Kevin Dede

Kevin Dede sought deeper color on the timelines for Starwood project enhancements, including when construction might begin and when services could launch for customers. He also requested a more detailed explanation of how MARA intends to leverage its investment in Exaion.

Answer

Fred Thiel, Chairman and CEO of MARA Holdings, explained that construction will commence only after a tenant lease is signed, as Starwood builds to specific tenant needs, not on speculation. He anticipates an accelerated process due to Starwood's relationships and EPC capabilities, with lease updates expected soon. Regarding Exaion, Fred detailed that MARA's 64% stake leverages Exaion's secure private/sovereign cloud technologies for global deployment, particularly in regions prioritizing data locality and security (e.g., Europe). Exaion's expertise with energy majors and diverse data center operations provides a differentiated offering for vertical AI solutions, maximizing value per MW.

Kevin Dede from H.C. Wainwright & Co. asked for deeper color on the timelines for Starwood Digital Ventures projects, specifically when construction might begin and when services would launch for customers, and requested a detailed explanation of the Exaion acquisition and MARA's strategy to leverage it.

Answer

Fred Thiel, Chairman and CEO of MARA Holdings, clarified that construction begins only after a tenant lease is signed, emphasizing Starwood's role in ensuring rapid, certain execution. Regarding Exaion, he explained that MARA's 64% stake leverages Exaion's expertise in secure, private sovereign cloud infrastructure and services, developed within EDF, to target enterprise customers globally, particularly in Europe, where data locality and security concerns differentiate it from U.S. hyperscalers.

Kevin Dede of H.C. Wainwright conducted an extensive interview covering MARA's Q3 2024 results and strategy. He inquired about the recent Ohio asset acquisition and its integration into the company's near-zero energy cost thesis, the flexibility afforded by the PJM grid connection, and progress on power cost reduction. Dede also asked about the company's Bitcoin holding strategy, capital allocation priorities, the development and production of its proprietary 2PIC immersion cooling technology, and views on wafer supply. Finally, he questioned MARA's stance on the AI hosting market, the impact of the U.S. election on crypto policy, and asked for a summary of financial performance highlights.

Answer

Chairman and CEO Fred Thiel explained that the Ohio acquisition significantly lowers operating costs and diversifies MARA's presence into the PJM ISO, providing power trading and hedging flexibility. He emphasized the company's focus on owning and operating its assets and developing proprietary technology like 2PIC immersion cooling, which is now in production and showing over 20% overclocking potential. Thiel reiterated MARA's strategy to avoid the AI hosting business, viewing it as a 'race to the bottom' for non-hyperscalers. He also expressed optimism about the pro-crypto shift in the U.S. legislature following the election. CFO Salman Khan highlighted key financial metrics, noting a 35% YoY revenue increase, a 9% rise in energized hash rate, and an 18% YoY reduction in cash cost of revenue per petahash to $37.1, attributing the improvements to accretive acquisitions and operational efficiency.

Kevin Dede asked about American Bitcoin's current contract position with Bitmain, plans for leveraging it, and its duration. He also questioned the potential for Bitmain to develop a U3 version of the S23 miner. Dede further inquired about the company's custody partners, the flexibility they offer for yield generation, and plans for diversifying custody positions. Finally, he asked about American Bitcoin's pool strategy, including the possibility of developing its own pool, and the timeline for mining expansion at the Corpus site.

Answer

Asher Genoot, Executive Chairman, stated that American Bitcoin maintains strong relationships with all major manufacturers, including Bitmain, and seeks creative, accretive structures for miner acquisition, potentially including new technological innovations like U-factored machines. He identified Anchorage Digital, Coinbase, and BitGo as custody partners, emphasizing maintaining control of cold wallets for yield generation to mitigate counterparty risk. Genoot also discussed working with partners like Foundry for pool operations, prioritizing U.S. hash rate security over operating their own pool due to volatility risk. He clarified that American Bitcoin has significant growth opportunities within Hut 8's existing portfolio and other energy avenues, without specifying a timeline for the Corpus site, reiterating a focus on Bitcoin accumulation over growth for growth's sake. Matt Prusak, President and Interim CFO, added that Layer 3 ecosystem development involves partnerships to accelerate Bitcoin adoption.

Kevin Dede asked about American Bitcoin's relationship with Bitmain, how they might leverage existing contracts, and the duration of any options. He also inquired about Bitmain's potential development of a U3 version of the S23 miner. Dede then asked about the company's custody partners, the flexibility for yield generation, and plans for diversifying custody positions. Finally, he questioned American Bitcoin's pool strategy, specifically if they plan to develop their own pool, and sought an update on the timeline for mining operations at the Corpus site.

Answer

Executive Chairman Asher Genoot stated that American Bitcoin maintains strong relationships with all major manufacturers, including Bitmain, and continuously seeks accretive and creative structures for miner acquisition, leveraging market conditions when demand is low. He also mentioned their collaboration with Bitmain on technological innovation, including direct liquid chip U-factored machines. Regarding custody, Asher Genoot confirmed partnerships with Anchorage Digital, Coinbase, and BitGo, emphasizing that yield generation opportunities are pursued while maintaining control of the custody accounts and keys through triparty agreements to mitigate counterparty risk. On pool strategy, Asher Genoot noted their partnership with Foundry, a U.S.-based pool, and explained that operating their own pool would introduce additional probability and volatility risk, preferring to focus on broader adoption initiatives within the Layer 3 ecosystem. President and Interim CFO Matt Prusak added that the company aims to go 'far as an ecosystem' by collaborating with partners. Asher Genoot clarified that American Bitcoin has significant incremental growth opportunities within Hut 8's existing 700 MW portfolio dedicated to Bitcoin compute, of which American Bitcoin currently uses only half, and is exploring other energy opportunities, without specifying a timeline for the Corpus site, reiterating the focus on accretive Bitcoin accumulation over growth for growth's sake.

Kevin Dede asked how Hut 8, its customers, and partners would react if a proposal by former President Trump, requiring big tech to build their own power, were to become law.

Answer

CEO Asher Genoot stated that this is a natural progression, emphasizing that data centers should be net positive to the community and grid. He explained that Hut 8 already pays for system upgrades and commits to energy capacity, viewing this as 'table stakes.' He anticipates a trend where companies bring both load and generation to the grid, interconnected for redundancy, which aligns with Hut 8's capabilities in developing power assets.

Kevin Dede at H.C. Wainwright asked how Hut 8, its customers, and partners would react if a law required big tech to build their own power, referencing a recent State of the Union address.

Answer

CEO Asher Genoot stated that this is a natural progression, emphasizing that data centers should be net positive to the community and grid. He explained that Hut 8 already pays for system upgrades and commits to energy capacity, viewing this as "table stakes." He anticipates more companies bringing both load and generation to the grid, aiming for a net equal impact while maintaining grid interconnection for redundancy.

Kevin Dede from H.C. Wainwright inquired about Canaan's 1 GW facility objective and the pipeline for achieving this power and computing infrastructure goal. He also asked about product development beyond A16, targeting 5-6 J/TH chips, potential product cycle shortening, and the timeline for next-generation chips, as well as Canaan's self-mining target for 2026.

Answer

Chairman and CEO Nangeng Zhang expressed confidence in gigawatt-level power opportunities, with more details to follow, and reiterated the goal to co-locate AI, HPC, and Bitcoin mining. He explained that achieving sub-10 J/TH with manageable costs is challenging due to rising manufacturing costs, emphasizing customer TCO and leveraging foundry peak capacities. He stated that R&D and customer delivery are priorities, with no fixed self-mining target for 2026, but internal goals for electricity infrastructure to enable rapid hash rate ramp-up when market conditions are favorable.

Kevin Dede inquired about Canaan's self-mining target for 2026, following the achievement of 10 EH/s in 2025.

Answer

Nangeng Zhang, Chairman and CEO, stated that the priority is R&D and customer delivery, with no fixed self-mining hash rate target for 2026. The focus is on allocating energy resources and building infrastructure, which will enable rapid hash rate ramp-up when market conditions are favorable, potentially making hash rate sales a mainstream contributor next year.

Kevin Dede questioned Canaan's self-mining objectives, specifically regarding Ethiopia's role as the largest exahash contributor and potential adjustments due to increased power tariff rates. He also sought clarification on the $56 million wafer purchase and $90 million in processing costs, and their implications for future cash use and supply chain components.

Answer

Chairman and CEO Nangeng Zhang explained that Canaan would slow its self-mining expansion in the near term to prioritize large miner orders, focusing on developing long-term power resources and prudently expanding its footprint. CFO Jin James Cheng clarified that the $56 million wafer payment was for Q3, not all Q1 supply, and that the $90 million processing cost covered supply chain payments, R&D, G&A, and sales/marketing expenses, with prepayments typically only for wafers.

Kevin Dede questioned Canaan's self-mining objectives, particularly regarding Ethiopia's role and potential impacts from increased power tariff rates. He also sought clarification on the $56 million wafer purchase and $90 million in processing costs, including their implications for future cash use and supply chain component prepayments.

Answer

Chairman and CEO Nangeng Zhang explained that in the near term, Canaan will prioritize large miner orders and slow the pace of self-mining hash rate additions, while actively developing more power resources and greenfield sites in the U.S. He noted that Bitcoin's pullback offers opportunities for attractively priced mining assets and energy resources. CFO Jin James Cheng clarified that the $56 million wafer payment was for Q3, with more payments expected in Q4, and that the $90 million outflow covered supply chain payments, R&D, G&A, and sales/marketing expenses. He added that prepayments are typically only for wafers, with most components paid after delivery.

Kevin Dede of H.C. Wainwright & Co. followed up on the treasury strategy, asking if Bitcoin holdings are used to fund operations. He also inquired about the primary geographies for Avalon home miner demand and the associated marketing strategy.

Answer

CFO James Cheng confirmed that the Bitcoin treasury is used to fund operations, such as securing loans for wafer orders and mining site expansions. CEO Nangeng Zhang added that while the Avalon home miners are sold globally, the U.S. is the primary region. He noted strong sales momentum but acknowledged the product requires enhancements in user experience and cost to penetrate the traditional consumer market, a task a dedicated team is working on.

Kevin Dede of H.C. Wainwright & Co. followed up on the Bitcoin treasury strategy, asking if it would be used to fund operations. He also inquired about the geographies showing the greatest demand for Avalon home miners and the associated marketing strategy.

Answer

CFO Jin James Chang confirmed they use Bitcoin as collateral for loans to fund operations, such as wafer orders and mining site expansion. CEO Nanjing Zhang added that the primary market for Avalon home miners is the U.S., with Q3 sales already significantly outpacing Q2. He acknowledged that the product requires further enhancement to appeal to the broader traditional consumer market.

Kevin Dede asked about improvements in U.S. customer service, the current state of the North American customer pipeline and sales funnel, and the timing for placing wafer orders for the new A16 machines.

Answer

CEO Nangeng Zhang detailed customer service enhancements, including 26 global service stations and improved product stability, while emphasizing a commitment to low failure rates. He confirmed North America represented 40% of 2024 sales, driven by major clients like Cipher, Hive, and CleanSpark, and noted a substantial pipeline of new customers. Regarding the A16, Zhang clarified that sample machines would be sent to customers in Q3 2025, following risk runs and the first mass production batch.

Kevin Dede asked about the demand mix between air-cooled and immersion-cooled miners as sales shift to the A15 series, sought clarification on the AI development timeline, and questioned the strategy for utilizing the company's Bitcoin holdings.

Answer

CEO Nangeng Zhang noted that the A15 series has superior performance and is seeing growing demand for its liquid-cooling models, driven by heat reuse applications and lower noise requirements. On AI, he reiterated that it would be unwise to invest heavily in AI ASICs now, as the market is still in a 'GPU stage' for inference. CFO James Cheng addressed the Bitcoin question, explaining that the company balances various fundraising options, including preferred shares and Bitcoin-backed loans, to generate liquidity while maximizing shareholder value.

Kevin Dede, Managing Director of Equity Research at H.C. Wainwright, questioned the 1.2 EH/s mining hash rate target for mid-2026 given current hash prices, Bit Digital's strategy for running validator nodes and optimizing Ethereum yield, the calculation of staking revenue, and the potential impact of large ETH treasury companies on Ethereum's inflation pattern.

Answer

Head of Investor Relations Cameron Schnier confirmed the mining hash rate target is likely achievable through portfolio pruning and optimization, noting mining is a sunsetting business. CFO Eric Huang explained they partner with Figment for native staking and engage external managers for additional yield strategies, targeting 4% or 10-20% above native staking, and clarified that staking revenue is calculated daily. Eric Huang also stated that large ETH treasury companies accumulating and staking ETH would not materially impact Ethereum's overall inflation, which is driven by blockchain issuance and on-chain activity, as staked ETH remains within the ecosystem.

Kevin Dede asked about the mining hash rate target of 1.2 EH/s by mid-2026 given the current hash price, the company's consideration of running its own validator nodes versus using Figment, how to extract more yield from the Ethereum network, the calculation of the $2.9 million staking revenue, and how large ETH treasury companies might affect Ethereum token inflation.

Answer

Head of Investor Relations Cameron Schnier explained the mining target is a function of hosting portfolio pruning and optimizing machines, noting that mining is sunsetting. CFO Eric Huang stated they are satisfied with Figment for native staking and are exploring external fund managers for additional yield strategies, targeting 4% or 10-20% above native staking. He confirmed staking revenue is calculated daily and clarified that treasury companies do not materially impact Ethereum inflation, as staked ETH remains within the ecosystem.

Kevin Dede from H.C. Wainwright & Co. requested more detail on the Bitcoin mining wind-down, including fleet age, tapering plans for legacy machines, and near-term hash rate expectations.

Answer

CEO Samir Tabar reiterated the strategy is to wind down the Bitcoin mining business, either by selling it or running the fleet until units become unprofitable. He noted that recently deployed S21 miners will temporarily boost the hash rate to the 1.6-1.8 EH/s range and improve overall fleet efficiency to below 22 J/TH as older models are retired. Tabar emphasized that capital is better allocated to the ETH treasury strategy rather than reinvesting in mining, even with positive margins.

Kevin Dede of H.C. Wainwright & Co. asked about the levers available to improve gross margins in the cloud and colocation businesses, and also inquired about the company's GPU procurement strategy for its cloud services.

Answer

Executive William Schnier explained that cloud margins will improve by spreading fixed operating lease costs over a larger revenue base. Billy Krassakopoulos, head of data centers, added that colocation margins are predictable due to long-term contracts. On procurement, Mr. Krassakopoulos stated the strategy is to align GPU purchases with signed contracts to minimize speculative risk, while also procuring some advanced GPUs for R&D and leveraging OEM relationships for accelerated delivery.

Kevin Dede requested more detail on the new HPC deals, including the potential for vendor financing for the required GPUs and the data center power strategy for these deployments. He also asked about the GPU type for the Boosteroid contract and sought clarification on the Bitcoin miner fleet upgrade plan, including the associated capital expenditure to reach 3 exahash.

Answer

Executive William Schnier detailed three new HPC agreements totaling approximately $21-22 million in annualized recurring revenue and confirmed that various financing options are being considered. He noted near-term deployments would use existing capacity in Iceland. CEO Samir Tabar and other executives clarified that the Boosteroid contract uses lower-cost AMD gaming GPUs and will be a gradual build-out. For the mining fleet, they confirmed the strategy is to replace older S19s with efficient models, with Schnier estimating a cost closer to $10-$15 million.

Kevin Dede asked about the year-end hash rate target given the pullback in mining, the strategy for offline miners, the selection and cost trends of HPC hosting sites for the Boosteroid deal, and the legal distinctions and obligations of a binding term sheet versus a master service agreement (MSA).

Answer

CEO Samir Tabar stated that the Bitcoin mining strategy is to remain opportunistic and that significant exahash growth is unlikely given current economics, with a potential modest investment of $5-10 million. Offline miners are warehoused or sold. Executive William Schnier confirmed that data centers for Boosteroid have been sourced near metropolitan areas, suitable for low-latency cloud gaming. The executives noted that while they can't detail pricing, the infrastructure requirements and costs for cloud gaming are directionally less expensive than for large-scale AI training. Tabar clarified the term sheet is legally binding, with the MSA containing more legal details, and expressed high confidence in the deal's consummation.

Kevin Dede asked Joseph Lubin about the progression of upcoming Ethereum upgrades, potential delays (referencing the Merge), and how this affects discussions with financial institutions regarding ETH versus Solana. He also inquired about the collective impact of large treasury companies accumulating ETH on token issuance and burn characteristics. Lastly, he asked Joseph Chalom about SharpLink potentially running its own validator nodes and his view on issuing preferreds versus converts for capital raising given compressing premiums to NAV.

Answer

Joseph Lubin, Chairman, stated that the Ethereum ecosystem has matured in landing upgrades on time, targeting 1-2 major upgrades per year, with Fusaka on track and GlamsterDAM expected 6-8 months later. He noted that financial institutions are becoming a "forcing function" for protocol improvements but Layer 2 modularity decouples their needs from Layer 1 delays. He explained Ethereum's expected annual inflation is below 1% (around 0.8%), significantly lower than Solana's, and that the network becomes deflationary when busy, with Layer 1 and Linea burning ETH. Joseph Chalom, Co-CEO, stated SharpLink is exploring future operating models, including running validator nodes, but had no specific update. He confirmed that preferreds and converts are complementary tools in their capital raising toolbox to monetize ETH volatility and enhance liquidity without dilution, especially when trading below NAV.

Kevin Dede from H.C. Wainwright inquired about the progression of upcoming Ethereum upgrades, potential delays, and how this affects discussions with financial institutions regarding ETH versus Solana. He also asked about the inflation characteristics of ETH token issuance, the collective impact of large treasury companies accumulating ETH on issuance and burn, SharpLink potentially running its own validator nodes, and the company's view on issuing preferreds versus converts for capital raising.

Answer

Joseph Lubin, Chairman, stated the Ethereum ecosystem has matured in landing upgrades, targeting 1-2 major upgrades per year, with Fusaka and Glamsterdam planned, and noted financial institutions are driving protocol enhancements. He explained ETH's expected annual inflation is below 1%, potentially deflationary when busy, with Linea also burning Ether. Joseph Chalom, Co-CEO, viewed the accumulation by peer treasuries as validation, differentiating SharpLink through its in-house team for yield generation and risk management, and committed to increasing ETH concentration. Chalom stated SharpLink has many tools for capital raising, including converts and preferreds, to monetize volatility without dilution, but offered no comment on running validator nodes at this time.

Kevin Dede asked about the company's operational approach to staking, specifically whether it runs its own validator nodes or outsources, and inquired about the day-to-day triggers for purchasing ETH on the market.

Answer

Co-CEO Joseph Chalom explained that for institutional-grade risk control, the company currently uses delegated staking through industry-leading custodians like Coinbase and Anchorage and asset managers like Parify and Galaxy. Regarding purchasing, Chalom stated that given the long-term thesis of being in an early mega-cycle for ETH, the strategy is to accumulate as much as possible, as early as possible, rather than timing the market with specific daily triggers.

Kevin Dede from H.C. Wainwright & Co. sought clarification on how Cango plans to achieve the remaining 6 exahash of its 50 exahash deployed capacity, given the August operational hash rate of 44 exahash, and asked what management considers the most important aspect of Cango's June report for investors to understand.

Answer

CFO Yongyi Zhang explained that the 44 exahash represents an 87% effective operational rate, with room for improvement through upgrading inefficient miners and operational team development. CEO Peng Yu added that implementation time and U.S. summer curtailments were factors. CEO Peng Yu highlighted the June report as a milestone, marking the completion of divestiture and 18 exahash acquisition, new management, achieving first-tier industry status with 50 exahash, growing Bitcoin holdings (>5,000 BTC), validating the B2B model, and identifying cost optimization opportunities.

Kevin Dede sought clarification on how Cango plans to achieve the remaining 6 EH of its 50 EH deployed capacity through improvements and optimization, given that the August hash rate was nearly 44 EH. He also asked what management considers the most important aspect of Cango's June report that should resonate with investors.

Answer

CFO Michael Zhang explained that the 44 EH represents an 87% effective operational hash rate, indicating room for efficiency improvement through upgrading inefficient miners and developing the operational team. CEO Paul Yu added that implementation takes time and U.S. summer curtailments were a factor. Paul Yu highlighted the Q2 report as a milestone, marking the completion of China divestiture, acquisition of 18 EH, new management structure, achieving first-tier industry player status with 50 EH, growing Bitcoin holdings over 5,000 BTC, and validating the B2B model's effectiveness with opportunities for cost optimization.

Kevin Dede of H.C. Wainwright & Co. asked about the company's strategic thinking regarding the artificial intelligence market, given its expertise in semiconductor design.

Answer

CFO Charles Yan stated that the company currently has no plans to expand its business into the artificial intelligence sector. He noted that while it's not a current focus, the topic would be discussed further internally.

Kevin Dede requested more color on the profile of the 13 signed XO Swap partners, their primary needs, and how traditional finance might incorporate crypto. He also asked about the commercial launch plans for the Echo product, whether it would expand beyond the X platform, and if there was interest from other platforms.

Answer

CEO J. Richardson stated that partners range from wallets to Web3 projects, all primarily interested in reliable cross-chain swap functionality, a complex technology that Exodus has mastered. CFO James Gernetzke added that the growth of stablecoins across multiple chains will be a key driver for XO Swap demand. Regarding Echo, Richardson clarified it was primarily a successful demo of Passkeys Wallet technology to experiment with gamification and user acquisition, resulting in 1.2 million wallets. While there are no immediate commercialization plans or expansion to other platforms like TikTok, the lessons learned will be incorporated into future product roadmaps. Gernetzke reiterated that Echo is not expected to have a material impact in 2025.

Kevin Dede of H.C. Wainwright & Co. asked for more details on the XO Swap business, its growth potential versus the legacy business, how the Exodus brand is presented within partner platforms like Ledger, the nature of the company's intellectual property moat, and the integration and user experience strategy for XO Pay with partners like MoonPay.

Answer

Executive J. Richardson explained that XO Swap allows Exodus to tap into the user bases of partners like Ledger and Magic Eden without direct marketing to those customers. He noted that branding varies by partner integration. Richardson described the company's moat as being built around the back-end XO Swap and XO Pay APIs, not the front-end wallet, which they may open-source to encourage adoption. He clarified that the goal for XO Pay is to create a seamless, integrated experience for users, abstracting away the choice between providers like MoonPay to reduce friction.

Asked for details on the XO Swap strategy versus the legacy business, its branding on partner platforms, and its role as a competitive moat. He also inquired about the XO Pay product, its integration with partners like MoonPay, the user experience, and its growth prospects.

Answer

The executive explained that XO Swap extends Exodus's reach to other platforms' user bases. The branding is flexible and varies by partner. The competitive moat lies in the proprietary back-end APIs for XO Swap and XO Pay, not the front-end wallet which they may open-source. XO Pay aims to create a seamless on-ramp experience, and while users currently choose between providers, the goal is a single integrated flow. XO Pay will be cross-sold to existing XO Swap partners.

Kevin Dede asked if the intellectual property developed with CoreWeave is proprietary and inquired about the company's M&A criteria, specifically regarding the focus on high-density builds versus legacy data center assets.

Answer

COO Matt Brown described the relationship with CoreWeave as a close collaboration where any resulting IP is shared and serves as a competitive advantage. CEO Adam Sullivan added that the M&A focus is on new-generation data center capacity to extend their lead in GPU deployments, though they will also evaluate assets for workload diversity.

Kevin Dede pressed for more specific details on the HPC rollout delay, asking to clarify the primary cause between permitting and equipment supply, and what specific equipment was at issue.

Answer

CEO Adam Sullivan clarified that the delay was a result of both supply chain and permitting issues. The need to source different types of equipment to meet timelines complicated the permitting process. He specified the issue was not with GPUs but with a 'plethora' of other items, including electrical equipment and broader design components.

Kevin Dede sought more detail on supply chain constraints for components like generators and switchgears, the company's site acquisition pipeline, and technical specifications for the new Block miners, including cooling methods and facility requirements.

Answer

CEO Adam Sullivan expressed high confidence in the supply chain for 2025 deliveries and noted they are exploring creative solutions like equipment rentals for 2026. He stated the new Block chips will use a new air-cooled design, requiring no significant facility retrofits. On acquisitions, he said the company is successfully finding unique sites by working directly with landowners and utilities, having already evaluated over 15 gigawatts of opportunities.

Kevin Dede of H.C. Wainwright asked about supply chain risks for components like generators, the nature of the new Block miners, the acquisition pipeline, and the deployment timeline for the new chips.

Answer

CEO Adam Sullivan expressed high confidence in the 2025 delivery timeline, stating the supply chain is secured and they are exploring creative solutions like equipment rentals for any 2026 gaps. He clarified the new Block chips will use an air-cooled design, avoiding major facility retrofits. He also noted a robust acquisition pipeline of over 15 GW of evaluated sites and confirmed the H2 2025 Block chip deployment is on schedule.

Kevin Dede of H.C. Wainwright & Co. asked for an update on the terminated Ericsson deal in British Columbia and inquired deeply about the new Captus project, questioning its latency, capital requirements, development partnerships, and potential business model (hosting vs. self-mining). He also asked about the competitiveness of the Captus acquisition process.

Answer

CEO Steven Gutterman explained that Gryphon terminated the original Ericsson agreement but is still in talks to acquire a smaller, more valuable subset of wells. Regarding Captus, he confirmed the site has excellent low-latency fiber connectivity and access to abundant natural gas with on-site carbon sequestration capabilities. Gutterman stated that development will be staged, starting with 136 megawatts, and will involve capital partners to manage costs. He noted significant inbound interest from potential customers and highlighted that the experienced Captus management team, which is joining Gryphon, was a key factor in winning the competitive bid.

Kevin Dede of H.C. Wainwright & Co. asked for details on the miner fleet transition from Coinmint, specifically regarding the timeline, expected hashrate during the move, and the capacity of the new low-cost power site. He also questioned the current fleet's efficiency, sought guidance on modeling production for the current quarter, inquired about the expertise Dan Grigorin from Anchorage Digital brings to the board, and asked about future hiring needs for the HPC initiative.

Answer

CEO Steven Gutterman explained that the announced low-cost power acquisition is a small first step and that the full fleet relocation, to be detailed by year-end, will involve other locations. He stated the current hosting agreement runs through year-end, and an early move would only occur for a significantly better opportunity. CFO Simeon Salzman noted that while their production models have been surpassed by market conditions, the key to profitability is securing a static, low-cost power deal. He affirmed the current S19j Pro fleet remains profitable at recent Bitcoin prices. Gutterman also detailed the strategic value of the Anchorage partnership and Dan Grigorin's deep mining expertise, and confirmed Gryphon plans to hire power and HPC experts as the AI strategy progresses.

Kevin Dede of H.C. Wainwright & Co. inquired about LM Funding's current operational statistics, including the deployment timeline for new miners, the status of Texas site acquisitions, the scope of the LuxOS firmware rollout, and the strategic rationale behind its Bitcoin-collateralized debt.

Answer

CFO Richard Russell and President of U.S. Digital Mining Ryan Duran clarified that the 256 new miners are not yet deployed and will add to the existing 560 petahash hash rate. They expect to add 2 megawatts of capacity at the Oklahoma site for these miners within 90 days. Duran noted that while LOIs were presented for Texas sites, none are currently active. He also confirmed the LuxOS firmware is deployed at their owned Calumet site. Russell detailed the $5 million loan, explaining it's a 2-year, 12% note collateralized by Bitcoin, allowing the company to fund expansion without selling its appreciating crypto assets.

Kevin Dede of H.C. Wainwright & Co. inquired about the company's condo business outlook, the impact of Florida legislation, the strategic priority between Bitcoin mining and the condo segment, and potential M&A activity with other miners.

Answer

Executive Richard Russell explained that while opportunities exist in the condo business due to new laws, legislative timing has delayed urgency. An Unknown Executive added that the primary focus is now on expanding vertical integration in Bitcoin mining by securing low-cost power sites. Regarding M&A, Russell confirmed they are open to discussions with other mining firms but no deals have been finalized.

Kevin Dede asked for more details on the NeuralDisplay technology and its market interest, the potential for a CES demo, supply chain hedging against potential tariffs, clarification on the $75 million order forecast, and an update on the BlueRadios litigation and related expenses.

Answer

CEO Michael Murray described NeuralDisplay as a key innovation for reducing components, power, and weight in AR/VR, noting significant progress under NDAs. He confirmed a CES demo is planned but challenging. Murray highlighted the success of the fab-lite strategy, having moved sensitive DoD work to a new, approved partner, mitigating China-related risks. He affirmed the $75 million order forecast for the year, up from $55 million, driven by expected Q4 orders for thermal weapon sights and helmet programs. CFO Richard Sneider detailed that Q3 legal fees were $1.5 million and are expected to normalize to a much lower quarterly run-rate post-trial.

Kevin Dede of H.C. Wainwright & Co. questioned the specifics of WISeKey's corporate restructuring, the launch schedule and customer pipeline for the WISeSaT subsidiary, and the drivers behind management's confidence in a revenue recovery for the SEALSQ semiconductor business.

Answer

CEO Carlos Moreira clarified that the restructuring involves creating autonomous subsidiaries like SEALCOIN and WISeSaT to attract targeted investment without diluting WISeKey, which remains a majority shareholder. He confirmed a minor SpaceX launch delay for WISeSaT but highlighted a growing pipeline with port authorities and logistics firms. For SEALSQ, Moreira attributed the H1 slowdown to temporary customer inventory issues and expressed confidence in a 2025 recovery, driven by a return to normal order patterns and the launch of its new post-quantum TPM chip, targeting 10% of a 500 million unit annual market.

Kevin Dede of H.C. Wainwright & Co. asked about the exclusivity of the new North American licensing agreement, the persistence of lower residual rates in Europe, the company's confidence in its revised 2024 revenue guidance, and the progress of the Visa Direct program.

Answer

CEO Fredi Nisan clarified that the licensing agreement is currently exclusive to their partner for the retail and e-commerce space. CFO George Oliva explained that Europe's lower blended residual rate of about 1% is a function of the mix between lower-rate banking services and acquiring, and this is expected to continue. Regarding guidance, Oliva noted that hitting the $65-$70 million target depends on a significant Q4 ramp-up from their pipeline, but emphasized that strong momentum is building for 2025 regardless. Nisan added that the Visa Direct rollout is proceeding at Visa's pace as it's a new product, with strong demand already visible in key markets.

The analyst asked a series of questions across two turns, seeking clarification on several key areas. He inquired about the timing and financial impact of the new Visa Direct integration, the specific reasons for the Q1 revenue slowdown in North America, distinguishing between a technology transition and regulatory issues. He also questioned the decline in revenue as a percentage of transaction volume. In his second turn, he asked for a detailed explanation of the company's various service offerings, including Banking-as-a-Service, RYVYL Block, and Coyni, and how they interrelate. Finally, he asked about the company's strategy for international expansion beyond Europe and the status of pursuing other closed-loop ecosystem opportunities similar to American Samoa.

Answer

The executives explained that the Visa Direct integration was completed in Q2, after the March quarter, and is expected to contribute to revenue going forward. The Q1 slowdown was attributed to a combination of technology and compliance changes in high-risk US verticals, involving a transition from hardware terminals to a more compliant mobile app-based system, which takes time to rebuild the user base. The decline in revenue as a percentage of volume was due to a business mix shift, with faster growth in the lower-margin but profitable European banking-as-a-service segment. They clarified that RYVYL Block is their Blockchain-as-a-Service infrastructure product, while Coyni is a front-end payment application that utilizes this backbone. Regarding expansion, the current focus remains on the European market as it represents the most efficient growth opportunity. Pursuing other closed-loop systems is a lower priority while the company focuses on backfilling the US revenue and capitalizing on European growth.

Kevin Dede of H.C. Wainwright asked for clarification on the Q1 North American slowdown, questioning the impact of regulatory issues versus the tech transition to mobile. He also inquired about the timing of the Visa Direct launch, the decline in revenue as a percentage of transaction volume, the strategic positioning of products like Coyni and RYVYL Block, and the company's international expansion plans beyond Europe and American Samoa.

Answer

COO Min Wei, CEO Fredi Nisan, CFO George Oliva, and Chairman Ben Errez collectively explained that the North American slowdown was driven by a combination of partner compliance requirements and a strategic shift to mobile app processing, which will take time to ramp. They clarified the revenue rate decline was due to a mix shift towards lower-rate but high-volume European banking-as-a-service. Executives detailed that Visa Direct went live in Q2, RYVYL Block is their Blockchain-as-a-Service offering, and Coyni is the front-end application. They confirmed the current international focus remains on Europe due to efficiency, while opportunities like American Samoa are maintained but not the immediate priority.

Asked for a detailed update on the carbon capture project's economics and timeline, including potential revenue recognition from the Puro registry. Also inquired about the new partnership with Champion Energy, the operational strategy for the power plants, and plans for expansion to other sites.

Answer

The carbon capture project is progressing better than expected with higher efficiency and lower costs, but specific financial projections will be provided in a quarter or two. Once registered on the Puro registry, they can sell carbon credits on a forward basis. The Champion Energy partnership will significantly lower costs when importing power. The plan is to run Scrubgrass as a peaker and Panther Creek as a baseload plant. The carbon capture focus is on Scrubgrass first, then Panther Creek.

Asked for details on the performance of the newly deployed ePIC BlockMiners.

Answer

The ePIC miners are performing better than expected, averaging 114 terahash per unit and representing about 11% of total hashrate capacity. Their efficiency is on par with S19J Pros, uptime is outstanding in Quebec, and the installation was completed very quickly within 48 hours of arrival.

Kevin Dede from H.C. Wainwright asked for details on the expected mix between self-mining and hosting for future capacity, the strategy behind selling the Texas facility, and how the company balances energy sales versus mining. He also inquired about the requirements for hosting partners and the potential for using immersion cooling.

Answer

CEO James Manning explained that the self-mining/hosting mix is optimized for profitability and risk. The Texas sale was a strategic move to focus on the Pennsylvania/Ohio region for its competitive power and favorable climate. Manning stated that the choice between energy sales and mining is a dynamic decision to maximize gross profit. He added that hosting contracts are typically cost-plus, aligning partner interests, and that immersion cooling is not currently economical for their climate.

Kevin Dede of H.C. Wainwright asked for details on the capital expenditure per megawatt for the Sharon facility, the number of new miners required to reach the 4 exahash self-mining target, the strategic plan for the Texas asset, and an update on the company's post-quarter-end cash and debt position, including collateral specifics.

Answer

COO Liam Wilson stated the target CapEx for the Sharon site is $250,000 per megawatt. CEO James Manning explained that Mawson would need to acquire approximately 2 to 2.5 exahash of new miners during 2023 to meet its goals. Manning also classified the Texas asset as non-core, with the company considering a sale to concentrate on its Pennsylvania operations. Regarding the balance sheet, Principal Accounting Officer Ariel Sivikofsky confirmed the receipt of $20.6 million in cash post-quarter end, and Manning detailed the company's two main recourse debt facilities, noting that pay-downs had been made.

Kevin Dede of H.C. Wainwright asked for specifics on hosting customers like Celsius and Foundry, the scope of the demand response program, details on the Texas deployment partnership, the machine specifications used for power-to-exahash conversions, and the company's strategy for immersion cooling.

Answer

James Manning, Founder and CEO, declined to break down hosting contracts by customer but confirmed that customers are performing as expected. He stated the demand response program is active in Pennsylvania and Australia. The Texas partnership with Texas Pacific Land Corporation allows for both self-mining and hosting with low CapEx. For conversions, he noted they use a mix of MicroBT, Canaan, and Bitmain units, assuming around 3,400 watts and 90-100 terahash output. Finally, he mentioned they are evaluating immersion cooling for the Texas build-out, likely using a proprietary design.

Kevin Dede from H.C. Wainwright inquired about the company's product line strategy and innovation pipeline, questioning if the new focus on cost-cutting would overshadow top-line growth. He specifically requested details on the FreshCap product rollout and quantitative targets for co-packer and store count expansion.

Answer

President & CEO Frank Lazaran affirmed that innovation remains a priority alongside the new focus on profitability, citing the phased launch of their sports drink. Executive Director of Sales & Operations Frank Chessman detailed strong retailer reception for the new FreshCap product, plans for new club packs, and set a target to add 15,000 new stores and expand SKUs in over 20,000 existing locations in the next fiscal year.