Good morning, ladies and gentlemen. Thank you for chiming in to this webcast. We are here to present our annual report for 2024. Thank you for hosting us, Ubaid, at InvestorWeb. For those of the listeners that are truly listeners and not viewers, you can submit questions to an email that would be ir@investorweb.no, and we will receive them even though you are on your phone or, for some reason, not watching us right now. That being said, let's dig into it, shall we? First, the Safe Harbor Statement. I've spent too much time with me today. I have Ruben Gómez, the CEO and founder of PowerPool.
PowerPool is continuing to become a more and more important part of the activity of the group, so I felt like bringing him and dragging him all the way from Miami to Oslo to join me today would be important for our shareholders and other stakeholders. My name is Ola Stene-Johansen. I'm the group CEO. Anything else you want to add to your introduction?
I'm jet-lagged, but very happy to be here. We're excited about everything we want to talk about, so let's get to it.
At least you'll bring some really fresh news. For those of you that don't know us, the group is a fabless semiconductor company. We are focused on blockchain and AI, but we do also own a majority stake in PowerPool, and we have a subsidiary that focuses on developing data centers. There are four data center projects in various stages of development. We've taken some leapfrogs on those projects throughout 2024, so please check more in the report for those details. We have redesigned our ASIC, the main focus of the group. That was finished during 2024, final power sims in September, and we've been working on capitalizing the company, going into mass production, transitioning into not an R&D-focused entity anymore, but more of an industrial actor.
The group is cash flow positive on a run rate basis, thanks to Ruben and his efforts to drive the growth in PowerPool. We're listed on Euronext Growth. Our market cap is around NOK 340 million on Friday last week. Some highlights from the year that went by. We concluded the validation phase of the ASIC design. That happened in May. We received the final power simulations in September. That's an accurate description of both the functionality, but also the power consumption of the commercial design ASIC. We've also implemented what's called PUF, a physical unclonable function, to protect the IP. It's a little bit more tricky, a bit more of an endeavor than what we first thought, but at least it's successfully there.
It will protect the IP, protect the chip from being reverse-engineered or, for some reason, a breach of data privacy for the AI application, for instance. It is an industry standard, and it is regarded as one of the best protections you can implement. We have also, finally, secured some rather large framework agreements for pre-ordering our hardware. We announced last week another $1 million in pre-orders, so we are continuing to build that book until we are seeing the first engineering samples of the mass production line. We acquired a 5,000 sq m mountain hall. It contains a decommissioned nuclear bunker, and we have been tactically and strategically procuring infrastructure over the year, doing it as cheap as possible, but still enough to enable us to launch more conventional data center services. I think that is part of the challenge going into 2025 is to mature that business.
We also completed the PowerPool acquisition that we started in the very beginning of the year. From a more honest side, we started the due diligence in December 2023, so it's been a long acquisition process, but it's in this year's books. We'll dig a bit more into the details of that later. I think it's important for the reader to understand when the books of the actual limited liability company start. After the balance state, we also launched the partially underwritten rights emission. That gives us a very good visibility on the group's previously communicated capital requirements. It's what's needed to transition into a mass production and industrial actor phase. Hopefully that will consummate. Important date, 30th of April. Let's just get over to the boring stuff.
Those of you that have followed us for a while, you know that our annual accounts have not been so interesting to read in detail. There are three focus areas I want you to put your attention towards on this year's accounts, namely the fact that our intra-group debt, a large portion of it, is not written off. We have had a policy of writing off the intra-group debt all the way to illustrate that this has been a risky R&D endeavor. Now we feel like the R&D effort is over. We have clear visibility on the revenues from the products that stem from that R&D, so we decided not to write off the intra-group debt this year, although we have also then decided not to write up the previously issued intra-group debt.
We want to make sure that the gross margins, the volumes, and the capabilities to deliver these units at a reasonable price before we write up the intra-group debt and have a financial income in the top company. This is also the first year where we show some revenue of significance. NOK 3.8 million, that's the group's part of the PowerPool revenue. I want to highlight that the group loss is primarily driven by the depreciation rates of the R&D. We're writing it off over two years, so it's a relatively aggressive scheme. At least you could argue that. We want to take a more deeper dive into the market and how the market has developed. 2024 has been an interesting year for the Scrypt ecosystem. As you know, Litecoin and Dogecoin are the main drivers, the main blockchains utilizing Scrypt for securing them.
I want to point out that Litecoin has been challenging Bitcoin this year for being the transactional leader. On certain dates in 2024, Litecoin is surpassing Bitcoin, and we are happy by the choice we made back in 2019 to go after the Scrypt algorithm first. Not only is it a large enough niche to be worth the risk of the R&D, not only does it make us capable of utilizing some techniques on the memory side to gain a competitive advantage, but I think the underlying proof that Litecoin really is the silver to Bitcoin is starting to show. Merge mining efforts have been increasing as well. We are going to spend some time today to educate our shareholders and other stakeholders on what that really means, what merge mining entails.
We think it's a huge benefit for the ecosystem of Scrypt and the underlying value of our hardware. An important part of showing the differences between SHA-256 and Scrypt as a niche. There's also been submitted multiple Litecoin and Dogecoin ETF applications from serious actors. There's at least four proper applications for each coin. If and when they are approved, we think it'll drive institutional inflow and the overall ecosystem growth as it's been done for Bitcoin. Two main points I want to comment on on the ETF side is the fact that the SEC has stated that proof of work coins with a fair launch should be considered commodities, which is a huge benefit for the Scrypt coins in this regard. We got some technical issues here. Just wait a second. There we go.
There we go.
Okay.
You can just continue from where you left, Ola.
And when?
That's the real question. When did we leave?
Two, three minutes ago.
Okay.
ETFs.
ETFs. Okay.
All right. Sounds good.
Let's go back one then.
Yeah. I'll go back one.
No worries. Okay.
I don't know exactly where I was. The ETF applications, there have been multiple of them for both Dogecoin and Litecoin, and we anticipate them to drive the institutional inflow of capital, and it typically increases the overall growth of the ecosystem. Two comments I have. The SEC, they appear to view any proof of work coin that has a fair launch as a commodity, which is a huge benefit for Litecoin and Dogecoin in this scenario. I like to think of the fact that BlackRock listed Litecoin ETFs as a key risk factor in its Bitcoin ETF application. If someone is looking into the future and yeah, Litecoin is finally starting to emerge as a new, and not a new, but a proper company.
Yeah.
The prices have been volatile as always. Obviously, you can see the excitement after the election in the U.S. in November. It stabilized on a higher level. I still feel like Litecoin is dragging a little bit behind Bitcoin, but as I said, on certain days, as we're making an example of on the left-hand side here, Litecoin is surpassing Bitcoin in number of transactions. BitPay, which is a top-tier payment processor, they're also incorporating Litecoin into their online payment processing services, and they report that Litecoin has been a stable winner when it comes to the number of transactions that users choose to pay with. I feel like the argument of this silver to the Bitcoin gold is starting to materialize. The hash rate has increased about 100%, a little bit above 100% over 2024, and it's grown significantly since.
Not another 100%, but 60-70% or so since New Year's. You can see that the hash rate coincides very well with both the U.S. election, but also Bitmain's delivery on the L9s. A new generation of hardware is coming to market, did come to market, and that did lead to a large increase in hash rate. It is also a little bit mixed because after the election, super profit started to emerge again in the Scrypt mining niche. We are now seeing L3s running live.
Yeah.
That's hardware from 2017.
2017, yeah.
2017.
Real hardware still, but yeah.
Definitely some of those older generation hardware have been turned on. The merge mining, it's a finicky topic, but what happens is that you mine multiple chains at the same time. It sounds a bit like magic, but I'll let Ruben try and delve into it later. The key takeaways, I think, is that it's a large economic benefit for the Scrypt miners. If you're not merge mining, you're doing it wrong, please then switch pools to a pool that is effectively merge mining. It enhances the attractiveness of that algorithm compared to, for instance, SHA-256. It makes it more profitable per kilowatt-hour spent, right? What it also does, it lends the network security that's being offered to Dogecoin and Litecoin to new projects.
Take Meowcoin, for instance, launching on the Scrypt network with merge mining capabilities effectively ensures the launch of that new coin, even though it's a proof of work project. There's no 51% attacks for $5 from some rental hash rate. You are piggybacking off of the investments already made. It's environmentally positive. Obviously, you use the same resources twice. The argument against how environmentally bad blockchain is, I think, is somewhat combated by these emerging technologies such as merge mining. Even though, as I showed you, hash rate has increased a lot, prices have increased a lot, the profitability for the miners, we've seen a couple of short-term spikes, but overall, it's been relatively stable. I think the market dynamics behind hash rate and the coin prices is a really interesting dynamic to follow because it's predictable in a sense. That is partly why PowerPool is doing so well.
Yeah, exactly.
You want to explain the technicalities behind it?
Sure. I mean, if we went to a technical, it would take us two hours to do it.
Yeah.
Merge mining, it's essentially like magic in the blockchain. Instead of having blockchains that are linear, with merge mining, you create a web of logs. Instead of them being referenced, so in blockchain, you reference the block before. In merge mining, you reference the block before, and the blocks that are in parallel to you on other chains at the same time. That's why you can use the same proof to prove all of them, because if you prove one, you prove all of them at the same time. It's like magic. It's beautiful. Essentially, it means that you're buying one lottery ticket. That's what your miner is doing every second. What you're doing is you're using it in multiple slot machines, you could say, that are trying to give you money out.
Even if the payout is lower on the other ones, because they're very competitive and everyone's doing it at the same time, you still get more for the same ticket. It increases your expected value of that mining. It's the same thing with merge mining. You're mining multiple chains at the same time with the same effort, so the same ticket.
Important part though, ticket has the same price.
Exactly. You can earn more from it. It is a pretty interesting dynamic.
Sounds a bit too good to be true in many ways.
Yeah, no, that's what people said at the start. They didn't trust the technology because it was like, what?
That's just common.
Yeah.
Now it's widely adopted. How many coins do you merge mine today?
There's about 17 different merge mine coins right now on Scrypt alone.
Yeah. And liquid, about six?
Yes, more or less. A bit more, maybe eight.
Maybe eight.
Yeah.
Depending if you're a pool or if you're a private player.
Yeah. If you're a pool, you can make them a lot more liquid, the smallest ones.
I'll let you take over now, Ruben. PowerPool.
All right.
No reason for me to spend time on trying to explain something when I've flown you in from Miami.
Yeah, PowerPool, like we said, it's a merge mining pool and a coin switching pool as well, but merge mining very effectively. We're allowed to give users more money for their hash rate because of the system. That's why we've seen the adoption we have seen and why the paid marketing we show here in this class is so effective because of our special keywords of merge mining being more money out of your hash rate. We started doing some paid marketing in 2024. We paused it before the end of 2024 just so that it could be simpler to consolidate a lot of the accounts and the auditing as well as the SOC processes. That's what you see in that graph.
The revenue so far since the, up to 2024, since the acquisition was EUR 456,000, which is about close to NOK 5 million. Depreciation was EUR 83,000, just I'm guessing. It's about NOK 1 million, more or less. The operating profit was EUR 346,000, which is about NOK 4 million again. You can do your own math on what the operating costs are for the pool, but it's around 5% of the revenue. That's what we computed it to be.
It's a very scalable business just because of the low cost that comes into managing the software on the back end. One amazing goal is that we reach 121 countries. That is a very big part of the world. You'll see a map in the next slide that it shows where we're at and the density on the different areas, as well as the SOC certifications that are in process that are expected to finish within the first half of this year.
A couple of key takeaways. The figure you're missing here is the operating cost, all the operating costs, right? And that's about EUR 23,000 or so?
Yeah.
Correct?
I think that's right, yeah.
Yeah. I think also an important distinction to make is that these numbers are from the 1st of April. So you're missing out a quarter.
Pretty much, yeah. A bit more.
Yeah, a bit more. Yeah, obviously, we're going to do more paid marketing.
Yeah, I'm in favor of. The effectiveness, it's very, very clear. People are looking for services like this. That's what we see when we start reaching out. The quality of the paid marketing, of course, not all the conversions are going to be mining because a lot of people, they just want to join to see what you have. It seemed to be very effective when we were doing it. We saw a lot of user growth, as well as a lot of hash rate being added to the service as well.
You're talking about the global footprint, 121 countries. I think the UN has 190 something.
Yeah, no, it's.
What's that, like 60, high 60%?
It's around there, yeah. It's a very big covering a lot of regions. We see that pretty much all South America is covered, which we didn't expect it to be that well, just because we don't have that many servers yet in South America. This analysis told us that we should put more servers there. That's very good. The U.S. is where we have the most servers, like densely packed, so it makes sense for it to be the most people there.
One thing that we've seen is that we're starting to enter the Chinese market. The language barrier is something that we've seen. We'll talk about also mining disrupts in the conversations we had there, but that's some of the conversations we had were there. That is something we're going to try and explore to see if we can do a version of PowerPool that is translated to Chinese just on the language so that it's a lot easier to enter. That way, we can conquer that side of the market as well.
Fifty-six percent in the Americas and North America, sorry, 51% in the US. I think we have a lot of room to grow both in China.
100%, yeah.
Large market, as we know.
It's the largest for crypto and crypto mining so far.
Yeah. You got to learn Mandarin really quickly.
Yeah. I used to speak Mandarin, so it shouldn't be too hard.
Speaking of hash rate, we're seeing some negative developments as well.
Yes. You see some red there. I want to reassure you that you don't have to be worried. Those two algorithms that you see there, they were added simply because we had one of the biggest customers on the other algorithms that had machines that mine those. We said, even if it's not going to be very profitable for us, we'll add them to the system as well, just so that you can consolidate all your accounts within the same umbrella.
Those are the lowest paying algorithms on ASICs in the market thus far, pretty much. Also, EagleSong is one that is very low paying in terms of the daily emissions, but we've seen growth there, so it's not really negative. We've seen a lot of growth in Scrypt, SHA-256, and KHeavyHash, which are the biggest ones. Those are the ones that we should mostly focus on, especially because SHA-256 is very, very big compared to Scrypt, and even bigger compared to KHeavyHash in terms of daily emissions. You have a lot more market to grow into.
Speaking of market, what's the market share roughly on current hash rates on Scrypt and SHA?
Scrypt is around 2.4. There are per hashes around the globe. That is in terms of daily emissions. I'm not sure how many millions it is, but it's quite a few millions a day. SHA-256 is 15 times bigger in terms of emissions.
5% of roughly $110 million US emissions on the Scrypt.
5% is 10 million.
109 million.
Okay. Yeah, a lot more. SHA-256 is gigantic. It is the market that we turn and go in towards just because it is the best in the long term. Scrypt is smaller customers. It is not enterprise-level customers. That is why PowerPool is the one that it attacked first, just because it was easier to convince to convert clients on Reddit, which is the platform we were most active at at that time. Now that we have our foot on Scrypt, we can get into SHA-256, which we currently have about between 0.1% and 0.3% of the global hash rate.
Key takeaways here, I think Scrypt growth has been moderate compared to SHA, but then again, the overall market hash rate has also been relatively moderate compared to the increase in SHA.
Yeah.
When we started looking at PowerPool, Scrypt and SHA-256 had like 48% each, roughly, when it comes to contribution.
Now it's more heavy on the Scrypt, just because we had a lot of Dogecoin price increases and a lot of more merge mining coins being added. I would say the economic development of Scrypt is a lot better than the economic development of SHA-256, just because SHA-256 is a race to the bottom in terms of electricity prices. Unless you have very, very cheap electricity, there's not really a way to make money. On Scrypt, you have a much more moderate slowdown of your revenue per kilowatt hour.
I think also an interesting thing to notice is that SHA-256 being the most competitive algorithm is also where the pool's impact on your bottom line is the largest.
Yeah.
In theory, it will be where you are most incentivized to switch pools.
Yeah.
I don't know if that's something that you can conclude on these simple figures, but at least it's something to keep in mind.
Here you see, we just wanted to portray the graphs on hash rate that we have on the pool thus far. You can see that the Scrypt, SHA-256, and KHeavyHash have a very similar underlying trend, which is upwards. That is great. It is accelerating. That is what we are seeing. Adoption is always exponential and up to a point, and it becomes sigmoid. It is exponential due to the fact that more people know, because if you have more hash rate on the pool, you are more likely to be known and more likely to be trusted. It is an accelerated growth every time.
On EagleSong, Blake2S, and X11, the growth is also there, especially on EagleSong. The trend on X11 and Blake2S, it is a bit different, especially because these two algorithms have older hardware in most of the cases. They are very competitive on electricity rates, meaning that unless your data centers that we know have a very low electricity price, they are going to start turning off the machines. Since the growth is not, they are not very actively maintained chains in terms of adoption, the growth is a lot slower.
You came straight from Miami to Oslo.
Yes.
How was Mining Disrupt ?
It was good. A lot of clients. There were very interesting moments. For example, when we first opened, the doors flung open, and there was a guy pretty much running to our booth to come and say hi because he was a mining PowerPool user. He came to show us the app. He was like, "We'll add it," to tell us that he liked the new interface a lot. That was very rewarding, honestly, on a personal level, as well as on a business level, just to see the stickiness and the desire of customers to meet us. That was very, very fun. We had a booth there, as you can see there on the images. That was right before we opened it, so it was pretty empty at that point.
We were giving out T-shirts as well as USB drives and fee discounts for the users that came in to see us and spin the wheel. We were explaining the profitability and benefits to a lot of the larger clients that we saw there. There were a lot of big mining farms, which showed very high interest on the profitability aspect, as well as all the services that we offer around it. We also showcased one of our new hardware solutions, which was the Power Bridge. We were giving out T-shirts and other prizes.
Let me intercept you because we're operating this thing, so we are working with this daily. Listeners, they might be very confused, like, "Why is PowerPool a service provider now suddenly talking about hardware solutions and hardware products? What is Power Bridge?
It is not like a miner, like Lokotech has. It is a very different case. When you have a data center, you have first your miners, and then you have your routers, your internet, your providers. You also have, for example, containers. You have your active components, which are the miners. You have your passive, which is your infrastructure, like in sort of two categories. Then you have something in between, which is where this Power Bridge comes in. It essentially sits between the miners and your internet provider and allows you to optimize for network bandwidth and latency. It allows you to scale a data center better. If you have, for example, remote power and you are in the middle of nowhere and you are operating a farm, you have satellite internet and you have gas-powered electricity because you have flare gas there.
There's not really a way to get fiber there. The only way you can connect is either having a 4G spot if you're near enough of a civilization or having satellite power, satellite internet. In both these cases, it becomes an issue when you have a lot of packets. If you have maybe 10,000 miner connections open towards the open internet, you start to be limited just because your router cannot handle, it can handle the connections, but the outward point, which is the satellite, cannot really receive that many. You start seeing very accelerated degradation on your network at some points.
Power Bridge sits in between these two systems, and it reduces the packet count and everything so that you don't have to worry about scaling as much. You can operate a lot better. There was a lot of interest by especially container manufacturers because they wanted to implement this to the clients where they're very remote and in the middle of nowhere. So very interesting connections there.
Trying to translate that into something that is short and sweet for investors and business-minded people. It's not a hardware sale you do for the gross margin of it. It's something you do in order to increase the stickiness of the clients in PowerPool and to give PowerPool an edge, especially in hosting situations where the hoster could have a Power Bridge from PowerPool, but no other supplier, meaning that they will prefer their users to enroll into PowerPool.
Exactly. They get all the benefits.
It's not a, you won't see any large hardware sales contributions in next year's annual accounts, but it will drive the underlying growth of PowerPool.
Exactly. We also thought it interesting to bring a case study of a 10-megawatt farm because a lot of the farms we were talking to when we were mining this route were from 10 megawatts up. We saw up to farms of 300 megawatts discussing what their issues were and talking with us. We wanted to do like kind of an estimation of what sort of conversion we would see if they came to us, not conversion in terms of what the revenue would be, but in terms of what PowerPool's revenue would be.
For example, a 10-megawatt farm that is running a pure SHA-256 farm, which is very case-heavy in this situation because a lot of people are only mining SHA-256 on the enterprise level. If they were using not very old hardware, but S19s, which I believe were 2020, 2020 released, it would translate to a return for us of between $4,000 and $12,000 in net revenue for us. If instead they were running.
Per month.
Per month, exactly. If instead they were running Scrypt, so that's the old generation of L7s, which were released in 2022, that would mean between $9,000 and $28,000 of mining revenue for us. We are using the old generation of the legal generation just because we cannot really estimate and expect for all the other hardware to be shut off and put the new hardware in because the enterprises have a low power cost, meaning that they are able to maintain older hardware for a lot longer. Consider one client joining in, one of this size, it would mean an estimated annual ROI of between 240% and 12,000% just on the cost of going to this type of conferences. Yeah, it's an interesting case study.
Key takeaway is we hope that we'll be able to recruit these type of sizes going into the future. I think it'll be very visible on the hash rate if we are successful doing so. This is some rough estimates on what it will yield PowerPool depending on several different factors. At least we're heading towards that type of clients with the SOC certifications in mind.
Exactly.
I'm trying to warn you or at least give you some heads up on what we should focus on going into the future, what we might be able to tell you about, and also some longer-term visions of the group. Obviously, the first challenge to overcome is to initiate and ramp up the mass production. In the key quarter of that initiation, we'll have to improve the mask set quality. We talked about that extensively in the webcast previously this year.
Ruben is well on his way of expanding PowerPool service offerings. You're also looking to start new algorithms to support some new verticals. We are obviously wanting to try and develop and mature the data center business. We've gotten some good quotes for power infrastructure in Capgemini. The framework agreement counterparts are hassling us or opening up a hosting service.
It might be something we should look deeper into, how to properly organize and offer that type of service in relation with local-based hardware. We also need to mature and commercialize the edge AI capabilities. Not quite certain how we're going to do that right now, but we are in discussions with both industrial players and also universities on supporting the underlying frameworks that our ASIC will support. That will be a task that I'll happily start to work on because it's been underprioritized for a while now. We're also trying to identify the optimal strategy for entering the SHA-256 market. As you know, it's significantly larger, at least 15 times, just measured in daily emissions. Once the Scrypt ASIC is up and running, I think that's the next algorithm we'll try and go after.
What I haven't mentioned here is identifying and concluding on whether or not we should start on the second generation of Scrypt shortly or if it's something we should go after a little bit down the road. Generation 2 is also something that we are considering. We want to talk a little bit about some select key risk factors. We worked a lot before the launch of the capital raise to try and identify and group risks. I think that we are trying to group them into three main categories. It's the development risk, the R&D, that has been the most important risk factor for this group for some years now. We feel like we've mitigated that sufficiently. It's thoroughly validated. We are not in a development phase anymore. It's a matter of stepping it up and starting mass production.
I think we're probably the company on Oslo Stock Exchange that have for the longest period of time identified and voiced their capital requirements. We delivered at least four semi-annual and annual reports with that text in it. We have finally crossed that bridge. The bridge is not crossed, but we see the bridge at least. We feel like that risk is also mitigated. Important date, 30th of April, the extraordinary general assembly that will formally approve this capital raise. If you're not going to attend, please send your power of attorneys properly in advance. We need shareholder support for this decision. I hope you are all very well read up on the structure of the transaction and that you are eager to cross that bridge together with us. There is always risk associated with upscaling technology.
One thing is obviously the production yield and the mask set that we've tirelessly spent time on talking about. There are also other risks in this category, product-market fit, the time risk that some competitor might show up and making errors on, for instance, mass production efforts, something that will clog up the value chain sometime later on. I think this is manageable risk factors. We're working with highly competent partners. I feel like it's not a high risk, but it's moderate, and it's definitely there. Keep that in mind. I think that's it. Ready for Q&A?
We got some questions here. Why is the timeline for refinancing so long?
The timeline is so long because we need to write and get approved an EU prospectus. It's a prospectus that will adhere to the European Union guidelines. That is a labor-effort. The document is 110 pages so far, and we're all working overtime in order to get that thing over the finish line. That's the main reason. We also want some 14 days for the rights to be tradable so that investors can take and decide what type of exposure they'd like to take in that transaction. Multiple different ways, reasons, but EEA prospectus is the main reason why it takes so long.
Thank you. Another question here. Can you confirm the edge AI chip is different from the current mining ASIC edge AI?
A little bit unsure how I'm going to interpret that question, but what it is, it's the same chip. It's the same chip design. There is an AI module that has been incorporated into the chip design. It utilizes the same computational cores as the Scrypt hashing does. The pinout is the same, so you can, in theory, mount it on the same equipment. The main difference is how you communicate with the chip and what instructions you give it at boot. That will decide if it's an edge AI ASIC or if it's a mining ASIC.
The only reason why we implement that effort is so that we do not sell hash plates with 198 chips on them, and you can desolder them and use them for AI purposes, seeing that the AI market is assumably in the range 8-10 times more as a higher willingness to pay. We have to separate them on the SKU level, but in itself, it is the same design, same ASIC.
Will tape out conclude before the month of May?
Yeah, first of all, I think that the shareholders have some type of confusion about the concept of tape out. We have maybe not been clear enough in our communication so far. It depends a little bit if you ask the engineers working on it. In their mind, they're already in the tape out process. It's not in an R&D process anymore. It's the tape out process.
If you want to define it as the strict original meaning of when you hand over the magnetic tape to the foundry, that is part of ongoing negotiations in connection with the rights issue. I can't give any specific details on when that would happen, but I do expect it to happen very early May. Then again, it's not about whether or not the design is ready for tape out. It's about when do we actually have visibility enough to be certain that we can pay the bill when it arrives, right? The EGA is a bit of a bottleneck in those terms.
Next question here. What amount is with the company from the pre-orders? In terms of total pre-orders, I'm guessing?
The range that you can summarize it up to now is $6-$13 million. We are in the final negotiations with one of the clients that we have postponed the deadline for for a while. He is trying to reorganize himself in order to up the order. We are still kind of a little bit hesitant of being too strict with him, but I'm certain that we'll find a solution shortly on specifying that order.
Any estimated potential income from PowerPool certification and new algos in 2025?
It's hard to value the certifications. It's hard to say how much that will drive business coming into towards the pool. We can do estimates on the growth that we've seen so far and if that would be the same growth or if it stagnates throughout 2025. I believe we did the calculation.
Yeah, so we've guided earlier that if the growth rate stagnates from December numbers down to 4% monthly, you're looking at EUR 1.5 million in net revenue for PowerPool Mining SL. If that continues on the same rate as throughout 2024, you're looking at EUR 2.8 million in net revenue.
It's important to note that costs always scale linearly pretty much with revenue. Our estimation on that is 5%. That's what you can expect the same cost to be at the end of 2025 in terms of percentage.
Yeah, and the depreciation rate should be also more or less the same.
Yeah, well, a little bit higher because of the exponential version.
Yeah, yeah, yeah, you're right. The software is depreciated exponentially.
You're correct, sorry. Yeah.
Next question. How has the growth rate been for PowerPool after the new year?
I don't have the updated numbers exactly, but we've seen a lot of growth, especially now after Mining Disrupt, clients hearing of us and trying us out. We've implemented some additional measures after 2024, which is trying to talk to different salespeople to try and join the team. We haven't seen that much effect yet, but it's a positive look so far.
I'm just taking a little bit of a look on the numbers. January was following somewhere in between that 4%-14%. February was a difficult month for cryptocurrencies in general. That was a stagnant and boring month for that matter. March has been really well. I think 14th of March was more or less the same as whole of February. It illustrates a little bit the fragility of it.
The new UI came in. A lot of people were really happy about that. A lot of people were a bit more skeptical because when you do big changes, you normally have issues that come along with it. Users have stuck with it. We have not seen any users drop out because of any bugs that we had the first days of the new interface. We can expect the growth to keep going throughout the year, even maybe a bit higher with the new interface and driving business up with the new functionality that we are trying to give to bigger customers.
It's a little bit about what we're trying to illustrate with the case study of 10 megawatts as well. That would set like a 20% increase in net revenue one such client. Yeah, I think that illustrates at least the potential of enterprise-sized operations.
We're talking to a lot of big clients in mining Europe, so the market's there.
Perfect, thank you. That was the last question. If we do not get any more questions, I think you guys can, if you have some last words.
No, I mean, thank you for listening and/or viewing depending on your platform. We are looking forward to the EGA and we will be very busy getting that prospectus over the finish line in the meantime. Yeah, I think that's it. Thank you and enjoy your week.
Thank you, InvestorWeb for having us.
Yeah, thank you, bye.