Nazar Khan: Yeah. So Mike, to your point, it was operational. It was a fairly clean quarter. We did have a couple scheduled outages that occurred. As we continued to build up the site and getting building through ready, there was some work that we had to do to tie in that site to the rest of the site. So, there was an outage in August — sorry — yeah August, that was in the quarter. And as Patrick said, there was an issue just with the lightning strike, but that was only a few hours. But overall, it was a fairly clean operational quarter. Again, the time that we were down was mostly or vastly due to scheduled outages in building three.
Patrick Fleury: Yeah, Mike, on your SG&A point, so I look at SG&A in our financials and I take out stock-based comp, right, because we, as you know, the management team here has a very big stake. So, we really don’t have much stock-based comp, but there is a little bit in there. So yeah, I think 2Q, if I take out stock-based comp, I think was closer to $6.8 million. 3Q, if I take out all the stock-based comp in there, because we did have a performance incentive that was triggered, it’s kind of closer to $6.3 million, I think, in 3Q. But 4Q should be one of our lowest quarters for SG&A. And as you know, first quarter tends to be higher just because we have to file 10-K, 10-Q work — proxy work, there’s a lot of filings and other things that renew obviously in the first quarter. So yeah, I think if you kind of extrapolate out that trend, I think that’s appropriate.
Mike Grondahl: Got it. Okay. Hey, thank you.
Paul Prager: Mike, the one other comment I’d want to just mention in terms of operations is just please recall that we’re vertically integrated. We operate our own facilities. So, I think we’re a little bit unique relative to a lot of the other folks in the mining space.
Mike Grondahl: Okay. Hey, thanks.
Operator: Thank you. Our next question comes from the line of Josh Siegler with Cantor Fitzgerald. Please proceed with your question.
Josh Siegler: Yeah. Hi, guys. Thanks for taking my follow-up here. Just real fast. I saw on your Q that you put down a deposit for potential S21s in the future. I was wondering if you could walk us through kind of that rationale and how you’re thinking about the S21 versus the 19j XPs. Thank you.
Nazar Khan: Hey, Josh, it’s Nazar here. So, the S21 came out low — better efficiency machine, lower price out of the gate that Bitmain had put out there. And so, I think this — there was a question earlier from Lucas just around the kind of miners versus infrastructure. And so, when we think about it, we think the infrastructure is unique, particularly the ability to procure low-cost power for term, and miners are available. So, what we see is that the S21s out there today, again under the structure that Bitmain rolled out, 80% payable before delivery and the remaining 20% a year out. Inevitably, 12 months from today there’s probably going to be another more efficient machine that comes out. And so, our current fleet efficiency is 27.5 joules per terahash.
Once we fully incorporate the full 18,500 j XPs, we’ll be pretty close to 25 joules per terahash. And our long-term goal and trend is to continue to drive that overall fleet efficiency into low 20s. So that will mean that we’d be looking at the S21s, T21s, those types of machines to kind of further drive down that incremental efficiency.
Patrick Fleury: Yeah. And I guess, Josh — it’s Patrick. So, just to touch on the financial aspect of that, I think the right way to think about it is, we’ve got I think about $14.3 million of deposits that we made on the S19j XPs. So that along with the $1.2 million of deposits that we made on the S21s, we’ll roll all that into — so that’s about $15.5 million, we’ll roll that into the — all into the j XP order. So that kind of converts to machines, if you will, at just under $19 a terahash. And then we’ll host the remainder, so the difference, which is roughly, 13,000 of the 18,500 in 2024. And when the time is right, we’ll buy some or all, if that make sense. Does that answer your question?
Josh Siegler: Yeah, that’s very helpful. Really do appreciate the candor. And thanks for taking my follow-up.
Nazar Khan: Thank you.
Operator: Thank you. Our next question comes from the line of [Matteo Levy with Parabolic Ventures] (ph). Please proceed with your question.
Unidentified Analyst: Hey, everybody. First of all, congratulations on your hash rate expansion to 5.5. I’m not aware of another miner who’s achieved that as quickly as you, so I just want to applaud that. But meanwhile my question relates to the short interest. What is the market missing? What are they misunderstandings? And how do you intend to prove them wrong? Because the short interest has grown, meanwhile, all your other metrics are looking amazing. So, I would love to get some feedback from you on this.
Paul Prager: Hi, Matteo. This is Paul. Thanks for your question. Part of the short position in the space, but I don’t think it’s close to even 50%. Part of that short interest would appear to be some of our lenders. And I think, by the way, they have been entirely supportive and remain, again, long the stock and willing to continue to help the company outperform its peers. I think the other shorts, part of it is I don’t think they understand the debt. So, they look at the debt and don’t appreciate that when cash flows — we have free cash flow until April and then once we’ve paid down a certain amount, which we’re clearly going to be able to do here and get it for the duration of the loan. They don’t appreciate. As well that we have built our facilities to scale pretty rapidly and we could do that internally.
