James Manning: So, I guess, ultimately, we are always optimizing that for the greatest gross profit margin. So because we don’t have a hurdle strategy. We sell our Bitcoin. Everything we do, we are about maximizing profitability ultimately. And so if it’s most lucrative ultimately to be selling energy back to the market, we will look to do that. If it’s more lucrative to the mining Bitcoin, we will be doing that. And we have an internal model and algorithm, which we look at daily, which ultimately helps drive that decision. So I know that’s not great from a modeling perspective for you, Kevin, but what we are looking to do is ultimately be as profitable as we can be as a business. So we really make — we make the jump between Energy Markets revenue mining or hosting ultimately to make the most margin as possible.
Kevin Dede: Okay. The just peeling the onion back a little bit on Josh’s question on hosting partners. Could you give us an idea of what you are looking for, and I guess, sort of your partner — we are expectation your partners flexibility given the flexibility that you want to have in making that energy consumption decision and then if
James Manning: Yeah. It’s a
Kevin Dede: you are able to find something that can fit that bill, how do you compensate them?
James Manning: Yeah. So it’s a great question. Most of our contracts are open book cost plus power contracts. So that has some huge advantages, because we are not — I guess we are not exposed to price risk like you saw core was where they had unprofitable power inputs with fixed price power. And I think you have seen some other hosting companies come across with similar arrangements where they are committed to a cost per kilowatt hour of power and their prices spiked and they subsequently they subsequently filed, I guess, ultimately. So we have always been transparent in our pricing model. So we do a cost plus model where we have got a charge green infrastructure recovery. We have got a margin component for the business and then, obviously, power is power.
So we are very transparent with our customers on that. And we think that’s while they are our customers, we think that forms a partnership type arrangement, where they get the benefits of seeing it. Wind power spikes, typically, people don’t want to be operating because they are on a cost basis. So they are very happy to turn off. And that’s built into, I guess, how we see what our margins are as part of what we consider our margin to our customer, we ultimately say we get the benefit of — we might get the benefit of any curtailment on any new hosting contract that we get. So we think they are important parts of our contract negotiation and making sure the relationship is right ultimately. And it’s about getting that mix right with our customers, because they don’t want to pay high power prices and we need to manage that.
Kevin Dede: Okay. Yeah. For fear of hog in the call, James, last question, given your and Liam’s view of the climate in Ohio and Pennsylvania, I get the sense that you are not going to explore immersion and dealing with those few hot days or am I not making the right assumption there?
James Manning: Look, we have got a viable emerging product. The reality is on a cost per megawatt basis, it doesn’t compete with it to build this stuff out at the moment and until those economics changes, especially with what has historically been through 2022 depressed oil prices, it’s very hard to make the economic stack. But I think if you are sitting in — if you are sitting in a half of climate, then you have to explore that and there’s a very logical reason to do that. But I think it’s all a trade-off between OpEx and CapEx, and I guess, given where we are, we are pretty comfortable with that OpEx CapEx balance. I’d also say that typically when you see the hottest days in somewhere like PA or Ohio, you wake up and realize that they are also the highest keep pricing of power and so switching off for those few hours in a day for the few days in a year makes a lot of economic sense as well.
