DMG Blockchain Solutions (Ticker: DMGI) has reported a 3% increase in revenue to $10 million in the March quarter of 2024 during their second-quarter update conference call. CEO Sheldon Bennett focused on the company's Core+ software strategy and the development of their digital asset custodian business, Systemic Trust.
Despite the rise in self-mining revenue, hosting revenue has seen a decrease, and net pool revenue was negative. DMG Blockchain Solutions expects to continue investing in its Core+ strategy, which will lead to elevated expenses, although the company has posted two consecutive quarters of positive net income. Their cash and digital currency holdings have risen to $43.6 million, with total assets reaching $118.4 million.
Key Takeaways
- DMG Blockchain Solutions reported a 3% revenue increase to $10 million in the March quarter, with a margin percentage of 47%.
- The company mined 153 Bitcoins and sold nearly 140 Bitcoin in the March quarter.
- DMG plans to deploy 4,550 Bitmain T21 miners in the June quarter to reach a hash rate of 1.7 exahash.
- The company is building a carbon-neutral mining ecosystem with Terra Pool (NASDAQ:POOL) and a new data center site for access to low-cost renewable energy.
- Non-mining expenses are expected to be between $1.5 million to $2 million per quarter, excluding interest expenses.
- DMG Blockchain Solutions is cautious about further capital raising and is exploring options to raise equity.
Company Outlook
- DMG Blockchain Solutions is committed to growing its hash rate and improving efficiency.
- The company is focused on its Core+ strategy, including the integration of Systemic Trust and the development of a qualified digital asset custodian business.
- DMG sees AI as both a friend and a potential competitor in Bitcoin mining and is working to mitigate crowding out effects.
Bearish Highlights
- Hosting revenue decreased, and net pool revenue was negative.
- Operating and maintenance costs increased by 2%.
- The company expects expenses to remain elevated due to investments in Core+ strategy.
Bullish Highlights
- DMG Blockchain Solutions has posted two consecutive quarters of positive net income.
- The company's cash and digital currency holdings increased to $43.6 million.
- The latest chip, T21, has a profitable cost structure and the company aims to achieve 21-23 joules per terahash energy efficiency.
Misses
- The company sold most of the Bitcoin it mined, which could indicate a need for liquidity.
Q&A Highlights
- The company discussed the economics and profitability of their latest chip, T21.
- DMG Blockchain Solutions is managing non-mining operating expenses and is satisfied with their software team's performance.
- The company emphasized the importance of power assets in valuation and potential M&A activity in the Bitcoin mining space.
- Regulatory approvals impact professional services expenses, particularly legal expenses.
- DMG Blockchain Solutions plans to maintain current R&D staff and make strategic hires while carrying debt at an interest rate of 7.8% to lower their weighted average cost of capital.
InvestingPro Insights
DMG Blockchain Solutions (Ticker: DMGI) has seen a dynamic financial performance over the past year, with some key metrics indicating both challenges and opportunities ahead. According to real-time data from InvestingPro, the company's Market Cap stands at $63.02 million, reflecting the market's current valuation of the firm. The P/E Ratio, a measure of the company's current share price relative to its per-share earnings, is high at 166.45, suggesting that investors may expect higher earnings growth in the future compared to the broader market.
InvestingPro Tips suggest that although analysts do not anticipate the company to be profitable this year, DMG Blockchain Solutions has managed a high return over the last year with a 91.46% 1 Year Price Total Return as of May 2024. This could be indicative of strong market confidence or speculative interest in the company's growth prospects. Moreover, the company's liquid assets exceed short-term obligations, providing a cushion for operational needs or potential investments.
Another noteworthy point is that DMG Blockchain Solutions does not pay a dividend to shareholders. This could be a strategic move to reinvest earnings into the company for further growth, which aligns with their commitment to invest in the Core+ strategy.
For readers looking to delve deeper into the financial health and prospects of DMG Blockchain Solutions, more InvestingPro Tips are available, offering a comprehensive analysis of the company's performance and potential. Interested investors can unlock these valuable insights and receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24. There are a total of 8 additional InvestingPro Tips listed for DMG Blockchain Solutions, providing a more nuanced understanding of the company's financial trajectory and market position.
Full transcript - Dmg Blockchain PK (DMGGF) Q2 2024:
Operator: Good afternoon. And welcome to the DMG Blockchain Solutions Second Quarter 2024 Update Conference Call. Participants on this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available on the company's website. Joining us today from DMG Blockchain Solutions is Sheldon Bennett, the company's Chief Executive Officer; and Steven Eliscu, Chief Operating Officer. During this call, management will be making forward-looking statements, including statements that address DMG Blockchain Solutions' expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in DMG Blockchain Solutions' most recently filed periodic reports and the company's recent press releases, particularly the cautionary statements within. The content of this call contains time sensitive information that is accurate only as of today, May 23, 2024. Except as required by law, DMG Blockchain Solutions disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Sheldon and Steven. Sheldon?
Sheldon Bennett: Thank you, Levi. Good afternoon, and thanks to everyone who has joined the call today. My name is Sheldon Bennett, and I am the CEO and Founder of DMG Blockchain Solutions. With a similar format as recent quarters, first, I will provide an overview of the company's achievements in the past quarter. I will then pass the call to Steven, who will review the company's performance. We will end the call with our Q&A based on questions submitted to us prior to the call. So now to our highlights of recent achievements. First, regarding our Core+, which is our software strategy. As an update to Systemic Trust, we are committing significant resources to build a qualified digital asset custodian business by the end of this calendar year. We have made great progress, both on the regulatory front as we have been in close contact with the Alberta regulators, as well on the software development. In particular, our team has executed most of what is needed for the trust to launch just since the beginning of this calendar year. We are proud of our team's work and we feel this will be the first of a number of new products in our pipeline, including a renewed version of Blockseer Explorer, which is now expected later this year. Next, our investment to support Bosonic. As we discussed on our last earnings call, we invested $600,000 into Bosonic to support its continued development and help enable its sustained cash flow positive operations. We remain encouraged with Bosonic's development as it has been able to progress without additional cash. And we are also working to integrate Bosonic’s platform with Systemic Trust, which we believe can accelerate Systemic's market development and growth. We have not discussed much about Terra Pool and hence ordinals in recent months. We have operated the pool in only limited capacity over the past couple of quarters and have focused our efforts on building a software for Systemic Trust. However, we are committed to build the software necessary to operate Terra Pool at scale, achieve SOC2 Type 2 compliance and provide an upgrade path for pool members to leverage our mine management software, which we are in the process of rebuilding as largely a ground up effort that we believe will be best-in-class. Our goal is to enable Terra Pool clients to not only have observability of potentially hundreds of thousands of miners but also controllability, a capability that would be unique among mining pool operators. The goal of these efforts is to build an ecosystem for carbon neutral miners that is holistic and differentiated. Terra Pool supplies the carbon neutral blocks, which in turn are to be filled by transactions from financial institutions and ordinal content providers, offering miners not only a competitively priced SOC2 compliant pool but also mine management software, digital asset custody and exchange services through partners such as Bosonic together with providing compelling package, leveraging efforts such as what our collaboration with PayPal (NASDAQ:PYPL) could offer us in the future were a fee premium for processing carbon neutral block transactions that can be shared among pool participants offers additional revenue opportunities that have the potential to make Terra Pool even more compelling. In terms of our core strategy, which is our Bitcoin mining strategy, during the March quarter, we had a utilized hash rate of 0.96 exahash, sequentially flat with a fleet efficiency of 28.4 joules per terahash as measured from our substation, also sequentially unchanged and we mined 153 Bitcoins, down 22% sequentially. As the network produced about 158 Bitcoins per exahash in the quarter, down 24% sequentially, our bitcoin production was in line with expectations based on our realized hash rate. Note that last quarter, we provided our estimate that our network Bitcoin production per exahash could be down in a range of 20%. We hope this guidance proved useful as it applied to all Bitcoin miners. We had guided hash rate to be slightly up but we missed that, as lean staffing resulted in our reduced ability to deal with miner maintenance. To address this, we are working to bring in new staff and improve miner reporting to optimize our miner uptime. Additionally, as we are now operating legacy miners in the low power mode post halvening, we expect a significant reduction in our legacy fleet maintenance efforts as these miners are generating far less heat, which is the enemy of all longevity. We still expect to deploy in the June quarter our 4,550 Bitmain T21 miners. Combined with our current fleet, which we have optimized via software post halvening, we expect to have a total fleet hash rate of 1.7 exahash with a fleet efficiency of 23 joules per terahash. We believe this level of efficiency post halvening is table stakes for any Bitcoin miner. As we grow our fleet with new generation sub 22 per terahash miners, we will continue to realize further fleet efficiencies -- efficiency improvements. Note that the number of miners that we actually retired post halvening was less than 10 units, which included older Bitmain S19S and MicroBT M30S. Additionally, we are slowing our immersion cooling deployment. We have built our first tank and we'll be integrating that tank into our Christina Lake Facility later this quarter. However, we are not likely to fully test our first immersion tank until next quarter. The reason for this is twofold. One, we are focusing our resources on our T21 deployment, and we are awaiting more details regarding the timing of new immersion miners being introduced into the market in the back half of this calendar year. We will be focused on deploying new immersion miners rather than utilizing legacy fleet for anything other than our initial tank testing. As we remain focused on maximizing our ROI, we are being cautious regarding spending large sums of capital for new miners until the economics of mining the post halvening environment are more clear. Regarding our prior announcement that we have entered into a non-binding agreement that would result in the development of new data center site with access to low cost reliable renewable energy located in Canada in a province outside of British Columbia, we are working to finalize our definitive agreement, after which we plan to disclose more details. The overarching goal of building out this site is to reduce our energy costs, which is just one of a number of initiatives that may help us realize this goal. Now for a summary of our strategy. First, with Core+, our software strategy. We remain optimistic that with Systemic Trust and the renewed software for Terra Pool and our mine manager, product called Helm, we will have the critical mass of software to realize our Core+ strategy. In the coming months, we expect to have announcements regarding the progress with Systemic Trust on the regulatory front. As we have been working closely with the Alberta regulators, our strategy remains to utilize Terra Pool, the world's first carbon neutral pool, to create a supply of carbon neutral blocks that enables financial institutions to have the choice of sending Bitcoins without adding carbon and without commingling with bad actors. Now regarding DMG's core mining strategy. We have made significant progress to expand our hash rate with the development of containerized mining at our facility, including the addition of approximately [286] exahash of new T21 minus that we intend to deploy in the June quarter, as well as our production tests of immersion cooled capacity. We encourage that we can keep the momentum up. This will be in large part dependent on our access to capital, which avoids the mass shareholder dilution we have seen amongst our peers. We have demonstrated our ability to smartly utilize debt and we may utilize additional debt, liquidate Bitcoins or raise equity capital for future expansion. However, as we have previously stated, we will do so as long as we can justify that we can earn more than our cost of capital. Now I'll hand over to Steve to review the company's performance.
Steven Eliscu: Thank you, Sheldon. I'm Steven Eliscu, DMG's COO. Now a few words about the company's overall position. In the March quarter, our cash plus Bitcoin balance was $43.6 million, an increase of 57% sequentially and up 101% year-over-year. This balance has been supporting our ability to make capital equipment purchases, including new mining equipment, immersion cooling infrastructure and power distribution infrastructure. Relatedly, we have utilized about half of our Bitcoin balance as collateral for our Sygnum Bank credit facility, which we have utilized specifically for the purpose of purchasing our Bitmain T21 mining fleet. For our mining operations, our near term focus has been to nearly double our hash rate, which should mitigate the recent halvening of the block subsidy. This is especially important as we cannot count on transaction fees staying elevated. Additionally, to mitigate the increased power cost that will be -- that we will be operating as we'll be operating much larger fleet, we expect to improve our fleet efficiency 23 joules terahash when we have our T21 fleet fully deployed. We have implemented low power operation of our S19j Pro and Pro+legacy fleet that will support us being able to achieve this goal. As low power operation results and reduction in hash rate, albeit greater efficiency, our hash rate reduction has been about a 150 petahash, which is in line with prior guidance for a drop in the range of 100 to 200 petahash post halvening. We have expected other miners to implement these changes as well, and thus, we expect at least a pause in the overall network hash rate growth post halvening, which has occurred so far. However, as our internal estimates for network hash rate growth over the past year has been vastly exceeded, we caution against making predictions, especially as three fourths of the Bitcoin network is composed of miners, which are not publicly listed. So it is difficult to extrapolate how much network growth we should expect in the coming months. In our March quarter, our revenue increased 3% to $10 million, up from $9.7 million in the prior quarter, mainly due to self mining revenues increasing 11%. 45% higher realized Bitcoin hash, the Bitcoin price more than offset the 22% drop in Bitcoin production. On a year-over-year basis, revenue increased 31% from $7.6 million, driven again by soft mining revenues, which increased 39%. Our hosting revenue decreased to $0.28 million in our March quarter, down from $0.37 million in the prior quarter. As we have previously guided, it is possible that hosting revenue could further decline this year as we are not focused on bringing in new hosting clients and our current clients may reduce their fleet. Net pool revenue was minus $1.3 million in the March quarter versus minus $1 million in the prior quarter. We are looking for ways to minimize this number as we continue to test Terra Pool, and we are pleased with our progress. As you know, being a pool operator requires advanced capabilities that we want to ensure are fully in place before we more broadly increase our pool member base. Operating and maintenance costs increased 2% to $5.3 million from the prior quarter. Note that while we don't provide explicit guidance for operating and maintenance costs, the product of our hash rate and efficiency, which results in our average megawatts consumed in the quarter, is very highly correlated to operating and maintenance costs. As we indicated last quarter in our Q&A section, we encourage investors to utilize this relationship when they forecast our operating and maintenance costs going forward. Our margin percentage on revenue less operating and maintenance costs was 47% in the March quarter, flat on a percentage basis versus the prior quarter. Our fleet efficiency was also flat at 28.4 joules terahash. However, as our utility costs rose 6% to $4.9 million versus the prior quarter as our -- our utility costs rose as our rate is adjusted on an annual basis. Accordingly, electricity cost to mine the Bitcoin was up more than one third from the prior quarter to about $23,000. As a proxy for cash from our business, which assumes we're selling about a 100% of our generated Bitcoin, our earnings before other items, excluding depreciation, amortization, and stock based comp, was $2.4 million or 24% -- percentage basis in the March quarter, down from $3.2 million, 33% in the prior quarter. Our actual cash flow from operations was $4.5 million in the March quarter, up 19% from $3.7 million in the prior quarter. Non-mine expenses, excluding depreciation, amortization and stock based comp were $2.3 million in the March quarter, up from the prior quarter of $1.3 million. As previously guided, expenses will remain somewhat more elevated in the current year as we're making more substantial investments in our Core+ strategy. The main driver of increased Core+ expenses is the build out of Systemic Trust. Additionally, in the most recent quarter, there were executive compensation payouts for prior periods reflected in the wages category. Finally, as we've began to incur interest on our Sygnum Bank loan, which is reflected in the interest and bank charges category. Regarding expense guidance, excluding interest expenses, we expect non-mining expenses to be in the range of $1.5 million to $2 million per quarter. Depreciation expense of $3.8 million in the March quarter decreased 12% from the prior quarter. As we have begun to put in service our Bitmain T21 miners, we would expect depreciation to reverse its downward trend at least when fully installed in the September quarter. Our earnings before other items was minus $1.8 million in the March quarter versus minus $1.5 million the prior quarter. We realized $1.8 million below the operating income line, mainly on unrealized gains on our Bitcoin holding and realized gains on the sale of Bitcoin, resulting in breakeven net income and accordingly $0.00 earnings per share versus $7 million and $0.04 per share in the prior quarter. This is the first time since the March quarter of 2022 that the company has posted two consecutive quarters of positive net income. Regarding further capital raising. We are still being very cautious regarding overall spending, especially as we have gone through the halvening. But we know we have significant expenses ahead for the second half calendar 2024 and beyond as we position the company for future growth. More CapEx to build out infrastructure for our new mining site outside of BC, as well as CapEx for immersion, including the future purchase of up to 36 megawatts of immersion ready miners, plus the step up in non-mine expenses, including Systemic Trust to grow our core plus business. For sources of new capital, we have been approved by a financial institution for a debt instrument that is of material value. Given we have fully exercised the amount on our Sygnum Bank Bitcoin backed loan facility for $9 million, we're hesitant to lever up further in the current environment. We are exploring options to raise equity. But as we're focused on minimizing dilution, we're proceeding at a measured pace. Regarding our balance sheet. Our cash plus digital currency holdings increased 57% to $43.6 million versus $27.7 million in the prior quarter as the value of our Bitcoin held increased 65%. The value of our property and equipment and long term deposits increased to $61.3 million from $49.1 million in the prior quarter as our depreciation was exceeded by the amount of new equipment either prepaid or deployed. The last time this occurred was the June quarter of 2022. Accordingly, our total asset base increased 30% sequentially to $118.4 million from $91 million. In the March quarter, DMG sold nearly 140 Bitcoin generating $10.7 million of cash. Thus, we sold 91% of the of the Bitcoin amount mined versus the prior quarter selling 97% of the Bitcoin mined. As a treasury policy, investors should continue to expect us to sell most or all of the Bitcoin we mine. As stated prior, investors should not expect DMG to be a major hodler in the future, especially as investors now have access to a plethora of US Spot Bitcoin ETFs that allow for direct exposure to Bitcoin. I will now hand the call back to Sheldon to summarize our prepared comments, and we'll answer questions submitted to us prior to the call. Sheldon?
Sheldon Bennett: Thank you, Steven. To reiterate our key results and outlook. In summary, we are positioning the company for hash rate growth to offset the halvening, but our spending is also being directed to establish and grow our Core+ business. DMG mined a 153 Bitcoin in the March quarter on a hash rate of 0.96 exahash and a fleet efficiency of 28.4 joules per terahash. Cash and digital currency at quarter end was $43.6 million with total asset of $118 million. On a net income basis, we were profitable for the second quarter in a row. We expect to deploy our next generation of Bitmain T21 miners that should enable us to reach 1.7 exahash by the end of the June quarter. This positions us to grow to 2 exahash and beyond. We have stepped up our investment to enable our Core+ software strategy with Systemic Trust as a key enabler that will provide financial institutions the option to send Bitcoin in a carbon neutral manner and without commingling with bad actors. As we have consistently stated, we are committed to our Core+ strategy and are building the necessary infrastructure that will enable us to execute this strategy. While we are encouraged by our outlook, the environment is very challenging, especially as peers continue to build up capacity by raising equity that continues to dilute shareholders. We will continue to grow our hash rate and improve our efficiency along with initiatives to reduce our cost of energy, but not at the expense of shareholders. We are now more than ever investing into more Core+, including the Systemic Trust along with Terra Pool and Helm, as well as utilizing Petra as the key enabling technology to tie all of this together. So now on to our Q&A. We've got a few questions here. We don't really do it in any particular order, I usually take a few, and Steven takes a few.
A - Sheldon Bennett: And I'll start with the first question. How do you see the effect of AI impacting your business? That's a great question. A lot of Bitcoin miners are talking about it. In fact, I think all of North America is talking about AI. We didn't talk about AI above in our prepared comments on the quarter. As we still see AI in its early infancy for us. We see AI as both a friend and a foe for DMG. It's our friend because it presents a new revenue opportunity, which we have been investigating that leverages our installed assets, i.e., our power infrastructure that we have to date in Christina Lake. It potentially can leverage our development of immersion cooling and may also reduce the aggressiveness of those in government who, in our province of B.C., but in other parts of Canada and the US want to regulate or change the cost structure of Bitcoin mining compared to other industry groups. And this is an issue whereby AI is seen differently than crypto mining and is more positive with governments. However, at the same time, given the potentially attractive ROI of deploying AI systems and the thirst for power that dwarfs what is needed in Bitcoin mining for AI, we are concerned that AI may crowd out Bitcoin mining, especially in North America. We're working to mitigate this issue in part with the new site that we've yet to announce specific details on, as well as other new site opportunities that we're continuing to explore. So we have a strategy whereby, if we were to go ahead with AI, we would be excluding that between sites that would be AI and traditional Bitcoin mine. Next question I have. With other miners claiming they will get their fleet efficiency to 16 joules per terahash, do you feel that you're already falling behind? Well, no, I don't feel we're falling behind. For us, I think we'll achieve these levels of efficiency, 16 joules may be better over time as we phase out our legacy fleets. A lot of people don't remember, we started with the very first S9s that were 11 terahash and phased them out. And over years, have grown our fleet to be from the most efficient to becoming least efficient and phasing into new miners as it makes economic sense to do that. Also, you have to understand that the latest generation of sort of 15, 16 joules per terahash miners normally costs 30%, 35%, 40% more than what we've just paid for our T21s, which are 19 joules per terahash. So there's a little bit of the economics of the cost of the latest chip versus one that's maybe not the latest, but the cost structure still makes it very profitable. So the point is there's always trade-offs between operational and capital costs. We are quite pleased, however, with how we've made some changes to achieve 21 -- 23, I think, were in that 23 joules per terahash in the near term. This is with changing how we're operating the j Pros and the XPs, which are the majority of our legacy fleet, combined with the new T21s. And we think that this overall sort of 23-ish joules per terahash, in the near to middle term of this halvening cycle, will be quite efficient. And looking at the price of hash right now, we seem to be doing quite well. Another question. You stated that you have the right software staff in place to achieve your goals. As projects have slipped, why not hire more? It's a good question. We may do that. I think every company is always looking to hire great software people, different types of engineers. But in the recent past, our team has done a great job of picking up a new project, which is basically the entire software stack integration needed for Systemic Trust in a short period of time to build that. Obviously, as we stated earlier in our comments, we've taken resources from other software that DMG's has been building to augment the team of Systemic Trust and really grown out to meet their time lines. And like I say, that's been quite successful for us, the integration work and the software they've built is quite impressive. And so we think that, that piece of Core+, putting the team -- the bulk of the team on that is going to pay dividends for the company. And we think it's really important that the trust is able to really tie together the ecosystem, which enables financial institutions to send Bitcoins without adding carbon and without comingling with bad actors. And the trust is a big part of doing that with Petra and Terra Pool. And this has been our strategy for quite some time. And we believe that we have the key components of an ecosystem that we can now realize this vision, also enabling ordinals and the ordinal marketplace to ascribe ordinals through Terra Pool falls right into this as part of the key components of our overall carbon free system using Terra Pool and using Systemic Trust as a custody solution for the underlying parts of our strategy, that you really do need a custody technology to integrate with multiple different exchanges and partners. I probably said a lot there. You have deemphasized discussing the release of a new version of Blockseer. Is it still on your road map? Maybe I'll let Steven take that one. Steven? I have my answer, but I'll let Steven take a crack at a few questions.
Steven Eliscu: Thank you, Sheldon. Yes, we had this question come in just because we talked about Blockseer Explorer earlier. And clearly, we've had to move some things around in terms of ensuring we get our trust executed this year. We have a very ambitious schedule. But we do very much want to bring out a new version of Blockseer Explorer. This really goes back to the foundation of the company. And so when we acquired Blockseer in 2018, this was part of why we valued the company was this, was really a basis for providing a path to track bad actors. So we're a pioneer in this. And we want to modernize it and offer it in a way that's perhaps a bit more broadly compelling and not necessarily just for law enforcement. It's just another component of our ecosystem that we feel will make it more sticky. But as we've described the key components we really need that this is a lower priority, and we're targeting initial version later this calendar year. So there are a couple of more questions here. How are you managing non-mining OpEx as it's exceeded levels that we've seen historically. And as you know, we've continued to monitor expenses very closely. Building out a qualified digital asset custodian business will require hiring more staff, and the effort related to the regulatory approvals, building out the infrastructure will -- has and will result in additional professional services expenses, especially on the legal side. That being said, as we indicated before, we're -- from the R&D point of view, we're going to keep that staff where it is now and reevaluate as we need to make specific hires that are more strategic, and when we need to achieve targeted objectives. But we're actually very happy with the team, how they're executing, leveraging the latest tools, the latest infrastructure, the latest software techniques, really to build software that is state of the art, that is scalable. And really be able to get a leapfrog ahead of the competition in a number of ways. Also related to our non-mining OpEx is the interest on the debt. We will likely carry debt for some time. We'll look to pay it down. But we realize that having some amount of modest -- some modest amount of leverage is good in terms of lowering our weighted average cost of capital. Our interest is 7.8% so it's a very attractive rate that effectively is good in terms of our capital structure. So we'll see how we utilize that going forward. We're very happy with having put that in place. But the interest related to that will generate some additional expenses on the non-mining OpEx line. And that's why we gave specific -- we gave guidance that excluded those interest payments. This last question here is really about miners, just M&A and what we think is going to happen post-halvening. As Sheldon alluded to you before that power is going to become a very important asset due to not just the, call it, 10 gigawatts of Bitcoin mining in North America but the tens of gigawatts of AI that is going to be needed to be able to deploy AI infrastructure. So we think there's going to be some shakeout but it's not necessarily what you think. It's not necessarily to get more hash rate, it's really access to more power. And those power assets are going to be a key driver, I think, we think, of what drives valuation in the Bitcoin mining space in terms of any M&A activity that may occur. So I think that's the end of our questions, Sheldon, and I'll hand it back to you.
Sheldon Bennett: Yes, that's the end of our questions. A couple of notes that I would like to just let everybody know for those listening. One, DMG plans to participate in the upcoming World Digital Mining Summit, which is put on by Bitmain. It will be in Las Vegas on June 17th and 18th. So anybody that's going there, somebody will be there, whether it's me or Steven or both of us. Haven't decided that yet, but we will be at that event. We also have another event. We do this every year, which is Mining Disrupt. It's in Miami. We've had a booth for many years there. We have one again this year, that's later in June on the 24th to the 26th. So if anybody is in Miami, come by our booth, and we're always there to talk to anybody. And we do plan on attending Bitcoin 2024 in Nashville, which is on July 25th and 26th. I think Steve and I have both got our tickets, so we will be in there and around there. So if anybody's looking for us, we will be in the vicinity and at the conference. Outside of that, we thank everyone for attending and our call is now over.
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