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spk08: Good morning and welcome to Stronghold Digital's mining conference call for the first quarter ended March 31st, 2023. My name is Catherine and I'll be your operator this morning. Before this call, Stronghold issued its results for the first quarter 2023 and 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. Join us on today's call, our Strongholds chairman and CEO, Greg Beard, and CFO, Matt Smith. Following their remarks, we will open the call for questions. Before we begin, Alex Kuftin from Gateway Group will make a brief introductory statement. Mr. Kuftin, please proceed.
spk02: Thank you, operator. Good morning everyone and welcome.
spk05: 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 www.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, the applicable GAAP measures, and our earnings release carefully as you consider these metrics. We expect to file our quarterly report on Form 10-Q on May 15, 2023, 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 previously filed annual report on Form 10-K, filed on April 3, 2023, and are to be filed quarterly reports on Form 10-Q. You may access Stronghold's Securities and Exchange Commission files for free by visiting the SEC website at www.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 a link available in the Investor Relations section of Stronghold's website. Now, I would like to turn the call over to Stronghold's Chairman and CEO, Greg Beard. Greg?
spk03: Thank you. Good morning, everyone, and thank you for joining us on our first quarter 2023 earnings call. For today's call, we are going to reference an associated slide presentation that is available through the webcast and on the IR portion of our corporate website. While the first quarter of 2023 remained a challenging environment for our business and most public Bitcoin mining companies, we continue to take proactive steps to execute on our strategic plan and best position Stronghold for long-term success. Before turning the call over to our CFO, Matt Smith, for a detailed review of our financial results, I'd like to touch on some recent highlights from our business and our confidence in the year ahead. Let's start on slide three. As a reminder to everyone on the call, Stronghold owns and operates two waste coal reclamation facilities in Pennsylvania, Scrawgrass and Panther Creek, both of which are low-cost, environmentally beneficial coal refuse power generation facilities. Today, we have 165 megawatts of power generation capacity and current hash rate capacity of 2.8 exahash per second and expect to achieve 4 exahash by the end of Q3 2023 with our already built and ready to use slots at our data centers. Moving to slide four. Stronghold today is significantly delevered versus where we were just nine months ago. We accomplished this delevering through five transactions or amendments with six counterparties. Our net debt is now just approximately 50 million. We have no mandatory amortization payments until July 2024, and we have significantly reduced our outstanding payables. With those efforts behind us, we are very excited to focus on what we believe are accretive and capital efficient growth initiatives and projects. Since returning 26,000 miners representing 2.5 exahash to our lender in August 2022, We have received or procured approximately 22,000 miners representing 2.2 exahash, nearly refilling the capacity made available by the miner return. We have done so while investing only 15 million of incremental capital. As announced last month, we recently acquired 5,000 micro BT What's Miner M50 miners for $15.50 per terahash. These are top-of-the-line machines, and we believe that the price is as attractive as we have seen in the market. These miners were funded with proceeds from our April 2023 private placement, in which I invested personally, not only because I continue to have a strong faith in the company, but also because we found an exceptionally compelling and accretive opportunity. Recent power prices have been $20 to $35 per megawatt hour, during the month of April, and forward prices for the next 12 months currently average $40 to $45 per megawatt hour. We expect that these M50 miners will generate revenue in excess of $110 per megawatt hour based on an 8-cent hash price with minimal incremental cash operating costs. This represents significant potential uplift to revenue and cash flow, that allows us to recover our entire investment in less than one year based on an $0.08 hash price, current forward power prices, and a 95% assumed miner uptime. We also recently announced a two-year capital-efficient Bitcoin mining agreement with leading miner manufacturer Canaan, where Stronghold will operate 4,000 miners by June 15, 2023, with total hash rate capacity of 400 petahash supplied by Canaan. Stronghold will receive 50% of the Bitcoin mined and recover cost plus 10% on half the associated power. We retain all upside from selling power to the grid. Half of the miners are currently onsite and ready to be deployed. To reiterate, the fact that we can plug these M50 miners and Canaan miners into our ready-for-use data center slots immediately further highlight the benefits of owning our own power and data center resources that enables us to undertake these types of transactions without the incurrence of any significant expenses. The MicroBT and Canaan transactions have accelerated our Bitcoin mining capabilities and growth. On our last earnings call, we raised our hash rate guidance to 4 exahash and expected to be there by year end. Following these recent announcements, we now anticipate that we will reach 4x a hash by the end of the third quarter. We are evaluating various opportunities that would exceed our current capacity. While we can make no assurances regarding future growth, we will continue to explore various opportunities to grow a hash rate in an accretive and capital efficient manner. Finally, when we talk about growth, We are primarily talking about cash flow growth, and that includes a diligent focus on expenses and operational efficiency. Consistent with our guidance, we achieved a net cost of power between 45 and $50 per megawatt hour in March. And we believe that certain tailwinds, such as reduced fuel costs and personnel expenses, could drive our costs lower for the rest of the year. We are now forecasting a net cost of power of $40 to $50 per megawatt hour on average for the rest of 2023. As we discussed on our last earnings call, low power prices have created the opportunity to be more flexible with how we dispatch our power plant resources versus importing power from the grid. Looking forward, we plan to optimize the use of our power plants, which means that the plants would be expected to run at full capacity in the summer and winter but idle during the shoulder months when we expect to be able to import power at a lower cost to stronghold. Additionally, as we have disclosed, our plants generally require one to two maintenance outages per year. To that end, we will be taking a two-week outage at Panther Creek later this month. However, we are happy to report that scrubgrass has already performed most of the maintenance work than an outage would have entailed, and we do not currently expect to take a planned outage this spring at Scrubgrass. Moving to slide five, which lays out our hash rate growth. We have been able to capitalize on some continued pockets of distress in the Bitcoin mining space and are actively evaluating incremental opportunities to fill our limited remaining data center capacity. After turning miners to our lender in August 2022, we had a hash rate capacity of 1.4 exahash. At the end of Q1, we had 2.6 exahash. We are currently at 2.8 exahash. We have contracted to receive minors to bring us to 3.8 exahash and believe that we will achieve 4 exahash by the end of Q3. Importantly, and I can't emphasize this enough, we are focused on accretive capital efficient growth And I think that the chart on the right illustrates this well. From inception to the first half of 2022, our CapEx divided by the hash rate contracted during the period was about $60 per terahash. In the second half of 2022, it was $20 per terahash. And in 2023, year to date, it has been about $10 per terahash. We believe that these numbers demonstrate that we are getting more revenue potential per dollar spent than we ever have before, and we aim to prudently grow and deploy capital. Let's move to the next slide. As I mentioned earlier, we recently announced unique agreements with Foundry and Cayman. These are technically hosting agreements in name, but we do not believe that the word hosting does them justice because they were very different than industry standard hosting agreements. Similar standing hosting agreements, We do not have upfront CapEx and we are being paid to operate Bitcoin miners. However, a significant difference is that we have exposure to Bitcoin mining economics as demonstrated in the chart on this page. We preserve power pricing upside in our relatively unique ability to curtail, which we believe is also differentiated. We believe that these agreements are highly beneficial for Stronghold and demonstrate our ability to creatively increase hash rate without capital investment. Collectively, these agreements are expected to add hash rate capacity of over .8 exahash per second. Before turning it over to Matt, I want to thank our co-founder and former co-chairman, Bill Spence, for his vision, service, and leadership. Bill recently announced his retirement to spend time with his family and focus on his health. but he will continue to consult with us, focusing primarily on supporting our efforts related to environmental reclamation, beneficial use ash, and carbon sequestration, areas of key focus for the company. With that, I'd like to pass it over to our CFO, Matt Smith.
spk01: Thanks, Greg. I'm going to start on slide seven with a quick recap of our deleveraging since last summer. Stronghold has reduced total debt plus net current liabilities from 179 million to 71 million, including a 60% reduction in total debt from 146 million to 60 million over the last nine months. And our mandatory principal amortization payments have gone from 45 million to zero for the remainder of 2023. Moving to slide eight for a review of our Q1 financial results. Revenue for the first quarter was 17.3 million. We mined almost 618 Bitcoin during the first quarter and generated a total mining segment revenue of 13.6 million and total energy segment revenue of 3.6 million. GAAP net loss was 46.7 million and adjusted EBITDA was a loss of 3.9 million. It is important to note that the company's intense focus on cash cost reductions continued to materialize in the first quarter, and we achieved a net cost of power sub $50 per megawatt hour in March. During the quarter, we continued to operate in an environmentally beneficial way, removing approximately 259,000 tons of coal refuse from piles and returning approximately 197,000 tons of beneficial use ash to remediate these toxic co-piles. Let's move to slide nine. In an effort to broaden the understanding of our business model, we wanted to provide this simple framework on slide nine. We have about 165 megawatts of power generation capacity. Current data center load is approximately 95 megawatts. and we expect it to increase to 130 megawatts by the end of Q3 based on guidance. We optimize our operations to maximize gross profit from the following alternatives. One, curtail miners to sell power to the grid if power prices are more attractive than Bitcoin mining economics. Two, power miners and maximize hash rate if Bitcoin mining economics are superior to power prices. And three, Reduce plant output and purchase power from the grid if power prices are less than our variable fuel costs net of renewable energy credits. On this slide, we also provide some explicit guidance for our four key cost categories. Moving to slide 10. Historically, we have focused on two primary drivers of hash price, which are Bitcoin price and network hash rate. because transaction fees that we earn have historically been between 1 and 3%. However, since early April, transaction fees have dramatically increased due to a sharp rise in transactions on the Bitcoin network. Increased transactions have led to increased congestion and time to verify transactions. This has resulted in higher incentives for Bitcoin miners to verify transactions. When the sharp rise in transaction fees is reflected in the hash price calculation, it results in greatly improved Bitcoin mining economics. We are not surprised to see increased transaction volume on the Bitcoin blockchain given recent innovations such as ordinals and BRC20 token standard. And we will be watching closely as the trajectory of transactions evolves. It is too early to extrapolate the current trend, and we cannot be sure that there will continue to be increased transactions or that transaction fees will remain higher than in prior periods. However, we believe that it is important to illustrate the positive impact of transaction fees on our primary revenue driver. I will now turn the call back over to Greg for his closing remarks.
spk03: All right. Thank you, Matt. Just a shout out, thank you to those that need to be recognized. One of the issues that we're not covering on this call is plant uptime and reliability, because we have the plants in a very good place now. It took more than 150 different people, including contractors, to get these plants back where they are. These are engineers, electricians, line operators, and then dozens of truckers that moved this waste to us and hauled the beneficial use ash away. So we've made a lot of progress and I wanted to be thankful for those that work, you know, in many cases, you know, seven days a week, you know, including holidays to keep this infrastructure going. Also a shout out to our general counsel who had a, who just got married a few weeks ago. So thank you, Matt. And again, once again, thank you to Bill for everything he's done for the company.
spk02: I'll turn it back over to the operator to close out the call.
spk08: Thank you. As a reminder, to ask a question, press star 11 on your telephone. Then wait until your name is called. Please stand by while we compile the Q&A roster.
spk00: Our first question comes from Chase White with Compass Point Research and Trading.
spk08: Your line is open.
spk06: Thanks. Good morning, guys. So for the $2 to $4 million of maintenance costs for the planned outages, how should we think about that being split between the May and September maintenance periods? Obviously, with scrub grass not going into maintenance at the end of May versus more than likely both of them going down in September, how should that be kind of split up in the year?
spk01: Good morning, Chase. So, Panther Creek will have a couple-week outage here in May, and the budget for that is well less than $2 million. Scrubgrass is not taking an outage this spring, and it's a little too early to know exactly what and if we have outages in the fall, but at this point in time, we pulled a lot of the work we may have done at Panther Creek forward to this outage, so that We may only need to take one outage. If we do something at Panther Creek in September, it would be very limited. I would guess less than a week. And SCOBRAS, we've been working on the redundant systems for the last six months, as we shared, since the outage in September. We've been kind of carefully checking systems, checking redundancies, and we just didn't see a need to take an outage in May. given that we've been working on, we've continued to work on the plant, maintain the plant well. We're importing power because that's advantageous to do. I think in September, we have not yet provided guidance on what an outage would look like for scrub arrest, but I would expect it's also pretty limited. And so that's why we gave the range that it's two to four million. And I think I'd like to see a lower end of that, but we want to leave ourselves some room in case it makes sense to put some more money to work to continue to push the plants forward.
spk06: Got it. That's helpful. And a follow-up, if I may, how should we think about the timing and spend on the 25 megawatts of additional capacity to the extent that you guys definitely move forward with that?
spk01: Yeah, Chase. We're focused on getting to the four exahash, which we now have numerous opportunities. We're evaluating in order to do that in kind of the unique way that we've been trying to accomplish it in a very, very capital-efficient way. We have not yet included anything related to 25 megawatts in guidance. It's not in the four exahash, certainly. We wanted to highlight that we spent money on all of the data center equipment end-to-end that we would need to deploy an additional 25 megawatts of data center, but we have yet to identify a site. When we do, you can imagine we will be very forthcoming about that, because it would further the growth trajectory of the business, but it's not yet in our guidance, and so it's just too early to talk about, but it's something we're certainly focused on internally.
spk06: Got it. But if you did decide to move forward, how long would it take, I guess, is a better way to ask the question, to kind of get from start to finish to get that up and running?
spk03: Yeah, don't model it, but this is something that we're focused on. So, you know, we love to, you know, we spend all the money on the strong boxes, which are the containers. That includes a switch gear, includes transformers. And so it's a very, compared to a regular build-out, It's really cheap, and given that we've now demonstrated that we can do what we call sort of quasi-hosting agreements with different parties, and we just obviously announced another one recently there, so we think we can do it in a very low capex way. We're focused on it, which means this year, but I think don't put it in your models. Let us have the upside from that, but know that we We think we have an exahash sitting on the ground to be picked up, and there isn't a week that we're going to work on the site. We've investigated many different locations, and we're going to find the right one. But it's not going to be a big capex spend.
spk06: Got it. That's helpful. Thank you.
spk08: Thank you. And one moment for our next question. Our question comes from Lucas Pipes with B. Reilly Securities. Your line is open.
spk07: Thank you very much, operator. Good morning, everyone. Thank you very much for the presentation. Lots of detail there, and appreciate all the color. Just to circle back on the ability to toggle back and forth between power generation and importing power, remind us, what is the variable cost for scrubgrass and Panther? I guess that would cause you to import power if power prices are lower than that. So appreciate your additional point on that. Thank you.
spk03: Yeah. Hey, Lucas. Good morning. Thanks for your attention to detail. As we have talked about, the big advantage of being vertically integrated is the ability to buy power from the grid when it's cheap and then sell power to the grid when it's expensive. and mine Bitcoin in the cases sort of in the in-between. So if you think about our variable cost, it's in the three cent range, and that's true for both plants. The calculus for running a plant or idling it and importing power, There are many, many variables in that. We need to, what we describe as net out in a month, and so we need to sell more power to the grid than we consume, or we get charged a higher rate for the power that we consume. So that's an important factor. We also earn renewable energy credits when we deliver power to the grid, and that reward comes later in the year. So that's a, you know, so on a given month, we're not earning the cash from the renewable energy credit, but it does make sense to, you know, later in the year put that in, and the value of those credits have gone up a lot this year, and so that's on our minds as well. But, you know, if you were looking for the simple answer for your model, you know, around $30 a megawatt, it's going to make sense to on the day import power rather than run the plant. But you have to, you know, if you see power prices well below 30 and you're wondering, hey, why are you running the plants anyway, the answer is it's because we needed that out or there are other considerations like renewable energy credits that we're using in our calculations.
spk07: Very helpful. Thank you, Greg. And you kind of answered my second question. Is there optionality to, given that you can import power, to go beyond the 4 plus 25 megawatts, I guess, of exahash capacity, i.e., does it make sense to build data centers, import power? I think you answered it in terms of the higher rate you would pay that maybe makes it prohibitive, but would appreciate it. Any thoughts on that matter? Thank you.
spk03: If I understand your question, it's can we put the additional 25 megawatts at an existing plant and import power at one of the two existing locations? Is that what you're asking?
spk07: Yeah, and then even going a step further, would it make sense to go even beyond the 25 megawatts or not, given that I guess power rates increase if you buy more power than you sell power.
spk03: Yeah, so the way we've designed the data centers and with our interaction with the local grid, we think it makes sense to continue to be a net power supplier to the grid even when the data centers are running at full capacity. That helps us be in sync with the grid and helps us manage the data centers up and down to manage energy flows up and down. That's what helps make the grid stable and is why we argue strongly that our presence as power plants coupled with data centers is hugely beneficial to the residents in our node in PJM by making the grid more stable. If we were to use all of the power and essentially disconnect from the grid or only pull power down from the grid, that argument would be lost. And we wouldn't be interstabilizing the grid as much as we are now. And so I think we're unlikely to do that. But, hey, you know, it is a – I think there is potential at our sites, you know, to put additional power assets because, you know, say scrub gas, for example, has 700 acres. and we're using about half of the transmission capacity of an existing line in place that we own. And, you know, there very well could be an opportunity to put renewable assets on site that could then increase the capacity, you know, of the power generation that would then cause us to look into expanding the data center. But that's not on the, you know, on the agenda for this year.
spk07: Very helpful. I think Central Park is 800 acres, so that's a lot of land.
spk03: Come see it. It's an amazing project. Hopefully at some point the market will recognize that having power assets coupled with data centers makes the development of renewable energy more possible in our section of the grid. We're cleaning up a bunch of nasty sites as we do it. These are not little projects. It's like sort of seven stories of steel and hundreds of trucks to move a waste into our facility. So you could not duplicate it today.
spk07: Very helpful, Greg, and thank you for the invitation. I will ask a third question. Thank you. And it's actually related. You mentioned earlier the potential for carbon capture and sequestration. I know there's more. I believe there's more government support. to advance that technology? Is there something on the drawing board of what stages of planning are those efforts at your sites? Thank you.
spk03: Yeah, so for the purpose of modeling and CapEx spend, I presume that we're not going to spend any money. But that being said, if you looked at what's in the – the Inflation Reduction Act. It's a dramatic increase in the value of carbon credits designed for facilities like ours. When we emit carbon, we argue strongly that all the carbon that we emit will be emitted into the environment anyway if the piles sit as they are. Obviously, when we're doing our cleanup of these areas, it's creating a hugely beneficial impact for the populations that live near those piles. But in spite of all those benefits, the government still wants us to decarbonize as much as possible, and they've made the value of carbon credits so high that we have to look at it. So I think at this point, we will say, hey, we are beginning to study strongly the chemical composition of our ash, which we know very well what's in there, and, you know, the attributes of what's in our exhaust or our flue gas and figuring out, hey, what would it cost to decarbonize that flue gas? So, and I think it's, you know, give us a quarter and maybe on the next call we'll say, well, we figured it out and it's cost prohibitive. Or we might say we found a partner to develop it, develop that, you know, decarbonization with us. But at this point, what we think is it's worth a look. So don't presume anything other than It's on our minds. And I think, honestly, what a great environmentally positive impact that would mean if we could actually clean up all of these toxic waste sites and have a resulting outcome be even less carbon and toxins in the air. That would be a great outcome, and we're working on it.
spk07: Yeah. Yeah, no, I guess it'd be carbon negative, considering the alternatives.
spk03: Very helpful, Greg. That's absolutely right.
spk07: Yep. Yeah, Greg and team, really appreciate the color. Continue best of luck to you and your team. Thank you.
spk08: Thank you. And our next question will come from Michael Donovan from HCW. Your line is open.
spk04: Thank you, Greg and Matt, for taking my question. This is Michael calling on behalf of Kevin Deedy. Can you talk more to the new business of selling ash, perhaps addressing the cost of transportation, such as moving coal in and ash out? Also, we're likely to see higher fuel prices this summer, and some of the latest prices haven't declined. So what should we expect at Stronghold? Thanks.
spk03: So, hey, thanks for getting on and for the questions. On the ash, we are, when we sell ash, which we've announced, you know, a contract, and we have a partnership to sell our ash now, most of the benefit is in cost avoidance. So we're avoiding more than $10 per ton of trucking costs, and we're gaining a couple dollars per ton as a sale. So I think if you modeled in, you know, say, $12 or $13 of net benefit by, quote, selling the ash, that you're going to be very close in the ballpark. And right now, we're having ash removed from Panther Creek, just one of our two sites. And what guns are we giving on tons sold this year?
spk01: So we've shared... that we think the business is in excess of a million dollar benefit this year, and we still feel pretty good about that. We want to be credible and so we want to put things out that we can beat, and we're going to strive to beat that. But at this point, I can still feel pretty good about that number as a benefit, as a net fuel cost deduct. The cost to remove ash from the site is, we'll just call it sort of $10 to $12 per ton. that we pay if there's not an off-taker taking it. And then there's, you know, there's the opportunity to earn revenue in addition to that. And the agreement, the confidential agreement that we have in place with a, you know, we'll call it a leading waste management company in the U.S., you know, they help us avoid that cost, and they also pay us a modest amount of revenue. And we think there is really, as we develop these markets, which, you know, Bill Spence developed that market from scratch, As we develop these markets, you know, we are going to – we think it's upside to the revenue component of the ash sales. And so we're pretty excited about it, but too early to go beyond that guidance. Michael, as for your question on diesel, I think there are a couple of components. You know, there's a whole recipe to the fuel on our site. It involves bringing in limestone, bringing in coal refuse. It involves bringing ammonia. You know, we use the Tampa ammonia index as kind of the basis for our ammonia purchases. That index has gone from $1,500 a ton to several hundred dollars a ton. It's reverted meaningfully since last summer. You know, natural gas and other things are key inputs into ammonia. That'll be seasonal, but we've gotten, you know, substantial relief and, you know, some key cost categories in our fuel costs. And then RECs have gone from $10 to, approaching $30 over the last number of months. And so most of our costs we've seen relief in. We're yet to get excited about it, given the volatility. As for diesel, I think what's interesting about the diesel market is we have seen some relief since last year. The diesel market is still tight. But we have become, I think, a bit more savvy at managing our working capital. And we have, for instance, over 100,000 tons of coal on site, ready to go at Scobrass. when we want to dispatch the plant. And so that would mean for those 100,000 tons, no diesel required, other than to take the ash away. So I think we've, I wouldn't bet against us in terms of, you know, what we put out there for our cost of power, and diesel's a key consideration in that. We look at the forward curve as well, and so hopefully there's some confidence that we're incorporating that into our forecast.
spk02: Great, much appreciated. That's very helpful, and congrats on the quarter.
spk03: Okay, great. Thanks. Hey, before – I don't know if we have more questions, but just for the analysts, make more of your follow-up questions about transaction fees, because I think the market is missing a pretty big opportunity there. So any other questions, operator? And then we'll hopefully get one about that topic.
spk08: Again, if you would like to ask a question, press star 1 1 on your telephone and wait for your name to be announced.
spk00: One moment.
spk08: At this time, this concludes our question and answer session. I would now like to turn a call back over to Mr. Baird for his closing remarks.
spk03: Okay, we have a question in the room on transaction fees, so go ahead, Matt.
spk01: I think it seems to us to have been lost, but there's some interesting developments we highlight in slide 10. And just as a disclaimer, we're looking to extrapolate the extremes in transactions fees here so far in May, but it's not surprising to us that block space is becoming a lot more valuable. Bitcoin mining rigs are mini toll bridges that, when energized, earn revenue in two ways. through block subsidies, which those are the current 6.25 BTC per block that are known, and then through transaction fees, which are also paid to miners in the form of additional Bitcoin. There are elegant features built into the Bitcoin blockchain, including market-based congestion pricing. In this case, various innovations such as ordinals and BRC20 tokens are causing increased traffic by putting more data through the blockchain, which has caused congestion as of late. Higher transaction fees are the correcting mechanism in the blockchain, and if you want to have your transaction verified, you can pay a higher fee to have your transaction verified sooner. Over the last four to five weeks, we started to see the number of transactions pick up, and it resulted in increased congestion and increased transaction fees. While we expect more volatility going forward, we look forward to continuing to verify the transactions on the network and seeing how this develops.
spk03: All right. Thanks, Matt. Hey, thank you, shareholders, analysts, and the interested people. I think we're really proud of the progress we made this quarter. And thank you also to those that we have, you know, our partners that have contracted with us, some of whom have become, you know, shoulders in the company. To Whitehawk, our remaining lender, you know, we have... very good relationships with every one of those groups. We've made a ton of progress, as I said, and it looks like we're going to have a fantastic rest of 2023. So we are thankful and look forward to delivering on that promise. Thank you, Operator.
spk08: Thank you for joining us today for Stronghold's earnings call. You may now disconnect.
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