Hello everyone. Thank you for joining us today. We are here today to present SATO Technologies Q1 2023 Results. My name is Romain Nouzareth. I am the CEO and Co-founder of the company, started in 2017. We will spend today some times about like discussing our company that is publicly listed on the stock market on the TSXV in Canada under the ticker SATO, and in the U.S. on the OTCQB: CCPUF. Before I start, the traditional forward-looking statement, it's not financial advice. We are gonna talk about expectation estimate and assumptions. We are very happy and we're very eager to have you joining us today so that we can go into the detail of the presentation. We will spend mainly the time today to talk about the first quarter. We had outstanding results. We published recently the full year 2022. We showed that we were operating cash flow positive for the full year. A few days ago, we published Q1 2023. Not only we are operating cash flow positive, but also providing net results, which is outstanding. We will talk about comparables. First, I will start by giving you a quick update on the company, where we are, where we're going to, and how we will continue growing into the actual market, in the next coming market that is coming mainly on the halving. We will then finish with some Q&A. Corporate highlights, as I was saying, we have been starting the company in 2017, so we are operating since a long time. In 2021, we decided to get listed on the stock market. We wanted to be a publicly listed company because we know that in a bull market, this is the right way to raise money at scale. In terms of operation, today we are operating around like 20 MW of power. It's green power consuming... producing almost zero carbon emission. We are mining from Quebec in Canada. Our energy is at 99.9% renewable, mainly hydroelectric. We are close to 0.6 EH of mining power. To give you an idea, we are running around like 6,000 computers, 6,000 mining rigs. In the total in the world, you have around like 340 EH The biggest miner today have around like 10 EH, between 5-10 EH. At 0.6 EH, which it shows that we are on the map, and that we are big enough to exist. More importantly, we've shown that we are financially stable. Vertically integrated. This is extremely important for us. Why? Because in a bear market like we have been witnessing for the past year, you can only succeed if you have no intermediary between your computers and your energy. This is what we have in our center. It was our own strategy to own the infrastructure. We manage our own electricity. We manage our own data center. We are what we call bare metal in some ways, and this is why we have outstanding results. More importantly even, we are ultra-efficient. It means that our center never stops. We make sure that we can run the computers on a long time, 24/7, 365 years days a year. It's important to do it well because you wanna make sure that these computers can extract the most Bitcoin possible today, but also in the long term. That's what we've built, and that's what we have shown for the whole year of 2022, again in Q1. Now we started to publish our monthly results. We started last month. We will start now every month publishing the monthly result, how much Bitcoin we make per exahash, how much Bitcoin we are producing, and how much efficient we are. Next, we're gonna talk about what is the long-term vision. As I was saying, we are extremely efficient operators, so we want to grow. We want to grow from 20 MW and do a minimum of 10x or more. It means that we are looking now to expand in the coming 15, 18, 24 months, expanding our megawatt. And if we wanna do it 10x, it means that we are looking at getting, like, a 200 MW of mining power. The good things that we have, in 2022, we bought some electrical equipment in advance. We have 8 MW that we can currently deploy in a new site, and we are actively looking for a site. The idea, of course, to have more megawatt is also to produce more exahash. You understood by producing more exahash, we are producing more Bitcoin at the end. The idea is simple. We've been showing for the past five years that we are extremely efficient at doing what we do. We've been showing that we can do it at scale for 20 MW. We've been showing that we are able to be operating cash flow positive. We are showing now that we can produce net profit. We just want to do it bigger, and that's what we are focusing on. This is the long-term vision for the company. At the same time, next slide. At the same time, we need to be ready for an event that is coming very soon to us. It's called the halving. You've heard about it, I'm sure, if you are here. The block is going to produce half less Bitcoin than before. It's coming in about. Well, I would say 11 to 12 months. It's near, and we need to be extremely cautious on the financial and how we run our operations. That's what we have been doing for the past six years, even more for the past year, because we're in total bear market, and even now in Q1, it's still a difficult market. We have been financially cautious. We wanna be financially cautious. We wanna make sure that the next halving, we're gonna be here, and we are gonna be there. What we are working on also in the mid-short term is to see how we could add AI and HPC data centers. Why? Because as an operator managing our own infrastructure, we believe we can bring excellent answers to this new world that is coming, you know, with the ChatGPT and different kind of like AI, OpenAI. It's gonna be open source also, different kind of like data model, LLMs being deployed. We believe that the type of data centers that we have built will be extremely efficient for this type of computing power. The good thing on this topic is that we have 1.5 MW of energy we could deploy for HPC in Quebec. We are currently looking at finding the right way to do it and making sure that we can do it in the long term. We will report more in the coming months and in the next quarters as we deploy the solution. As you know, we are also a big fan of the Bitcoin and everything related to Bitcoin, so we are working on a different kind of like application based on the Lightning Network and also on Ordinals. It's something that is very much interesting right now. It's innovation on built on top of Bitcoin, and we think it's really to our interest to look at that and to provide solution for this. You have probably not missed that a few weeks ago, or maybe even last week, the fees made by per block were more than the reward. Sometime last week we had a block, instead of producing 6.25 BTC for the reward, they produced more for the fees. We had block at 10, 12-point-something Bitcoin. It's really good for us. It means more revenue, but we believe that we're gonna be able to even be better if we can bring solution to the market on this. Again, financially cautious. The halving is coming. We want to grow. We have shown that we have been able to grow in difficult time. In the first crypto winter that we've seen in 2018, we've been able to grow. In the current crypto winter that we are in, we have been showing that we've been able to grow. Even better, we are making net profit. The next slide. I will give the floor to Fanny. Fanny is our COO. You know her, and most of you here know her. She started with us as our CFO. She was a auditor for Grant Thornton for like seven years. She's super knowledgeable. With her on her team, we have also a team extremely focused on our finance and financials and how to manage our cash flow and everything. Fanny will go over our results for Q1. First, she will start by taking a few minutes to explain the big pictures on how to read financial statements for Bitcoin miners. It's very opaque, sometimes difficult. She's here, and Fanny, you're on. Hi, everyone. Exactly as Romain explained, I'm the COO of SATO. I've been working with the team for many years now. As a CPA, I usually have question, how can we navigate in the financial statements of a company having exposure to digital assets? It's been very difficult, I will say, and even more if you try to understand financial statements from companies that do mine digital assets, either Bitcoin or other digital assets. I wanted to take like few minutes this morning with you guys to try to give you more information or insight how to navigate in this financial statement because everyone, every public miner release their year-end. Like, Q1 is now pretty much disclosed everywhere. I think it's a good additional knowledge if you're not comfortable with this. My first thing will be go through the notes in the financial statement and try to find the digital asset note. In this note, you're gonna have all the movement during the period, either the full year or quarter that been around digital assets, either some digital asset mined, used. You're gonna have a picture of what happened during this period. After this, you have to think and remember that in the statement of income, if you mine a digital asset, you're gonna have revenue in your revenue section, you're gonna have digital assets. These digital assets are recorded at cost when they are received. It's very important to understand this. As a Bitcoin miner, every day we receive some digital assets. We have the cost of every day booked in our statement of income under revenue. Two thing. Either you use a digital asset in a period, that mean you sell some digital asset. If you sell some digital asset, we have to compare to the cost when we receive, and you're gonna have again all of unused in your revenue, in your statement of income again. If you are not use the digital asset, what is called HODL in this industry. That mean you increase the quantity of unit of digital asset, and this unit quantity is shown in the balance sheet. Here again, be careful in the balance sheet. It's a picture at a specific time. It's presented at the fair value. You're going to have an unrealized gain or loss on revaluation in the statement, in the statement of income or comprehensive income again. This is unrealized gain or loss depending on the volatility of the Bitcoin or the digital asset that you have in your balance sheet at a specific date. Either, March 31 or December 31, for example. We all know that basically for other industry, when you want to have a good understanding of the business, what you look, cash flow statement. Here again, you have to understand that all digital assets, so not only Bitcoin, all digital assets are not considered as cash or cash equivalents. What does that mean? That means all digital asset value has to be deduct or added, we're going to see it, in the operating activity depending on the use during the reported period. If we sold digital asset, again Bitcoin during the period, what we're gonna have? We're gonna have an increase in cash value of the sale. That's exactly the amount you see in gain loss in your statement of income. I just explained earlier. If you did not sell, that means it's gonna only in the financial position, and you're gonna have nothing in the cash flow statement. Be very careful. That mean if you want to have the full picture, you have to think how much the company sell during the period. It's gonna be in the cash flow statement. How much is produced, you go to see in the notes. How much is left over, that's in the financial position, but the value is at a specific date, not at the date you read the financial statement. I hope this going to give you a bit more understanding of how to navigate in the financial statement. Keep posted because you're going to have more information from us on how to read more in detail the cycle of revenue to increase the knowledge in this industry. Now I think you're ready for SATO. Let's jump into our numbers. Here you see Q1 of 2023 and comparable is Q1 2022. Revenue. We have almost CAD 4 million as revenue. Cost of revenue, a bit less than CAD 2,800,000. That give us a gross profit of CAD 1,129,000. Expenses, that's G&A expenses, a bit less than CAD 1 million. That give us an operating income of CAD 725,000, compared to last year same quarter, a loss just above CAD 2 million. Other charges, it's mainly financial expense. It's CAD 214,000, that give us a net income for the period of CAD 510,000, compared to last year, a net loss of CAD 2,100,000. EBITDA, for the Q1 2023, we have an EBITDA for CAD 1,100,000, compared to last year, a negative EBITDA of CAD 4,700,000. Some big highlights you might saw in the press release or in the MD&A, we have a total increase quarter-over-quarter on revenue, total revenue of 129%. Increase of EBITDA of more than CAD 2 million, almost CAD 3 million. A positive operating cash flow of just a bit less than CAD 1 million. Here you see the evolution over the past three years, full year here, and then you have at the right, the Q1 2023 results. You can see that over the past three years, we had a negative EBITDA, but as soon as we remove all the accounting entries, non-realized and gain loss, we have the adjusted EBITDA, and we see a good increase over the years. We started with CAD 332,000 in 2022, CAD 1,300,000, 2021, 2022, just CAD 258,000, and Q1 just below CAD 1 million. Some other number that is very important and that miners usually explain is how much costs you to produce 1 BTC. Here we put a lot of transparency, a lot of details, in order to make you understand what we have in our cost to produce 1 BTC. Q1 average, it's $11,000 to produce 1 BTC. You have on the right too, the evolution over each month, January, February, and March 2023. On the left, you have a graphic when we compare to the price, so the average price of each month. You see the profit we did, the gross profit, in the dark blue for each month. You have the operating salary. Here we put all the salary that we need to operate our centers. Site operation. It's some maintenance costs, insurance costs, again, linked to the production of digital assets. The main cost, again, is the electrical cost in the light blue. Here we wanted to show some comparable on the historical efficiency. You can see us, it's the, let's say, the darkest blue with the dot. You see a graph for the whole 2022 year, month by month, and the first three months of 2023, the evolution. We put three comparable based on the information available. You can see on the average of Q1 2023, we ranked number three with a production of Bitcoin per exahash equivalent to 93.61. Something interesting that it need to be highlighted, you see that all the numbers from all the peers decreased at some point around September, let's say. September to March, you see a small decrease. You see in blue an increase in the network hashrate. What's happened in the industry, that we have more difficulty, everyone produce a bit less since September. The trend is the same for everyone, but it's something to look compared to the increase in the network hashrate. Quick highlight on the cash and digital asset position. You have on the left, December 31, 2022 numbers, total CAD 1.3 million. We report in Canadian dollar the financial statements, so be careful as well if you want to compare to other miners. Check the currency they use. In March this year, we have CAD 1,400,000. Capital structure as at March 31, 2023. We have CAD 72 million of outstanding shares, some warrants and stock option for CAD 8 million. That give us a total of security of CAD 81 million. In this, we have CAD 20 million, almost CAD 21 million under [escrow] following the RTO. We had an escrow rules that applied to some people. I think it's important to highlight as well that 65% of the security on a fully diluted basis are owned by officer, director, insider or shareholders above 7%. All these people have a long-term vision. It's good to see this. We manage over the year to make sure to bring the most value to the shareholders. We are being very careful with the dilution, but we want to grow as well. We take care of all the stakeholders' interests and having a long-term vision for SATO. Th+ank you very much, Fanny. Thank you very much. Again, outstanding results. We are in a bear market. In a bear market, being able to show operating cash flow positive and net profit is outstanding. Now imagine when the bull market is gonna start, what kind of results we're gonna show. That's what we have been focusing on. Why can we perform in this kind of market? Because we started a long time ago. This is not our first rodeo. We started in 2017. We've seen the ups, we've seen the downs. We've seen everything. Again, we are vertically integrated. We have no intermediary between our electricity and our computer. This is why we can pass this kind of, like, situation with the kind of results that we show today. One of the reason is because of our electricity is one of the best in the world. Not only it's low cost and well priced, we pay around $0.04 a kWh, which is extremely good in the in the market. But more importantly, the energy that we have is very stable. It never stops, except of course for the maintenance like many other Bitcoin miners. We have very stable electricity. On top of that, the cherry on the cake, it's an energy that is 100% green. We are near zero carbon emission for our Scope 1 of carbon emissions. Scope 2 is very little because we only run our centers. Scope 3, it's a little bit complicated with the chips. We can really say that we are near zero carbon emission for our centers. We have proven that we are financially stable. We're managing our finances very, very precisely. On that, again, I would like to really give a big prop to Fanny and Fanny's team. I mean, it's been since we've been listed on the stock market in 2021, it's been in our objectives to be extremely professional on this path and showing to the market that we can be transparent, open and always on time at producing our numbers. More importantly, our team is ready. We are a small team. We have probably less than 12 people in the company. It's a small team, very dedicated, super efficient. Not only on the operation, we saw [Sébastien] that you see here on the picture. We have Cedric, we have [Bastien] working on the center. On the finance, you have Fanny, you have Lydia, you have Ben working with us. We also have a Corporate Counsel in the company, Alasdair, who is also helping us very much. We have a core team of people dedicated on our mission. We've been showing for the past five years that we've been producing outstanding results. Now is the time for us to grow. We want to grow responsibly because, again, the halving is coming soon, we need to be cautious. At the same time, we've shown in the past that even in bear market, we've been able to grow and increase our mining power. This is happening now. It's coming in next quarter, Q2, Q3, Q4. We are more than energized to do that, and it's a burning question for the energy. Now we are going to deliver. Stay with us, expect us, continue watching us. We're going to show you very, very good stuff in the coming weeks, coming months, and coming years. We are not building for the next halving, but the next halving after that, and the next halving after that. I see some questions. Maybe we can answer some of them. On the average Bitcoin production, the ratio I showed earlier, the 96.61 is per exahash. If we go back to our numbers, that means around 58 for Q1, 58 BTC per month. That's a ratio that can be used to compare all the miner with this ratio. You multiply by the exahash, and you're gonna have the production for each miners. Another question compared to the. Sorry, Fanny. On this, I mean, I also see a question that is related, which is what is the average BTC production per day? We publish our monthly results, and we started last month. We are going to do that every month. Last month, 1.41 BTC mined every day as a daily average and also aggregate of self-mining and hosting. In terms of EH target, we wanna grow. Today 0.6 is great. We wanna go to 1 EH as soon as possible. We want to deploy our 8 MW of energy that we have already bought. Of course, we don't want to stop there. We wanna go to 6 EH, 10 EH. We are in the race. We are extremely great operator. We are a professional, we can scale. For us, doing 10 MW or 100 MW is the same thing. Of course, you have a little bit of differences between the two, we can operate the same way. It's a daily in our business, which is also, I think a question of [Olivier] saying, "What is the EH target?" [MARA] is going to 23 EH. It's for sure. We're seeing lots of Bitcoin miners plugging more computing power. It's a good thing. It's a good thing for the security. Also you need to understand that it's not really competition because at the end we are all sharing the same pie or the same cake. You can be extremely profitable and efficient even with 10%, 1%, 50%. We can really, like, continue growing, and we don't need to be the biggest one to be the most efficient. That's what we are, we've been focusing on. Question regarding the evolution of numbers quarter per quarter. This information, I'm gonna give some numbers, but this information, it's presented in the MD&A. Recent one, it's page 15. You have the evolution over the eight past quarters. That's an interesting data when you want to compare quarter per quarter results. If we go back to give you some idea, Q1 2022, we saw revenue was CAD 1,000,700 Q2 2022, CAD 2 million. Q3 2022, CAD 2,000,700. Q4 2022, CAD 4,000,100. Q1 2023, it's CAD 3,000,900. Why the small decrease? It's because, you know, in Quebec, we do [cost per element] in the first quarter. We always have a Q1 that is a bit lower than the first quarter. We're maintaining, you can have in mind CAD 4 million per quarter since Q4 2022. On the expenses, you know, considering we were in a bear market, we continue to manage the cost. We were very careful with the cost. That's why you saw a decrease in the expenses, Q4, CAD 1,000,600, Q1 2023, a bit less than CAD 1 million. Let me see if I have another number that we need to add. So- So the net- The what. Yeah. The net income loss in Q4 2022 was CAD 1,000,500, compared a net profit in Q1 of CAD 500,000. What we're showing is that we reduced our cost. In a bear market, this is important. I mean, I've been managing companies in technology for the past 25 years. I've also seen 2008. I've also seen the Internet bubble. In bear market, you need to look at your cost, and you need to cut and cut and cut. You need to make sure also that you can continue operating, because when the market starts back, you wanna make sure that you can deploy and expand. This is what we've been working on for the past a few months. Obviously it takes time sometimes to see the effect on the cost cutting on the account, but this is also why we are seeing it in Q1. We will continue doing this for the next quarter. Do we have any other questions? One question I think is about the halving. Yes, the halving is coming. It's in our mind. We've seen an halving already since we started. It's gonna be the first halving coming into the Bitcoin network. We're gonna have way more halving in the next 100 years. We are prepared. We are very careful. What we're gonna see, again, in a Bitcoin mining, you need to be the most efficient so that you can pass the next halving and the next halving. That's why we are building our company with this in mind. We have proven that we've been able to do it for the past five years, showing extremely good results. We will continue doing it at the same time. If the halving I mean, the halving will happen, but if the Bitcoin market is not very favorable to Bitcoin miners, we're gonna see another branch of Bitcoin miners who are not efficient stopping. Of course, it's never aligned with the difficulty and the halving. We might see a difference in times before the halving and the halving event and maybe four months after. We will see how it is, but we are going to take a very open approach like we've done before, taking the problems when they arrive and making sure that we can pass. The way we've been structuring ourselves, our cost of energy, our efficiency of our miners will make it so that we will pass the next halving. Is there any other questions in the chat? I don't see them. No, all is answered, so thank you. Well. Thank you, everyone. Thank you, everyone. Thank you for being here. Again, tough time for Bitcoin. Tough time for the market. We are more than ever excited to continue growing and developing more solutions for SATO and for every vertical we're working in, focusing on Bitcoin mining, making sure that we can grow our operation at least 10x in the next X months. I don't really know exactly at what time, because you know, you have different kind of variables that comes into play, but it's our focus. We wanna grow, we wanna put the recipes that we've put in place, you know, put in place in the past, five years into the next, five years. At the same time, we want to deploy more energy for HPC and AI. This is extremely interesting, what's going on. I believe that a ChatGPT type of situation is going to explode. I mean, when we're gonna have as much people using ChatGPT as people using Google Search today, we're gonna see an increase and an explosion of computing power related to that. As a Bitcoin miner, we believe the centers that we have built as an operators will be extremely well positioned to take care, take pieces of the hosting market in that market segment. We'll come back. We will do quarterly meetings. You will be invited. Please follow us on our website. Add your email so that you can receive news. Also follow us on Twitter, follow us on LinkedIn, and we'll have more good news to announce very soon. Thank you very much. Thank you.