Q2 2024 LM Funding America Inc Earnings Call
Speaker Change: [inaudible]
Speaker Change: Data Analyst 5735 Meeting Classroom
Unknown Executive: Matthew Galinko, Kevin Dede, Bruce Rodgers, Unknown Executive, Ted Ayvas, Greetings and welcome to the LM Funding America Incorporated second quarter 2024 business update call. At this time, all participants are in a listen-only mode, and 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.
Unknown Executive: Greetings, and welcome to the LM Funding America Incorporated, second quarter 2024 business update call. At this time, all participants are on a listen-only mode, and 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 keypads.
Speaker Change: Greetings and welcome to the LM Funding America Incorporated second quarter 2024 business update call.
Speaker Change: At this time, all participants are on a listen-only mode and a question and answer session will follow the formal presentation.
Speaker Change: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded.
Ted Ayvas: To now turn to conference over to your host, Mr. Ted Ayvas, Investor Relations. Sir, you may begin.
Unknown Executive: Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Ted Ayvas, Investor Relations. Sir, you may begin.
Speaker Change: I will now turn the conference over to your host, Mr. Ted Ayvas, Investor Relations. Sir, you may begin.
Ted Ayvas: Good morning, and thank you for joining LM Funding America's 2024 second quarter financial results and business update conference call.
Ted Ayvas: Good morning, and thank you for joining LM Funding America's 2024 Second 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 June 30, 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 US Securities and Exchange Commission, which can also be accessed on the company's website. 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 LM Funding America's 2024 Second 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 of LM Funding.
Ted Ayvas: On the call with us today are Bruce Rodgers, Chief Executive Officer, and Richard Russell, Chief Financial Officer of LM Funding. This morning, the company announced its operating results for the quarter end of June 30, 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 US 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.
Speaker Change: This morning, the company announced its operating results for the quarter ended June 30, 2024, and its financial condition as of that date. The press release is posted on the company's website, lmfunding.com.
Speaker Change: In addition, the company has filed its quarterly report on Form 10Q 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.scc.gov.
Ted Ayvas: If you have any questions after the call or would like any additional information about the company, please contact Prachendo Communication at 212-671-1020. Before management reviews, the company's operating results for the three and six months ended June 30, 2024, and its financial condition as of that date.
Speaker Change: 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.
Ted Ayvas: Before management reviews the company's operating results for the three and six months ended June 30, 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: Before management reviews the company's operating results for the three and six months ended June 30, 2024, and its financial condition as of that date, we would like to remind everyone that this conference call may contain forward-looking statements.
Ted Ayvas: We would like to remind everyone that this conference call may contain forward-looking statements. All statements, others, and statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plan, and our expectations for future operations, are forward-looking statements. 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, result 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 described in the company's Form 10-K, followed with the U.S.
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 10-K, which will be filed with the U.S. Securities and Exchange Commission on April 1s Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or applied in the forward-looking statement.
Speaker Change: 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.
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 achievements. 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 the forward-looking statements.
Speaker Change: 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, result of operations, strategy, short-term and long-term business operations and objectives, and financial needs.
Speaker Change: These forward-looking statements are subject to various risks, uncertainties, and assumptions as described in the company's Form 10-K , followed with the U.S. Securities and Exchange Commission on April 1, 2024.
Ted Ayvas: Securities and Exchange Commission on April 1, 2024. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or applied in the forward-looking statements. 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 responsibilities for the accuracy and completeness of any of these forward-looking statements.
Speaker Change: Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or applied in the forward-looking statement.
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.
Speaker Change: 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 the forward-looking statements.
Ted Ayvas: The company disclaims any duty to update any of the forward-looking statements. 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 evaluate all forward-looking statements made by the company in the context of these risks and uncertainties.
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 references to non-GAAP measures. 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 website. With that, I would now like to turn the call over to Bruce Rodgers, Chairman and CEO of LM Funding. Bruce?
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. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties.
Ted Ayvas: In addition, today's discussion will include references to non-GAAP measures. 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 on today's news release on our website.
Speaker Change: In addition, today's discussion will include references to non- GAAP measures .
Speaker Change: 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.
Ted Ayvas: With that, I would now like to turn the call over to Bruce Rodgers, Chairman and CEO of LM Funding.
Speaker Change: With that, I would now like to turn the call over to Bruce Rodgers, Chairman and CEO of LM Funding.
Bruce Rodgers: Bruce? Thanks, Ted. Good morning. Thanks to everyone who joined us today. I'm a happy LM Funding team.
Bruce Rodgers: Thanks, Ted. Good morning, and thanks to everyone who joined us today. On behalf of the LM Funding team, I'd like to thank all of our shareholders for your ongoing support and for joining us on this call this morning. April was an eventful month with the Bitcoin halving event. Despite this transition reducing miners' rewards by 50%, we are pleased that we successfully mined 44.1 bitcoins during the quarter, valued at approximately $2.9 million.
Bruce Rodgers: Thanks, Ted. Good morning, and thanks to everyone who joined us today. On behalf of the LM Funding team, I'd like to thank all of our shareholders for your ongoing support and for joining us on this call this morning.
Bruce Rodgers: Notwithstanding the halving event, we're extremely pleased that several expensive hosting contracts have recently expired, allowing us to relocate these machines to more cost-effective mining sites. As of July 31st, we had approximately 3,800 miners placed at several hosting sites, and our potential hash rate remains strong at 639 petahash. We believe that this positions LM Funding for even greater mining success in the future. I would now like to turn the call over to our CFO, Rick Russell, for a review of the financial highlights for the 2024 second quarter. Rick Thank you, Bruce.
Bruce Rodgers: I'd like to thank all of our shareholders for your ongoing support and for joining us on this call this morning. April was an eventful month with the Bitcoin having event. Despite this transition reducing miners' rewards by 50 percent, we are pleased that we successfully mined 44.1 bitcoins during the quarter, valued at approximately $2.9 million. Notwithstanding the having event, we're extremely pleased that several expensive hosting contracts have recently expired, allowing us to relocate these machines to more cost-effective mining sites. As of July 31st, we are approximately 3,800 miners placed at several hosting sites, and our potential hash rate remains strong: 639 peta hash.
Speaker Change: April was an eventful month with the Bitcoin halving event. Despite this transition reducing miners rewards by 50%, we are pleased that we successfully mined 44.1 bitcoins during the quarter, valued at approximately 2.9 million dollars.
Speaker Change: Notwithstanding the halving event, we're extremely pleased that several expensive hosting contracts have recently expired, allowing us to relocate these machines to more cost-effective mining sites.
Speaker Change: As of July 31st, we had approximately 3,800 miners placed at several hosting sites and our potential hash rate remains strong at 639 petahash.
Bruce Rodgers: We will use this position as LM funding for even greater mining success in the future.
Speaker Change: We believe that this positions LM Funding for even greater mining success in the future. I would now like to call over to our CFO , Rick Russell, for a review of the financial highlights for the 2024 second quarter. Rick?
Richard Russell: I would now like to turn the call over to RCFO Rick Russell for review of the financial highlights for the 2024 second quarter. Thank you, Bruce. As of June 30th, 2024, the company had approximately 1,900 Bitcoin and my machine operations at various hosting sites. We have subsequently placed an additional 2,000 machines into service at the Arthur mining site. In total, our 5900 miners provide the company with approximately 639 peta hash of mine capacity. We mined 44.1 bitcoins in a second quarter of 2024 during 2.9 million revenue and average Bitcoin price at $65,600. As of June 30th, 2024, the company held 160.4 bitcoins that had approximately $10 million.
Richard Russell: As of June 3, 2024, the company had approximately 1900 Bitcoin mining machine operations at various hosting sites. We have subsequently placed an additional 2,000 machines into service at the Arthur mining site. In total, our 5900 miners provide the company with approximately 639 petahash of mining capacity. We mined 44.1 bitcoins in the second quarter of 2024, generating 2.9 million in revenue at an average bitcoin price of $65,600. As of June 30, 2024, the company held 160.4 bitcoins, valued at approximately $10 million.
Rick Russell: Thank you, Bruce. As of June 3, 2024, the company had approximately 1,900 Bitcoin mining machines in operation at various coasting sites. We have subsequently placed an additional 2,000 machines into service at the Arthur mining site.
Rick Russell: In total, our 5,900 miners provide the company with approximately 639 petahash of mining capacity.
Speaker Change: We mined 44.1 bitcoins in the second quarter of 2024, generating $2.9 million in revenue at an average bitcoin price of $65,600. As of June 30, 2024, the company held 160.4 bitcoins, valued at approximately $10 million.
Richard Russell: Total revenue for the second quarter of 2024 was approximately $3 million, a decrease of $184,000 from the same period last year. Digital mining revenue was relatively flat at 2.9 million in the second quarter of 2024 versus 3 million in Q2 of 2023. This change was the result of the effects of the April 2024 Bitcoin having event and the reposition of miners during the month of June. Offset and part by the increase of Bitcoin prices. Operating expenses for the quarter and the June 30th, 2024, rose $7.89 million from $6.49 year-over-year due to a $1.3 million loss in Bitcoin fair value and $1.2 million increase in appreciation and organization costs.
Richard Russell: Total revenue for the second quarter of 2024 was approximately $3 million, a decrease of $184,000 from the same period last year. Digital mining revenue was relatively flat at $2.9 million in the second quarter of 2024 versus $3 million in Q2 of 2023.
Speaker Change: Total revenue for the second quarter of 2024 was approximately $3 million, a decrease of $184,000 from the same period last year.
Speaker Change: Digital mining revenue was relatively flat at $2.9 million in the second quarter of 2024 versus $3 million in Q2 of 2023.
Richard Russell: This change was a result of the effects of the April 2024 Bitcoin halving event and the repositioning of miners during the month of June, all set in part by the increase in Bitcoin prices. Operating expenses for the quarter ended June 30, 2024 rose to $7.8 million from $6.4 million year-over-year due to a $1.3 million loss in Bitcoin fair value and a $1.2 million increase in depreciation and amortization costs, offset in part by a $1.6 million decrease in staff calls and payroll. Additionally, we reported a net loss attributable to shareholders of approximately $6.1 million, including a $1.9 million unrealized loss on securities compared to a $4.5 million net loss in the prior year.
Speaker Change: This change was a result of the effects of the April 2024 Bitcoin halving event and the repositioning of miners during the month of June , offset in part by the increase in Bitcoin prices.
Speaker Change: Operating expenses for the quarter ended June 30, 2024 rose to $7.8 million from $6.4 million year-over-year due to a $1.3 million loss in Bitcoin fair value and a $1.2 million increase in appreciation and amortization costs, all set and par.
Richard Russell: Offset and part by a $1.6 million decrease in staff costs in payroll.
Speaker Change: by a $1.6 million decrease in staff costs and payroll.
Richard Russell: Additionally, we reported net laws attributable to shareholders of approximately $6.1 million, including a $1.9 million unrealized loss of securities, compared to a $4.5 million net loss in the prior year. Moreover, we reported that our poor EBITDA loss was $2.2 million in Q2 of 2024, from $1 million in Q2 of 2023.
Speaker Change: Additionally, we reported net laws attributable to shareholders of approximately 6.1 million, including at 1.9 million unrealized laws and securities compared to a 4.5 million net laws in
Bruce Rodgers: Moreover, we reported that our core EBITDA loss was $2.2 million in Q2 2024 from $0.1 million in Q2 2023. However, we achieved positive core EBO for the first half of 2024 of $2.2 million. I'll turn it back over to Bruce for our business overview. Thanks, Rick.
Speaker Change: Moreover, we reported that our core EBITDA loss was $2.2 million in Q2 2024 from $0.1 million in Q2 of 2023. However, we achieved positive core EBITDA for the first half of 2024 of $2.2 million.
Richard Russell: However, we achieved positive core EBITDA for the first half of 2024 at $2.2 million.
Bruce Rodgers: I'll turn it back over to Bruce for our business overview. Thanks, Rick.
Speaker Change: I'll turn it back over to Bruce for our business overview.
Bruce Rodgers: I now like to focus our attention on our overall business and strategic focus for 2024, 2025, and beyond. We recently announced that the company has entered into a letter of intent to acquire a mining site in Texas. This site offers an initial power capacity of 12 megawatts with the potential to expand by an additional 60 megawatts. This acquisition will provide us with a cost-effective location to power all of our existing machines. The mining site is currently generating 55 petatash of mining capacity using immersion mining techniques. And our primary goal with this acquisition is to invest capital to mine the full potential 72 megawatts.
Bruce Rodgers: I'd now like to focus our attention on our overall business and strategic focus for 2024, 2025, and beyond. We recently announced that the company had entered into a letter of intent to acquire a mining site in Texas. This site offers an initial power capacity of 12 megawatts, with the potential to expand by an additional 60 megawatts. This acquisition will provide us with a cost-effective location to power all of our existing machines. The mining site is currently generating 55 petatash of mining capacity using immersion mining techniques.
Bruce Rodgers: Thanks, Rick.
Bruce Rodgers: I'd now like to focus our attention on our overall business and strategic focus for 2024, 2025, and beyond.
Speaker Change: We recently announced that the company has entered into a letter of intent to acquire a mining site in Texas.
Speaker Change: This site offers an initial power capacity of 12 megawatts, with the potential to expand by an additional 60 megawatts. This acquisition will provide us with a cost-effective location to power all of our existing machines.
Speaker Change: The mining site is currently generating 55 petatash of mining capacity using immersion mining techniques.
Bruce Rodgers: And our primary goal with this acquisition is to invest capital to mine the full potential 72 megawatts. We are leveraging our Bitcoin holdings to finance the acquisition of market-priced power, which can be used for Bitcoin mining or resold to the grid. We now have a clear path to grow from our current transitory position to quickly mining 12 megawatts and then to a steady leveraged capital expansion plan aimed at growing our Texas site's mining capacity to 72 megawatts, which is projected to yield about a thousand Bitcoin annually at Current Network Difficulty Rates.
Speaker Change: And our primary goal with this acquisition is to invest capital to mine the full potential 72 megawatts.
Bruce Rodgers: We are leveraging our Bitcoin holdings to finance the acquisition of market price power, which can be used for Bitcoin mining or resold to the grid. We now have a clear path to grow from our current transitory position to quickly mining 12 megawatts. And then to a steady leverage capital expansion plan aimed at growing our Texas sites mining capacity is 72 megawatts, which is projected to yield about a thousand Bitcoin annually at current network difficulty rates. Additionally, the company has partnered with Arthur Mining to establish a new 15 megawatt hosting facility near Oklahoma City, where we have already relocated approximately 3,000 of our Bitmain S19 J Pro machines.
Speaker Change: We are leveraging our Bitcoin holdings to finance the acquisition of market price power, which can be used for Bitcoin mining or resold to the grid.
Speaker Change: We now have a clear path to growth from our current transitory position.
Speaker Change: to quickly mining 12 megawatts and then to a steady leveraged capital expansion plan aimed at growing our Texas site's mining capacity is 72 megawatts, which is projected to yield about a thousand Bitcoin annually at Current Network Difficulty Rates.
Bruce Rodgers: Additionally, the company has partnered with Arthur Mining to establish a new 15 megawatt hosting facility near Oklahoma City, where we have already relocated approximately 3,000 of our Bitmain S19J Pro machines. Arthur Mining has agreed to host these machines at no cost for 10 months, significantly reducing operating expenses for LM Funding.
Speaker Change: Additionally, the company has partnered with Arthur Mining to establish a new 15 megawatt hosting facility near Oklahoma City, where we have already relocated approximately 3,000 of our Bitmain S19J Pro machines.
Bruce Rodgers: Arthur Mining has agreed to host these machines at cost for 10 months, significantly reducing operating expenses for all in funding. The companies are also considering a new 60 megawatt site adjacent to the existing Oklahoma facility. We believe these sites provide us with cost-effective short and long-term solutions to our S19 J pros, allowing us to rapidly scale our Bitcoin mining capabilities.
Arthur Mining: Arthur Mining has agreed to host these machines at cost for 10 months, significantly reducing operating expenses for LM funding.
Bruce Rodgers: The companies are also considering a new 60 megawatt site adjacent to the existing Oklahoma facility. We believe these sites provide us with cost-effective, short and long-term solutions to host our S19J pros, allowing us to rapidly scale our Bitcoin mining capability. The Strategic Alliance with Arthur Mining enables LM Funding to capitalize on Arthur's hosting expertise and infrastructure and allows us to focus on our core competencies while minimizing operational integration risks.
Speaker Change: The companies are also considering a new 60-megawatt site adjacent to the existing Oklahoma facility. We believe these sites provide us with cost-effective, short- and long-term solutions to host our S19J pros, allowing us to rapidly scale our Bitcoin mining capabilities.
Bruce Rodgers: The strategic alliance with Arthur Mining enables Ellen Funding to capitalize on Arthur's hosting expertise and infrastructure, and allows us to focus on our core competencies while minimizing operational integration risks, thus positioning the company for what we believe will be a period of accelerate growth and increase profitability. In order to facilitate these expansion initiatives, the company secured a $5 million non-convertible loan, the proceeds in which will be dedicated to acquiring additional minors, further bolstering the company's mining capabilities.
Speaker Change: The strategic alliance with Arthur Mining enables LM Funding to capitalize on Arthur's hosting expertise and infrastructure, and allows us to focus on our core competencies while minimizing operational integration risks.
Bruce Rodgers: Best decision in the company for what we believe will be a period of accelerate growth and increase profitability. In order to facilitate these expansion initiatives, the company secured a $5 million non-convertible loan, the proceeds of which will be dedicated to acquiring additional miners, further bolstering the company's mining capabilities. Our legacy business, which provides funding to non-profit community associations, has been state-owned since the end of 2023. Looking ahead, we anticipate growth due to increased demand for reserve funding spurred by legislative changes following the 2023 seaside tower collapse in South Florida. New Florida laws now mandate that condominium associations fully fund building maintenance reserves, which may lead to higher association dues and more homeowners unable to pay.
Speaker Change: Thus positioning the company for what we believe will be a period of accelerated growth and increased profitability.
Speaker Change: In order to facilitate these expansion initiatives, the company secured a $5 million non-convertible loan, the proceeds of which will be dedicated to acquiring additional miners, further bolstering the company's mining capabilities.
Bruce Rodgers: Our legacy business, which provides funding to nonprofit community associations, has been stalled since the end of 2023. Looking ahead, we anticipate growth due to increased demand for reserve funding spurred by legislative changes following the 2023 seaside tower collapse in South Florida. New Florida laws now mandate that associations fully fund building maintenance reserves, which may lead to higher association dues and more homeowners unable to pay. Our experience collecting over 12,000 delinquent condominium owners' accounts may afford us an opportunity to address the fully funded reserve problem faced by Florida condominium associations.
Speaker Change: Our legacy business, which provides funding to nonprofit community associations, has been stayed all since the end of 2023.
Speaker Change: Looking ahead, we anticipate growth due to increased demand for reserve funding, spurred by legislative changes following the 2023 Seaside Tower Collapse in South Florida.
Speaker Change: New Florida Laws now mandate because associations fully fund building maintenance reserves, which may lead to higher association dues and more homeowners unable to pay.
Bruce Rodgers: Our experience collecting over 12,000 delinquent condominium owner accounts may afford us an opportunity to address the fully funded reserve problem faced by Florida condominium associations. So to wrap up, we are committed to reinvesting our mining revenue into purchasing additional cutting-edge miners. Perhaps more important is our laser focus on integrating sophisticated software and technologies into our mining operations, enabling us to enhance the hash rate of our existing machines. We are excited about our new initiatives to acquire the mining facility in Texas and our partnership with Arthur Mining to establish a new 15-megawatt hosting facility in New York, Oklahoma City, and possibly a new 60-megawatt site adjacent to that facility.
Speaker Change: Our experience collecting over 12,000 delinquent condominium owners' accounts may afford us an opportunity to address the fully funded reserve problem faced by Florida condominium associations.
Bruce Rodgers: So, to wrap up, we are committed to reinvesting our mining revenue into purchasing additional cutting-edge minors. Perhaps more important is our laser focus on integrating sophisticated software and technologies into our mining operations, enabling us to enhance the hash rate of our existing machines. We are excited about our new initiatives to acquire the mining facility in Texas and our partnership with Author Mining to establish a new 15 megawatt hosting facility in New York, Oklahoma City, and possibly a new 60 megawatt site adjacent to that facility. We are confident that these initiatives will provide LM Funding with cost-effective and efficient hosting solutions for our S19J pros, benefiting us in both the short and long term.
Speaker Change: So to wrap up, we are committed to reinvesting our mining revenue into purchasing additional cutting-edge miners.
Speaker Change: Perhaps more important is our laser focus on integrating sophisticated software and technologies into our mining operations, enabling us to enhance the hash rate of our existing machines.
Speaker Change: We are excited about our new initiatives to acquire the mining facility in Texas in our partnership with Arthur Mining to establish a new 15-megawatt hosting facility near Oklahoma City and possibly a new 60-megawatt site adjacent to that facility.
Bruce Rodgers: We are confident that these initiatives will provide LM funding with cost-effective and efficient hosting solutions for our S19J pros, benefiting us in both the short and long term. By implementing these initiatives, we are well positioned to significantly accelerate our Bitcoin mining operations. Furthermore, we believe these efforts will drive increased shareholder value for our investors in the future.
Speaker Change: We are confident that these initiatives will provide Ellen funding with cost-effective and efficient hosting solutions for our S19J pros, benefiting us in both the short and long term. By implementing these initiatives, we are well positioned to significantly accelerate our Bitcoin mining operations.
Bruce Rodgers: By implementing these initiatives, we are well positioned to significantly accelerate our Bitcoin mining operations. Furthermore, we believe these efforts will drive increased shareholder value for our investors in the future.
Speaker Change: Furthermore, we believe these efforts will drive increased shareholder value for our investors in the future.
Operator: I would now like to open the call up for questions. Operator, can you assist us with that? Thank you. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question, and you may press star two if you'd like to remove your question from. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.
Unknown Executive: I would now like to open the call up for questions. Operator, views; this is with that. Thank you. At this time, we would be conducting our question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question key. And you may press star 2 if you would like to remove your question from the key. From participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions.
Speaker Change: I would now like to open the call up for questions. Operator, can you assist us with that?
Speaker Change: Thank you. At this time, we will be conducting our question and answer session.
Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad.
Speaker Change: The confirmation tone will indicate your line is in the question key.
Speaker Change: And you may press star 2 if you would like to remove 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.
Operator: One moment, please, while we poll for questions. Thank you. Our first question is coming from Michael Donovan, who hates C-Wayne Rice. Your line is... Thank you, operator. Congratulations on the quarter, Bruce and Rick.
Michael Donovan: Thank you. Our first question is coming from Michael Donovan, which H.C. Wainwright, your line is life. Thank you, operator. Two rats on the quarter, Bruce and Rick. Can you help us get a better read on Texas and Oklahoma, just in terms of build out. I know you mentioned immersion. Do you plan on just dropping containers there? Or do you expect to have a larger build-out? Also, what are you thinking about in terms of power? Our transformers are going to be needed at additional transformers. New containers in there. Okay, Texas and Oklahoma are two different places.
Speaker Change: One moment please, while we pause for questions.
Speaker Change: Thank you.
Speaker Change: Our first question is coming from Michael Donovan, H.C. Wainwright. Your line is live.
Michael Donovan: Can you help us get a better read on Texas and Oklahoma? Just in terms of build out. I know you mentioned immersion.
Michael Donovan: Thank you, operator.
Michael Donovan: Congrats on the quarter, Bruce and Rick.
Speaker Change: Um, can you help us get a better read on Texas and Oklahoma, just in terms of the buildout. I know you mentioned immersion. Um, do you plan on just dropping containers there?
Speaker Change: or do you expect to have a larger build-out?
Speaker Change: Also, where you think it about in terms of power or transformers going to be needed at additional transfers need at both these sites, thank you.
Michael Donovan: Thanks, Michael.
Michael Donovan: Do you plan on just dropping containers there? Or do you expect to have a larger build out? Also, what are you thinking about in terms of power?
Michael Donovan: Our transformers are going to be needed at additional transformers knew at both of these sites. Thanks, thank you. Thanks Michael.
Speaker Change: A lot of bundled questions there. Okay, Texas and Oklahoma are two different places. Both sites will operate using containers. I'm sorry, Texas actually does have a...
Bruce Rodgers: Both sites will operate using containers. I'm sorry, Texas actually does have a... The Texas will be immersion containers right now. The Oklahoma site is air containers, right? And that is 15 megawatts. It's fully built out right now. The Texas site, they've got four new immersion containers that were put in service once we buy it. They have three slightly older suburb immersion containers that are active right now. And then, of course, we will buy more immersion containers to fill out the other six megawatts of the site. That's Texas. Okay, and the second part of your question, Michael, was that yes, there are transformers on the ground in Texas.
Bruce Rodgers: Bundle question there. Okay, Texas and other two different places. Both sites will operate using containers. I'm sorry Texas actually does have a, Yeah, Texas will be immersion containers. Right now, the Oklahoma site is air containers, right? And that is 15 megawatts that's fully built out. The Texas site. They've got- Four new emerging containers that we will put in service once we buy them. They have three slightly older suburbs.
Speaker Change: Texas will be immersion containers. Right now the Oklahoma site is air containers, right? And that is 15 megawatts is fully built out right now.
Speaker Change: The Tachysite
Speaker Change: They've got
Speaker Change: Four new emerging containers that we will put in service once we buy it. We have three slightly older suburb.
Bruce Rodgers: Emerging containers that are at an active price. Kevin, of course, [inaudible] We will buy more emerging containers to fill out the other six megawatts of the site. Okay. And the second part of your question, Michael, was that yes, there are transformers on the ground in Texas.
Speaker Change: Emerging Containers that are active right now. And then of course...
Speaker Change: We will buy more emerging containers.
Speaker Change: to fill out the other six megawatts of the site.
Bruce Rodgers: There are, you know, Oklahoma, but there are costs for additional costs for build out at both in tranches to build more megawatts. Okay. Now, in terms of the potential for AI or HPC hosting, what sort of connectivity do these sites offer, either for fiber connectivity and, What sort of water sources do you have nearby just for this potentiality? We have not priced or valued the sites for HPC uses.
Speaker Change: OK, and the second part of your question, Michael, was that? Yes, there.
Bruce Rodgers: There are, you know, Oklahoma, but there are costs for additional costs for build out at both entrances to build more megawatts.
Speaker Change: There are transformers on the ground in Texas, there are in Oklahoma, but there are additional costs for build out at both in tranches to build more megawatts.
Bruce Rodgers: Okay, now in terms of the potential for AI or HPC posting, what's our connectivity to these sites all for either for fiber connectivity and, and what sort of water sources do you have nearby just for this potential? We have not, we've not priced or valued sites for HPC uses. I only have general knowledge, just stuff like that. To us, it's securing the power. So it's 70 months in Texas and the additional 60 potential in Oklahoma, what we've got there. So just not our business yet. Yeah, now Oklahoma. So it's going to be at cost for 10 months for the running the 3000 miners there.
Speaker Change: Okay.
Speaker Change: Now, in terms of the potential for AI or HPC posting, what's our connectivity to these sites all for, for fiber connectivity, and, and, and, and, and, and.
Speaker Change: What sort of water sources do you have nearby just for this potentiality? We have not priced or valued the sites for
Bruce Rodgers: I only have general knowledge, just stuff like that. To us, it's securing the power. So it's 70 months in Texas and then the additional 60 potential months in Oklahoma where we've got it. It's just not our business. Yeah, actually, fair enough.
Speaker Change: HPC uses. I only have general knowledge of stuff like that. To us, it's securing the power. So it's 70,000 watts in Texas and the additional 60 potential in Oklahoma, what we've got there. So just not our business yet.
Michael Donovan: Now Oklahoma, so it's going to be at cost for 10 months for the running of the 3000 miners there. After the 10 months, have you guys discussed what that looks like or what a potential deal would be? It's in the agreement. It's in the agreement. The docs, it goes to market price after the 10 months.
Speaker Change: Yeah, actually fair enough. Now Oklahoma, so it's going to be at cost for 10 months for the running the 3000 miners there. After the 10 months, had you guys discussed what that looks like or what what a potential deal would be.
Bruce Rodgers: After the 10 months, have you guys discussed what that looks like or what a potential deal would be? It's in the agreement. The docs, it goes to market price after the 10 months. So the big picture that is we rather than rather than provide a hosting company with the deposit that they use in to build you something, we'd loan them on a secured basis. The money they needed to build it out. And then to make money on our money, they're mining for us for costs for this first 10 months. And then after that, we plan to be elsewhere, and they'll rent our space out to somebody that will play market rates and be able to pay off that loan to us.
Speaker Change: It's in the agreement, Michael. It's in the agreement, the docs, it goes to market price after the 10 months. So the big picture of that is we rather than
Bruce Rodgers: So the big picture that is we rather than. Rather than provide a hosting company with the deposit that they use to build you something, we'd loan them on a secured basis the money they need to build it out. And then, to make money on our money, they're mining for us for costs for these first 10 months.
Speaker Change: Rather than provide a hosting company with a deposit that they use to build you something, we'd loan them on a secured basis, the money they needed to build it out, and then to make money on their money, they're mining for us for costs for this first 10 months.
Speaker Change: And then after that, we plan to be elsewhere and they'll rent our space out to somebody that will pay market rates and be able to pay off that loan to us.
Bruce Rodgers: Yep. Okay, thank you. Now in terms of timeline that took to transition those 3000 miners. Was that in June and July? I think I believe that they're all over there now, right? The 3000. So just that were that had interrupted operations? Yeah, it took probably a good 45 days to transition over, right? Just get a move set up, you know, a few kinks worked out with the news side as usual, but they're all installed there now at this point, the 3000. Okay.
Bruce Rodgers: And then after that, we plan to be elsewhere, and they'll rent our space out to somebody that will pay market rates and be able to pay off that loan to us. Yep. Okay, thank you. Now, in terms of the timeline that it took to transition those 3,000 minors, it was, um, June, Antelaya, Rob. I think I believe that they're all over there now, right? The 3000 so just that were that had interrupted operations. Yeah, it took probably 45-ish days to transition over, right?
Speaker Change: Okay, thank you.
Speaker Change: Hell.
Speaker Change: In terms of the timeline that took to transition those 3,000 miners, was that in June and July?
Speaker Change: I believe that they're all over there now, right, that 2000 so just that we're that had interrupted operations. Yeah, it took probably.
Bruce Rodgers: Just get a move set up, you know, a few kinks worked out with the new site as usual, but they're all installed there now, at this point, the 3,000. Okay. Can you remind us about the new machines, the S21s? Are they located at a third-party site? I believe you're expecting them to arrive in March or April.
Speaker Change: Just get a move set up, you know, a few kinks worked out with the new site as usual But they're all installed there now
Speaker Change: at this point, the 3,000.
Bruce Rodgers: Now can you remind us about the new machines that you asked 21s and where are they located at a third party site? I believe they're you're expecting them to arrive in March, April. Can you sell with that? Yeah, they came and I want to say, April, and they're installed at the core location in Kentucky with our XP's. So we have about 800 S21s and XPs combined over there. Okay, and for a third party hosting, is that everything with core now, or do you still have some at Giga? No, we transition at Giga, and they went to our house, and we're looking to move some of those over to the Texas site once that's done.
Speaker Change: Okay.
Speaker Change: And can you remind us about the
Speaker Change: The new machines that you, the S21s.
Speaker Change: and where are they located at a third party site? I believe they're expecting them to derive and mark people can just help with that. Yeah, they came and I want to say people and they're installed at the core location and Kentucky with our XP's.
Bruce Rodgers: Can you just help with that? Yeah, they came in, I want to say April, and they're installed at the core location in Kentucky with our ex- So we have about 800 S21s XTs combined over there. Okay, and for third-party hosting, is everything with core now? Or do you still have some at Giga?
Speaker Change: So we have about 800 S21s and XTs combined over there.
Speaker Change: Okay, and for your third-party hosting, is everything with core now or do you still have some at Giga?
Bruce Rodgers: No, we transitioned out of Giga, and they went to a warehouse, and we're looking to move some of those over to the Texas side, one side. So for hosting, we have CORE, and then the Arthur site is a hosting site. Yep. All right. You know? Great. Now, more of a big picture, Clutch Dedeau, with that $5 million loan, you spoke to some of that being used for immersion. Is this going to be mostly for infrastructure or purchasing new machines too? How should we think about that? Mostly, well mostly, it mostly has a number attached to it.
Speaker Change: No, we transitioned out of Giga and they went to a warehouse.
Speaker Change: And we're looking to move some of those over to the Texas side once that's done.
Bruce Rodgers: So for hosting we have Core and then the Arthur site is the hosting site. Yeah, great.
Speaker Change: So, for hosting we have core and then the Arthur site is a hosting site.
Bruce Rodgers: Now more of a big picture, a question with that $5 million loan, I'm going to believe you. You spoke to some of that being used for immersion. Is this going to be mostly for infrastructure or purchasing new machines too? How should we think about that? Mostly, wow, mostly, it mostly has a number attached to it. Whatever infrastructure it takes, plus whatever machine the infrastructure will support. That's the plan. Okay, so mix up. Good, all right. Well, I'll hop back and make a lot of capacity. It doesn't do any good if you don't have any machines to plug into it.
Speaker Change: Great.
Speaker Change: Now, more of a big picture question, though, with that $5 million loan, I believe you, you.
Speaker Change: Spoke to some of that being used for, for immersion.
Speaker Change: is this going to be mostly for infrastructure or purchasing new machines to how should we think about that.
Speaker Change: Mostly, well, mostly, mostly has a number attached to it. Whatever infrastructure it takes, plus whatever machines the infrastructure will support, that's the plan.
Bruce Rodgers: Whatever infrastructure it takes, plus whatever machines, the infrastructural support, that's the plan. Mixed up. Good. All right. Well, I'll help out. 10 megawatts or spastic. It doesn't do you any good if you don't have any machines to plug into it. So you got to kind of think of it like, "Bear it out."
Speaker Change: Okay. Thank you.
Speaker Change: Okay, so next up.
Speaker Change: 10 megawatts of capacity doesn't do you any good if you don't have any machines to plug into it, so you've got to kind of think of it like that.
Michael Donovan: So you got to kind of think of it like that. Thank you so much, Bruce and Rick. Thank you.
Michael Donovan: Thank you so much, Bruce and Rick. Thank you. Thank you. Ladies and gentlemen, if there will be any final questions or comments, please indicate so by pressing star one on your telephone key. Okay, as we currently have no further questions in queue, I will hand it back to management for closing comments. Thank you all for joining us on today's call. The 2024 having event is behind us. We now turn our focus toward enhancing our Bitcoin mining operations and anticipation of the next having event expected to occur in 2028. With our current initiatives providing cost-effective locations to power all of our existing machines, we are extremely excited about what the future holds for LM Funding and its shareholders.
Speaker Change: Fair enough. Thank you so much, Bruce and Rick.
Speaker Change: Thank you.
Bruce Rodgers: Ladies and gentlemen, if there will be any final questions or comments, please indicate so now by pressing star one on your telephone keypad. Okay, as we currently have no further questions in key, I will hand it back to management for closing comments. Thank you all for joining us on today's call with 2024 having event behind us. We now turn a focus toward enhancing our Bitcoin mining operations and anticipation of the next having event expected to occur in 2028, with our current initiatives providing cost effective locations to power all of our existing machines. We are extremely excited about what the future holds for Ellen Funding and its shareholders.
Speaker Change: Thank you. Ladies and gentlemen, if there will be any final questions or comments, please indicate so now by pressing star 1 on your telephone keypad.
Speaker Change: Okay, as we currently have no further questions in queue, I will hand it back to management for closing comments.
Bruce Rodgers: We are grateful for the ongoing support of our shareholders and look forward to updating you on future progress. Thank you. Thank you. This concludes today's call, and you may disconnect your lines at this time. And we thank you for your participation.
Speaker Change: Thank you all for joining us on today's call. With 2024 halving event behind us, we now turn our focus toward enhancing our Bitcoin mining operations in anticipation of the next halving event expected to occur in 2028.
Speaker Change: With our current initiatives providing cost effective locations to power all of our existing machines we are extremely excited about what the future holds for LM Funding and its shareholders.
Bruce Rodgers: We are grateful for the ongoing support of our shareholders and look forward to updating you on the future of progress. Thank you.
Speaker Change: We are grateful for the ongoing support of our shareholders and look forward to updating you on the future progress. Thank you.
Unknown Executive: This concludes today's call, and you may disconnect your lines at this time. We thank you for your participation.
Speaker Change: Thank you. This concludes today's call and you may disconnect your lines at this time. And we thank you for your participation.
Unknown Executive: Greetings, and welcome to the LM Funding America Incorporated, Second Quarter 2024 Business Update Call. At this time, all participants are on a listen only mode, and 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 keypads.
Ted Ayvas: To no turn to conference over to your host, Mr. Ted Ayvas, investor relations. Sir, you may begin.
Ted Ayvas: Good morning, and thank you for joining LM Funding America's 2024 Second Quarter Financial Results and Business Update Conference Call.
Ted Ayvas: On the call with us today are Bruce Rodgers, Chief Executive Officer, and Richard Russell, Chief Financial Officer of LM Funding. This morning, the company announced its operating results for the quarter end of June 30, 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 is filed its quarterly report on form 10Q with the US 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.
Ted Ayvas: If you have any questions after the call or would like any additional information about the company, please contact Prachendo Communication at 212-671-1020. Before management reviews, the company's operating results for the three and six months ended June 30, 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, others and statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plan, and our expectations for future operations are forward-looking statements.
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, result 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 described in the company's form TENK, followed with the U.S. Securities and Exchange Commission on April 1, 2024. Because of these risks uncertainties and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or applied 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 achievements. In addition, neither the company nor any other person assumes responsibilities to the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of the forward-looking statements. 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 evaluate all forward-looking statements made by the company in the context of these risks and uncertainties.
Ted Ayvas: In addition, today's discussion will include references 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 on today's news release on our website.
Bruce Rodgers: with that, I would now like to turn the call over to Bruce Rodgers, Chairman and CEO of LM Funding. Bruce? Thanks, Ted. Good morning. Thanks to everyone who joined us today. I'm a happy LM funding team. I'd like to thank all of our shareholders for your ongoing support and for joining us on this call this morning.
Bruce Rodgers: April was an eventful month with the Bitcoin having event. Despite this transition reducing miners rewards by 50 percent, we are pleased that we successfully mined 44.1 bitcoins during the quarter, valued at approximately $2.9 million. Notwithstanding the having event, we're extremely pleased that several expensive hosting contracts have recently expired, allowing us to relocate these machines to more cost effective mining sites. As of July 31st, we are approximately 3,800 miners placed at several hosting sites and our potential hash rate remains strong, 639 peta hash. We will use this position as LM funding for even greater mining success in the future.
Richard Russell: I would now like to turn call over to RCFO Rick Russell for review of the financial highlights for the 2024 second quarter. Thank you, Bruce. As of June 30th, 2024, the company had approximately 1900 Bitcoin and my machine operations at various hosting sites. We have subsequently placed an additional 2000 machines into service at the Arthur mining site. In total, our 5900 miners provide the company with approximately 639 peta hash of mine capacity.
Richard Russell: We mined 44.1 bitcoins in a second quarter of 2024 during 2.9 million revenue and average Bitcoin price at $65,600. As of June 30th, 2024, the company held 160.4 bitcoins that had approximately $10 million. Total revenue for the second quarter of 2024 was approximately $3 million, a decrease of 184,000 from the same period last year. Digital mining revenue was relatively flat at 2.9 million in the second quarter of 2024 versus 3 million in Q2 of 2023.
Richard Russell: This change was the result of the effects of the April 2024 Bitcoin having event and the reposition of miners during the month of June. Offset and part by the increase of Bitcoin prices. Operating expenses for the quarter and the June 30th, 2024 rose $7.89 million from $6.49 year-over-year due to a $1.3 million loss in Bitcoin fair value and $1.2 million increase in appreciation and organization costs. Offset and part by a $1.6 million decrease in staff costs in payroll.
Richard Russell: Additionally, we reported net laws attributable to shareholders of approximately $6.1 million, including a $1.9 million unrealized loss of securities compared to a $4.5 million net loss in the prior year. Moreover, we reported that our poor EBITDA loss was $2.2 million in Q2 of 2024 from $1 million in Q2 of 2023.
Richard Russell: However, we achieved positive core EBITDA for the first half of 2024 at $2.2 million.
Bruce Rodgers: I'll turn it back over to Bruce for our business overview. Thanks, Rick.
Bruce Rodgers: I now like to focus our attention on our overall business and strategic focus for 2024, 2025 and beyond.
Bruce Rodgers: We recently announced that the company has entered into a letter intent to acquire a mining site in Texas. This site offers an initial power capacity of 12 megawatts with the potential to expand by an additional 60 megawatts. This acquisition will provide us with a cost effective location to power all of our existing machines. The mining site is currently generating 55 petatash of mining capacity using immersion mining techniques. And our primary goal with this acquisition is to invest capital to mine the full potential 72 megawatts.
Bruce Rodgers: We are leveraging our Bitcoin holdings to finance the acquisition of market price power, which can be used for Bitcoin mining or resold to the grid. We now have a clear path to grow from our current transitory position to quickly mining 12 megawatts. And then to a steady leverage capital expansion plan aimed at growing our Texas sites mining capacity is 72 megawatts, which is projected to yield about a thousand Bitcoin annually at current network difficulty rates.
Bruce Rodgers: Additionally, the company has partnered with Arthur Mining to establish a new 15 megawatt hosting facility near Oklahoma City, where we have already relocated approximately 3000 of our bit main S19 J pro machines. Arthur Mining has agreed to host these machines at cost for 10 months, significantly reducing operating expenses for all in funding.
Bruce Rodgers: The companies are also considering a new 60 megawatt site adjacent to the existing Oklahoma facility. We believe these sites provide us with cost effective short and long-term solutions to our S19 J pros, allowing us to rapidly scale our Bitcoin mining capabilities. The strategic alliance with Arthur Mining enables Ellen funding to capitalize on Arthur's hosting expertise and infrastructure, and allows us to focus on our core competencies while minimizing operational integration risks, thus positioning the company for what we believe will be a period of accelerate growth and increase profitability.
Bruce Rodgers: In order to facilitate these expansion initiatives, the company secured a $5 million non-convertible loan, the proceeds in which will be dedicated to acquiring additional minors, further bolstering the company's mining capabilities.
Bruce Rodgers: Our legacy business, which provides funding to nonprofit community associations, has been stalled since the end of 2023. Looking ahead, we anticipate growth due to increased demand for reserve funding spurred by legislative changes following the 2023 seaside tower collapse in South Florida. New Florida laws now mandate as associations fully fund building maintenance reserves, which may lead to higher association dues and more homeowners unable to pay. Our experience collecting over 12,000 delinquent condominium owners accounts may afford us an opportunity to address the fully funded reserve problem faced by Florida condominium associations.
Bruce Rodgers: So to wrap up, we are committed to reinvesting our mining revenue into purchasing additional cutting edge minors. Perhaps more important is our laser focus on integrating sophisticated software and technologies into our mining operations, enabling us to enhance the hash rate of our existing machines. We are excited about our new initiatives to acquire the mining facility in Texas and our partnership with author mining to establish a new 15 megawatt hosting facility in New York, Oklahoma City and possibly a new 60 megawatt site adjacent to that facility.
Bruce Rodgers: We are confident that these initiatives will provide LM Funding with cost effective and efficient hosting solutions for our S19J pros, benefiting us in both the short and long term. By implementing these initiatives, we are well positioned to significantly accelerate our Bitcoin mining operations. Furthermore, we believe these efforts will drive increased shareholder value for our investors in the future.
Unknown Executive: I would now like to open the call up for questions. Operator, views, this is with that. Thank you. At this time, we would be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question key. And you may press star 2 if you would like to remove your question from the key. From participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Thank you.
Michael Donovan: Our first question is coming from Michael Donovan, which H.C. Wainwright, your line is life. Thank you, operator. Two rats on the quarter, Bruce and Rick. Can you help us get a better read on Texas and Oklahoma, just in terms of build out. I know you mentioned immersion. Do you plan on just dropping containers there? Or do you expect to have a larger build out? Also, what are you thinking about in terms of power?
Michael Donovan: Our transformers are going to be needed at additional transformers. New containers in there. Okay, Texas and Oklahoma two different places. Both sites will operate using containers. I'm sorry, Texas actually does have a... The Texas will be immersion containers right now. The Oklahoma site is air containers, right? And that is 15 megawatts. It's fully built out right now. The Texas site, they've got four new immersion containers that were put in service once we buy it.
Michael Donovan: They have three slightly older suburb immersion containers that are active right now. And then of course, we will buy more immersion containers to fill out the other six megawatts of the site. That's Texas. Okay, and the second part of your question, Michael, was that yes, there are transformers on the ground in Texas. There are, you know, Oklahoma, but there are costs for additional costs for build out at both entrances to build more megawatts.
Michael Donovan: Okay, now in terms of the potential for AI or HPC posting what's our connectivity to these sites all for either for fiber connectivity and, and, uh, and what sort of water sources do you have nearby just for this potential? We have not we've not priced or valued sites for HPC uses. I only have general knowledge just stuff like that. To us, it's securing the power. So it's 70 months in Texas and the additional 60 potential in Oklahoma, what we've got there.
Michael Donovan: So just not our business yet. Yeah, now Oklahoma. So it's going to be at cost for 10 months for the running the 3000 miners there. After the 10 months, have you guys discussed what that looks like or what what a potential deal would be? It's in the agreement. The docs, it goes to market price after the 10 months. So the big picture that is we rather than rather than provide a hosting company with the deposit that they use in to build you something, we'd loan them on a secured basis.
Michael Donovan: The money they needed to build it out. And then to make money on our money, they're mining for us for costs for this first 10 months. And then after that, we plan to be elsewhere and they'll rent our space out into somebody that will play market rates and be able to pay off that loan to us. Yep.
Michael Donovan: Okay, thank you. Now in terms of timeline that took to transition those 3000 miners. Was that in June and July? I think I believe that they're all over there now, right? The 3000. So just that were that had interrupted operations? Yeah, it took probably a good 45 days to transition over, right? Just get a move set up, you know, a few kinks worked out with the news side as usual, but they're all installed there now at this point, the 3000.
Michael Donovan: Okay. Now can you remind us about the new machines that you asked 21s and where are they located at a third party site? I believe they're you're expecting them to arrive in March, April. Can you sell with that? Yeah, they they came and I want to say, April and they're installed at the core location in Kentucky with our XP's. So we have about 800 S21s and XP's combined over there. Okay, and for a third party hosting is that is everything with core now or do you still have some at Giga?
Michael Donovan: No, we transition at Giga and they went to our house and we're looking to move some of those over to the Texas site once that's done. So for hosting we have core and then the Arthur site is the hosting site. Yeah, great.
Michael Donovan: Now more of a big picture, a question with that $5 million loan, I'm going to believe you, you spoke to some of that being used for for immersion. Is this going to be mostly for infrastructure or purchasing new machines too? How should we think about that? Mostly, wow, mostly, it mostly has a number attached to it. Whatever infrastructure it takes, plus whatever machine the infrastructure will support. That's the plan. Okay, so mix up.
Michael Donovan: Good, all right. Well, I'll hop back and make a lot of capacity. It doesn't do any good if you don't have any machines to plug into it. So you got to kind of think of it like that.
Bruce Rodgers: Thank you so much, Bruce and Rick. Thank you. Ladies and gentlemen, if there will be any final questions or comments, please indicate so now by pressing star one on your telephone keypad. Okay, as we currently have no further questions in key, I will hand it back to management for closing comments. Thank you all for joining us on today's call with 2024 having event behind us. We now turn a focus toward enhancing our Bitcoin mining operations and anticipation of the next having event expected to occur in 2028 with our current initiatives providing cost effective locations to power all of our existing machines.
Bruce Rodgers: We are extremely excited about what the future holds for Ellen funding and its shareholders. We are grateful for the ongoing support of our shareholders and look forward to updating you on the future of progress. Thank you.
Unknown Executive: This concludes today's call and you may disconnect your lines at this time and we thank you for your participation.