PowerCompute, Inc. Common Stock 2026 Q2 Earnings Call

Bruce, please go ahead. 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 22nd, we trade on Nasdaq under our new name, PowerCompute, and our new ticker, PWCM. The business you know as LM Funding America still exists, but the name we carried no longer captured where we were headed. Our owned 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 a 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, owned power, low cost, operational infrastructure, and room to scale, are what AI compute customers are looking for. 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 four megawatts of currently available energized capacity at our Columbus, Mississippi site for co-location and hosting. The 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-$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 would require substantial additional capital, customer contracts we have 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-$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 will now turn the call over to Rick to review the financial results.

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, and 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 3rd, 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 $460,000 of increased interest costs, primarily attributed to the imputed interest cost of the Galaxy loan and $280,000 of increased digital mining costs of revenues from higher Bitcoin mined. On June 3rd, 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 under the Galaxy Digital matched currency loan and $8.5 million of other notes payable, of which $1.9 million is long-term.

As a 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 replaced 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 3rd, 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 $11 million non-interest-bearing facility with Galaxy, but with imputed interest from the collar feature. The Arch facility is shorter in duration than the debt it replaced, and its rate and availability are subject to renewal.