Financial Data and Key Metrics - Revenue for Q2 2023 was 19.2million,adecreaseof24.6 million compared to 43.8millioninQ22022,drivenbylowerBitcoinminedandareductioninBitcoinprices[8]−Digitalassetminingrevenuewas15 million in Q2 2023, down from 39.1millioninQ22022,with399Bitcoinminedcomparedto946Bitcoinintheprioryear[8]−NetlossforQ22023was16.7 million, compared to a net loss of 88.1millioninQ22022,whichincludedanon−cashlossondigitalassetrevaluationof104.9 million [10] - Adjusted EBITDA for Q2 2023 was negative 2.7million,animprovementfromnegative98.1 million in Q2 2022 [20] - The company held 9,136 Bitcoin in reserve as of June 30, 2023, with a market value of 368.7million,ofwhich8,289Bitcoin(334.5 million) remain unencumbered [36] Business Line Performance - High-performance computing (HPC) revenue was 4.2millioninQ22023,downfrom4.7 million in Q2 2022, due to client churn and discontinued low-margin products [23] - The company signed a five-year agreement with Interior Health for co-location services, with revenue expected to start in Q4 2023 [4][28] - Digital asset mining profit decreased to 3.2millioninQ22023from14.9 million in Q2 2022, impacted by lower Bitcoin prices, increased network difficulty, and operational issues [34] Market and Operational Data - The average Bitcoin price in Q2 2023 was approximately 37,600,downfrom41,400 in Q2 2022 [23] - Mining operations at Drumheller were operating at approximately 20% of installed hash rate due to electrical issues, with remediation efforts ongoing [21] - The company curtailed mining activities at North Bay, which also impacted Q2 results [19] Strategic Direction and Industry Competition - The company remains bullish on Bitcoin and its treasury strategy, which has been a key differentiator, including securing a 50millioncreditfacilitywithCoinbaseCreditInc[5]−Thecompanyisfocusedondiversifyingitsrevenuestreams,includingHPCandhostingservices,aspartofitsmergerwithUSBTC,whichisexpectedtoclosebytheendofSeptember2023[22][55]−Thecompanyisexploringopportunitiesinthehigh−performancecomputingmarket,particularlyforAI,machinelearning,andvisualeffectsworkloads,with200GPUsavailableforrental[26]ManagementCommentaryonOperatingEnvironmentandOutlook−ManagementhighlightedchallengesinQ2,includingelectricalissuesatDrumhellerandthesuspensionofminingatNorthBay,butremainsoptimisticaboutthelong−termvalueofBitcoinandthecompany’sdiversifiedstrategy[5][19]−ThecompanyexpectstoresolvetheelectricalissuesatDrumhellerwithinthecalendaryearbutdidnotprovideaspecifictimeline[47]−ManagementemphasizedtheimportanceofthemergerwithUSBTC,whichwillincreaseself−miningcapacityto7.5exahashandprovideadditionalfiat−basedrevenuestreams[22][56]OtherKeyInformation−ThecompanyenteredintoatransactionsupportagreementwithMacquarieEquipmentFinanceLimitedtopotentiallyacquireassetsofValidusPowerCorp,whichcouldresolveongoinglitigation[6][17]−GeneralandadministrativecostsforQ22023were12.5 million, including one-time transaction costs related to the USBTC merger [31] - The company has a cash balance of 26.7millionand19.1 million in loans outstanding under the Coinbase credit facility as of June 30, 2023 [36] Q&A Session Summary Question: Timeline for resolving electrical issues at Drumheller - Management expects full resolution within the calendar year but did not provide a specific timeline [47] Question: Details on the transaction support agreement with Validus - The company did not disclose further details but will provide updates as information becomes available [48] Question: Outlook on the mining industry and diversification - Management believes the industry will see more diversification, with some miners remaining pure-play while others, like Hut 8, pursue diversified revenue streams [42] Question: Expected exahash output and capital for additional miners - The increase in exahash output to 7.5 exahash comes from USBTC’s existing self-mining facilities, with miners already ordered and coming online [56] Question: Progress on the USBTC merger - The company is confident in closing the merger by the end of September and has scheduled a shareholder vote for September 12 [55]