Good afternoon and welcome to the CleanSpark Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would like to turn the floor over to Rachel Silverstein, Senior VP of Compliance and General Counsel.

Welcome everyone. On behalf CleanSpark, Inc., thank you for joining our second quarter financial results conference call for fiscal year 2022. With us today with prepared remarks are CleanSpark's Chief Executive Officer, Zach Bradford; and Gary Vecchiarelli, our Chief Financial Officer. On today's call, we will make forward-looking statements under the Safe Harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that would cause actual results to materially differ from these forward-looking statements are contained in today's press release and in our filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During today's call, we will also discuss certain non-GAAP financial measures about our performance. You can find the reconciliation of GAAP financial measures in our press release, which is in our 8-K and will be posted on our website during this call. With that, it is my pleasure to turn the call over to our CEO, Zach Bradford.

Thank you, Rachel. Good afternoon and thank you for taking time this late in the afternoon to join our call. CleanSpark is a value driven company that is engaged in the once in a lifetime opportunity of building the infrastructure of the new economy. And that's exactly what Bitcoin Mining is. It is infrastructure that makes a difference in the lives of millions of people across the world. And that number is growing every day, as more people are introduced to this transformational technology. Bitcoin is at an inflection point in human history. And we are proud to be part of it. This has been a quarter of execution for CleanSpark, and I'm looking forward to discussing some of those accomplishments during today's call, which we aim to keep brief, informative and targeted towards those elements most important to our shareholders. We had our most productive quarter ever in terms of Bitcoin produce, minting 899 new Bitcoin, which is a 36% increase over the previous quarter, and we are on track to exceed our original hash rate expectations. Our average production per day, even if difficulties increase have surpassed 10 Bitcoin per day. And with the significant operational progress we are seeing at Norcross, we expect to see those numbers continue to tick upward. Well, we have mined more Bitcoin than ever before. We mined them at a lower average market price, which has weighed on our revenue generation. This has been a demanding market for high growth, innovative focus companies like ours. The macro conditions all miners say all public companies really are changing in the face of inflation, war and the pandemics aftershock, but our fundamentals are strong. The Bitcoin project has weathered difficult macro conditions before and we expected will emerge strong, just like us on the…

Thank you, Zach. I want to begin by further echoing the comments Zach made previously. This was a quarter of operational and strategic execution. While the industry faced some macro headwinds, I believe our company has the strongest financial position in its history. With that, I'm happy to now share our financial performance for the second quarter and six month period ended March 31, 2022. As presented in our Form 10-Q, which will be filed with the SEC today, our total revenues increased exponentially in the second quarter of 2022 versus the same quarter of the prior year. Total revenues for Q2 were $41.6 million compared to $8.1 million, representing increase of over 4 times. The overwhelming majority of this revenue was driven by our digital currency segment with revenues totaling almost $37 million. Investments in mining equipment and infrastructure, we have made to-date, have contributed to our growth in these revenues. Our energy segment saw a healthy increase as well, growing to $4.6 million in the second quarter of 2022 from approximately $1.3 million in the same period of the prior year. The majority of this growth was due to the acquisition of Solar Watt, which occurred in the second quarter of last year. Total revenue sequentially increased approximately 1% in the second quarter versus the prior first quarter. Revenues from the digital currency mining increased slightly, even as Bitcoin faced pricing pressure. Despite mining more Bitcoins this quarter, the average price of Bitcoin decreased in the second quarter offsetting the potential for revenue growth. The Company did, however, experience revenue growth of approximately 616,000 in its energy segment, representing an increase of almost 16% sequentially between the periods. Looking at growth profit, you will see the increase in revenues between the second quarte, this year versus the same…

Thanks, Gary. Before transitioning to the Q&A portion of today's call, I will briefly touch on our operational strategy. As I mentioned at the beginning of this call, we have put strategy over ideology, which has placed us in an enviable position to navigate current market volatility. Allow me to reiterate our capital infrastructure and ESG strategies. We've adopted a capital strategy that yields operational excellence and it's rooted in the realities of our business. Take for example, our announcement last year that we would start using some of the Bitcoins we mine finance our growth in operations. The decision was met with mixed reaction. Since then, many of our peers have followed suit with one major difference. While we sold when Bitcoin was in the 60s, 50s and 40,000s, our peers are now being forced to sell when Bitcoin is in the 30. Some of them have paired that with issuing equity at extremely low relative share prices. We continue to execute a huddleing strategy, the imperative word being strategy. We intend to hold Bitcoin and grow our Bitcoin reserves over the coming quarters, but we won't blindly accumulate Bitcoin at the cost of diluting our shareholders and taking on unnecessary debt. Our infrastructure strategy is another example of how we are making calculated choices that benefit us now and in the future. We put infrastructure first by securing power and facilities before securing machines, which is what we have done with Lancium. As we predicted in Q1, basic cost per terrahash has gone down at machines with nowhere to be plugged in, have begun to enter the market. At the same time, innovative technologies are becoming available that are making Bitcoin mining more efficient. We are well-positioned to take advantage of these cost savings and efficiency gains. Speaking…

We will now begin the question-and-answer session. [Operator Instructions] The first question is from Tyler DiMatteo of BTIG. Please go ahead.

Zack, if I could just go back to the comment you made about owning and operating, there is maybe some other locations. What would the timeline be there? And would we look for that to be immersion cooling? Or what would that look like? Have we had those conversations?

Yes, I can address that at a high level. So, we're looking at multiple sites right now, and we are at a level of evaluation on several of those. It would be our attention that we would lean towards immersion cooling at future sites. I think that is an important part of where the industry is going as a whole. And if you look at the miners and the importance of keeping them around long-term, increasing their longevity, increasing their performance, it's more likely than not that we really wouldn't be leaning into immersion, if chosen technology for future say.

So then would we think about maybe relocating the coin mint rig, the 11,000 there are so or would we end up just the rigs we purchase then think about deploying them straight to immersion?

Yes, I think, we want to keep our options open. We would look to deploy our miners at the lowest cost areas, right? Our goal is to maximize the value. Now, if miner prices go the direction we think they're going to go, then we would be adding miners to the fleet and growing our extra hash from there. If market conditions change and it makes more sense to relocate miners, then we'll make that choice. Again, what we want to be able to do is take market conditions real time and make smart decisions on how we do that. But ultimately, we're here to grow revenue and to grow value for the shareholders. So, I think the options are both possible options on the table. But that's how we're viewing it right now is to really take real time market decisions when we actually pulled the trigger on it.

[Operator Instructions] There are no other questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Rachel Silverstein for closing remarks.

Before we end today's earnings call, I would like to remind everyone that this call will be available for replay later today. Please refer to today's press release for dial-in and replay instructions available via the 8-K or the Company's website. Thank you for joining.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.