Q3 2021 Stronghold Digital Mining Inc Earnings Call

Speaker 1: Ladies and gentlemen, thank you for standing by. Your conference call shall begin momentarily. Again, thank you for standing by. Your conference call shall begin momentarily. Thank you.

Ladies and gentlemen, thank you standing by your conference calls you have again momentarily I can't take any standing by the conference call should begin momentarily. Thank you.

[music].

Speaker 2: ??? ??? ??? ???

Speaker 2: The the.

Good afternoon, and welcome to the stronghold, you'll get a mining conference call for the third quarter ending September 32021, My name is Sally and I'll be operator this afternoon.

Speaker 1: Good afternoon and welcome to the Stronghold Digital Mining Conference Call for the third quarter ending September 30, 2021. My name is Della and I'll be your operator this afternoon.

Speaker 1: Before this call, Stronghold issued its results for the third quarter 2021 in a press release, which is available in the investor section of the company's website at www.strongholdingmining.com. You can find the link to the investor section at the top of the homepage. Joining us on today's call are Stronghold co-chairman and CEO , Greg Beard, CFO , Ricardo Lareda, and company's outside investor relations advisor, Jeff Graham, with Gateway Investment Relations.

Before the call chocolate issue gets resolved for the third quarter 2021 and a press release, which is available in the investors section on the company's website at Www Dot strong holding mining dot com you can find the link to the Investor section at the top of the homepage.

On today's call are strong hold co chairman and CEO, Greg Bier, CFO, Ricardo Merida and companies outside Investor Relations adviser Jack Wang with.

Gateway Investor Relations.

Speaker 1: Following their remarks, we will open the call for questions. And now I'd like to turn the call over to Mr. Gramps for some introductory comments.

Their remarks, we will open the call for questions and now I would like to turn the call over to Instagram Whatsapp.

What's the index comment.

Thank you before management begins their formal remarks, our discussion may contain forward looking statements within the meaning of the federal securities laws statements that are not historical facts, including <unk>.

Speaker 3: Thank you. Before management begins their formal remarks, our discussion may contain forward-looking statements within the meaning of the federal securities laws.

Speaker 3: Statements that are not historical facts, including statements about strongholds, beliefs, expectations and future performance are forward looking.

Thats about strongholds beliefs expectations and future performance are forward looking statements forward looking statements can be identified by use of the words such as anticipate intend believe estimate plan seek project expect may will would could or should the negative of these terms or other comparable.

Speaker 3: Forward-looking statements can be identified by use of the words such as anticipate, intend, believe, estimate, plan, seek, project, expect, may, will, would, could or should, the negative of these terms or other comparable terminology. Examples of forward-looking statements include statements relating to our expectations regarding future growth, future revenue and earnings increases, EBITDA margins.

Terminology examples of forward looking statements include statements relating to our expectations regarding future growth future revenue and earnings increases EBITDA margins cash flow projections and annual growth rates, our growth plans and opportunities, including our strategies for future acquisitions and power potential minor targets estimated returns on future acquisitions.

Speaker 3: cash flow projections and annual growth rates, our growth plans and opportunities, including our strategies for future acquisitions and power, potential minor targets, estimated returns on future acquisitions, and our assumptions underlying

<unk>.

And our assumptions underlying these expectations.

Speaker 3: Forward-looking statements in this discussion are not a guarantee of performance and you should not place under reliance on such statements. We base these forward-looking statements largely on our expectations and projections about future events.

Forward looking statements in this discussion are not a guarantee of performance and you should not place undue reliance on such statements. We base. These forward looking statements largely on our expectations and projections about future events forward looking statements are subject to many uncertainties in other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors in our S. One.

Speaker 3: Forward-looking statements are subject to many uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors in our S-1 and Stronghold's quarterly reports on Form 10-Q . These factors could cause our actual results and experience to differ materially from any forward-looking statement.

And strongholds quarterly reports on Form 10-Q.

Factors could cause our actual results and experience to differ materially from any forward looking statement.

Given these risks and uncertainties that you are cautioned not to place undue reliance on these forward looking statements. The forward looking statements included in this presentation are made only as of the date hereof, we do not undertake and specifically disclaim any obligation to update any such statements or to publicly announce the results of any revisions to any of these statements to reflect future updates or developments, except the <unk>.

Speaker 3: Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements.

Speaker 3: The forward-looking statements included in this presentation are made only as of the date hereof. We do not undertake and specifically disclaim any obligation to update any such statements or to publicly announce the results of any revisions to any of these statements to reflect future updates or developments, except as specifically stated or to the extent required by law. You may get Stronghold Securities and Exchange Commission filings for free by visiting the SEC website at www.sec.gov.

Pacifically stated or to the extent required by law you may get stronghold Securities and Exchange Commission filings for free by visiting the SEC website at Www Dot FCC Dot Gov.

Speaker 3: or Strongholds Investor Relations website at ir.strongholddigitalmining.com. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of Strongholds website. Now I would like to turn over the call to Strongholds Co-Chairman and CEO , Greg Beard. Sir, please proceed.

Our strongholds Investor Relations website at IR Dot stronghold digital mining Dot com I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of strongholds website now I would like to turnover the call to strongholds co chairman and CEO, Greg Bier. Sir. Please proceed.

Speaker 4: Thank you, Jeff. Good evening, everyone, and thank you for joining us on our inaugural earnings call following our successful IPO in October . I would like to welcome our new shareholders and analysts. We appreciate your support.

Thank you Jess good evening, everyone and thank you for joining us on our inaugural earnings call. Following our successful IPO in October.

I'd like to welcome our new shareholders and analysts we appreciate your support.

Speaker 4: I'm going to quickly walk through an update on our operations and recent activity. After that, because this is our first call since going public, I want to provide some background and highlights about our business. And then I'll turn it over to Ricardo to discuss our results in more detail before opening up for Q&A.

I'm going to quickly walk through an update on our operations and recent activity after that because this is our first call since going public I want to provide some background and highlights about our business and then I'll turn it over to Ricardo to discuss our results in more detail.

For opening up for Q&A.

In the last few months, we have made significant progress executing our strategy of being a low cost vertically integrated environmentally beneficial big quite minor.

Speaker 4: In the last few months, we have made significant progress executing our strategy of being a low-cost, vertically-integrated, environmentally-beneficial Bitcoin miner. On October 22nd, we closed our IPO, generating net proceeds of roughly $132 million, and began trading on the NASDAQ.

<unk> 'twenty.

We closed our IPO generating net proceeds of roughly $132 million and began trading on the NASDAQ.

And we are deploying the capital we have raised an attractive investment.

Speaker 4: and we are deploying the capital we have raised in attractive investments.

Despite global supply chain difficulties are impacting the bitcoin mining space as well as numerous other industries. We are actively receiving commercial quantities of minors under our agreements with Minerva and northern data and we are happy with the performance of the units we have.

Speaker 4: Despite global supply chain difficulties that are impacting the Bitcoin mining space, as well as numerous other industries, we are actively receiving commercial quantities of miners under our agreements with Minerva and Northern Data. And we are happy with the performance of the units we have received to date. We have already received nearly 4,000 miners associated with the Northern Data JB, and we're scaling the operation to fully implement the JB.

Received to date.

We have already received nearly 4000 miners associated with the northern data JP and we're scaling the operation to fully implement the J D.

Speaker 4: With respect to Minerva, we have 240 MV7 miners plugged in currently, and expect to have over 500 plugged in by the end of this quarter.

With respect to Minerva, we have 240 <unk> seven miners clubbing currently and expect to have over 500 plugged in by the end of this week.

Speaker 4: we had expected all 15,000 Minerva miners to be received late this year or early next year. And this is still the case.

We had expected all 15000 Minerva miners to be received later this year or early next year and this is still the case, however to mitigate any potential delays in minor deliveries broadly we have begun by miners in the open market with over 2500 purchased.

Speaker 4: However, to mitigate the potential delays, a minor delivery problem.

Speaker 4: we have begun buying miners in the open market with over 2,500 purchased to date with the hash rate capacity of over 200 petahash to be delivered and installed before year end. We were able to procure these miners at attractive terms due to our extensive industry relationship.

Date with the hash rate capacity of over 200, Petter has to be delivered and installed before year end.

We were able to procure these minor that attractive terms due to our extensive industry relationships.

Speaker 4: These purchases will allow us to take advantage of the current market opportunity and they demonstrate our ability to move quickly and creatively. And they also demonstrate the benefit of our owning our own power generation and infrastructure. Power and minor ready outlets are not constraints for us.

These purchases will allow us to take advantage of the current market opportunity and they demonstrate our ability to move quickly and creatively.

Also demonstrate the benefits of our owning our own power generation and infrastructure.

And minor ready outlets are not constrained for us.

In addition to the miners purchased for immediate delivery, we entered into two agreements with <unk> to purchase 12000 S 19, J Pro miners and 1800 S 19 X P Myers.

Speaker 4: In addition to the miners purchased for immediate delivery, we entered into two agreements with Bitmain to purchase 12,000 S19J Pro miners and 1,800 S19XP miners. To date, we have installed or purchased a total of approximately 45,000 miners with hash rate capacity of approximately 4.4 FPM.

We have installed a purchased a total of approximately 45000 miners with hash rate capacity of approximately $4 four <unk> and we believe we are on track to hit our goal of ending 2022 with approximately 80000 miners and total cash rate capacity.

Speaker 4: And we believe we are on track to hit our goal of ending 2022 with approximately 80,000 miners and total hash rate capacity of at least 8 exahashes.

Least APAC. The hash we are also continuing to make progress on expanding our power generation capacity earlier. This month, we closed on the acquisition of our second reclamation and power facility Panther Creek, which roughly doubled our power generation capacity with an additional 80 megawatts.

Speaker 4: We are also continuing to make progress on expanding our power generation capacity. Earlier this month, we closed on the acquisition of our second reclamation and power facility, Panther Creek, which roughly doubles our power generation capacity with an additional 80 megawatts.

We plan to begin installing miners at the facility in December.

Speaker 4: we planned to begin installing minors at the facility in December , so under two months from close to minor installation. A lot went into making this possible. First, we began ordering the equipment to develop our data center before we executed the definitive agreement.

So under two months from close to minor installation.

A lot went into making this possible first we began ordering the equipment to develop our data center before we executed the definitive agreements, we completed substantial reliability upgrades between sign and close which we expect will allow the plant to run at a full load on a constant basis going.

Speaker 4: We completed substantial reliability upgrades between sign and close, which we expect will allow the plant to run at a full load on a constant basis going forward.

Forward.

Speaker 4: And also, before closing, we began the plant modifications and data center buildout to allow us to deliver power directly to our

And also before closing we began the plant modifications and data center build out to allow us to deliver power directly to our miners. We have developed an expertise in retrofitting power generation assets for bitcoin mining and the current project at Panther Creek highlights our ability to move fast and execute.

Speaker 4: We have developed an expertise in retrofitting power generation assets for Bitcoin mining. And the current project at Panther Creek highlights our ability to move fast and

Beyond Panther Creek, we are actively evaluating opportunities to further increase our power generation capacity, including another reclamation and power facility in Pennsylvania that we have under non binding LOI to acquire.

Speaker 4: Beyond Panther Creek, we are actively evaluating opportunities to further increase our power generation capacity, including another reclamation and power facility in Pennsylvania that we have under non-binding LOI to acquire.

Speaker 4: We have also purchased most of the equipment needed to modify our next acquired power asset for Bitcoin mining so that we can execute as fast or faster than we did for Panther Creek.

We have also purchased most of the equipment needed to modify our next acquired power asset for bitcoin mining. So that we can execute as fast or faster than we did for Panther Creek. We also.

We have also already ordered equipment beyond what we need for the first three assets.

Speaker 4: We have also already ordered equipment beyond what we need for the first three hours.

In addition to mine a purchases and power generation asset acquisitions, we have made other important strides since the beginning of the third quarter and building out our business. We have manufactured 33 megawatts of our proprietary strongbox modular data centers and we expect to have completed approximately 125 megawatts by the <unk>.

Speaker 4: In addition to minor purchases and power generation asset acquisitions, we have made other important strides since the beginning of the third quarter in building out our business. We have manufactured 33 megawatts of our proprietary strong box modular data centers and we expect to have completed approximately 125 megawatts by the end of the first quarter 2022.

The end of the first quarter of 2022.

We hired 39 employees since the beginning of the third quarter to support our data center operations reclamation operations and corporate efforts. In addition to 39 employees associated with the Panther Creek acquisition.

Speaker 5: We hired 39 employees since the beginning of the third quarter to support our data center operations, reclamation operations, and corporate efforts. In addition to 39 employees associated with the Panther Creek acquisition.

Speaker 5: We also signed an office lease in Pittsburgh that will support up to 25 people and strengthens our presence in Pennsylvania. We are still in a build-out phase.

We also signed an office REIT in Pittsburgh that will support up to 25 people and strengthens our presence in Pennsylvania, we are still in a build out phase.

Speaker 5: but we believe we have established a strong foundation and are executing on our ambitious growth plans.

We believe we have established a strong foundation and are executing on our ambitious growth plans.

As I alluded to.

Speaker 5: this is our first earnings call since going public, I'd like to give an overview of our business for those of you who may not be as familiar.

This is our first earnings call since going public I'd like to give an overview of our business for those of you may not be as familiar.

Stronghold is a bitcoin mining company that we believe is differentiated from its peers.

Speaker 5: Stronghold is a Bitcoin mining company that we believe is differentiated from its peers for four critically important reasons.

For critically important reasons first and most importantly is that we are vertically integrated and environmentally beneficial we play an active role in cleaning up one of the most environmentally neglected regions of the country by Remediated.

Speaker 5: First, and most importantly, is that we are vertically integrated and environmentally beneficial. We play an active role in cleaning up one of the most environmentally neglected regions of the country by remediating some of the nearly 1,000 toxic coal refuse piles throughout Pennsylvania to fuel our power generation assets.

Some of the nearly 1000 toxic coal refuse piles throughout Pennsylvania Gpus.

Our power generation assets.

Speaker 5: This not only cleans up the environment, but it also provides us with among the lowest net power costs in the industry. Additionally, by owning our own power generation, we believe we will position ourselves well for market volatility and retain operational control to take advantage of arbitrage opportunities on the power grid. I'll cover these points in greater detail in a few minutes.

Not only cleans up the environment, but it also provides us with among the lowest net power costs in the industry.

Additionally, by owning our own power generation, we believe we will position ourselves well for market volatility and retain operational control to take advantage of arbitrage opportunities are on the power grid.

For these points in greater detail in a few minutes.

The second differentiating point is our aggressive rep track record and expansion plan.

Speaker 5: The second differentiating point is our aggressive grub track record and expansion.

Speaker 5: Since Stronghold's formation in March of this year, we have acquired two reclamation and power facilities and purchased approximately 4.4 exahash of miners. We successfully completed two private placements, two equipment financings, and an IPO to support our growth. Our successes to date provide us with confidence to achieve our target to end 2022 with hash rate capacity of eight exahash of miners.

Stronghold formation in March of this year, we've acquired two reclamation and power facilities and purchased approximately 4.4 extra hatchment miners, we successfully completed two private placements.

Equipment financings.

And an IPO to support our growth our successes to date provide us with confidence to achieve our target to end 2022 with hash rate capacity of eight X a hash of mining.

One thing that gives us confidence in our growth strategy is our third differentiating point are accomplished management team. We've assembled a talented team with an established track record of creating value for investors and operating complex assets.

Speaker 5: One thing that gives us confidence in our growth strategy is our third differentiating point, our accomplishment.

Speaker 5: We've assembled a talented team with an established track record of creating value for investors and operating complex applications.

Speaker 5: I was the head of natural resources at private equity at Apollo for 10 years and on the firm's management committee. Before that, I was a managing director at the private equity energy focused firm called Riverstone, and I started my career at Goldman Sachs.

He was the head of natural resources private equity and Apollo for 10 years and on the permits management Committee before that I was the managing director at the private.

Equity energy focused firm called Riverstone.

My career at Goldman Sachs Bill Spence My co chairman.

As a pioneer and wastewater reclamation with 40 years of experience in the industry, where card a lot of day, our CFO with me at Apollo for many years.

Speaker 5: is a pioneer in waste coal reclamation with 40 years of experience in the industry. Ricardo Laude, our CFO , worked with me at Apollo for many years and was then head of financial risk management at Anheuser-Busch Invest.

And it was then had a financial risk management and Anheuser Busch Inbev.

Speaker 5: team we've assembled is highly capable with significant experience in engineering, power operations, and investing in financial analysis, which we think is critical for a successful vertically integrated Bitcoin miner. We aim to have one of the deepest, most analytical teams in the Bitcoin mining space and continue to attract top talent. Additionally, this team is highly aligned with the shareholders as our insider ownership exceeds 50%.

The team we've assembled a highly capable with significant experience in engineering, how our operations and investing in financial analysis, which we think is critical for a successful vertically integrated bitcoin miner. We aim to have one of the deepest most analytical teams and the bitcoin mining space.

And continue to attract top talent. Additionally, this team is highly aligned with shareholders as our insider ownership exceeds 50%.

Speaker 5: Finally, we believe that the support that we enjoy from the financial markets is a key differentiating factor. We were the first Bitcoin miner to go public through a traditional underwritten IPO. And I'm thrilled that some of the world's largest institutional investors have decided to join us on our journey.

Finally, we believe that the support that we enjoyed from the financial markets is a key differentiating factor we were the first bitcoin miner to go public through a traditional underwritten IPO.

I am thrilled that some of the world's largest institutional investors have decided to join us on our journey.

Speaker 5: We believe that this critical access to capital separates us from much of the industry and supports our aggressive growth plan.

We believe that this critical access to capital separates us from much of the industry and supports our aggressive growth plans.

Speaker 5: Now I would like to take a few minutes to expand on the role that we play in improving our environment.

Now I would like to take a few minutes expanding the role that we play in improving our environment. Some of our peers utilize renewable power, which we believe is a positive step but it is more a passive approach of simply not doing more harm at best at stronghold, we aim to be better than.

Speaker 5: some of our peers utilize renewable power, which we believe is a positive step.

Speaker 5: but it is more a passive approach of simply not doing more harm at best.

Speaker 5: at Stronghold. We aim to be better than environmentally neutral.

Mentally neutral as our operations actively improve the environment in the areas. We operate our two current reclamation facilities scrub grass and Panther Creek, our coal refuse to energy facilities, both located in Pennsylvania.

Speaker 5: as our operations actively improve the environment in the areas we operate. Our two current reclamation facilities, Scrub Grass and Panther Creek, are coal refuse to energy facilities, both located in Pennsylvania.

Coal refuse is the toxic waste byproduct created by legacy coal mining operation.

Speaker 4: Coal refuse is the toxic waste byproduct created by legacy coal mining operations.

Up until the 19 seventies and cole of mine the high quality coal is used for power and steel and the lower quality coal and other material. The refuse was left an expansive piles across the state really more like Mt.

Speaker 4: Up until the 1970s, when coal was mined, the high quality coal was used for power and steel, and the lower quality coal and other material, the refuse, was left in expansive piles across the state, really more like mountains. There are hundreds of millions to billions of tons of coal refuse across thousands of acres in Pennsylvania.

There are hundreds of millions to billions of tons of coal refuse across thousands of acres in Pennsylvania.

Piles represent the largest source of water pollution in the state and many are literally on fire as we speak producing toxic emissions that harm the local communities.

Speaker 4: The piles represent the largest source of water pollution in the state, and many are literally on fire as we speak, producing toxic emissions that harm the local community.

Through our operations, we removed the coal refuse and Combusted and our specialized purpose built facilities that use circulating fluidized bed technology or process for moved nearly.

Speaker 5: Through our operations, we remove the coal refuse and combust it in our specialized purpose-built facilities that use circulating fluidized bed technology. Our process removes nearly all NOx, sulfur dioxide, particulate, and mercury emissions.

All Nox sulfur dioxide particulate and Mercury emissions.

Speaker 5: with the byproduct being beneficial use ash, which is a certified liming agent and can be used to remediate the land where the refuse piles exist.

With the byproduct being beneficial use ash, which is a certified lining agent and can be used to immediate the land worthy refuse pilot existed.

Our operations, but ultimately transform these toxic piles into usable land once again, allowing ecosystem to return and benefiting the local communities.

Speaker 4: our operations will ultimately transform these toxic piles into usable land, once again, allowing ecosystems to return and benefiting the local communities. As a matter of fact, in the third quarter, we removed more than 100,000 tons of toxic coal refuse from our ecosystem.

Matter of fact in the third quarter, we removed more than 100000 tons of toxic coal refuse from our ecosystem.

And replace it with 65000 tons of beneficial use ash to facilitate the remediation of this plant.

Speaker 4: and replace it with 65,000 tons of beneficial use ash to facilitate the remediation of.

Speaker 5: Not only does owning our own power generation assets allow us to improve the environment, but it is also critical to maintaining superior profitability through cycles and provide valuable arbitrage opportunities. When we install Bitcoin miners, we power them through stronghold-owned power.

Not only does owning our own power generation assets allow us to improve the environment.

But it is also critical to maintaining superior profitability through cycles and provides valuable arbitrage opportunities when we install bitcoin miners, we power them through strong volt owned power assets.

Speaker 5: which gives us operational control and some of the lowest electricity costs in the industry. And electricity is far and away the largest direct cost associated with mining. As investors, we care a lot about costs because we are always thinking about downside protection. While we are bullish about Bitcoin and Bitcoin mining, we appreciate the risk profile and expect significant volatility along the way.

Which gives us operational control and some of the lowest electricity costs in the industry and electricity is far and away the largest direct cost associated with mining as.

As investors, we care a lot about cost.

We are always thinking about downside protection.

While we are bullish about bitcoin bitcoin mining, we appreciate the risk profile and expect significant volatility along the way.

We also expect that network cash rate will continue to increase.

Speaker 4: But we also expect that network hash rate will continue to increase.

With our power generation assets, we think that our cost of my bitcoin would be under $3000 per bitcoin once our operations, our scaled and assuming a network hash rate.

Speaker 5: With our power generation assets, we think that our cost to mine Bitcoin would be under $3,000 per Bitcoin once our operations are scaled and assuming a network hash rate of 150x a hash.

150 acts of hash.

Speaker 5: We believe this is about one-third of the industry average.

We believe this is about one third of the industry average.

Speaker 5: So if network hash rate triples, we think our cost would still be less than $10,000 per Bitcoin. But for many of our peers, we would expect their cost to approach $30,000 per Bitcoin.

Oh, It network hash rate triples, we think our costs would still be less than $10000 per bitcoin, but for many of our peers. We would expect their cost to approach $30000 per bitcoin the impact becomes more and more pronounced as network hash rate increases and prices fluctuate.

Speaker 4: impact becomes more and more pronounced as network hash rate increases and prices fluctuate.

<unk>.

Speaker 4: We built this business to be durable through market volatility and market downturns without giving away upsides, and we believe our vertical integration and resulting low-cost profile gives us a distinct advantage in terms of long-term margin preservation and ability to acquire money.

We built this business to be durable through market volatility and market downturns without giving away upside and we believe our vertical integration and resulting low cost profile gives us a distinct advantage in terms of long term margin preservation and ability to acquire miners.

In addition to facilitating industry, leading costs vertical integration also gives us the ability to sell power to the grid, while bitcoin mining is generally the most profitable use of our power power prices are volatile. So when grid prices are more attractive than mining revenue, we are able to take advantage of this.

Situation and create incremental value for shareholders.

Speaker 5: I hope that this provides some valuable background on Stronghold and what separates us from most of the rest of the industry.

I hope that this provides us valuable background on stronghold and what separates us from most of the rest of the industry.

Speaker 5: At this point, we'll shift the focus to third quarter results and our outlook for the next several months. To do that, I'll turn the call over to our CFO , Ricardo Aude, before providing my closing remarks.

At this point, while shifting focus to the third quarter results and our outlook for the next several months to do that I'll turn the call over to our CFO Cartelized day before providing my closing remarks.

Thank you, Greg and good evening, everyone I'll review of our third quarter results relatively briefly keeping in mind, our third quarter numbers do not reflect the significant minor delivery, we're actively receiving and expect to receive over the next several months.

Speaker 3: Thank you, Greg, and good evening, everyone. I will review our third quarter results relatively briefly, keeping in mind our third quarter numbers do not reflect the significant minor deliveries we're actively receiving and expect to receive over the next several months.

At the end of the third quarter, we had about 3000 minor viewpoint.

Speaker 6: At the end of the third quarter, we had about 3,000 miners deployed, with a total hash rate capacity of roughly 185 petahertz.

It'll have great capacity of roughly 185.

From the end of the quarter through November 29.

Speaker 6: From the end of the quarter through November 29th, we received nearly 3,000 additional miners with total hash rate capacity of approximately 285 petahash, more than doubling our hash rate capacity.

Steve nearly 3000 additional miners with total have great capacity of approximately 285.

More than doubling our hatchery capacity in less than two months.

These minor it includes the 140 Minerva in seven months, we expect to have by over 500 by the end of the week.

Speaker 6: These miners include 240 Minerva MD7 miners, and we expect to have over 500 by the end of the week.

Speaker 6: Our current minors also include nearly 4,000 minors associated with our northern data.

Our current miners also include nearly 4000 miners associated with our northern data agreement.

We're in consistent contact with Minerva and northern data and expect to receive the balance of the miners under these agreements over the next few months.

Speaker 6: We're in consistent contact with Minerva and Northern Data and expect to receive the balance of the miners under these agreements over the next few months.

To date, the company has ordered or installed approximately 45000 liners with total pathway capacity of approximately $4 for excess cash.

Speaker 6: To date, the company has ordered or installed approximately 45,000 liners with total hash rate capacity of approximately 4.4 exahertz.

Speaker 6: We were roughly breakeven on an adjusted EBITDA basis for the quarter, with close to $10,000 on roughly $6 million of revenue.

We were roughly breakeven on an adjusted EBITDA basis for the quarter with close to $10000 and roughly $6 million of revenue.

Pro forma for IPO, the bank of Greek acquisition closing and deposits on announced miner purchases are past that our cash balance on September 30th with approximately a $104 million.

Speaker 6: both former for ICO, the Bank of Greek Acquisition Closing, and deposits on announced minor purchases. Our cash balance on September 30th was approximately $104 million. So we have sufficient liquidity to continue to execute on our growth targets. We expect to have a total hash rate capacity of at least 8x a hash by the end of 2022, which implies a mining power load of approximately 285 megawatts.

So we have sufficient liquidity to continue to execute on our growth targets, we expect that the hash rate capacity of at least eight at the half by the end of 2022.

And by the mining power load of approximately 285 megawatts.

The Azure arrangement reminding offerings, we're also scaling our power generation capacity to maintain our vertical integration.

Speaker 6: As we're arranging our mining operations, we're also scaling our power generation capacity to maintain our vertical integration.

Speaker 6: Following the Panther Creek acquisition earlier this month, we have 165 megawatts of power generation capacity and are constantly evaluating other opportunities to increase our power generation capacity on expected terms.

I'll leave the Panther acquisition earlier. This month, we added 165 megawatts of power generation capacity and are constantly evaluating other opportunities to increase our parking rates capacity on attractive firm.

Including continued to billings and a third coal refuse declination embarked liquidity that we have under nonbinding LOI stockpile.

Speaker 6: including continued surveillance on a third cold, refuse acclimation, and power facilities that we have under a non-binding LOI.

Speaker 6: That completes my financial summary. Now, I'll turn the call over to Greg for closing remarks.

That completes my financial summary, now are critical over to Gregg for closing remarks.

Thank you Ricardo.

Speaker 5: Thank you, Ricardo. And thank you everyone for taking the time to dial in. We are excited about our entry into the public markets and look forward to continuing to grow the value of our business and improve the communities in which we operate. With that, we can now take your questions.

And thank you everyone for taking the time to dial in.

We are excited about our entry into the public markets and look forward to continuing to grow the value of our business and improve the communities in which we operate.

We can now take your questions operator.

Thank you again, ladies and gentlemen, if you like to ask a question. Please press Star then one when you touched on telephone again, if he would like to ask a question. Please press Star then one.

Speaker 1: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star then one on your touch-tone telephone. Again, if you would like to ask a question, please press star then one.

One moment for our first question.

Our first question comes from Lucas pipes of B Riley Securities. Your line is open.

Speaker 1: Our first question comes from Lucas Pipes of D-Raleigh Securities, your line is open.

Hey, good good afternoon everybody.

Speaker 7: Hey, good afternoon, everybody. Hey, Luke.

Congrats on the listing.

Speaker 7: Congrats on the listing. Also great to see the positive operating cash flow and solid results through Q3.

So great to see the positive operating cash flow and solid results through Q3.

Just a just a few quick questions first I wanted to make sure that I understand the 2500 open market order.

Properly.

A lot of buzz in the industry about difficulty in getting minor so so.

Would it be possible to share some context on.

How you were able to.

These additional miners and then is this something that you think is repeatable over the next weeks months et cetera, as you continue to grow out the bitcoin mining business yeah.

Hey, Lucas. Thanks. This is Greg So we know that were judged by the deployment of hash rate into our model.

Speaker 4: Yeah. Hey, Lucas. Thanks. This is Greg. So we know that we're judged by the deployment of hash rate into our model. And so, you know, I think we know there have been questions around the delivery schedule for Minerva and maybe even for main miners as well. So we think the best way to mitigate the risk of delays in any delivery schedule is by buying miners.

So I think we know there've been questions around the delivery schedule for Minerva and maybe even for main miners as well. So we think the best way to mitigate the risk of delays and any delivery schedule is by buying miners in the open market.

And so that's what we've been doing so the 25, we have deep relationships with vendors brokers board members.

Speaker 5: And so that's what we've been doing. So the 25, we have deep relationships with vendors, brokers, board members, companies that bought miners, that can't plug them in for six months, that might want to sell them, or those. We have, even this week, have reached not definitive terms, but reached an oral agreement on another, say, 3,000 miners that are sitting in North America that are for sale. And we're able to get these for around $80.

Companies that bought miners that can't plug them in for six months, they might want to sell them or those we have even this week.

Have reached.

They're not definitive terms, but but reached.

Oral agreement on another say 3000 miners that are.

Sitting in North America that are.

That are for sale and we're able to get these.

For around $80 a <unk>.

Speaker 5: So the math and the logic behind paying $80 a terahash for deliveries say within 10 days is that about every machine makes about $10 a terahash per month.

So the math and the logic behind paying $80 at her house for deliveries say within 10 days.

Is that about every machine makes about $10 <unk> per month.

Speaker 5: And so paying $80 today is actually a better deal than paying $60 for delivery next June . And then it also eliminates the market perception risk that these things won't be delivered at all.

So paying $80 today is actually a better deal than paying $60 for delivery next June and then it also eliminates the the market perception of risk that these things won't be delivered at all so I think.

Speaker 5: I think we're going to start to share a lot more of our data around what we've ordered, what we've paid, what is currently plugged in versus on a pallet, how much power we have available, and I think that will give the market a lot of comfort as to what our growth expectations are and how they're being realized on a daily basis.

<unk>.

We have a I think we're going to start to share a lot more of our data around what we've ordered what we paid what is currently plugged in versus versus on a pallet.

How much power we have available.

And I think that will give the market a lot of comfort as to what our growth expectations are in and how they are being realized on a daily basis.

So I think youre right getting access to matter I think you would not want to.

Speaker 5: So I think you're right, getting access to miners, I think you would not want to, you know, I would say the restrictions on growth in this market is one around power, and we have that fully available to us, I would describe it as plug-ready power by December 18th on two plants.

I would say that the restrictions on on growth in this market as one around power and we have that.

Fully available to us and I kind of I would describe as plug ready power by December 18th on two plants.

Speaker 5: You know, which is, that's a lot of power. We make our own strong boxes, we make our own mobile data centers, that's another bottleneck that we've removed. And so really, our only bottleneck is just to assure the market that we can get access to these miners, and we can do it without overpaying. So I think just some of the stats that we put together to share with you.

That's a lot of power.

We make our own strong boxes make our own mobile data centers. It's another bottleneck, we've removed and so really our only our only bottleneck is to assure the market that we can get access to these miners.

And we can do it without overpaying. So I think just some of the stats that we put together to share with you.

Speaker 5: around what we're expecting still by the end of the year, is conservatively about 12,000 miners by the end of the year, and as many as 15,000 miners if that additional order of 3,000 comes to fruition. And that represents between 1 exa-hash and almost 1.3 exa-hash by the end of the year.

Around what we're expecting still by the end of the year is conservatively about 12000 miners by the end of the year and as many as 15000 miners have that additional order of 3000 comes to fruition.

And that represents.

Between one axa hash and almost one three <unk> by the end of the year.

Speaker 5: Now, by the end of the first quarter, we're still expecting a really massive ramp, which we're still expecting to execute on. But by the end of the first quarter, we should have between 30,000 and 36,000 miners delivered and plugged in, representing between 2.7 and 3.3 ExaHash.

The now by the end of the first quarter.

Still expecting a really massive ramp.

So, which we're still expecting to execute on.

But by the end of the first quarter, we should have between 30000 36000.

Myners delivered and plugged in representing between two seven and 3.3 Axa hash.

Speaker 4: I mean, just to put it in perspective, we've been at this about, you know, it'll be about a year by the end of the first quarter. And so, you know, I think those that know us know our ability to execute, so we bought a couple of power plants.

And I mean, just to put in perspective, we've been at this about.

It'll be about a year by the end of the first quarter and so I think those are no no us know our ability to execute that we bought a couple of power plants.

And are now making ourselves as large as some of the biggest miners in the world inside of a year.

Speaker 5: and are now making ourselves as large as some of the biggest miners in the world inside of a year. And so, you know, I am happy to have our, you know, to be asked to prove it on the growth rate.

And so you know.

I'm happy to have our to be asked to approve it on the on the growth rate.

Sure.

Speaker 4: You know, which we're going to have to obviously do. But I would say, hey, we are opportunistic. We know what the restrictions and bottlenecks are. And we're getting around them. In spite of.

Which we're going to we're going to have to obviously do but I would say hey, we are opportunistic we know what the restrictions and bottlenecks are and we're getting around them.

In spite of.

Speaker 5: of market rumors and delays in supply chain and all the things that are impacting not just his space but the world.

So the market rumors and delays in supply chain and all the things that are impacting not just the space, but the world.

So I think it's what I guess, what we really want to communicate is that yes, we have aggressive plans and we have more than one way to achieve that growth.

Speaker 4: So I think that's what we really want to communicate is that we have aggressive plans and we have more than one way to achieve that growth.

Greg This is super helpful and really appreciate the detail on end of year end of Q1 cash rate.

Speaker 7: Greg, this is super helpful and really appreciate the detail on end of year and NFQ1 hash rate. On the minor delivery, you mentioned Minerva and in the release, you say your shipments are ramping up towards the $15,000.

On the minor delivery.

You mentioned Minerva and in the release.

You say your shipments are ramping up.

<unk> to 15000.

Would it be possible to provide some color as to what you're hearing from your supplier in terms of.

Speaker 7: Would it be possible to provide some color as to what you're hearing from your supplier in terms of how quickly that cadence is expected to pick up? And then kind of secondly, has the supplier provided guidance as to what bottlenecks it is currently facing and how they're going to be overcome?

How quickly that cadence is expected to pick up.

And then kind of secondly.

Has the supplier provided guidance as to what what bottlenecks it.

It is currently facing and how theyre going to be overcome.

Sure. So yeah, I don't want to be on my quarterly conference calls were making recommendations on behalf of Minerva I'll tell you what they what they have told US and we believe them is that they're constrained comes largely from having an assembly center that has been part of an industrial park that has experienced.

Speaker 4: Sure, so I don't want to be on my quarterly conference calls or making representations on behalf of Minerva. I'll tell you what they have told us, and we believe them, is that their constraint comes largely from having an assembly center that has been part of an industrial park that has experienced power curtailments.

Power curtailments.

Speaker 5: Which, hey, that's concerning. In spite of that, they're still shipping miners to us, and hopefully others, and they're now starting to show up. And they're working, you know, as expected on the spec that we paid for, and in fact today I posted on, you know, I'm aware that there are rumors out there saying, hey, is Minerva, you know, are they going to be able to deliver at all, does this company really even exist? So for that reason.

Which that's concerning.

In spite of that they are still shipping miners to us and hopefully others and they're now starting to show up.

And they are working.

As expected on the spec that we paid for and in fact today I posted on I'm aware that there are rumors out there saying has minerva.

Are they going to be able to deliver all of this company really even exist so for.

For that reason.

Posted on Linkedin.

Speaker 5: I posted on LinkedIn pictures of one of our strong boxes full of Minerva miners that had been delivered and are running.

Pictures of one of our strong boxes full of Minerva miners have been delivered and are running.

Speaker 4: And hey, we'll be doubling that quantity by the end of the week.

And he will be doubling that quantity by the end of the week.

Speaker 5: this week, actually, and so they're coming. So the

This week actually and so they are coming so.

Speaker 5: The curtailment of power impacted one facility. We talk to Minerva every day. We are aware of the other facilities that they are trying to move their assembly operations to and believe that they will be successful.

The the curtailment of power impacted one facility, we talked in Minerva everyday we are aware of the other facilities that they are trying to move their assembly operations too.

And believe that they will be successful.

And ramping up assembly outside of mainland China to be able to produce.

Speaker 5: and ramping up assembly outside of mainland China to be able to produce

Uh huh.

Speaker 5: you know, I would say industrial quantities of these machines.

And I would say industrial quantities of these machines.

Speaker 5: I can tell you, I don't think they've done it yet. So I think right now we're still, it's still, you know, dribs and drabs out of that one facility. But, you know, because we have, you know, we are not passes in this effort.

I can tell you that I don't think they have done it yet so I think right now we're still it's still.

Dribs and drabs out of that one facility.

But.

Because we have we are not passive in this effort.

Speaker 5: You know, we're actively trying to, you know, both understand and push.

We are actively trying to both understand and push and help Minerva with that assembly issue I think the the.

Speaker 5: and help Minerva with that assembly issue. I think the critical component of the miner is the chip.

A critical critical component of the minor is the chip.

Speaker 5: And I would be much more concerned if they didn't have the supplies of parts to assemble these things. So we believe that they do. And the most critical component of that is the chip. We believe they have those already in their possession. And I can tell you that they're working as a customer. They're working on the spec that we paid for in industrial quantities. So it's a, you know...

And I would be much more concerned if they didn't have the supplies of parts to assemble these things. So we believe that they do and the most critical component of that is the chip. We believe they have those already in their possession.

And I can tell you that they are working as a customer they are working on the spec that we paid for in industrial quantities. So I'd say.

It's a it's a pretty bad fraud, if they're actually shipping miners.

Speaker 5: It's a it's a pretty bad fraud if they're actually shipping minors. So that's the you know, and I'm aware I've been made aware of what of what, you know, some folks are saying about Minerva, again, not representing them, but and it's certainly not issue free.

So that's the.

And I'm aware I've been made aware of what of what some folks are saying about minerva again, not representing them but.

And it's certainly not issue free.

But we do believe that we're going to get all 15000 miners.

Speaker 5: But we do believe that we're going to get all 15,000 miners in the first quarter of next year. For that to happen, they still need to figure out their assembly issues. But having helped them and worked with them, I think they're going to do it. I think also, just from your modeling standpoint and ours, we're presuming that we get only 1,500 of these miners by the end of this year.

In the first quarter of next year for that to happen they still need to figure out their assembly issues.

But having having helped them and work with them I think theyre going to do it.

Also just just from your modeling standpoint.

And ours.

We're presuming that we get only 1500 of these minus by the end of this year.

So this is not like we're assuming that we're going to get <unk>.

Speaker 5: So it's not like we're assuming that we're going to get $15,000 and our growth is going to be limited by Minerva. They are a small part of the picture this year. And overall, I think they're going to be a relatively small part of our story. They're a part of it. I think we got what we feel like a good deal on those machines, but obviously them being late, that hurts us.

<unk> thousand and our growth is going to be limited by Minerva. They are a small part of the picture of this year and overall I think theyre going to be a relatively small part of our story.

They are a part of it is I think we.

Well, we feel like a good deal on those machines, but obviously them being late that hurts us so.

It's not a it's not in a position that we want to be and we are reliant on a single producer of these things.

Speaker 5: You know, it's not a it's not a position that we want to be in where we are. We are reliant on a single producer.

I am not even sure what your question was but that was one of them.

Speaker 7: I'm not even sure what your question was, but I wanted to make sure I said it. That was very helpful. So, kind of for modeling purposes.

That was very helpful. So so kind of for modeling purposes.

Speaker 7: 1,500 for the end of this year, that's a reasonable.

<unk> hundred for the end of this year, that's that that's a reasonable target.

Speaker 8: target, and I think in your response to your prior question, you said kind of conservatively 12,000. Presumably, that would include those 1,500. And then if the oral order or oral agreement is converted into a firm order, that would get 15,000. Again, then Minerva would be just 10% of your end-of-year target. Now, just to be sure, the...

And I think in your.

In response to your prior question, you said that kind.

Kind of conservatively 12000.

<unk> that would include those 500 and then if you if the oral if the oral orders oral agreement is converted into a firm order that would get.

15000, again that Minerva would be just 10% of your end of year target.

Just to be sure that the.

Speaker 6: The 12,000 includes the oral agreement on the 3,000 minors, which is pretty much done.

The 12000 includes the oil agreement on the on the 3000 miners, which is pretty much done.

But not that would be.

Speaker 6: But not, that would be, the 12,000 would include this. Got it.

12000 would include them.

Got it got it okay.

And then and then Greg did I hear that right by the end of by the end of Q1, you would expect the full delivery of the Minerva orders.

Speaker 7: And then, Greg, did I hear that right? By the end of Q1, you would expect full delivery of the Minerva orders. Has that been kind of what's been communicated? That's what we're expecting.

Has that been kind of what's been correct, that's what we're expecting.

Alright, well really appreciate all the additional color continued best of luck and I'll turn it over for now thank you.

Speaker 7: All right, well, really appreciate all the additional color. Continue best of luck, and I'll turn it over for now. Thank you. You bet.

You bet.

Thank you. Our next question comes from Mike Grondahl of Northland Securities. Your line is open.

Speaker 1: Thank you. Our next question comes from Mike Rondell of North Lawrence Security Sheriff's Office.

Yeah, guys. Thank you.

Speaker 9: Yeah, guys, thank you. A couple questions. I think that 1,800 of Bitmain miners, that was a new order.

Questions.

I think the 1800.

<unk> main miners.

That was a new order.

Speaker 9: is are those expected to be on a delivery schedule like the 12,000? I think the 12,000 were split between 2Q22 and 3Q22. Is that sort of still a good rough guideline and then on the 1800 kind of roughly when do you expect those?

Is are those expected to be on a delivery schedule like the 12000 I think the 12000 more split between.

<unk> 22, and <unk> 22.

Is that sort of still a good rough guideline and then on the 800 kind of roughly when do you expect those.

Yeah.

Speaker 3: Yeah, so the point you're making on the 1800 bitmain or are you talking about, sorry, which order are you talking about specifically?

So the point, you're making on the <unk> hundred.

Or are you talking about sorry, which would are you talking about specifically.

Yes, the 1800 between ordered its bottom of page one of the press release.

Speaker 9: Yeah, the 1800-bit main order that's bottom of page one on the press release.

That one is the <unk> and <unk> of next year.

Okay, that's not part of the market purchases that we didn't just now that's in addition to those 2500.

Speaker 6: That's not part of the market purchases that we did just now, that's in addition to those.

Speaker 10: In addition, OK. And is the 12,000-bit main, are those still sort of thought to be 2Q, 3Q of 22? Yes.

In addition, okay.

Is the 12000, Maine are those still sort of thought to be two Q3 Q of 'twenty two.

Yes.

And thats outside of the current purchases that we just did.

Got it.

Speaker 9: Got it. And the 3,000, the oral agreement that you're close to, when do you think that would be finalized?

The 3000, the oral agreement that you are close to when do you think that would be finalized.

Speaker 6: I mean it's still I don't want to commit to this publicly let's let's just say hopefully in the next few you know days We'll make it well aka that if it happens, yeah Got it

I mean, it's still I don't want to commit to that.

Such as.

Hopefully in the next two days.

Will it get well AK that perhaps yeah.

Got it got it.

Maybe just lastly.

Minerva.

Is there a city in China, where the power was out there in the other question I have kind of been asked is just is Minerva manufacturing.

Speaker 9: Is there a city in China where the power was out there? And the other question I've kind of been asked is just, is Minerva manufacturing?

All of those miners or are they sourcing them from another source.

Speaker 9: all those miners, or are they sourcing them from another?

So I think it's been pretty well publicized about the power curtailments, but I think I think I, we're not going to comment beyond that and then I can I can tell you that the.

Speaker 5: So I think it's been pretty well publicized about the power curtailments, but I think we're not gonna come out beyond that. And then I can tell you that the miners that we receive are.

The minor that we receive are.

Speaker 5: were put together and assembled in a facility that had been used to assemble other miners. So it's not a, you know, a first-time experience for Minerva. But they are, you know, the test miners that we received, you know, we had them obviously taken apart and evaluated with favorable results. And, you know, these are labeled.

Were put together are assembled in a facility that had been used to assemble.

Other minor so it's not a.

First time experience for for Minerva.

But they are the tests miners that we received we had them obviously taken apart and evaluated.

With favorable results and.

These are these are labeled.

Minerva miners and are not similar to any other miner in the market.

Speaker 5: Minerva miners and are not similar to any other miner on the market.

Got it okay. Thanks.

Thanks, guys.

Sure no problem.

Thank you. Our next question comes from Chris Butler of D. A Davidson your line is open.

Speaker 1: Thank you. Our next question comes from Chris Brindler of BA Davidson. Your line is open.

Hi, Thanks, Good afternoon question, Congratulations Greg and team on your first quarter out of the gate.

Speaker 6: Hi, thanks. Good afternoon. Thanks for the question. Congratulations, Greg and team, on your first quarter out of the gate. I just wanted to ask on the power plants, the Panther Creek, how much of the non-recurring maintenance costs fell into this quarter? And I imagine that was not a high number, but is there an expectation for what that would be in the fourth quarter? Yeah.

I wanted to ask on the phone.

On the power plants the paas.

Panther Creek, how much of the nonrecurring maintenance costs fell into this quarter and I imagine that was not a high number but is there a potential.

That was in the fourth quarter.

Yes, it's mostly on the fourth quarter.

Is it rough sizing.

Speaker 8: what we're going to say in the low single digits and millions.

We're going to say.

Low single digits in millions.

Okay great.

Speaker 11: Okay, great. And then on the third facility, the non-binding, can you just remind us like you know what the what the timeline pathway is there and you know sort of steps to get there?

And then on the third facility. The non binding can you just remind us like what the what the timeline pathway is there sort of steps to get there.

Yes, so I think the important thing to note I would expect to have definitive agreements in the first half of 2022, the ownership structure of that facility is.

Speaker 5: Yeah, so I think the important thing to note, we, I would expect to have definitive agreements in the first half of 2022. The ownership structure of that facility is a little more complicated, so it takes a little longer. But I think it's as like we pointed out, all of the equipment needed to modify that plant or a similar plant has already been ordered. And so we can, we can have a very fast turnaround from, you know, from the.

A little more complicated so it takes a little longer.

I think it is as we pointed out all of the equipment needed to modify that plant or similar plant has already been ordered.

And so we can have a very fast turnaround from.

From the.

Definitive documents stage to turning it into a data center and Panther Creek It was.

Speaker 5: definitive document stage to turning it into a data center. Like in Panther Creek it was a couple of months for that process and we'd expect a similar answer on the next acquisition.

A couple of months.

For that process and we would expect a similar answer on the next acquisition.

Sounds good okay.

Speaker 11: Sounds good. OK. The real question is, you know, just given all the activity in capital raising and thirst for power, we're seeing just now that Bitcoin mining is becoming very popular. Is there a risk that someone comes in and swoops that away from you or does your waste coal expertise make that unlikely?

Real question is just given all the activity in capital raising and thirst for power were seeing.

Now that bitcoin mining is becoming very popular is there.

There are risks that someone comes in the sweeps that away from you or does your.

Waste coal expertise make that unlikely.

Hey, we're experts in this space.

Speaker 5: You know what, hey, we're experts in this space. I would not, I would not expect someone to come in and...

We're not.

I would not expect someone to come in and.

And taken away from us about hey, it's anything is possible, but I wouldn't say we have.

Speaker 5: and take it away from us, but hey, anything's possible. But I would say we have, you know, we're obviously in dialogue with additional potential targets both in, you know, waste coal reclamation as well as other sources and other geographies.

Obviously in dialogue with.

Additional potential targets, both in wasteful reclamation as well as other sources in other geographies.

So I think there's a buying power assets.

Speaker 5: So I think obviously buying power assets is probably the easy part for us.

Is probably the easy part for us.

And I think Theres no doubt that the acquisition cost for the first couple of facilities is probably viewed as abnormally low at this point.

Speaker 5: And I think there's no doubt that the acquisition cost for the first couple of facilities is probably viewed as abnormally low at this point. But we'll end up... We do want to stay with the vertical integration model. We think that is far superior to being on PPAs for this power. So I think expect us to continue to buy.

But we'll add we'll end up we do want to stay with the vertical integration model. We think that is far superior to being on Ppas for this power.

So I think I expect us to continue to buy.

Okay.

Speaker 5: Okay. I've seen a lot of activity in the space, but I haven't seen anyone else trying to do waste coal. Are you guys aware of anyone else trying to copy this strategy? You know, I'd say a couple of the guys that own these facilities call us with the hopes that we will teach them how to do it, but we haven't been that nice to those guys quite yet. I wouldn't expect to see a lot of competition.

I've seen a lot of activity in the space, but I haven't seen anyone else trying to do ways. Kolar you guys aware of anyone else trying to copy this strategy.

I'd say a couple of the guys that we that own these facilities call us call us with the hopes that we will keep them how to do it.

But we havent, we havent been that nice to those guys quite yet.

I wouldn't expect to see a.

<unk>.

To see a lot of competition.

That would impact us in any material way in high school.

Okay great.

Speaker 11: Okay, great. Last question is just competition in general, increasing most likely going to see a much higher hash rate by this time next year. How do you guys think about the balance between ordering those brand new, super efficient XP's or trying to get hash rate on now when you know it's not going to be as efficient as those new bit mains that you're ordering for next fall?

Last question is just competition in general increasing most likely going to see a much higher attach rate by this time next year. How do you guys think about the balance between ordering those those brand new super efficient xps.

Or trying to get hatch rate on now.

It's not going to be as efficient as those new fitments that you're ordering for next fall.

Yeah, I would say you know what we're hopeful that that over time.

Speaker 5: Yeah, I would say, you know what, we're hopeful that over time, the investors, the marketplace will recognize that this is probably going to be viewed as a power arbitrage business in five years. And then I would be surprised if most of the market, most of the Bitcoin mining market is going to end up being owned by power facilities that have an extremely low cost of power.

Investors in the marketplace will recognize that this is probably going to be viewed as a power arbitrage business in five years, and then I'll be surprised if most of the market most of the big claim mining market is going to end up being owned by a power facilities that have an extremely low cost of power.

With regard to the new generation machines that is coming out and what they cost. That's just simply a math question. So I think we're always motivated by return on invested capital and return on equity.

Speaker 5: With regard to the new generation of machines that is coming out and what they cost, that's just simply a math question. So I think we're always motivated by return on invested capital and return on equity.

Speaker 5: And so it may be that the latest and greatest machine with the highest hash rate comes at a price that makes it less economic, considering our low power cost, than buying a last generation machine.

And so it may be that the latest and greatest machine with the highest cash rate comes at a price that is that makes it less economic considering our low power cost than buying a last generation machine. So.

Speaker 5: So I think we can show you that math, because that's the math that we do whenever we make any purchase. Sounds good.

We can show you that math.

Because thats the math that we do whenever we make any purchase.

Okay, great. Thanks.

Sure.

Thank you.

Our next question comes from Giuliano Bologna.

Speaker 1: Our next question comes from Giuliano Molagna of Compass Point, Illinois.

Conflict point your line is open.

First of all congratulations on completing a successful IPO and raising significant a lot of equity capital.

Speaker 12: First of all, congratulations on completing a successful IPO and raising a significant amount of equity capital.

Speaker 12: I'd like to start off a little bit more on the minor side. It looks like from the press release, as some of the questions before me implied, the 1800S19 order is incremental, and then there's also the order for the

I'd like to start off with more on the minor side.

It looks like from the press release says something.

Questions before me required.

<unk> hundred 19 order is incremental and then there's also the order for the.

Sorry.

Speaker 12: Sorry, for the additional 200 pay-to-hash of that come from the other 2,500 miners that you guys are purchasing in the open market.

Additional talked to underpin.

Is that coming from the other 2500 monitors that you guys are purchasing in the open market.

I put that number so somewhere around you know incremental orders of about four.

Speaker 12: I put that number somewhere around incremental orders of about 452 pay-to-hash per second based on the tariff per second capacity.

452 pet.

First of all I can do is somehow mcarthur sorry can capacity is there any sense of how much potash capacity would come from that oral agreement that you guys talked about we're on discussions you guys are having about two or three of those miners kind of what the average tariff for minor is without potentially not going to be too hung up on that agreement for the 3000 miners I mean, we're.

Speaker 8: sense of how much pay-to-ask capacity would come from that oral agreement that you guys have, that oral discussion that you guys are having about the 3,000 miners have what the average terahertz per miner is for that potential transaction? Not to be too hung up on that agreement for the 3,000 miners. I mean, we're constantly, as we purchase, and you'll see on the subsequent events, the dates and when we purchase these machines.

Constantly as we purchased and Youll see on the subsequent event the dates and when we purchased these machines.

We're actively talking to several folks so I would not just keep focusing on one specific in talking about an oil agreement that's not and we do have that but where we're constantly getting monitoring the market for these and whenever there is dips I mean, it's easier to transact in some people transact on them. So just don't get too much to focus on the three.

Speaker 8: We're actively talking to several folks, so I would not just keep focusing on one specific and talking about an oral agreement. We do have that, but we're constantly monitoring the market for these. Whenever there's dips, it's easier to transact and some people transact on them. Just don't get too much too focused on the 3,000 machines specifically that we just mentioned. We would find a portion or even more of that still in the open market for us.

<unk> thousand machines, specifically that we just mentioned.

We would find a portion of it even more of that still in the open market for us.

Speaker 5: But that's an addition. Yeah. In terms of terahash, most machines that we're buying at this point are going to be 100 terahash machines or greater.

Yeah.

Thank you.

Okay. Cvs are these are most machines that were buying at this point are going to be 100, Tera <unk> machines or greater.

That's great. Thank you Ben.

Speaker 12: That's great. Thank you. Then switch to a slightly different topic. You know, you guys have.

So to a slightly different.

Topic.

You guys have.

Roughly speaking 33 megawatts of the Strongbox is broken and what you are saying about your target for the end of the first quarter. This year to 125 by my math that implies that you guys are rebuilding is at about a rate of about 23 megawatts per quarter is that sustainable through the end of 'twenty two because based on my math that would imply that you guys would get slightly above 300.

Speaker 12: We're up to seeing 33 megawatts of the strongboxes built and what you're saying about your target for the end of the first quarter is to get to 125. By my math, that implies that you guys are going to be building these at about a rate of about 23 megawatts per quarter. Is that sustainable for the end of 22? Because based on my math, that would imply that you guys would get slightly above 300 if you ran at 23 megawatts per month.

She ran at 23 megawatts per month so.

Speaker 12: So I'm just curious from a rollout perspective if that's kind of a good trajectory from a rollout perspective.

So I'm just curious from a rollout perspective, but that's kind of a good trajectory.

A rollout perspective.

Yes, I think we should.

We should probably just do a better job of describing what our capacity is but we have.

Speaker 5: We should probably just do a better job of describing what our capacity is, but we have, if there's a bottleneck on the strong boxes, it's the PDUs, but we

If theres a bottleneck on the strong boxes SVP to use but we've ordered.

Speaker 5: And we have orders for enough to fulfill our capacity that should be, you know, arriving in time.

And we have orders four enough to fulfill our capacity that should be.

Arriving in time.

Speaker 5: to fulfill the expectation of that build-out. But I think apart from that, we have every other component that we need, and it's just a matter of the labor.

To fulfill the expectation of that build out.

And but I think apart from that.

Yes, we have every other component that we need it just a matter of the labor to assemble.

That's great. Thanks, a lot of times the other thing I'd be curious to kind of pick your brain.

Speaker 12: That's great, that makes a lot of sense. The other thing that I'd be curious about to kind of pick your brain about is, you guys have orders for N miners and deployed a total of about 45,000 miners. The disclosure during the IPO process was.

You guys have orders orders for and miners and deployment.

45000 miners.

The disclosure trials during the IPO process was.

Speaker 12: I'm going to butcher exactly which one goes where, but 17,000 miners at one of the power plants and 20,000 at the other, so it puts it at roughly 37,000, so you have about 8,000 incremental miners.

Im not sure exactly which one goes where about 17000 monitors at one of the power plants I mean 20000 together. So it puts it roughly 37000. So you have about 8000 incremental miners.

If I back into kind of the math that wouldn't consume anywhere near the 165 megawatts of power.

Speaker 12: If I – that came to kind of the math, that wouldn't consume anywhere near the, you know, 165 megawatts of power that's, you know, generated at, you know, both Tansyrcrete and Scribgras together. Can you – if there were delays –

Panther Great progress together can you if there were delays in acquiring a third Powerpoint could you deploy the 45000 miners are to existing power plants, because you should have enough power generation capacity to actually power of those monitors I'm curious if you could retool that and of course more miners onto those two powerpoints.

Speaker 12: in acquiring a third power plant, could you deploy the 45,000 liners at the two existing power plants?

Speaker 12: you should have enough power generation capacity to actually power those miners. I'm curious if you could retool that and push more miners onto those two power plants.

Yes, we can.

That's great I appreciate it I'll jump back in the queue. Thanks for answering my questions sure.

Speaker 12: That's great. I appreciate that. I'll jump back in the queue. Thanks for answering my questions. Sure.

Thank you.

Speaker 1: Thank you. Again, if you'd like to ask a question, please press star then 1. Our next question comes from Jacob Roberts of Tudor Pickering Holt. Your line is open. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

Like to ask a question. Please press Star then one our next question comes from Jacob Robyn Pickering Holt Your line is open.

Afternoon, guys.

So I was just I was wondering if you could maybe walk us through the major decision factors on the acquisition of the facilities and really what I'm trying to understand what might make something of a gold standard and maybe even the range of prices that you're seeing in the market.

A moment.

Yes.

Speaker 5: Yeah, that's a great question, sort of an unexpected layup for us to answer. Number one, what we're doing with these plants that we own.

It's a great question.

Unexpected lay out for us.

The answer is like number one like what we're doing these plants that we have that we own.

Making environment cleaner and better in the regions that we where we operate so we're cleaning up legacy problem of that's a result of more than 100 years of coal mining.

Speaker 5: make the environment cleaner and better in the regions where we operate. So, we're cleaning up a legacy problem that's a result of more than 100 years of coal mining. That's a benefit. Because the byproduct of this activity is power in addition to beneficial use ash.

That's a benefit because we are the byproduct of this activity.

Is power in addition to beneficial use ash our generation cost is an industry low for bitcoin minor. So I think today our generation cost is like around was $118 a megawatt.

Speaker 5: our generation cost is an industry low for Bitcoin miners. So I think today our generation cost is around $1.18 a megawatt. You probably know that's pretty close to a third of what the market's paying. And I think going back to the question around global hash rate increasing.

You probably know that's probably pretty close to a third of what the market's paying.

And I think going back to the question around global hash rate increasing.

Speaker 5: the power costs are going to become even more of a focus.

Power costs are going to become.

Even more of a focus for the industry as it get as margins erode with increasing cash rate.

Speaker 5: for the industry as margins erode with increasing hash rate. So for us, the gold standard is low acquisition costs.

So for US the gold standard is low acquisition cost.

Coupled with a cheap generation cost.

Speaker 5: coupled with a cheap generation cost, when that's sort of the holy grail. So normally, if you want to have a very low cost to generate power, you're going to pay a dear price to acquire that asset. But waste coal, because it's really a waste coal reclamation, power is a byproduct, and it's a tough business to run.

And that's sort of the Holy Grail. So normally if you want to have a.

Very low cautionary power youre going to pay a dear price to acquire that asset, but waste coal because it's really a by wesco reclamation power as a byproduct and it's a tough business to run.

And we're doing something other than really generating power that's the.

Speaker 5: and we're doing something other than merely generating power, that's the.

The big advantage that we have and why we think we have a very attractive set of assets.

Speaker 5: the big advantage that we have and why we think we have a very attractive set of assets. The other thing to point out...

The other the other thing to point out.

Is.

We don't really care about the broader implications for the power market and I think as you know.

Speaker 5: We don't really care about the broader implications of the power market, and I think, as you know, in PJM, natural gas dictates the price of power, and so, hey, it's going to be a cold, tough winter.

<unk> natural gas dictates the price of power and so it's going to be a cold tough winter.

Speaker 5: in the Northeast probably, power prices are expected to be high, and if you're running a gas plant, your feedstock is also going to be expensive, so your margins might not be really any better.

In the northeast probably power prices are expected to be high and if youre running a gas plant. Your feedstock is also going to be expensive. So your margins might not be really any better.

But because our feedstock is nat gas our costs are not our feedstock is mostly free or totally related to the cost of excavation and trucking. So we might be hit in a small way for incremental trucking or activation cost related to diesel, but we're not going to see exponentially higher costs.

Speaker 5: But because our feedstock is not gas, our costs are not, our feedstock is mostly free or it's really related to the cost of excavation and trucking, so we might be hit in a small way for incremental trucking or excavation costs related to diesel, but we're not going to see exponentially higher costs because our feedstock is not related to the price of natural gas. And most markets don't have that benefit.

Because our feedstock is not related to the price of natural gas in most markets don't have that benefit.

As far as Bitcoin mining goes if you're just just to further highlight that the optionality around owning your own power assets.

Speaker 5: As far as Bitcoin mining goes, just to further highlight the optionality around owning your own power assets, if your power is on a PPA,

If your power is on a PPA.

Speaker 5: And let's say you've agreed to buy 100 megawatts of power from one of the big...

So you've agreed to buy 100 megawatts of power from.

One of the Big <unk>.

Producers.

If youre miners are delayed and they don't show up for some reason you are still on the hook to pay for your 100 megawatts of power.

Speaker 5: If your miners are delayed and they don't show up for some reason, you are still on the hook to pay for your 100 megawatts of power.

Speaker 5: This is not like a pay-as-you-go outlet for these massive industrial-scale PPAs.

This is not like a pay as you go.

Outlet for these massive industrial scale ppas.

Well, if if and when our miners are delayed we don't suffer and that way, we can really say hey, we will still sell power into the grid and power prices in PJM today are really attractive.

Speaker 5: If and when our miners are delayed, we don't suffer in that way. We can merely say, hey, we'll still sell power into the grid, and power prices in PGM today are really attractive. I think we've been averaging more than $50 a megawatt hour, not including the RECs, for our power in recent times.

And I think I think we've been averaging more than $50 a megawatt hour not including the Rex for our power in recent times.

Speaker 5: Obviously, mining for Bitcoin is a much better proposition than that, but these assets do have value and there is a tremendous amount of optionality around owning your own power asset because if power prices go through the roof, we can shut the data center down and deliver that power to the grid at that high price. And I think there will come a time when that happens more and more. Does that answer your question?

Obviously mining for bitcoin as a much better proposition than that but these assets do have value and there is a tremendous amount of optionality around owning your own power asset because if power prices go through the roof. We can shut the data center down and deliver that power to the grid at that high price.

And I think there will come a time when that happens more and more.

Does that answer your question.

No that's really helpful. I appreciate it maybe as a quick follow on there.

Speaker 13: No, yeah, that's really helpful. I appreciate it. Maybe as a quick follow on there, in terms of the cost, is there a material difference in BTU content across the coal sources that could drive a variance over a given quarter or over a given year, so to speak?

In terms of the cost is there a material difference in btu content across the coal sources that could drive.

Over a given quarter or over a given year so to speak.

So I think you have to think about like the complication of running one of these utilities is that.

Speaker 5: So I think you have to think about the complication of running one of these facilities.

Speaker 5: is that, you know, we'll be pulling away.

We will be pulling waste from as many as five different locations at any one time and that waste is kind of sorted by quality and btu content moisture content and when it's when it's put on the.

Speaker 5: from as many as five different locations at any one time. And that waste is sorted by quality and BTU content, moisture content. And so it's organized both at these sites that we're reclaiming as well as on-site at the plants to make sure that what's fed into the boiler.

So it's kind of organized and are both at the sites that we're reclaiming as well as onsite at the plants to make sure that what's fed into the boiler is a mix that will.

Speaker 5: is a mix that will effectively be reclaimed and burned.

Actively be reclaimed and burns.

And as well as give us an ash that is usable.

Speaker 5: as well as give us an ash that is usable.

Speaker 5: So this is not a situation where you can just sort of show up, pick up this waste coal, and truck it to the site, put it in the fluidized bed, and hope for the best. You have to actually, if there is a process to it, that's important.

So it's a this is not a situation where you can just sort of.

So up pick up this this waste.

Waste coal and truck it to the site put it in the fluidized bed and hope for the best you have to actually if there is a.

There is a process to it that's important.

Speaker 13: Okay, perfect, and I guess I'll be the cold question guy today. In terms of the waste coal tax credit, I believe there is a state limit in Pennsylvania for all operators participating in the scheme, and then there's some additional limits on the percentage that can go to a single facility.

Okay, perfect and I guess that'll be the coal question Guy today.

Of the waste coal tax credit I believe there is a limit in Pennsylvania for all operators participating in the scheme and then theres. Some additional limits on the percentage I can go to a single facility.

Speaker 13: Can you maybe frame where the overall industry is relative to that threshold and is it something we should be thinking about?

Can you maybe frame where the overall industry is relative to that threshold and is it something we should be thinking about in the medium term.

Okay.

Speaker 5: Hey, we know exactly what you're talking about, but I don't want to give you a wrong number on a recorded earnings call, so why don't we follow up with you directly? But I think that's for the best. We don't expect any...

Hey, why don't we why don't we are not.

We know exactly you are talking about but if we get I want to give you a wrong number on our recorded earnings call.

I don't we follow up with you directly but I think.

That's the best we don't expect any.

Speaker 5: issues or challenges to that waste coal tax credit. I can answer in that way, but we'll give you specifics around what the industry limit is and what the plant limit is directly to you.

Issues or challenges to that waste coal tax code I can answer in that way, but it will give you specifics around the the.

What the industry limit is and what the plant limit is direct with you.

Got it understood and appreciate the time guys sure.

Okay.

Speaker 1: Thank you. Our next question comes from Lucas Pipes of B Raleigh. Security line is open.

Thank you. Our next question comes from Lucas pipes of B Riley Securities. Your line is open.

Thank you very much for taking my follow up question.

Speaker 7: Thank you very much for taking my follow-up question. The 470 peta hash, that's, well, first congrats to ramp up to that level, that's significant. And I wondered if you have a good indication here at this point on what the on-time is of that capacity. Obviously, the industry is currently guiding to capacity, but currently less so.

470 <unk>.

So first congrats to ramp up to that level that that's significant.

I'm wondering if you are a good indication here at this point on what the on time.

<unk>.

Capacity.

The industry is currently guiding to capacity, but currently less so.

Speaker 7: to actually coin production. So I wondered if you could maybe provide some comments on how that capacity might convert into coin production in December and into January . Thank you.

<unk>.

Actually coined production so I'm wondering if you could maybe.

Provide some comments on too.

On how thats.

How that capacity might convert into quite production in in December.

And into January.

Yeah sure. That's a great question and obviously, hey, we have we have we have specifics by the day by the minute on.

Speaker 5: Yeah, sure, that's a great question. And obviously, hey, we have statistics by the day, by the minute on what our hash rates are, practically by minor. But I think we're not quite ready to share those yet. So I think expect a detailed uptime performance, probably by brand, by location, for the first quarter of next year.

I don't want a hash rates are practically by minor, but I think we're not quite ready to to to share those yet, but I think expect a detailed.

Uptime.

<unk> probably by brand by location.

For the first quarter next year. So we agree that these metrics are important we fully intend to do to have a an uptime, that's pretty close to capacity.

Speaker 5: So we agree that these metrics are important. We fully intend to have an uptime that's pretty close to capacity. But at this point, I think we're not ready to share that.

But at this point I think we're not.

We're not we're not ready to share that data yet.

I will tell you that the machines that when they arrive they have been all plug in within hours.

Speaker 6: I'll tell you that the machines that when they arrive, they've been all plugged in within hours and we're very keen on whenever they arrive, we want to plug them in. So we don't have any machines that we have capacity for that are not hashing as we need. But we will be very detailed in how we show this performance going forward.

And we're very keen on whenever they arrive we want and we want to plug them in and so we don't have any any machines that we have capacity for they're not hashing as we need but we will be very detailed and as we.

So this performance going forward.

Got it got it. Thank you. Thank you for that and then.

Sorry to go back to the Minerva question, but.

Speaker 7: Sorry to go back to the Minerva question, but if I heard you right, you commented on potential relocation or expansion of manufacturing capacity at the supplier.

If I heard you right you commented on potential relocation.

Or expansion of manufacturing capacity at the supplier.

Is this north America and if so.

Speaker 7: If it's North America, and if so, you mentioned they have the components, they really need to just find the facility to assemble them.

Mentioned the half the components, they really need to just find the facility two to assemble them.

<unk>.

Kind of.

Speaker 7: Is North America a good home, and if so, can all the components reach North America in a time of supply chain issues? I understand it's, again, a supplier question, but would really appreciate your comments on that.

Is north America, a good home and if so can all the components reach North America in a time of supply chain issues.

Understand it it's again a supplier question, but would really appreciate your comments on that.

Speaker 5: Yeah, you know, I think I don't want to comment further on Minerva. If I think I can say, hey, we're actively working with them. We know that they're researching, you know, facilities around the world.

Yes, I think I don't want to comment further on the neuroma.

I think I can say hey, we are actively working with them, we know that they are researching.

Facilities around the world.

<unk>.

That do include North American so I'll say that but why don't we hopefully we will have hopefully minerva will have material updates that will give you.

Speaker 5: that do include North America, so I'll say that. But why don't we, you know, hopefully we'll have, hopefully Minerva will have material updates.

Speaker 5: that will give us and others more comfort in the coming weeks.

Austin, others more comfort.

The coming weeks.

That's a.

Speaker 14: That's a hope. But I think it's better for them to respond to that type of question.

That's our hope, but I think it's better for them to respond to that type of question.

And for Us.

Got it.

Speaker 7: got it. Okay, well, really appreciate you taking the follow-up question and again, best of luck.

Okay, well I appreciate you taking the follow up question again best of luck.

Thanks, so much thank you.

Thank you I'm showing no further questions at this time I'd like to turn the call back over to Mr. Greg There for any closing remarks.

Speaker 1: Thank you. I'm sure no further questions at this time. I want to turn the call back over to Mr. Greg Beard for any closing remarks.

Thank you operator, I really want to think.

Speaker 5: Thank you, operator. I really want to thank the investors, the analysts, for doing the work to understand our story. We feel like we have made a tremendous amount of progress this year, but this is still a story for the coming quarters. We recognize that execution on our plan is still yet to be proven, but we're focused on it every day and plan on delivering on the expectation. We look forward to talking to you.

The investors the analysts for doing the work to understand our story.

We feel like we have made a tremendous amount of progress this year.

But this is still a story for the coming quarters.

And we recognize that execution on our plan, it's still yet to be proven but we're focused on it every day and plan on delivering on the expectations. So we look forward to talking to you all very soon.

Have a great night.

Speaker 15: Have a great night.

Thank you ladies and gentlemen, this does conclude today's conference. Thank you all for participating you may now disconnect have a great day.

Speaker 2: Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.

Okay.

Okay.

[music].

[music].

Speaker 2: I.

[music].

Good afternoon, and welcome to the Franco they'll get a mining conference call for the third quarter ending September 32021. My name is Alan I'll be your operator this afternoon.

Speaker 1: Good afternoon and welcome to the Stronghold Digital Mining Conference Call for the third quarter ending September 30, 2021. My name is Dahlia and I'll be your operator this afternoon.

Speaker 1: Before this call, Stronghold issued its results for the third quarter 2021 in a press release, which is available in the investor section of the company's website at www.strongholdingmining.com. You can find the link to the investor section at the top of the homepage. Joining us on today's call are Stronghold co-chairman and CEO , Greg Beard, CFO , Ricardo Lareda, and company's outside investor relations advisor, Jeff Graham, with Gateway Investment Relations.

Before this call chocolate into its results for the third quarter 2021 and a press release, which is available and then that just got you on the Companys website at Www Dot strong holiday mining dotcom.

The link to the Investor section at the top of <unk>.

Joining us on today's call are strong hold co chairman it'd be a great Baird CFO, Ricardo Merida and companies outside Investor Relations adviser, Jeff Grant with.

Gateway Investor Relations.

In their remarks, we will open the call for questions and now I'd like to turn the call over to the graph.

Speaker 1: Following their remarks, we will open the call for questions. And now I'd like to turn the call over to Mr. Gramps for some inductory comments.

That's very common.

Thank you before management begins their formal remarks, our discussion may contain forward looking statements within the meaning of the federal securities laws statements that are not historical facts, including state and.

Speaker 3: Thank you. Before management begins their formal remarks, our discussion may contain forward-looking statements within the meaning of the federal securities laws.

Speaker 3: Statements that are not historical facts including statements about strongholds, beliefs, expectations and future performance are forward-looking statements.

It's about strongholds beliefs expectations and future performance are forward looking statements forward looking statements can be identified by use of the words such as anticipate intend believe estimate plan seek project expect may will would could or should the negative of these terms or other comparable to.

Speaker 3: Forward-looking statements can be identified by use of the words such as anticipate, intend, believe, estimate, plan, seek, project, expect, may, will, would, could or should, the negative of these terms or other comparable terminology. Examples of forward-looking statements include statements relating to our expectations regarding future growth, future revenue and earnings increases, EBITDA margins.

Monology examples of forward looking statements include statements relating to our expectations regarding future growth future revenue and earnings increases EBITDA margins cash flow projections and annual growth rates, our growth plans and opportunities, including our strategies for future acquisitions and power potential minor targets estimated returns on future acquisitions.

Speaker 3: cash flow projections and annual growth rates, our growth plans and opportunities, including our strategies for future acquisitions and power, potential minor targets, estimated returns on future acquisitions, and our assumptions underlying.

And our assumptions underlying these expectations.

Speaker 3: Forward-looking statements in this discussion are not a guarantee of performance, and you should not place them to reliance on such statements. We have based these forward-looking statements largely on our expectations and projections about future events.

Forward looking statements in this discussion are not a guarantee of performance and you should not place undue reliance on such statements. We have based these forward looking statements largely on our expectations and projections about future events forward looking statements are subject to many uncertainties and other variables circumstances, including but not limited to risks and uncertainties identified under the caption risk factors in our S. One.

Speaker 3: Forward-looking statements are subject to many uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors in our S-1 and Stronghold's quarterly reports on Form 10-Q . These factors could cause our actual results and experience to differ materially from any forward-looking statement.

<unk> and stronghold quarterly reports on Form 10-Q. These factors could cause our actual results and experience to differ materially from any forward looking statement. Given these risks and uncertainties that you are cautioned not to place undue reliance on these forward looking statements. The forward looking statements included in this presentation are made only as of the date hereof, we do not undertake and specifically just.

Speaker 3: Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements.

Speaker 3: The forward-looking statements included in this presentation are made only as of the date hereof. We do not undertake and specifically disclaim any obligation to update any such statements or to publicly announce the results of any revisions to any of these statements to reflect future updates or developments, except as specifically stated or to the extent required by law. You may get Stronghold Securities and Exchange Commission filings for free by visiting the SEC website at www.sec.gov.

Claim any obligation to update any such statements or to publicly announce the results of any revisions to any of these statements to reflect future updates or developments, except as specifically stated or to the extent required by law you may get stronghold Securities and Exchange Commission filings for free by visiting the SEC website at Www Dot S E C.

Gov.

More strongholds Investor Relations website at IR Dot stronghold digital mining dot com I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of strongholds website now I would like to turnover the call to strongholds co chairman and CEO, Greg Bier. Sir. Please proceed.

Speaker 3: or Strongholds Investor Relations website at ir.strongholddigitalmining.com. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of Strongholds website. Now I would like to turn over the call to Strongholds Co-Chairman and CEO , Greg Beard. Sir, please proceed.

Thank you Jeff Good evening, everyone and thank you for joining us on our inaugural earnings call. Following our successful IPO in October.

Speaker 4: Thank you, Jeff. Good evening, everyone, and thank you for joining us on our inaugural earnings call following our successful IPO in October . I would like to welcome our new shareholders and analysts. We appreciate your support.

I'd like to welcome our new shareholders and analysts we appreciate your support.

Speaker 4: I'm going to quickly walk through an update on our operations and recent activity. After that, because this is our first call since going public, I want to provide some background and highlights about our business, and then I'll turn it over to Ricardo to discuss our results in more detail before opening up for Q&A.

I'm going to quickly walk through an update on our operations and recent activity after that because this is our first call since going public I want to provide some background and highlights about our business and then I'll turn it over to Ricardo to discuss our results in more detail before opening up for Q&A.

Speaker 4: In the last few months, we have made significant progress executing our strategy of being a low-cost, vertically-integrated, environmentally-beneficial Bitcoin miner. On October 22nd, we closed our IPO, generating net proceeds of roughly $132 million, and began trading on the NASDAQ.

In the last few months, we have made significant progress executing our strategy of being a low cost vertically integrated environmentally beneficial big quite minor.

Cobra twenty-second.

We closed our IPO generating net proceeds of roughly $132 million and began trading on the NASDAQ.

And we are deploying the capital we have raised an attractive investment.

Speaker 4: and we are deploying the capital we have raised in attractive investments.

Speaker 4: Despite global supply chain difficulties that are impacting the Bitcoin mining space as well as numerous other industries, we are actively receiving commercial quantities of miners under our agreement with Minerva and Northern Data. And we are happy with the performance of the units we've received to date. We have already received nearly 4,000 miners associated with the Northern Data JB, and we're scaling the operation to fully implement the JB.

Despite global supply chain difficulties are impacting the bitcoin mining space as well as numerous other industries. We are actively receiving commercial quantities of miners.

Our agreements with Minerva and northern data and we are happy with the performance of the units we have received to date.

We have already received nearly 4000 miners associated with the northern day to J P and we're scaling the operation to fully implement the JV.

Speaker 4: With respect to Minerva, we have 240 MV7 miners plugged in currently and expect to have over 500 plugged in by the end of this

With respect to Minerva.

We have 240 at least seven minor plugged in currently and expect to have over 500 plugged in by the end of this week. We had expected all 15000 in Minerva miners to be received later this year or early next year and this is still the case.

Speaker 14: But we had expected all 15,000 Minerva miners to be received late this year or early next year. And this is still the case.

Speaker 14: However, to mitigate the potential delays in minor delivery process.

However to mitigate any potential delays in minor deliveries broadly we have the gun by miners in the open market with over 2500 purchased to date with the hash rate capacity of over 200, Petter has to be delivered and installed before year end, we were able to procure these mine.

Speaker 14: we have begun buying miners in the open market with over 2,500 purchased to date with the hash rate capacity of over 200 petahash to be delivered and installed before year end. We were able to procure these miners at attractive terms due to our extensive industry relationship.

That attractive terms due to our extensive industry relationships.

These purchases will allow us to take advantage of the current market opportunity and they demonstrate our ability to move quickly and creatively.

Speaker 14: These purchases will allow us to take advantage of the current market opportunity, and they demonstrate our ability to move quickly and creatively. And they also demonstrate the benefit of our owning our own power generation and infrastructure. Power and minor ready outlets are not constraints for us.

Also demonstrate the benefits of our owning our own power generation and infrastructure power and minor ready outlets are not constraints for us.

In addition to the miners purchased for immediate delivery, we entered into two agreements with <unk> to purchase 12000 S 19, J pro miners and 1800.

Speaker 4: In addition to the miners purchased for immediate delivery, we entered into two agreements with Bitmain to purchase 12,000 S19J Pro miners and 1,800 S19XP miners. To date, we have installed or purchased a total of approximately 45,000 miners with hash rate capacity of approximately 4.4 FTP.

F 19 X P Myers.

We have installed a purchased a total of approximately 45000 miners with hash rate capacity of approximately 4.4 at the hash and we believe we are on track to hit our goal of ending 2022 with approximately 80000 miners and total cash rate capacity.

Speaker 14: and we believe we are on track to hit our goal of ending 2022 with approximately 80,000 miners and total hash rate capacity of at least 8x a hash.

Leased eight excess cash we are also continuing to make progress on expanding our power generation capacity earlier. This month, we closed on the acquisition of our second reclamation and power facility Panther Creek, which roughly doubled our power generation capacity with an additional 80 megawatts.

Speaker 14: we are also continuing to make progress on expanding our power generation capacity. Earlier this month, we closed on the acquisition of our second reclamation and power facility, Panther Creek, which roughly doubled our power generation capacity with an additional 80 megawatts.

We plan to begin I'm talking minor at the facility in December so under two months from close to minor installation a lot went into making this possible.

Speaker 14: we planned to begin installing minors at the facility in December , so under two months from close to minor installation. A lot went into making this possible. First, we began ordering the equipment to develop our data center before we executed the definitive agreement.

We began ordering the equipment to develop our data center before we executed the definitive agreements, we completed substantial reliability upgrades between sign and close which we expect will allow the plant to run at a full load on a constant basis going forward.

Speaker 14: We completed substantial reliability upgrades between sign and close, which we expect will allow the plant to run at a full load on a constant basis going forward.

Speaker 14: And also before closing, we began the plant modifications and data center build out to allow us to deliver power directly to our money.

And also before closing we began the plant modifications and data center build out to allow us to deliver power directly to our miners. We have developed an expertise in retrofitting power generation assets for bitcoin mining and the current project that Panther Creek highlights our ability to move fast and execute.

Speaker 14: We have developed an expertise in retrofitting power generation assets for Bitcoin mining. And the current project at Panther Creek highlights our ability to move fast and.

Beyond Panther Creek, we are actively evaluating opportunities to further increase our power generation capacity, including another reclamation and power facility in Pennsylvania that we have under non binding LOI to acquire.

Speaker 14: Beyond Panther Creek, we are actively evaluating opportunities to further increase our power generation capacity, including another reclamation and power facility in Pennsylvania that we have under non-binding LOI to acquire.

Speaker 14: We have also purchased most of the equipment needed to modify our next acquired power asset for Bitcoin mining so that we can execute as fast or faster than we did for Panther Creek.

We have also purchased most of the equipment needed to modify our next acquired power asset for bitcoin mining. So that we can execute as fast or faster than we did for Panther Creek.

We also.

We have also already ordered equipment beyond what we need for the first three assets.

Speaker 14: And we have also already ordered equipment beyond what we need for the first three assets.

Speaker 14: In addition to minor purchases and power generation asset acquisitions, we have made other important strides since the beginning of the third quarter in building out our business. We have manufactured 33 megawatts of our proprietary strong box modular data centers and we expect to have completed approximately 125 megawatts by the end of the first quarter 2022.

In addition to might've purchases in power generation asset acquisitions, we have made other important strides since the beginning of the third quarter and in building out our business. We have manufactured 33 megawatts of our proprietary strongbox modular data centers and we expect to have completed approximately 125 megawatts by the end.

The first quarter of 2022.

Speaker 14: We hired 39 employees since the beginning of the third quarter to support our data center operations, reclamation operations, and corporate efforts. In addition to 39 employees associated with the Panther Creek acquisition.

We hired 39 employees since the beginning of the third quarter to support our data center operations reclamation operations and corporate efforts. In addition to 39 employees associated with the Panther Creek acquisition.

Speaker 14: We also signed an office lease in Pittsburgh that will support up to 25 people and strengthens our presence in Pennsylvania. We are still in a build-out phase.

We also signed an office lease in Pittsburgh that will support up to 25 people and strengthens our presence in Pennsylvania, we are still in a build out phase but.

Speaker 14: but we believe we have established a strong foundation and are executing on our ambitious growth plans.

But we believe we have established a strong foundation and are executing on our ambitious growth plans.

As I alluded to because this is our first earnings call since going public I'd like to give an overview of our business for those of you may not be as familiar.

Speaker 14: this is our first earnings call since going public, I'd like to give an overview of our business for those of you who may not be as familiar.

Stronghold is a bitcoin mining company that we believe is differentiated from its peers.

Speaker 14: Stronghold is a Bitcoin mining company that we believe is differentiated from its peers for four critically important reasons.

For critically important reasons first and most importantly is that we are vertically integrated and environmentally beneficial we play an active role in cleaning up one of the most environmentally neglected regions of the country by Remediated.

Speaker 14: First and most importantly is that we are vertically integrated and environmentally beneficial. We play an active role in cleaning up one of the most environmentally neglected regions of the country by remediating some of the nearly 1,000 toxic coal refuse piles throughout Pennsylvania to fuel our power generation assets.

Some of the nearly 1000 toxic coal refuse piles throughout Pennsylvania Gpus.

Our power generation assets.

Not only cleans up the environment, but it also provides us with among the lowest net power costs in the industry.

Speaker 14: This not only cleans up the environment, but it also provides us with among the lowest net power costs in the industry. Additionally, by owning our own power generation, we believe we will position ourselves well for market volatility and retain operational control to take advantage of arbitrage opportunities on the power grid. I'll cover these points in greater detail in a few minutes.

Additionally, by owning our own power generation, we believe we will position ourselves well for market volatility and retain operational control to take advantage of arbitrage opportunities are on the power grid.

For these points in greater detail in a few minutes.

Speaker 14: The second differentiating point is our aggressive grub track record and expansion.

Second differentiating point is our aggressive rep track record and expansion plan.

Speaker 14: Since stronghold formation in March of this year, we've acquired two reclamation and power facilities and purchased approximately 4.4 exahash of miners. We successfully completed two private placements, two equipment financings, and an IPO to support our growth. Our successes to date provide us with confidence to achieve our target to end 2022 with hash rate capacity of eight exahash of miners.

Stronghold formation in March of this year, we've acquired two reclamation and power facilities and purchased approximately 4.4 Axa Hashman miners, we successfully completed two private placements.

Equipment financings.

And an IPO to support our growth our successes to date provide us with confidence to achieve our target to end 2022 with hash rate capacity of eight axa hash of mining.

Speaker 14: One thing that gives us confidence in our growth strategy is our third differentiating point, our accomplishment.

One thing that gives us confidence in our growth strategy is our third differentiating point are accomplished management team. We've assembled a talented team with an established track record of creating value for investors and operating complex assets.

Speaker 14: We've assembled a talented team with an established track record of creating value for investors and operating complex assets.

Speaker 14: I was the head of natural resources at private equity at Apollo for 10 years and on the firm's management committee. Before that, I was a managing director at the private equity energy-focused firm called Riverstone, and I started my career at Goldman Sachs.

He was the head of natural resources private equity and Apollo for 10 years and on the permits management Committee before that I was the managing director at the private.

Equity energy focused firm called Riverstone.

My career at Goldman Sachs Bill Spence My co chairman.

Speaker 14: is a pioneer in waste coal reclamation with 40 years of experience in the industry. Riccardo Laude, our CFO , worked with me at Apollo for many years and was then head of financial risk management at Anheuser-Busch Invest.

As a pioneer and wastewater reclamation with 40 years of experience in the industry, where card a lot of day our CFO.

With me at Apollo for many years.

And it was then had a financial risk management and Anheuser Busch Inbev.

Speaker 14: team we've assembled is highly capable, with significant experience in engineering, power operations, and engineering.

The team we've assembled a highly capable with significant experience in engineering how.

Our operations and investing in financial analysis, which we think is critical for a successful vertically integrated quite minor we aim to have one of the deepest most analytical teams and the bitcoin mining space and continue to attract top talent. Additionally, this team is highly alert.

Speaker 14: and investing in financial analysis, which we think is critical for a successful vertically integrated Bitcoin miner. We aim to have one of the deepest, most analytical teams in the Bitcoin mining space and continue to attract top talent. Additionally, this team is highly aligned with shareholders as our insider ownership exceeds 50%.

The shareholders as our insider ownership exceeds 50%.

Speaker 14: Finally, we believe that the support that we enjoy from the financial markets is a key differentiating factor. We were the first Bitcoin miner to go public through a traditional underwritten IPO. And I'm thrilled that some of the world's largest institutional investors have decided to join us on our journey.

Finally, we believe that the support that we enjoy from the financial markets is a key differentiating factor we were the first bitcoin minor to go public right traditional underwritten IPO.

I'm thrilled that some of the world's largest institutional investors have decided to join us on our journey.

Speaker 14: We believe that this critical access to capital separates us from much of the industry and supports our aggressive growth plan.

We believe that this critical access to capital separates us from much of the industry and supports our aggressive growth plans.

Now I would like to take a few minutes expanding the role that we play in improving our environment. Some of our peers utilize renewable power, which we believe is a positive step but it is more a passive approach of simply not doing more harm at best at stronghold, we aim to be better than.

Speaker 14: Now I would like to take a few minutes to expand on the role that we play in improving our environment.

Speaker 14: some of our peers utilize renewable power, which we believe is a positive step.

Speaker 14: but it is more a passive approach of simply not doing more harm at best.

Speaker 14: at Stronghold. We aim to be better than environmentally neutral.

Mentally neutral as our operations actively improve the environment in the areas. We operate our two current reclamation facilities scrub grass and Panther Creek, our coal refuse to energy facilities, both located in Pennsylvania.

Speaker 14: as our operations actively improve the environment in the areas we operate. Our two current reclamation facilities, Scrub Grasp and Panther Creek, are coal refuse to energy facilities, both located in Pennsylvania.

Coal refuse is the toxic waste byproduct created by legacy coal mining operation.

Speaker 14: Coal refuse is the toxic waste by-product created by legacy coal mining operations.

Up until the 19 seventies when coal of mine the high quality coal is used for power and steel and the lower quality coal and other material. The refuse was left an expansive piles across the state really more like mountains. There are hundreds of millions to billions of tons of coal refuse.

Speaker 4: Up until the 1970s, when coal was mined, the high quality coal was used for power and steel, and the lower quality coal and other material, the refuse, was left in expansive piles across the state, really more like mountains. There are hundreds of millions to billions of tons of coal refuse across thousands of acres in Pennsylvania.

Thousands of acres in Pennsylvania.

Speaker 4: The piles represent the largest source of water pollution in the state, and many are literally on fire as we speak, producing toxic emissions that harm the local community.

Piles represent the largest source of water pollution Interstate and many are literally on fire as we speak producing toxic emissions that harm to local communities.

Our operations, we removed the coal refuse and Combusted and our specialized purpose built facilities that use circulating fluidized bed technology.

Speaker 14: Through our operations, we removed the coal refuse and combusted in our specialized purpose-built facilities that use circulating fluidized bed technology. Our process removes nearly all NOx, sulfur dioxide, particulate, and mercury emissions.

Our process for moved nearly.

All Nox sulfur dioxide particulate and Mercury emissions.

With the byproduct being beneficial use ash, which is a certified liming agents and can be used to immediate the land worthy refuse pilot existed.

Speaker 14: with the byproduct being beneficial use ash, which is a certified liming agent and can be used to remediate the land where the refuse piles exist.

Speaker 4: our operations will ultimately transform these toxic piles into usable land once again, allowing ecosystems to return and benefiting the local communities. As a matter of fact, in the third quarter, we removed more than 100,000 tons of toxic coal refuse from our ecosystem.

Our operations, but ultimately transform these toxic piles into useful land once again, allowing ecosystem to return and benefiting the local communities as a matter of fact in the third quarter, we removed more than 100000 tons of toxic coal refuse from our ecosystem.

And replaced it with 65000 tons of beneficial use ash.

Speaker 14: and replace it with 65,000 tons of beneficial use ash to facilitate the remediation of this plant.

Facilitate the remediation of this plant.

Speaker 14: Not only does owning our own power generation assets allow us to improve the environment, but it is also critical to maintaining superior profitability through cycles and provide valuable arbitrage opportunities. When we install Bitcoin miners, we power them through stronghold-owned power.

Not only does owning our own power generation assets allow us to improve the environment.

It is also critical to maintaining superior profitability through cycles and provide valuable arbitrage opportunities when we install a big coin miners, we power them through strong volt owned power assets.

Speaker 14: which gives us operational control and some of the lowest electricity costs in the industry. And electricity is far and away the largest direct cost associated with mining. As investors, we care a lot about costs because we are always thinking about downside protection. While we are bullish about Bitcoin and Bitcoin mining, we appreciate the risk profile and expect significant volatility along the way.

Which gives us operational control and some of the lowest electricity costs in the industry.

Electricity is far and away the largest direct cost associated with mining.

As investors, we care a lot about cost because we are always thinking about downside protection.

While we are bullish about bitcoin and bitcoin mining, we appreciate their risk profile and expect significant volatility along the way.

We also expect that network cash rate will continue to increase.

Speaker 4: But we also expect that network hash rate will continue to increase.

Speaker 14: With our power generation assets, we think that our cost to mine Bitcoin would be under $3,000 per Bitcoin once our operations are scaled, and assuming a network hash rate of 150x a hash.

With our power generation assets, we think that of all our cost of my bitcoin would be under $3000 per bitcoin once our operations, our scaled and assuming a network hash rate.

150 exit cash.

Speaker 5: We believe this is about one-third of the industry average.

We believe this is about one third of the industry average.

Oh, if network hash rate triples, we think our cost would still be less than $10000 per bitcoin, but for many of our peers. We would expect their cost to approach $30000 per bitcoin the impact becomes more and more pronounced as network hash rate increases and prices fluctuate.

Speaker 14: So if network hash rate triples, we think our cost would still be less than $10,000 per Bitcoin. But for many of our peers, we would expect their cost to approach $30,000 per Bitcoin.

Speaker 14: impact becomes more and more pronounced as network hash rate increases and prices fluctuate.

It.

Speaker 4: We built this business to be durable through market volatility and market downturns without giving away upsides, and we believe our vertical integration and resulting low-cost profile gives us a distinct advantage in terms of long-term margin preservation and ability

We built this business to be durable through market volatility and market downturns without giving away upside and when do you believe our vertical integration and resulting low cost profile gives us a distinct advantage in terms of long term margin preservation and ability to acquire miners.

Speaker 4: In addition to facilitating industry-leading costs, vertical integration also gives us the ability to sell power to the grid. While Bitcoin mining is generally the most profitable use of our power, power prices are volatile. So when grid prices are more attractive than mining revenue, we are able to take advantage of the situation and create incremental value for shareholders.

In addition to facilitating industry, leading costs vertical integration also gives us the ability to sell power to the grid, while bitcoin mining is generally the most profitable use of our power power prices are volatile. So when grid prices are more attractive than mining revenue, we are able to take advantage of this.

Situation and create incremental value for shareholders.

Speaker 14: I hope that this provides some valuable background on strongholds and what separates us from most of the rest of the industry.

I hope that this provides us valuable background on stronghold and what separates us from most of the rest of the industry.

Speaker 14: At this point, we'll shift the focus to third quarter results and our outlook for the next several months. To do that, I'll turn the call over to our CFO , Ricardo Aude, before providing my closing remarks.

At this point, while shifting focus to the third quarter results and our outlook for the next several months to do that I'll turn the call over to our CFO Ocado out a day before providing my closing remarks.

Thank you, Greg and good evening, everyone I'll review of our third quarter results relatively briefly keeping in mind, our third quarter numbers do not reflect the significant mine of delivery.

Speaker 6: Thank you, Greg, and good evening, everyone. I will review our third quarter results relatively briefly, keeping in mind our third quarter numbers do not reflect the significant minor deliveries we're actively receiving and expect to receive over the next several months.

You'll be receiving and expect to receive over the next several months.

At the end of the third quarter, we had about 3000 minor viewpoint with little have great capacity of roughly 185.

Speaker 6: At the end of the third quarter, we had about 3,000 miners deployed with a total hash rate capacity of roughly 185 petahertz.

Yes.

Speaker 6: From the end of the quarter through November 29th, we received nearly 3,000 additional miners with total hash rate capacity of approximately 285 petahash, more than doubling our hash rate capacity.

From the end of the quarter through November 29, we received nearly 3000 additional miners with little have great capacity of approximately 285.

More than doubling our hatchery capacity in less than two months.

These minor it includes 140, Minerva and Miami, we expect to have by over 500 by the end of the week.

Speaker 6: These miners include 240 Minerva MD7 miners, and we expect to have over 500 by the end of the week.

Our current miners also include nearly 4000 miners associated with our northern data agreement.

Speaker 6: Our current minors also include nearly 4,000 minors associated with our northern data.

We're in consistent contact with Minerva and northern data and expect to receive the balance of the miners under these agreements over the next few months.

Speaker 6: We're in consistent contact with Minerva and Northern data and expect to receive the balance of the miners under these agreements over the next few months.

To date, the company has ordered or installed approximately 45000 miner with total pathway capacity of approximately $4 for excess cash.

Speaker 6: To date, the company has ordered or installed approximately 45,000 liners with total hash rate capacity of approximately 4.4 exahash.

Speaker 6: We were roughly breakeven on just the EBITDA basis for the quarter, with close to $10,000 on roughly $6 million of revenue.

We were roughly breakeven on an adjusted EBITDA basis for the quarter with close to $10000 and roughly $6 million of revenue.

Speaker 6: full form of our ICO, the Bank of Greece acquisition closing and deposits on announced minor purchases. Our cash balance on September 30th was approximately $104 million. So we have sufficient liquidity to continue to execute on our growth target. We expect to have a total hash rate capacity of at least 8x a hash by the end of 2022, which implies a mining power load of approximately 285 megawatts.

Pro forma for IPO.

Greek acquisition quality and deposits on announced miner purchases are past that our cash balance on September 30th with approximately $104 million.

We have sufficient liquidity to continue to execute on our growth targets. We expect to have to all have great capacity of at least eight at the half by the end of 2022.

Which is by the mining power load of approximately 285 megawatts.

<unk> mining operations were also scaling our power generation capacity to maintain our vertical integration.

Speaker 6: As we're ramping our mining operations, we're also scaling our power generation capacity to maintain our vertical integration.

Speaker 6: Following the Panther Creek acquisition earlier this month, we have 165 megawatts of power generation capacity and are constantly evaluating other opportunities to increase our power generation capacity on attractive terms.

While we the Panther acquisition earlier. This month, we added 165 megawatts of power generation capacity and are constantly evaluating other opportunities to increase our part generation capacity when in fact that firm.

Speaker 6: including continued buildings and a third coal refuse acclimation and power facilities that we have under a non-binding LOI requirement.

Including continued stability and a third coal refuse declination of harvest that we have under nonbinding LOI for Oklahoma.

Speaker 6: That completes my financial summary. Now, I'll turn the call over to Greg for closing remarks.

That completes my financial summary, now our clinical over to Gregg for closing remarks.

Thank you Ricardo and thank you everyone for taking the time to dial. It we're excited about our entry into the public markets and look forward to continuing to grow the value of our business and improve the communities in which we operate.

Speaker 14: Thank you, Ricardo. And thank you everyone for taking the time to dial in. We are excited about our entry into the public markets and look forward to continuing to grow the value of our business and improve the communities in which we operate. With that, we can now take your questions. Operator.

That we can now take your questions operator.

Thank you again, ladies and gentlemen, if you like to ask a question. Please press Star then one when you touched on telecom again, if he would like to ask a question. Please press Star then one.

Speaker 1: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star then one when you touch down telephone. Again, if you would like to ask a question, please press star then one.

One moment for our first question.

Speaker 1: Our first question comes from Lucas Price of V-Roller Securities, your line is open.

Our first question comes from Lucas pipes of B Riley Securities. Your line is open.

Hey, good good afternoon everybody.

Speaker 7: Hey, good afternoon, everybody.

Hey, Luke congrats.

Speaker 7: Congrats on the listing. Also great to see the positive operating cash flow and solid results through Q3.

Congrats on the listing also great to see the positive operating cash flow and solid results through Q3.

Sure.

Speaker 7: Just a few quick questions, and first I wanted to make sure that I understand the 2,500 open market order properly.

Just a just a few quick questions.

First I wanted to make sure that I understand the 2500 open market order.

Probably like.

A lot of buzz in the industry about difficulty in getting minor so so.

Speaker 7: a lot of buzz in the industry about difficulty in getting miners. So would it be possible to share some context on kind of how you were able to obtain these additional miners? And then is this something that you think is repeatable over the next weeks, months, et cetera, as you continue to grow out the Bitcoin mining?

Would it be possible share some context on kind of how you were able to obtain these additional miners and then is this something that you think is repeatable over the next weeks months et cetera, as you continue to grow out the bitcoin mining business.

Speaker 5: Yeah, hey Lucas, thanks, this is Greg. So we know that we're judged by the deployment of hash rate into our model. And so, you know, I think we know there've been questions around the delivery schedule for Minerva and maybe for big main miners as well. So we think the best way to mitigate the risk of delays in any delivery schedule is by buying miners.

Yeah, Hey, Lucas. Thanks. This is Greg So we know that we're judged by the deployment of hash rate into our model.

And so I think.

We know there've been questions around the delivery schedule for Minerva and maybe for main miners as well. So we think the best way to mitigate the risk of delays and any delivery schedule is.

By buying miners in the open market.

Speaker 5: And so that's what we've been doing. So the 25, you know, we have deep relationships with vendors, brokers, board members, companies that bought miners, they can't plug them in for six months, that might wanna sell them, or those, we have, even this week, have reached, you know, not definitive terms, but reached an oral agreement on another, say, 3,000 miners that are sitting in North America that are for sale. And we're able to get these for around $80.

So that's what we've been doing so the 25, we have deep relationships with vendors brokers board members.

Is that bought miners they can't plug them in for six months, they might want to sell them or those we have even this week.

We have reached our goal.

Definitive terms, but but reached an all agreement on another say 3000 miners that are.

Sitting in North America that.

That are for sale and we're able to get these.

For around $80, a terror hashed.

Speaker 5: So the math and the logic behind paying $80 a terahash for deliveries say within 10 days is that about every machine makes about $10 a terahash per month.

So the math and the logic behind paying $80 or ash for deliveries say within 10 days.

Is that about every machine makes about $10 <unk> per month.

Speaker 5: And so, you know, paying $80 a day is actually a better deal than paying $60 for delivery next June . And then it also eliminates the market perception risk that these things won't be delivered at all.

So paying $80 today is actually a better deal than paying $60 for delivery next June and then it also eliminates the the market perception risk that these things won't be delivered at all so I think.

Speaker 5: I think we're going to start to share a lot more of our data around what we've ordered, what we've paid, what is currently plugged in versus on a pallet, how much power we have available, and I think that will give the market a lot of comfort as to what our growth expectations are and how they're being realized on a daily basis.

<unk>.

We have a I think we're going to start to share a lot more of our data around what we've ordered what we paid what is currently plugged and versus versus on a pallet.

How much power we have available.

And I think that will give the market a lot of comfort as to what our growth expectations are in and how they are being realized on a daily basis.

So I think youre right getting access to money I think you would not want to.

Speaker 5: So, I think you're right, getting access to minors, I think you would not want to...

Speaker 5: I would say the restrictions on growth in this market is one around power, and we have that fully available to us, I would describe it as plug-ready power by December 18th on two plants.

I would say that the restrictions on on growth in this market as one around power and we have that.

Fully available to us and I kind of I would describe as plug ready power by December 18th on two plants.

Speaker 5: That's a lot of power. We make our own strong boxes, we make our own mobile data centers, that's another bottleneck we've removed. And so really our only bottleneck is to assure the market that we can get access to these miners and we can do it without overpaying. So I think just some of the stats that we put together to share with you.

That's a lot of power.

We make our own strong boxes maker on mobile data centers. It's another bottleneck, we've removed and so really our only our only bottleneck is this there sure the market that we can get access to these miners.

And we can do it without overpaying. So I think just some of the steps that we put together to share with you.

Speaker 5: around what we're expecting still by the end of the year is conservatively about 12,000 miners by the end of the year and as many as 15,000 miners if that additional order of 3,000 comes to fruition. And that represents between 1 exa-hash and almost 1.3 exa-hash by the end of the year.

Around what we're expecting still by the end of the year is conservatively about 12000 miners by the end of the year and as many as 15000 miners have that additional order of 3000 comes to fruition.

And that represents.

Between one excess cash and almost one three <unk> by the end of the year.

Speaker 5: Now, by the end of the first quarter, we're still expecting a really massive rent, which we're still expecting to execute on. But by the end of the first quarter, we should have between $30,000 and $36,000.

Now by the end of the first quarter.

Still expecting a really massive ramp.

So, which we're still expecting me to execute on.

But by the end of the first quarter, we should have between 30000 36000.

Minor is delivered and plugged in representing between two seven and 3.3 X the hash.

Speaker 5: you know, miners delivered and plugged in, representing between 2.7 and 3.3 ExaHash.

Speaker 5: I mean, just to put it in perspective, we've been at this about, you know, it'll be about a year by the end of the first quarter. And so, you know, I think those that know us know our ability to execute, so we bought a couple of power plants.

I mean, just to put it in perspective, we've been at this.

It'll be about a year by the end of the first quarter and so I think that was a no no us know our ability to execute we bought a couple of power plants.

Speaker 5: and are now making ourselves as large as some of the biggest miners in the world inside of a year. And so, you know, I'm happy to have our, you know, to be asked to prove it on the growth rate.

And are now making ourselves as large as some of the biggest miners in the world inside of a year.

And so.

I'm happy to have our to be asked to prove it on the on the growth rate.

Sure.

Speaker 5: which we're going to have to obviously do. But I would say, hey, we are opportunistic. We know what the restrictions and bottlenecks are, and we're getting around them. In spite of.

Which we're going to we're going to have to obviously do but I would say hey, we are opportunistic we know what the restrictions and bottlenecks are and we're getting around it.

In spite of.

So the market rumors and delays in supply chain and all the things that are impacting not just the space, but the world.

Speaker 5: of market rumors and delays in supply chain and all the things that are impacting not just this space but the world.

So I think it's what I guess, what we really want to communicate is that yes, we have aggressive plans and we have more than one way to achieve that growth.

Speaker 5: So I think that's what we really want to communicate is that we have aggressive plans and we have more than one way to achieve that growth.

Greg This is super helpful and really appreciate the detail on end of year end of Q1 cash rate.

Speaker 4: Greg, this is super helpful and really appreciate the detail on end of year and end of Q1 hash rate. On the minor delivery, you mentioned Minerva and in the release, you say your shipments are ramping up towards the 15,000.

On the minor delivery.

You mentioned Minerva and in the release you.

You say your shipments are ramping up towards the 15000.

Would it be possible to provide some color as to what you're hearing from your supplier in terms of.

Speaker 7: Would it be possible to provide some color as to what you're hearing from your supplier in terms of how quickly that cadence is expected to pick up? And then kind of secondly, has the supplier provided guidance as to what bottlenecks it is currently facing and how they're going to be overcome?

How quickly that cadence is expected to pick up.

And then kind of.

Secondly.

Has the supplier provided guidance as to what what bottlenecks. It is currently facing and how theyre going to be overcome.

Speaker 5: Sure, so I don't want to be on my court of conference calls sort of making representations on behalf of Minerva. I'll tell you what they have told us, and we believe them, is that their constraint comes largely from having an assembly center that has been part of an industrial park that has experienced power curtailments.

Sure. So yeah, I don't want to be on my quarterly conference calls were making representations on behalf of Minerva I'll tell you what they what they have told US and we believe them is that they're constrained comes largely from having an assembly a center that has been part of an industrial park that has experienced.

Power curtailments.

Which that's concerning.

Speaker 4: Which, hey, that's concerning. In spite of that, they're still shipping miners to us, and hopefully others, and they're now starting to show up. And they're working, you know, as expected on the spec that we paid for. In fact, today I posted on, you know, I'm aware that there are rumors out there saying, hey, is Minerva, you know, are they going to be able to deliver at all? Does this company really even exist? So, for that reason.

In spite of that they are still shipping miners to us and hopefully others and they are now starting to show up.

And then working.

As expected on the spec that we paid for <unk>.

Fact today I posted on.

There are rumors out there, saying has minerva.

Are they going to be able to deliver to all of this come to really even exist.

Ah.

For that reason.

Speaker 5: I posted on LinkedIn pictures of one of our strongboxes full of Minerva miners that had been delivered and are running. We'll be doubling that quantity by the end of the week.

<unk> posted on Linkedin.

Pictures of one of our strong boxes full of Minerva miners have been delivered and are running.

And he will be doubling that quantity by the end of the week.

Speaker 5: uh... this week actually and that they're coming to the the the curtailment of power impacted one facility we talked to him in her everyday we are aware of the other facilities that they are trying to move their family operations too and believe that they will be fixed

This week actually and so they are coming so.

The curtailment of power impacted one facility, we talked to Minerva everyday we are aware of the other facilities that they are trying to move their assembly operations too.

And believe that they will be successful and ramping up assembly outside of mainland China to be able to produce.

Speaker 5: and ramping up assembly outside of mainland China to be able to produce

And I would say industrial quantities of these machines.

Speaker 5: you know, I would say industrial quantities of these machines.

Speaker 5: I can tell you that I don't think they've done it yet. So I think right now we're still we're it's still You know dribs and drabs out of that one facility But you know because we have you know, we are not passive in this effort

I can tell you that I don't think they have done it yet so I think right now we're still it's still.

Dribs and drabs out of that one facility.

But.

Because we have we're not passive in this effort.

We are actively trying to both understand and push and help Minerva with that assembly issue I think the the critical.

Speaker 5: You know, we're actively trying to, you know, both understand and push.

Speaker 4: and help Minerva with that assembly issue. I think the critical component of the miner is the chip.

Critical component of the minor is the chip.

And I would be much more concerned if they didn't have the supplies of parks to assemble these things. So we believe that they do and the most critical component of that is the chip we believe they have those.

Speaker 5: And I would be much more concerned if they didn't have the supplies or parts to assemble these things. So we believe that they do. And the most critical component of that is the chip. We believe they have those already in their possession. And I can tell you that they're working as a customer. They're working on the spec that we paid for in industrial quantities. So it's a, you know...

Already in their possession.

And I can tell you that they are working as a customer they are working on a spec that we paid for in industrial quantities. So I'd say.

Hey, if it's a it's a pretty bad fraud, if they're actually shipping miners.

Speaker 5: It's a pretty bad fraud if they're actually shipping minors. So that's the, you know, and I'm aware, I've been made aware of what, you know, some folks are saying about Minerva, again, not representing them, but, and it's certainly not issue free.

So that's the.

And I'm aware I've been made aware of what of what some folks are saying about minerva again, not representing them but.

And it's certainly not issue free.

But we do believe that we're going to get all 15000 miners.

Speaker 14: But we do believe that we're going to get all 15,000 miners in the first quarter of next year. For that to happen, they still need to figure out their assembly issues. But having helped them and worked with them, I think they're going to do it. I think also, just from your modeling standpoint and ours, we're presuming that we get only 1,500 of these miners by the end of this year.

In the first quarter of next year for that to happen they still need to figure out their assembly.

<unk>.

But having having helped them and work with them I think theyre going to do it I think.

Also just just from your modeling standpoint and hours like we're presuming that we get only 1500 of these minus by the end of this year.

So this is not like we're assuming that we're going to get fit.

Speaker 5: So it's not like we're assuming that we're going to get $15,000 and our growth is going to be limited by Minerva. They are a small part of the picture this year. And overall, I think they're going to be a relatively small part of our story. They're a part of it. I think we got what we feel like a good deal on those machines, but obviously them being late, that hurts us.

<unk> thousand and our growth is going to be limited by Minerva. They are a small part of the picture of this year and overall I think theyre going to be a relatively small part of our story.

They are a part of it is I think we got what we feel like a good deal on those machines, but obviously being late that hurts us so.

It's not a it's not in a position that we want to be and we are reliant on a single producer of these things.

Speaker 5: You know, it's not a it's not a position that we want to be in where we are. We are reliant on a single producer.

I think I'm not even sure what your question was but that was one of them.

Speaker 7: I think, I'm not even sure what your question was, but that was, I wanted to make sure I said it. No, no, that was very helpful. So, so kind of for, for modeling purposes.

Correct.

That was very helpful. So so kind of for modeling purposes.

Speaker 7: 1,500 for the end of this year, that's a reasonable.

<unk> hundred for the end of this year that that's a reasonable target.

Speaker 8: target, and I think in your response to your prior question, you said kind of conservatively $12,000, presumably that would include those $1,500. And then if the oral order or oral agreement is converted into a firm order, that would get $15,000. Again, then Minerva would be just 10% of your end-of-year target. Now, just to be sure, the...

And I think in your.

Response to your prior question you said kind.

Kind of conservatively 12000.

<unk> that would include those 500 and then if you if the oral if the oral orders oral agreement is converted into a firm order that would get.

15000, again that Minerva will it be just 10% of your end of year target.

Just to be sure that the.

Speaker 8: The 12,000 includes the oral agreement on the 3,000 minors, which is pretty much done.

The 12000 includes the oil agreement on the on the 3000 miners, which is pretty much done.

Speaker 6: But not, that would be, the 12,000 would include this. Got it.

But not that would be.

The 12000 would include those.

Got it.

Got it okay.

And then and then Greg did I hear that right by the end of by the end of Q1, you would expect full delivery of the Minerva orders.

Speaker 7: And then, Greg, did I hear that right? By the end of Q1, you would expect a full delivery of the Minerva orders. Has that been kind of what's been created? That's what we're expecting.

Kind of what's been correct, that's what we're expecting.

<unk>.

Alright, well really appreciate all the additional color.

Speaker 7: All right, well, really appreciate all the additional color. Continue best of luck, and I'll turn it over for now. Thank you. You bet.

Best of luck and I'll turn it over for now thank you.

Right.

Thank you. Our next question comes from Mike Grondahl of Northland Securities. Your line is open.

Speaker 1: Thank you. Our next question comes from Mike Rondau of New Orleans Security Jelanus.

Speaker 9: Yeah, guys, thank you. A couple questions. I think that 1,800 of Bitmain miners, that was a new order.

Yeah, guys. Thank you.

A couple of questions.

I think the 800.

Main miners that was a new order.

Speaker 9: is are those expected to be on a delivery schedule like the 12,000? I think the 12,000 were split between 2Q22 and 3Q22. Is that sort of still a good rough guideline? And then on the 1800, kind of roughly, when do you expect those?

Are those expected to be on a delivery schedule like the 12000 I think the 12000 more split between <unk>.

<unk> 22, and <unk> 22.

Is that sort of still a good rough guideline and then on the 1800 kind of roughly when do you expect those.

Yeah.

Speaker 8: Yeah, so the point you're making on the 1800 bitmain or are you talking about, sorry, which order are you talking about specifically?

The point you make on the <unk> hundred.

Sure.

Or are you talking about sorry, which order or are you talking about specifically.

Yes, the 800 between ordered its bottom of page one on the press release.

Speaker 9: Yeah, the 1800-bit main order that's bottom of page one on the press release.

Oh that one is the <unk> of next year.

Okay, that's not part of the market purchases that we didn't just now that's in addition to those 2500.

Speaker 6: Okay, that's not part of the the market purchases that we did just now. That's in addition to those the two

In addition, okay.

Speaker 10: In addition, OK, and is the 12,000-bit main, are those still sort of thought to be 2Q, 3Q of 22? Yes.

Is the 12000 are those still sort of thought to be <unk> <unk> of 'twenty two.

Yes.

And thats outside of the current purchases that we just did.

Got it.

Speaker 9: Got it. And the 3,000, the oral agreement that you're close to, when do you think that would be finalized?

The 3000, the oral agreement that you are close to when do you think that would be finalized.

<unk>.

Speaker 6: I mean it's still I don't want to commit to this publicly let's let's just say hopefully in the next few you know days We'll make it well aka that if it happens yeah Got it

I mean, it's still I don't want to commit to that.

Great.

Say hopefully in the next few days.

Will it get well AK that perhaps.

Got it got it.

Maybe just lastly.

Minerva.

It.

Is there a city in China, where the power was out there and the other question I have kind of been asked is just is Minerva manufacturing.

Speaker 9: Is there a city in China where the power was out there? And the other question I've kind of been asked is just, is Minerva manufacturing?

Speaker 9: all those miners or are they sourcing them from another?

All of those miners or are they sourcing them from another source.

So I think it's been pretty well publicized about the power curtailments, but I think I think I, we're not going to comment beyond that and then I can tell you that the.

Speaker 5: So I think it's been pretty well publicized about the power curtailments, but I think we're not gonna comment beyond that. And then I can tell you that the miners that we receive are.

The minor that we receive are.

Speaker 5: were put together and assembled in a facility that had been used to assemble other miners. So it's not a, you know, a first-time experience for Minerva. But they are, you know, the test miners that we received, you know, we had them obviously taken apart and evaluated with favorable results. And, you know, these are labeled.

Or put together are assembled in a facility that had been used to assemble.

Other miners so it's not a <unk>.

First time experience for Minerva.

But they are the they test miners that we received we had them obviously taken apart and evaluated.

With favorable results and.

These are these are labeled.

Minerva miners and are not similar to any other miner in the market.

Speaker 4: Minerva miners and are not similar to any other miner on the market.

Got it okay. Thanks.

Thanks, guys.

Sure no problem.

Thank you. Our next question comes from Chris Butler of D. A Davidson your line is open.

Speaker 1: Thank you. Our next question comes from Chris Brindler of DA Davidson. Your line is open.

Speaker 6: Hi, thanks. Good afternoon. Thanks for the question. Congratulations, Greg and team, on your first quarter out of the gate. I just wanted to ask on the power plants, the Panther Creek, how much of the non-recurring maintenance costs fell into this quarter? And I imagine that was not a high number, but is there an expectation for what that would be in the fourth quarter? Yeah.

Hi, Thanks, Good afternoon question, Congratulations Greg and team on your first quarter out of the gate.

Wanted to ask on the so on the.

Power plants the Panther.

Panther Creek, how much of the nonrecurring maintenance costs fell into this quarter and I imagine that was not a high number but is there a stage.

That would be the fourth quarter.

Yes, it's mostly on the fourth quarter.

Is it rough sizing.

Speaker 8: what we're going to say in the low single digits in millions.

We're going to say.

Low single digits in millions.

Speaker 11: Okay, great. And then on the third facility, the non-binding, can you remind us like, you know, what the timeline pathway is there and, you know, sort of steps to get there?

Okay great.

And then on the third facility. The non binding can you just remind us like what the what the timeline pathway is there sort of steps to get there.

Yes, so I think the important thing that I would expect to have definitive agreements in the first half of 2022, the ownership structure of that facility is.

Speaker 5: Yeah, so I think the important thing to note, I would expect to have definitive agreements in the first half of 2022. The ownership structure of that facility is a little bit more complicated, so it takes a little longer. But I think as we pointed out, all of the equipment needed to modify that plant or a similar plant has already been ordered. And so we can have a very fast turnaround from the...

A little more complicated so it takes a little longer.

I think it is as we pointed out all of the equipment needed to modify that plan or similar plant has already been ordered.

And so we can have a very fast turnaround from.

From the.

Definitive document stage to turning into a datacenter and Panther Creek it was.

Speaker 5: definitive document stage to turning it into a data center. Like in Panther Creek, it was a couple of months for that process, and we'd expect a similar answer on the next acquisition.

A couple of months.

For that process and we would expect a similar answer on the next acquisition.

Sounds good okay.

Speaker 11: Sounds good. OK. The real question is, you know, just given all the activity in capital raising and thirst for power, we're seeing just now that Bitcoin mining is becoming very popular. Is there a risk that someone comes in and swoops that away from you or does your waste coal expertise make that unlikely?

Real question is just given all the activity in capital raising and thirst for power were seeing.

Now the bitcoin mining is becoming very popular is there.

There are risks that someone comes in the sweeps that away from you or does your.

Waste coal expertise make that unlikely.

Hey, we're experts in this space.

Speaker 5: You know, hey, we're experts in this space. I would not, I would not expect someone to come in and...

Not.

I would not expect someone to come in and.

And taken away from us about hey, it's anything is possible, but I wouldn't say we have.

Speaker 5: and take it away from us, but hey, anything's possible. But I would say we have, you know, we're obviously in dialogue with additional potential targets both in, you know, waste coal reclamation as well as other sources and other geographies.

Obviously in dialogue with.

Additional potential targets, both in waste coal reclamation as well as other sources in other geographies.

So I think I hope is a buying power assets.

Speaker 5: So I think obviously buying power assets is probably the easy part for us.

Is probably the easy part for us.

And I think Theres no doubt there will be acquisition costs for the first couple of facilities is probably viewed as abnormally low at this point.

Speaker 5: And I think there's no doubt that the acquisition cost for the first couple of facilities is probably viewed as abnormally low at this point. But we'll end up, we do want to stay with the vertical integration model. We think that is far superior to being on PPAs for this power. So I think expect us to continue to buy.

But we'll add we'll end up.

We do want to stay with the vertical integration model, we think that is far superior to being on Ppas for this power.

You can expect us to continue to buy.

Okay.

I've seen a lot of activity in the space, but I haven't seen anyone else trying to do waste coal are you guys aware of anyone else trying to copy their strategy.

I'd say a couple of the guys that we that own these facilities call us call us with the hopes that we will keep them how to do it.

But we havent, we havent been that nice to those guys quite yet.

I wouldn't expect to see a.

Uh huh.

To see a lot of competition.

That will impact us in any material way in high school.

Speaker 11: Okay, great. Last question is just competition in general increasing, most likely you're going to see a much higher hash rate by this time next year. How do you guys think about the balance between ordering those brand new super efficient XPs or trying to get hash rate on now when you know it's not going to be as efficient as those new bit mains that you're ordering for next fall?

Okay great.

Question is it just.

Competition in dental increasing most likely going to see a much higher highest rate by this time next year. How do you guys think about the balance between ordering those those brand new super efficient xps.

Or trying to get hatch rate on now.

It's not going to be as efficient as those new fitments that you're ordering for next fall.

Speaker 5: Yeah, I would say, you know what, we're hopeful that over time, the investors, the marketplace will recognize that this is probably going to be viewed as a power arbitrage business in five years, and that I would be surprised if most of the market, most of the Bitcoin mining market is going to end up being owned by power facilities that have an extremely low cost of power.

Yeah, I would say, we're hopeful that over time.

Investors in the marketplace will recognize that this is probably going to be viewed as a power arbitrage business in five years, and then I'd be surprised if most of the market most of the bitcoin mining market is going to end up being owned by a power facilities that have an extremely low cost of power.

With regard to the new generation of machines that is coming out and what they cost.

Speaker 5: With regard to the new generation of machines that is coming out and what they cost, that's just simply a math question. So I think we're always motivated by return on invested capital and return on equity.

It is simply a math question. So I think we're always motivated by return on invested capital and return on equity.

Speaker 5: And so it may be that the latest and greatest machine with the highest hash rate comes at a price that makes it less economic, considering our low power costs, than buying a last generation machine.

And so it may be that the latest and greatest machine with the highest cash rate comes at a price that is that makes it less economic considering our low power cost than buying a.

Last generation machine.

Speaker 14: So I think we can show you that math because that's the math that we do whenever we make any purchase. Sounds good.

No.

I think we can show you that math.

Because thats the math that we do whenever we make any purchase.

Okay, great. Thanks, so much.

Sure.

Thank you.

Our next question comes from Giuliano Bologna.

Speaker 1: Our next question comes from Giuliano Bologna of Compass Point, Illinois.

Point your line is open.

First of all congratulations on completing a successful IPO and racing.

Speaker 12: First of all, congratulations on completing a successful IPO and raising a significant amount of equity capital.

And a lot of equity capital.

Speaker 12: Well, I'd like to start off a little bit more on the minor side. It looks like from the press release, as some of the questions before me implied, the eighteen hundred S-19 order is incremental. And then there's also the order for the

I'd like to start off with more on the minor side.

It looks like from the press release.

Some of the questions before me required the 1800 personnel and team.

Orders are incremental and then there's also the order.

For the.

Sorry for the additional $200.

Speaker 12: Sorry, for the additional 200 pay-to-hash that come from the other 2,500 miners that you guys are purchasing in the open market.

You've got coming from the other 25 under monitors that you guys are purchasing in the open market.

I put that number so somewhere around incremental orders of about four.

Speaker 12: I put that number somewhere around incremental orders of about 452 pay-to-hash per second based on the tariff per second capacity.

452 per person I think there is somehow a retro capacity is there any sense of how much potash capacity would come from that oral agreement that you guys talked about we're on discussions you guys are having about two or three of those miners kind of what the average tariff for minor is without potentially not going to be too hung up on that agreement that for the three.

Speaker 8: sense of how much pay-to-ask capacity would come from that oral agreement that you guys have, that oral discussion that you guys are having about the 3,000 miners have what the average terahash per miner is for that potential transaction? Not to be too hung up on that agreement for the 3,000 miners. I mean, we're constantly, as we purchase and you'll see on the subsequent events, the dates and when we purchase these machines.

Minors I mean, we're constantly as we purchased and Youll see on the subsequent event the dates and when we purchased these machines.

We're actively talking to several folks so I would not just keep focusing on one specific in talking about an oil agreement that's not and we do have that but where we're constantly getting monitoring the market for these and whenever there is dips I mean, its EBIT either to transactions and people transact on them. So just don't get too much to focus on the <unk>.

Speaker 8: We're actively talking to several folks, so I would not just keep focusing on one specific and talking about an oral agreement. We do have that, but we're constantly monitoring the market for these. Whenever there's dips, it's easier to transact than some people transact on them. Just don't get too much too focused on the 3,000 machines specifically that we just mentioned. We would find a portion or even more of that still in the open market for us.

3000 machines, specifically that we just mentioned I mean, we would find a portion or even more of that fill in the open market for us.

But our conditions.

Speaker 5: But that's an addition. Yeah. Let me take you a little bit on this. In terms of terahash, most machines that we're buying at this point are going to be 100 terahash machines or greater.

Thank you.

Okay. Cvs Rfps are most machines that were buying at this point are going to be 100, Tera <unk> machines are greater.

That's great. Thank you Ben.

So two are slightly different.

You guys have.

Representing 33 megawatts of the Strongbox is broken and what you are saying about your target for the end of the first quarter. It's just the 195 by my math that implies that you guys are rebuilding is at about a rate of about 23 megawatts per quarter is that sustainable through the end of 'twenty two because based on my math that would imply that you guys would get slightly above 300.

Speaker 12: We're up to seeing 33 megawatts of the strongboxes built, and what you're saying about your target for the end of the first quarter is to get to 125. By my math, that implies that you guys are going to be building these at about a rate of about 23 megawatts per quarter. Is that sustainable for the end of 2022? Because based on my math, that would imply that you guys would get slightly above 300 if you ran at 23 megawatts per month.

Around 23 megawatts per month.

So I'm just curious from a rollout perspective, but that's kind of a good trajectory.

Speaker 12: So I'm just curious from a rollout perspective if that's kind of a good trajectory from a rollout perspective.

Our rollout perspective.

Yes, I think we should.

We should probably just do a better job of describing what our capacity is but we have.

Speaker 5: We should probably just do a better job of describing what our capacity is, but we have, if there's a bottleneck on the strong boxes, it's the PDUs.

If theres a bottleneck on the strongbox as SVP to use but we've ordered.

Speaker 5: And we have orders for enough to fulfill our capacity that should be, you know, arriving in time.

And we have orders four enough to fulfill our capacity that should be.

Arriving in time.

Speaker 5: to fulfill the expectation of that build-out. And that's, but I think apart from that, you know, we have every other component that we need, and it's just a matter of the labor to...

To fulfill the expectation of that build out.

And but I think apart from that.

Yes, we have every other component that we need and it's a matter of the labor to assemble.

That's great. Thanks, a lot.

Speaker 12: That's great, that makes a lot of sense. The other thing that I'd be curious about to kind of pick your brain about is, you guys have orders for N miners and deployed a total of about 45,000 miners. The disclosure during the IPO process was.

The other thing I'd be curious to kind of pick your brain about as you guys have orders orders for and miners.

45000 miners.

The disclosure during the IPO process was.

Speaker 12: I'm not sure exactly which one goes where, but 17,000 miners at one of the power plants and 20,000 at the other. So it puts it roughly 37,000, so you have about 8,000 incremental miners.

Not sure exactly which one goes where about 17000 monitors at one of our clients I mean 20000 would be other puts at roughly 37000. So you have about 8000 incremental miners.

If I back into kind of the math that wouldn't consume anywhere near the 165 megawatts of power.

Speaker 12: If that came to kind of the math, that wouldn't consume anywhere near the 165 megawatts of power that's generated as both cancer-creating scrubgrass together. Can you, if there were delays?

Sure.

Jonathan.

Panther greeting to our growth together can you if there were delays in acquiring a third powerpoint could you deploy the 45000 miners to existing power plants.

Speaker 12: in acquiring a third power plant, could you deploy the 45,000 miners at the two existing power plants? Because you should have enough power generation capacity to actually power those miners. I'm curious if you could retool that and push more miners onto those two power plants.

Have enough power generation capacity to actually power of those monitors I'm curious if you could re tooled out and of course more miners onto those two powerpoints.

Yes, we can.

That's great.

Speaker 12: That's great. I appreciate that. I'll jump back in the queue. Thanks for answering my questions.

With that I'll jump back in the queue. Thanks for answering my questions sure.

Thank you and again I'd like to ask a question. Please press Star then one our next question comes from Jacob Roberts of <unk> Pickering Holt. Your line is open.

Speaker 1: Thank you. Again, if you'd like to ask a question, please press star then 1. Our next question comes from Jacob Roberts of Tudor Pickering Holt. Your line is open.

Hey, good afternoon guys.

So I was wondering if you could maybe walk us through the major decision factors on the acquisition of the <unk>.

Speaker 13: I was wondering if you could maybe walk us through the major decision factors on the acquisition of the power facilities and really what I'm trying to understand is what might make something the gold standard and maybe even the range of prices that you're seeing in the market at the moment.

Facilities and really what I'm trying to understand is what might make something the gold standard and.

And maybe even the range of prices that youre seeing in the market at the moment.

Yeah.

Speaker 5: Yeah, that's a great question, sort of an unexpected layup for us to answer. Number one, what we're doing with these plants that we own.

That's a great question.

Sort of an unexpected lay out for us.

The answer is like number one like what we're doing this these plants that we have that we own.

Make the environment cleaner and better in the regions that we where we operate so we're cleaning up legacy problem of that's a result of more than 100 years of coal mining.

Speaker 5: make the environment cleaner and better in the regions where we operate. So, we're cleaning up a legacy problem that's a result of more than 100 years of coal mining. That's a benefit. Because we are the byproduct of this activity is power in addition to beneficial use ash.

That's a benefit.

We are the byproduct of this activity is power in addition to beneficial use.

Cash.

Speaker 4: our generation cost is an industry low for Bitcoin miners. So I think today our generation cost is around $1.18 a megawatt. You probably know that's pretty close to a third of what the market's paying. And I think going back to the question around global hash rate increasing.

Our generation cost is an industry low for bitcoin minor so I think today, our generation cost is like around one <unk>.

Dollars a megawatt.

You probably know that's probably pretty close to a third of what the market is paying.

And I think going back to the question around global hash rate increasing.

The power costs are going to become.

Speaker 5: the power costs are going to become even more of a focus.

Even more of a focus for the industry as it get as margins erode with increasing cash rate.

Speaker 5: for the industry as margins erode with increasing hash rate. So for us, the gold standard is low acquisition costs.

So for US the gold standard is low acquisition cost.

Speaker 5: coupled with a cheap generation cost, when that's sort of the holy grail. So normally, if you want to have a very low cost to generate power, you're going to pay a dearer price to acquire that asset. But waste coal, because it's really a waste coal reclamation, power is a byproduct, and it's a tough business to run.

Coupled with a cheap generation cost.

And that's sort of the Holy Grill. So normally if you want to have a.

Low cautionary power youre going to pay a dear price to acquire that asset, but waste coal because it's really a wesco reclamation power as a byproduct and it's a tough business to run.

And we're doing something other than really generating power that's the.

Speaker 5: and we're doing something other than merely generating power, that's the.

Speaker 5: the big advantage that we have and why we think we have a very attractive set of assets.

The big advantage that we have and why we think we have a very attractive set of assets.

The other the other thing to point out.

Is.

<unk>.

We don't really care about the broader implications of the power market.

Speaker 5: We don't really care about the broader implications of the power market, and I think, as you know, in PJM, natural gas dictates the price of power. And so, hey, it's going to be a cold, tough winter.

I think as you know.

JM natural gas dictates the price of power and so it's going to be a cold tough winter.

Speaker 5: in the Northeast probably, power prices are expected to be high, and if you're running a gas plant, your feedstock is also going to be expensive, so your margins might not be really any better.

In the northeast probably power prices are expected to be high and if youre running a gas plant. Your feedstock is also going to be expensive. So your margins might not be really any better.

Speaker 4: But because our feedstock is not gas, our costs are not, our feedstock is mostly free or it's really related to the cost of excavation and trucking. So we might be hit in a small way for incremental trucking or excavation costs related to diesel. But we're not going to see exponentially higher costs because our feedstock is not related to the price of natural gas. And most markets don't have that benefit.

But because our feedstock is nat gas our costs are not our feedstock is mostly free or it's really related to the cost of excavation and trucking. So we might be hit in a small way for incremental trucking or activation costs related to diesel, but we're not going to see exponentially higher costs.

Because our feedstock is not related to the price of natural gas in most markets don't have that benefit.

As far as Bitcoin mining goes if you're just just to further highlight the optionality around owning your own power assets.

Speaker 4: As far as Bitcoin mining goes, if you're just to further highlight the optionality around owning your own power assets, if your power is on a PPA,

If your power is on a PPA.

Speaker 5: And let's say you've agreed to buy 100 megawatts of power from one of the big...

And so you've agreed to buy 100 megawatts of power from.

One of the big.

Producers.

If youre miners are delayed and they don't show up for some reason you are still on the hook to pay for your 100 megawatts of power.

Speaker 14: If your miners are delayed and they don't show up for some reason, you are still on the hook to pay for your 100 megawatts of power.

Yes.

Speaker 5: This is not like a pay-as-you-go outlet for these massive industrial-scale PPAs.

It is not like a pay as you go out.

Outlet for these massive industrial scale ppas.

Speaker 4: If and when our miners are delayed, we don't suffer in that way. We can merely say, hey, we'll still sell power into the grid, and power prices in PGM today are really attractive. I think we've been averaging more than $50 a megawatt hour, not including the RECs, for our power in recent times.

Well, if if and when our miners are delayed we don't suffer and that way, we can really say hey, we will still sell power into the grid and power prices in PJM today are really attractive.

And I think I think we've been averaging more than $50 a megawatt hour not including the Rex for our power in recent times.

Speaker 5: Obviously, mining for Bitcoin is a much better proposition than that, but these assets do have value and there is a tremendous amount of optionality around owning your own power asset because if power prices go through the roof, we can shut the data center down and deliver that power to the grid at that high price. And I think there will come a time when that happens more and more. Does that answer your question?

Hey, obviously mining for bitcoin as a much better proposition than that but these assets do have value and there is a tremendous amount of optionality around owning your own power asset because if power prices go through the roof. We can shut the datacenter down and deliver that power to the grid at that high price.

And I think there will come a time that when that happens more and more.

Does that answer your question.

No that's really helpful. I appreciate it and maybe as a quick follow on there.

Speaker 13: No, yeah, that's really helpful. I appreciate it. Maybe as a quick follow-on there, in terms of the cost, is there a material difference in BTU content across the coal sources that could drive a variance over a given quarter or over a given year, so to speak?

In terms of the cost is there a material difference in btu content across the coal sources that could drive.

Over a given quarter or given year so to speak.

So I think you have to think about like the complication of running one of these facilities is that.

Speaker 5: So I think you have to think about the complication of running one of these facilities.

Speaker 5: is that uh... you know where it will be pulling away

We will be pulling waste from as many as five different locations at any one time and that waste is kind of sorted by quality and btu content moisture content and when it's when it's put on the.

Speaker 5: from as many as five different locations at any one time. And that waste is kind of sorted by quality and BTU content, moisture content. And when it's put on the... And so it's kind of organized in a bolt at these sites that we're reclaiming, as well as onsite at the plants, to make sure that what's fed into the boiler.

So it is kind of organized and are both at the sites that we're reclaiming as well as onsite at the plants to make sure that what's fed into the boiler is a mix that will.

Speaker 5: is a mix that will effectively be reclaimed and burned.

Actively be reclaimed and burns.

As well as give us an ash that is usable.

Speaker 5: as well as give us an ash that is usable.

Speaker 5: So this is not a situation where you can just sort of show up, pick up this waste coal, and truck it to the site, put it in the fluidized bed, and hope for the best. You have to actually, if there is a process to it, that's important.

So it's a this is not a situation where you can just sort of.

So up pick up this this waste.

Waste coal.

And truck it to the site put it in the fluidized bed and hope for the best you have to actually if there is a.

There is a process to it that's important.

Okay, perfect and I guess that'll be the coal question guys stay.

Speaker 13: Okay, perfect, and I guess I'll be the cold question guy today. In terms of the waste coal tax credit, I believe there is a state limit in Pennsylvania for all operators participating in the scheme, and then there's some additional limits on the percentage that can go to a single facility.

In terms of the wistful tax credit I believe there is a limit in Pennsylvania for all operators participating in the scheme and then theres. Some additional limits on the percentage that can go to a single facility.

Can you maybe frame where the overall industry is relative to that threshold and is it something we should be thinking about in the medium term.

Speaker 13: Can you maybe frame where the overall industry is relative to that threshold and is it something we should be thinking about?

Yes.

Speaker 5: Hey, why don't we, why don't we, we're not, we know exactly what you're talking about, but I don't want to give you a wrong number on a recorded earnings call, so why don't we follow up with you directly, but I think that's for the best. We don't expect any...

Hey, why don't we why don't we are not.

We know exactly you are talking about but if we get I want to give you a wrong number on our recorded earnings call. Yeah. So why don't we follow up with you directly but I think.

That's the that's the best we don't expect any.

Speaker 5: issues or challenges to that waste coal tax credit? I can answer in that way, but we'll give you specifics around what the industry limit is and what the plant limit is directly to you.

Issues or challenges to that waste coal tax correct answer in that way, but it will give you specifics around the the.

What the industry limit is and what the plant limit is directly to you.

Got it understood and I appreciate your time guys.

Thank you. Our next question comes from Lucas pipes of B Riley Securities. Your line is open.

Speaker 1: Thank you. Our next question comes from Lucas Pipes of B Raleigh. Security's your line is open.

Speaker 7: Thank you very much for taking my follow-up question. That's 470 petahash, that's, well, first congrats to ramp up to that level, that's significant. And I wondered if you have a good indication here at this point on what the on-time is of that capacity. Obviously, the industry is currently guiding to capacity, but it's currently less so.

Thank you very much for taking my follow up question.

Okay.

470 <unk>.

Well first congrats to ramp up to that level that that's significant.

I'm wondering if you are a good indication here at this point on what the on time it.

Thanks.

Capacity, obviously the industry is currently guiding to capacity, but currently less so.

Speaker 7: to actually coin production. So I wondered if you could maybe provide some comments on how that capacity might convert into coin production in December and into January . Thank you.

<unk>.

Actually coin production. So I'm wondering if you could maybe.

To provide some comments on too.

How that.

How that capacity might convert into production in in December and into January. Thank you.

Speaker 5: Yeah, sure. That's a great question. And obviously, hey, we have we have we have

Sure.

Great question, and obviously, hey, we have we have we have to.

Six five a day by the minute on.

Speaker 5: by the day, by the minute on what our hash rates are practically by minor, but I think we're not quite ready to share those yet, but I think expect a detailed uptime performance probably by brand, by location for the first quarter of next year.

I don't want our hash rates are practically by minor, but I think we're not quite ready to to to share those yet, but I think it's.

A detailed.

Uptime performance, probably by brand by location.

For the first quarter next year. So we agree hey, these metrics are important we fully intend to do to have a an uptime, that's pretty close to capacity.

Speaker 5: So we agree that these metrics are important. We fully intend to have an uptime that's pretty close to capacity. But at this point, I think we're not ready to share that.

But at this point I think we're not.

We're not we're not ready to share that data yet.

I will tell you that the machines that when they arrive they have been all plug in within hours.

Speaker 6: I'll tell you that the machines, when they arrive, they've been all plugged in within hours and we're very keen on whenever they arrive, we want to plug them in. So we don't have any machines that we have capacity for that are not hashing as we need. But we will be very detailed in how we show this performance going forward.

And we're very keen on whenever they arrive we want we want to plug them in and so we don't have any any machines that we have capacity for they're not hashing as we need but we will be very detailed and as we show.

So this performance going forward.

Got it got it. Thank you. Thank you for that and then.

Speaker 7: Sorry to go back to the Minerva question, but if I heard you right, you commented on potential relocation or expansion of manufacturing capacity at the supplier.

Sorry to go back to the Minerva question, but.

Yes.

Heard you right you commented on potential relocation.

Our expansion of manufacturing capacity at the supplier.

Is this north America and if so.

Speaker 7: Is this North America? And if so, you mentioned they have the components. They really need to just find the facility to assemble them. It's.

Mentioned behalf the components that they really need to just find the facility two to assemble them.

Sure.

Kind of.

Speaker 7: Is North America a good home, and if so, can all the components reach North America in a time of supply chain issues? I understand it's, again, a supplier question, but would really appreciate your comments on that.

Is north America, a good home and if so could it can all the components reached North America in a time of supply chain issues.

Understand it it's again a supplier question, but would really appreciate your comments on that.

Speaker 5: Yeah, you know, I think I don't want to comment further on Minerva. I think I can say, hey, we're actively working with them. We know that they're researching, you know, facilities around the world, and...

Yes, I think I don't want to comment further on Minerva.

I think I can say hey, we are actively working with them, we know that they are researching.

Facilities around the world.

And.

That do include North American so I'll say that but why don't we hopefully we will have hopefully minerva will have material updates that will give.

Speaker 5: that do include North America, so I'll say that. But why don't we, you know, hopefully we'll have, hopefully Minerva will have material updates.

Austin, others more comfort.

In the coming weeks.

Hey.

Speaker 14: That's a hope. But I think it's better for them to respond to that type of question.

That's our hope, but I think it's better for them to respond to that type of question.

And for Us.

Got it.

Speaker 7: Okay, well, really appreciate you taking the follow-up question, and again, best of luck.

Okay, well I appreciate you taking the follow up question on again best of luck.

Thanks, so much thank you.

Thank you I'm showing no further questions at this time I would like to turn the call back over to Mr. Greg There for any closing remarks.

Speaker 1: Thank you. I'm sure no further questions at this time. I would turn the call back over to Mr. Greg Beard for any closing remarks.

Thank you operator, I really want to think.

Speaker 5: Thank you, operator. I really want to thank the investors, the analysts, for doing the work to understand our story. We feel like we have made a tremendous amount of progress this year, but this is still a story for the coming quarters. We recognize that execution on our plan is still yet to be proven, but we're focused on it every day and plan on delivering on the expectation. We look forward to talking to you.

The investors the analysts for doing the work to understand our story.

We feel like we have made a tremendous amount of progress this year.

But this is still a story for the coming quarters.

And we recognize that execution on our plan, it's still yet to be proven but we're focused on it every day and plan on delivering on the expectations. So we look forward to talking to you all very soon.

Have a great night.

Speaker 16: Have a great night.

Thank you ladies and gentlemen, this does conclude today's conference. Thank you all for participating you may now disconnect have a great day.

Speaker 1: Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.