Q1 2024 LM Funding America Inc Earnings Call

Okay.

Operator: Greetings. Welcome to the LM Funding America, Inc. First Quarter 2024 Business Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that the conference is being recorded. I will now turn the conference over to your host, Ted Ayvas. You may begin.

Speaker Change: Greetings welcome to the L. N Funding America, Inc. First quarter 2024 business update conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero.

Speaker Change: On your telephone keypad. Please note that this conference is being recorded I will now turn the conference over to your host Chad Avis you may begin.

Ted Ayvas: Good morning, and thank you for joining LM Funding America's 2024 First Quarter Financial Results and Business Update conference call. On the call with us today are Bruce Rodgers, Chief Executive Officer, and Richard Russell, Chief Financial Officer, LM Funding. This morning, the company announced its operating results for the quarter ended March 31, 2024, and its financial condition as of that date. The press release is posted on the company's website, lmfunding.com. In addition, the company has filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.

Speaker Change: Good morning, and thank you for joining L. M funding America's 2024 first quarter financial results and business update conference call on the call with US today are Bruce Rogers, Chief Executive Officer, and Richard Russell, Chief Financial Officer of L. Unfunded.

This morning, the company announced its operating results for the quarter ended March 31, 2024, and its financial condition as of that date.

Speaker Change: The release is posted on the company's website L M funding dot com.

Speaker Change: In addition, the company has filed its quarterly report on Form 10-Q, with the U S Securities and Exchange Commission, which can also be accessed on the company's website as well as the Sec's website at Www Dot FCC Dot Gov.

Speaker Change: If you have any questions after the call or would like any additional information about the company. Please contact crescendo communications at 2126711020.

Ted Ayvas: Before management reviews the company's operating results for the three months ended March 31st, 2024, and its financial condition as of that date, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy, and plans, and our expectations for future operations, are forward-looking statements.

Speaker Change: For management reviews, the Companys operating results for the three months ended March 31, 2024, and its financial condition as of that date, we would like to remind everyone that this conference call may contain forward looking statements all statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position.

Speaker Change: <unk> strategy and plans and our expectations for future operations are forward looking statements. These forward looking statements are based largely on the companys current expectations and projections about future events and trends that it believes may affect its financial condition results of operations strategy short term and long term business operations and objectives.

Ted Ayvas: These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to various risks, uncertainties, and assumptions as described in the company's Form 10K, which will be filed with the US Securities and Exchange Commission on April 1st, 20 Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.

Speaker Change: And financial needs. These.

Speaker Change: These forward looking statements are subject to various risks uncertainties and assumptions as described in the company's Form 10-K filed with the U S Securities and Exchange Commission on April 1st 2024.

Speaker Change: Because of these risks uncertainties and assumptions the forward looking events and circumstances discussed in this conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward looking statements.

Ted Ayvas: You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievement. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements.

Speaker Change: You should not rely upon forward looking statements as predictions of future events, although the company believes that the expectations reflected in the forward looking statements are reasonable it cannot guarantee future results level of activity performance or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and complete.

Speaker Change: If any of these forward looking statements the company disclaims.

Speaker Change: Disclaims any duty to update any of these forward looking statements.

Ted Ayvas: All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made in this conference call. You should therefore evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. In addition, today's discussion will include reference to non-gap measures. The company believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-gap measures to the most directly comparable gap measures is available in today's news release on our website. With that, I would now like to turn the call over to Bruce Rodgers, Chairman and CEO of LM Funding. Bruce. Thanks, Ted.

Speaker Change: All forward looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made in this conference call.

Speaker Change: Should evaluate all forward looking statements made by the company in the context of these risks and uncertainties.

Speaker Change: In addition, today's discussion will include references to non-GAAP guidance. The company believes that such information provides an additional measurement and consistent historical comparison of its performance a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our web.

Speaker Change: Right.

Speaker Change: With that I would now like to turn the call over to Bruce Rogers, Chairman and CEO of L. M funding Bruce.

Bruce Martin Rodgers: Thanks, Ted. Hello from sunny Tampa, and thank you to everyone who joined us today.

Bruce Martin Rodgers: Thanks, Ted Hello from Sunny Tampa, and thank you to everyone who joined us today.

Bruce Martin Rodgers: On behalf of the LM Funding team, I'd like to thank our shareholders for your ongoing support. We've made significant strides in expanding our Bitcoin mining operations in the first quarter of 2024, building on the substantial progress we achieved in 2023, our inaugural first full year in the Bitcoin mining industry. The momentum we built in 2023 has carried over into 2024 and continues to drive our business forward. We've returned to profitability. So I'd like our CFO, Rick Russell, to tell you about that.

Speaker Change: After the island funding team I'd like to thank our shareholders for your ongoing support.

Speaker Change: We've made significant strides in expanding our bitcoin mining operations in the first quarter of 2024 building on the substantial progress we achieved in 2023, our inaugural first full year in the bitcoin mining industry.

Speaker Change: When we built in 2023 has carried over into 2024 continues to drive our business forward. We returned to profitability. So I liked our CFO, Rick Russell to tell you about that.

Bruce Martin Rodgers: Thank you, Bruce. As of March 31, 2024, the company had approximately 5,900 Bitcoin mining machines in operation, engaged in Bitcoin mining at various hosting sites, providing LM Funding with approximately 614 petahash of mining capacity. Recall 86.4 bitcoins' value at approximately $4.6 million based on the average price of $53,000 per bitcoin during the first quarter, with Bitcoin prices reaching record highs during the quarter and currently standing at approximately $63,000. We believe this strongly validates our strategy.

Speaker Change: Thank you Bruce.

Richard D. Russell: As of March 31, 2024, the company had approximately 5900 bitcoin mining machines in operation engaged in Bitcoin mine at various hosting sites provide.

Richard D. Russell: Providing bonding with approximately 614 Petter has of mining capacity.

Remind $86 four bitcoins valued at approximately $4.6 million based on the average price of $53000 per bitcoin during.

Richard D. Russell: During the first quarter.

Richard D. Russell: With declining prices, reaching record highs during the quarter and currently standing at approximately $63000.

Richard D. Russell: We believe this strongly validates our strategy.

Richard D. Russell: B increase our revenue by 105% in the first quarter of 2024 compared to the same quarter last year.

Richard D. Russell: We increased our revenue by 105% in the first quarter of 2024 compared to the same quarter last year. Additionally, we achieved a net income of $1.9 million in the first quarter of 2024, a significant turnaround from a net loss of $7.2 million in the comparable quarter of 2020. Moreover, we report positive EBITDA of approximately $4.4 million for the quarter ended March 31, 2024. A substantial improvement compared to a four-even loss of $300,000 in the comparable quarter of the previous year.

Richard D. Russell: Additionally, we achieved net income of $1 $9 million in the first quarter of 2024.

Richard D. Russell: A significant turnaround from a nap.

Richard D. Russell: Net loss of $7 2 million in the comparable quarter of 2023.

Richard D. Russell: Moreover, we report positive EBITDA of approximately $4 4 million.

Richard D. Russell: For the quarter ended March 31 2024.

A substantial improvement compared to a core EBITDA loss.

Richard D. Russell: A 300000, the comparable quarter of the previous year.

Richard D. Russell: Lastly, and perhaps most importantly, I want to highlight that as of March 31st, 2024, we had stockholders equity of $38.5 million, or 15.43 cents per share. As of March 31, 2024, the company held approximately 163.4 BTC. They are roughly 11.7 million based on a Bitcoin price of $73,000. As of April 30, 2024, the company held 155.1 Bitcoin, a value of approximately $9.7 million based on the recent Bitcoin price of roughly $63,000. I want to turn it back over to Bruce for our business review. Thanks, Rick.

Richard D. Russell: Lastly, and perhaps most importantly.

Richard D. Russell: I want to highlight that as of March 31, 2024, we had stockholders equity of $38.5 million or $15.43 per share.

Richard D. Russell: As of March 31, 2024, the company held approximately 163.4 bitcoins.

Richard D. Russell: They are roughly $11 7 million based on a bitcoin price.

Richard D. Russell: $73000.

Richard D. Russell: As of April 32024, the company held $155 one bitcoins.

Richard D. Russell: Approximately $9 7 million based on the recent bitcoin price approximately $63000.

Richard D. Russell: I want to turn it back over to Bruce for a business review.

Bruce Martin Rodgers: Thanks, Rick.

Bruce Martin Rodgers: You've painted the financial picture of a company that has completed the startup phase of its Bitcoin mining operations and attained profitability. We are now poised to scale and grow. So I want to focus our attention on our overall business and our strategic focus for 2024, 2025, and beyond. The company was well-positioned for the recent Bitcoin halving event, which took place in mid-April. And looking ahead, we anticipate entering into new hosting agreements that reflect the post-2024 halving economic reality.

Speaker Change: You've painted the commercial picture of a company that has completed the startup phases bitcoin mining operations entertained profitability.

Bruce Martin Rodgers: We are now poised to scale and grow so.

So I want to focus our attention on our overall business and our strategic focus for 2020 for 2025 and beyond.

Bruce Martin Rodgers: The company was well positioned for the recent bitcoin, having event, which took place in mid April and looking ahead, we anticipate entering into new hosting agreements that reflect the post 2024, having economic realities.

Bruce Martin Rodgers: Considering the current market conditions and the future outlook for Bitcoin, which reached a new all-time high of approximately $73,800 in the first quarter of 2024, we remain highly optimistic about its future. Historically, halving events like the one in April have led to new all-time high Bitcoin prices in the six months following the halving. In January, the company invested approximately $1.1 million to purchase 300-bit main S21 Antminer machines. The S21 is a high-efficiency, high-hashrate machine for mining the SHA-256 algorithm. Manufactured by Bitmain, each unit boasts a hash rate of 200 terahash per second and consumes 3500 watts of power.

Bruce Martin Rodgers: Considering the current market conditions, and the future outlook for Bitcoin, which reached a new all time high of approximately $73800 in the first quarter of 2024.

Bruce Martin Rodgers: We remain highly optimistic about its future.

Bruce Martin Rodgers: Historically, having events like the one in April.

Bruce Martin Rodgers: Led to new all time high big corn prices and the six months following the having.

Bruce Martin Rodgers: In January the company invested approximately $1 1 million to purchase 300, Bip main F 'twenty, one and minor machines.

Bruce Martin Rodgers: Yes, 'twenty one is a high efficiency high ash right machine for mining the shot $2 56 algorithm.

Bruce Martin Rodgers: Manufacturing by bit made each unit those the hash rate of 200 Taro has per second and consumes 3500 watts of power.

Bruce Martin Rodgers: We believe these are the most capable machines on the market. These machines are now fully operational and increase the company's mining capacity to 639 petabytes of ash per second. We remain committed to reinvesting the proceeds from our Bitcoin mining operations into acquiring the most efficient Bitcoin mining equipment available. We believe that our S21 mining machines will be leading producers and anticipate that this model will continue to generate revenue through the next halving event, which we expect to occur in 2028.

Bruce Martin Rodgers: We believe these are the most capable machines on the market.

Bruce Martin Rodgers: These machines are now fully operational increase the company's mining capacity of 639 <unk> per second we.

Speaker Change: We remain committed to reinvesting the proceeds from our bitcoin mining operations into acquiring the most efficient bitcoin mining equipment available.

Speaker Change: We believe that our F. 'twenty, one mining machine, which will be leading producers and anticipate this model will continue to generate revenue through the next having event, which we expect to occur in 2028.

Bruce Martin Rodgers: We continue to concentrate our capital investments on Bitcoin and mining machines whose value closely follows Bitcoins. However, we are also open to exploring opportunities that could lower our mining costs and potentially expand our operations to include hosting for AI machines. We are actively pursuing developments in these areas and look forward to sharing these with our shareholders. If historical patterns hold and anticipated events unfold as expected, we anticipate creating significant value for our shareholders. We expect this value creation to reflect both the appreciation of our Bitcoin holdings as well as our legacy business.

Speaker Change: Continue to concentrate our capital investments on bitcoin and mining machines, whose value closely follows bitcoins.

Speaker Change: However, we are also open to exploring opportunities that could lower our mining costs and potentially expand our operations to include hosting for AI machines.

Speaker Change: We are actively pursuing developments in these areas and look forward to sharing these with our shareholders.

Speaker Change: If historical patterns hold an anticipated events unfold as expected, we anticipate creating significant value for our shareholders. We expect this value creation to reflect both the appreciation of our bitcoin holdings as well as the.

Speaker Change: Understood.

Bruce Martin Rodgers: Our legacy business focused on providing funding to non-profit community associations.

Speaker Change: Our legacy business focused on providing styling to nonprofit community associations has remained stable since the end of 2022 looking ahead, we see growth opportunities arising from increased demand for reserve funding, which is a response to the legislative changes following the collapse of the seaside tower and south.

Bruce Martin Rodgers: Looking ahead, we see growth opportunities arising from increased demand for reserve funding, which is a response to legislative changes following the collapse of the Seaside Tower in South Florida in 2023. Florida law now requires associations to fully fund reserves for building maintenance. The resulting increase in association dues will likely increase the number of homeowners who fail to pay their dues.

Speaker Change: Florida in 2023.

Florida Law now requires associations to fully fund reserves for building maintenance, the resulting increase in association dues will likely increase the number of homeowners who failed to pay their dues we.

Bruce Martin Rodgers: We see an opportunity to provide funding and services to help associations transition to maintaining fully funded reserve accounts. However, we continue to be frustrated by what we perceive as the market's undervaluation of our shares. Despite our firm belief that we are generating substantial shareholder value, our stock price is currently less than a fifth of our stockholders' equity per share. Our record net income in the first quarter is a clear testament to the successful execution of our business strategy.

Speaker Change: We see an opportunity to provide funding and services to help associations transitioned to maintaining fully funded reserve accounts.

Speaker Change: We continue to be frustrated by what we perceive as the market's undervaluation of our shares despite our firm belief that we are generating substantial shareholder value. Our stock price is currently less than a fifth of our stockholders' equity per share.

Speaker Change: Our record net income in the first quarter is a clear testament to the successful execution of our business strategy.

Bruce Martin Rodgers: We are actively pursuing our strategic goals and taking every opportunity to share our story with investors, including presenting at several upcoming conferences. As more investors become familiar with our company and growth opportunities, our market share price will better reflect our intrinsic value. Our optimism about the business has never been as bright. We are making money mining, and we see a clear path to scaling our operations and improving our cost per Bitcoin mine.

Speaker Change: We are actively pursuing our strategic goals and taking every opportunity to share our story with investors, including presenting at several upcoming investment conferences as more investors become familiar with our company and growth opportunities our market share price will better reflect our intrinsic value.

Speaker Change: Our optimism about the business has never been as bright.

Speaker Change: We're making money mining bitcoin and we see a clear path to scaling our operations and improving our cost per bitcoin mind we've.

Bruce Martin Rodgers: We believe the market will eventually recognize these. Finally, I would like to take a moment to welcome Marty Traver back to the LM Funding Board of Directors. We are pleased to reintroduce an investment banking perspective to our board. Given his expertise in the capital markets, we believe Marty's current market insights will significantly assist our strategic decisions as we continue to expand our Bitcoin mining operations and hold Bitcoin on our balance sheet.

Speaker Change: We believe the market will eventually recognize these efforts.

Speaker Change: Finally, I would like to take a moment to welcome Marty Traver back to the island funding Board of Directors. We are pleased to reintroduce an investment banking perspective to our board.

Speaker Change: Given his expertise in the capital markets. We believe <unk> current market insights will significantly assist our strategic decisions as we continue to expand our bitcoin mining operations and whole bitcoin on our balance sheet. Additionally, we sincerely thank Todd Zhang for substantial contributions during the ramp up of our bitcoin mining operations.

Bruce Martin Rodgers: Additionally, we sincerely thank Todd Zhang for his substantial contributions during the ramp-up of our Bitcoin mining operations and wish him success in his future endeavors. Thank you again for listening today. I look forward to hearing your questions.

Speaker Change: And wish him success in his future endeavors.

Speaker Change: Thank you again for listening today, and I look forward to hearing your questions.

Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from Kevin Dede with H.C. Wainwright.

Speaker Change: Like do I move your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Your first question for today is from Kevin Didi with H C. Wainwright.

Speaker Change: Okay.

Kevin Darryl Dede: Morning, Bruce, and Rich. Thanks for having me on the call.

Speaker Change: Good morning, Bruce Rich thanks for thanks for having me on the call.

Bruce Martin Rodgers: It's great to hear from you.

Speaker Change: Sure.

Speaker Change: Great to hear from Needham.

Kevin Darryl Dede: So you'll have to excuse me, Bruce, I think I have my lines a little crossed. Unknown Speaker The press release pointed to 5900 machines, and I just wanted to be sure that that figure included the 300 new S21s and that everything is installed and hashing now.

Speaker Change: So you'll have to excuse me Bruce I think I have my lines little crossed.

The.

Speaker Change: The press release pointed to 950 900 machines.

And I just wanted to be sure that that figure included the 300, new asked joining ones and that everything is installed and hashing now.

Unknown Speaker: The 5900 machines were as of March. Unknown Speaker, We got the new S21, can't the end of April, 1st of May, but we also Disposed to 300 machines. So we're still about the same number of machines, but with the S21, for PetaHash is up. And the machines we got read off were the old sub 100 machines that slipped in.

Speaker Change: The 5900 machines.

Speaker Change: As of March.

Speaker Change:

Speaker Change: We got the new F 'twenty ones.

End of April 1st of May, but we also.

Speaker Change: Those two.

Speaker Change: 200 machines. So we're still about the same number of machines with the F. 'twenty one.

Speaker Change: <unk> is up.

Speaker Change: And the machines, we got right up where the old sub 100.

Speaker Change: Machines that slipped.

Kevin Darryl Dede: All right, so The Earnings Press talked to a hash rate of 673, but I, I don't know, I, I may have heard 639.

Speaker Change: Alright so.

Speaker Change: The earnings press talk to a hash rate at six of $6 73.

Speaker Change: But I I don't know I may have heard 639, I'm just yeah.

Unknown Speaker: I'm just here at a big number. Make sure I have that number right, because that's what we're based on in our forecast. 639 is the right number.

Speaker Change: Make sure I have that number right. So that's what we're basing our forecast on.

Speaker Change: 639 is the right number.

Speaker Change: Got it.

Speaker Change: Yes.

Kevin Darryl Dede: All right, perfect. Bruce, I especially appreciated hearing your sort of strategic snapshots. I mean, I know you guys are still financial buccaneers. Maybe you could just take a step back and help me think about or guide my thinking in your view of investment in building your hash rate versus your strategic attention on sort of your legacy endeavor.

Bruce: Alright, perfect Bruce I, especially appreciated hearing.

Speaker Change: Your sort of strategic snapshot.

Speaker Change: I mean, I know you guys are still financials about 10 years.

Speaker Change: Maybe you could just take a step back in and help me think about.

Speaker Change: Or guide my thinking and your view of.

Speaker Change: Investment in in building your hash rate versus your strategic attention.

Speaker Change: And sort of your legacy endeavors.

Bruce Martin Rodgers: So we're Bitcoin miners, primarily and foremost, right now. Our legacy business, really, the way that legislation works, that's a 2025 event, and really unclear as to where that would be. So I would focus on our company as being a Bitcoin miner. And then our strategy has been infrastructure light, but we're, you might have noticed in the queue, we borrowed $1.5 million for some strategic initiatives, and we should be making some announcements about that.

Speaker Change: So we're big coin miners, primarily its almost right yeah, our legacy business really the way that legislation works. That's a 2025 event and really unclear as to where that would be so I would focus on our company as being a bit coin miners.

Speaker Change: Our strategy has been infrastructure light, but.

Speaker Change: As you might have noticed in the Q, we borrowed a million five four strategic initiatives and we should be making some announcements on that.

Speaker Change: Traditionally.

Speaker Change: Okay.

Kevin Darryl Dede: Unknown Speaker You alluded to that in the call a little bit in reviewing HPC. Would you consider owning your own infrastructure, either for Bitcoin mining or for targeting the HPC market?

Speaker Change: You alluded to that.

Speaker Change: In the call a little bit and reviewing H P. C U E.

Speaker Change: Would you consider owning your own infrastructure, either for bitcoin mining or for addressing the H P C market.

Speaker Change: I might not understand what you mean by H H P C market.

Bruce Martin Rodgers: I might not understand what you mean by the HPC market. Oh, I'm sorry.

Kevin Darryl Dede: Oh, I'm sorry, high performance computing. That's sort of the AI.

Speaker Change: Oh, I'm, sorry high performance computing that sort of the a I I know I know that you. Yeah, you talk you talked to that a little bit.

Kevin Darryl Dede: I know, I know that you Yeah, you talk about that a little bit. I'm just Maybe let's just take the question back a step. I apologize. I kind of, run in my mouth here a little bit, forgive me. How are you reviewing your asset light strategy? Are you?

Speaker Change: I'm just.

Speaker Change: Maybe let's just take the question back a step I I apologize I kind of.

Speaker Change: We're out of my mouth here, a little bit forgive me.

Speaker Change: How how are you reviewing your asset light strategy or are you.

Speaker Change: I know you said, you're you know you've borrowed the money and you'll probably have more to say about that shortly but are.

Bruce Martin Rodgers: I know you said you're, you know, you've borrowed some money, and you'll probably have more to say about that shortly. But are you thinking about owning assets for or infrastructure for Bitcoin mining or for other purposes? If we own anything, the first and primary consideration is.

Speaker Change: Are you thinking about.

Speaker Change:

Speaker Change: Owning assets.

Or infrastructure for bitcoin mining or for other purposes.

Bruce Martin Rodgers: If we owned anything, the first and primary purpose would be Bitcoin mining. You look at other purposes for potential exits, should you decide to leave the field. You know, there could be things that happen. So that's the way we regard it.

Speaker Change: If we own anything in the first and primary purpose who'd be bitcoin mining.

Speaker Change: You look at other purposes for potential exit should you decide to leave the field.

Speaker Change: It could be things that happened so that's the way that we regard that.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change:

Speaker Change: How how are you thinking about adding to your fleet.

Kevin Darryl Dede: How, how are you thinking about adding to your fleet from a hash rate perspective beyond this last S 21 order? And how have your hosting partners talked to you about Pass-through pricing, rev share, contractual obligations, given sort of the lower hash price that we've seen since the halving?

Speaker Change: From a hash rate perspective beyond this last F 'twenty one order.

Speaker Change: And how have your hosting partners talk to you about.

Speaker Change: Pass through pricing Rev share.

Speaker Change: <unk> obligations, given sort of the lower house price that we've seen since the having.

Bruce Martin Rodgers: Hello, good question there, because we have more than one hosting partner, and we have more than one hosting contract with each one of our hosting partners. So there's probably discussions on every possible plane at all times about different things.

Speaker Change: Okay.

Speaker Change: Okay.

Hello. Good question, there because we have more than one hosting partner and we have more than one hosting contract with each one of our hosting partners.

Speaker Change: So theres probably discussions on every possible playing at all times on things.

Bruce Martin Rodgers: Back to the million five we bought and the strategic initiative I alluded to, the reality of hosting is that you usually have to make a deposit in order to host someone. So we're looking to use that deposit type of money to get more control over some of the infrastructure. It's still infrastructure light in theory, but we like to have some more control right up to where the electric meter is.

Speaker Change: Back to the million five we bought in the strategic initiative I alluded to.

Speaker Change: The reality of hosting is that you usually have to make a deposit in order to bolster some of them. So we're looking for using the deposit type of money to get more control over some of the infrastructure.

Speaker Change: Still a restructure light in theory, but we'd like to have some more control right up to where the electric meter is.

Speaker Change: Okay.

Kevin Darryl Dede: Okay, I hope that that helps. Thanks, Bruce.

That that helps thanks, Bruce how about expanding the mining fleet I guess, you've got to put one step.

Kevin Darryl Dede: Well, how about expanding the mining fleet? I guess you've got to take one step. That's, that's the goal, right? So if the thing starts flywheeling cash, that's where the cash is going to go to buy more machines. And all of the roads lead to that. That's how you grow a mining business. You got to keep up with the increasing difficulty. Go faster than that, and you increase your potential returns. Right. Rich, did you, or how are you considering this mark to market for digital assets ruling? Have you incorporated it? Or not? When do you expect it? Help me understand that, please.

Speaker Change: That's the goal right so.

Speaker Change: Yes.

Speaker Change: The thing starts flywheel cash than sort of the cash is going to go is to buy more machines.

Speaker Change: All of the roads lead to that's how you grow a mining business you got to keep up with the increase in difficulty and then if you go faster than that you increase your potential returns.

Rich: Right Rich did you.

Or how are you considering this mark to market for digital asset ruling have you incorporated or how.

Speaker Change: When do you expect to.

Speaker Change: Help me understand that please.

Richard D. Russell: Yeah, we adopted the mark to market effective this year, for one month, and that's where you see the $4.3 million gain that is buried in operating expenses. I don't really agree that it's the best place, but that's where the guide points you to. And that really bad value was about 72-ish, 73 at the end of March, and that's what it's marked to right now.

Rich: We adopted the mark to market effective this year, one model and that's where you see the 4.3.

$3 million gain that is varied and.

Speaker Change: Operating expenses I don't really agree.

Speaker Change: That's the best place, but that's where the.

Speaker Change: Guidance points you said.

Speaker Change: And I believe that.

Speaker Change: <unk> was about 72 ish 73 at the end of March and Thats put smart T right now.

Kevin Darryl Dede: Oh, you mean 72 Bitcoin?

Speaker Change: Oh, you mean 72 bitcoin.

Kevin Darryl Dede: $70,000, $70,000, perfect.

Speaker Change: 17000 $17000 per day.

Kevin Darryl Dede: Oh, oh, oh, oh, okay.

Speaker Change: Oh, Oh Oh, okay.

Richard D. Russell: As part of the adoption, we recognize the 600,000. We take up equity for, you know, what we had at 1231, right? That was not factored into this gain on operation. But what we mind doing from one one was about 43,000, I think, and what we mined in the quarter. So that mining was an average of, I think 53,000, that accumulated Bitcoin to 160, I think, three, resulted in a pickup of $4.3 million.

Speaker Change: Yeah.

Speaker Change: The adoption, we recognized a 600000.

Speaker Change: Pickup in equity for what we had as of 12 31, right that was not factored into this gain one operation.

Speaker Change: But what we mine doing from one one.

Speaker Change: One was about 43000 I think.

Speaker Change: And what we mined during the quarter.

Speaker Change: That mining with an average of I think 53000.

Speaker Change: That accumulate big point of 163.

Speaker Change: It's resulted in the pickup of $4 3 million.

Speaker Change: Oh, okay.

Speaker Change: So so Bruce as I sort of think about your comment regarding the <unk>.

Kevin Darryl Dede: So, Bruce, as I sort of think about your comment regarding the rulings in Florida taking effect on 25th, have you considered maybe just separating yourself from that business and going all in with Bitcoin?

Speaker Change: Rulings in Florida, taking effect in 'twenty five.

Speaker Change: How have you considered maybe just separating yourself from that business in <unk>.

Speaker Change: Going all in in Bitcoin.

Bruce Martin Rodgers: The two businesses have absolutely nothing to do with each other other than the fact that I'm involved. So, yeah, when things are right, there'll be a right time for that, and it'll make sense, and it'll be obvious to us.

Bruce: The two businesses have absolutely nothing to do with each other other than the fact that I'm involved in English.

Bruce: So yeah that.

Bruce: When things are right there'll be a right time to that and it would make sense and it will be obvious to us.

Kevin Darryl Dede: Okay, fair enough. Thank you very much, gentlemen, for taking my questions. I appreciate it. Thank you. Once again.

Speaker Change: Okay Fair enough. Thank you very much gentlemen for taking my questions I appreciate it.

Speaker Change: Thank you.

Operator: Once again, if you would like to ask a question, please press star 1. We have reached the end of the question and answer session, and I will now turn the call over to management for closing remarks.

Speaker Change: Once again, if you would like to ask a question. Please press star one.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: We have reached the end of our question and answer session and I will now turn the call over to management for closing remarks.

Bruce Martin Rodgers: Thank you. I want to thank everyone for joining us on today's call. Our pivot towards Bitcoin mining has proven fruitful with promising results so far. We are dedicated to reinvesting our mining revenue and acquiring additional mining equipment. We've secured $1.5 million in debt financing to help fund strategic initiatives. Furthermore, we're also focused on integrating advanced software and other technologies to boost the hash rate of our existing machinery. With Bitcoin reaching an all-time high of around $74,000 in March and presently trading near $67,000, our confidence in the enduring value of Bitcoin as an investment continues to solidify. We are grateful for the ongoing support from our shareholders and will continue to provide updates on our progress as new developments emerge. Thank you.

Thank you.

Speaker Change: Thank everyone for joining us on today's call our pivot towards bitcoin mining has proven fruitful with promising results so far.

Speaker Change: We are dedicated to reinvesting or mining revenue into acquiring additional mining equipment.

Speaker Change: We have secured one and a half million dollars in debt financings to help fund strategic initiatives.

Speaker Change: Furthermore, we're also focused on integrating advanced software and other technologies to boost the hatch rate of our existing machinery.

Speaker Change: With <unk>, reaching an all time high of around $74000 in March and presently trading near $60 $7000, our confidence in the enduring value of bitcoin as an investment continues to solidify.

Speaker Change: We are grateful for their ongoing support from our shareholders and will continue to provide updates on our progress as new developments emerge. Thank you.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: Okay.

Speaker Change: Okay.

Yeah.