Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Successfully mined 44.1 Bitcoins during the quarter, valued at approximately $2.9 million.
- Several expensive hosting contracts expired, allowing relocation to more cost-effective mining sites.
- Entered into a letter of intent to acquire a mining site in Texas with significant expansion potential.
- Partnered with Arthur Mining to establish a new 15 megawatt hosting facility near Oklahoma City.
- Secured a $5 million nonconvertible loan to acquire additional mining capabilities.
Negative Points
- Total revenue for the second quarter of 2024 decreased by $184,000 compared to the same period last year.
- Operating expenses rose to $7.8 million from $6.4 million year over year.
- Reported a net loss attributable to shareholders of approximately $6.1 million.
- Core EBITDA loss increased to $2.2 million in Q2 2024 from $0.1 million in Q2 2023.
- Digital mining revenue was relatively flat at $2.9 million in the second quarter of 2024 versus $3 million in Q2 2023.
Q & A Highlights
Q: Congrats on the quarter, Bruce and Rick. Can you help us get a better read on Texas and Oklahoma? Just in terms of the buildout, do you plan on just dropping containers there or do you expect to have a larger buildout? Also, what are you thinking about in terms of power transformers needed at both these sites?
A: Thanks, Michael. Texas and Oklahoma are two different places. Both sites will operate using containers. Texas will be emerging from containers right now, while the Oklahoma site is using containers. Texas has new emerging containers and some older ones that are active. We will buy more emerging containers to fill out the site. There are transformers on the ground in Texas and Oklahoma, but additional costs for buildout will be needed.
Q: Now in terms of the potential for AI or HPC hosting, what does our connectivity to these sites offer in terms of fiber connectivity and water sources?
A: We have not priced or valued the sites for HPC uses. Our focus is on securing the power—72 megawatts in Texas and additional 60 megawatts in Oklahoma. HPC is not our business yet.
Q: In Oklahoma, it's going to be at cost for 10 months for the 3,000 miners there. After the 10 months, have you discussed what that looks like or what a potential deal would be?
A: It's in the agreement that it goes to market price after the 10 months. We loaned them money on a secured basis to build out the site. They mine for us at cost for the first 10 months, and after that, we plan to be elsewhere. They will rent our space out at market rates to pay off the loan.
Q: Can you remind us about the new machines, the S21s, and where they are located?
A: The S21s arrived in April and are installed at the core location in Kentucky. We have about 800 S21s combined there.
Q: For third-party hosting, is everything with Core now, or do you still have some with Giga?
A: We transitioned out of Giga and moved those miners to a warehouse. We are looking to move some of those to the Texas site once it's ready. Core hosting is at the Arthur site.
Q: With the $5 million loan, is this going to be mostly for infrastructure or purchasing new machines?
A: Mostly for land and whatever infrastructure it takes, plus whatever machines the infrastructure will support.
Q: How long did it take to transition the 3,000 miners to Oklahoma?
A: It took about 45 days to transition and set up the miners. They are all installed and operational now.
Q: What is the timeline for the buildout in Texas and Oklahoma?
A: The Texas site has new emerging containers and older ones that are active. We will buy more emerging containers to fill out the site. Oklahoma is using containers and has a 50-megawatt capacity fully built out.
Q: What are the future plans for LM Funding's Bitcoin mining operations?
A: We are focused on enhancing our Bitcoin mining operations and securing cost-effective locations to power our machines. We are excited about our initiatives in Texas and Oklahoma and believe these efforts will drive increased shareholder value.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
