Full Year 2023 Bit Digital Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Bit Digital Fiscal Year 2023 Earnings Conference Call. At this time, all participant lines are in listen only mode. Later, following our update, we will conduct a question and answer session. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Cameron Schnier, Head of Investor Relations. Please go ahead, Cameron.

Operator: Ladies and gentlemen, thank you for standing by. And welcome to the BitDigital Fiscal Year 2023 Earnings Conference Call. At this time, all participant lines are in listen-only mode.

Bye.

And welcome to the bit digital fiscal year 2023 earnings conference call.

At this time all participant lines are in listen only mode.

Operator: Later, following our update, we will conduct a question and answer session. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Cameron Schneer, Head of Investor Relations. Please go ahead, Cameron.

Later, following our update we will conduct a question and answer session.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Cameron Cheniere head of Investor Relations. Please go ahead Cameron.

Cameron Schneer: Thank you, Mariana. Good morning, and welcome to the BIT Digital Fiscal Year 2023 Earnings Call. Joining us on the call today are Sam Tabar, Chief Executive Officer, and Eric Huang, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements.

Cameron Schnier: Thank you, Mariana. Good morning and welcome to the Bit Digital Fiscal Year 2023 earnings call. Joining us on the call today are Sam Tabar, Chief Executive Officer, and Erke Huang, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to our latest 20-F filing and our other SEC filings. Our comments today may also include non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures can be found in our 20-F filing, which is on our website. After our prepared remarks, we will open the call up for questions.

Thank you Mariano good morning, and welcome to the <unk> digital fiscal year 2023 earnings call joining us on the call today are Sam to Barr, Chief Executive Officer, and Eric Wong Chief Financial Officer.

Before we begin I would like to remind all participants that some of the statements we will be making forward.

We're looking.

These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements I. Therefore refer you to our latest 20-F filing and our other SEC filings.

Cameron Schneer: I therefore refer you to our latest 20-F filing and our other SEC filings. Our comments today may also include non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures can be found in our 20-F filing, which is on our website.

Our comments today May also include non-GAAP financial measures additional details and reconciliation to the most directly comparable GAAP financial measures can be found in our 20-F filing which is on our website.

Cameron Schneer: After our prepared remarks, we will open the call up for questions. If you would like to ask a question, please type your name and company name in the Q&A box. With that, I will turn the call over to Sam. Thank you, Cam.

After our prepared remarks, we will open the call up for questions. If you would like to ask a question. Please type your name and company name in the Q&A box with that I will turn the call over to Sam.

Cameron Schnier: If you would like to ask a question, please type your name and company name in the Q&A box. With that, I will turn the call over to Sam.

Samir Tabar: Thank you, Cam. Ladies and gentlemen, thank you for joining us on the call today. In my prepared remarks, I'll discuss three things. Our Q4 and full year results, discuss a number of achievements, and three, our thoughts on the outlook of 2024 and our future ambitions. Cam and Erke will then provide more detail on our financial results, and then we'll open the line for your questions. 2023 was quite a year. It was a rebound year for our industry and a foundational year for Bit Digital. We began last year with Bitcoin prices below $17,000 and ended above $43,000, with the majority of that gain occurring in the final months of the year. The price rally has continued into 2024, with the price of Bitcoin reaching new all-time highs.

Thank you Kim ladies and gentlemen, thank you for joining us on the call today.

Sam Tabar: Ladies and gentlemen, thank you for joining us on the call today. In my prepared remarks, I'll discuss three things. First, our fourth quarter and full year results, discuss a number of achievements, and, three, our thoughts on the outlook for 2024 and our future ambitions. Cam and Eric will then provide more detail on our financial results, and then we'll open the line for your questions. 2023 was quite a year.

In my prepared remarks, I'll discuss three things, our fourth quarter and full year results.

Discuss a number of achievements and three our thoughts on the outlook of 2024 and our future ambitions.

Jim and Eric will then provide more detail on our financial results and then we'll open the line for your questions.

2023 was quite a year it was a rebound year for our industry and a foundational year for digital.

Sam Tabar: It was a rebound year for our industry and a foundational year for BitDigital. We began last year with Bitcoin prices below $17,000 and ended above $43,000, with the majority of that gain occurring in the final months of the year. The price rally has continued into 2024, with the price of Bitcoin reaching new all-time highs. The Bitcoin price rally was a welcome reprieve for the mining industry, especially given the upcoming halving when mining rewards will be cut in half. However, we spent the last year focused on building a company that could withstand both events and cyclical gyrations in the price of Bitcoin. More on that later in this call. As of December 31st, 2023, our Bitcoin mining fleet was approximately 93% carbon-free, which is a material improvement from our prior year levels, but a small dip below our prior 99% run rate. The decrease is because of our geographical diversification into new regions, namely Texas and Kentucky, where the power grids there use more carbon-based energy sources.

We began last year with bitcoin prices below 17000 and ended above 43000 with the majority of that gain occurring in the final months of the year.

The price rally has continued into 2024 with the price of bitcoin, reaching new all time highs.

Samir Tabar: The Bitcoin price rally was a welcome reprieve for the mining industry, especially given the upcoming halving when mining rewards will be cut in half. However, we spent the last year focused on building a company that could withstand both halving events and cyclical gyrations in the price of Bitcoin. More on that later in this call. As of 31 December 2023, our Bitcoin mining fleet was approximately 93% carbon-free, which is a material improvement from our prior year levels, but a small dip below our prior 99% run rate. The decrease is because of our geographical diversification into new regions, namely Texas and Kentucky, where the power grids there use more carbon-based energy sources. While we continue to strive to be entirely carbon-free, we are willing to make certain compromises as we search for the best economics and the benefits of geographical diversification.

The bitcoin price rally was a welcome reprieve for the mining industry, especially given the upcoming having when mining rewards will be cut in half.

However, we spent the last year focused on building a company.

That could withstand both having events and cyclical gyrations in the price of bitcoin more on that later in this call.

As of December 31, 2023 <unk>.

Our bitcoin mining fleet was approximately 93% carbon free which is a material improvement from our prior year levels, but a small dip below our prior at 19, 9% run rate. The decrease is because of our geographical diversification into new regions, namely, Texas, and Kentucky, where the power grids, they're used more carbon base.

Energy sources.

Sam Tabar: While we continue to strive to be entirely carbon-free, we are willing to make certain compromises as we search for the best economics and the benefits of geographical diversification. As of December 31st, we had approximately 101 megawatts contracted with 6 hosting partners. We have since added 6 megawatts, bringing the total to 107 megawatts.

While we continue to strive to be entirely carbon free we are willing to make certain compromises as we search for the best economics and the benefits of geographical diversification.

Samir Tabar: As of 31 December, we had approximately 101 megawatts contracted with six hosting partners. We have since added six megawatts, bringing the total to 107 megawatts. We are using approximately 80 megawatts as of that date, providing roughly 27 megawatts to support our growth initiatives. We are targeting an active hash rate of six exahash by the end of the year, roughly double where we are today. This means we'll have to secure approximately 37 incremental megawatts if we fill the capacity with new generation miners, such as the S21. We are actively engaged in discussions with several hosting partners for new sites, and we have a strong pipeline of new potential locations. At this time, we do not foresee hosting capacity as a bottleneck for achieving our six exahash target in 2024.

As of December 31, we.

We had approximately 101 megawatts contracted with six hosting partners we.

We have since added six megawatts, bringing the total to 107 megawatts.

Sam Tabar: We were approximately 80 megawatts as of We are using approximately 80 megawatts as of that date, providing roughly 27 megawatts to support our growth initiative. We are targeting an active hash rate of 6x a hash by the end of the year, roughly double where we are today. This means we'll have to secure approximately 37 incremental megawatts if we fill the capacity with new generation miners, such as the S21. We are actively engaged in discussions with several hosting partners for new sites, and we have a strong pipeline of new potential locations. At this time, we do not foresee hosting capacity as a bottleneck for achieving our sixth ExaHash target in 2024.

We were approximately 80 megawatts as of we are using approximately 80 megawatts as of that date.

Providing roughly 27 megawatts to support our growth initiatives.

We are targeting an active has rate of six <unk> by the end of the year roughly double where we are today.

This means we'll have to secure approximately 37 incremental megawatts. If we feel that if we fill the capacity with new generation miners such as the F. 'twenty one.

We are actively engaged in discussions with several hosting partners for new sites and we have a strong pipeline of new potential locations.

At this time, we do not foresee hosting capacity as a bottleneck for achieving our six extra has target in 2024.

Okay.

Samir Tabar: While we continue to believe in our infrastructure-light approach, which is conducive to our own goals, we would consider owning a portion of our infrastructure at the right price and returns profile. Our balance sheet remains a core strength, with approximately $140 million worth of cash and digital assets at the end of February and zero debt. We continue to believe a strong balance sheet and liquidity position is one of the most important features to withstand halving events. In October, we proudly announced a new business line, Bit Digital AI. Importantly, we didn't just announce an aspiration to start a business in AI because we noticed it was trending. We had carefully considered this business long before the announcement, and it was critical to us that we were not only confident in our ability to execute on this strategy, but to secure an anchor customer prior to any announcement.

Sam Tabar: While we continue to believe in our infrastructure-light approach, which is conducive to our own goals, we would consider owning a portion of our infrastructure at the right price and return profile. Our balance sheet remains a core strength, with approximately $140 million worth of cash and digital assets at the end of February and zero debt. We believe, and we continue to believe, a strong balance sheet and liquidity position is one of the most important features to withstand having events. In October, we proudly announced a new business line, Digital AI. Importantly, we didn't just announce an aspiration to start a business in AI because we noticed it was trending. We had carefully considered this business long before the announcement, and it was critical to us that we were not only confident in our ability to execute on this strategy but to secure an anchor customer prior to any announcement. Our core competencies include sourcing specialized computer systems, data center selection, and network design.

While we continue to believe in our infrastructure light approach, which is conducive to our own goals, we would consider owning a portion of our infrastructure at the right price and returns profile.

Our balance sheet remains a core strength with approximately $140 million worth of cash and digital assets at the end of February and zero debt.

We believe we continue to believe.

Our strong balance sheet and liquidity position as one of the most important features to withstand having events.

In October we.

We proudly announced the new business line that digital AI importantly, we didn't just announced an aspiration to start a business NII, because we noticed that was trending well.

We have carefully considered this business long before the announcement and it was critical to us that we not only we're not only confident in our ability to execute on this strategy, but to secure an anchor customer prior to any announcements.

Okay.

Samir Tabar: Our core competencies include sourcing specialized computer systems, data center selection, and network design. Our GPU business fits seamlessly within these strengths, allowing us to go from signing a customer contract to installing and deploying an incredibly complex network of more than 2,000 GPUs in a matter of months. This contract is now generating over $50 million of annualized revenue, and our sights are set on expanding this business line, both through expanding the scope of our existing customer contract and by onboarding new customers. We're actively engaged in conversations with new prospects, and we hope to be able to announce growth initiatives soon. We are targeting a minimum of $100 million in annualized run rate revenue from this business by year-end, and we are confident in reaching that goal.

Our core competencies include sourcing specialized computer systems data center selection and network design.

Sam Tabar: Our GPU business fits seamlessly within these strengths, allowing us to go from signing a customer contract to installing and deploying an incredibly complex network of more than 2,000 GPUs in a matter of months. This contract is now generating over $50 million of annualized revenue, and our sights are set on expanding this business line, both through expanding the scope of our existing customer contracts and by onboarding new customers. We're actively engaged in conversations with new prospects, and we hope to be able to announce growth initiatives soon. We are targeting a minimum of $100 million in annualized run rate revenue from this business by year end, and we are confident in reaching that goal, while we have purposely remained debt-free to date.

Our CPU business that seamlessly within these strengths, allowing us to go from signing a customer contract to installing and deploying an incredibly complex network of more than 2000 Gpus in a matter of months.

This contract is now January and is now generating over $50 million of annualized revenue and our sights are set on expanding this business line, both through expanding the scope of our existing customer contract and by Onboarding new customers.

We're actively engaged in conversations with new prospects and we hope to be able to announce growth initiative soon.

We are targeting a minimum of $100 million in annualized run rate revenue from this business by year end and we are confident in reaching that goal.

Samir Tabar: While we have purposely remained debt-free to date, we would consider leverage as a means to accelerate the growth of our Bit Digital AI business, as we believe predictable cash flows from that segment are much more conducive to debt relative to Bitcoin mining. We understand that we are unlikely to receive full credit for this business until we start reporting the financials. Given that this business started earning revenue at the end of January 2024, our Q1 2024 results will be the first time that this business shows up in our financial statements. While we can't offer guidance on the specifics of the margin profile, we will state that even at current Bitcoin prices, our Bit Digital AI business earns substantially higher margins than our mining business, even on a pre-halving basis. I'll now hand over the line to Erke, who will discuss our financial results.

While we have purposely remained debt free to date.

Sam Tabar: We would consider leverage as a means to accelerate the growth of our BitDigital AI business as we believe predictable cash flows from that segment are much more conducive to debt relative to Bitcoin mining. We understand that we are likely to receive, but we are unlikely to receive full credit for this business until we start reporting the financials. Given that this business started earning revenue at the end of January of 2024, our first quarter 2024 results will be the first time that this business shows up in our financial statement. While we can't offer guidance on the specifics of the margin profile, we will state that even at current Bitcoin prices, our BitDigital AI business earns substantially higher margins than our mining business, even on a pre-having basis. I'll now hand over the line to Eric, who will discuss our financial results. Thank you, Sam.

We would consider leverage as a means to accelerate the growth of our bid digital AI business as we believe predictable cash flows from that segment.

A much more conducive to that relative to bitcoin mining.

We understand that we are likely to receive we are unlikely to receive full credit for this business until we start reporting the financials.

Given that this business started earning revenue at the end of January of 2024.

Our first quarter 2024 results will be the first time that this business shows up in our financial statements.

While we cant offer guidance on the specifics of the margin profile, we will state that even at current bitcoin prices are a bit digital AI business earns substantially higher margins than our mining business, even on a pre having basis.

I'll now hand over the line to Eric who will discuss our financial results.

Erke Huang: Thank you, Sam. I will now discuss certain financial results for fiscal year 2023 and Q4 2023. The total revenue for 2023 was $44.9 million, a 39% increase compared to the prior year. The revenue increase was primarily driven by increase of deployed miner fleet and the modestly higher average Bitcoin price. Our Bitcoin production increased 21% year-over-year to 1,507, with an increase in our active hash rate partially offset by increase of network difficulty. Our ETH staking strategy generated approximately $700,000 in 2023 in its fiscal full year of operations. Cost of revenue was $29.6 million for 2023, an increase of approximately $9 million from 2022. The increase was primarily driven by increase our active mining fleet. Our electricity price was approximately $0.05 kWh for 2023.

Thank you Sam I will now discuss certain financial results for fiscal year 2023 in the fourth quarter of 2023.

Eric Huang: I will now discuss certain financial results for the year 2023 and the fourth quarter of 2023. The total revenue for 2023 was $44.9 million, a 39% increase compared to the prior year. The revenue increase was primarily driven by the increase in the deployed fleet and the modestly higher average Bitcoin price. Bitcoin production increased 21% year-over-year to 1,507, with an increase in our active hash rate partially offset by an increase in network difficulty. Our e-staking strategy generated approximately $700,000 in 2023 in a full year of operation. The cost of revenue was $29.6 million for 2023, an increase of approximately $9 million from 2022. The increase was primarily driven by an increase in active mining fleets. Our electricity price was approximately 5 cents per kilowatt hour in 2023.

The total revenue for 2023 was $44 9 million a 39.

Percent increase compared to the prior year.

The revenue increase was primarily driven by increased service deploying power fleet and a modestly higher average price.

Our production.

Production increased 21% year over year to 1500 <unk> seven.

With increase in our active cash flow, partially offset by increase of network that Bobby.

Are you taking strategy generated approximately $700000 in 2023.

The full year of operations.

Cost of revenue was $29 6 million for 2003, an increase of approximately $9 million from 2022.

The increase was primarily driven by increase our active mining fleet.

Electricity price was approximately five kilowatt hour for 2023.

Erke Huang: Our production cost per Bitcoin, defined as electricity and other hosting fees divided by Bitcoin production, amounted to approximately $15,700 for 2023. Profit sharing fees amounted to around $3,900 per Bitcoin for 2023. Depreciation amortization expense was $14.4 million in 2023, compared to $26.8 million in 2022, with a decrease primarily due to lower carry values for miners. We expect D&A to increase in this year due to our recent GPU procurement and new miner purchases. Adjusted EBITDA was $12.4 million in 2023, compared to a loss of $26.9 million in 2022. The improvement was primarily driven by better cash margins and reduced digital assets impairment charges. As a note, we have not yet adopted new FASB fair value accounting rules, but plan to implement the change for our Q1 earnings report this year.

Eric Huang: Our production cost per bitcoin, defined as electricity and other hosting fees divided by bitcoin production, amounted to approximately $15,700 for 2023. Profit sharing fees amounted to around $3,900 per Bitcoin for 2023. Depreciation amortization expense was $14.4 million in 2023 compared to $26.8 million in 2022, with a decrease due primarily due to lower carry values for miners.

Our production cost per a bitcoin defined as electricity and other hosting fees divided by bitcoin production amounted to approximately $15700 for 2023.

Profit sharing fees amounted to around 3900, her big point for <unk>.

Depreciation and amortization expense was $14 4 million in 2023 compared to $26 8 million in 2022.

With the decrease due to primarily due to lower carrying values for miners, but we expect it to increase in this year due to our recent GPO procurement and new mine their purchases.

Eric Huang: But we expect D&A to increase this year due to our recent GPU procurement and new miner purchases. Adjusted EBITDA was $12.4 million in 2023 compared to a loss of $26.9 million in 2022. The improvement was primarily driven by better cash margins and reduced digital asset impairment charges. As a note, we have not yet adopted the new FASB Fair Value Accounting rules, but we plan to implement the change for our first quarter earnings report this year. Gap earnings per share for 2023 was a loss of 16 cents compared to a loss of $1.34, or sense, in 2022.

Adjusted EBITDA was $12 $4 million in 2016, 3% compared to a loss.

$26 9 million in 2022 <unk>.

The improvement was primarily driven by better cash margins and reduced asset impairment charges.

As a note we have not yet adopted the new FASB fair value accounting rules, but and to implement the change for us.

First quarter earnings report this year.

Erke Huang: GAAP earnings per share for 2023 was a loss of $0.16, compared to a loss of $1.34 in 2022. That's a great improvement. Adjusted earnings per share was approximately $0.12, compared to a loss of $0.34 in 2022. Adjusted earnings per share excludes approximately $16 of D&A, $10 of Sorry, $0.16 of D&A, $0.10 of share-based compensation, and $0.02 from a loss of write-off of a deposit. Our average fleet efficiency for active fleet was $28.8 per terahash as of 31 December 2023. Our goal is to improve the metric materially as we progress through this year. CapEx for 2023 was approximately $66.7 million. Approximately $55 million of that was related to our Bit Digital AI business. The remaining spend for initial contract was largely offset by the proceeds we received from the sale-leaseback transaction we executed for 768 GPUs.

GAAP earnings per share for 2023 was a loss of 16.

Compared to a loss of $1 34.

In turning to hold to that.

Eric Huang: That's a great improvement. Adjusted earnings per share were approximately $0.12 compared to a loss of $0.34 in 2022. Adjusted earnings per share exclude approximately $0.16 of D&A, $0.10 of share-based compensation, and $0.02 from a loss or write-off of a deposit.

Great improvement.

Adjusted earnings per share was approximately 12 cents compared to a loss of <unk> 34.

In 2022.

Adjusted earnings per share excludes approximately $16.

A $10 of sorry, Tencent 16th of DNI 10 cents of share based compensation and <unk> from allows a write off of a deposit.

Eric Huang: Our average freight efficiency for the active fleet was 28.8 JPH as of December 31, 2023. Our goal is to improve that metric materially as we progress through this year. Carpex for 2023 was approximately $66.7 million, and approximately 55 million of that was related to our BetDigital AI. The remaining spent for the initial contract was largely offset by the proceeds we received from the sale-backed lease transaction we executed for 768 GPUs. We raised approximately $66 million in net proceeds from the insurance of 21.5 million alternate shares in 2023. Approximately 14.7 million shares were sold in connection with our ATM offering, the majority of which were issued during the first quarter.

Our average freight efficiency for active fleet was 28 eight <unk> as of December 31, 2023, our goal is to improve that metric materially as we progress through this year.

Capex for 2023 was approximately $66 $7 million.

Approximately 55 million of that was related to a bad digital AI business. The remaining spend for the initial contract was largely offset by the proceeds we received from the sale back these transaction.

We executed four 768 Gpus.

Erke Huang: We raised approximately $66 million of net proceeds from the issuance of 21.5 million ordinary shares in 2023. Approximately 14.7 million shares were sold in connection with our ATM offering, the majority of which were issued during Q1. The proceeds were used to fund our growth initiatives for general corporate purposes and to fortify our balance sheet ahead of the halving. We're cautious of dilution and only seek to raise equity when we have identified opportunities to deploy capital in higher return areas, such as our Bit Digital AI business. I will now turn the call back to Sam for closing remarks.

We raised approximately $66 million of net proceeds on the insurance of 21.

5 million ordinary shares in 2023, approximately 14 7 million shares were sold in connection with our HCM offering the majority of which were issued during the first quarter.

Eric Huang: The proceeds were used to fund our growth initiatives, for general corporate purposes, and to fortify a balance sheet ahead of the half-anniversary. And we're cautious about dilution and owning six degrees of equity when we have identified opportunities to deploy capital in higher-return areas, such as our big digital assets. I will now turn the call back to Sam for closing remarks. Thanks, Eric.

The proceeds were used to fund our growth initiatives for general corporate purposes and to fortify our balance sheet ahead of that happening.

And we're cautious of dilution and Odeon seek to raise equity when we have identified opportunities to deploy capital in higher return.

Areas, such as our <unk> business.

I will now turn the call back to Sam for closing remarks.

Samir Tabar: Thanks, Erke. We have a great team in place, and I'm proud of the foundation we built in 2023. 2023 was an interesting year for the mining sector, to say the least. It seemed as if up until Q3, the industry's overarching focus was on improving resilience ahead of the halving. That is to say, mining companies were seemingly focused on de-leveraging, improving the balance sheet, and lowering costs so that they would be in a more stable position when mining rewards were cut in half in 2024. As many of you probably noticed, that sentiment changed dramatically in October as Bitcoin charged past $30,000 and then above $40,000 by year-end as optimism around the Bitcoin ETF reached fever pitch. The improvement in Bitcoin price changed the narrative from resilience to growth, and ambitious growth announcements were generally rewarded by the market.

Thanks, Eric we have a great team in place and I'm proud of the foundation, we built in 2023.

Sam Tabar: We have a great team in place, and I'm proud of the foundation we built in 2023. 2023 was an interesting year for the mining sector, to say the least. It seemed as if up until the third quarter, the industry's overarching focus was on improving resilience ahead of the halving. That is to say, mining companies were seemingly focused on deleveraging, improving the balance sheet, and lowering costs so that they would be in a more stable position when mining rewards were cut in half in 2024. Many of you probably noticed that sentiment changed dramatically in October, as Bitcoin surged past $30,000 and then above $40,000 by year-end, as optimism around the Bitcoin ETF reached fever pitch.

2023 was an interesting year for the mining sector to say the least it seemed as if up up until the third quarter. The industry's overarching focus was on improving resilience ahead of the having that is to say mining companies were seemingly focused on deleveraging improving the balance sheet and lowering cost.

So that they would be in a more stable position when mining rewards were cut in half in 2024.

As many of you probably noticed that sentiment changed dramatically in October as big quite charged past 30000, then above 40000 by year end as optimism around the bitcoin ETF reached fever pitch the improvement in bitcoin price change the narrative from resilience to growth and ambitious.

Sam Tabar: The improvement in Bitcoin price changed the narrative from resilience to growth, and ambitious growth announcements were generally rewarded by the market. Now, in 2024, Bitcoin is up around 50% year to date, and mining stocks are generally in the red for the year. It's as if market participants temporarily forgot about the halving in late 2023 and then recently remembered. We never forgot.

Growth announcements were generally rewarded by the market now.

Samir Tabar: Now, in 2024, Bitcoin is up around 50% year to date, and mining stocks are generally in the red for the year. It's as if market participants temporarily forgot about the halving in late 2023 and then recently remembered. We never forgot. We are, of course, very pleased with the improvement in digital asset prices. It has had a material impact on the value of our liquidity position, and we are less likely to have to make difficult decisions following the halving compared to where we would have been if Bitcoin was near October 2023 levels. That said, we think improved Bitcoin prices are masking the fragility of certain business models. We think current Bitcoin prices are causing investors to overlook the importance of having non-correlated revenue streams that could produce enough cash flow to cover fixed expenses.

Now in 2020 for Bitcoin is up around 50% year to date and mining stocks are generally in the red for the year, it's asset market participants temporarily forgot about the having in late 2023, and then recently remembered we never forgot.

Sam Tabar: We are, of course, very pleased with the improvement in digital asset prices, which has had a material impact on the value of our liquidity position. And we are less likely to have to make difficult decisions following the halving compared to where we would have been if Bitcoin was near its October 2023 level. That said... We think improved Bitcoin prices are masking the fragility of certain business models. We think current Bitcoin prices are causing investors to overlook the importance of having non-correlated revenue streams that can produce enough cash flow to cover fixed expenses, even if Bitcoin goes parabolic. We think there is significant value in having cash flow streams that serve as a downside hedge.

We are of course very pleased with the improvement in digital asset prices. It has had a material impact on the value of our liquidity position and we are less likely to have to make difficult decisions following having compared to where we would have been if bitcoin was near October 2023 levels.

That said.

We think improved bitcoin prices are masking the fragility of certain business models. We think current current bitcoin prices are causing investors to overlook the importance of having non correlated revenue streams that could produce enough cash flow to cover our fixed expenses.

Samir Tabar: Even if Bitcoin goes parabolic, we think there is significant value in having cash flow streams that serve as a downside hedge. Look, we are a fundamental long-term believer in both Bitcoin and Ethereum. If we could accurately and consistently predict the price of Bitcoin, we'd be trading call options and not buying ASICs. We are trying to build a company that is less driven by speculation and more driven by strong underlying fundamentals. The historical trend for Bitcoin prices has been higher, and we're in the camp, of course, that Bitcoin will continue to achieve new all-time highs as time progresses. If you want to enjoy the good times, you have to survive the hard times, and that's the mentality we rely to plan our business.

Even if big coin goes parabolic.

We think there is significant value in having cash flow streams that serve as a downside hedge.

Look.

Sam Tabar: We are a fundamental long-term believer in both Bitcoin and Ethereum. However, if we could accurately and consistently predict the price of Bitcoin, we'd be trading call options and not buying ASIC. We are trying to build a company that is less driven by speculation and more driven by strong underlying fundamentals. The historical trend for Bitcoin prices has been higher, and we're in the camp, of course, that Bitcoin will continue to achieve new all-time highs as time progresses. However, if you want to enjoy the good times, you have to survive the hard times.

We are a fundamental long term believer in both bitcoin and ethereum. However.

However, we if we could accurately predict and consistently.

We could accurately predicted sorry, apologies, if we could accurately and consistently predict the price of bitcoin.

We'd be trading call options and not buying <unk>. We are trying to build a company that is less driven by speculation and more driven by strong underlying fundamentals.

The historical trend for bitcoin prices has been higher and we are in the camp of course that bitcoin will continue to achieve new all time highs as time progresses.

However, if you want to enjoy the good times you have to survive the hard times and that's the mentality, we rely to plan our business.

Sam Tabar: And that's the mentality we rely on to plan our business. We are differentiated in the realm of Bitcoin miners. Our operational and treasury management strategies are unique.

Samir Tabar: We are differentiated in the realm of Bitcoin miners. Our operational and treasury management strategies are unique. We own over 15,000 ETH at the end of February, and over 12,000 of that is actively staked. As far as I can tell, we own one of the largest ETH stacks of any publicly listed company in the United States. It's our view that a portfolio with both ETH and Bitcoin will outperform a Bitcoin-only portfolio over the medium term, especially when you layer in the rewards from staked ETH. We also see the potential SEC approval of a spot ETH ETF as a major medium-term catalyst for the price of ETH. We fundamentally believe that ETH's strong monetary policy and strong ecosystem provides a compelling path forward regardless of the SEC's decision. Bit Digital remains categorized as a Bitcoin miner, but frankly, we are much more than that.

We are differentiated in the round the bitcoin miners.

Our operational and Treasury management strategies are unique.

Sam Tabar: We own over 15,000 ETH at the end of February, and over 12,000 of that is actively stable. As far as I can tell, we own one of the largest EAT stacks of any publicly listed company in the United States. It's our view that a portfolio with both ETH and Bitcoin will outperform a Bitcoin-only portfolio over the medium term, especially when you layer in the rewards from Stakes East.

We own over 15000 east at the end of February and over 12000 of that is actively staked as far as I can tell we own one of the largest each stacks of any publicly listed company in the United States.

It's our view that our portfolio with both <unk> and bitcoin will outperform at bitcoin only portfolio over the medium term.

Especially when you layer in the rewards from staked east.

Sam Tabar: We also see the potential SEC approval of a spot ETH ETF as a major medium-term catalyst for the price of ETH. But we fundamentally believe that each strong monetary policy and strong ecosystem provides a compelling path forward, regardless of the SEC's decision. BitDigital remains categorized as a Bitcoin miner.

We also see the potential FCC approval of a spot ETF is a major medium term catalysts for the price of beef.

But we fundamentally believe that E strong monetary policy and strong ecosystem provides a compelling path forward regardless of the FCC's decision.

Digital remains categorized as a bitcoin miner.

Operator: But frankly, we are much more than that. We have a growing HPC business that is already on track to produce more revenue in 2024 than our mining business generated in 2023. These are complementary business lines that we believe strengthen our financial profile and will provide incredible optionality in terms of capital allocation. And with that, I'd like to open the line for some questions. Thank you, Sam.

But frankly, we are much more than that we have a growing <unk> business that is already on track to produce more revenue in 2024, then our mining business generated in 2023.

Samir Tabar: We have a growing HPC business that is already on track to produce more revenue in 2024 than our mining business generated in 2023. These are complementary business lines that we believe strengthen our financial profile and will provide an incredible optionality in terms of capital allocation. With that, I'd like to open the line for some questions.

These are complementary business lines that we believe strengthen our financial profile and will provide an incredible incredible.

Incredible optionality in terms of capital allocation.

And with that I'd like to open the line for some questions.

Operator: Thank you, Sam. If you would like to ask a question, please type your name and company into the Q&A box on your screen. Our first question comes from Mike Grondahl, Northland Securities. Please go ahead, Mike.

Thank you Sam.

Operator: If you would like to ask a question, please type your name and company into the Q&A box on your screen. Our first question comes from Mike Grondell of Northland Security.

If you would like to ask a question. Please type your name is happening into the Q&A box on your screen.

Our first question comes from.

Mike Grondahl.

Northland Securities.

Mike Grondell: Please go ahead, Mike. Thank you. The first question, Sam, is really about capital allocation. Can you kind of talk about how you're doing?

Yeah.

Please go ahead Mike.

Mike Grondahl: Thank you. The first question, Sam, is really about capital allocation. Can you kind of talk about how you're investing between the HPC opportunities and the Bitcoin mining opportunities? How do you think about payback margins and then really funding both of those growths? First, talk about the returns and margins and payback Bitcoin versus HPC.

Thank you.

The first question Sam is really about capital allocation.

Can you kind of talk about how your.

Sam Tabar: Investing between the HPC opportunities and the Bitcoin mining opportunities, like, how do you think about payback, margins? And then really funding both of those growths, but but first, you know, I'm going to talk about the returns and margins and payback on Bitcoin versus HPC. Sure, Mike.

Investing between the HBC opportunities.

And the bitcoin mining opportunities like how do you think about payback margins.

And then really funding both of those grow split but first.

Talk about the returns and margins and payback bid.

Bitcoin versus H P C.

Samir Tabar: Sure, Mike. Thanks very much for your question. Look, the way we think about capital allocation between GPUs and miners depends on the market prices for the equipment when we execute the respective orders. To reach our $100 million revenue target for Bit Digital AI, we probably need to invest around $60 million at the current prices. To double our fleet size to add 3 exahash, that cost would be around $45 million at the current pricing. It depends on the model we select. Capital allocation decisions are going to be based on a returns basis model. We don't want to just grow both businesses. We're not going to just grow for the sakes of growth if the returns don't justify the expenditure. Cam and Erke, do you want to add a little bit to that?

Sure Mike Thanks, very much for your question and look at it depends on the way, we think about capital allocation between Gpus and miners depends on the market prices for the equipment when we execute the respective orders so to reach our $100 million revenue target for a bit digital AI, we probably need to invest around 60 million bucks at the current prices.

Sam Tabar: Thanks very much for your question. Look, the way we think about capital allocation between GPUs and miners depends on the market prices for the equipment when we execute the respective orders. So to reach our $100 million revenue target for BitDigital AI, we probably need to invest around $60 million at the current prices. And to double our fleet size, to add 3x a hash, that cost would be around $45 million at the current prices. It depends on the model we select. For example, capital allocation decisions are going to be based on a returns-basis model.

To double our fleet size to add three axa has with that cost would be around $45 million at the current pricing it depends on the model we select.

So capital allocation decisions are going to be based on a returns basis model, we don't want to just grow both businesses.

Sam Tabar: We don't want to just grow both businesses, but we're not going to just grow for the sake of growth if the returns don't justify the expenditure. Cam and Eric, do you want to add a little bit to that?

But we're not going to just grow the just grow for the sake of growth of it if the returns don't justify the expenditure.

Cam and Eric do you want to add a little bit to that.

Eric Huang: Yeah, if I may add the return for Bitcoin mining and return for HPC hosting or computing power hosting, they're different, but it really depends on the market conditions and the Bitcoin price and for the contract we sign with the customer and especially for the HPC equipment we procure. So those are generally good businesses. We're monitoring closely, especially for Bitcoin; there's a half a million ahead of us, so we want to see where the market stands and make decisions. And, yeah, Mike, I mean, at current market prices, it would be about run rate revenue for BitDigital AI for $100 million, and then to add 3x hash is about $45 million, depending on the model. And that's all based on what we can see now, but obviously, that could change.

Erke Huang: Yeah. If I may add, the return for Bitcoin mining and return for HPC hosting or computing power hosting, they're different. It really depends on the market conditions, and for Bitcoin price and for the contract we sign with the customer, and especially for the HPC equipment we'll procure. Those are generally good businesses where we're monitoring them closely, especially for Bitcoin. There's a halving right ahead of us, so we want to see where the market stands and to make decisions.

Yes, if I may add the return appropriate point, Miami and retirement for Hps and hosting.

Our computing power hosting.

Different.

It really depends on the market conditions.

Four quick points highest and.

The contract was signed with the customer.

Especially.

For the estrogen equipment for sure.

So those are generally in good businesses.

We're monitoring closely especially appropriate point theres a half of them lie ahead of us So we want to see where the equipment market.

Our stance and to make decisions.

Cameron Schnier: Yeah, Mike, at current market pricing, it would be about $60 million or so to double the run rate revenue for Bit Digital AI to $100 million, and then to add 3 exahash is about $45 million, depending on the model. That's all based on what we could see now, but obviously that could change.

Yeah, Mike I mean at current.

Hi.

Market pricing it would be about <unk>.

$60 million or so to double b.

Run rate revenue for bit digital AI to $100 million and then to add three ex ash is about.

$45 million, depending on the model so.

And that's all based on what we can see now, but obviously that could change.

Eric Huang: Great. And then kind of following up on that, you mentioned your, your, eagerness or desire to kind of layer some debt into the business, um potentially on the HPC side, but you also have, If I read it right, like $140 million of liquidity with $34 million of that being cash. How would you see funding some of this growth in 2024? Well, just before I let Eric respond to that a little bit, but I just want to take a step back and mention that philosophically, the company never took on leverage in the past, um to fund a bit sort of a bitcoin fleet and the reason for that is that you can't predict cash flows so if you can't predict cash flows because you don't know where the bitcoin price is going to be taking on leverage to buy bitcoin mining equipment is is is stupid frankly so we never took on leverage philosophically for that reason however on the HPC business side that's very different there's certainty of revenue we have a contract we know exactly how much we're going to make so taking on leverage when you can predict cash flow that makes a lot of sense but on that front to that point i'll just leave it to eric to respond in a more detailed manner, Yeah, thanks.

Mike Grondahl: Great. Kind of following up on that, you mentioned your eagerness or desire to kind of layer some debt into the business, potentially on the HPC side. You also have, if I read it right, like $140 million of liquidity with $34 million of that being cash. How would you see funding some of this growth in 2024?

Great.

And then kind of following up on that you mentioned your ear.

This or desire to kind of layer some deep into the business.

Potentially on the HP suicide.

You'll also have.

If I read it right like $140 million of liquidity with $34 million of that being cash.

How would you see funding some of this growth in 2024.

Samir Tabar: Well, I'll let Erke respond to that a little bit, but I just want to take a step back and mention that philosophically, the company never took on leverage in the past to fund a Bitcoin fleet. The reason for that is that you can't predict cash flows. If you can't predict cash flows because you don't know where the Bitcoin price is going to be, taking on leverage to buy Bitcoin mining equipment is stupid, frankly. We never took on leverage philosophically for that reason. However, on the HPC business side, that's very different. There's certainty of revenue. We have a contract. We know exactly how much we're going to make. Taking on leverage when you can predict cash flow, that makes a lot of sense.

Well, just before I'm I'll, let Eric respond to that a little bit, but I just wanted to take a step back and mention that philosophically the company never took on leverage in the past.

To fund it a bit.

Bitcoin fleet and the reason for that is that you can't predict cash flows.

So if you can't predict cash flows because you don't know where the bitcoin prices going to be taking on leverage to buy bitcoin mining equipment is stupid frankly, so we'd ever took on leverage philosophically for that reason however on the APC business side, that's very different there is certainty of revenue we have a contract we know exactly how much we're going to make so to.

Taking on leverage when you can predict cash flow that makes a lot of sense, but on that front to that point I'll just leave it to Eric to respond in a more detailed manner.

Samir Tabar: On that front, to that point, I'll just leave it to Erke to respond in a more detailed manner.

Erke Huang: Yeah. Thanks, Sam. Just like Sam said for the AI business, we can model it out and the contract is for three years. The reason we're thinking about taking on debt on that business is to further improve the profit margins, and which the model allows. The future growth can be funded by existing cash on balance sheet and the credit or debt we're taking on and the prepayment or deposits from the customers. That will be sufficient for our growth. Again, we're cautious about dilution, so we want to put the capital to work as much as we can. Yeah, and the condition of the underlying business or model allows us to do so.

Yeah, Thanks, Sam and.

Eric Huang: And just like you said, for the AI business, we can model it out, and the contract is for three years. And the reason we're thinking about taking on debt on that business to further improve the profit margin, which the model allows. So the future growth can be funded by existing cash on the balance sheet and the credits or debt we're taking on and the prepayment or deposits from the customers. So that will be sufficient for our growth. And again, we're cautious about dilution, so we want to put the capsule to work as much as we can. And the condition of the business, the underlying business, or model, allows us to do so. Got it. And then, maybe lastly, I would just ask.

And just like as Ben says or rehab business, we can model out and the contract is for three years and the reason we're thinking about taking on now.

<unk> on that business to improve further improve the corporate margins.

And which the model than ours.

So the future growth can be funded by existing cash on balance sheet and the credits that we're taking on and the prepayment of deposits from the customers.

That would be sufficient for our growth.

And again, we're cautious about dilution so we want to put the capital to work as much as we can.

Yeah and the condition.

The business the underlying business our model allows us to do so.

Mike Grondahl: Got it. Maybe lastly, I would just ask, the 2,000 GPUs you're renting to this one customer, can you talk about the incremental opportunity with that customer and how that plays out? You mentioned you were talking to other new prospects too. How deep is the pipeline?

Yeah.

Got it and then maybe lastly, I would just ask.

Sam Tabar: The 2,000 GPUs you're renting to this one customer. Can you talk about the incremental opportunity with that customer and how that plays out? And then you mentioned you were talking to other new prospects, too. Like, how deep is the pipeline?

The 2000 Gpus, you're renting to this one.

Tumor.

Can you talk about.

The incremental opportunity with that customer.

How that plays out.

And then.

You mentioned you were talking to other new prospects to like how deep is the pipeline.

Sam Tabar: Sure, I'll take that just as the first brush just on that front with respect to diversifying the customer base for HPC business. We're engaged with a number of clients and prospective clients. I could, I could think right now, I believe there are 5, although there are many, many more knocking on our doors.

Samir Tabar: Sure. I'll take that just as first brush. Just on that front, with respect to diversifying the customer base for our HPC business, we're engaged with a number of prospective clients. I could think right now of, I believe five, although there are many, many more knocking on our doors. We've shortlisted a very small number that we're actively working on. They're at various stages in terms of how advanced each discussion is. There are several clients beyond our anchor client where the talks are pretty advanced. The types of customers we're talking to are quite diverse. They're both big and small, startups and later stage tech companies. Some of these prospective clients are not yet renting GPUs, and others are currently working with other providers and they wish to diversify.

Sure I'll take badger's us for gross price just on on that front.

With respect to diversifying the customer base for our APC business, we're engaged with a number of clients or prospective clients I could I could think right now I believe five.

Although there are many many more knocking on our doors, we have shortlisted.

Sam Tabar: We've shortlisted a very small number that we're actively working on. There are various stages in terms of how advanced each discussion is, but there are several clients beyond our anchor client where the talks are pretty advanced, and the types of customers we're talking to are quite diverse. They're both big and small startups and later stage tech companies, and some of these prospective clients are not yet renting GPUs, and others are currently working with other providers, and they wish to diversify.

Very small number that we're actively working on.

They're at various stages in terms of how advanced each discussion is.

But there are several clients beyond our anchor client, where the talks are pretty advanced and the types of customers. We're talking to are quite diverse they're both big and small startups and later stage tech companies.

Some of these prospective clients are not yet renting gpus and others are currently working with other providers and they wish to diversify.

Sam Tabar: So, we've had customers approach us that are working with another HPC provider, but again, they're trying to diversify their vendors. So, it's been very promising, and that is simply outside the anchor client that we have with respect to our anchor client. There is an insatiable appetite to continue growing the business, and that's why we're pretty confident that we'll get to a 100Million dollars run rate by the end of the year. Maybe one more, but would it be larger than 100 million? I mean, I understand it.

Samir Tabar: We've had customers approach us that are working with another HPC provider, but again, they're trying to diversify their vendors. It's been very promising, and that is simply outside the anchor client that we have. With respect to our anchor client, there is insatiable appetite to continue growing the business, and that's why we're pretty confident that we'll get to $100 million run rate by the end of the year.

So we've had customers approach us that are working with another SPC provider, but again, they're trying to diversify their vendors. So it's been very promising and that is simply outside the anchor client that we have with respect to our anchor client there's insatiable appetite to continue growing the business and that's why we're pretty confident that we'll get to a $100 million run rate by the.

End of the year.

Mike Grondahl: Maybe one more. Could it be larger than $100 million? I mean, I understand it's capital-heavy, but-

Let me one more.

Would it be larger than 100 million I understand it can be in capital heavy but.

Samir Tabar: It can be. We're targeting $100 million by the end of the year.

It can be but we're targeting and we're targeting.

Sam Tabar: It's capital heavy, but it can be, but we're targeting, end of we're targeting, hundreds of millions by the end of the year. And Mike, if you just recall, when we initially announced the business, we did put out a binding term sheet with that customer, which provided up to 4096 GPUs. So we've executed about half of that. But that sort of indicates their sort of immediate desire for that quantum.

100 million by the end of the year.

Cameron Schnier: Mike, if you just recall, when we initially announced the business, we did put out a binding term sheet with that customer, which provided up to 4,096 GPUs. We've executed about half of that. That sort of indicates their immediate desire for that quantum and it could theoretically stretch above that, but the contract is more plug-and-play to scale up to that number.

And Mike if you just recall when we initially announced the business. We did put out a binding term sheet with that customer, which provided up to 4096 Gpus soybean executed about half of that but that sort of indicates they're sort of immediate desire for that quantum.

Could theoretically stretch above that but it's pretty.

The contract is more plug and play to scale up to that number.

Sam Tabar: And you know, it could theoretically stretch above that. But it's pretty, the contract is more plug and play to scale up to that number. And look, I'm sure plenty of people are thinking about the AI unit economics. Gross margins are substantially higher, as I mentioned, than our core mining business, even at current prices. The overhead is very limited.

Samir Tabar: Look, I'm sure plenty of people are thinking about the AI unit economics. Gross margins are substantially higher than, as I mentioned, in our core mining business, even at current prices. The overhead is very limited. Our Q1 financials will provide detail on the achieved margin profile. We do target a sub 2-year payback period, however.

And local I'm sure I'm sure plenty of people are thinking about the AI unit economics gross margins are substantially higher than as I mentioned in our core mining business even at current prices.

The overhead is very limited or our Q1 financials will provide detail on the achieved market margin profile.

So.

Sam Tabar: Our Q1 financials will provide detail on the achieved margin profile. You know, we do target a sub-two year payback period, however. Thank you, Sam. Thank you, Mike. Shall we go to the next question? Next, we have Kevin Dede from HC Wainwright.

We do target as sub two year payback period. However.

Operator: Thank you, Sam. Thank you, Mike. Shall we go to the next question? Next, we have Kevin Dede from H.C. Wainwright & Co. Kevin, please go ahead.

Thank you Sam.

Mike.

Shall we go to the next question.

Next we have Kevin D D.

H C Wainwright.

Operator: Kevin, please go ahead. Can you guys hear me okay? Yes. Hi, Kevin. Hi, hi. Feel free to. Yeah, we hear you. Feel free to ask your question. Okay. Yeah, I was hoping you could dive in a little bit on the Ethereum slide, Will. Please, Sam.

Kevin. Please go ahead.

Kevin Dede: Can you guys hear me okay?

Can you guys hear me okay, yes.

Samir Tabar: Yes. Hi, Kevin.

Hi, Kevin Hi.

Kevin Dede: Hi.

Hi.

Samir Tabar: Feel free to-

Two or three days.

Kevin Dede: Can you hear me?

Samir Tabar: Yeah, we hear you. Feel free to ask your question.

Yeah, we hear you feel free to ask your question. Okay. Yes, I was hoping you could dive in a little bit on the theory of a flywheel. Please Sam.

Kevin Dede: Okay. Yeah. I was hoping you could dive in a little bit on the Ethereum flywheel, please, Sam. Just maybe talk about what you allocated for the year, what you expect to allocate next year, what sort of returns you see. Maybe a little bit on your decision between native staking and liquid staking, which tokens you prefer to use. Ultimately, the contribution and piggybacking off Mike's line of thinking, the capital allocation process there.

Sam Tabar: Just maybe talk about what you allocated for the year, what you expect to allocate next year, what sort of returns you see. Maybe a little bit on your decision between, you know, native staking and liquid staking, which tokens you prefer to use, and ultimately the contribution and, piggybacking off Mike's line of thinking, the capital allocation process there. Sure, let me just discuss conceptually and philosophically; we'll get into the numbers in a moment. BitDigital invented a business model where we call it the BitDigital flywheel, where we take the rewards from Bitcoin, we put a material portion of that into Ethereum, then we stake a lot of that Ethereum, then we take the staking rewards, and we pour that back into our operations.

Just maybe talk about what you allocated for the year, what you expect to allocate next year, what sort of returns you see.

Maybe a little bit on your decision between arms.

Neither staking and liquid staking, which tokens you prefer us.

And ultimately the contribution in.

Piggybacking off Mikes minor thinking the capital allocation process there.

Samir Tabar: Sure. Let me just discuss conceptually and philosophically. We'll get into the numbers in a moment. Bit Digital invented a business model where we call it the Bit Digital flywheel, where we take the rewards from Bitcoin, we put a material portion of that into Ethereum, then we stake a lot of that Ethereum, then we take the staking rewards, and we pour that back into our operations. That is a business model, as far as I know, no one has ever done, and we've invented that. Also, another thing that's unique, as I mentioned in our call, is that we have probably the largest, if not one of the largest, ETH stacks in any public company in the US. There is a lot of value in that. I've been personally in the Ethereum space for many years, and there's functionality that Bitcoin doesn't have. Bitcoin is digital gold.

Sure, let me just discuss conceptually or philosophically will get into the numbers in a moment.

<unk> digital invented a business model, where we call. It the best digital flywheel, where we take the rewards from big coin, we would put a material portion of that Intuit theory them. Then we stake a lot of that theory them and we take mistaken rewards and report that back into our operations.

Sam Tabar: That is a business model, as far as I know, no one has ever done, and we invented that. Also, another thing that's unique, as I mentioned in our call, is that we have probably the largest, if not one of the largest, ETH stacks in any public company in the U.S. There is a lot of value in that. I've been personally in the Ethereum space for many years, and there's functionality that Bitcoin doesn't have.

That is our business model as far as I know no one has ever done and we've invented that.

Also one thing another thing that's unique is the as I mentioned in our call is that we have probably the largest if not one of the largest east stacks in any public company in the U S.

There is a lot of value in that.

I've been personally in the DRAM space for many years.

And there is functionality that bitcoin doesn't have big coin as digital gold. If DRAM has smart contracts you could basically rewrite the entire financial system with a theory and they're two very different things both equally of value.

Sam Tabar: Bitcoin is digital gold. Ethereum has smart contracts. You could basically rewrite the entire financial system with Ethereum. They're two very different things, both equally valuable.

Samir Tabar: Ethereum has smart contracts. You could basically rewrite the entire financial system with Ethereum. They're two very different things, both equally of value. In terms of how we allocate our Bitcoin to Ethereum, I'm going to leave that for Erke.

In terms of how we allocate in terms of how we allocate.

Our bitcoin to a theory I'm I'm going to leave that for Eric.

Eric Huang: In terms of how we allocate, in terms of how we allocate our Bitcoin to Ethereum, I'm gonna leave that for Eric. Yes, so we continue to convert Bitcoin to Ethereum, and Ethereum is generating about 4% of revenues, and now the majority of foreign speaking, I would say 95% plus, is through native speaking. The waiting time to get into native speaking is one day, and exiting out is one day as well. So it's very liquid.

Erke Huang: Yeah. We continue to convert Bitcoin to Ethereum, and Ethereum is generating about 4% of revenues. Now majority of our staking, I would say 95% plus is through native staking. The waiting time to get into native staking is one day, and exiting out is one day as well. It's very liquid. The only reason we were trying liquid staking. Sorry, we're using native staking now. The only reason we're doing liquid staking was because there was a time it took about two months. Now it's very liquid. I anticipate going forward, we'll still use native staking as a primary source for staking.

Yes, so we continue to convert viewpoint to it to you and I have your homes generating about 4%.

Revenues and now majority Fast-breaking I was 95% us as sort of a native speaking.

<unk> has been mining up.

The waiting time to get into an industry, it's taking us a long day and exiting out as one day as well so it's very liquid.

Eric Huang: The only reason we're using native speaking now, the only reason we're doing liquid speaking is because there was a line of getting into it. There was a time, it took about two months, but now it's very liquid. So I anticipate going forward, we'll still use native speaking as a primary source for speaking. Yeah, and Kevin, I mean, you just wouldn't expect it to grow as a proportion of revenue just with the advent of the digital AI revenue stream. Just in terms of forecasting, I mean, it's a mid-single-digit yield, but that's in ETH terms. So, I mean, the revenue contribution is very contingent on the ETH price at the end of the period. I should remind everybody on the call that there's no having event in Ethereum or in AI. Yes, Sam. In fact, Ethereum is deflationary at this point. Can you just sort of ballpark where the numbers fell out for the year?

And the reason we're finding.

Nick this taking site when using native stating that the only reason we're doing.

Do you mean.

Liquids, taking was because there was that in line.

You know getting to there was a time it takes to take about two months, but now it's very good.

So I anticipate going forward, we'll still use native speaking as a primary source.

<unk> speaking.

Hum.

Cameron Schnier: Yeah. Kevin, you just wouldn't expect it to grow as a proportion of revenue just with the advent of the Bit Digital AI revenue stream. Just in terms of forecasting, it's a mid-single-digit yield, but that's in ETH terms. The revenue contribution is very contingent on the ETH price at the end of the period.

Yes, Kevin I mean, I, just wouldn't expect it to grow as a proportion of revenue just with the advent of digital.

Digital AI revenue stream.

And just in terms of forecasting I mean, it's a mid single digit yield that that Keith.

Keith terms, so I mean, it's the revenue contribution is very contingent on.

Each price at the end of the period.

Samir Tabar: I should remind everybody on the call that there's no halving event in Ethereum or in AI.

I should remind.

Everybody on the call that Theres, no, having event and a theory or an AI.

Kevin Dede: Yeah, Sam. In fact, Ethereum is deflationary at this point. Can you just sort of ballpark where the numbers fell out for the year? I didn't get a chance to see them. Understand less emphasis on it going forward, given all the other options you have, makes perfect sense. Next sort of line of questioning, Sam, if you indulge me, would just be on the financing of the GPUs that you have thus far and the contribution or the investment you need to make going forward to hit the numbers that you want. I think some of it you're sharing and some of it you're not. Maybe you could just sort of help us understand how that's working out.

Yeah, Sam in fact.

Serious deflationary at this point can you just sort of ballpark, where the numbers fall out for the year, because I didn't get a chance to see them.

Sam Tabar: Because I didn't get a chance to see them, understand less emphasis on it going forward given all the other options you have makes perfect sense. Next sort of line of questioning, Sam, if you'll indulge me, would just be on... the financing of the project, but the GPUs that you have thus far and the contribution or the investment you need to make going forward to hit the numbers that you want. I think some of it you're sharing, and some of it you're not, maybe you could just... sort of help us understand how that's working out. Yeah, we think about that pretty deeply. I'm going to have Eric, our Chief Financial Officer, talk about the financial weight of that. Yes, so the current contract has been all paid out.

Understand less emphasis on it going forward given all the other options you have makes perfect sense.

Our next sort of line of questioning Sam if you indulge me would just be on the.

The financing of the.

But the Gpus that you have thus far and contra.

Contribution or the investment you need to make going forward to hit the numbers that you want.

I think some of it you're sharing.

And some of it you are not maybe you could just.

Sort of help us understand how that's working out.

Samir Tabar: Yeah, we think about that pretty deeply. I'm going to have Erke, our Chief Financial Officer, talk about the financial weights on that.

Yes, we think about that pretty deeply.

Gonna have Eric our Chief financial Officer to talk about the financial.

Weights on that.

Erke Huang: Yeah. The current contract has been all paid out. We paid $55 million for those GPUs. About 20% is from the sale-leaseback agreement that we had with a third party. Going forward, like I stated on this call earlier, we're going to do some lending against those equipments. That's one option. Two, we're likely to use the same sort of sale-leaseback agreement with potential partners, and three, use our cash on balance to fund the growth. To reach 100-million revenue target, we would need to invest around $60 million or so in current prices. We have enough sufficient options at this moment.

Yes, so the current.

Contract had we had been all pan out we paid.

Eric Huang: We paid $55 million for the CPUs and about 20% from the sales back agreement that we had with the party. And going forward, like I stated on this call earlier, we're going to do some lending against those equipments. That's one option.

$55 million for the Cpus.

And.

About 20% and as from the sale leaseback agreement that we had with a with a third party.

And going forward like I stated on this call earlier, our going to do some.

Lending against those equivalents, that's one option and to.

Eric Huang: And two, we're likely to use the same sort of sales back agreement with potential partners. And three, use our cash on balance to fund the growth. So to reach our 100 million revenue target, we would need to invest around $60 million or so at current prices.

We're likely to use this.

And so the Saudis back agreement.

With potential potential.

And three using our cash on balance to fund the growth too so to reach 100 million revenue target, we would need to invest around $16 million herself and current prices.

And now we have enough.

Eric Huang: And we have enough sufficient options at this moment. Eric, if I may, I have got to congratulate you on your ability to move right up the super micro demand chain, and I was wondering if you might be able to speak to that. How is it that you were able to position BitDigital and SAM, for that matter, against all the other competitors you have demanding these machines? I think that is an understated, an underappreciated, you know, advantage that BitDigital brings to the AI space. Maybe you could elaborate on that.

Ah sufficient options and Theres a limit.

Okay.

Kevin Dede: Erke, if I may, I've got to congratulate you on your ability to move right up the Supermicro demand chain, and I was wondering if you might be able to speak to that. How is it that you were able to position Bit Digital, and Sam for that matter, against all the other competitors you have demanding these machines? I think that is an understated and underappreciated advantage that Bit Digital brings to the AI space. Maybe you could elaborate on that.

Eric Eric if I may I I've got to congratulate you on your ability to move right up the supermicro demand chain and I was wondering if you might be able to speak to that I was it that you were able to position digital Sam for that matter against all the other.

Competitors you have demanding these machines.

I think that is an understated.

And under under appreciated.

You know advantage that the digital brings the AI space, maybe you could elaborate on that.

Eric Huang: Yeah, I mean, our experience procuring those specialized equipments came all the way back to when we were in the Ethereum POW business, and we built those relationships with NVIDIA and Supermicro, the semiconductor industry partners. And it comes when we were trying to procure those H100 servers for NVIDIA, and Supermicro gave us quite a lot of support, and that's how we could procure those equipment in such a short period of time and also install them in Iceland, with our expertise in international logistics. And frankly, I was at NTTC yesterday.

Erke Huang: Yeah. Our experience for procuring those specialized equipments came all the way back to when we were in the Ethereum PoW business, and we built those relationships with NVIDIA and Supermicro, the semiconductor industry partners. It comes when we were trying to procure those H100 servers. NVIDIA and Supermicro give us quite a lot of support, and that's how we could procure those equipments in such short period of time, and also installed them in Iceland with our expertise in international logistics. Frankly, I was in TTC yesterday. I'm going to have meetings with Supermicro right after this call. It'd be good to improve the relationship and for our future growth.

Yeah.

Our experience for procuring.

Those are specialized agreements can all the way back to when we were in the a few of them.

Tablet business, and we'll build those relationships with Nvidia and sort of micro in the semiconductor.

Industry upon us and.

And accountants.

When we were trying to procure those H 100 servers and so.

So in media and.

So the micro give us.

Lab support and that's how we could.

Procure those equivalents seen such short period of time and also installed them.

And.

With our expertise in international and logistics.

And frankly that was entities yesterday I'm going to have meetings with supermicro right. After this call.

Kevin Dede: I'm going to have meetings with Supermicro right after this call, so it'd be good to pick up the relationship and plan for our future growth. wonderful, gentlemen. Thanks. Thanks for taking my questions. I appreciate it.

So.

And they get to into the relationship and to offer our future reserve growth.

Yeah.

Kevin Dede: Wonderful, gentlemen. Thanks for taking my questions. Appreciate it.

Wonderful gentleman. Thanks, Thanks for taking my questions I appreciate it.

Sam Tabar: Thank you so much, Kevin. But Kevin, thank you for highlighting that is one of our secret sauces in terms of our access to get these machines from legacy relationships that we've had going back years. Next, we have our next speaker. We have Joshua.

Operator: Thank you so much, Kevin.

Thank you so much Kevin.

Samir Tabar: Kevin, thank you for highlighting. That is one of our secret sauces in terms of our access to get these machines from legacy relationships that we've had going back years.

Kevin Thank you for highlighting that as one of one that is one of our secret sauces in terms of our access to get these machines from legacy relationships that we've had going back years.

Operator: Next speaker, we have Joshua Zoefel from Noble Capital Markets. Please go ahead, Joshua.

Next we have next speaker, we have Joshua.

Operator: Joe Excel from Noble Capital Market. Please go ahead, Joshua. Thank you. Can you guys hear me? Yeah, yeah. Hey, guys, just filling up for Joe.

Yeah, what fell from <unk>.

<unk> capital markets.

Please go ahead Joshua.

Joshua Zoefel: Thank you. You guys hear me?

Thank you Jamie.

Operator: Yes.

Samir Tabar: Yes.

Yes.

Joshua Zoefel: Hey. Hey, guys. Just filling up for Joe. First off, I wanted to congratulate you guys on the year. Obviously, you guys talked about the AI, how it's kind of transforming a little bit of the business, and how it's adding a good revenue stream to you guys in 2024 and forward. I just wanted you guys to say, kind of answer something with, just in terms of the mining business. Have you guys already kind of had talks with just companies in regards to their miners, and are they kind of ready to sell those, or are they kind of holding off until the halving event and then seeing what's going on from there?

Hey, Hey, guys, who is filling in for Joe.

Operator: So first off, I wanted to congratulate you guys on the year. Obviously, you guys talked about AI, how it's kind of transforming a little bit of the business, and how it's adding a good revenue stream to you guys in 2024 and forward. I just wanted you guys to kind of answer something in terms of the mining business. Have you guys already kind of had talks with just companies in regards to their miners, and are they kind of like ready to like kind of sell those, or are they kind of holding off until the halving event and then seeing what's going on from there? There's been, I'm happy to take that call, that question.

So first off I want congratulate you guys on the year.

We see you guys, obviously talked about the AI ops kind of transforming a little bit of the business and now it's adding a good revenue stream you guys in 2024 and forward.

I just wanted you guys to say kind of answer something with just in terms of the mining business.

That's already kind of had talks with like just companies.

Regards to their miners.

And are they kind of like ready to buy kind of sell those or are they kind of holding off until the happier than seen what's going on from there.

Samir Tabar: I'm happy to take that question. There's been a lot of talk. We do get approached often about buying machines. I think a lot of people are waiting to see what happens after the halving. Historically, as you know, Bitcoin goes up quite a bit after the halving. One of the reasons why Bitcoin has gone up a lot now, and this is just my opinion, is that the Bitcoin ETFs have caused massive inflows into Bitcoin. It's quite possible that the Bitcoin halving event, that has not been the catalyst for the spike in the price of Bitcoin going up. There could be another catalyst after the halving event once that happens, and of course, it's not overnight. Historically, it takes a while. It could take a few months, even up to a year.

Theres been out I'm happy to take that call that question Theres been a lot of talk we do get approached often about buying machines in but I think a lot of people are waiting.

Sam Tabar: There's been a lot of talk. We do get approached often about buying machines. And I think a lot of people are waiting to see what happens after the halving. Historically, as you know, Bitcoin goes up quite a bit after the halving. One of the reasons why Bitcoin has gone up a lot now, and this is just my opinion, is that the Bitcoin ETFs have caused massive inflows into Bitcoin. So it's quite possible that the Bitcoin halving event that has not been, that has not been the catalyst for the spike in the price of Bitcoin going up. So there could be another catalyst after the halving event once that happens. And, of course, it's not overnight. Historically, it takes a while. It could take a few months, even up to a year.

Let's see what happens after the having.

Historically as you know a big claim goes up quite a bit after the having one of the reasons why they coin has gone up a lot now and this is just my opinion is that the bitcoin Etfs have caused massive inflows into bitcoin. So it's quite possible that the bitcoin having event that has not been.

That has not been the catalyst for the spike in the price of bitcoin going up so there could be another catalyst after the having event once.

That happens and of course, it does not overnight. It historically it takes a while to take a few months even up to a year, but until people figure out where bitcoin is going to be where it ends up stabilizing and then people are going to start taking a view as to whether they will sell their equipment or not so I think theres a lot of holding going on right now and people are just waiting to see.

Sam Tabar: But until people figure out where Bitcoin is going to be, where it ends up stabilizing, then people are going to start taking a view as to whether they'll sell their equipment or not. So I think there's a lot of holding going on right now, and people are just waiting to see. Just to specify, there's no bottleneck from an OEM procurement perspective, like we have all the access to miners we want or need right now. It's more just a product of us, timing, and growth. Okay, thanks guys, and then. This is obviously when I'm kind of looking at the productions you guys release monthly, and, you know, over the past few months, over the past few months, I've kind of noticed the increase in network difficulty. You guys kind of expect this to continue going forward, even with the halving. Pam, do you want to take this?

Samir Tabar: Until people figure out where Bitcoin's going to be, where it ends up stabilizing, and then people are going to start taking a view as to whether they'll sell their equipment or not. I think there's a lot of holding going on right now and people just waiting to see.

Cameron Schnier: Just to specify, there is no bottleneck from an OEM procurement perspective. We have all the access to miners we want or need right now. It is more of just a product of us timing the growth.

Just specify there is no bottleneck.

From a OEM procurement perspective, like we have all the access to minors, we want or need right now it's more of just a.

Product of us timing the gross.

Joshua Zoefel: Okay. Thanks, guys. This is obviously, I'm kind of looking at the productions you guys release monthly. Over the past few months, I've kind of noticed the increase in network difficulty. Do you guys kind of expect this to continue just going forward, even with the halving?

Okay. Thanks, guys.

And then.

And there's obviously kind of looking at the production you guys are at least monthly and.

Over the past few months Superfast few months, you've kind of noticed the increase in network difficulty.

Do you guys kind of expect this to continue going forward, even with the happening.

Okay.

Okay.

Samir Tabar: Sam, do you want to take that?

Cam do you want to take that.

Cameron Schneer: Yeah, then there are plenty of miners coming online. If you look around at the public. Minor landscapes, there's been, you know, pretty massive growth announcements, and a lot of that has not yet been deployed. And obviously, there's a lot of growth in the non-public realm that, you know, is harder to track, but Historically, you do see a pretty meaningful portion of the network cash rate drop off following, you know, the halving events. So it might not be as dramatic of a decrease post halving this go around, but we would still expect, you know, some meaningful numbers to fall off post having and, you know, commensurately reduced difficulty.

Cameron Schnier: Yeah. There's plenty of miners coming online. If you look around at the public miner landscape, there's been pretty massive growth announcements. A lot of that has not yet been deployed. Obviously there's a lot of growth in the non-public realm that is harder to track.

Yes.

Plenty of miners coming online I think if you look around at the.

Public.

Minor landscapes.

Pretty massive growth announcements and a lot of that has not yet been deployed.

And obviously, there's a lot of growth in the nonpublic round that is harder to track but.

Cameron Schnier: Historically, you do see a pretty meaningful portion of the network hash rate drop off following the halving events. It might not be as dramatic of a decrease post-halving this go around, but we would still expect some meaningful number to fall off post-halving and commensurately reduce difficulty.

But historically you do see a pretty.

Meaning Paul.

Portion of the network cash rate drop off following.

Having events so it might not be as dramatic of a decrease both having this go around but.

We would still expect.

Yeah.

Some meaningful <unk>.

Number to falloff post having an.

Commensurately reduce difficulty.

Cameron Schneer: Yeah, to Cam's point, I think it'll be much less than it was in the past, only because the industrialization of Bitcoin is here, unlike the other halvings in the past. And with the industrialization of Bitcoin comes the ability to absorb shock, and so I think it'll have less of an impact than in the past.

Samir Tabar: Yeah. To Cam's point, I think it'll be much less than it was in the past, only because the industrialization of Bitcoin is here, unlike the other halvings in the past. With the industrialization of Bitcoin comes the ability to absorb shocks. I think it'll be less of an impact than in the past.

Yeah to Cam's point, I think it'll be much less than it was in the past on the because of the industrialization of bitcoin is here. Unlike the other having in the past and with the industrialization of big claim comes the ability to absorb.

Socks.

And so I.

I think the I think it'll be less of an impact than than in the past.

Sam Tabar: Thank you, Sam. Thank you, Josh. Okay, for the next speaker, we have Edward Engel from Singular Research. Please go ahead, Edward. Hi, thanks for taking that question. Can I confirm that you can hear me?

Operator: Thank you, Sam. Thank you, Josh. Okay. For the next speaker, we have Ed Engel from Singular Research. Please go ahead, Edward.

Thank you Sam Thank you Josh.

Okay for the next speaker, we have Edward Engel from <unk>.

Singular research.

Please go ahead Edward.

Ed Engel: Hi. Thanks for taking the question. Can I confirm you can hear me?

Hi, Thanks for taking the question I can't confirm you can hear me.

Operator: Yeah, thank you. Great. Thank you. Yeah, just want to talk about the high level of the cost structure of the AI business. Specifically, would it be fair to assume that the growth costs, specifically the energy costs, are decently lower for AI than for Bitcoin mining?

Samir Tabar: Yes, we can. Thank you.

Thank you.

Ed Engel: Great. Thank you. Just wanted to talk about the high level, the cost structure on the AI business. Specifically, would it be fair to assume that the growth cost, specifically the energy costs, are decently lower for AI than Bitcoin mining?

Great. Thank you.

Yeah, just wanted to talk about the high level of the cost structure on the AI business specifically.

Specifically would it be fair to assume that the gross costs specifically on the energy costs are a decently lower for AI them, then the COVID-19.

Edward Engel: Uh, much more, but I'm unsure what I could say. In terms of MMPI, but I'd like to, I know what the numbers are, but I'm not, I'm unsure if we're allowed to disclose that, Cam and Eric. And the electricity costs on a per revenue basis are dramatically less. Great, I just wanted to confirm, yeah, and I guess from a footprint perspective, for the same level of square feet, would AI also be more profitable? Yeah, if you look at our, like, we're running less than around 2 megawatts for that $50 million run rate per revenue base compared to, you know, we were using around 80 megawatts on the mining side, which generated $44 million of revenue in 2023, obviously. Bitcoin prices are much higher, but even with that increase, I mean, from a footprint perspective, we're able to get a lot more revenue on the AI side. Perfect, thank you.

Samir Tabar: Much more, but I'm unsure what I could say in terms of MPI, but I know what the numbers are, but I'm unsure if we're allowed to disclose that, Cam and Erke.

Much more but I'm unsure what I could say.

In terms of MTI.

MTI, but I'd like to I know, what the numbers are but I'm not I'm not sure. If we're allowed to disclose that Cameron Eric.

Cameron Schnier: The electricity costs on a per revenue basis are dramatically less.

And the electricity costs on a per revenue basis are dramatically less.

Ed Engel: Great. I just wanted to confirm, yeah. I guess from a footprint perspective, for the same level of square foot, would AI also be more profitable?

Great.

Confirm ya and I get it from a footprint perspective.

For the same level of square foot, what AI also be more profitable.

Cameron Schnier: Yeah. If you look at, we're running less than around 2 MW for that $50 million run rate. It's on a per revenue basis compared to we were using around 80 MW on the mining side, which generated $44 million of revenue in 2023. Obviously, Bitcoin prices are much higher, but even with that increase, from a footprint perspective, we're able to generate a lot more revenue on the AI side.

Yeah.

If you look at our deck, we're running less than.

Around two megawatts.

And part of that $50 million run rate is on a per revenue basis compared to we were using.

Around 80 megawatts on the mining side, which generated.

$44 million of revenue in 2023, obviously.

Bitcoin prices are much higher, but even with that increase units from a footprint perspective.

And a lot more revenue on the AI side.

Okay.

Perfect. Thank you and then one more on the <unk> a lot of questions were asked so just confirming that's N.

Eric Huang: And then one more on ETH20. A lot of questions were asked, so I'm just gonna put this in. Would you consider redefining ETH on emerging protocols like Agile, or is it a bit too early to tell? And that's a very good question. Maybe I can add, so we now have pretty much majority data staking, but we are monitoring those restaking or better, we call it enhanced strategies in one of our self-custody funds, the Digital NAM. So that's like an experimental and R&D fund within the house.

Ed Engel: Perfect. Thank you. Then one more on the ETH one. A lot of questions were asked, so just kind of throwing this in. Would you consider restaking ETH on emerging restaking protocols like EigenLayer, or is it a bit too early to tell?

Would you consider re staking E Sun like emergent <unk>, Inc.

Cause like I can layer or is it a bit too early.

Yeah.

Al.

Erke Huang: That's a very good question. Maybe I can add. We now are having pretty much majority data staking, but we are monitoring those restaking or better we call it enhanced strategies in one of our self-custody, the fund, the digital NAV. That's experimental and R&D fund within the house. Now we're doing those higher returns in the ETH ecosystem. We will announce when it becomes material or better returns are justified. Thanks for your question.

And that's a very good question and maybe I can add.

So we now are having.

Inventory data city, but we are monitoring those risk taking or better with hard enhanced strategies are in one of our self SUV.

The farm with digital Nab, So that's right.

Experiment and so on.

<unk> and R&D.

I M D.

I'm, leaving the house now aren't doing those.

Eric Huang: Now we're doing those higher returns in the ecosystem, but we will announce when they become material or better returns are justified. Thanks for your question.

Our higher returns.

Sure.

Ecosystem.

I will ask one when they become material.

Better returns justify it.

Fair question.

Ed Engel: Great. Thanks for the color. Thank you.

Edward Engel: Thank you, Thank you so much, Edward. And the next speaker we have is Alex Schmidt from Coinshare. Please go ahead, Alec.

Great. Thanks for the color. Thank you.

Operator: Thank you so much, Edward. The next speaker we have is Alex Schmidt from CoinShares. Please go ahead, Alex.

Thank you so much out there.

And the next speaker, we have edge.

Alex Schmitt pharma quaint shares.

Please go ahead Alex.

Operator: Hi, good afternoon, or good morning for you guys. Yeah, I think given that most of my questions have already been answered, I'll just leave you with a more of a philosophical one. You know, from a perspective of miners, how do you see the investment case for miners in relation to, you know, now the possibility of investing in Bitcoin ETFs directly in the US? We know that these businesses were peers to this type of investment before, but now, you know, investors have other options. So how do you see in terms of, you know, share price performance going forward? Yeah, I'm happy to answer that question. Feel free to express any opinions, Cam and Eric. But on that note, Alex, I agree with you that right now there's a lot more on the menu for investors to express their Bitcoin aspirations. So now they can express that. In the past, it was through the Bitcoin mining sector or the underlying commodity itself. Now, there are a lot of Bitcoin miners in the sector, and there is an ETF, the Bitcoin ETF, and there is the underlying commodity, and there are other ways to express Bitcoin aspiration. So there's a lot on the menu.

Alex Schmidt: Hi. Good afternoon. Good morning to you guys. Yeah, I think given that most of my questions have already been answered, I'll just leave you with more of a philosophical one. From a perspective of miners, how do you see the investment case for miners in relation to now the possibility of investing in Bitcoin ETFs directly in the US? We know that these businesses were peers to this type of investment before, but now investors have other options. How do you see in terms of share price performance going forward?

Hi, Good afternoon, good morning, Hey, guys.

Yeah, I think given that most of my questions have already been answered.

That leaves you with a.

More of a philosophical one.

S S from a perspective of miners.

How do you see.

The.

Investment case for miners in relation to.

Now the possibility of investing in bitcoin Etfs directly in the U S.

That these businesses are appears to this type of investment before but now.

All in all it vessels have other options so hodges.

<unk> seen in terms of you know share price performance going forward.

Samir Tabar: Yeah, I'm happy to answer that question. Feel free to express any opinions, Cam and Erke. On that note, Alex, I agree with you that right now there's a lot more on the menu for investors to express their Bitcoin aspirations. Now they can express that. In the past, it was through the Bitcoin mining sector or the underlying commodity itself. Now there is a lot of Bitcoin miners in the sector, there is an ETF, the Bitcoin ETF, and there is the underlying commodity. There are other ways to express Bitcoin aspiration. There's a lot on the menu.

Yes, I'm happy to answer that question.

Feel free to two.

Express any opinions camp and Eric but on that note Alex I agree with you that.

Right now Theres a lot more on the menu for investors to express their big clean aspiration. So now they can express that in the past it was through.

They claim mining sector or the underlying commodity itself now.

There is a lot of the climb miners in the sector and there is an ETF that bitcoin ETF and there is the underlying commodity.

And there are there other ways to express.

The Queen aspiration, so theres a lot on the menu all the more reason why we felt.

Samir Tabar: All the more reason why we felt it was very necessary to differentiate ourselves from the sector, which is one of the reasons why we have the largest ETH stack in the country. Which is another reason why we built a vertical using our skill set that's throwing off very material revenue that's completely uncorrelated to the price of Bitcoin. What we didn't want to do running this business philosophically is run it on hope. Hope that Bitcoin goes up. That's not a good way to run a business. That's why we have done this tripartite approach of ETH staking and a very solid AI vertical and increase our Bitcoin mining fleet, doubling it to the size of the end of the year. We've differentiated ourselves like that, and we hope the capital markets, we know the capital markets, time is our friend.

Sam Tabar: All the more reason why we felt it was very necessary to differentiate ourselves from the sector, which is one of the reasons why we have the largest ETH stack in the country, which is another reason why we built a vertical using our skillset that's throwing off very material revenue that's completely uncorrelated to the price of Bitcoin. And what we didn't want to do running this business philosophically is run it on hope, hope that Bitcoin goes up. That's not a good way to run a business.

It was very necessary to differentiate ourselves from the sector, which is one of the reasons why we have the largest E stack in the country.

Which is another reason why we built a vertical using our skill set that has that's throwing off very material revenue that's completely uncorrelated to the price of bitcoin and while we didn't want to do running this business philosophically has run it on hope hope that they claim goes up that's not a.

A good way to run a business.

Sam Tabar: And so that's why we have done this tripartite approach of ETH staking and a very solid AI vertical and increased our Bitcoin mine fleet, doubling it to the size of it at the end of the year. We've differentiated ourselves like that, and we hope the capital markets, we know the capital markets, time is our friend. They will recognize that we built an all-weather business. Yeah, you mentioned growth in hash rate, and you made some smaller acquisitions at the beginning of the year, whilst your peers made massive ones. I was just wondering, at current prices, even despite the fact that, you know, Bitcoin mining has become attractive, you know, very attractive again. Do you think that, you know, holding your guns for much longer, maybe you could lose some of this, you know, rather cheap mining gear that's available still at the moment? Eric, I have a view on that, but Eric, do you want to go first? And then I'll add.

And so that's why we have done.

This is try protide approach of east staking, and a very solid AI vertical and.

The increase are a big claim mindfully doubling it to the size of the end of the year, we've differentiate ourselves like that and and so that and we hope the capital markets. We know the capital markets time is our friend they will recognize that we built an all weather business.

Samir Tabar: They will recognize that we built an all-weather business.

Alex Schmidt: Yeah, you mentioned growth in hash rate. You made some small acquisitions in the beginning of the year while your peers have made massive ones. I was just wondering, at current prices, despite the halving, Bitcoin mining has become attractive, very attractive again. Do you think that holding your guns for much longer, maybe you could lose some of this rather cheap mining gears that's available still at the moment?

Yeah, you mentioned.

You know growth in harsh rate.

And you made some smaller acquisitions in the beginning of the year, whilst appears I've made massive walls.

Monitoring and you know at current prices.

And despite the having.

You know take on mining cycle attractive very attractive again.

Do you think that you know holding on guns for much longer maybe you could lose some of this.

Rather rather cheap mining gears is available are still at the moment.

Okay.

Samir Tabar: Erke, I have a view on that, but Erke, do you want to go first and then I'll add?

Eric do you want to I have a view on that but Eric do you want to go first and then I'll add.

Erke Huang: Happy to. Procuring miners really hasn't been an issue for us. We have all the channels to procure them. From my point of view, I think miner price will just going to be more attractive going forward with the halving, with the increase of network hash. Now we are actively monitoring where the network difficulty will go, especially after the halving, and to make sure the investment or the procurement we make can be return risk-adjusted. It has been our strategy. For example, from year late 2021 until Q1 2023, we didn't make any miner purchases because it was just the model doesn't work out. After Q1 2023, we started growth again. It's a matter of timing and also the overall market conditions.

Yeah I have two.

Eric Huang: Yeah, I'm happy to. I mean, procuring miners really hasn't been an issue for us. We have all the channels to procure them.

I mean, procuring miners really hasnt been an issue for us we have all the channels to procure them.

Eric Huang: And from my point of view, I think miner price will just go in to be more attractive going forward with the increase of network cash. So now we are, you know, actively monitoring where the network difficulty will go, especially after the event. And to make sure, you know, the investment or, you know, the procurement we make can be, you know, return risk justified. It has been our strategy. So for example, from late 2021 until the first quarter of 2023, we didn't make any minor purchases because it was just, you know, the model didn't work out. So about after Q1 2023, we started growth again. So it's a matter of timing and also the overall market conditions.

And from my point of view I think minor price will just going to be more attractive going forward with the happening with the increase of network cash.

So now we are.

Actually monetary, whereas the and there were typically will go, especially after the happening and.

Make sure you know the investment or.

The procurement will make it can be.

Our return risk adjusted side it has been.

It has been our strategy. So for example from year late 2022 2021 until the first quarter of 2023, we didn't make any minor purchases as it was just.

The the model doesn't work out.

So how.

But after Q1, two and 'twenty three restart it.

Growth again.

Is it a matter of timing and also the the.

Overall market conditions.

Eric Huang: And Alex, I think you would expect the demands I post to have to subside to some degree, I mean, if no other reason than just based on if you look at the public minor stock price year to date, the cost of equity is way more expensive. So using that as a source of funding, basic purchases, you know, probably not going to sustain the levels we saw late.

Cameron Schnier: Alex, I think you would expect the demand side post-halving to subside to some degree, if no other reason than just based on if you look at public miner stock price year to date, cost of equity is way more expensive, so using that as a source of funding basic purchases is probably not going to sustain the levels we saw in late 2023. We continue to have the view that even if they go up to some degree, that we're not risking missing a great value right now just by being cautious. Yeah. Okay. Thank you very much.

And Alex I think you would expect.

The demand side post having to subside to some degree and then if no. Other reason than just based on if you look at.

Public minor stock price year to date I mean.

Cost of equity is way more expensive so using that as a.

And a source of funding basic purchases.

Probably not going to sustain the levels we saw in late.

Cameron Schneer: 2023. So I mean, we continue to have the view that, even if they go up to some degree, we're not risking missing out on great value right now just by being cautious. Yeah. Okay. Thanks very much. Okay, that concludes our Q&A session, and I would like to turn this back to Sam for final remarks. Thank you, Alex. Thank you, Mariana. I think what I have to say, I don't really have much more final remarks except, as mentioned, we built a solid business that is an all-weather business. We have a great team in place, and we are very proud of the foundation that we built in 2023. I don't have any further remarks.

2023, so minimal we continue to have the view that.

Even if they go up.

To some degree that we're not.

Risking Michigan.

Right value right now just by being cautious.

Yeah, Okay. Thank you very much.

Operator: Okay. That concludes our Q&A session, and I would like to turn this back to Sam for final remarks. Thank you, Alex.

Okay that concludes our Q&A session and I would like to turn this back to Sam or final remarks.

Thank you Alex.

Samir Tabar: Thank you, Mariana. I don't really have much more final remarks. As mentioned, we built a solid business that is an all-weather business. We have a great team in place, and we are very proud of the foundation that we built in 2023. I don't have any further remarks. Thank you for joining us today, and we look forward to receiving any other further questions in the future.

Thank you Mariana.

I think I have to but I don't really have much more final remarks of SAP as mentioned, we built a solid business that has an all weather business.

We have.

Have a great team in place and we are very proud of the foundation that we built in 2023.

I don't have any further remarks.

Sam Tabar: Thank you for joining us today. And we look forward to receiving any further questions in the future. And with that, I would like to thank everyone again for joining us today. Before we conclude, I also want to take a moment to thank our shareholders, analysts, and members of the press for participating and joining us. And thank you to everyone, and have a great day. Thank you, Mariana.

Thank you for joining us today.

And we look forward to receiving any other further questions in the future.

Operator: With that, I would like to thank everyone again for joining us today. Before we conclude, I also want to take a moment to thank our shareholders, analysts, and members of the press for participating and joining us. Thank you to everyone, and have a great day.

And with that I would like to thank everyone again for joining us today.

Before I conclude I also wanted to take a moment to thank our shareholders analysts and members of the past.

Thanks for participating and joining us and thank you to everyone and have a great day.

Samir Tabar: Thank you, Mariana.

Thanks Marianna.