Stronghold Digital Mining (SDIG) 14 Nov 232023 Q3 Earnings call transcript

Good morning, and welcome to Stronghold Digital Mining's conference call for the third quarter ended September 30, 2023. My name is Liz, and I will be your operator this morning.

Before this call, Stronghold issued its results for the third quarter of 2023 and announced a new business initiative in a press release, which is available on the Investors section of the company's website at www.strongholddigitalmining.com.

You can find the link in the Investors section at the top of the home page.

Joining us on today's call are Stronghold's Chairman and CEO, Greg Beard; and CFO, Matt Smith.

will call we questions. remarks, their open for the Following

Group, Kovtun, a please Before Alex Gateway proceed. will Kovtun, we begin, Mr. from make statement. brief introductory

Great. welcome. everyone, Thank Good and you, operator. morning,

release Today's along to website our today slide earlier on disclosures, can accessed at with earnings our be presentation, and website were and our posted financial www.strongholddigitalmining.com.

we're securities uncertainties. a involve risks and law making number may considered be today statements and Some forward-looking under statements of

of materially a a are result, results you caution control, of could beyond forward-looking which As described many which that there our the number and factors, are events from we cause in statements. actual to those differ

with For relating disclosures the to Exchange more Commission. see assumptions release the and in please risks, detailed our our forward-looking made and Securities uncertainties and statements, earnings filings public

obligation required update forward-looking date law. the to We forward-looking occur events as undertaking the or disclaim to except statements by that made, any circumstances reflect after statements are or

to financial our We disclosures earnings non-GAAP in these will as reconciliation also release measures and metrics. discuss encourage carefully metrics you read to GAAP the consider our tables applicable you and

We XXXX, our X, but filed XX, April annual expect to, circumstances under Securities Form and on our risks with quarterly to descriptions in filed and Form limited Risk quarterly not Exchange report XX-Q on on Factors, previously variable business detailed well of the other report including, and and forth subsequently uncertainties caption, XX-Q. identified XX-K filed on which disclosures XXXX, Commission, sets the to prior our file on or uncertainties Form as our November report as and

or Investor SEC filings for website Relations Exchange website may You at by free Commission ir.strongholddigitalmining.com. and visiting Securities at access the Stronghold's www.sec.gov Stronghold's

in remind call made Investor recorded everyone the to will available Relations via replay is like be being a of section website. this link would Stronghold's I available for and that

to Beard. Greg? call and to would Stronghold's the over I Now like Chairman turn CEO, Greg

capture carbon of third XXXX us for initiative results. in quarter our everyone, our morning, joining and thank you and Good announcement our

through be and corporate throughout the We Relations associated available Investor the webcast slide that is our will presentation on of an referencing website. the call section

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any So but about it, as we what we are excited presenting we're through today. forgive really fumbles get

will in in slides and hopefully the that Q&A. the out come So

on So X. Slide start let's

As Stronghold in everyone and Panther miner. vertically environmentally joining and us mining-waste-to-power aggregate to a the Pennsylvania, two We megawatts. only Scrubgrass facilities reminder, power public is and today, integrated operate Creek, beneficial of own XXX capacity with Bitcoin

to over of end-to-end X.X the owned tons Through we Today, our waste have removed deploying XX nearly XXXX. mining toxic process, we XX,XXX of capacity to the since miners million Bitcoin equipment. and of have beginning from megawatts expand environment continue our center by opportunities data seek

Moving X. to Slide

committed and We remain Bitcoin mining. are a to Bitcoin miner

potential base significant However, substantial as have Bitcoin for a unique miner, a asset we complementary with revenue streams. integrated vertically

lot our transformational significant testing the a you talked I'm excited potentially in it. and a about that ash byproduct time tell has have created past year this We have opportunity. spent to

discovery. the capture forming this out complementary business, ash capture, carbon are Our Stronghold atmosphere, highly a of and dioxide can carbon directly around we

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X. Slide

looking sold projects market The their Both government and from can who reduce federal to that validation, capture few grown buyers to and developed. the have offset last for registries projects markets emissions. markets of carbon emissions. private private established carbon validate credits carbon upon those significant initiatives the certain consists Over and/or years, have those be and

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We several learned we have can extensively. carbon. capture over studied months, And it the ash past our

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circulating that reclamation convert waste into We own utilize beds facilities fluidized two electricity. to mining

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to X. Moving Slide

are they the our of think published year, is mining-waste-to-power and Environmental, findings carbon-negative. studies. waste third-party who both that Lehigh University the the highlight examining piles mining impact those studies TRC recent to into environmental want Earlier industry. and burning atmosphere, COX I process this pumping concluded studies of and waste Both coal For

the I'm in Pennsylvania it waste from a been to you mining look at by encourage comprehensive mining environment. gas overview. expected we call reduced Meaning, removed cover net for had crisis the emissions not greenhouse the but to XX% I waste the to going a on appendix compared from over today, take emissions not

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partners, starting ash conducted last determined conditions, Slide XX. to carbon a to at intended third-party ash. replicate our Moving Karbonetiq, by X Scrubgrass conditions can the weather capacity have the testing our of of ash to our XX% which Scrubgrass we weight that we over After up by under extensive capture of months,

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minimize is design Scrubgrass. capture testing unit first to we that excited iterating and are around while deployed our We direct currently and And has process underway. cost, air capture at maximize to anticipate been announce carbon

that's results coming up Investor field month December. the in expect this We advance next within of Day our

facilities year metric of Scrubgrass produce Moving can equates carbon XXX,XXX to per which ash XX. capture operating capacity, XXX,XXX at and Creek XXX,XXX tons to capacity. to tons Panther at XX% when approximately capture of Slide baseload

over almost take cars, X.X million For emissions to reference, and it trees the this would much from is the XX,XXX same capture this as eliminating mature carbon.

unit Scrubgrass. capture Last first at Friday, we our carbon deployed

partner, technology in branded Our these facilities. with and proprietary only intellectual property use Karbonetiq, the connection we mining-waste-to-power Very We're with CFB patent-pending patent-pending units importantly, exclusivity as Karbonetiq. to this have allowed group has Karboliths.

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shortly thereafter. documentation, QX a anticipate concept supportive project We Puro, to project We have the formal to already paper in plan to with feedback submit monetization efforts follow and a XXXX. design of having goal submitted listed received

Moving to Slide XX.

lay We ash and to from incorporating waste new capture. remove typically the Here, back the piles, operations process it we our status facilities quo our is out ash mining carbon and it The into exposure limited transport packed site air. acidity for the neutralize process the ground the land. of the current ash's to revegetate carbonation the little to and given where allows removal

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to ash generate into our new We value from additional are the also cement, markets, evaluating such sell opportunities green carbonated process. as to newly

XX. direct to of Moving be planned, operational the would capture announced capture process U.S. fully it projects be air world. air it project carbon in And the one our largest in operational could largest XXXX. If Slide the capture becomes as direct

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range removal the we average qualify million credits tons has private per This credit from in to proceeds, to captured $XX into price to for carbon under implies XXX,XXX plan in as of annual markets, the XXXX IRS, with assuming $XXX ton million the annually. carbon tax credits $XX carbon. carbon Initially, approximately we ranged for to index of $XXX Puro work sell XXQ

Qualification tax annually. imply million carbon credits in $XX for proceeds tons $XXX of per removed ton would XXQ annual at XXX,XXX additional

X-year it XXQ back. able clear be qualify we a will look is note is it to important credits, that has XXQ not that tax entirely to While for

even could So number qualify don't qualification a for be of carbon capture years, eligible. we if before

to impact of I'll over to now financial call the capture. carbon Matt turn the Smith Stronghold's discuss

we Greg. you, as you, financial the qualifications factors. presentation risk for assumptions, would and We refer estimates, Thank we would remind discuss to various you

can a for our carbon represents see on you As compelling XX, opportunity value Stronghold. proposition capture Slide a

or the up to EBITDA, this could of to annually, have As dioxide without carbon assuming $XX up of XXX,XXX credits, incremental of to capture XXQ drive receipt of tons credits. million potential we tax up million tax to EBITDA incremental $XX

higher would of in and positioned timing, The flow will in profile in credits potential expanding a think carbon the some XXXX, XXXX private in capture to has is of likelihood beyond XXQ carbon way, an the we monetizing we XXXX. XXXX. terms credits earliest to earnest, we In hope cash Bitcoin that with optionality exponential Simply further the the markets. be power to in in transform level start and put, receive tax at business

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is Bitcoin. mine Lastly, the as largest on cost XX, aware, to some electricity may Slide be

peers. Looking reduce lowest the the initiative Bitcoin mining potential opportunity at public our capture cost power carbon the among to mining lens, to this of Bitcoin through has the

are note exposure close, many today. capture To concentrated express markets carbon public I'd there to in not ways like to to the

this we create seek to opportunity for with As investors. we hope that initiative, value our to become

turn for closing the call Q&A. that, back Greg and to I'll remarks over With

business. We opportunity. as Thanks, up extremely you new be continue toxic and reclamation cleaning about are has Matt. environmental tell, we waste in business, will our excited and the been to started and generation power of always Hopefully, can this a mining cornerstone

A strategy, or This for this power. grid alternative creating depressed having mine power option to and by markets, either beneficial use the PJM to that the few around enabled the were years Stronghold sell our market space, Bitcoin, formed to is more innovative to opportunity in the own and was it to plants. its company whichever stakeholders. power entering our mining power we ago, Bitcoin our producing an response We in

these pursue markets ownership mining has Now is and business our makes are the valuable IRA opportunity carbon -- complementary. transform carbon the potential can again. we generation, once of What power that has help and reclamation, another a assets to and all new will unique capture, created yet that and Stronghold completely Bitcoin from

a revenue carbon the one line projects direct potential time that relatively and capture with assets. shorter the From mining the cost the than mining benefit the carbon of in boost From power and to power generation the additional reduce lines of world producing costs the of to levels. a other control our selling net as our of potential Bitcoin have a us perspective, power perspective, less capture have value a air we power projects. capture perspective, power risk largest From from allows to best-in-class technology announced capture Bitcoin has grid. to opportunistically serve and carbon And

sitting here shepherded before table to recognize months. Mike Shout over at just the of obviously, them. and to technology a the got at of with who's understanding Matt the open the into We've So Houston, California has I through Mark. to up markets. me, want lot gone think we from Karbonetiq, past it a partners testing, lot out has there's work we questions, this X

out in that Of course, of is we've are the new the capturing what power, and about and opportunities keeping at plants business get got always Bill doing tough of creatively these course, carbon. Bitcoin Spence, running. most between reclamation really now co-founder new our guys us to That the making the And assets. work optionality our is making Stronghold, lines gives the thinking and

And questions. So the future. about hey, up Operator? we're open I'll excited with that, to

Lucas Securities. [Operator Pipes Instructions] Our first B. question with comes Riley of from line the

congrats Coles Lucas. affirmative long on for I And really event Nick guys, the couldn't here. progress know is mission. is on side. This But of metals join the a apologies, he hosted been with your this on what's today

So congratulations.

believe -- noted it $XXX capture. capital the per My I costs, you first COX ton to question $XX of just was was

Just can low to you talk given could you end it's end? get range, a high wide pretty what about or the the

take I then the when carbonated. correct the can that. in But which And I can be I'll biggest will wrong. get someone a CapEx Yes, on the total them it team stab let the the pace at at cost is factor ash

of to the X ash process expect XX%, if X example, the ash only to X be reach takes of carbonation Karboliths week if that full it would to same quantity And of what that half or X so of to for at ash. weeks for the be carbonate quantity number it took it or

So it's to is really time -- the carbonate. biggest probably factor

can in were a seen having less that ash using XX person, you, where than we lab culminated tell solution results and I And minutes. carbonating ash was in

ash be hopeful more then CapEx. much to solution a so But a CapEx And the process on we'll air obviously, answer lab. than less through is capture to will we in hey, are different a pump ways air lower the find that because require

running -- first really that tell you now machine. that's I we're our can But

are until Day. website on it In XX, more a think, think website. our and going of -- carbon we'll lot And right. to there is December just pictures We're it know the our iterate CapEx we'll to on what we then on I about needed is. get Karbonetiq's the all month, capture Investor a I

for follow-up. or event. to a as you piece expect secondly, really on When carbonated then be an noted to would would When maybe helpful. relates for to whether a that likely XXXX you just update of methodology, that? receive would Okay, that a receive qualify Maybe of -- XXXX it just XXQ, Greg. the expect the notice it? That's that qualification Matt, And you materials you

Houston. This is Matt

in The for the private and is process on document, taking piece then submitting approval PDD, project a step registry So the first. next a registry. that design listing subsequent

for may That our back typically be It and of involves how that attaches we've applicable existing and our it the identified bit methodologies project to project. a describes forth.

first of but We on a of hopeful at next to take point of year, think, time, in quarter the we're will no it this a we being of couple line couple in but than listed comments, registered earlier the of hopefully, rounds we that, expect longer but that. side months, Puro have and of towards sight

done when to credits After attempt is really monetizing private on can we is the that side. start the

be opportunity the this. that real first would So revenue recognize to around some

On the data. XXQ be side, audit It little year's of worth of requires that's a -- that a capture bit will later. an

know, able 'XX, capture XXXX. something as 'XX in I into to utilize a until conservatively, we're this we this if or X-year think, back as even I next the month getting look But 'XX, year. to our wouldn't that model allow well, from going 'XX X would there's start us

is of factors what There check in qualification XXXX, would our that involved out. of and you qualification we if be the the IRA risk potential think to the But deck there. in refer things for otherwise, in I some aspects highlights

question next with come Compass Point will of White from Chase Research. line the Our

I terms think just those cadence spend the kind somewhat the impact this look it's terms understand time to timeframes and leading of to plants. up in deployment? So in up obviously, pretty could deployment the clear would what line that? full what in -- of But actual I'm of of And to ultimately, at trying And both like air. is

Yes.

responded So question to the the starting Chase, I would Greg link what prior point. with

the initial as would takes that time a we at we're the this Scrubgrass' in reach environment. and comes test data simulating laboratory So what of assets going to amount saw out it outcome phase, as what we Karbolith Scrubgrass, view use of the to similar

that perfect process. to may we or time, third to second fourth iterate And or time, time try

carbonation would the to and is, think probably about If matches see data data we more the the it to would we thesis, capital may becomes more XX%, As if deploying sooner. then accelerating follow. the supportive a take like, And we week, constructive it what don't at capital we iterations. expect of

are a importantly, the Karbolith to I rise couple from we what expect would things. of not But there shared. the of cost

In it's in $XXX,XXX. less Karbolith fact, slides, first the we than shared the

made The we've already first than in XX,XXX. Karbolith approach around think And field number that we less a modifications $XX,XXX. was could XX,XXX, that's the it where

look over iterations, with we data now. the drive exposure supports 'XX, in question. payback likely the are the think we trying And time period of deploying better ash savings sees subsequent right put as some in so maximize the about carbonation our money Scrubgrass of an the and will of that or to which what possible the of assuming course the cost just rollout to as to answer fast a will, the to, is your entire the capital, returns it than into anything we else could on things

And a run excited Scrubgrass be to hope opportunity testing would XX-month and to I quite so and But ramping of about XX-month about we're in a we Panther at rate at of where XXXX. process, sort entering think then kind to Creek. the ramp full

It's is rapidly. pretty shelf. stuff expect like note them going This important equipment the mostly don't assemble delays. We're we to to off

this not later. so something or don't you I months is where And it -- you year order X a something, get

data-driven. going So be it's to just

benefits Got then of we also Frontier how mean That's little gears I should associated about the it. a with the OpEx agreement? the kind changing bit. helpful. And with and associated think

Yes, I can start.

of that have known we've aspire really Frontier for have years at we respected a work. and mining same had think the the is, I their uptime which the So to, time, not couple we team

data the behalf. essentially And have to it us quartile market I uptime Sure first I think incentivized with the working of of entered X can the them the quo our expect over versus next we management industry is would they is agreement going allow -- to top to would hopefully he's and of do And happen uptime to agree months Ireland shown to so operations, for prior that months. essentially the Frontier. status in on -- that And our the and -- that, peers. -- over I into so. enter have I think we that an And the improvement think say a centers I outsources should

the cash includes has uptime deal for I rewards that Frontier metrics think hitting and stock. both

the is that the just the would Chase, weren't year, no we all of the with of add sort of summer, hitting did miners. efficiency And required terms in through we And down we of spent got to we upgrade just I capital that incremental road. we as this the stride which expected with the -- funded we CapEx on fleet. significant uptime

And the people a and expertise. it, spreadsheet it, today when Frontier thing, call pie revenue $XX a the to same next stack a, to team experts firmware the with XX consistent with you and million months we'll $X ash team a million represented hiring over of do at so other Ireland, Arlen technology versus price

start it a, us, in in out. bring for And team. mathematically the already of no-brainer so play a the seen we've fruits our Frontier to And was to that view,

so And improving we're of meaningfully quite excited that kind generation. revenue our about

will Dede the line Our from of come Wainright. next Kevin with question H.C.

comments. capture -- Kevin Dede. to the of you'd on Matt's mining rolling thinking the go I go first I carbon it understand as box understand decision sort you're test. And outside I Congrats of about Bitcoin curious of now, tree. your big is guess I'm like kind out your real-life I mean plan. no-go for

inputs you deployment But see on your from get CapEx. how You using just the this better variable -- can't rationalize your inputs option decision? take in those the I'd you to test a making and hear like your that in

the in Yes. confidence. interest Kevin, for thanks your

bit hundreds that opportunities with of just legacy plants of that's history start are plants. that here much part like a me Let is worth the the the of of have lesson we just process. Like dollars, a millions of and on part why these

think makes we I we now carbon but power -- a rapidly have compliment, us different Bitcoin and the around options mining is have machines, XX,XXX capture. also around what we as yes, but Bitcoin miner appreciate I So depreciating

perspective, it from -- this after test, and isn't explaining have tell have this we lot shown after after we've just discipline doing we're -- we're of so doing. And big first out bucket our -- a only And we what now a while my can testing -- to our ash. caveat, lab after this with market constructed, before we first a of extensive I bucket coming really testing field that bucket first it's the you device bucket

And We're that emulate have we not this California. and to conditions out simulated in will they in what great shifting stuff Pennsylvania. have a in lab Pennsylvania, it's weather

past only capture." We is -- The are point to geologists carbon it. of capture. are like, we'll amount we "Well, just pace chemists, know of can when see going captures it's it the carbon. to to this the amount So because say, where describe it's captures ash your going we that ash the of that hey, question what -- we the is the chemistry, we guys well, course, process or they're know

the chemical part giant and certainty air. going from be not to Lunsen that process, a bind mystery. and use as it's the permanently It's removed You carbon this a is geologically process a of with and

way, as Karbolith machines to if thinking of here, sticking that conditions are does long how long take? cargo inside And is, wind airflow XX it take airflow, certain study need end sitting conditions? death and have to how and then by the the I'm And Bitcoin that mining temperature the does help creates. who we up we a question certain knows it under only The along. even We

creatively iterating of of we motivated, for have bunch we we -- this to carbon. around don't hey, a to it. it's going great through we're It's airflow And ash, minded and I people. all It's going a this know, a project. and have ingredients the matter capture make And think I are just the

got work. a to say, next but the to do lawyer sitting it's hey, done. But to hey, We've not

ends you today. capturing can going carbon. how only with lot question, We the have by I story it. is time all this the But end to The ash We're line test a more know the to ends. tomorrow. know to going this we're of It tell and

think just the announced have And carbon the process is of we How the current I -- it we we And them. given things the these they make still from XX. to make if rapid it My cheaper? December setup. won't the put will well, But news data before Day, we've just How that sort think do fairly cheaper? we'll with we we'll have faster? it -- test, do Analyst better? how don't the make Investor capture and I a understand then bet a make do our the you have How design I of say,

really big is I project we're That was because around spent But the The think relatively part big million already just plant. And was decades and part to the Karbolith, of to spent part. it. we're build the efficient get $XXX this iterating capital cost process. expense. the ago tough that's of the the easy And

some a I know -- I -- didn't that mentioned days in for can't that So and -- you're that's looking day I we give you yet.

hear appreciate about respond to Greg. I to I I and that. your just wasn't really way thinking, the looking for that. the want you question, I appreciated

it's you'll Yes. it's over. we've No, -- when over won. I think my That's know when

It's but immersion Well, heat think one could piping would and some want just That day. winning I to it. think maybe you I put mix over well. I fight is these in make I don't sense, Karboliths. only mean to a don't see I'll temporary, every tell Greg. machines miners you, your dust of

in and and advice. Come we'd check get out it to your person, then love engineering

third have give us in that the you facility, XX-megawatt you one Well, the to alluded it. Can on have sharper mine than past? Yes. on potential update minds an you guys

Yes.

Kevin, about to So thoughtful this. addressing try be we

process-oriented. reality And potential but wanted data-driven we much with the third-party the We is are those allocators have owners pull one discussions and diligence we very had to numerous of on partners. trigger And and extensive and site have today, if -- of capital done we could.

efficiency we're our about of of paid have at going we that already site against million with that we while equipment an lower this upgrades And or our clubs low existing current sites, you could and two minor much add constantly do or believe of where million And prospects for. weighing we -- center [indiscernible] data with cost third of place $XX power. at excited in we've the a inventory are $XX we --

compared capture no the And having just so secular opportunity event in discussed. against those to a story with are that carbon we growth be

And X makes data-driven no in to is these to Houston capital what in right values Beard markets credits to private if start so deploy work start months, in what having potentially and for put sense and in private in I money think potentially X there's carbon well and over Matt to the We Greg early can next test now. of can it's and sell the 'XX Bitcoin you excess miner carbon capture.

I thing we're what out with to do the capital. transparent just going We're it. would be about going point so to And right

And data at the decision about these hopefully, miner Analyst and forward clearer, should of the value ahead look what creating assets we Day, to exploiting make a but vision process it's and Bitcoin that value of the be to help dogmatic we'll putting not so have, a fullest. to creating

the your commentary rationalize Can target miners that just you the and Xs four this in morning. press X,XXX mentioned with high-spec

Yes.

So those [indiscernible] and, tail end hosting July miners previously purchases expanded deliveries were agreement. actually already announced of the -- the the of

August. as September, by but incremental made of All minor July. since the August happened purchases those planned or mostly at deliveries we've no So in the early end latest,

effective significant opportunity as that's previously monthly and all the Look, We're for announced by can citing. increase press coins Xx you our we deliveries. the from the have minor That's improving cash you so quarter release need the organic rate Yes. actual to that the operations. grow to we deliveries, And crash third were include for gas, impute

capital. next be it will And Frontier. is XXX, XXX And here pretty petahash months short that. X with I systematically XXX, the And can be having. replacing term We're site. will pick to It deploy will up and doing over and we we Scrubgrass, the unaffected makes Like create payback going forward do return described, be will in at then whatever look so upgrading the we Panther it to or third carbon place sense by miners to capture value.

for that guidelines of well ash? CapEx you're you've do include, transportation I feel set that The outlined, guess, like would Or you vehicles there?

Yes.

our I we We including it we're are moving So at we thankfully, -- every at on ash materials, site believe -- day. plants. experts do

in embedded assumptions fixed OpEx rate of and have EBITDA we costs in embedded the the provided. kind slides We run our those EBITDA variable illustration our in

$XXX the would be for two expenditures for carbon, the kind Karboliths addition assuming $XX it illustration. in primarily final to capital then that baseline fixed in the of flex and are they And for the form that labor, expenses It's take, the the things for they're in operating primarily expecting we're the effective. embedded forecasted The ton. per to equipment we've variable

feel point. I best so early, we've on want our to been don't what now, based we know that still We we out. like miss. But at and this we put conservative in forecast it's what think

will [Operator Josh from question Cantor with the Instructions] next Fitzgerald. line of Our Siegler come

addressed, new Congrats my been of I on the this among already initiative. couple Bitcoin things. sounds and wanted It of space. have questions mining but Most of touch launch super a interesting unique the on to

political that a risk IRA? is the could changing associated thinking First, future? there administration you're credits with in And how about impact the tax

has of and land, a sort really the of a always that's to us. there's and generally this take of change impact type sort it tail long order the political is it law political it climate, In but IRA in meaningful would landslide risk, -- to that the

out not certainly point. of it's question, the but at this So expected not

Okay. Understood.

for bipartisan like earmarked do things. this protective environmentally carbon view our of which -- But is to tax come intent think other and estimate to it's is IRA than of $XXX carbon us at credits IRA what the incentivize companies to like up to with our billion capture. more think I I point, this is is is -- are the capture projects

project And trying fits they're certainly this to that -- of do. what the intent with

a are see we possible, thing away? whole a not But probable. say about, would this new to going I wouldn't hey, worrying just to administration spend I it's of lot time take So

line, really the of that. expect credits? helpful And how into that color. That's what's it removal on then do investors the for you depending appreciate I the us and better can fees And Kind here? on and credits bucket? royalties to total aspect Okay. fluctuate you help understand going tax

in sort we'll -- you the a the a specific initially. fee deduct. Each We've talk it, markets to sell want the whatever registry, registries listed you there's studied of private to the gross specifically once about registry, a were if call that's a credit -- or commission, five

accounts, for value is your always you off uplift having and meaningful sequester the put illustration doing our all in And a transact that for the by registry. to then process our deck. receiving in But registry value the work slide accounted of We've validated for carbon. can you're on

from from model and and today. tried And fees based to deduct agreements have and private have gross we the the from the appropriately so we on XXQ receipts market appropriately thereafter, place commissions qualifications X% as in a in place the agreements deducted And income stream. XX% then some

the next Our with from Riley Lucas Pipes Securities. Instructions] [Operator question line B. comes of

if anything inclusive capture there cite again the the elsewhere. exclusive you for referenced Matt, of piece? Nick not seeing I Apologies missed returns paybacks a you maybe project and initiative, here. it. XXQ would IRR and It's better Is

what I do front-run from the is I Scrubgrass. to -- Yes, think I'd would we not what like data

much and payback to think IRR, know Scrubgrass, single We just at at the Scrubgrass. scale if in you think the ash you Karbolith were that for how about I instance. we make

optimally how lab to capture, calculate you on ash, the the Scrubgrass's you it's week to or potentially Karbolith And in these at determine results order would the that with in time to that a Scrubgrass structures captured can the many based to of to lab instance, placed, were X be carbon whether then If for like could much ash. carbon how extend the weeks, capture available capture. are

That annually, relative X place can call Scrubgrass a that and XX,XXX running we'll that the payback, earnest us is CapEx suffer which we range payback, to to for we're where multiplied That having we've to payback, to which a CapEx hope months. provided from CapEx XXXX, basis about again, doesn't run be that carbon market, rate of the a think project we carbon if of you start in in that tons slides, -- I total it, to the XXXX. ash, half potentially the reach on in think which to to estimated, the private kind range first then as available the approximate of expect question you is the assuming XX,XXX get sort be should by of, private CapEx, or in and of the in X

it's And is to getting growth money the quarter, traction work, first And compelling demonstrating because because a In data capture. you're the the put with Puro opportunity. if Scrubgrass. secular it's the its testing carbon in you it's

allocating of you're capital because with potentially can a You cash faster capital scaling as credits, selling in payback getting actually deploying coordinate you're and that up. and makes for

-- Greg I our many how are needed is space that add we but maybe some we're point still There's around would just today I out other the mining call around can of as publicly. -- is I ourselves that which one [indiscernible] the thing, that point the Bitcoin there just described, think to of metric multiple uncertainty we the fraction so every traded we money a relative timing. we've today would would that maybe And orphan more compelling. And places miner -- on put Bitcoin does because every other payback really

kind suffer of I you of concerns that that don't think and businesses of the private to prevailed the transition having what market. the we'd energy the types have from in mining market is Bitcoin kind other and point

flow it's and we're That's idiosyncratic to potential that about. our really about stream totally double quite exciting, over Stronghold, differentiated XX we're XX excited think next income potentially could months. cash I which a pretty the excited to totally

how follow-up you in just thinking place? based structures this current remind just could on you're Maybe paydown or sweeps us impact Can that? one how And there. about debt

Sure.

time. placed July is we There's beyond. that agreement a that to not have after for have amortization do a until mechanically have sweep starting cash available of kind and we've The in having -- of single mandatory level. above $X.X million works over creditor. the that pay we down publicly We -- well credit So 'XX

we with to creation is XX to or -- sorry, the maybe basis a our creditor. We I And what value from LIBOR would next X,XXX relationship with capital months point the to relative interest rate opportunities have meaningfully think have opportunities of that we'll today plus improve plus cost out really hope good We've SOFR that. and got we're over success announcing points.

me. SOFR not plus plus Yes. And SOFR myself, correct XX%, just to it's forgive XX,

over turn to At time, to question-and-answer back Beard our this remarks. for the call concludes I'd his Mr. this now closing session. like

right. presentation here. any you are Hopefully, there what that or All in Thank what and of terms Q&A out investors for the have questions. clarify processed we've very said parties your help much insightful interested listening the

get listening, next Bye-bye. here. our prospects disclose few thanks to But for do going our to best it. we're the well over and months excited about just to We're communicate we quickly really as and fully information

Thank for you today call. earnings for joining Stronghold's us

may You now disconnect.