Q4 2023 Stronghold Digital Mining Inc Earnings Call

Before this call stronghold issued its results for the fourth quarter and full year of 2023 any press release, which is available in the investors section of the company's website at Www Dot stronghold digital mine Dot com.

You can find the link in the investors section at the top of the homepage.

Joining us on today's call are strong host chairman and CEO, Greg Bier and CFO, Matt Smith.

Following their remarks, we will open the call for questions.

Before we begin Alex Kovtun from Gateway group will make a brief introductory statement Mr. Carlson. Please proceed.

Great. Thank you operator.

Everyone and welcome today's slide presentation, along with our earnings release and financial disclosures were posted to our website earlier today and can be accessed on our website at www dot stronghold digital mining dot com.

Some statements, we're making today, maybe considered forward looking statements under securities law and involve a number of risks and uncertainties.

As a result, we caution you that there are a number of factors many of which are beyond our control, which could cause actual results and events to differ materially from those described in forward looking statements.

For more detailed risks uncertainties and assumptions relating to our forward looking statements. Please see the disclosures in our earnings release and public filings made with the Securities Exchange Commission.

We disclaim any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur. After the date. The forward looking statements are made.

Sept as required by law.

We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics we expect to file our annual report on Form 10-K on or around March eight 2024, with the Securities and Exchange Commission.

Okay.

Good morning, and welcome to stronghold Digital mine. These conference call for the fourth quarter and full year ended December 31st 2023.

Operator: Good morning, and welcome to Stronghold's Digital Mining Conference call for the fourth quarter and four years ended December 31st, 2022. My name is Tawanda, and I will be your operator this morning.

Which sets forth detailed disclosures and descriptions of our business as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors you may access strong hold securities and Exchange Commission filings for free by visiting the SEC website at Www Dot SEC Dot Gov.

My name is to Wanda and I will be your operator this morning.

Operator: And on this call, Stronghold issued its results for the fourth quarter and four years of 2023 in a press release, which is available in the investors section of the company's website at www.strongholddigitalmining.com. You can find the link in the investor section at the top of the homepage. Joining us on today's call are Stronghold Chairman and CEO Greg Beard and CFO Matt Smith. Following their remarks, we will open the call for questions. Before we begin, Alex Kovtun from Gateway Group will make a brief introductory statement. Mr. Kovtun, please proceed. Great, thank you, operator. Good morning, everyone, and welcome.

Before this call stronghold issue its results for the fourth quarter and full year of 2023 any press release, which is available in the investors section of the company's website at Www Dot stronghold digital mine Dot com.

You can find the link in the investors section at the top of the homepage.

Or strongholds Investor Relations website at IR about stronghold digital mining dot com.

Joining us on today's call are strong host chairman and CEO, Greg Bier and CFO, Matt Smith.

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.

Following their remarks, we will open the call for questions before.

Now I would like to turn the call over to strongholds, Chairman and CEO, Greg <unk> Greg.

Before we begin Alex Kovtun from Gateway group will make a brief introductory statement Mr. Carlson. Please proceed.

Good morning, everyone and thank you for joining us on our fourth quarter and full year 2023 earnings call.

Great. Thank you operator, good morning, everyone and welcome today's slide presentation, along with our earnings release and financial disclosures were posted to our website earlier today and can be accessed on our website at www dot stronghold digital mining dot com.

We'll be referencing and associated slide presentation throughout the call that is available through the webcast and on the Investor Relations section of our corporate website.

Alex Kovtun: Today's slide presentation, along with our earnings release, disclosures which were posted to our website earlier today, can be accessed on our website at www.strongholddigitalmining.com. Some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks. As a result, we caution that there are a number of factors, many of which are beyond our control, which could cause actual results and events to be different materially from those ascribed and forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, see Risks, Uncertainties, and As

Let's start on slide three.

I will say this on every earnings call until it is no longer true.

Some statements, we're making today, maybe considered forward looking statements under securities law and involve a number of risks and uncertainties.

Stronghold is the only environmentally beneficial and vertically integrated public bitcoin miner.

As a result, we caution you that there are a number of factors many of which are beyond our control, which could cause actual results and events to differ materially from those described in forward looking statements.

Own and operate two mining waste to power facilities in Pennsylvania, scrub grass and Panther Creek with aggregate power capacity of 165 megawatts.

For more detailed risks uncertainties and assumptions relating to our forward looking statements. Please see the disclosures in our earnings release and public filings.

Our process to grow grass and Panther Creek have removed an estimated 30 million tons of toxic mining waste from the environment from nearly 100 different sites today.

Alex Kovtun: Please see the disclosures in our earnings release and public filing made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. We expect to file our annual report on Form 10-K on or around March 8, 2024, with the Securities and Exchange Commission, which sets forth detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors. You may access Stronghold's Securities and Exchange Commission filings for free by visiting the SEC website at www.sec.gov or Stronghold's Investor Relations website at ir.strongholddigitalmining.com.

Made with the Securities Exchange Commission.

We disclaim any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur. After the date. The forward looking statements are made except as required by law.

Today, we operate over 40000, bitcoin miners with $4, one exit hash of hash rate capacity.

We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics we expect to file our annual report on Form 10-K on or around March eight 2024, with the Securities and Exchange Commission.

While we are thrilled to surpass four extra cash we believe that we have significant runway to continue cash rate growth within our existing infrastructure, we're high grading our fleet.

As a vertically integrated digitally miner, we have a unique substantial asset base with significant potential complementary revenue stream in.

<unk>, which sets forth detailed disclosures and descriptions of our business as well as uncertainties and other variables circumstances, including but not limited to risks and uncertainties identified under the caption risk factors you may access stronghold Securities and Exchange Commission filings for free by visiting the SEC website at Www Dot SEC Dot Gov.

In November we announced our carbon capture project.

It's simply an extension of our reclamation process. We are excited about the progress. We've made on this project over the last few months, we believe that we could capture up to 100000 tons of <unk>.

<unk> annually at Baseload capacity utilization of our plants as discussed in our December presentation.

Or strongholds Investor Relations website at IR about stronghold digital mining dot com.

I would like to.

Gregory A. Beard: I would like to remind everyone this call is being recorded and will be made available for replay via a link available in the Investor Relations section of Stronghold's website. Now, I would like to turn the call over to Stronghold's Chairman and CEO, Greg Beard. Good morning, everyone, and thank you for joining us on our fourth quarter and full year 2023 earnings call. We will be referencing an associated slide presentation throughout the call that is available through the webcast and on the investor relations section of our corporate website. Let's start on slide three.

Moving to slide four.

Remind everyone. This call is being recorded and will be made available for replay via a link available in the Investor Relations section of Charlotte's Web site.

Over the past year, and a half stronghold executed on its plan to grow hash rate to four exit cash with high capital efficiency.

Now I would like to turn the call over to strongholds, Chairman and CEO, Greg Bier Greg.

We plan to continue adding hash rate and improving our fleet efficiency Opportunistically we.

Good morning, everyone and thank you for joining us on our fourth quarter and full year 2023 earnings call.

We have over 40000 energized slabs in these slides.

With more than seven ex ash of mining.

Well be referencing and associated slide presentation throughout the call that is available through the webcast and on the Investor Relations section of our corporate website.

With a high graded sweet of latest generation miners, we are exploring various avenues and structures to grow into this capacity.

Let's start on slide three.

Looking at our fleet the average efficiency for our 2500, <unk> least efficient miners exceeds 40 joules per tower at Ash and our next 10000 least efficient miners are approximately 37 joules per Terry.

I will say this on every earnings call until it is no longer true stronghold is the only environmentally beneficial and vertically integrated public bitcoin manner.

I own and operate two mining waste to power facilities in Pennsylvania, Scrubbed Rath from Panther Creek with aggregate power capacity of 165 megawatts.

Thats low hanging fruit and just replacing those miners with latest generation layers could yield hash rate capacity of over $5 three ex ash.

Our process scrub grass on Panther Creek have removed an estimated 30 million tons of toxic mining waste from the environment from nearly 100 different sites today.

So we think that the high grading opportunity is very attractive.

We also remain focused on improved uptime at our data centers and had been working closely with the frontier mining team since October to enhance our data center operations going into the having in April.

Gregory A. Beard: I will say this on every earnings call until it is no longer true. Stronghold is the only environmentally beneficial and vertically integrated public Bitcoin miner. We own and operate two mining waste-to-power facilities in Pennsylvania, Scrubgrass and Panther Creek, with aggregate power capacity of 165 MW. Through our process, Scrubgrass and Panther Creek have removed an estimated 30 million tons of toxic mining waste from the environment from nearly 100 different sites.

Today, we operate over 40000, bitcoin miners with 4.1 extra hash of hash rate capacity.

While we are thrilled to surpass four extra cash we believe that we have significant runway to continue cash rate growth within our existing infrastructure are high grading our fleet.

This partnership has been a success.

Evidenced by a recent achievement of approximately three nine X the hash of operating cash right.

Moving to slide five.

As a vertically integrated bitcoin miner, we have a unique substantial asset base with significant potential for complementary revenue stream in November we announced our carbon capture project, which is simply an extension of our reclamation process. We are excited about the progress we've made on this project.

As the having approaches we continue to focus on our liquidity and debt service obligations as of February 29.

We had over $10 million of liquidity.

Current liquidity more than covers the $6 5 million in 2020 for mandatory amortization associated with our white hot nodes and the $1 million of remaining committed minor capex.

The last few months, we believe that we can capture up to 100000 tons of <unk> annually at Baseload capacity utilization of our plants.

And importantly, our operations are generating cash flow with over $5 million of adjusted EBITDA projected for the first quarter further enhancing our resiliency.

Gregory A. Beard: Today, we operate over 40,000 Bitcoin miners with 4.1 exahash of hashrate capacity. While we are thrilled to surpass 4x a hash, we believe that we have significant runway to continue hash rate growth within our existing infrastructure by high-grading our fleet. As a vertically integrated Bitcoin miner, we have a unique, substantial asset base with significant potential for complementary revenues. In November, we announced our carbon capture project, which is simply an extension of our Reclamation. We are excited about the progress we've made on this project over the last few months. We believe that we could capture up to 100,000 tons of CO2 annually at baseload capacity utilization of our plants, as discussed in our December presentation. Moving to slide four.

Discussed in our December presentation.

Moving to slide four.

Over the past year, and a half stronghold executed on its plan to grow the hash rate to four exit cash with high capital efficiency and we plan to continue adding hash rate and improving our fleet efficiency opportunistically.

Moving on to slide six to discuss bitcoin market dynamics.

Following the approval of Bitcoin Etfs in January we have seen a significant rise in bitcoin price and half price Bitcoin has set a new all time high and hash price is around 12 per Terry ash.

We have over 40000 energized slabs and these slots.

There have been 8 billion of inflows into the Etfs, which averages nearly 6000 bitcoin per day six five more and what is mined daily so.

More than seven ex ash of mining.

With a high graded sweet of latest generation miners, we are exploring various avenues and structures to grow into this capacity.

So we view the recent run up in Bitcoin price as a result of the mismatch in supply and demand.

Looking at our fleet the average efficiency for our 2500 least efficient minors exceeds 40 joules per tower at Ash and our next 10000 least efficient miners are approximately 37 <unk> <unk> that's <unk>.

With a price runup continue.

While we won't take a view on inflows representing potential demand the having will impact the supply side of the equation, which all else equal is quite constructive for future good corn price.

Low hanging fruit and just replacing those miners with latest generation matters could yield cash rate capacity of over $5 three excess cash. So we think that the high grading opportunity is very attractive.

Moving on to slide seven.

Owning our own power assets gives us a lot of Optionality as electricity is the largest variable cost to my bitcoin.

Gregory A. Beard: Over the past year and a half, Stronghold executed on its plan to grow hash rate to 4 exahash with high capital efficiency, and we plan to continue adding hashrate and improving our fleet efficiency opportunistically. We have over 40,000 energized slots, and these slots could support more than seven exahash of mining with a high-graded suite of latest generation miners. We are exploring various avenues and structures to grow into this capacity. Looking at our fleet, the average efficiency for our 2,500 least-efficient miners exceeds 40 joules per terahash, and our next 10,000 least-efficient miners are approximately 37 joules per terahash. That's low-hanging fruit, and Jeff replacing those miners with the latest generation miners could yield a hashrate capacity of over 5.3XX.

<unk> is our ability to be responsive to changing market conditions. When power prices are high we turn off our miners and sell to the grid.

We also remain focused on improved uptime at our data centers.

<unk> been working closely with the frontier mining team set October two.

When prices are lower than bitcoin mining economics, but higher than variable fuel costs.

Hence our data center operations going into the having in April.

This partnership has been a success.

Use the plans to power our miners.

Evidenced by our recent achievement of approximately three nine X a hash of operating <unk>.

And when power prices are lower than our variable plant cost, we turn off the plants and import electricity to power our miners.

Right.

Moving to slide five.

Power prices in our region are currently very well with the forward curve for the remainder of 2024, averaging around $30 per megawatt hour.

Has the having approaches we continue to focus on liquidity and debt service obligations as of February 29.

While low power pricing is a trend broadly.

Had over 10 million of liquidity.

Current liquidity more than covers the $6 5 million in 2020 for mandatory amortization associated with our white hot nodes and the $1 million of remaining committed minor capex and importantly, our operations are generating cash flow with over 5 million of adjusted EBITDA projected for the first quarter.

Curbs in PJM are generally the lowest in the country right. Now this is great for us because it gives us the flexibility to opportunistically import electricity from the grid to power our miners and unit you can expect to see us do just that.

Moving to slide eight.

On the other side of the equation the PJM grid is extremely vulnerable over the medium to long term renewal.

Further enhancing our resiliency.

Moving on to slide six to discuss bitcoin market dynamics.

Renewable energy sources like solar and wind are great because they are clean, but the unfortunate reality is that they generate power intermittently.

Following the approval of Bitcoin Etfs from January we have seen a significant rise in bitcoin price and half price bitcoins has set a new all time high and hash prices around 12 per Terry Ash.

Placing stable baseload generation with intermittent generation severely threatens the stability of the grid.

Gregory A. Beard: So we think that the high grading opportunity is very attractive. We also remain focused on improved uptime at our data centers and have been working closely with the Frontier Mining Team since October to enhance our data center operations going into the halving of the year. This partnership has been a success, as evidenced by a recent achievement of approximately 3.9 exahash of operating hash rates. Moving on to slide five.

This is becoming very clear in PJM by its own account.

There have been 8 billion of inflows into the Etfs, which averages nearly 6000 bitcoin per day six five more and what is mined daily.

<unk> 40, Gigawatts of Baseload thermal generation is expected to be retired by 2030. This is over 20% of current PJM generating capacity on top of this nearly 95% power generation projects in the PJM Q renewable and it takes multiple megawatts.

So we view the recent run up in Bitcoin price as a result of the mismatch in supply and demand.

With a price runup continue.

While we won't take a view on inflows representing potential demand, having will impact the supply side of the equation, which all else equal is quite constructive for future big corn price.

The renewables to replace each megawatts of base load generation as.

As a result at the current rate of development PJM believes that the new projects will not be sufficient to keep up with demand growth and the expected plant retirements by 2030.

Moving on to slide seven.

Owning our own power assets. It gives us a lot of Optionality as electricity is the largest variable cost Tonight bitcoin.

Imply that come here is extreme volatility and market tightness in the medium to long term, making existing base load assets like scrubbed breath and Panther Creek highly valuable.

Gregory A. Beard: As the halving approaches, we continue to focus on liquidity and debt service obligations. As of February 29, we had over $10 million in liquidity. The current liquidity more than covers the $6.5 million in 2024 mandatory amortization associated with our White Hawk note and the 1 million remaining committed minor. And importantly, our operations are generating cash flow, with over $5 million of adjusted EBITDA projected for the first quarter, further enhancing our resilience. Moving on to slide six, we discuss Bitcoin market dynamics. Following the approval of Bitcoin ETFs in January, we have seen a significant rise in the Bitcoin price and hash price. Bitcoin has set a new all-time high, and the hash price is around $0.12 per terahertz. There have been 8 billion inflows into the ETFs, which averages nearly 6,000 Bitcoins per day, 6.5 more than what is mined daily.

<unk> is our ability to be responsive to changing market conditions. When power prices are high we turn off our miners and sell to the grid.

Moving to slide nine since announcing our carbon capture project in November our team has made significant progress improving our enhancing and validating our process.

Prices are lower than bitcoin mining economics, but higher than variable fuel costs.

Use the plants to power our miners.

And when power prices are lower than our available plant cost, we turn off the plants and import electricity to power our miners.

Call that our initial third party testing indicated that our scrub grass ash could capture carbon at a capacity of up to 12% by starting weight of the ash, where recent test from our first car bovis have demonstrated that up to 14% is achievable we.

Power prices in our region are currently very well with the forward curve for the remainder of 2024, averaging around $30 per megawatt hour.

Our low power pricing is a trend broadly.

Curves in PJM are generally the lowest in the country right. Now this is great for us because it gives us the flexibility to opportunistically import electricity from the grid to power our miners and unit you can expect to see us do just that.

We recently partnered with the Pittsburgh mineral and environmental Technology lab was assisting with more enhanced lab analysis.

They're improving and reinforcing our process.

In early February we announced that we had begun constructing our second couple this with our partners Carbonetti. This carbo list is now up and running at scrubbed brands inclusive of design enhancements that we expect will increase airflow and carbonation and reduce cost and construction time is <unk>.

Moving to slide eight.

On the other side of the equation the PJM grid is extremely vulnerable over the medium to long term.

Renewable energy sources like solar and wind are great because they are clean, but the unfortunate reality is that that generate power intermittently.

Carbo lift cost is about $33000 of materials, representing significant savings from the first couple of months and we expect to continue to reduce costs as we scale.

Placing stable baseload generation with intermittent generation severely threatens the stability of the grid.

This is becoming very clear in PJM by its own account 40.

<unk> 40, Gigawatts of Baseload thermal generation is expected to be retired by 2030. This is over 20% of current PJM generating capacity on top progress nearly 95% power generation projects in the PJM Q renewable and it takes multiple megawatts.

As we mentioned on our last earnings call. Our team has been working closely with carbon Amex in September to lift our project on the pure registry. The worlds first registry for engineered carbon sequestration projects to monetize our carbon removals in the private markets.

We are excited to announce.

The renewables to replace each megawatts of Baseload generation as.

Gregory A. Beard: So we view the recent run-up in Bitcoin prices as a result of the mismatch in supply and demand. Will the price run-up continue? While we won't take a view on inflows, representing potential demand, the halving will impact the supply side of the equation, which, all else equal, is quite constructive for future Bitcoin prices.

That PURA Earth registry registered the scrubber facility in late February and the company will now undertake the RF process, which is the next step towards generating carbon capture related revenue.

As a result at the current rate of development PJM believes that the new projects will not be sufficient to keep up with demand growth and the expected plant retirements by 2030.

We are now embarking on the audit process with Bureau, and our goal is to have an accredited carbonated materials project as early as the end of the second quarter.

Imply that come here is extreme volatility and market tightness in the medium to long term, making existing baseload assets like scrubbed breath and Panther Creek highly valuable.

We expect to have further updates on this project, including timeline for meaningful monetization and related milestones in the next few months with that I would like to pass it over to our CFO, Matt Smith.

Moving to slide nine since announcing our carbon capture project in November our team has made significant progress improving out enhancing and validating our process.

Gregory A. Beard: Moving on to slide seven, owning our own power assets gives us a lot of optionality, as electricity is the largest variable cost to mine. It enhances our ability to be responsive to changing market conditions. When power prices are high, we turn off our miners and sell them to the grid. When prices are lower than Bitcoin mining economics but higher than variable fuel costs, we use the plant to power a miner. And when power prices are lower than our variable plant costs, we turn off the plant and import electricity to power our mine. Power prices in our region are currently very low, with the forward curve for the remainder of 2024 averaging around $30 per megawatt hour. While low power pricing is a trend broadly, four curves in PJM are generally the lowest in the country right now.

Thank you Greg moving to slide 10, we continue to believe that stronghold is significantly undervalued on an absolute basis and acutely so relative to public bitcoin mining peers.

Call that our initial third party testing indicated that our scrub grass ash could capture carbon at a capacity of up to 12% by starting weight of the ash, where recent test from our first <unk> have demonstrated that up to 14% is achievable.

When looking at select evaluation metrics adjusted EBITDA hatchery capacity.

We recently partnered with the Pittsburgh mineral and environmental Technology lab was assisting with more enhanced lab analysis.

And adjusted EV to annualized January Big wind production stronghold trades at an approximately 70% discount to peers.

They're improving and reinforcing our process.

I have nothing else to add.

In early February we announced that we had begun constructing our second coverlet with our partners Carbonetti. This carbo list is now up and running at scrub brands inclusive of design enhancements that we expect will increase airflow and carbonation and reduce cost and construction time is <unk>.

Lastly on slide 11 revenue for the fourth quarter was $21 7 million with $25 million from crypto currency operations on 599, bitcoin mined at $1 2 million from energy operations.

GAAP net loss was $21 2 million for the fourth quarter and adjusted EBITDA was $2 3 million a reconciliation for those figures is included in the appendix I will now turn the call back over to Greg for closing remarks.

Second cover lift cost is about $33000 of materials, representing significant savings from the first couple of months and we expect to continue to reduce costs as we scale.

Thanks, Matt to summarize what we've discussed today, we are executing on the objectives, we have communicated to the market. We remain confident in the strength of our business going into the having and we believe that we have outstanding growth prospects through high grading our fleet in developing carbon capture with that.

As we mentioned on our last earnings call. Our team has been working closely with carbon IMAX since September to lift our project on the pure registry. The worlds first registry engineered carbon sequestration projects to monetize our carbon removals in the private markets.

Gregory A. Beard: This is great for us because it gives us the flexibility to opportunistically import electricity from the grid to power our miners, and you can expect to see us do just that. Moving to slide 8, on the other side of the equation. PJM grade is extremely vulnerable over the medium to long term. Renewable energy sources like solar and wind are great because they're clean, but the unfortunate reality is that they generate power intermittently. Replacing stable baseload generation with intermittent generation severely threatens the stability of the grid.

We will open up the call for Q&A operator.

We are excited to announce that PURA Earth registry registered the scrubber facility in late February and the company will now undertake the RF process, which is the next step towards generating carbon capture related revenue.

Thank you.

Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and then wait to hear your name announced to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.

We are now embarking on the audit process of Bureau, and our goal is to have an a credit carbonated materials project as early as the end of the second quarter.

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

We expect to have further updates on this project, including timeline for meaningful monetization and related milestones in the next few months with that I would like to pass it over to our CFO, Matt Smith.

Thank you very much operator, and good morning, everyone.

I just wanted to.

Two.

Ask a few questions on slide four.

When you show that.

Thank you Greg moving to slide 10, we continue to believe that stronghold is significantly undervalued on an absolute basis and acutely so relative to public bitcoin mining peers.

With additional opportunities.

A few questions there first.

What type of machine should we be thinking about.

What would it.

Gregory A. Beard: This is becoming very clear in PJM by its own account. 40 gigawatts of baseload thermal generation is expected to be retired by 2030. This is over 20% of the current PJM generating capacity. On top of this, nearly 95% of the power generation projects in the PJM queue are renewable, and it takes multiple megawatts of renewables to replace each megawatt of baseload generation. As a result, at the current rate of development, PJM believes that new projects will not be sufficient to keep up with demand growth and the expected plant retirements by 2030. The implied outcome here is extreme volatility and market tightness in the medium to long term, making existing baseload assets, like Scraggrass and Panther Creek, highly valuable. Moving to slide nine.

<unk> cost or Capex range be for that or is that included in the guidance I don't think so but I would appreciate your perspective, and then I have a few more follow up questions from there. Thank you.

When looking at select evaluation metrics adjusted EBIT to hash rate capacity and adjusted EV to annualized January Beckman production.

Stronghold trades at an approximately 70% discount to peers.

Yes.

We're thinking about it in terms of like the generic latest generation miner that you can still buy so we're not looking at the next generation does the current latest generation, so something like that 'twenty one.

I have nothing else to add.

Lastly on slide 11 revenue for the fourth quarter was $21 7 million with $25 million from crypto currency operations on 599, bitcoin mined at $1 2 million from energy operations GAAP net loss was $21 2 million for the fourth quarter.

In terms of.

The market for these machines.

Changes really weekly.

And on.

In the past we've been very opportunistic about how we manage to to fill slots whether it be just buying machines outright JV ing on machines.

Adjusted EBITDA was $2 3 million a reconciliation for those figures is included in the appendix I will now turn the call back over to Greg for closing remarks.

Yes to just to improve the capital efficiency to get a very high Roe.

Thanks, Matt to summarize what we've discussed today, we are executing on the objectives, we have communicated to the market. We remain confident in the strength of our business going into the happening and we believe that we have outstanding growth prospects through high grading our fleet in developing carbon capture.

And so I think the.

At current prices market prices, I'd say, hey to fill up all of these swaps would be around the $20 million at current rates.

We think obviously the rates are going to be.

Potentially materially different post having.

That we will open up the call for Q&A operator.

And as always we're trying to do better than.

Thank you.

Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and wait to hear your name announced to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.

Then.

The market in terms of what we spend and how we structure.

Thank you Greg when would you make a decision on.

Gregory A. Beard: Since announcing our carbon capture project in November, our team has made significant progress in proving out, enhancing, and validating our process. Recall that our initial third-party testing indicated that our scrub grass ash could capture carbon at a capacity of up to 12% by starting weight of the ash, where recent tests from our first carbolist have demonstrated that up to 14% is achievable. We recently partnered with the Pittsburgh Mineral and Environmental Technology Lab, who is assisting with more enhanced lab analysis, further improving and reinforcing our process. In early February, we announced that we had begun constructing our second carbolift with our partners, Carbonetic. This carbolift is now up and running at Scrubgrass, inclusive of design enhancements that we expect will increase airflow and carbonation and reduce costs and construction time. The second cover lift cost about $33,000 in materials, representing significant savings from the first cover lift.

Deploying.

Additional capital there.

I think we.

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

Once you give us a quarter or two present.

What we.

Thank you very much operator, good morning, everyone.

What we want to do in the pace of that.

Potential.

Okay great.

Re powering of the data center.

Two.

Ask a few questions on slide four.

Yes.

Replacing all of these.

When you show that.

Miners with more with more miners. So I think we're not ready to be specific with dates and times yet on on though is not just a really a function of.

Column with additional opportunities.

A few questions there first.

What type of machine should we be thinking about.

Yeah.

<unk>.

What would a reasonable cost or capex range be for that or is that included in the guidance I don't think so but I would appreciate your perspective, and then I have a few more follow up question from there. Thank you.

Making sure that we're opportunistic to achieve the best pricing and rates of return on that equipment.

Got it.

Do you have a site in mind.

Yes, so I think we're.

Thinking about it in terms of like the generic latest generation miner that you can still buy so we're not looking at the next generation because the current latest generation. So if something like that 'twenty one.

Yes, I think we have we only got two sides scrubbed RASM Panther Creek.

Thank you you can expect it at.

At both plants and just to be clear at current.

In terms of.

Current pricing, it's $20 million per <unk> machine.

The market for these machines.

Machine just in case that was.

The changes really weekly.

Yes.

Noted. Thank you thank you for that.

And in the past we've been very opportunistic about how we manage to to fill slots, whether it'd be just buying machines outright.

So look I think.

Lucas I would just add I think I think there is.

Being on machines.

As we have been.

Carefully observing industry peers.

Yes to just to improve the capital efficiency to get a very high Roe.

Announcing.

And so I think.

Growth projects.

<unk>.

That are significant kind of greenfield builds or that require.

At current prices market prices, you'd say, hey to fill up all of these swaps would be around the $20 million of current rates.

Extraordinary timelines and future delivery schedules.

What we're what we're trying to focus you.

We think obviously the rates are going to be in.

One is the factset.

Potentially materially different post having.

We look at third sites, we look to organically on our own existing 41000 slots.

And as always we're trying to do better than.

Gregory A. Beard: And we expect to continue to reduce costs as we scale. As we mentioned on our last earnings call, our team has been working closely with Carbonomics since September to list our project on the PURE registry, the world's first registry for engineered carbon sequestration projects, to monetize our carbon removals in the private market. We are excited to announce that Puro Earth Registry registered this scrub gas facility in late February, and the company will now undertake the audit process, which is the next step towards generating carbon capture-related revenue. We are now embarking on the audit process with Bureau, and our goal is to have an accredited carbonated materials project as early as the end of the second quarter. We expect to have further updates on this project, including a timeline for meaningful monetization and related milestones With that, I would like to pass it over to our CFO, Matt Smith. Thank you, Greg. Moving to slide 10.

And we have a number of our tier one tier two tier three miners.

Then.

The market in terms of what we spend and how we structure.

In terms of stratified by efficiency and if you were to take the least efficient miners.

Thank you Greg when would you make a decision on that.

And and high grade those into what's called a next 'twenty, one type miner, which could be utilized existing plugs better energized you can get to seven ex ash.

Ploy.

Additional capital there.

I think we will.

Once you give us a quarter to present.

Plus and so.

We.

What we want to do in the pace of that.

Identifying but thats an opportunity is not a commitment to.

Potential.

Re powering of the data center.

Spend the money to do that.

But we've demonstrated very gradually very creative ways join slots in the past and we think there are a lot of opportunities to do that without.

Yes.

Replacing all of these.

Miners with more what more miners. So I think we're not ready to be specific with dates and times yet on on though is not just a really a function of.

Im stretching towards so in fact, we actually have an exact capacity in existing data centers is the message.

Making sure that we're opportunistic to achieve the best pricing and rates of return on that equipment.

Got it.

I appreciate that.

Yes.

Got it.

Kind of switching topics.

Do you have a site in mind.

Obviously power price environment, it's been very soft and.

Your flexibility to toggle between owned generation.

Yes, I think we have we only got two sides scrubbed RASM Panther Creek.

And purchasing power could you speak a little bit to what your costs are when.

You can expect that.

At all plants and just to be clear at current.

When you produce in house today at Panther and scrub grass.

Current pricing, it's $20 million per Axa hash of machine just in case that was.

And.

Kind of what the utilization rate of the plant is expected to be in this in this price environment.

Net.

Yes.

Noted. Thank you thank you for that.

Yeah. So this is a nice reminder of the strength of the stronghold business model.

So look I think Lucas.

Lucas I would just add I think I think there is.

Which is hey, if power prices are Super high we can quickly turn the data centers off and divert all of that power to the grid.

As we have been.

Carefully observing industry peers.

Announcing.

Conversely, when power prices are low and.

Growth projects.

Our significant kind of greenfield builds.

And by low mean, a lower than are available cost to make the power.

Or that require.

We can and we wanted to do it on a single day, but it is expected to be low four weeks or a month.

Extraordinary timelines and future delivery schedules.

What we're trying to focus.

We can turn the power plant off so right now, we're saying that.

One is the factset.

We look at third sites, we look organically on our own existing 41000 slots.

Matthew Jared Smith: We continue to believe that Stronghold is significantly undervalued on an absolute basis, and acutely so relative to public Bitcoin mining peers. When looking at select valuation metrics, adjusted EV to hashrate capacity, and adjusted EV to annualized January Bitcoin production, Stronghold trades at an approximately 70% discount to peers. I have nothing else to add. Lastly, on slide 11, revenue for the fourth quarter was $21.7 million, with $20.5 million from cryptocurrency operations on 599 Bitcoin mined and 1.2 million from energy operations. Gap's net loss was $21.2 million for the fourth quarter, and adjusted EBITDA was $2.3 million.

We're expecting costs to average between 40 or $45 per megawatt hour to make the power and if you looked at the forward curve.

And we have a number of in a tier one tier two tier three miners.

In terms of stratified by efficiency and if you were to take the least efficient miners.

For power expected power pricing.

In PJM.

And and high grade dose into what's called a nice 21 type miner, which could utilize existing plugs better energized you can get to seven ex ash.

It's one of the lowest power markets in the U S and so that's that decision too.

To buy power and set a make it.

Plus and so.

It comes when we see power in the Twenty's or below which is where we're seeing it now seasonally so I think.

Identifying but thats an opportunity is not a commitment to.

Spend the money to do that.

You can expect us to.

Demonstrated very it's going to take very creative ways join slots in the past and we think there are a lot of opportunities to do that without.

Just make the economic decision to buy the power at a cheaper cost and then we can make it which is there is.

Im stretching towards so in fact, we actually have an excess capacity in existing data centers is the message.

<unk>.

There is a spot in the middle where it makes sense to run the plants.

Got it.

And supply all that power of the data centers right now.

I appreciate that.

Looking like if the curve ends up playing out as it's.

Yes.

Kind of switching topics.

Obviously power price environment, it's been very soft and you noted your flexibility to toggle.

As it's priced will run at least scrub grass.

Seasonally rather than all the time and then by power.

On generation.

Gregory A. Beard: A reconciliation for those figures is included in the appendix. I will now turn the call back over to Greg for closing remarks. Thanks, Matt. To summarize what we've discussed today, we are executing on the objectives we have communicated to the market. We remain confident in the strength of our business going into the halving, and we believe that we have outstanding growth prospects through upgrading our fleet and developing carbon capture. With that, we'll open up the call for Q&A. Operator.

And purchasing power could you speak a little bit to what your costs are.

Great.

And lower price so it can make it which obviously will improve our margins.

When you produce in house today at Panther and scrub grass.

Thank you very much Greg really appreciate the color.

And.

Kind of what the utilization rate of the plant is expected to be in this in this price environment. Thank you.

Best of luck I'll turn it over for now.

Yeah, Okay. Thank.

Yes. So this is a nice reminder of the strength of the stronghold business model, which is hey, if power prices are Super high we can quickly turn the data centers off and divert all of that power to the grid.

Thank you.

Please standby for our next question.

Our next question comes from the line of Joe <unk> with Conference point Research and trading your line is open.

Hi, guys I wanted to dig a little bit more on your strategy going into to having.

Conversely, when power prices are low and.

Bi Lo Mein had lowered our variable costs to make the power.

I guess what.

$3, a megawatt hour, it's pretty strong prices from a marginal cost standpoint, we keep machines on them, but I guess in the event that you don't see a correction of hedge price and you kind of see it so.

We can and we wanted to do it on a single day, but it was expected to be low four weeks or a month.

Operator: Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 1-1 on your telephone and then wait to hear your name announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A list. Our first question comes from the line of Lucas Pipes with B-Rally.

We can turn the power plant off so right now, we're saying that.

Sub five.

Levels.

We're expecting costs to average between 40 or $45 per megawatt hour to make the power and if you looked at the forward curve.

One is just like how do you how are you going to manage the balance sheet and growth.

Ambitions to ultimately put yourself in a better position from us.

Power expected power pricing.

Both cost and cash position.

In PJM.

It's one of the lowest power markets in the U S and so that's that decision too.

Yes, I think we have the benefit of not having.

Lucas Nathaniel Pipes: Your line is open. Thank you very much, operator. Good morning, everyone.

To be making debt amortization payments and we have no or very very small obligations on capex today, So and right now today, we are generating cash.

To buy power and sort of make it.

It comes when we see power in the Twenty's or below which is where we're seeing them now seasonally so I think.

Lucas Nathaniel Pipes: I first wanted to ask a few questions on slide four, show that column with additional options. A few questions there. What type of machines should we be thinking about? What would a reasonable cost or CapEx range be for that, or is that included in the guidance? I don't think so, but

And so I think if you looked at our at the potential for the improvement and efficiency of our mining fleet.

And you can expect us to.

Just make the economic decision to buy the power at a cheaper cost and then we can make it which is there is.

Thank you you're going to have to we need to lay in the market and what the what a realistic timeframe to do that which we will do but I think the <unk>.

A.

There is a spot in the middle where it makes sense to run the plants.

Fast response to having in.

And our view is to drive power costs as low as you can and that's really the most important variable that we can control.

And supply all that power of the data centers right now.

Looking like if the curve ends up playing out as it's.

<unk>.

Yes, happily Luckily, we have a power curve and it's allowing us to do that so we're going to end up with.

As it's priced will run at least scrub grass.

Gregory A. Beard: Bye, and then I have a few more follow-up questions. Yeah, so I think we're thinking about it in terms of like the generic latest generation miner that you can still buy. So we're not looking at the next generation to the current latest generation. So it's something like a Bitmain S21.

Seasonally rather than all the time and then by power.

Lower power costs and what.

Well, we would have modeled.

<unk> ago, just given where the curve.

Great.

And lower price so it can make it which obviously will improve our margins.

Move to just related to natural gas pricing being so cheap.

Thank you very much Greg really appreciate the color.

But I think if you if you were to study our balance sheet.

Best of luck I'll turn it over for now.

And our obligations there are purposely low due to having to let us get to the point, where we should be able to.

Yes, okay.

Thank you.

Please standby for our next question.

Gregory A. Beard: In terms of, you know, we that the market for these machines changes really weekly, and in the past, we've been very opportunistic about how we've managed to fill slots, whether it be just buying machines outright, JV-ing on machines, just to improve the capital efficiency and to get a very high ROE. You know, at current prices, market prices, you'd say, hey, to fill up all these swaps would be around $20 million at current rates. We think, obviously, the rates are going to be... you know, potentially entirely different post-halving. And as always, hey, we're trying to do better than the market in terms of what we spend and how we structure. Thank you, Greg. When would you make a decision on this?

Our next question comes from the line of Joe <unk> with Conference point Research and trading your line is open.

Begin to spend to upgrade the fleet.

On top of what you would give us a benefit on top of.

Hi, guys I wanted to dig a little bit more on your strategy going into to having.

Having a extremely low power price.

Also at some point that we're making a lot of progress on carbon capture.

Yes.

$30 a megawatt hour.

Strong prices from a marginal cost standpoint, we keep machines on them, but I guess in the event that you don't see a correction of hedge price and you kind of see it.

And that project is really designed as well to give us an even lower power price sort of on a net basis for that so that's a that's one of the reasons that we continue to focus on.

<unk>.

Levels.

On carbon capture is a benefit to the company.

One is like how do you how are you going to manage the balance sheet and growth.

Thanks, that's helpful. That's helpful.

Ambitions to ultimately put yourself in a better position from us.

I also wanted to.

I'd say more into the hosting business.

Both cost and cash position.

So far.

Demonstrated strong results, but I guess just.

Yes, so I think we have the benefit of not having.

What do you think the outlook is there.

I was wondering if you could pursue additional opportunities on that front.

To be making debt amortization payments and we have no or very very small obligations on capex today, So and right now today, we are generating cash.

<unk>.

Maybe.

The overall advantages to your kind of your model versus <unk>.

Traditional hosting.

Minors.

And so I think if you looked at our at the potential for the improvement and efficiency of our mining fleet.

I'm definitely struggle over the past two years.

There is a lot of.

Andrew Sheetrock could talk about the whole demand going away I guess.

Going to have to.

We need to lay in the market and what the what a realistic timeframe minutes to do that which we will do.

How are you guys positioned.

In that respect.

So I think we're we think we have a good relationship with our partners and I think youre really unlikely to see us Andrew.

The best response to having an.

And our view is to drive power costs as low as you can thats really the most important variable that we can control.

Gregory A. Beard: deploying additional capital. You know what? I think we want you to give us a quarter to present what we, you know, what we want to do and the pace of that. It's a re-powering of the data center or re-replacing all of these. Unknown Executive, Alex Kovtun, Nicholas Giles, Matt Usdin, Unknown Executive, Alex Kovtun, Making sure that we're opportunistic to achieve the best pricing and rates return on that equipment. Do you have a site in mind?

Enter into what I would describe as like a regular way of hosting what we run on someone else's minor in southern power.

<unk>.

Yes, happily Luckily, we have a power curve and it's allowing us to do that so we're going to end up with lower power costs and what.

We strongly prefer the.

The model, we share a significant amount of the.

Bitcoin mining revenue with our partners. So I think we will expect them to continue.

Well, we would have modeled.

<unk> ago, just given where the curve.

And in some way.

Move to just related to natural gas pricing being so cheap.

If we.

I think I would view that as one of the opportunistic ways too.

But I think if you if you were to study our balance sheet.

And our obligations there are purposely low due to having to let us get to the point, where we should be able to.

Drive the efficiency to a better place from the miners is through expanding.

Our JV with <unk>.

Existing and new partners.

Begin to spend to upgrade the fleet.

So I think I would say.

We don't we don't.

On top which will give us a benefit on top of.

We're not expecting any immediate changes to the.

Having a extremely low power price.

To the JV structures.

I think also at some point that we're making a lot of progress on carbon capture.

Alright, Thanks, that's all for me.

Okay. Thank you. Thank you.

And that project is really designed as well to give us an even lower power price sort of on a net basis.

As a reminder, ladies and gentlemen that start one wanted to ask a question.

Gregory A. Beard: Yeah, I think we have, you know, we've only got two sites, Scrub Grouse and Panther Creek. So I think you can expect it at both plants. And just to be clear, at current prices, it's $20 million per exahash of machines, just in case that was, Yes, noted. Thank you.

Please standby for our next question.

For that so that's a that's one of the reasons that we continue to focus on.

Our next question comes from Kevin Dede with H C. Wainwright Your line is open.

On carbon capture is a benefit to the company.

Thanks, Hi, Greg Matt Thanks for having me on.

Thanks, that's helpful. That's helpful.

Greg kind of I.

I also wanted to.

I guess sort of a.

The more into the hosting business.

Abroad, one I was hoping you would take some time to work.

So far.

Demonstrated strong results, but I guess just.

To walk me through and anyone else I was curious.

What do you think the outlook is there.

On the carbon capture and the balance of.

I was wondering if you could pursue additional opportunities on that front.

Now that youre seeing 14% recovery.

Gregory A. Beard: Thank you. So, Lucas, I think, Lucas, I would just add, I think, I think there are, as we've been, carefully observing industry peers and announcing growth projects that are significant kinds of greenfield builds or that require, you know, extraordinary timelines and future delivery schedules. You know, what we're trying to focus you on is the fact that, you know, we've looked at third sites, we've looked organically at our own existing 41,000 slots, and we have a number of Tier 1, Tier 2, Tier 3 miners. In terms of stratifying by efficiency, and if you were to take the least efficient miners and high grade those into what's called an S21 type minor, which could utilize existing plugs that

<unk>.

Maybe.

The overall advantages to kind of you guys have modeled versus <unk>.

A lower cost to deploy the carbo lists.

Traditional hosting.

And the balance of running the plants to generate to ash and the expected revenue offset.

Minors.

I've definitely struggle over the past two years.

There is a lot of.

Industry Chocolate talk about the hosted model going away I guess.

It's a big question I know that Youre expecting a credit Asian.

How are you guys positioned.

In that respect.

Peru next quarter, which means conceivably you could see revenue in the third quarter.

So I think we're we think we have a good relationship with our partners and I think youre really unlikely to see us Andrew.

What point.

Do you think you can just run both plants all out regardless of the power curves.

Enter into what I would describe it as like a regular way of hosting what we brought in someone else's miners in southern power we.

We strongly prefer the.

Yes sure Kevin.

What youre describing is absolutely the goal.

The model, we share a significant amount of the.

And I would say the last three months has been.

The bitcoin mining revenue with our partners So I think.

Yes.

Expect them to continue.

I would say better than confirmatory, because it's when you're driving the the rate of carbon absorption up and not only is the upper potential had moved up.

And in some way.

If we.

I think I would view that as one of the opportunistic ways too.

Drive the efficiency to a better place from the miners is through expanding.

The rate that the ash as carbon dating has moved up so.

Not only is it according.

Our JV with <unk>.

According to require fewer carbo lists to get the same job done.

Existing and new partners.

So I think I would say.

The cost of the Carnival is coming down and labor is coming down. So we're really I think we were very conservative in the early days.

I can say, we don't we don't we're not expecting any immediate changes to the.

To the JV structures.

Alright, Thanks, that's all for me.

Sort of late last year, describing the potential of their project.

Okay. Thank you. Thank you.

As a reminder, ladies and gentlemen that start one wanted to ask a question. Please.

But it's still while we've made a ton of our progress and.

Gregory A. Beard: You can get to seven X-ash plus, and so, you know, identifying that that's an opportunity is not a commitment to. We've demonstrated various, very creative ways of filling slots in the past, and we think there are a lot of opportunities to do that without stretching forward. So the fact that we have seven exit hash capacities in the existing data centers is the message. I am kind of switching topics. Obviously, the power price environment has been very soft.

Every on every assumption.

Please standby for our next question.

Our next question comes from Kevin Dede with H C. Wainwright Your line is open.

It's proven to be conservative.

So far.

But it's still too early.

Thanks, Hi, Greg Matt Thanks for having me on.

Still too early to spike the football and say Hey, we're going to have X number of Carnival is.

Greg kind of I.

I guess sort of a.

Fully deployed and generating.

Abroad, one I was hoping you would take some time to work.

X amount of.

To walk me through and anyone else I was curious.

Revenue related to that sequestration.

On the carbon capture and the balance of.

I think that should happen I would expect that we will be in a position to do that in the next quarter.

Now that youre seeing 14% recovery.

A lower cost to deploy the carbo lists.

But I think we've got we're still testing.

Gregory A. Beard: And you noted your flexibility to toggle between your own generation and purchasing power. Could you speak a little bit about what your costs are when you produce in house today at Panther and Scrubgrass and what the utilization rate of the plant is expected to be in this? Thanks.

The balance of running the plant to generate ash and the expected revenue offset.

Literally dozens of tests a week.

<unk>.

Now now we are testing the newly redesigned to cover <unk>.

It's a big question I know that Youre expecting a credit Asian.

Number two that has a increase airflow. So I think it's from our vantage point.

On Peru next quarter, which means conceivably you could see revenue in the third quarter.

I think when we see a plateau.

Gregory A. Beard: Yeah, so this is just a nice reminder of the strength of the stronghold business model, which is, hey, if power prices are super high, we can quickly turn the data centers off and divert all that power to the grid. Conversely, when power prices are low, and by low, we mean lower than our available cost to make the power. We can, and we wouldn't do it in a single day, but it's expected to be low for weeks or a month.

And the testing results and we've sort of reiterated to the best Carnival that design to maximize the airflow in combination.

What point.

Do you think you can just run both plants all out regardless of the power curves.

Sure.

That also minimises, the capex build out cost.

Yes sure Kevin.

What youre describing is absolutely the goal.

That's when they will say hey, now we're ready to.

And I would say the last three months has been.

<unk>.

Go ahead, and do the build out and at that point, we will describe what the capex costs are and what we think we can.

Yes.

I would say better than confirmatory, because it's when you're driving the the rate of carbon absorption up and not only is the.

Questor, but youre right the.

The reason to be excited.

This is a revenue stream that when looked at on a on a an offset for power cost.

Gregory A. Beard: We can turn the power plant off. So right now, we're saying that. We're expecting costs to average between $40 or $45 per megawatt hour to make the power.

<unk> is the upper potential had moved up.

The rate that the ash as carbonated has moved up so.

It's going to meaningfully drive.

The revenue up in the sort of the average cost per megawatt down which is that was the <unk>.

Not only is it going to require fewer carbo lists to get the same job done.

We've always said that that's even more important.

Gregory A. Beard: And if you looked at the Ford curve for expected power pricing in PJM, it's one of the lowest-powered markets in the US. And so that's that decision to buy power instead of make it. It comes when we see power in the 20s or below, which is where we're seeing it now seasonally.

Then the efficiency of the machines is a lower power costs.

Cost of this carnival is coming down and labor is coming down. So we're really I think we were very conservative in the early days.

So that's what we're driving towards so I think standby give us give us a.

Sort of late last year, describing the potential of the project.

A quarter or two.

Project.

We need to refine our results and designs and with those results and designs. We can have accurate capex estimates inaccurate.

It's still while we've made a ton of our progress and <unk>.

Every on every.

<unk>.

Gregory A. Beard: So I think you can expect us to, you know, just make the economic decision to buy the power at a cheaper cost than we can make it, which is, you know, there's a spot in the middle where it makes sense to run the plants and supply all that power to the data centers. But now we're looking like if the curve ends up playing out as it is at its price, it will run at least scrubgrass. Seasonally, rather than all the time, and then by power for a lower price, so we can make it, which will obviously improve our margins. Thank you very much, Greg. I really appreciate the color and best of luck.

Sure.

It has proven to be conservative.

Timeframes.

So far.

Sure.

But it's still too it's still too early to spike the football and say Hey, we're going to have X number of Carnival is fully deployed.

I think on the we also disclose we are now listed on the <unk>.

Registry.

And then as they have now begun their quote auditing process.

And generating.

X amount of.

Alright, I think making a mistake about it this will be a big year for carbon capture.

Revenue related to that sequestration.

I think that should happen I would expect that we'll be in a position to do that in the next quarter.

At least that scrub graph this year so that's the.

And hopefully in the next quarter have specifics to share as well so I'm sorry, we can't tell you.

But I think we've got we're still testing.

Just literally dozens of tests a week.

Exactly per unit and everything but thats a.

I can say, we did all that math in December on a hypothetical basis.

Now now we're testing the newly redesigned to cover <unk>.

And that is materially better than what we had initially thought in terms of capex.

Two that has.

Kris airflow, so I think it's from our vantage point.

Speed to.

I think when we see a plateau.

Carbonate and.

And the rate of absorption so.

And the testing results and we've sort of reiterated to the best Carnival that design to maximize the airflow in combination.

Lucas Nathaniel Pipes: I'll turn it over to you. Thank you. Please stand by for our next question. Our next question comes from the line of Joe Flynn with CompensPoint Research and Trading. Your line is open.

Okay. Just finally, yes.

No.

Appreciate the color.

No need to apologize understand it's a very dynamic situation I appreciate all the effort there.

That also minimises, the capex build out cost.

That's when they will say hey, now we're ready to.

Understand.

Two.

We just we just don't want to we don't want to go backwards and say, Hey, we promised X percent or whatever costs and have it be.

Go ahead, and do the build out and at that point, we'll describe what the capex costs are and what we think we can get to.

Unknown Caller: You guys, I wanted to dig a little bit more. Century Hours megawatt hour, The Event Head, Just Like Us. Matt, Yeah, so hey, I think we have the benefit of not having to be making debt amortization payments, and we have no or very, very small obligations on CapEx today. So we, and right now, we're generating cash. And so I think if you look at the potential for the improvement in efficiency of a mining fleet, I think you're going to have to, you know, we need to lay it out to the market what the, you know, what a realistic time frame is to do that, which we will do. But I think the best response to having, in our view, is to drive power costs as low as you can.

Questor, but youre right the reason to be excited.

We're completely.

Completely understand theres been enough of that.

This is a revenue stream that when looked at on a on a an offset for power cost.

Maybe maybe a little more insight on.

Associated revenue timing. If you are registered by the end of the second quarter as the press release intimated would that is it fair to assume you could see revenue in the third quarter maybe.

It's going to meaningfully drive the.

The revenue up in the sort of the average cost per megawatt down which is that was neat.

Which we've always said that.

That's even more important than the efficiency of the machines is a lower power costs.

Maybe.

Give us a little more insight on that how are you looking at it.

So that's what we're driving towards so I think sandbox give us give us a.

You know what I would say if we get on the registry.

What we would hope to do is.

A quarter or two.

We need to refine our results and designs and with those results and designs, we can kind of accurate capex estimates inaccurate.

Cell.

Carbon credits and the private market.

And on a forward looking basis.

Timeframes.

Hey, once we have our science and we're confident we can share that with potential buyers of of carbon credits and we are on the exchange and auditing and.

Sure.

I think on the we also disclose we are now listed on the <unk>.

Gregory A. Beard: That's really the most important variable that we can control. And just happily, luckily, we have a power curve that is allowing us to do that. So we're going to end up with lower power costs and what we would have modeled a quarter ago, just given where the curve moved, and it's related to natural gas pricing being so cheap. But I think if you were to study our balance sheet and our obligations, they're purposely low through the halving to let us get to the point where we should be able to begin to spend, upgrade the fleet, on top, you know, which I think also at some point, hey, we're making a lot of progress on carbon capture, and that project is really designed as well to give us an even lower power price, sort of on a net basis.

Bureau registry.

I guess, then transact will in this way.

They have now begun their quote auditing process.

That then opens up the ability for us to sell.

Alright, I think making a mistake about it this will be a big year for carbon capture.

We could sell out than the.

A certain number of credits.

At least at scrubbed graph this year so that's the.

And.

And deliver those as we build the project out.

And hopefully in the next quarter have specifics to share as well so I'm sorry, we can't tell you.

So I think that's absolutely right. So I think I think if theres a benefit to being on a registry.

Exactly per unit and everything but thats a I.

I can say, we did all that math in December on a hypothetical basis.

<unk>.

And have the process fully vetted out.

And it is materially better than what we had initially thought in terms of capex.

We can then sell credits.

Before we generate them.

<unk> two.

With an expected timeline to deliver them.

Carbonate and.

And the rate of absorption so.

Love to fully address that.

And the forward market.

Okay. Just finally, yes.

Okay.

Yes, yes.

Okay.

I appreciate the color.

Sounds good.

Other topic I think has to do with the mention of champion.

No need to apologize I understand it's a very dynamic situation I appreciate all the effort there.

Could you just help me understand how champion interfaces between you and PGM and how you see them, helping to deliver those lower power prices to you before.

Understand.

We just don't want to we don't want to go backwards and say, Hey, we promised X percent or whatever costs and have it be.

Gregory A. Beard: So that's one of the reasons that we continue to focus on carbon capture as a benefit to the company. The outlook is there. Additional Op.. Lots of Yeah, so I think we're, we think we have a good relationship with our partners. And I think you're really unlikely to see us enter into what I would describe as like a regular way of hosting where we run someone else's miners and sell them power. We strongly prefer the model where we share a significant amount of the Bitcoin mining revenue with our partners, so I think I think we'll expect them to continue in some way. And if we, you know, I think I would view that as one of the opportunistic ways to drive efficiency to a better place for the miners through expanding our JVs with, you know, our existing or new partners. So I think it's a thing that we don't, we don't, we're not expecting any immediate changes to the JV Structures. Thank you. As a reminder, ladies and gentlemen, that's star 11 to ask the question.

We're completely.

Before carbon captures fully up and running at both plants.

Completely understand theres been enough of that.

Maybe maybe a little more insight on.

Hey, Kevin it's Matt.

<unk> revenue timing. If you are registered by the end of the second quarter as the press release intimated would that is it fair to assume you could see revenue in the third quarter maybe.

I would refer you back to our December.

Press release, and when we mentioned that we had been through.

Deep discussions constructive.

Constructive discussions with PJM around our data center load banks co located the plants and.

Maybe.

Give us a little more insight on that how are you looking at it.

You know what I would say if we get on the registry.

We have been over the course of the last few months.

What we would hope to do is.

Purchasing retail electricity.

Cell.

And when you when you are in that market.

Carbon credits and the private market.

This is when the plant is not on which December Panther Creek had an outage that.

And on a forward looking basis.

We have since come out of and it's been running well but.

Hey, once we have our science and we're confident we can share that with potential buyers of of carbon credits and we are on the exchange unaudited in.

During that period of time, we were purchasing retail electricity.

And at times, the the AD or the premium to wholesale can be onerous, which I mean, you can see in the fourth quarter.

I guess, then transact able in this way.

Fuel and important power cost.

Then opens up the ability for us to sell.

Fast forward, we wanted more visibility and more flexibility when you go into the shoulder here.

We could sell out than the.

A certain number of credits.

It was a very warm February metro gas prices are at a $1 $50 75 versus a year ago. When they were twice that and it's the marginal fueling our marketing so we expect.

And.

And deliver those as we build the project out.

So I think it's absolutely right. So I think I think if theres a benefit too.

Single digit to $20 real time prices and the shorter potentially.

Being on a registry.

Said.

And have the process fully vetted out.

Notwithstanding any.

Ukraine, Russia type of real structural items, and you want to be able to purchase power as low a cost and real time markets as you can during that period and so we.

We can then sell credits.

Before we generate them.

With an expected timeline to deliver them.

Sure.

Loved the fully Africa.

We have been working on.

Operator: Please stand by for our next question. Our next question comes from the line of Kevin Dede with HC Wainwright. Your line is open. Thanks. Hi, Greg, Matt.

And the forward market.

Competitive supply agreements for a while to.

Okay.

Okay.

To make sure we have ultimate flexibility.

That sounds good.

Another topic I think has to do with the mentioned a champion.

We are very grateful with.

Calpine.

Champion energy.

Calpine stepped into that role and we're very excited about the.

Could you just help me understand how champion interfaces between you and PGM and how you see them, helping to deliver those lower power prices to you.

Kevin Darryl Dede: Thanks for having me on, Greg. Kind of a, I guess sort of a broad one. I was hoping you would take some time to walk me through and anyone else who's curious about carbon capture and the balance of now that you're seeing 14% recovery, a lower cost to deploy the CarboLift, and the balance of running the plants to generate the ash and the expected revenue offset. It's a big question.

Reduce cost to power that will.

Absolutely result from that during periods when we're importing so it's.

It's a pretty big it will be resolved in a pretty big savings for us.

Before carbon captures fully up and running at both plants.

Yes.

Okay. So looking out we should assume generally right generally that youre running both plants.

Hey, Kevin it's Matt.

I would refer you back to our December.

Sure.

Press release, and when we when we mentioned that we had been through.

Sort of peak times.

Excess past winter.

Deep discussions constructive.

But.

Constructive discussions with PJM around our data center load banks co located the plants and.

Maybe through the summer and then off on the shoulder months is that a fair assumption at least for the next year or so.

Kevin Darryl Dede: I know that you're expecting accreditation on Puro next quarter, which means conceivably, you could see revenue in the third quarter. But at what point do you think you can just run both plants all out regardless of the power curve?

We have been over the course of the last few months.

So we are going to run scrubber.

I would say more or less the base cases.

Purchasing retail electricity.

<unk> or more than that depending on carbon.

And when you are in that market.

As we start to monetize carbon potentially and perfect our design.

This is when the plant is not on which.

December Panther Creek had an outage that we have since come out of it it has been running well but.

Gregory A. Beard: Yes, sir. I can tell that what you're describing is absolutely the goal. And I would say, hey, the last three months have been, you know, better than confirmatory because it's when you're driving the rate of carbon absorption up. And not only is the is the upper potential, you know; it moved up. The rate that the ash is carbonating has moved up, so not only is it going to require fewer carboliths to get the same job done, but the cost of those carboliths is coming down, and the labor is coming down as well.

Carbon continues step change in <unk> cost of power, but right now as we're looking at at the peak price for power. The rest of the year is in July at 50 Bucks.

At a time, we were purchasing retail electricity.

And at times, the the AD or the premium to wholesale can be onerous, which I mean, you can see in the fourth quarter.

Ish.

And so in that case.

If you can buy power.

Fuel and important power cost fast forward, we wanted more visibility and more flexibility when you go into the shoulder here.

Well below your marginal fuel costs Youll do it subscriber has probably runs as a beaker and Panther Creek.

As might be to run as a base load continue to run as a baseload plant.

It was a very warm February metro gas prices are at a $1 $50 75 versus a year ago. When they were twice that and it's the marginal fuel on our marketing so we expect.

For the year aside from some.

Potential pointed out it's time that we are not is not yet on the calendar.

Okay any immediate plans to drive the carbo lifts at Panther given that Youll have.

Single digit to $20 real time prices and the shorter potentially.

Gregory A. Beard: So really, I think we were very conservative in the early days, sort of late last year describing the potential of the project. But it's still, you know, while we've made a ton of progress, and every assumption is proven to be conservative. So far, but it's still too early, you know. It's still too early to spike the football and say, Hey, we're gonna have x number of Carver lists fully deployed and generating X amount of revenue related to that sequestration. I think that should happen.

Notwithstanding any.

Continuous supply of ash.

Ukraine, Russia type of real structural items, and you want to be able to purchase power.

So we're still.

<unk> of our cost and real time markets as you can during that period and so.

<unk> is nearest term.

We have been working on.

Due to the really high.

Competitive supply agreements for a while to make sure we have ultimate flexibility.

Limestone calcium element of.

The CFPB process there.

And we're very grateful with trying.

<unk>.

To have Calpine Champs.

Once we perfect scrubber asked where we started.

Champion energy.

We're studying it will move over to Panther.

Calpine stepped into that role and we're very excited about the.

We don't really see any reasons.

Reduced cost of power that will.

Why why Panther can scale as well, but we need to go over in further test the ash.

Absolutely result from that during periods when we're importing so it's.

It's a pretty big it will be resolved in a pretty big savings for us.

The byproduct beneficial use ash.

And then ultimately.

Can potentially scale at both plants.

Okay. So so looking out we should assume generally rate generally that youre running both plants.

So I would just say scrubber ashes near term focus because it's.

Gregory A. Beard: I would expect that we'll be in a position to do that in the next quarter. You know, but I think we've got we're still testing.........you know, just literally dozens of tests a week.

It's already started.

Have 600, plus acres and there are a lot.

Sure.

Sort of peak times.

Benefits, including the very calcium rich nature of the ash and so we're going to scale <unk>, probably and then move over to Panther.

Excess past winter.

Gregory A. Beard: Now we're now testing this, this newly redesigned Carboliv number two that has a, you know, increased airflow. So I think it's from our vantage point. I think when we see a plateau in the testing results, and we've sort of iterated to the best cargo lift design that maximizes airflow and carbonation, that also minimizes the CapEx doled out cost.

But.

Maybe through the summer and then off on the shoulder months is that a fair assumption at least for the next year or so.

Yes understand agree in Grand demand on capital.

So we are going to run scrubber.

The hinge, but have you considered other sites.

Would you say more or less the base cases.

<unk> or more than that depending on carbon.

Any change in your thinking on that and if so what type of timeline might you consider.

As we start to monetize carbon potentially and perfect our design.

Carbon continues step change in <unk> cost of power, but right now as we're looking at at the peak price for power. The rest of the year is in July at 50 Bucks.

Yes, I think we're all.

Gregory A. Beard: That's when they'll say, hey, now we're ready to go ahead and do the build out. And at that point, we'll describe what the CapEx costs are and what we think we can sequester. But you're right, the reason to be excited is that this is a revenue stream that when looked at as an offset for power costs, It's going to meaningfully drive the revenue up and the sort of the average cost per megawatt down, which is that we've always said that that's even more important than the deficiency of the machines is a low power cost. So that's what we're driving toward. So I think if they stand by, they should give us, you know, a quarter to continue to refine our results and designs.

Looking at other sites and comparing what we have to say does it make sense to you.

To high grade our fleet at our current sites or should we look at it.

Ish.

And so in that case.

You can buy power.

At new sites.

Well below your marginal fuel costs Youll do it subscriber has probably runs as a beaker and Panther Creek.

Constantly ascent.

Opportunities to review.

Alright.

As might be to run as a base load.

The cost of our power is lower than what.

We didn't run as a baseload plant.

Throughout the year aside from some potential pointed out it's time that were not there is not yet on the calendar.

Most of the things that we see.

Okay achieve.

So I think yes, we have we have no pain.

Okay any immediate plans to drive the carbo lifts at Panther given that Youll have.

Pending our announced new sites at this point, but we are we are constantly reviewing.

Yes.

Continuous supply of ash.

Okay fair enough.

So we're still scrub brushes as nearest term.

I'll hop back in the queue Greg.

Thanks, Kevin.

Due to the really high.

Gregory A. Beard: And with those results and designs, we can have accurate CapEx estimates in accurate timeframes to share. I think on the, you know, we also disclosed that we are now listed on the Bureau Registry. And they've now begun their, quote, auditing process. But I think, making a mistake about it, this will be a big year for carbon capture, at least at ScrubRaft this year. So that's that's the, and hopefully, in the next quarter, we have specifics to share as well. So I'm sorry we can't tell you exactly how much per unit and everything.

Okay.

Thank you as a reminder, ladies and gentlemen that start one wants to ask a question. Please standby for our next question.

Limestone calcium element of that.

CFB process there.

<unk>.

Once we perfect scrubber asked where we started.

Hi.

We have a follow up question from the line of Lucas pipes with B Riley Your line is open.

We're studying it we will move over to Panther.

We don't really see any reasons.

Thank you very much operator, thank you for taking my follow up question.

Why why Panther can scale as well, but we need to go over in further tests the ash.

There's a lot of talk about shortages.

Power.

Given demand not only from.

By product beneficial use ash.

And then ultimately.

Bitcoin mining, but also AI applications to what extent.

Potentially scale of both plants.

Are you receiving inbounds.

So I would just describe rashes near term focus because it's.

Given.

You have direct access to power and land package. Thank you very much.

It's already started.

Gregory A. Beard: But that's a, I can say we did all that math in December on a hypothetical basis, and it is materially better than what we had initially thought in terms of CapEx. Speed to, you know, carbonate and any rate of absorption, so, Unknown Speaker Yeah, appreciate the caller.

Have 600 plus acres in.

Yes, I would say, we do have interest from from inbound, but I would say.

A lot of benefits, including a very calcium rich nature of the ash and so we're going to scale. It <unk>, probably and then move over to Panther.

Yeah.

The recent run up in big corn price and half price.

Yes understand and agree and grand demand on capital.

It's an attractive business to run right now and we'll see what happens.

The hinge, but have you considered other sites.

Having dash price and corn price.

Kevin Darryl Dede: No need to apologize. I understand it's a very dynamic situation. I appreciate all the effort there.

But I think if bitcoin or to be.

Any change in your thinking on that and if so what type of timeline might you consider.

Gregory A. Beard: Unknown Speaker We just don't want to go back and say, hey, we promised X percent or whatever costs and have it be. Unknown Speaker No, I completely, completely understand there's been enough of that. Maybe a little more insight on associated revenue timing. If you are registered by the end of the second quarter, as the press release intimated, is it fair to assume you could see revenue in the third quarter? Maybe you could give us a little more insight on that.

Lord from the Earth. There is there are multiple purposes for you.

40000 fully built out.

Yes, I think we're always looking at other sites and comparing what we have to say does it make sense too.

That have computing capacity.

Available given what's happening in the world of AI.

To high grade our fleet at our current sites or should we look at it.

As well so.

Sure.

We are confident that the all of the infrastructure that we.

At new sites.

Constantly ascent opt.

That were running that we built with access to power.

Opportunities for review.

These sites alright.

And that that redundancy as a valuable infrastructure asset.

The cost of our power is lower than what.

Most of the things that we see.

Thank you.

Okay achieve.

Matt.

Quick question on the whiskey.

So I think yes, we have we have no pain.

Tango slide.

Gregory A. Beard: How are you looking at it? You know what I would say, if we get on the registry, we could, you know, what we'd hope to do is, Cell. Carbon Credits in the private market, and on a forward-looking basis. So it's a hey, you know, once we have our assigned center, we're confident we can share that with potential buyers of carbon credits. And we're on the exchange and audited and, you know, I guess then transactable in this way, that then opens up the ability for us to sell. We could sell out then a certain number of credits and deliver those as we build the project out. So I think it's absolutely right. So I think if there's a benefit to being on a registry, it's that and have the process fully vetted out.

Pending our announced new sites at this point, but we are we are constantly reviewing.

Yes.

You've been in public markets for a long time, how do you explain these discrepancies.

What became forget Europe.

Thank you.

Okay fair enough.

So I wanted to avoid speculating, but I think what it is.

I'll hop back in the queue Greg.

Thanks, Kevin.

What's interesting is that it.

It's a business where.

Okay.

Thank you as a reminder, ladies and gentlemen that start one wants to ask a question. Please standby for our next question.

Okay.

Industry in the stock market, where people can buy ourselves every day.

And that can happen in any sort of way and when you think about the reasons and past potential execution.

Hi.

We have a follow up question from the line of Lucas pipes with B Riley Your line is open.

Thank you very much operator, thank you for taking my follow up question.

Issues or.

Our leverage which we are.

There's a lot of talk about shortages.

Chips away at some and are optimistic about.

Power.

Given demand not only from.

Really about escape velocity with cash flow related deleveraging against that debt.

Bitcoin mining, but also AI applications to what extent.

There are a lot of reasons to be optimistic.

Are you receiving inbounds.

And there is hard asset value here that is.

Kevin.

You have direct access to power and land package. Thank you very much.

Is absolutely in our view not recognized by the market in terms of our plants and the carbon opportunity. So I can start to step through the different.

Yes, I would say, we do have interest from from inbound, but I would say.

Attributes of stronghold.

The recent run up in bitcoin price and half price.

Compared to other peers.

And there is some scale related things or some.

It's an attractive business to run right now and we'll see what happens pellets, others, having dash price and bitcoin price.

Im kind of daily trading volume and size size related matters, but.

Gregory A. Beard: And we can then sell credits before we generate them, with an expected timeline to deliver them. Love the Ford market. Yeah, I think that's in the Ford market, too.

In the end, it's a commodity industry where.

But I think if bitcoin and where to be.

There should not be large disparities other than adjusting for operating and financial leverage.

Rod from the Earth. There is there are multiple purposes for.

And some other nuances between businesses and so to trade at a 70% or 80% discount to peers, who are in the same business.

Yes, 40000 fully built out plugs that have computing capacity.

Kevin Darryl Dede: Okay. Okay. That sounds good.

Available given what's happening in the world of AI as well.

It doesn't make any sense.

Matthew Jared Smith: Another topic I think has to do with the mention of Champion. Could you just help me understand how Champion interfaces between you and PGM and how you see them helping to deliver those lower power prices to you before carbon capture is, you know, fully up and running at both plants? Hey, Kevin, it's Matt.

So what question is what's going to close that.

Yes.

We're confident that the all of the infrastructure that we have.

And I'll just leave that to you all to ponder.

We're working on it so.

They were running that we built with access to power.

I'll just leave it at that.

And that that redundancy as a valuable infrastructure asset.

I appreciate it Matt.

Again best of luck. Thank you.

Thank you.

Thank you.

Matt.

Thank you.

Quick question on the <unk>.

I'm showing no further questions in the queue that concludes the question and answer session I would now like to turn the call back over to Mr. <unk> for closing remarks.

Tango slide.

Yes.

You've been in public markets for a long time, how do you explain these discrepancies.

What became forget Europe.

Okay, Hey, stockholders.

Thank you.

<unk>.

All of our employees. Thank you for all the effort. Thank you for the phase, where we're doing our best and we are optimistic about our prospects given the and.

So I wanted to avoid speculating, but I think what is what.

Matthew Jared Smith: So we, I would refer you back to our December press release, and when we mentioned that we had been through deep discussions, constructive discussions with PJM around our data center load banks, co-located with plants. And, you know, we have been, over the course of the last few months, purchasing retail electricity. And when you're in that market, this is when the plan is not on, which we were in December. Panther Creek had an outage that we've since come out of, and it's been running well. But during that period of time, we were purchasing retail electricity.

It's interesting.

It's a business where.

Alright.

Industry in the stock market, where people can buy ourselves every day.

And the business model and we will.

And that can happen in any sort of way and when you think about the reasons and past potential execution.

See you next quarter. Thank you bye bye.

Thank you for joining us today for strong host earnings call you may now disconnect.

Issues or.

Our leverage which we are.

Chips away at some and are optimistic about.

It really about escape velocity with cash flow related deleveraging against that debt.

There are a lot of reasons to be optimistic.

And that's hard asset value here that is.

Is absolutely in our view not recognized by the market in terms of our plants and the carbon opportunity. So I can start to step through the different <unk>.

Matthew Jared Smith: And at times, the, you know, the adder or the premium to wholesale can be onerous, which I think you can see in the fourth quarter fuel and import power costs. Fast forward. We wanted more visibility and more flexibility when you go into the shoulder here. You know, it was a very warm February, and natural gas prices are at $1.50, $1.75 versus a year ago when they were twice that, and it's the marginal fuel in our market, and so we expect single-digit to $20 real-time prices in the shorter term, potentially, notwithstanding any of the Ukraine, Russia type of real structural items. And you wanna be able to purchase power at as low of a cost in And so we have been working on competitive subplot agreements for a while to make sure we have the ultimate flexibility, and we're very grateful for that to have Calpine or Champion Energy, part of Calpine, step into that role. And we're very excited about the reduced cost of power that will absolutely result from that during periods when we're importing.

Attributes so stronghold.

Compared to other peers.

And there is some scale related things or some.

Im kind of daily trading volume and size size related matters, but.

In the end, it's a commodity industry where.

There should not be large disparities other than adjusting for operating and financial leverage.

And some other nuances between businesses and so to trade at a 70% or 80% discount to peers, who are in the same business.

It doesn't make any sense.

So what question is what's going to close that.

And I'll just leave that to you all to ponder.

We're working on it so.

I'll just leave it at that.

I appreciate it Matt.

Again best of luck. Thank you.

Thank you.

Thank you.

I'm showing no further questions in the queue that concludes the question and answer session I would now like to turn the call back over to Mr. <unk> for closing remarks.

Okay, Hey, stockholders investors.

Matthew Jared Smith: So that's, it's a pretty big deal, and it will result in a pretty big savings for us. Okay, so looking out, we should assume, generally, right generally that you're running both plans, sort of at peak times. X this past winter, but maybe through the summer and then off during the shoulder months.

All of our employees. Thank you for all the effort. Thank you for the phase, where we're doing our best and we are optimistic about our prospects given a.

And the business model.

And we will.

See you next quarter. Thank you bye bye.

Thank you for joining us today for strong host earnings call you may now disconnect.

Matthew Jared Smith: Is that a fair assumption, at least for the next year or so? If so, we we are going to run scrub brass would say more or less the base cases as a peeker or more than that, depending on carbon. I mean, if we start to monetize carbon potentially and perfect our design, carbon could be a step change in the scrubber cost of power. But right now, as we're looking at it, the peak price for power for the rest of the year is in July at $50-ish, and so in that case, if you can buy power well below your marginal fuel cost, you'll do it. The scrub rest probably runs as a peaker.

[music].

Matthew Jared Smith: And Panther Creek is likely to run as a baseload, continue to run as a baseload plant throughout the year, aside from some potential plant outage time that is not yet on the calendar. Okay, any immediate plans to try the carboliths at Panther, given that you'll have a continuous supply of ash? So we're still, Scowbrass is the nearest term term due to the, you know, really high limestone and calcium element of the CFB process there. You know, once we perfect scrub grass where we started, you know, where we're studying it, we'll move over to Panther. We don't really see any reasons why Panther can't scale as well, but we need to go over and further test the ash, the byproduct beneficial use ash, and then ultimately, we can potentially scale at both plants.

Matthew Jared Smith: So I would just say scrub brass is the near-term focus because it's already started and, you know, we have 600 plus acres and, and, you know, there are a lot, a lot of benefits, including the very calcium-rich nature of the ash. And so we're going to scale. Let's go rest first, probably, and then move over to Panther, understand the gray and grand demand on capital. That's the hinge.

Kevin Darryl Dede: But have you considered other sites? Any change in your thinking on that? And if so, what type of timeline might you consider?

Gregory A. Beard: Yeah, I think we're always looking at other sites and comparing what we have, say, does it make sense to, you know, upgrade our fleet at our current sites? Or should we look at a new site? We are constantly sent opportunities to review. News Science. The cost of our power is lower than what?

Gregory A. Beard: and the things that we see to achieve. So I think yeah, we have no, pending or announceable new sites at this point, but we are constantly reviewing www.strongholddig.com. Okay, fair enough. I'll hop back in the queue, Greg.

Kevin Darryl Dede: Thanks, Kevin. Thank you. As a reminder, ladies and gentlemen, that's Star 11 to ask a question. Please stand by for our next question. We have a follow-up question from the line of Lucas Pipes with D. Riley.

Lucas Nathaniel Pipes: Your line is open. Thank you very much, operator. Thank you for taking my follow-up question. Greg, there's a lot of talk about shortages of power, given demands not only from Bitcoin mining but also AI applications. To what extent are you receiving inbound? Direct Access to Power and Land Tax.

Gregory A. Beard: Yeah, I would say we do have interest from inbound, you know, but I would say the recent run-up in Bitcoin price and hash price. It's an attractive business to run right now. We'll see what happens, and the Bitcoin price. But I think, if Bitcoin were to be, you know, outlawed from the earth, there would be multiple purposes for 40,000 fully built-out plugs that have, you know, computing capacity available given what's happening in the world of AI as well.

[music].

Matthew Jared Smith: You know, we're confident that all the infrastructure that we're running that we built with access to the power and that redundancy is a valuable infrastructure asset. Thanks. Matt, quick, quick question on the whiskey tango slide, which has been in public markets for a long time. How do you explain these descriptions?

Matthew Jared Smith: Yeah, so I want to avoid speculating. But I think what's interesting is that it's it's a business where, it's an industry and a stock market where, you know, people could buy or sell us every day, and that can happen in any sort of way. And when you think about the reasons and past potential execution issues or, you know, our leverage, which we've chipped away at some and are optimistic about, really about escape velocity with cash flow-related deleveraging against that debt, there are a lot of reasons to be optimistic.

Matthew Jared Smith: And there's hard asset value here that is absolutely, in our view, not recognized by the market in terms of our plants and the carbon opportunity. And so, you know, I can start to step through the different attributes of Stronghold, you know, compared to other peers. And, you know, there are some scale-related things.

Matthew Jared Smith: There are some, you know, kind of daily trading volume and size-related matters. But in the end, it's a commodity industry where there should not be large disparities, other than adjusting for operating and financial leverage and some other nuances between businesses.

Matthew Jared Smith: And so to trade at a 70 or 80% discount to peers who are in the same business doesn't make any sense. And so the question is, what's going to close that? And I'll just leave that to you all to ponder. But, you know, we're working on it. So. Oh, you know. I'll just leave it at that.

Matthew Jared Smith: I appreciate it, Matt. Again, best of luck. Thank you. I'm showing no further questions in the queue.

Gregory A. Beard: That concludes the question and answer session. I would now like to turn the call back over to Mr. Beard for closing remarks.

Operator: Okay, a stockholders, investors, Stronghold Employees, thank you for all the effort. Thank you for the faith. Hey, we're doing our best and we are optimistic about our prospects given the business model and we will See you next quarter. Thank you. Bye. Bye, Thank you for joining us today for Stronghold's earnings call, you may now disconnect. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? www.

Operator: StrongholdDig.com My name is Tawanda, and I will be your operator this morning. And on this call, Stronghold issued its results for the fourth quarter and four years of 2023 in a press release, which is available in the investors section of the company's website at www.strongholddigitalmining.com. You can find the link in the investor section at the top of the homepage. Joining us on today's call are Stronghold's Chairman and CEO, Greg Beard, and CFO, Matt Smith. Following their remarks, we will open the call for questions. Before we begin, Alex Kovtun from Gateway Group will make a brief introductory statement. Mr. Kovtun, please proceed. Great, thank you, operator. Good morning, everyone, and welcome.

[music].

Good morning, and welcome to strongholds digital Mind's conference call for the fourth quarter and full year ended December 31st 2023.

My name is to Wanda and I will be your operator this morning.

Before this call stronghold issued its results for the fourth quarter and full year of 2023 any press release, which is available in the investors section of the company's website at Www Dot stronghold digital mine dotcom.

You can find the link in the investors section at the top of the homepage.

Joining us on today's call are strong host chairman and CEO, Greg Bier and CFO, Matt Smith.

Following their remarks, we will open the call for questions.

Before we begin Alex Kovtun from Gateway group will make a brief introductory statement Mr. Copeland. Please proceed.

Alex Kovtun: Today's slide presentation, along with our earnings release, disclosures which were posted to our website earlier today, can be accessed on our website at www.strongholddigitalmining.com. Some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks, and I'm turning. As a result, we caution that there are a number of factors, many of which are beyond our control, which could cause actual results and events to be different materially from those ascribed and forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our foregoing statements, please see the disclosure We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Great. Thank you operator.

Everyone and welcome today's slide presentation, along with our earnings release and financial disclosures were posted to our website earlier today and can be accessed on our website at www dot stronghold digital mining dot com.

Some statements, we're making today, maybe considered forward looking statements under securities law.

Involve a number of risks and uncertainties.

As a result, we caution that there are a number of factors many of which are beyond our control, which could cause actual results and events to differ materially from those described in forward looking statements.

For more detailed risks uncertainties and assumptions relating to our forward looking statements.

Please see the disclosures in our earnings release and public filings made with the Securities Exchange Commission.

We disclaim any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur. After the date. The forward looking statements are made.

As required by law.

We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics we expect to file our annual report on Form 10-K on or around March eight 2024, with the Securities and Exchange Commission.

Alex Kovtun: We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to GAAP measures applicable to GAAP measures in our earnings release carefully as you consider these metrics. We expect to file our annual report on Form 10-K on or around March 8, 2024, with the Securities and Exchange Commission, which sets forth detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors. You may access Stronghold Securities and Exchange Commission filings for free by visiting the SEC website at www.sec.gov or Stronghold's 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 Stronghold's website.

Which sets forth detailed disclosures and descriptions of our business as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors you may access strong hold securities and Exchange Commission filings for free by visiting the SEC website at Www Dot SEC Dot Gov.

Or stronghold Investor Relations website at IR that stronghold digital mining dot com.

I would like to remind everyone. This call is being recorded and will be made available for replay via a link available in the Investor Relations section of Charlotte's Web site.

Alex Kovtun: Now I would like to turn the call over to Stronghold's Chairman and CEO, Greg Beard. Good morning, everyone, and thank you for joining us on our fourth quarter and full year 2023 earnings call. We will be referencing an associated slide presentation throughout the call that is available through the webcast and on the investor relations section of our corporate website. Let's start on slide three.

Now I would like to turn the call over to strongholds, Chairman and CEO, Greg <unk> Greg.

Good morning, everyone and thank you for joining us on our fourth quarter and full year 2023 earnings call.

We will be referencing and associated slide presentation throughout the call that is available through the webcast and on the Investor Relations section of our corporate website.

Start on slide three.

Gregory A. Beard: I will say this on every earnings call until it is no longer true. Stronghold is the only environmentally beneficial and vertically integrated public Bitcoin miner. We own and operate two mining waste-to-power facilities in Pennsylvania, Scrubgrass and Panther Creek, with aggregate power capacity of 165 MW. Through our process, Scrubgrass and Panther Creek have removed an estimated 30 million tons of toxic mining waste from the environment at nearly 100 different sites. Today we operate over 40,000 Bitcoin miners with 4.1 exahash of hash rate capacity. While we are thrilled to surpass 4x the hash rate, we believe that we have significant runway to continue hash rate growth within our existing infrastructure by high-grading our

I will say this on every earnings call until it is no longer true stronghold is the ordering environmentally beneficial and vertically integrated public bitcoin manner, we own and operate two mining waste to power facilities in Pennsylvania scrub, Brad from Panther Creek with aggregate car capacity of 100.

65 megawatts.

Through our process to grow grass and Panther Creek have removed an estimated 30 million tons of toxic mining waste from the environment from nearly 100 different sites.

We operate over 40000, bitcoin miners with 4.1 extra hash of hash rate capacity.

While we are thrilled to surpass Forex Mahesh we believe that we have significant runway to continue cash rate growth within our existing infrastructure, we're high grading our.