Stronghold Digital Mining (SDIG) has agreed with noteholders to exchange $17.9 million of convertible debt for $23.1 million of convertible preferred stock, according to a press release Tuesday.

The deal is the bitcoin miner's latest effort to improve its balance sheet. In August, Stronghold announced a deal to return 26,200 mining rigs to lender NYDIG in exchange for extinguishing $67.4 million in debt. In September, the company cancelled a hosting agreement with Germany's Northern Data in an effort to improve its cash flow.

Under the agreement announced on Tuesday, 10% convertible notes will be extinguished in exchange for a new series of convertible preferred shares that can be converted into common shares for 40 cents per share.

If all the preferred stock is converted, about 57.8 million common shares would be issued, adding about 46% to the current common float, according to the company. Stronghold won't pay a dividend on the new preferred shares.

With the deal, which is set to close by Feb. 20, Stronghold will have less than $55 million in debt outstanding, CEO Greg Beard said in the statement.

At the end of 2022, Stronghold had about $12.4 million of unrestricted cash and about 6 bitcoins, which are worth about $100,000 at current prices.

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UPDATE (Jan. 3, 15:00 UTC): Adds detail about closing date and outstanding debt in fifth paragraph.