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DATE

Friday, Aug. 14, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer - Bruce Rodgers
  • Chief Financial Officer - Richard Russell
  • President of U.S. Digital Mining - Ryan Duran

TAKEAWAYS

  • Revenue -- $2.1 million, representing a 9.8% year-over-year increase driven by a higher number of active miners and a decreased difficulty rate.
  • Net Loss -- $4.6 million, compared to net income of $100,000 in the prior-year period due to $3 million in fair value losses on digital assets.
  • Core EBITDA Loss -- $2.8 million, shifting from core EBITDA income of $2.6 million in the second quarter of 2025.
  • Bitcoin Mined -- 27.9 Bitcoins, increasing from 18.4 Bitcoins in the prior-year period.
  • Bitcoin Treasury -- 318 Bitcoins, valued at approximately $18.6 million as of June 30, 2026, when Bitcoin was priced at $58,400.
  • Mining Margin -- 29%, supported by $145,000 in energy sales and curtailment revenue while facing lower average Bitcoin prices.
  • Energy Curtailment Sales -- $145,000, recognized as a reduction of cost of revenues for the second quarter.
  • Operating Cash -- $900,000, held as of June 30, 2026, to support ongoing operations.
  • Total Liabilities -- $21.6 million, primarily consisting of $10.8 million on the Galaxy Digital Master Currency Loan and $8.5 million in other notes payable.
  • Refinanced Debt Facility -- $18 million, representing a consolidation of three existing debt facilities into a single revolving 30-day term facility with Arch Lending.
  • Consolidated Interest Rate -- 2% APR, replacing retired debt that carried a blended annual rate of approximately 13%.
  • Managed Power Capacity -- 26 megawatts, distributed across a 15-megawatt site in Oklahoma and an 11-megawatt site in Mississippi.
  • Average Power Cost -- $0.036 per kilowatt hour, reflecting a blended average between Oklahoma at $0.037 and Mississippi at $0.035.
  • AI Infrastructure Revenue Estimate -- $20 million to $50 million, representing management's illustrative estimate of annual revenue potential if the full 26-megawatt capacity is built out.
  • July Bitcoin Production -- 7.9 Bitcoins, reflecting seasonal heat-related curtailment at both owned sites during the month.
  • July Energy Sales -- $91,000, generated by monetizing power during periods of peak demand on the electrical grid.
  • July Bitcoin Treasury -- 315.1 Bitcoins, valued at approximately $20.2 million as of July 31, 2026.
  • Bitcoin Collateral -- 307 Bitcoins, pledged as collateral for the consolidated $18 million loan facility with Arch Lending.
  • Digital Mining Cost of Revenues -- $280,000 increase, driven by the higher volume of Bitcoin mined compared to the prior-year quarter.
  • Average Bitcoin Price -- $72,000, decreasing from $75,700 in the first quarter of 2026 and $98,000 in the second quarter of 2025.

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RISKS

  • Rodgers stated, "The Arch facility is shorter in duration than the debt that it replaced and its rate availability are subject to renewal," noting that substantially all Bitcoin is currently pledged as collateral.
  • Rodgers warned that the estimated $20 million to $50 million annual revenue opportunity is subject to "substantial execution, capital and market risks," as it requires additional capital and unsigned customer contracts.
  • Management noted risks regarding the ability to "retain the listing of our securities on the NASDAQ Capital Market."

SUMMARY

Management reported that PowerCompute, Inc. (PWCM +0.98%) is expanding its business to include hosting artificial intelligence (AI) infrastructure and high-performance computing (HPC) by utilizing its 26 megawatts of owned power. The company consolidated $18 million in debt into a single Bitcoin-backed facility with Arch Lending, significantly reducing its blended interest rate from 13% to 2% APR. Management stated that the defining constraint in AI infrastructure has shifted from space to power availability, which the company intends to address using its existing energized sites. PowerCompute is currently running a proof-of-concept deployment with its first GPU while marketing available capacity in Mississippi for colocation services.

  • Chairman and Chief Executive Officer Bruce Rodgers stated, "We believe the defining constraint in AI infrastructure has shifted from space and fiber to power."
  • Management reported that the company's first GPU is listed on the Vast.ai compute marketplace as a proof-of-concept deployment to build operational experience and gauge demand.
  • The company is marketing 4 megawatts of currently available energized capacity at its Columbus, Mississippi site for colocation and hosting.
  • Rodgers indicated that management is evaluating modular containerized data center solutions to facilitate a quick conversion of power infrastructure to GPU compute.
  • Management stated that the Oklahoma site expansion does not carry social or headline risk because it is located within an industrial oil patch.
  • Todd Liebl, Vice President of Operations, positioned the company's ability to curtail power at the Mississippi site as a community benefit to prevent grid brownouts during peak periods.

INDUSTRY GLOSSARY

  • HPC: High-performance computing, involving the use of supercomputers and parallel processing to solve complex computational problems.
  • GPU: Graphics Processing Unit, a specialized electronic circuit designed to accelerate compute-intensive tasks, essential for AI processing.
  • Vast.ai: A marketplace for renting and leasing graphics processing unit computing power.
  • Curtailment: The process of reducing electricity consumption from the grid, often in exchange for compensation, when demand exceeds supply.
  • Colocation: A data center service where a provider rents space, power, and cooling to customers for their own computing hardware.
  • Core EBITDA: A non-GAAP financial measure that adjusts earnings for interest, taxes, depreciation, and amortization, as well as specific gains or losses on digital assets.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the PowerCompute Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I would like to hand the conference over to your speaker today, Bill Carlson. Please go ahead.

Bill Carlson: Thank you, operator, and thank you all for joining us on PowerCompute's Second Quarter 2026 Earnings Conference Call. Joining us today are Chairman and Chief Executive Officer, Bruce Rodgers; Chief Financial Officer, Richard Russell; and President of U.S. Digital Mining, Ryan Duran. An accompanying supplemental investor presentation has been posted under the Events section of our Investor Relations website. Before we begin, please note that today's remarks include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results and are subject to risks and uncertainties that could cause actual results to differ materially.

Important factors include, among others, our ability to retain the listing of our securities on the NASDAQ Capital Market, our liquidity and our ability to obtain additional financing on acceptable terms, the short-dated nature of our credit facility and our ability to renew it, the early stage of our AI infrastructure business and our lack of operating history in it, the volatility of Bitcoin prices and risks related to the use of Bitcoin as collateral and our ability to secure customers and capital for any conversion of our power capacity. Any statements regarding the potential revenue opportunity from a full build-out of our power capacity are illustrative estimates only.

They are not guidance, not a forecast for any period and are subject to substantial execution, capital and market risks. We will also reference certain non-GAAP financial measures. Please refer to our Form 10-Q for a full reconciliation to the most comparable GAAP measures and to our SEC filings in the Investors section of our website at power-compute.com/investors for a more comprehensive discussion of these and other risks. I will now turn the call over to Chairman and Chief Executive Officer, Bruce Rodgers. Bruce, please go ahead.

Bruce Rodgers: Thank you, and good morning, everyone. This is a transformational time for our company. In July, we expanded our business to include hosting AI infrastructure and high-performance computing to take advantage of the 26 megawatts of power under our control. As of July 22, we trade on NASDAQ under our new name, PowerCompute, and our new ticker, PWCM. The business you know is LM Funding America still exists, but the name we carried no longer captured where we are headed. Our own power is the foundation of this strategy. We control 26 megawatts across two sites, a 15-megawatt site in Calumet, Oklahoma, and an 11-megawatt site in Columbus, Mississippi, both energized, industrial zoned and operating today.

Power is priced at approximately $0.037 per kilowatt hour in Oklahoma and $0.035 per kilowatt hour in Mississippi, a blended average of $0.036. Our power is priced at variable market rates and will fluctuate. Our roughly 22 megawatts currently power Bitcoin mining and all or part of that capacity is addressable for AI and HPC. We are also in discussions with our Oklahoma power provider regarding the potential expansion, and we continue to evaluate additional low-cost power sites. Those discussions are preliminary, and we cannot predict whether they will result in an agreement. We believe the defining constraint in AI infrastructure has shifted from space and fiber to power. Greenfield grid connection and permitting can take years.

Our sites are energized now. The same attributes that make a strong mining site, own power, low-cost operational infrastructure and room to scale, are what AI compute customers are looking for. And we think that convergence creates a timely opportunity for us. Our first steps are deliberately small. In July, we acquired our first GPU and listed that capacity on the Vast.ai compute marketplace. This is a proof-of-concept deployment. It generated no revenue in the second quarter and revenue in the third quarter will be immaterial. Its purpose is to build operational experience and give us direct visibility into demand.

In parallel, we are marketing approximately 4 megawatts of currently available energized capacity at our Columbus, Mississippi site for colocation and hosting. A full 11-megawatt site is convertible to HPC, and we would redeploy mining capacity there for the right customer commitment. We are also evaluating modular containerized data center solutions for converting power infrastructure to GPU compute and engaging vendors so that we can move quickly when we are ready. Over the long term and assuming a full build-out of our existing 26 megawatts, we have said we believe this could represent a $20 million to $50 million annual revenue opportunity.

I want to be clear about what that is, an example estimate of the opportunity at full build-out, not guidance and not a forecast for any period, realizing it requires substantial additional capital, customer contracts we've not yet signed and execution over multiple years. We have no assurance any of that will occur. But we value the opportunity to pursue $20 million to $50 million in annual revenue potential by building on the assets we already own and operate. Second quarter marks the beginning of this work rather than the result of it. I'll now turn the call over to Rick to review the financial results.

Richard Russell: Thank you, Bruce. Total revenue for the second quarter of 2026 was $2.1 million, essentially flat compared with $2.1 million in the first quarter of 2026, but an increase from $1.9 million in the second quarter of 2025. This represents a year-over-year increase of 9.8% for the quarter. This revenue growth reflects an increase in the number of miners actively mining and a decreased difficulty rate, partially offset by a lower average Bitcoin price. We mined 27.9 Bitcoins in the second quarter of 2026, up from 26.1 Bitcoins in the first quarter of 2026 and up from 18.4 Bitcoins in the second quarter of 2025.

On June 30, 2026, our 318 Bitcoins were valued at approximately $18.6 million when Bitcoin was valued at $58,400. Our mining margin, after including curtailment and energy sales was 29% in the second quarter of 2026 compared with 24.1% in the first quarter of 2026. The mining margin for the second quarter of 2025 was 41% when Bitcoin was much higher. Mining margin in the current quarter was supported by $145,000 in curtailment and energy sales, which was recognized as a reduction of cost of revenues set against an average Bitcoin price that declined to $72,000 in the second quarter of 2026 from around $75,700 in the first quarter of 2026.

The average Bitcoin price in the second quarter of 2025 was $98,000. Net loss for the second quarter of 2026 was around $4.6 million, while our core EBITDA loss was $2.8 million compared with second quarter of 2025 net income of $100,000, while core EBITDA income was $2.6 million. The change from the prior year quarter primarily reflects a loss on fair value of digital assets and digital asset receivables totaling $3 million versus a gain of around $3.8 million in the prior year quarter, together with $450,000 of increased interest costs, primarily attributed to the imputed interest cost of the Galaxy loan and $280,000 of increased digital mining cost of revenues from higher Bitcoin mined.

On June 30, 2026, total assets were around $37.1 million, including 318 Bitcoins, of which 174 were being held by Galaxy Digital as collateral. The total value of all Bitcoin was around $18.6 million and cash was $900,000. Total liabilities were around $21.6 million, consisting primarily of $10.8 million on the Galaxy Digital Master Currency Loan and $8.5 million of other notes payable, of which $1.9 million is long term. At the subsequent event update, we refinanced and consolidated our three existing debt facilities totaling $18 million with Arch Lending secured by 307 Bitcoins from our treasury.

The Arch facility reflects an $11 million loan from Galaxy Digital and $7 million of loans from another lender used to purchase our Oklahoma and Mississippi facilities. We initially entered into a bridge loan with Arch to consolidate the three loans. Then on August 3, 2026, we entered into a Bitcoin-backed facility with a revolving 30-day term carrying an interest rate of 2% APR. The debt we retired carried a blended annual rate of around 13%, consisting of $7 million of notes at 12% and an $11 million noninterest-bearing facility with Galaxy, but with imputed interest from the call feature.

The Arch facility is shorter in duration than the debt that it replaced and its rate availability are subject to renewal. The Arch structure lets us hold our Bitcoin at a low cash carrying cost rather than sell it. We retain participation in Bitcoin appreciation between the contractual floor and ceiling of the collar with the ability to reset those levels as the facility renews. I will now turn the call back to Bruce.

Bruce Rodgers: Thank you, Rick. So let me close with where we are focused. Our near-term priority is proving out the model, running our proof of concept at Oklahoma, learning what demand for this capacity actually looks like and using what we learned to decide how quickly to convert additional owned megawatts in Oklahoma and Mississippi from mining to AI and HPC. This is a single GPU today. It is deliberately small because we would rather learn cheaply before we commit capital at scale. We are not starting from zero, though. We already own the power, the sites and the operating experience this transition requires. We have real work ahead, and we intend to do it deliberately.

At the same time, managing liquidity remains a near-term priority. The refinancing we completed after quarter end reduced our interest expense, though the facility is shorter in duration than the debt it replaced and substantially all of our Bitcoins pledged as collateral. The structure lets us hold our Bitcoin rather than sell it, and we retain participation in Bitcoin appreciation between the contractual floor and the ceiling with the ability to reset those levels as the facility renews. Between owned low-cost power infrastructure and the large and growing market for AI compute, we believe PowerCompute has an opportunity to convert this quarter's announcements into tangible results. We look forward to updating you on our progress.

Thank you for your continued support. Operator, please open the line for questions.

Operator: [Operator Instructions] Our first question comes from Matthew Galinko with Maxim Group.

Matthew Galinko: Maybe if we could start with -- I think it's been a few weeks now since you announced the potential for hosting AI HPC of your infrastructure. Have you had any initial discussions with potential counterparties to provide a colo style arrangement? Or can you just give us any color of how the beginnings of that process is going?

Bruce Rodgers: We haven't announced anything definitive and it'd be premature to do that. But the answer to your question is, yes, we are talking to counterparties and sorting through it.

Matthew Galinko: Got it. And then in the prepared remarks, I think you mentioned exploring containerized type AI or GPU infrastructure to maybe scale up the single GPU pilot that you're doing now. Again, I understand it's maybe a little bit early to be going into which direction you might go. But could you maybe add some color to what the economics of that might look like or what operations might look like? And would you be able to fund the acquisition of a container? Would you kind of replace your mining wholesale with containerized GPU infrastructure? Just how do you kind of envision that playing out as the direction you go?

Bruce Rodgers: Yes, Matt, I'd love to answer every one of those questions, but I can't. But I can answer a bunch of the questions. So the -- there are folks out there that are manufacturing containers for HPC. They are sophisticated enough to require NDAs and wrap this stuff pretty tightly. They are -- it's also sophisticated enough to come with willing financial partners on both sides of it to advance that because of the potential of all of the other cheap places you could possibly run these things and while the AI curve and the price for compute is so high. So that's kind of the color and context.

I wish I could tell you some material developments, but we're not to that point yet.

Matthew Galinko: Got it. And maybe if I can get a last question in. With regards to any capacity expansion potential at your existing sites, what are the steps you need to do? And maybe just on a local level, how would you say the -- your counterparties are -- what is the willingness to deploy an AI data center there? Do you expect pushback on a local level?

Bruce Rodgers: I think you're probably going to more of a community-by-community on the pushback question. And so the pushback question in Oklahoma is you're in a middle of an oil patch. There's no community. So any expansion there doesn't have any social or headline risk. Our facility in Columbus is in a community that I used to live in, believe it or not. And like all places, there's some anti-data center sentiment there that you can find on Facebook. But we had a really a very nice interview with the local newspaper, the Columbus Dispatch, where Todd Liebl, our Vice President of Operations there, fielded every question, any question and was pretty forthright with them.

And I think it came off quite well that we complement the community because they would be facing brownouts otherwise and that our ability to shut off our power and deliver power to them at peak is being seen as a community benefit or at least being positioned there. So I hope that's responsive to what you're asking. I'll give you another shot at it if it's not.

Operator: [Operator Instructions] There being no further questions, this concludes PowerCompute's Second Quarter 2026 Earnings Conference Call. Thank you for participating. You may now disconnect.