CleanSpark, Inc.

Ladies and gentlemen, good afternoon. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to CleanSpark's fiscal third quarter financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star won a second time. Thank you. And at this time, I would like to turn the floor over to Isaac Holyoke, Chief Communications Officer. You may begin.

Thanks, Abby. And thank you for joining us today for our fiscal third quarter financial results call covering the period April 1st, 2023 through June 30th, 2023. Our press release was issued about 30 minutes ago and is available on our website, at www.cleanspark.com forward slash investors. Today's call is also being webcast and a replay and transcript will be available on our website. I'm here with Zach Bradford, our Chief Executive Officer, and Gary Becchiarelli, our Chief Financial Officer. Keep in mind that some of the statements we make today are forward-looking and based on our best view of the world and our businesses as we see them today. As described in our SEC filings and on our website, those elements may change as the world changes. We will also discuss certain non-GAAP financial measures concerning our performance during today's call. You can find the reconciliation of GAAP financial measures in our press release, which is available on our website. And with that, it is my pleasure to turn the call over to Zach.

Thank you, Isaac. Good afternoon, and thank you for joining us for our third quarter earnings call. Since last speaking with you, we have strengthened our position as one of the largest, most efficient publicly traded Bitcoin mining operators in the world. The dedication of our teams has resulted in an extraordinary rapid growth. We now outperform almost every single one of our competitors in monthly production, even compared to competitors that on paper may seem bigger than us. As a CEO and founder, I hope you'll excuse a little cheerleading, but I don't think it is at all an exaggeration to say that we are the best bet in the space. We have a proven track record of doing what we say we'll do, and to that point, we have hit or exceeded every milestone we've set for ourselves. This company and the people who work here are best in class in every way. Now, before I get into the details on the quarter, I want to take a moment and announce that we have fully funded our growth to 16 exahash. This includes machines, materials, and everything else nuts to bolts that goes into building a world-class Bitcoin mining facility and bridging the gap to 16 exahash per second. This creates certainty for our shareholders around our future and puts any questions to bed about our path to 16 exahash per second. We are building transformational infrastructure with almost 90,000 machines deployed and another 60,000 on hand or pending delivery for a total fleet of approximately 150,000 state-of-the-art miners, all fully funded. We are operating over nine exahash per second, and over the next half of the year, we expect to add an additional seven exahashes per second after energizing the expansion of our data center in Sandersville, Georgia. That expansion, I again would like to state, is fully funded. I know this has been an important question for many of you. There is no longer any uncertainty about when we will have the funds in hand to pay for the expansion and the miners. That day is today. Our track record speaks for itself. So far, this fiscal year, which for us started on October 1st, 2022, we have mined over 5,600 Bitcoins through July. That speaks not only to our scale, which is substantial, but also to our skill as operators. We run the most efficient facilities at scale in the industry. We have among the highest hash rate realization rates of any publicly traded company. This is a key metric for our shareholders to understand because it doesn't matter if a company has 200,000 machines if those machines aren't plugged in and hashing. We maintain industry-leading uptime at scale, and not only are we becoming ever more efficient as operators, but our efficiency at the machine level is also becoming unmatched by our competitors. We use technology to maximize our fleet's efficiency. Fleet efficiency matters because it means we can mine more Bitcoin with less power. This is a win for our margins and a win for the Bitcoin mining network. It allows for us to pack more hash rate into our existing infrastructure. And as machines become more powerful and more efficient, we are poised to take advantage of some of these synergies in rather sophisticated ways. As of our latest report at the end of July, we reported that our fleet-wide efficiency is approximately 29 joules per terahash. This is good, but not good enough for us. Once all the XPs that are on hand or ordered are plugged in and hashing, we expect to see our efficiency improve significantly, coming in at approximately 25 jewels per terahash. We believe this rating will make us one of the most, if not the most, efficient Bitcoin miners at scale on the network, producing more Bitcoin, expanding our margins, and driving more revenue to our bottom line. We've maintained hash rate gains to deliver impressive revenue over the nine-month period reported today. Now, Gary will provide more details about the quarter, but through June 30th, we've generated over $115 million in revenue. Our balance sheet has been strong and is growing stronger, and as of this call today, our unaudited cash balance is over $90 million. We have minimal long-term outstanding debt, and we hold approximately 1,200 Bitcoin. With our CapEx now funded through 16 exahash per second, we have increased flexibility to continue to grow our Bitcoin treasury. We are pragmatic about how we manage our Bitcoin balance with the goal of creating the best outcome for our shareholders. We believe we can do this best by being strategic and not ideological. and by being responsive to market dynamics. Right now, that means moving some of our liquidity into Bitcoin. We see substantial momentum building across the Bitcoin ecosystem, and we intend to gradually grow our Bitcoin balance. Doing so underscores our commitment to Bitcoin and our critical role in building Bitcoin infrastructure. Bitcoin is a remarkable advancement in human history. As we are fond of saying, It is just getting started. Over the last few months, we have seen a string of high-profile institutional investors make serious moves in the Bitcoin ecosystem, including multiple spot ETFs waiting for approval. Now, while many of these have languished for months and even years, there are signs of potentially favorable movement on the horizon. For example, BlackRock's application for a spot ETF the largest asset manager in the world is one such opportunity. BlackRock has successfully filed hundreds of ETFs and has only ever once not been approved. Their track record suggests that they believe there is a path to successfully launch an ETF. Now, although there can be no guarantee this will occur, if it does, we would expect to see substantial inflows of funds into Bitcoin. We believe this could make the coming months very interesting for our industry. We also see some of the regulatory scrutiny abating as Bitcoin further solidifies its position as different from other so-called cryptocurrencies. We agree with regulators that Bitcoin is a commodity and should be treated as such in all respects. We expect the next 12 to 18 months to be transformational for Bitcoin, not only with ETFs on the horizon, but also with the coming halving and the price action we expect to see as Bitcoin continues its program trajectory of scarcity. We are very well positioned to take advantage of this momentum, having just completed a 50 megawatt expansion of our data center in Washington, Georgia. Tucked on the outskirts of this beautiful rural community, that facility now hosts almost 26,000 machines for a total hash rate of about 2.8 exahashes per second. That expansion alone has already produced 114 Bitcoins or about 3.3 million in revenue at an assumed value of 29,000 per Bitcoin since the first machine in the expansion was turned on just a few weeks ago. The entire site is now producing nearly seven Bitcoin a day. We work closely with community leaders to negotiate a win-win power purchase agreement that allows the city to thrive while maintaining low power costs for our operations. Our teams and partners in Washington, led by Delston Branch, the site manager, Scott Garrison, our vice president of business development, and Taylor Monning, our vice president of mining, have worked through rain and shine, heat and cold, to expand this remarkable facility. We also acquired two smaller sites in Dalton, Georgia, last quarter. adding 20 megawatts to our portfolio. Located in Northwest Georgia in the foothills of the Blue Ridge Mountains, Dalton is a thriving community with its own electrical utility. Our move into Dalton has allowed us to deepen our regional expertise while diversifying our utility providers. Georgia is rich in affordable energy, and Dalton is uniquely positioned as one of the owners of Vogel III. we are eyeing several expansion opportunities in the surrounding area. With the Washington expansion now fully online and Dalton running at full capacity, we have hit all-time high hash rate of over nine exahashes per second. And we are well on our way to achieving our target of 16 exahashes per second. Now, before discussing what the next half of the year looks like, I'd like to take a moment to reflect on how momentous this achievement is. It took us nearly two and a half years to get to where we are today. And in the last year alone, we've grown over 200%. We are now set to nearly double our hash rate in a matter of a few months with the expansion of the Sandersville site. Our Sandersville expansion is shaping up to be a truly impressive data center. Currently, Sandersville runs at about 80 megawatts. The expansion is expected to add another 150 megawatts, giving our data center there a total operating capacity of 230 megawatts. We believe the expansion will make it the largest Bitcoin mining campus in the South. Once complete, the expansion will consist of 10 buildings, each capable of holding thousands of machines. To give you a sense of the scale here, The two largest buildings are the length of three football fields each. The site is gently tiered, allowing for carefully controlled flow of air to maximize ambient cooling efficiencies. This approach ensures machines operate at peak capacity, even during the rare times of year when the region experiences extremely high heat. As of this call, the land has been graded. Excavation for the underground wiring starts next week and breaker panels and other building materials are arriving onsite daily. Pouring of the concrete pads and building construction is expected to start soon. The expansion is sited directly next to a new substation. The Municipal Energy Authority of Georgia, or MEAG, is building the substation. MEAG provides most of our power needs in the region, and we are very proud to continue to work with them and their partner cities. MEag expects the substation to be finished by the end of the year. Now, we are dependent on them for the construction of the substation and the related infrastructure. The delivery of the machines and the construction of the data centers to house them are within our control, and we expect to finish our work inside the next few months. After the substation is complete, we will energize the expansion over the following weeks until we hit 16 exahashes per second and become one of the largest proprietary miners in North America. Of course, 16 exahash per second isn't the end of the road for us. We are opportunistic. Dalton is one example of potential opportunities. We've identified several avenues that would allow us to deepen our commitments to the community and expand our fleet there. We are also eyeing several new greenfields or new build opportunities or acquisitions that we believe could provide maximum optionality for us to choose to build as fast or as slow as makes sense over the next several years, through and after the next halving, as we prepare to corner more and more of the Bitcoin network's North American hash rate. We also continue to explore opportunities that could monetize renewable projects that are expected to wait years in the queue before they are ever connected to the grid. The future is bright for Bitcoin and for CleanSpark, and we are exceptionally well positioned to make the most of the opportunities we see on the horizon. Now, none of this is possible without the dedication of my management team and our teams in Georgia and Nevada that believe in this work. We talk a lot internally about grit and what it takes to be the best. I can say without hesitation that our teams have grit. They're the best operators in the entire industry, I'm so proud to work with them. I'm going to turn it over to Gary now.