Good afternoon, and welcome to Stronghold Digital Mining's conference call for the second quarter ended June 30th, 2022. My name is Mandeep, and I will be your operator this afternoon. Before this call, Stronghold issued its results for the second quarter 2022 in a press release, which is available in the investor section of the company's website at www.strongholddigitalmining.com. You can find the link to the investor section at the top of the homepage. Joining us on today's call are Stronghold's Co-Chairman and CEO, Greg Beard, and CFO, Matt Smith. Following their remarks, we will open the call for questions. Before we begin, Jeff Grampp from Gateway Group will make a brief introductory statement. Mr. Grampp, please proceed. Thank you, Mandeep. Good afternoon, everyone, and welcome. Today's slide presentation, along with our earnings release and financial disclosures, were posted to our website earlier today and can be accessed on our website at strongholddigitalmining.com. Some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. We expect to file today our quarterly report on Form 10-Q with the Securities and Exchange Commission, which sets forth detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption Risk Factors in our quarterly reports on Form 10-Q filed on May 16th, 2022, and August 16th, 2022, and annual report on Form 10-K filed on March 29th, 2022. You may get Stronghold's Securities and Exchange Commission filings for free by visiting the SEC website at sec.gov or Stronghold's investor relations website at ir.strongholddigitalmining.com. I would like to remind everyone that this call is being recorded and will be made available for replay via link available in the investor relations section of Stronghold's website. Now, I would like to turn the call over to Stronghold's Co-Chairman and CEO, Greg Beard. Sir, please proceed. You bet. Thank you, Jeff. Good afternoon, everyone. Once again, apologies that we are a live call today. This is not a recording. I'm joined on the table by, you know, by a team that's been, you know, working hard for weeks and really months on what is a series of transformative transactions for the company. You'll hear about how we are much better on the other side of it. Excited to walk you through this call today, and apologies that it took us a little longer to get all this news out. We've got, you know, it was quite an achievement with the, you know, about a half a dozen counterparties that were all contingent upon each other to get it signed, but it just took longer than what we had hoped. Anyway, we're happy to be through and done today. Thanks, everyone, for joining us. For today's call, we're going to reference an associated slide presentation that is available through the webcast and on the IR portion of our corporate website. I'm gonna start on slide three of that presentation to discuss our vertical integration, which is a foundational piece of our strategy and a source of significant value for Stronghold. This slide provides visibility for how we think about our business and our ability to toggle between Bitcoin mining and selling power to the grid, which is an intrinsic advantage of power asset ownership. We can pull from the grid when grid prices are lower than our variable cost of power, and we can sell power to the grid when grid prices are more attractive than Bitcoin mining economics. Most recently, the latter has materialized, as we have seen very strong power prices over the past few months, with our power pricing averaging over $100 per MW over the last month and even higher during on-peak hours. This near-record pricing is expected to continue for at least the next six months, with forward prices over $100 a MW on average. We're gonna explain how that relates to Bitcoin mining economics as well. If you see the tables on the top right, they're intended to provide insight as to how to think about Bitcoin prices in dollar per MW terms and vice versa for a few recent vintage miners. For Bitcoin prices between $20,000 and $25,000, we would expect a MicroBT M30S to generate revenue between $92 and $115 per MW h. For a more efficient Bitmain S19j Pro, we'd expect this range to increase to $114-$143 per MW h. On the bottom chart, we are showing the inverse, how grid pricing translates into Bitcoin prices. At $125 a MW, which is in line with the average on-peak price over the next six months, you'll see that the implied Bitcoin price ranges from $22,000-$27,000 across the miner types shown. We expect to sell power to the grid over mining Bitcoin frequently during the next several months. Additionally, we have developed a proprietary software that allows us to take advantage of intraday power price movements. By turning our data center off within minutes, allowing us to divert that power to be sold. As a reminder, when we went public last year, Bitcoin prices were substantially higher and grid prices substantially lower than where they currently are. The economics of the power business represented a more theoretical downside protection. We didn't expect the power business to be a meaningful driver of value for at least a couple of years, but it's critical now. At current pricing levels of Bitcoin and the power markets, our power business offers returns that are attractive and oftentimes superior to our Bitcoin mining business. Consequently, there's a high probability that a meaningful portion of our power generation will be allocated to selling power to the grid, irrespective of our hash rate capacity. Which brings me to our next slide to discuss the recent agreements we have made in the context of current market dynamics. Now turning to page four. When we initially capitalized the business, we structured it to operate in a $30,000 downside Bitcoin pricing case. We took out equipment level loans, non-recourse to Stronghold, knowing Bitcoin could drop even further. This structure has provided us with significant flexibility in this prolonged downturn. Over the past few weeks, we worked with our lenders to restructure all debt outstanding with NYDIG and WhiteHawk with these ends in mind. We believe this restructuring is transformational for Stronghold in terms of capitalization, liquidity, leverage, and ultimately equity value. We have entered into an agreement to eliminate all debt outstanding with NYDIG, nearly $70 million, in exchange for approximately 2.5 exahash of miners that we believe has a replacement value closer to $50 million. We view this effectively as an asset sale at a meaningful premium to current market value. We were able to achieve this outcome due to the structural security of the agreements we negotiated, which were with LLCs and were non-recourse to Stronghold Inc. Additionally, we executed a commitment letter with WhiteHawk, which will convert our equipment financing into a first lien note, more than double tenor to 36 months, and provide a $20 million line of credit accordion that is undrawn today. WhiteHawk will receive 2 million warrants as a part of the financing. Lastly, we have extinguished approximately $11 million of principal from the convertible notes by reducing the strike price on the warrants. We will also equitize the remaining principal over the next few quarters with a total reduction of cash interest and principal payments by $25 million. To summarize, this is an immediate $79 million reduction in debt and a $113 million reduction in cash, principal, and interest payments through 2023. In exchange, we will be transferring away approximately 26,000 miners and issuing 2 million warrants. This move is uniquely advantageous to Stronghold as a vertically integrated Bitcoin miner. Since we generate our own power, we can almost instantly toggle from Bitcoin mining to selling power to the grid, allowing us to continue earning revenue and largely offset the divested mining capacity for at least six months. Turning to slide five, to further illustrate the continued revenue generation capabilities of our business, which has given our uniquely vertically integrated model that has the ability to toggle between Bitcoin mining and selling power. Accordingly, we estimate a minimal impact on our revenue as a result of our reduction in miner fleet. While our mining fleet has been reduced, our power sales can step up to fill in that revenue gap since there is now more power generation available to sell into the grid. As we have previously discussed, future power prices through winter 2023 are currently quite high, so the power generation that is being reallocated to the grid can continue to earn attractive returns for us. In this example on the slide, we are only trading off $9 million of revenue during this period in exchange for the significant debt and interest reduction we previously discussed in a period when cash flow is extremely important. Now compare that to a traditional Bitcoin-only business model that does not have the ability to toggle sales to the grid. You can see that Stronghold can generate 95% of the revenue with 15,000 miners than a Bitcoin-only business model could generate with 40,000 miners. Over time, of course, we expect to opportunistically replace the 26,000 empty slots. I will now hand the call over to our CFO, Matt Smith, to discuss in more detail the financial impact of the restructuring and our financial position. Thank you, Greg. Good evening, everyone. Slide six provides additional detail about the impact of these agreements to our liquidity and financial profile. Restructuring is highly attractive from a financial perspective. The left-hand chart shows our debt over time before and after restructuring. Our principal outstanding will be reduced from $144 million to $65 million, and it remains at a very manageable level through 2023 and into the halving in 2024, importantly. The right-hand graph illustrates the quarterly and cumulative impact on our debt service cash flow, cash outflows and estimated forecasted cash flow impact. Quarterly debt servicing cash outflows. We're set to peak at around $30 million, but it has now decreased to about $5 million as we have eliminated, converted or restructured the vast majority of our outstanding debt. Through year-end 2022, cumulative debt servicing cash outflows are reduced by $82 million from $100 million to $18 million. Through the end of 2023, cumulative debt servicing cash outflows are reduced by $113 million from $140 million to $26 million. This decrease in debt service, along with continued revenue generation from our power business and mining fleet, will allow us to generate more cash flow than we otherwise would have without these agreements. We estimate these transactions collectively improve our cash flow by about $40 million through year-end 2023, relative to our base case internal projections before these transactions. This assumes no benefit to value we can create from prudently and potentially filling 25,000 open mining slots that we have fully developed and are energized. Given robust power markets, we are not in a rush to fill these slots, and you can expect us to be patient and opportunistic when looking to add to our mining fleet over the coming quarters as we expect to build to being a low-cost Bitcoin miner with scale. In a world where capital availability is somewhere between tight and nonexistent for Bitcoin miners, we believe having a self-sufficient business is critical. Accordingly, we expect this self-sufficiency to provide us with opportunities to create meaningful shareholder value through accretive transactions that regrow our mining fleet in an intelligent way. Slide seven provides a high-level overview of our second quarter 2022 results. As we previously announced, we mined 637 gross Bitcoin during the quarter, representing a sequential increase of 45%. In the first half of the year, we mined 1,075 Bitcoin. Revenue for the second quarter was $29.2 million, a 2% sequential increase despite the material decrease in Bitcoin pricing in the second quarter, with the increase being driven by our increased Bitcoin production and relative stability in our power business. Adjusted EBITDA during the quarter was -$1 million compared to $4 million in the first quarter of 2022. I would note that during the quarter, we recorded a $5.2 million non-cash impairment associated with our digital currency holdings and a $5.7 million non-cash impairment associated with our Bitcoin mining assets. Both of these impairments were due to the significant decrease in Bitcoin pricing during the second quarter, and again, are non-cash in nature. During the quarter, we continued our positive environmental impact, removing approximately 241,000 tons of coal refuse from piles and returning approximately 168,000 tons of beneficial use ash to remediate these toxic coal piles. Lastly, to properly calibrate your models, I want to remind everyone that there will be planned downtime that will occur in the third quarter at both of our plants. During September, we plan to conduct our annual plant maintenance at both Scrubgrass and Panther Creek, resulting in approximately two weeks of downtime at each plant. This will reduce our power generation in the third quarter relative to a quarter without the maintenance, and we will record incremental operating expenses of around $5 million, which is unchanged from prior expectations related to the turnaround. These turnaround events are normal course operations for base load power plants, and they ensure long-term reliability and the performance of the assets into very tight power markets as we look forward in the winter and into 2023. We strategically scheduled the outage during the second half of September, which should have lower power prices compared to peak summer or winter, which allows us to still import power to mine Bitcoin as long as Bitcoin margins remain higher than import costs. I will now turn the call back over to Greg for closing remarks. Great. Thanks, Matt. I'll now turn to slide eight, and just to give you a view of our strength and path forward for the company. First, we're gonna focus on power in the near term. This is the lifeblood of our business, and we expect to largely focus on selling power to the grid with over 100 MW of excess power capacity availability to sell after allocating power to our mining fleet, which will generate approximately 1.4 exahash and consume about 50-55 MW of power. As I alluded to earlier, we did not expect power economics to compete with Bitcoin economics until potentially the halving in 2024. While we always plan to invest in our plants over time to bring them back to base load, we did not think it would be as important so quickly. We have experienced reliability issues in plant operations, but are making significant progress and are confident in go-forward operations. We will be taking the one to two-week outages at both plants in September. The work at Panther Creek is expected to be less significant in nature, and Scrubgrass improvements remain a primary objective for us. To that end, we are continuing to progress the Scrubgrass upgrades. We have spent about $3 million in 2022 and expect to spend about another $2 million to complete the remaining work in late September, early October, at which point we anticipate Scrubgrass will run base load with more consistency. On the Bitcoin mining side of the business, we plan to be patient but opportunistic buyers in an extremely oversupplied market. We estimate there are over 500,000 miners unplugged in North America, and buyers are few and far between, given the distress in the space. As we have shown since our IPO, this is an extremely creative and motivated team. In addition to open market purchases, we are evaluating JV and M&A opportunities that leverage our core capabilities, including power and infrastructure ownership and operatorship. We are long infrastructure and short miners, and the industry is generally in the exact opposite position. As we have long said, owning your own power and infrastructure assets provide key advantages that we plan to leverage to the benefit of our shareholders. Lastly, we plan to aggressively review our cost structure to identify redundancies and areas for efficiency improvements to lower our cash costs and improve profitability. We estimate there are between $5 million- $10 million of annual savings potential in our current cost structure, and we'll begin cutting over the coming quarters. As you all know, we came out of our IPO in hyper growth mode, which put significant pressure on the company to scale its capabilities and operations. As we have matured, this has given us time to reassess our business needs and have accordingly identified opportunities to eliminate these redundancies in our cost structure. Looking ahead, we expect Stronghold to be an optimized operator of power assets that provide power to both the grid and to our Bitcoin mining operations, with the ability to toggle between business units and optimize profitability and also provide stability to the grid. We expect to continue to delever and enhance our capitalization. We will also have a strong capital efficiency through the prudent acquisition of mining assets and related equipment to generate attractive full cycle returns on our capital. Lastly, we will be an efficient operator, running our power plants with high uptime and low costs and maintaining a Bitcoin mining fleet with strong utilization. Thank you everyone for taking the time to dial in. We're now ready to take your questions. Operator? The floor is now open for your questions. To ask a question at this time, please press star one on your telephone keypad. If at any point you would like to withdraw from the queue, please press star one again. We will take a moment to render our roster. Now our first question will come from Chase White from Compass Point Research & Trading. Please proceed. Thanks. Good evening, guys. First question, you know, I have a few questions, but just to make sure, there's no impact to the miners in the Northern Data JV to the reduction in miners, correct? No, yeah, we gave them back to NYDIG. So yeah, we have a bunch of miners that we already have in possession that we're gonna put into that JV to replace them. I expect in fairly near term, we'll have those 14,000 miners replaced in the JV. Gotcha. Then, you know, how should we think about the ramp up to full capacity at Scrubgrass going forward once you guys start, you know- You know, I would just say. The complete bid work. Yeah. Part of like, hey, our dream scenario would've been to get on this call and say, "Hey, we extinguished the NYDIG debt, you know, refinance the WhiteHawk debt, equitize the convertible note." Had we been able to, we would've also said we've already replaced all these miners, but we couldn't. We weren't. Our documents didn't allow us to do that. It would've been viewed as sort of circumvention of our debt docs, and so we couldn't do it. I think that was the, you know, that would've been like the cherry on top. I think you need to recognize over time, you know, with all these miners in the market, we have a very strong sense for where, you know, what's gonna cost and the timeframe to prudently replace these miners. I think you could call about any mining broker in the world, and you'll find that there is a glut of miners out there. You know, we already get a lot of phone calls about buying equipment. I don't have any, you know, I have no anxiety about, you know, refilling the Northern Data JV quickly without issue with them, and prudently, you know, filling up the 26,000 slots that are nearly empty. I'll say if, you know, because power prices are so high, if we, you know, I'd say we've got, you know, more than six months to do it because we're not really losing any revenue along the way. So as much as Sure. I You know, just don't feel pressure to. Understood. I was more talking about the actual power capacity, like to get to nameplate at Scrubgrass. You know what? I would say give us. We're gonna be out late September, early October. I think as we talked about, there's a lot of equipment that we ordered, you know, about a year ago that's finally here. You know, we're gonna install it at the end of September. You know, give us, you know, 45 days to, you know, get all of that fresh equipment going. We'll have about $5 million of new capital in the plant this year. We've got it, you know, way overstaffed right now just to make sure that we, you know, get it sort of on solid footing. Hey, give us 45 days after the reboot to show you know, how reliable it can be, but it's got, you know, 20+ years of operating data on it that shows that as an extremely reliable plant when all the equipment is up to date. That's what we expect to be. I would say give us, you know. Let's look in November. That's sort of the probably the beginning of a fair test for where Scrubgrass can end up. It's the nameplate capacity is 85 MW on that plant. Got you. That's helpful. If I may, one more. The reduction in the exposure to capacity markets. How could that impact the future electricity sales revenues, you know, the pricing that you receive, you said it reduced it. Then on top of that, is your designation as a Reg D generator impacted by this at all? Yeah. We were getting a capacity payment. The guys helped me. I think it was like about a $7 million capacity payment between both plants on an annualized basis. I think that was what we expected, and that number might have been going down next year. We opted to come out of that market, so we'll no longer get that capacity payment. The reason we opted out is that there is a regulatory rule called price cap, and we were finding that, you know, that we were effectively not able to sell power at the spot price because the grid operator was declaring, you know, grid congestion or, you know, other, like, I would say, you know, electrophysical issues with the system that then gave them a reason to say, "You can only sell power for your cost plus 10%," as opposed to selling power for market pricing. That was effectively lopping the peaks of the market pricing. We're very thankful that we opted out. We gave up the capacity payments in exchange for the ability to take advantage of the peaks in power pricing. You know, I could say, given some of the prices that we've seen this summer, you know, that's kind of repaid. Expect that to be repaid manyfold. Sorry, just to nail that home. We were, you know, many days we were stuck selling in the day-ahead market versus the real-time market. If you are a close observer of those markets, I think you'll find in recent days, you know, for instance, at Panther Creek, a week ago, prices reached $2,000 a MW, whereas the day-ahead market was stuck in the low hundreds. I think you'll find significant dynamic response and revenue opportunities in the real-time markets that just weren't available to us previously. When we think about the revenue opportunity and the convexity, that's where you wanna be. Got it. Very helpful. Thanks, guys. Sure. Our next question comes from Lucas Pipes from B. Riley Securities. Please proceed. Hey. Good afternoon. Thanks for taking my question. The first one is, in terms of the 1.4 exahash that are remaining, what's the utilization rate that we should be thinking about for that for the second half of the year? And on the power side, more broadly, what's a good range for the cash cost per MW h? Thank you very much. I think what we're modeling for utilization for the ASIC fleet. I think we should. I want to say, why don't you model out 90% for the miner fleet? I'm sure that, you know, we can beat that given that we have a lot of, you know, techs that once they recover from moving out 26,000 miners, we'll have a smaller fleet to manage until we grow it again. Then what was your question, Lucas, on the power side? Cash cost per MW h. I think assume for the third quarter, like, relatively high cash costs, and they should be declining, you know, pretty meaningfully, hopefully in the fourth quarter post downtime. What numbers do we have for third and fourth quarter? If you look at the variable costs to power, we wanna be careful. We've purposely avoided giving explicit guidance here because of the, you know, the volatility of the markets for, you know, ammonia and limestone, locally. Obviously, you know, diesel as an input and with surcharges related to transporting the coal refuse that we use as primary fuel in our plants. I think you can find. You know, we've seen kind of, we'll call it between $50 and $80 per MW of cost. It's been quite volatile, as you know, as we sort of work through the recent months from a maintenance perspective. It depends on how you treat certain of those costs within O&M. That would be, you know, that would be before REC sales. As we think about the fourth quarter and beyond, this period where we're coming out of a period of relatively low utilization, you know, the fixed cost amortization picks up considerably. We've seen the upward pressure in virtually every one of our variable costs abate. We're pretty optimistic about how that fixed cost absorption plus the variable cost kind of mitigation and topping, and you can look at most of those costs I just mentioned, they've all come off. We're pretty optimistic about, you know, meaningfully getting our cost of power down into 2023. That would be sub 50 or maybe even lower than that. I would say, I think that's definitely possible, but I think you should probably look more at the margins. If power prices are through the roof again next year, expect some of our variable costs to also be higher. It's a, you know, I think we should probably start to introduce the idea of a power margin being more important than our cash costs. They're so correlated. That's- Yeah. People in the crypto universe focus on the cash cost, the cost of electricity, and they compare it to Bitcoin price. When you're selling power at a Bitcoin equivalent price of $100,000-$250,000 during peak days in the summertime, you just don't focus as much on this, and you focus on margins. I think we're pretty optimistic as we look at the winter forward power curve and our opportunities to you know deliver reliability to the grid. It just happens to be the case that when the grid is vulnerable and calling for you know calling for your electricity, it's also the most profitable to deliver it. I think we'll you know look forward to demonstrating those lower costs coming out of these planned downtime events. You know, I think margins are gonna be quite a bit, you know, quite strong, you know, as a result of the revenue opportunity as well as the cost coming down. That's very helpful. Thank you. My second question is a bit higher level in regards to the transactions you announced. If I got all the details right, I think at about 24,000 BTC, you're better off at the end of 2023 from a cash flow perspective, having done these transactions today. How high would the Bitcoin price have to be, and no specific number, just ballpark, for you to have been better off not having done these transactions? Do you see what I'm getting at? Like how great of a BTC environment would we have to be living in? No, I think here's how you think about it. Not wanting. The risk that we have right now, if Bitcoin, you know, rips tomorrow and opens up at $100,000 a coin, obviously, hey, we probably would rather have all these machines for that because now we would need to go rebuy them. It may be more expensive to do that if the price rips. I think our view is we have, you know, quarters and quarters of a mining supply glut to work through, so we think we have an advantage there. I don't really view a, you know, from our perspective, we just capitalized on an opportunity to replace our fleet at a, you know, big discount to the debt outstanding. That is gonna be true at any Bitcoin price. I think we have, you know, that debt elimination accrues straight to the equity. I think really it's a, you know, by our math, this is a value capture transaction in addition to a liquidity and optionality enhancing one, regardless of Bitcoin price. I would focus you on 2024. When we go into April 2024 and the halving in the Bitcoin markets, obviously history would suggest that there's a positive Bitcoin price response to offset the step function lower in capital efficiency for miners. When you wake up in April 2024 and every one of your Bitcoin miners produces half as much Bitcoin, our power revenue and EBITDA generation opportunities don't halve. I think when we think about this, it's beyond this, we'll call it sort of myopic view of Bitcoin price versus cost of electricity. It's how do you optimize for selling power, or importing power, you know, when power prices are depressed? How do you think about dynamically switching over to mining for Bitcoin at night or during the day or during seasonal shoulder months? Then ultimately, over multiple years, how does that look? I think we like our chances of being seriously on offense, and being able to, you know, sit back and look for opportunities, distressed equipment, which we are seeing meaningful signs of, and certainly, you know, moving our costs down. There are lots of low-hanging fruit and, you know, all those things suggest that, you know, Bitcoin needs to be $40,000+, $45,000+ from where we were, where debt amortization was asphyxiating. Now that's largely relieved and, you know, clear skies ahead. We're really optimistic. I appreciate the color and best of luck. Thanks. Our next question comes from Chris Brendler from D.A. Davidson. Please proceed. Hi. Thanks, good afternoon, and congratulations. I know this is a lot of work. You know, I imagine actually. On just the current state of mining operation, I see you have 25,000 open slots. You know, obviously seen quite a bit of pressure on rig prices, and there's some fire sales out there that some folks have jumped on. You know, what's the hesitation here? You know, do you think miner prices are going lower? Do you not really have the capacity on the power side to plug in at this point? You know, maybe, you know, are we expecting something on the mining side soon, or are we gonna wait to see if Bitcoin price can go higher? Yeah, I think you know, this may be, we may be isolated. I think we're really structurally positive on blockchain technology and on Bitcoin over, you know, over the four or five-year horizon. I think we want to have ultimate flexibility as we move through 2023 into 2024 is having, to, you know, take advantage of the volatility. When we think about what we just did to restructure the business and put ourselves in better footing, you know, the last thing we're gonna do is rush into a market timing call on equipment when we our research shows that there are potentially 500,000 landed brand-new Bitcoin mining rigs. And that, you know, that can't find plugs or that are waiting for plugs to be built out. That is a material contrast to the actual plugs themselves, where the value of fully built-out energized plugs and data centers has exploded as a result of scarcity with too many miners and too few power plants with plugs, given the lack of investment in power plants over the last multiple decades. When we think about, you know, spending our dear investor capital to buy miners today, we're gonna prudently think about opportunities. We're gonna stand back and look for pain points, and we're gonna frankly reflect on the lessons from the last nine months since almost a year since the IPO. We're gonna be seriously on offense thinking about how to create value. Great. Appreciate that. The opportunity cost is almost nothing because the power markets are so strong that if we don't buy, you know, if we don't replace these 26,000 slots in the next six months, you're not gonna see a big difference in revenue. It's negligible. Yeah. No, I appreciate that. It doesn't make sense to sort of lever up to not make any more money. Where not my area of expertise, but where would the Bitcoin equivalent price be, you know, before the power markets went crazy, with all the disruptions in 2022? You know, where would the Bitcoin equivalent price be last year? I think last year we had kind of the opposite. We had fantastic Bitcoin mining margins where we're making equivalents like $250 per MW, and power prices were in the, you know, high 20s, low 30s. In those cases we, you know, we could have decided to shut the power plant down and just buy power from the grid and use that power to run the data centers. Now we're in exactly the opposite position, where we are selling power and, you know, essentially divesting of a large portion of the miner fleet, because power pricing is now averaging, you know, $120 during the day. I think what we're expecting is probably a period of time where we're running the data center during the day. I'm sorry. We're putting the data center in sleep mode during the day and selling power. At night, when power prices are significantly cheaper, running the data center. Like our, you know, we have software to toggle the data center off and on. You know, we do it to satisfy, you know, the grid for like, for a Reg A, you know, test that we pass. We also do it for ourselves just to take advantage of power pricing spikes. Which we've seen. Yeah. The past few weeks, you know, kind of amazing pricing levels for power that makes you want to shut the data center off quickly. Yeah. Not to belabor it, but just, I just wanna drive one thing home that I think is lost a bit in the discussion, which is, you know, in PJM, our power market, or you look at markets like ERCOT, where natural gas is the marginal fuel, and you think about the average heat rate of a modern CCGT natural gas plant, it's about a 10, we'll call it about a 10 heat rate. When you think about power prices and you look back at 2021 or prior years where we're coming out of a you know sort of generational lows in U.S. energy prices, that led to a generation of underinvestment in fossil production and that is coming home to roost as we speak. I think we are sort of dubious of you know calling for a top in power prices. I think we really like our exposure, our net long exposure, and think about the convexity we can capture in the power markets by providing the grid with reliability as something that's you know very positive. We're gonna do everything we can to exploit that. This you know these material transactions are a key part of that. Yeah, makes total sense. I want to follow up on, I think it was Lucas's question on power price or just your cost of power, what you're generating now. You know, I think that was like the best part in my view of the whole Stronghold story because you know, especially given what's going on in the world today, where you've got high natural gas prices, you know, you're not really relying directly on natural gas. Sounds like a lot of your inputs have risen in price. But can you just walk us through potentially, like, you know, where you sit today roughly versus, you know, the IPO or, you know, guidance of two or in sub two cents, you know. Is that even a possibility today or. What has changed in the last year or so that makes that not a possibility? If you look at the cost of generating power almost anywhere in the world, the input costs are up 3x, 4x, 5x. If you look at our power costs, you know, they've risen too, far less. If you look at when Greg mentioned earlier that our plants were being called on through the end of May and quote-unquote, "cost-capped" by PJM as a capacity resource, that's because, by definition, PJM views us as a low-cost provider of energy. We get called on to provide that service to the grid. We're now out from under that and selling in the real-time market starting in June. We talked about the uplift there. When you think about the, you know, the cost recovery, it's just not. It cannot be isolated from the overall revenue opportunity and the prices of power, where margins have exploded relative to the cost of power. I think we, you know, we're. Our costs have risen. If you think about, you know, you can sort of go through the trailing three quarters of O&M and cost of fuel. You know, our costs have risen, you know, above $50 a MW, you know, into the $60-$70 MW range. That's not a secret. It's. You can back into that math. That's due to significant O&M investment in the plants, where because we're not elongating the life of our plants with our investments, they have to be expensed, and they're not capitalized, where in typical business they'd be capitalized. Our O&M has been pretty heavy-handed. As we move out of these planned downtime periods, we should see significant fixed cost absorption. As I mentioned before, we've seen a number of our input costs from a variable cost cash cost perspective have started to come off meaningfully as we track into the shorter months. I think we're Okay. You know, we're quite optimistic about, you know, $40-$50 cost of power being a more sustainable level as we go into 2023 than you know, some of the onerous parts of the cost structure as we, you know, as some of the input costs exploded, and we were just not yet set up to be, you know, to be, you know, the base load provider that we wanted to be. Thanks. I appreciate that, Matt. Last quick one for me. I saw an update on MinerVa. Sounds like you made some progress there. Can you give us some details? Sure. I think what we disclosed was we received about half of the contract value. The good news is, instead of receiving MinerVas, we are receiving replacement hash rate in the form of Bitmain S19j Pros. We've been, you know, putting pressure on MinerVa to continue to ship the replacement hash rate. You know, I'll say it again, do not model in a bunch of upside from MinerVa, but we will gladly report it as stuff sort of dribbles in. Okay, great. Thanks, Greg. Thanks, Matt. Take care. Yeah, thank you. Our next question comes from Jake Roberts from TPH. Please proceed. Hey, good afternoon, guys. Hi. Just kind of a follow-up on the cost question. You know, appreciate that the inputs are elevated to some extent. Looking ahead, can you guys talk about the ability or willingness to maybe, you know, lock in the variable cost, as you're looking forward to an elevated power market over the next six, 12 months? There aren't really liquid forward prices for ammonia, limestone, and we don't want to buy trucks and increase our fixed cost investment. We're happy to be price takers because we're way more than making up for it with power prices when it comes to surcharges to truck coal refuse or waste coal out of the hills of Pennsylvania into our plants. As we think about as we really think about that cost structure, I think what I'm sensing is there's a little bit of lost perspective given the focus on it. Our costs have gone up 2x, maybe 2.5 x over the last year. Now ammonia is up 5x. You know, diesel's up, you know, 100%. When you think about, coal refuse is effectively flat price, but some of those other variable expenses are what drive the variable cost higher. Variable cost is probably ±$45/MW. When I talk about the fixed cost absorption dramatically improving out of our two plant turnarounds in September, it's a very serious and fairly straightforward mathematical equation where the fixed cost absorption ticks up as the utilization of the plants drives into the wintertime. We've seen almost every variable cost category start to come off or, you know, in a couple cases, it has come off, you know, decently. We're pretty optimistic about $40-$50, you know, cost of power as we look into our future in the not-too-distant period. It's hard to lock that in because there aren't liquid forwards for the cost inputs. We're, you know, I would say we're exuberant about the margin opportunity. Okay. I appreciate that. Maybe the second question. Just curious, you guys talk about, you know, 500,000 or, you know, the miners available on the market, brand new landed miners. I'm just curious, can you give me a sense of of how that market's transacting? Really what I'm after is if we think about you guys replacing that fleet over a given period of time, should we expect a material uplift in miner efficiency? Yeah. It's a, you know, it's a pretty small set of people who transact in miners in large size. We try to make sure we're dialed into that group of people. I think we would characterize in recent months that the market is more or less frozen with expanding bid asks on equipment where, you know, Bitcoin bulls don't wanna part ways with highly efficient machines. You know, there's a lot of machines that were purchased after all the ASIC chip ramp-up that happened and the machines that were ordered. You know, those machines are not getting plugged in because plugs are scarce. I think we've seen, you know, kind of a market that's frozen, waiting to see what direction Bitcoin will move over the next four, five, six months. You know, I think the reality is we are a price taker when it comes to making and selling Bitcoin and making and selling power. We were just not in a sustainable place with our cap structure. Now we sure as heck are, where we can take our time buying efficient machines, high grading the fleet every day, improving utilization both at the plants and the data centers. Between the low-hanging fruit and you know, kind of being very careful about how we bring miners back into our data centers, I think we're looking to improve our game in every way. That miner oversupply is not something we see ending anytime soon. All right. Great. Thanks, guys. Appreciate the time. Okay. Our next question comes from Michael Grondahl from Northland Securities. Please proceed. Hey, guys. Just continuing on the 25,000 open slots. Is it fair to say that the two most important variables kind of in your thought process on replacing those is kind of the forward curve and too, just the price of miners out there? I think that's right. Obviously, if right now the forward curve is so high for power that it says we're not in a rush. It doesn't make sense to go be in a rush to buy miners to fill those slots and then maybe run them, maybe not, you know, because they're expensive. I think for us, if you don't own your own power plant and can't take advantage of the curve, you would never have given up the miners in the first place. For us, we gave them up because it didn't mean that we're gonna make, you know, a lot less revenue. Obviously it impacted in a very positive way, our liquidity and financial position. It's really as easy as an easy decision for us. I think I just want to, you know, make sure that, you know, the market understands that we are not going to—you're not gonna see us, you know, relever up to, you know, make ourselves a, you know, potential—to put ourselves in a potentially a tough position again if Bitcoin prices don't stay high. You know, but hey, we do have empty slots. Will they be empty in a year? It is highly unlikely, you know. We will find ways to opportunistically buy miners, but we're just not gonna do it in a hurry. I really can't at this point, you know, where this is fresh for, you know, maybe an hour and a half or we have to have all these deals done. Ask again in a couple of weeks, and we'll probably have a better answer for, you know, timing for how to expect these slots to be filled. You know, right now I can say they're gonna get filled because it does make sense to have the option to mine Bitcoin. You know, I think the good news is it's not gonna make us much more money at this point if we did it. The bar to do that is extremely high. Sure. Got it. Okay. Thanks, guys. Sure. Our next question comes from Stephen Glagola from Cowen. Please proceed. Hi. Thanks for the question. I just wanted to touch on the constituents of the current miner rig fleet. The 1.4 exahash, I think you said like 15,000-16,000 rigs. What's the makeup of that? I know you made some comments around MinerVa. I believe in the press release it said you took delivery of 8,500 MinerVa rigs. Are those Bitmain rigs or are they MinerVa rigs? Why were you able to get Bitmain rigs from MinerVa? Thank you. Yeah. Just to drive something home. The press release explicitly states that we have received value from MinerVa in the form of cash. Leading in, you know, industry-leading, brand new, in this case, we mentioned S19j Pros on the call here. We took possession of about 3,400 MinerVa. But since then, most of the value we've received from MinerVa are the result of their doing swaps and us receiving brand new machines that are, you know, hashing at you know, 100 terahash per second. Make no mistake, the MinerVa number are capped, the 3,400 that we sort of previously disclosed, and the rest have been, you know, really good machines. You know, brand-new Bitmain machines. You know, sorry, that's related to the MinerVa question. Okay, that's helpful. I guess too, maybe I wanna tackle just this question of getting to scale in another way on mining Bitcoin. You know, a value of a hash rate today is arguably more and deployed than the value of hash rate deployed a year from now. How do you think of that strategically as you're going to market prior to the next halving, you know, and balancing that with sort of this new focus now on just selling power back to the grid? Thanks. There's just really one answer. It's patience. We don't have to do anything. We have incredible convexity to the power markets that we just opened ourselves up to. You know, you eloquently said it, in 2024, the revenue generation from a single miner is cut in half. We're gonna be really thoughtful about how we approach that and keep flexibility and try to be on offense every day. All right. Thank you. At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Beard for his closing remarks. All right. Hey, guys, thanks for the questions. Thanks to our investor base for joining, for those that did. Thanks for the patience and letting us get all this news out. We look forward to the coming months and quarters as we take advantage of our newfound position of strength. Talk soon. Good night. Thank you for joining us today for Stronghold's earnings call. You may now disconnect.