Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $15.9 million, reflecting a 44% decrease from $28.3 million in Q3 2024, primarily due to the transition of the largest customer to another supplier [14] - Gross profit for Q3 2025 was $2.3 million, a 64% decrease from $6.2 million in Q3 2024, with a gross margin of 14%, down from 22% in Q3 2024 [14][15] - Adjusted EBITDA for Q3 2025 was $50,000, an improvement from negative $200,000 in Q2 2025 and negative $400,000 in Q1 2025 [16] - Cash and cash equivalents increased to $23.7 million from $18.4 million at the end of Q2 2025, driven by the issuance of common stock [16][17] Business Line Data and Key Metrics Changes - The company signed several new long-term product purchasing agreements, including a notable three-year commitment with a dialysis center in Southern Florida, potentially generating approximately $1 million in annualized net sales [8] - Expanded product purchase agreement with the largest provider of dialysis in skilled nursing facilities in the U.S., effective for three years [9] Market Data and Key Metrics Changes - The largest customer represented 12% of net sales in Q3 2025, indicating reduced dependence on any single customer due to successful diversification efforts [10] - The company is actively pursuing business development opportunities across various customer segments and geographic markets, reinforcing optimism about growth in 2026 and beyond [8] Company Strategy and Development Direction - The company is focused on right-sizing its organization to enhance operational efficiency while maintaining high-quality customer service [4][5] - Strategic decisions made earlier in the year are translating into tangible results, with over 80% of customers operating under long-term agreements, providing stability and revenue visibility [4][6] - The introduction of a new bicarbonate cartridge is expected to significantly grow the higher-margin product opportunity [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance targets and sustainable profitability moving forward [6][7] - The transition period with the largest customer is expected to resolve within the current quarter, with ongoing discussions regarding future commitments [21][24] - The company anticipates providing forward revenue guidance for 2026 early in the year, with plans for potential acquisitions to enhance growth [22][24] Other Important Information - The company is actively restructuring its operations to align with changes in the customer base, focusing on improving efficiency and reducing costs [12][30] - A facility closure was executed to consolidate manufacturing activities, which is expected to reduce operating expenses [32] Q&A Session Summary Question: When will the situation with the former largest customer be resolved? - Management expects resolution within the current quarter and is in contract discussions [21] Question: When will forward revenue guidance for 2026 be provided? - Guidance is typically provided early in the year, with visibility expected during the fourth quarter earnings release [24] Question: What are the key prospects for the bicarbonate disposables business? - The introduction of the bicarbonate cartridge is expected to significantly grow this higher-margin product opportunity [25] Question: How is the company balancing organizational restructuring with investments? - The company is reallocating resources to focus on growth opportunities while winding down unsupported operations [28] Question: Where is there room for improving gross margin? - Immediate focus is on labor costs, with long-term potential in reducing materials and distribution costs [30][31] Question: Update on West Coast expansion and home dialysis business? - The West Coast is seen as a growth area, with potential announcements on new customers expected soon; home dialysis remains a small but growing segment [38][40][41]

Financial Data and Key Metrics Changes - The company faced significant headwinds in 2022, including a drop in Bitcoin prices and a rise in energy prices, leading to a Chapter 11 filing in December 2022 [5][6] - The company reemerged in January 2024 and has since signed contracts worth over $5 billion to build out 590 megawatts of data center capacity [7][8] - The company has approximately $800 million in cash and liquidity, with the potential to leverage contracts for an additional $4 billion, totaling nearly $5 billion in equity capital for new deals [11] Business Line Data and Key Metrics Changes - The company transitioned from Bitcoin mining to a data center business model, aiming to capture significant market share in the high-density colocation space [10] - The company is developing data centers with power densities of 150 kilowatts per rack for 2025 and plans to increase this to over 200 kilowatts for future deliveries [21][22] Market Data and Key Metrics Changes - The company is focusing on low-latency sites, with many of its contracted sites achieving sub-10 millisecond latency, which is critical for their end customers [14][15] - The company is exploring opportunities in markets outside major metros, recognizing pockets of opportunity in areas like Northern Virginia [17] Company Strategy and Development Direction - The long-term vision is to build a large-scale data center platform that rivals Digital Realty and QTS, leveraging unique capital structures to facilitate growth [10] - The company aims to reduce customer concentration below 50% by 2028 through both organic and inorganic growth strategies [11][42] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by utilities, including the ability to change power agreements even after contracts are signed, which poses risks to data center operations [61][62] - The company is optimistic about signing new contracts to diversify its customer base and reduce reliance on a single customer, targeting significant EBITDA contributions from new deals [74] Other Important Information - The company achieved a 3700% internal rate of return (IRR) on a unique data center deal, which management believes is unprecedented in the industry [28] - The company is actively engaged with multiple hyperscalers and has undergone onboarding processes to position itself for future contracts [56] Q&A Session Summary Question: What is the company's long-term growth strategy? - The company aims to grow market share while maintaining attractive return profiles, recognizing the need to diversify its customer base and increase its footprint [36][37] Question: How does the company plan to manage customer concentration? - The company plans to add incremental customers and potentially crystallize value from existing data center builds to reduce exposure to large customers [40][42] Question: What keeps management up at night regarding data center capacity? - The primary concern is the unpredictability of utilities changing power agreements, which can impact the company's ability to deliver on contracts [61][62] Question: How does the company view the current demand from hyperscalers? - Management noted that hyperscalers have become more specific in their geographical requirements, moving away from broad demand to location-specific needs [31][32]