Bitdeer Technologies Group Price & Performance (BTDR)

Thank you, operator, and good morning, everyone. Welcome to Big Deer's fourth quarter and Full Year twenty twenty four Earnings conference call. Joining me today are Jianwui, Chairman and CEO [indiscernible] Chief Business Officer Harris Bacchette, Chief Strategy Officer and Jeff Leberg, Head of Capital Markets and Strategic Initiatives. Harris will begin today by providing a high level overview of Bitfir's fourth quarter and full year twenty twenty four results. And then cover the company's strategy, and a detailed business update. After that, Jeff will cover Goodyear's fourth quarter financial results in more detail, and then we will open the call for questions. To accompany today's earnings call, we have provided a supplemental investor presentation This presentation can be found on Fifth Year's Investor Relations website under webcasts and presentations. Before management begins their formal remarks, we would like to remind everyone that during today's call, we may make certain forward looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties. Which may cause actual results to differ materially. For a more complete discussion on forward looking statements, and the risks and uncertainties related to BitShares business please refer to its filings with the SEC.

Further, in addition to discussing results that are calculated in accordance with international financial reporting standards, or IFRS, We will also make references to certain non IFRS financial measures such as adjusted EBITDA and adjusted profit. For more detailed information on non IFRS financial measures please refer to our earnings release that was published earlier today. Which can be found on BitShares Investor Relations website. Thank you. I will now turn the call over to Harris. Harris? Thank you, Yujia. And good day, everyone. Welcome to our Q4 and Full Year twenty twenty four Earnings Conference Call. I'm excited to share the many developments happening at Bitdeer and walk you through the progress we've made since last quarter. Before diving in, I'd like to briefly highlight our Q4 financial results. For which Jeff will provide more details in a few minutes. Starting on Slide three, For Q4 twenty twenty four, Total revenue was $69,000,000 Gross profit was $5,100,000 and adjusted EBITDA was negative $3,800,000 This lower performance compared to Q4 twenty twenty three was primarily driven by the impact of the April 2024 halving. Increased global network cash rate, lower hosting and cloud mining revenue, and higher R and D costs.

These negative impacts were partially offset [indiscernible] year over year average self mining hash rate and higher Bitcoin prices. Over the last year, we made a deliberate decision to prioritize resources on the development of our own ASIC technology. This limited our hash rate growth but gives us massive advantages going forward that differentiates our business from the rest of the sector. As our mining machines become available in volume in the coming months, we will be able to rapidly increase our self mining hash rate at a significant cost advantage. As well as sell our machines to external customers to begin penetrating the $4,000,000,000 to $5,000,000,000 annual ASIC market. A core pillar of our strategy is to develop internal technologies and capabilities driven by our belief that this is the best way to maximize long term shareholder value. To secure long term success, we are committed to building a fully vertically integrated business This includes developing our own power generation assets, globally diversified data centers, and leading edge mining hardware. As seen on Slide five of our supplemental presentation, and in pursuit of our vertical integration initiative, we successfully acquired a 19 acre site that is fully permitted for construction of a 101 megawatt gas fired power plant This project is near Fox Creek, Alberta.

And was acquired earlier this month for $21,700,000 in cash. It also includes approval for a 99 megawatt grid interconnection with Alberta electric system operator. We plan to develop and construct the power plant in in partnership with a leading engineering procurement and construction firm for the completion and energization expected by Q4 twenty twenty six. In parallel to the gas fired generator, we plan to develop a 99 megawatt data center for Bitcoin mining as the first phase of this site's development. We estimate that total capital expenditure for constructing the gas fired power plant to be approximately $90,000,000 with an additional $30,000,000 allocated for electrical and data center infrastructure. Upon completion, we intend to deploy approximately 9x a hash of our Seal Miner A3 mining machines which are expected to deliver industry leading efficiency of 11 to 12 joules per terahash. We estimate energy production costs at this gas fired power plant to range between $20 to $25 per megawatt hour. Based on current gas prices. Additionally, as part of the acquisition, we plan to implement a carbon utilization system that captures CO2 making this project a net zero carbon producer. This initiative is expected to help offset Canadian carbon tax obligations while also creating potential future revenue opportunities through the sale of carbon credits.

Further, as part of our energy optimization strategy we plan to curtail and sell power back to the Alberta grid during periods of peak demand. This approach is expected to enhance cost efficiency while contributing to grid stability with minimal impact on Bitcoin production. We are extremely excited about this acquisition This newly acquired site and power generation project represents a big step for Bitir. Positioning us as the world's first fully vertically integrated Bitcoin miner at scale. With this development, we are on a path to achieve one of the lowest Bitcoin mining costs in the industry. In terms of our ASIC business, which is highlighted on Slide six through eight of our supplemental presentation. We continue to execute on our advanced chip roadmap positioning ourselves for a transformative 2025. Owning and deploying our own mining ASICs is an integral part of our full vertical integration strategy. It will provide us distinct advantages such as a lower cost structure, enhanced capital efficiency, and a dramatically improved supply chain compared to the broader industry. In addition, commercializing Seal Miner ASICs allows us to diversify our revenue streams into the rapidly growing ASIC market. Where we see strong demand for alternative suppliers of ASIC solutions.

I will now provide a detailed update on our [indiscernible] Starting with Steel Miner A1, To date, we have energized 0.4 exa hash of our Seal Miner A1 minuteers. And they have demonstrated solid performance. The mass production of the remaining 3.3 exahash remains on schedule and is expected to be completed in March 2025. For Steel Miner A2, this miner represents a significant advancement in our technology roadmap. Leveraging our proprietary Seal O2 chip. In Q4, we commenced mass production at TSMC to deliver approximately 35 exahash of Seal Miner A2s by October 2025. This represents a delay of approximately one month compared to our original expectation due to a 6.4 magnitude earthquake that struck Taiwan on January 21, 2025. The Seal Miner A2 is our first commercial miner available for sale to external customers. So far, we have allocated seven exahash of the current 35 exahash for external sale. Initial customer demand has been extremely strong with pre orders for the seven Exahash being oversubscribed by a factor of six. We have already received 20% of the total price as down payments on all seven Exahash. Volume shipments to these customers will commence in March 2025. The remaining 28 exahash of A2 capacity It's currently intended to be used for our own self mining.

The first batch of air cooled machines have been delivered to our mining data center for testing and are running stably. Building on the success of A2, our R and D efforts for Seal Miner A3 are progressing smoothly. This next generation model will feature the CLO3 chip which is expected to deliver industry leading energy efficiency of 10 joules per terahash at the chip level. Finished wafers from the initial tape out are expected in March 2025 with production readiness targeted for later this year. Achieving 10 joules per terahash chip efficiency would mark a major milestone for the industry. Positioning Seal Miner A3 as the most advanced and energy efficient ASIC on the market. As energy efficiency remains the most important single metric influencing buying decisions, We believe having the most efficient ASIC is the key factor to winning market share. Unlike other industries, such as smartphones, where switching costs include significant ecosystem frictions Bitcoin Mining ATX operate in a highly fluid market We are transitioning to alternate machines creates little or no friction. In this space, the most efficient and reliable machines With that in mind, we are eagerly awaiting the return of CLO3 sample wafers scheduled for March.

Looking ahead, to the second half of this year, our Seal Mine A four project is a testament to our commitment to maintaining technological leadership and pushing past perceived limitations of ASIC design. The CLO4 uses a revolutionary new [indiscernible] that significantly enhances energy efficiency and is projected to have a chip level energy efficiency of five joules per terahash. Tape out is planned for Q3 twenty twenty five. We believe Seal Miner A four along with our third generation chip, will position Bit Gear as the leading supplier of the world's most energy efficient mining machines significantly strengthening our market position and unlocking substantial value for our customers and shareholders. As we look to the remainder of 2025, we are fully committed to executing a successful entry into the multibillion dollar ASIC market, while also rapidly ramping our self mining hashrate. On Slide eight of our supplemental investor presentation, we have laid out our expectations for self mining hash rate into Q4 of this year. Given the significant amount of power capacity we have coming online, our plan is to initially prioritize our current ASIC production towards self mining. We plan to energize the remaining Seal Miner A1s and 28 ex a hash of Seal Miner A2s on top of our existing 8.7 exahash of self mining hash rate, as of January 31, 2025.

Therefore, upon deployment of a combined 31.3 Exahash, of Steel Miner A1 and A2 machines. We expect our total self mining hash rate to be approximately 40 exahash. We expect to be able to deliver this with machines fully racked and energized by Q4 twenty twenty five. Please note that this forecast does not include anticipated additional wafer allocations for CLO2 or for CLO3. Depending on the exact manufacturing schedule, these anticipated additional wafer allocations could increase our self mining hash rate well above the 40x of hash guidance for Q4 twenty twenty five. In addition, I'd like to address the recently published U. S. Department of Commerce Bureau of Industry and Security, ruling regarding Advanced Computing Integrated Circuit. Based on our preliminary review, we do not expect that the application of the BIS rules will have any impact on the delivery of sealed chips. Has the outsourced semiconductor assembly and test OSAT, companies for Seal ships are approved OSAT companies under BIS regulations. Next, I'd like to talk about our energy infrastructure and pipeline that's highlighted on Slides nine and ten of our supplemental investor presentation. We have secured one of the largest globally diversified with over 2.6 gigawatts of total power capacity.

About one gigawatt is scheduled to be newly energized over the course of 2025. This massive power portfolio allows us to deploy our field miner machines for self mining and also capitalize on the significant demand for HPC and AI data center power. Based on a third party feasibility study, many of our sites are suitable for HPC and AI data centers. In particular, our Clarington, Ohio site is a strong contender given its near term access to power scale and fiber and water resources. We are actively working with leading data center developers on long term partnerships for selected sites. The shortage of reliable power for AI data centers is a critical challenge for the industry and we believe Bitdeer can play a significant role We look forward to providing an update to our shareholders in the near future. In summary, we made significant strides across all of our strategic initiatives to close out 2024. And we couldn't be more proud of the entire Bitdeer team. We expect 2025 to be a pivotal year as our efforts start to bear fruit. I'll now turn it over to Jeff Laverge, our Head of Capital Markets and Strategic Initiatives to go over financial results for the quarter.

Thank you, Harris. Before I go over Fitbitures fourth quarter and full year 2024 results, I'd like to remind everyone that all figures I refer to today are in U. S. Dollars and that all comparisons are on a year over year basis unless stated otherwise.

I would like to also note that these results are unaudited preliminary we are working to file our 2024 annual report [indiscernible] with the SEC, by the March 2025. Starting with Q4 results, Consolidated revenue was $69,000,000 versus $114,800,000 Self mining revenue was $41,500,000 down 11.5% primarily due to impact from the April 2024 having and higher global network cash rate. This was partially offset by an increase in our average self mining hash rate to 8.4 eggs a hash from seven ex a hash and higher year over year Bitcoin prices.

Cloud Hash rate revenue was $2,300,000 versus $16,200,000 This decline was primarily due to long term cloud hash rate contracts rolling off and our decision to reallocate nearly all of this hash rate to our self mining operations over the course of 2024. General hosting revenue was $8,500,000 versus $25,200,000 Membership hosting revenue was $12,400,000 versus $23,400,000 The decrease in hosting revenue was mainly due to the expiration of certain hosting contracts as well as the removal of older and less efficient machines by other hosting customers following the having in April 2024, Compared to Q3 twenty twenty four, total hosting revenue and gross profit improved by 7.2106.7% respectively due to higher margins of profit sharing in Q4 Total gross profit for the quarter was $5,100,000 versus $27,000,000 and gross margin was 7.4% versus 23.5%. The decrease in our gross margin was primarily a result of April 2024 halving and the expiration of contracts from our high margin Cloud Hashrate business.

Going forward, we begin to rapidly grow our hash rate with new much more efficient CO miners, we expect our margins to improve significantly assuming all else equal in terms of Bitcoin price network difficulty. Total operating expenses for the quarter were $42,500,000 versus $27,400,000 The increase was primarily driven by higher engineering staff and other costs related to the R and D of our ASICs roadmap and non cash amortization expenses of intangible assets related to the acquisition of FreeChain. Sequentially versus Q3 twenty twenty four, total operating expenses decreased by approximately 1%. This is primarily due to no takeout costs in Q4 which was almost entirely offset by increases in the non cash amortization expense to the acquisition of FreeChain, year end bonuses and consulting expenses capital markets activities compliance activities. Other net gainloss for the quarter was a net loss of $479,800,000 versus a net gain of $1,100,000 due to a $55,800,000 non cash derivative loss on the Tether warrants, and a $413,700,000 non cash derivative loss on the convertible notes issued in August and November. This loss was caused by the significant increase in our stock price during the quarter. IFRS net loss for the quarter was $531,900,000.0 versus $5,000,000 Adjusted profit and adjusted EBITDA for the quarter was negative $36,900,000 and $3,800,000 respectively.

This quarter's losses were primarily due to the year over year revenue declines in our cloud hash rate and hosting businesses and lower gross profit margins in our self mining business as a result of the April 2024 having and higher R and D expenses as described previously. Quickly touching on our full year 2024 results. Revenue was $349,800,000 Gross profit was $66,400,000 and adjusted EBITDA was $39,400,000 A detailed breakdown of our full year results by business line can be found in our earnings press release that was issued today. In terms of Q4 twenty twenty four, ending balance sheet, there were several notable items that I would like to highlight. Prepayments and other assets were $310,200,000 up from $97,100,000 This change was primarily driven by our advanced payments to TSMC for our COO2 mass production. Inventories were $64,900,000 up from essentially zero This mainly included wafers, chips, and finished steel miner inventory. Intangible assets of $83,200,000 and goodwill of $35,800,000 are mainly from our 2024 acquisition of Norway and FreeChain. In liabilities, which relates to the Tethr warrants in August and November convertible senior notes. These are non cash fair value adjustments driven by the significant increase in our stock price do not impact our liquidity or operations.

Under IFRS, certain derivative instruments such as warrants and convertible debt are required to be revalued at fair market value each reporting period. As our stock price increases, the fair value of these instruments rise resulting in a higher reported liability. The recorded liability will ultimately be netted at settlement either upon conversion to equity or expiration of the underlying securities. And do not represent an actual cash outflows.

With respect to liquidity, we ended the year in a strong financial position. $476,300,000 in cash and cash equivalents $77,500,000 in cryptocurrencies and $208,100,000 in borrowings, excluding derivatives. In Q4, began to hold a portion of our Bitcoin mine and we anticipate to continue this strategy for the foreseeable future at management's discretion. Please note our P and L and adjusted EBITDA does not include any fair value gains or losses related to cryptocurrencies on our balance sheet due to IFRS accounting rules that require cryptocurrencies holdings to be accounted for on a cost basis net of impairments rather than fair value basis. Moving on to our cash flow statement. Q4 twenty twenty four cash used in operations was $325,100,000 compared to $67,100,000 This material change was primarily driven by payments of $190,600,000 to TSMC for CO2 wafers which represent more than half of the required wafers for the previously announced 35 exit hash. And payments of $52,800,000 to TSMC for takeout of CLO3 including initial risk wafers. Please note that while the CLO3 tape out costs were paid in Q4 twenty twenty four, it will be expensed on the Q1 twenty twenty five P and L. Further, I think it is important to highlight that our cash inflow from the sale of bitcoin related to our bitcoin mining business are classified in the investing section of our cash flow statement.

Net cash used in investing activities was $10,000,000 including $48,400,000 of capital expenditure for infrastructure construction and mining rigs, offset by $38,800,000 of proceeds from the sale of cryptocurrencies received from our principal business. Net cash generated from financing activities for the quarter was $522,800,000 and was primarily related to the proceeds from our convertible note issued in November and our ATM program. In terms of our 2025 capital expenditures, we anticipate CapEx including Fox Creek, Alberta, to be in the range of $3.40 to $370,000,000 and could be fully funded by the existing balance sheet. It should be noted that this infrastructure spend assumes the sites are developed for Bitcoin mining does not include CapEx for CO miners used for self mining. Finally, I'd like to provide some context on the $1,000,000,000 ATM shelf registration that we filed on January 3, 2025. I want to emphasize that we will continue to utilize our ATM in a disciplined manner that we believe will add value to existing shareholders. Our management team's ownership in the company is among the highest in the industry. Thus aligning our interests On Slide 12 of our supplemental investor presentation, you can see our ATM usage for 2024 and January of twenty twenty five.

Notably, we did not begin meaningfully utilizing our ATM until the fourth quarter of twenty twenty four. When our stock price had risen significantly. As a result, our total ATM usage 2024 plus January 2025 accounted for only 14.4% of our shares outstanding as of January 31, 2025.

The primary objective of this ATM is to enhance balance sheet flexibility and provide us with the necessary liquidity to secure additional wafer allocations from TSMC typically require large advance payments. This flexibility will enable us to significantly scale C O Miner production to meet growing demand and position us to capture significant market share in the multibillion dollar basic market. Thank you, everyone. That concludes the prepared remarks sections of our earnings call. Operator, please open the call for questions.

Our first question coming from the line of Mike Collins with H. C. Wainwright. Your line is now open.

Hi, good morning guys. Great update today and thank you for taking my questions. We're going to be focused on the mining rigs here. So there have been several media reports out there that suggest some U. S. Based miners are experiencing delays in receiving their ASICs from your biggest competitor amid the trade tension [indiscernible] and if this has changed the demand for your sale miners?

So I'll take a quick try that.

We are just watching the news the same as you for in terms of what's happening with other folks, miners.

We have not direct experience about ourselves. So, I don't know if, if you want to elaborate on that.

Well, I think that this issue according to the recent news [indiscernible] quite good. And about industrial industrial associations efforts to communicate with the [indiscernible] I think we consider this issue as well. Because our mining rig we'll need to explore the market over The United States.

Hopefully, that this issue can be resolved quite smoothly.

Got it. Thanks for the color there. And you're staying on the proprietary mining rigs here. So how should we think about manufacturing capacity you have available to produce your next batch of A2s in the next gen A3 rig? I know you're shipping 35x of hash of the A2s this year. Just trying to think through total capacity to produce your net next batch of rigs there?

We do expect the capacity to continue to go up. TSMC is really a trusted and very good partner for us on this. But we don't really pre announce any of those. And so as we get more allocation from TSMC, we will make those announcements in the future. We're optimistic and our relationship with TSMC remains strong.

Got it. Helpful. And just one more to slip in. How do we think about the revenue recognition of ASIC sales? I know you received a 20% payment for the full 7x of Hash, but how do the payments progress through the stages of the delivery?

Sure. So I'll take that. So revenue is typically going to be recognized upon delivery of the ASICs.

So the down payments right now are held on just on the balance sheet. And will be recognized once they're fully delivered to the customer.

Great.

Thank you for taking my questions.

Thank you. Our next question coming from the line of Nick Chiles with B. Riley. Your line is now open. This is Feather Chabalin asking question on behalf of Nick Giles. I wanted to touch on CapEx outlook for 2025.

Jeff, you mentioned some number, but could you outline the allocation just kind of if you want if you may specify the sites involved for Visa, Visa part and intended users of this funds. So what is the breakdown between self mining CapEx and say HPC or AI spending? Thank you.

Sure. So the CapEx numbers that we've discussed call are specifically assuming the sites are used for Bitcoin mining. And that reflects the just the infrastructure costs of those. So that infrastructure you're going to see change if we were to pivot it to example, HPC, AI it also does not include the cost of steel miners that we would therefore for self mining. So of the the numbers that we referenced earlier, those will cover our expansions in Rockdale, Texas, hydro expansion there. Build out in Bougainville, build out in Bhutan, Madeline, Ohio, and clearly the Phase one of Clarington, Ohio and would also cover the The generation portion of the new one facility in Alberta. And again, assumes all those will be going to Bitcoin mining Obviously, if one of them were to be pivoted to something else, that would change.

Got it. Thank you for that. And then the then on Clarington side, What will be ready by developed line date in 3Q twenty twenty five, so this year, And the same question from Mestland side. Just infrastructure wise, what will be done by this? So the Clarion site will the Phase one of two six megawatts is expected to be available in 2024. [indiscernible] Same with Maslin, Ohio, the full two twenty one megawatts.

Should be available there as well. [indiscernible] just going to be energized or substation in place or [indiscernible] what about the shelf for data center?

So that would just cover the infrastructure the power infrastructure. So again, we are under construction in Maslin, Ohio. That will be ready that is targeted for the second half of this year. Again, if we continue down with Bitcoin mining, we should have that completed by the end of the year. And the Clarion Substitution, we are as currently still in the development stage right now. So we would expect construction on the substation this year.

Got it. Thank you for color. [indiscernible] [indiscernible] Thank you. Our next question coming from the line of Darren Aftahi from with Broad Capital. Your line is now open.

Hey, good morning. Good evening. Thanks for taking my questions. I'm just kind of curious with the full verticalization with the acquisition in Alberta.

How are you guys kind of strategically thinking about Bitcoin mining for sites you currently have or you're maybe I guess the question is in the vein of full verticalization of behind the mirror versus not And then my second question, how do we kind of think about Your strategic decisions about self mining versus selling those rigs to third parties, just given Harris your comments about [indiscernible] oversubscription. Thanks.

Okay. I think I can take a first crack at that. So With regards to our existing sites, we haven't changed our position there. We're still very bullish on big [indiscernible] And for the most part, you can assume that we will continue allocating Bitcoin mining resources to our existing sites. As we pivot any one of those sites, we'll we'll definitely announce that. But it hasn't really the acquisition of the site in Canada or Alberta has not really changed our thoughts on the other sides.

The allocation between selling the machines versus using them Until we satisfied most of our own spare capacity, we will have a strong preference for using the machines for self mining. But as our capacity fills up and especially with the A3 we will lean further and further towards sales versus self usage. So you can expect that transition to happen sometime 26 per probably where we'll have more emphasis on sales than on self usage. But for now, we're focusing very much on using the A2s in particular for our Self mining. Helpful.

Thank you.

Thank you. Our next question coming from the line of Kevin Cassidy with Rosenblatt Securities. Your line is now open.

Thanks. Thank you for taking my question. My question also is around the steel mining You're going to start shipping in March for the A2. How long will it take your customers to qualify it and say that they'll have accepted it and What's the next phase that we're not So, it typically doesn't take very long for mining rig to be qualified, but maybe I'll ask either Matt or Gihan to who are closer to some of these customers that are qualifying if they have a timeframe in mind. I think the time we committed has already included the time to do everything.

Including the qualification We committed the time we're shipping out the mining rig Okay. Maybe as a follow-up, Yes, I was just wondering as you go to the eighth if that's going to be the larger model for sales, is that a quicker qualification From verification of the chip to mass production, [indiscernible] six months I think this is quite fast speed in the industry to bring the chip into gas production.

Okay, great. And maybe just one other question. How many customers Have you will you be shipping to? The A2? So I think we have said in earlier earnings call that it was more than 60 customers.

Okay.

Thank you.

Our next question coming from the line of Brian Kreindslinger with Alliance Global Partners. Your line is now open.

Great. Thanks so much for taking my questions. As it relates to external sales for Cielminer, how are you thinking about the short term pricing strategy and medium term given the efficiency And then can you call out the maybe total expected tape out cost by quarters, if you know them, roughly for 2025?

Okay. So our existing pricing for the A2s we announced earlier was $15 per terahash. And we think that's a very competitive price based on our being a new entrant into the market. And just wanting to be get a large market presence initially. So I think as we [indiscernible] A3s and our energy efficiency is leading of any other vendor. We have much more flexibility in our pricing and we expect that our pricing will reflect the energy efficiency of the machine. So you can expect to see that And then what was the second part of your question? It was just the tape out cost. I think you mentioned the first quarter is when you'll see some just maybe for modeling purposes, you can kind of discuss what you are So the tape out costs for A2 and A3 are already paid for. So those have obviously already been paid.

The tape out costs looking forward are primarily for the A-four.

And so that should be in line with A2 and A3 costs. We will incur that most likely in Q3. So there may be other small Kibat costs for other things, but I don't think that's going to be as meaningful as what we've already incurred for the A2 and A3.

Great. My second question sorry for the A3, we tape it out to type of designs simultaneously. So for the A3, R and D, maybe extra spending expenditure on the design and R and D cost I'm not sure whether this has been delivered to the other or not, [indiscernible] On the expenses.

Got it.

Yes, just to emphasize that A3 we had different competing designs and so the tape out costs for the A3 were almost double because of that.

Makes sense. And then my other question I guess a larger HPCAI question that I'm sure investors are thinking about.

Since the Deepseek moment, if you will, Obviously, suggesting any way that they were able to perform with unusually low cost and power then we've seen some of the hyperscalers kind of have some uncertainty about their plans. Have you seen any changes in conversations about HPCAI opportunities or has there been zero change?

So we have after each of those events queried our connections and the people that we're discussing partnerships with and we have not seen any pullback from the people that we're speaking with.

Great.

Thank you so much.

Thank you. Our next question coming from the line of Mike Grondahl with Northland Capital Markets. Your line is now open.

Hey, guys. Two questions. At a high level, how would you describe the demand environment for HP CAI And specifically, how many megawatts of your power are you offering And then Post the 35x hash for A2, do you have a rough season when we should expect the next batch or when you'll get some [indiscernible] as to when you'll get another batch?

I'll take the first part of that.

For how many megawatts we're looking at for HPCAI, it's More about whether which sites we're looking at and once a site is allocated to HPCAI, it's likely to be the entire site really looking at is our Clarington, Ohio site. So you can the size of that site, the initial phase is two sixty six megawatts total is two sixty six plus three zero four, so five seventy megawatts.

Those are still in discussion [indiscernible] it's really site by site basis rather than partitioning of the megawatts.

I think your next question was about the next allocation of A2s or A3s. Is that correct?

When do you I mean is it a spring, summer? I know you don't know exact timing, but I don't know how you're thinking about it at a high level.

So we have said that we could have 40x a hash by the end of this year. And optimistic that that might be increased. So we expect that there may be more allocation that hits even this year in order to increase that. So [indiscernible] said earlier, we really don't want to pre announce anything until we have it securely in hand.

And Mike, just to clarify that 48% of Hash includes the 35% and the 3.5 or four or the A1s that we already have allocated That allocation is already given to us and it is under production right now.

Got it. Okay. Thank you.

Thank you. Our next question coming from the line of Greg Lewis with BTIG. Your line is Hey, thank you, and good morning and good evening everybody. It's I just was hoping to talk a little bit more about decision to go vertically integrated with the acquisition in Alberta. I guess as you think about building out your your Bitcoin mining footprint and maybe your HPC footprint, Should we kind of look at this as kind of a one off or is this something where this was the first one that kind of met all met all of our wants and needs and but don't be surprised if we're back in the market acquiring more and for term?

When we look at Kalian site, what attracts us is that this site is not only about the 100 megawatt, but quite sure right now we can build. We already got the license almost everything ready. We just need to spend money in time and the team on the site to construction it. But we are also very passionate about the potential future to build gigawatt level of power plants and data center or mining facility infrastructures on that side because that side got lots of gas productions that right now have low ready pipe to sell to outside the world. So potentially we can expand that to really large operations. Our strategy will like a very large like a giga mining operation or [indiscernible] to gain economic upscale So I think we will be quite careful to expand into new sites, but I think we will always be interested in looking for new sites to develop Okay, great. Super helpful. Thank go ahead. Greg, I would just add to that too. But what's unique about this side also is that not only do we have the ability to produce behind the meter for ourselves, but it also comes with the interconnection to the grid.

Which is increasingly more difficult to define So that gives us the ability to sell power back to the grid balance the Alberta grid and potentially reduce our power costs even further there. [indiscernible] we think it's a very unique asset and Yes. And I can just chime in there that Alberta is a location that has really a surplus of engineering and construction talent related to the energy industry. And so It's a a very easy place to build these kinds of assets because there's a lot of engineering and construction talent available locally.

Okay, great. And then just one quick one for me.

You know, Harris, you've mentioned all the customers that are going to be getting the steel miners.

Is there plans or are there thoughts around selling rigs to companies, which then you will then host? Or is it really just going to be third party other companies that are going to go then take those rigs and mine them elsewhere?

Yes, we have no objection [indiscernible] those are two separate [indiscernible] there is some advantage in this vertical integration that we can in many cases, sell mining rigs and possibly host them as well. I don't think it's going to be a major thrust that we're going to try to get a lot of that business, but think that we're open to it.

Okay, great. Super helpful. Thank you very much.

Thank you. Our next question coming from the line of Brian Britten with Needham and Company. Your line is now open. It's Great. Thanks, guys. For the purchase orders for new ASICs, could you remind us just how much folks are paying for the deposits, maybe what's coming in so far? And then on HPC, would you guys be open to partnering with another peer in the space to develop the Ohio sites for HPC?

Thank you.

Yes. So we collected a 20% deposit from all everybody that's ordered. That's already been collected. And again, we'll collect the balance before shipment. And on the SQC side, I mean, look, we're always open to any strategic opportunity that makes sense. That would add value to our shareholders. So we I don't think we've closed out any any potential partnerships Thank you.

Thank you. Our next question coming from the line of Raki Wang with Yumrong H. K. Asset Management. Your line is now open.

Okay. Thank you. Good morning and good evening.

My first question is could you tell how long it's with prepayment cycle to the TSMCs. I mean, how many months that you are $200,000,000 in advance payment correspond to the TSMC W3 can you repeat that one more time?

You kind of broke up. I mean, I mean, how long is your wafer premium site payment cycle to the TSMC? [indiscernible] [indiscernible] $200,000,000 advance payment is for four months wafer implant [indiscernible] So have that payment So, okay, thank you. So my second question is, so I you have 1,000,000,000 ATM plan So just from the current, you are stock price, it seems that if you want to get all the financing from the ATM plan, it will dilute the stock price quickly.

So So will your ability to obtain cash affect you are processing acquiring the wafer capacity from TSMC. So and what are the main factors considered by TSMC when you obtain wafer capacity from TSMC?

So I guess with respect to the ATM is your question, are we planning to use the ATM to finance this or [indiscernible] mean, you are recently [indiscernible] [indiscernible] Your stock price, will that affect your obtain the money from market And will that be a fact your ability to acquire the wafer capacity from TSMC I mean, if you don't have that much cash, you can't get the paper capacity from TSMC.

The way we finance the wafer It's not the owning one way because of selling shares at the market. We've got multiple ways to finance it. We can use in comparable bond, we can borrow money, We already got $17,000,000 of credit line from Singapore Bank.

We can also sell our money rigs as we showcased that we already got 30,000 units of Manurex from market. And we can also deploy those manorics and mine people and sell it on the market and we can call it the cash flows to finance future with ordering from So we are not we have more than one way to finance the wafer ordering. [indiscernible] is because if you look at the mining activity with our advanced design and super effective mining rig production, It's a very high [indiscernible] I think, of course, there can be challenges. For example, if the Bitcoin price crashes and the stock price crashes, But if you look at our cash balance of at the end of the year, we already financed a lot of money and I know we already built up inventories. And we already have a lot of [indiscernible] So I think will be okay for us to venture into the future and to see how the situation goes. Definitely, we will need to [indiscernible] But by the way, we're not solely relying on the ATM.

Okay. Thank you. That's all my questions. Thank you. And there are no further questions at this time. This concludes today's conference call. Thank you all for participation. And you may now disconnect.