Good morning. Thank you for standing by and welcome to Cipher Mining's Second Quarter 2022 Business Update Conference Call. Please be advised, today's conference is being recorded and a replay will be available on Cipher Mining's Investor Relations website. I would now like to hand the conference over to Lori Barker, Investor Relations. Please go ahead. Good morning, ladies and gentlemen, thank you for joining us on this conference call to discuss Cipher Mining's second quarter 2022 business update. Joining me on the call today are Tyler Page, Chief Executive Officer; and Ed Farrel, Chief Financial Officer. Please note that you may also review our press release and presentation, which can be found on the Investor Relations section of the website at investors.ciphermining.com. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website. The conference call is the property of Cipher Mining and any taping or other reproduction is expressly prohibited without prior written consent. Before we start, I'd like to remind you that the following discussion as well as our press release and presentation contains forward-looking statements, including but not limited to Cipher's financial outlook, business plans and objectives. And other future events and developments, including statements about the market potential of our business operations, potential competition and our goals and strategies the forward-looking statements and risks in this conference call include responses to your questions are based on current expectations as of today and Cipher assumes no obligation to update or revise them whether as a result of new developments or otherwise, except as required by law. Additionally, the following discussion may contain non-GAAP financial measures. We may use non-GAAP measures to describe the way in which we manage and operate our business. We reconcile non-GAAP measures to the most directly comparable GAAP measures and you are encouraged to examine these reconciliations which are found at the end of our earnings release issued earlier this morning. I will turn the call over to Tyler. Tyler?

Hello, this is Tyler Page, the CEO of Cipher Mining, and thank you for joining us today on our second quarter business update call. Let me begin today's call with some key highlights about our progress. First, we continue to deploy our new bitcoin mining data centers. Notably, we have completed the build-out of our Alborz data center, which is a 40 megawatt facility powered by wind. This site has machines capable of generating up to 1.3 exahash per second. Which on a windy day means the data can generate up to 5.7 bitcoins in current market conditions. In the coming months, we will continue to deploy further data centers as we complete our initial build-out. We have industry-leading unit economics in our operations resulting from our low cost structure that I will walk through today. We believe these unit economics are the most important factor when evaluating a bitcoin mining company. Given our strong unit economics we have a business model that is more resilient than our competitors in the tougher bitcoin mining environment that we have seen in the past few months. Let's talk a little more about our low cost operations in the large-scale we are building. As we roll out our data centers we expect to deploy up to 6.9 exahash per second by early 2023. And importantly, we will do that with a new fleet of machines that averages 32.1 joules per terahash in terms of efficiency and for which we paid an average price per terahash per second of $34.96. We source our power via five year power purchase agreements with an average fixed price of power of $0.273 cents per kilowatt hour. These power purchase agreements are longer than those typically contracted by our competitors and feature a low fixed-price as the contracted…

Thank you, Tyler. And hello to everyone on the call. As evidenced in the photos that Tyler presented, you can see that not only did we complete the Alborz facility, but we continue to make significant progress in building out our data centers in the second quarter of 2022. This resulted in fulfilling the commitments we previously announced relating to purchasing mining rigs, electrical infrastructure, security deposits for our power purchase agreements and corporate related expenses to support our business. During the quarter, we invested approximately $66 million on capital expenditures relating to the build-out of our data centers. Since inception we have invested $278 million related to CapEx, which is recorded on our balance sheet as deposits on equipment, property and equipment and investments in equity investee, the latter representing Cipher equity interest in the Alborz joint venture. On June 30, 2022 we had cash of approximately $37 million and a funded operations with equity and have no debt at the corporate level. If we look at our GAAP operating results for the quarter ended June 30, 2022, we had a net loss of approximately $29.2 million resulting in a net loss of $0.12 per share. The primary drivers of this loss include stock-based compensation of $10.1 billion, we recognized a loss of $11.6 million related to the contribution of miners from Cipher to our JV Alborz due to the fair value being less than the cost we paid for the miners which is included in loss of equity investment on our income statement. Corporate related expenses of approximately $6.6 million include insurance, professional fees, employee comp and benefits and other public company expenses. We believe non-GAAP financial measures are also helpful to investors in comparing our performance across reporting periods on a consistent basis. Our non-GAAP P&L and non-GAAP diluted earnings per share excludes the impact of certain noncash recurring items which include stock compensation expense, depreciation of fixed assets and the change in fair value of our warrant liability. These measures are not a substitute for GAAP results, but management will use these non-GAAP financial measures internally to help understand, manage and evaluate our business performance and to help us make operating decisions. So for the three months ended June 30, our non-GAAP loss is $19 million, resulting in a non-GAAP loss of $0.08 per share. We provided a reconciliation of our GAAP versus non-GAAP results. Finally, we continue to achieve several key milestones in our business plan and we look forward to reporting our progress in future periods as we continue to scale Cipher’s operations. I will stop there and Tyler and I are happy to take your questions.

[Operator Instructions] Your first question comes from the line of Kevin Dede. Your line is open.

Good morning, Tyler, Ed. Thanks so much for having me on the call.

Hey, Kevin.

Congrats on. -- Yeah. Congrats on Alborz. Could you just sort of fill me in on where you are with Bitmain? My understanding and just remind me that 6.9 target for say March quarter ’23, what was the mix again of MicroBT versus Bitmain?

Yeah. So that is -- let me start at the high level. We have a 27,000 machine contract with Bitmain. That I think we mentioned is paid off at this point, I think there's one more – technically, I think one more monthly payment due, but we actually have a credit with them as the prices are flexible and have been dropping. And then we have a 60,000 machine contract with MicroBT that is just beginning deliveries now. Now, all of those 87,000 machines that is to cover our joint ventures at Alborz, Bear and Chief as well as Odessa, which we own 100% of. I mentioned that, because basically half the machines found for Alborz Bear and Chief are effectively sold through our JV partner. Right? So we have round numbers -- 13,000 machines at Alborz, so about 65,000 of those are ours. And then again back of the envelope, there will be about 65,000 machines going to Bear and Chief collectively. And again, half of those roughly will be our, 32,000, 50,000 or so. Does that answer your question.

Yeah. I have to juggle little puzzle pieces in my mind, but I think I’ll get there. The $99 million that you -- I think is still owed to MicroBT, that goes above and beyond what you have access to now. I didn't get through the balance sheet carefully.

Yes. So, as we mentioned, right now we've got or as of August 1, I should say, $30 million of cash, we have a $9 million income in receivable from our JV partner that will come in shortly. And then, no corporate debt. And so, we are in current discussions with MicroBT to align the payments and deliveries of machines under our contract to better align with the readiness at the data centers. So, meaning, back of the envelope, we've paid for about, call it, roughly half of that 60,000 machine order thus far. Shipments are beginning so that we will have them on site and then we are in discussions with MicroBT to push the payment and delivery obligations at the back end of that contract into 2023. So when we think about fulfilling that contract we can either pay for it with cash and then cash being generated from operations as the datacenter's spin up and continue to mine more bitcoin. We remain flexible with sort of capital markets transactions and potential debt, though the market has dried up a little bit for equipment finance over the last quarter, we are in current discussions with some lenders about potentially doing a secured debt facility against some of our data centers. So that could be an option as well. And if not, we also have the flexibility we will -- we have more than enough cash to build all of the non-rig infrastructure at Odessa. And so, we have flexibility on the remaining sort of unallocated machines, about -- the whole site will take about 60,000, there is about 40,000 that are accounted for between MicroBT and other machines we have coming from Bitmain. And so on that last, let's call it, one-third or so of the Odessa data center, we will have flexibility. We could do hosting, we could simply sell power, we do have the rights to sell power and we have a fixed price of $27 per megawatt. So we sort of prioritize flexibility just given the market backdrop. But those discussions with MicroBT are ongoing, we will have in all likelihood given our ambitious growth plans for 2023 more machines to be buying as well in the future. And so we're working with them on aligning the timing of payments just to match our own development plans as things come up and online.

Okay. And I understood you correctly, Tyler, in thinking that the infrastructure ally apart from the machines is all said and done.

Yes.

Okay. Can you give us an update on where you think Bitfury development is and your relationship there?

Yeah. I mean, we still have roughly six years left of a seven year master agreement with them that provides us the right of first refusal on their equipment, as well as a most favored nation pricing framework for that equipment. I think we've mentioned in the past that this year we did not flex the option to buy their equipment. But we think there is value and still having six years if we return to a machine market where it is difficult to acquire machines that should provide us a decent advantage, assuming they come out with competitive machines in the future. They remain roughly an 80% -- a slightly more than 80% shareholder of ours. But that's where it is.

Okay. The $9 million -- I know this is better for Ed. The $9 million due from the JV is on account of what the initial spool up at Alborz?

Correct.

Yes. That's our contribution to Alborz that they will reimburse us for.

Okay. So it's primarily rigs that we contributed through the JV? Okay. Then -- all right. Yeah. Good. Okay. I'll hop back in the queue. Thanks so much, Tyler. I appreciate it. Good to talk to you both.

Thank you, Kevin.

Thanks, Kevin.

There are no further questions at this time. Tyler, I turn the call back over to you.

Thank you very much for joining our second quarter business update call and we look forward to the next one when we will hopefully have more great progress to report on. Please do check out our website ciphermining.com to learn more about us. Thank you very much.

This concludes today's conference call. You may now disconnect.