Greenidge Generation to restructure $75M of debt in deal with NYDIG

Greenidge Generation ( NASDAQ: GREE ) stock dipped 9.4% in Tuesday morning trading after the bitcoin ( BTC-USD ) miner tentatively agreed to restructure $74.7M worth of debt in a deal with its lender NYDIG . At the same time, the company's board warned that it has "engaged in active discussions about the potential for, and timing of, a voluntary bankruptcy filing" amid uncertainty about its overall financial health, i.e., its unsustainable cash burn rate. Under the terms of the non-binding term sheet, NYDIG will acquire 2.8 exahash per second of Greenidge's ( GREE ) mining capacity, representing a "substantial" portion of its bitcoin ( BTC-USD ) mining machines, it said. That would leave GREE with 1.2 EH/s of miners and potentially erase $57M-$68M of its debt. In addition, Greenidge ( GREE ) might transfer its coupons with bitcoin ( BTC-USD ) machine developer Bitmain Technologies to NYDIG. Within three months following the debt restructuring and hosting agreements, the miner will also transfer mining machines to NYDIG. In an effort to secure the rest of the loan with NYDIG, Greenidge ( GREE ) said it will pledge its remaining mining-related assets, infrastructure assets, equity of its subsidiaries and certain cash balances. That additional collateral is expected to amount to $6M-$17M. As a result of the deal, Greenidge's ( GREE ) business model is set to transition to hosting from self-mining because it will host up to 74 megawatts of NYDIG's machines. "In the absence of additional liquidity, the Company is at risk of having insufficient cash to support ongoing business operations within the next two months," Greenidge said. The company estimated it will need at least ~$20M in new funding through 2023 to remain viable. The bitcoin ( BTC-USD ) mining space has been stung by a combination of a rise in energy costs and the network hashrate, as well as depressed BTC prices, squeezing miners' profitability. Argo Blockchain ( ARBK ), Iris Energy ( IREN ) and Core Scientific ( CORZ ) are other miners that have also flagged liquidity issues of their own. Previously, (Nov. 14) Greenidge GAAP EPS of -$0.55 misses by $0.05, revenue of $29.36M beats by $0.21M .