Right. Hello again. My name is Romain Nouzareth. I am the co-founder and CEO of SATO Technologies. Today, we will talk our company building data centers for efficient computing power, mainly and originally Bitcoin mining, but also developing into AI and HPC. Legal disclaimer, you know the drill, and you know how it works. Everything that we discuss here is looking forward information. We are gonna talk about different kind of things. The first few minutes, I will give you an update, a business update of where we are in our development plans and also where we are going to. We will go more into the details regarding the financials for the Q2 results with Kyle Appleby, with our CFO.
We will have Benoit Vincelette, who is going to join us to talk about comparables of about specific data points in the industry, and we will end with a Q&A. We are a publicly listed company. Our ticker on the in Canada is SATO, S-A-T-O, on the TSXV, we are also listed on the OTC in the US under the ticker CCPU.F. We've been starting our adventure in 2017. Myself, I am an entrepreneur. I've been developing internet companies and startups since 1995, being passionate with Bitcoin, in 2017, I decided to start a mining firm with three other partners. Since then, we've been able to grow our mining power and to become a 100% self-mining.
Today, we are running close to 0.6, 0.6 exahash of mining power. To give you an idea, it's creating between 1.2, 1.3 Bitcoin per day, during about our last month. It's an important point also for Bitcoin miners to be self-mining, because this is where we get our valuation for the company as a publicly listed company. We are infrastructure people, we are operator people, and we are focused on efficiency. We are running our own electricity, and we are transforming this electricity into computing power. This is from this computing power that we are making our money.
Being efficient means that we are making more money at the end of the quarter or at the end of the day, and we will go over the details lately in the presentation. Now, that we are efficient and that we've proven that we've been able to grow from 2 MW to 20 MW, we want to grow again. If possible, 10 times, if possible, more. The way we want to do it, is not only grow our mining power, but we also want to address the new market or the nascent market or the booming market of AI and HPC. HPC stands for High Power Computer, and it's a different type of computer that we would host in our centers. Lots of Bitcoin miners are following this way. Why?
When we operate and when we build our energy, our data centers, when we manage our heat, we are capable of hosting any kind of computing power. We believe we will have a role to play in that, in that part. Our goal, at least at ten times. We are running 20 MW. We've been showing how efficient we were, not only in how many Bitcoins we are producing, but also on the financials that we will show you. But now we want to do a ten times into our electrical infrastructure, so it means having more megawatts. First, we have 8 MW of electrical equipment that we bought in the previous years, and that we can deploy very quickly. We don't want to stop there. We want to go again, if possible, ten times.
That means 200 MW of energy, maybe more, if we can. We want to do it in two ways, two separate ways that are somewhat connected and will work together. One part is about Bitcoin mining. We want to have more exahash and produce more BTC. In the industry, being the biggest is not always the best. I mean, it's great to be big if you are efficient, but you can exist, and you can be profitable, and you can make money, and you can continue mining with any kind of size, as long, as long as you have some kind of economy of scale, but most importantly, as long as you manage your electricity yourself, that there is no intermediary between your electricity and your computing power that you produce. Because we excel in Bitcoin mining, we want to grow.
We want to grow our Bitcoin mining facility. We also want to grow in various geographies. We are today located in Quebec. Our 20 MW are in Quebec, one of the best energy in the world. Not only it's extremely well priced, all in, it's $0.043 a kWh, fixed price for the year, very stable energy, which is very important when you mine Bitcoin, and when you manage data computing, computing data centers. It's also very environmentally conscious energy. It's 95% hydroelectricity, 99.9% is not producing carbon emission or very low carbon emission. Because we have this electricity, we are capable of advancing and moving into the different phases and cycle of the Bitcoin energy.
One thing that we want is to go also outside of Quebec and outside of Canada, mainly North America and some parts in Europe, and we want to build out more centers and find more energies. We have lots of opportunities in front of us right now, and we're going to work and find the right way for us to go to the next phase of our company. On the side, very quickly. You can see on the right side that we are also working on L2 infrastructures, because we are infrastructure people. Not only we are building data centers, but we want to build the infrastructure on Bitcoin or based, or using Bitcoin Layer 1 as a base, the security of this amazing tool that we have in our hands.
We have new technologies such as the Lightning Network, Ordinals, Rare Sats, very interesting. We are working on this. We are innovating on this. We think it's a way for us to be aligned with our goal to have more digital assets on our balance sheet, mining Bitcoin, computing power for AI and HPC, but also developing services where we can have fees when people are using our solution. You're probably wondering, how do we finance all this? We are publicly listed. We decided to be publicly listed to be able to raise money at scale when the market permits. Right now, we are in a bear market. The way we decided to grow was to use one tool that we have for us, was to do a debt for buying some Bitcoin miners.
We announced a very good deal with our bank in Switzerland called Sygnum, and it's a 9.5 interest rate for a three year period. It's one of the best way to be able to grow without doing any dilution. One thing that we want to do and developing what we are developing, data centers, transforming the energy from high voltage to medium voltage, et cetera, and using your ventilation. It's a very CapEx business intensive, not only for the infrastructure, but also for the computers that we need to buy. We need to raise money, we need to have access to capital, and we need to use everything that we have at our disposals. When you're publicly listed, it's already done.
I mean, we, we have different of tools we can use, we plan to use them well. We will do it with keeping in mind the dilution of our shareholders. We are all shareholders in the company. We are co-founders. Most of our shareholding, our shareholders are also here with us since the beginning of the company, so we plan to continue as this. We're building for the long term. Recently, we have had very good results with our stock price since January 1st to August 11th, plus 350% on our stock price. I think we were the best performing Bitcoin miner on the TSXV, maybe also the Nasdaq on this period of time.
You can see here we are beating Bitcoin in terms of performance and also the Valkyrie Bitcoin Miners ETF, WGMI , almost like me, we're all gonna make it. I'm going to leave the stage now to Kyle Appleby, our CFO, and he will present the high numbers for our financial statement. Thank you.
Thank you, Romain. I'm very pleased to present our results. We're very proud of the three and six months ended June thirtieth. We had record revenues for those periods, of $4.2 million for the three months ended June, and $8.1 million for the six months ended June. For the six months, that represents a 170% increase in revenues from the prior period, and over 100% for the three months. The revenues both include the Bitcoin and crypto mined, digital assets mined, and hosting revenues, which we have there. Our cost of revenues, you can see it increased given the increase in revenues, and it includes the site operating costs, which are electricities, salaries, and depreciation. Expenses, mainly G&A expenses included here.
Most of them would be salaries representing approximately 50%, we have professional, legal, audit, custodial fees, and other corporate and administrative expenses. Our operating income, again, positive growth, positive of over $1 million for the six months, $285,000 for the three months ended June. We ended up at the day with a net income of $600,000 in net profit for the six months ended June, and $90,000 for the three months ended June. You can see our trending positively in the right direction. We're not only efficient in our mining, but in our, in our costs. We're focused on efficiency in both of those, and it's working out well.
In addition, we've had positive operating cash flow for the six months ended June 30th, of over $1.2 million, which is a great achievement for us. There's those three really positive key factors trending in the right direction: revenues, positive operating cash flow, and net profit. Our, our next slide, you can see again our EBITDA and adjusted EBITDA for six months ended June 30th, 2023. Positive, $1.8 million, over $1.8 million for EBITDA and adjusted EBITDA, $1.7 million. Again, positive, trending in the right direction. EBITDA, adjusted EBITDA is our EBITDA, which also includes adjustments for unrealized and one-time items. Here you can see the holdings that we have of our cash and digital assets, position at June 30th compared to December 30th.
Holding over 20% in cash and around 75% - 80% in Bitcoin between the two periods. 99% of the digital assets are in Bitcoin, and Ethereum represents 1%. Our cash holdings, generally like to hold it around 20%, between 20% and 25%, and that's what we, we can show here. Our next slide shows our capital structure at June 30, and you can see our outstanding shares, 72 million. We haven't issued any shares in 2023 yet. And our options and warrants of 8.8 million to get a fully diluted of 81 million.
You can see here, our 65% of the outstanding shares on a fully diluted basis are owned by officers, directors, insiders, and that shows the support and belief of the company of management and directors.
Good morning, everyone. I'll be going over some metrics and comparables for the sector. I've noticed that we received some questions. We're gonna be addressing those at the end of the live cast. For this first chart, what we wanted to represent was for an average Bitcoin that is mined in a given month, what would be the percentage of gross profit? What would be the percentage of electrical cost regarding that Bitcoin? Those numbers are presented in USD. For example, if we decide to take the month of February, you can notice that we have, for a revenue of $31,694, if I'm not mistaken, there is a $19,000 gross profit, which represents roughly 60%. There's $229 for salaries.
We don't have many employees in our facilities, we've ensured that those are aligned with the business. They have stock options and other initiatives, that they are aligned with us. They work really in an efficient manner. We have site operating costs, which would represent it, insurance. Just so you guys know, insurance is something that we consider really important in our facility, we make sure that everything is properly insured. That includes electrical equipment, infrastructure, miners themselves, and the last cost would be electrical costs. There's two elements that you might see. There's a significant increase in the electrical cost per Bitcoin mined. That's because of two factors. The first one would be the rate hike that we sustained throughout the province of Quebec.
It was decided by Hydro-Québec that residential clients would get a 3% hike. For other businesses, which pretty much all businesses, we received a 6.5% increase starting April 1st. That's why you can see that there's a major increase. Another element that explains why there is a significant increase would be the network hashrate. On a 30 day average, if you take the on January 31st, you would have 273 exahash of Bitcoin mining. When we look at the number on July 31st, July 30th, sorry about that, we would have 369. That's a 36% increase. That means that we mine less Bitcoin with the same mining power. That's, that for sure has an impact on us.
We decided, on a transparency basis, we decided to add another component in our cost to mine a Bitcoin. We have the all-in electrical cost, which includes the transportation, power premium, and everything, and we have the kilowatt hour cost, 'cause we've seen some of our competitors show aggressive, aggressive rates, but sometimes they don't include power premiums and so on. We decided to show people what would that represent in our facility. On a year-to-date basis, you would get a Bitcoin mined for $8,195 for the kilowatt hour cost, which excludes, sorry about that, the electrical premium. If we go to the next slide. One of the metrics that is often looked at by analysts in our sector is the Bitcoin produced by exahash.
This is a way to show if your mine is efficient or not. As you can see, there is a clear trend in between the main companies on the stock market, on the TSX. It's, it's almost kind of difficult to see which companies which company is the best when you look at the chart. When we look at the year-to-date average, you can see that there's a one Bitcoin difference between the three main competitors. Just so you guys know, we're, we're always proud to showcase that we're always pretty much top three of all the miners, NASDAQ and TSX combined. That's something that we are quite, quite proud of, and that's because of the fact that we are efficiently running our mine. The next chart would be.
This is a new chart that we came up with. It's a correlation metrics between peers and also the BTC price. What is super interesting with this chart is that we show if there is a linear re-regression, correlation, sorry about that, with in between two items. For example, if you look at Bitfarms, Hive and Hut 8, 0.95, 0.96, 0.97 is very highly correlated, which means that when a company goes up, the other is pretty, pretty much gonna be going up as well.
When we look at SATO, our closest correlation that we get is 0.679 with Bitfarms, but we also get a 0.70 with Bitcoin, which is the second highest, and which would indicate that there is a high correlation between us and the Bitcoin price. That could mean to the investor, that someone that, that is looking for an exposure in Bitcoin, but doesn't want to go through the hassle of the whole hot and cold storage, the proof of funds of exchanges and so on, they can invest in a company such as ours, and they would get an exposure to the Bitcoin itself.
Thank you very much, Ben. Ben is our, our, our VP Finance and Special Project. He's working in Fanny's team. Our CEO, Fanny, she's on vacation. He's working with us for the past two years. You were a former auditor at Grant Thornton. That's, that's why we can, we've been able to, to show, like, those data. To finish and to go to the conclusion, I just wanted to expose where we are at again today and where we're going to. We are infrastructure people, and we are operators. We have no intermediaries between our electricity and the computer power we are generating.
It is extremely important in bear market, in bear market with difficulties that is going up, the Bitcoin price that is not going very high recently, plus the halving that is coming. We need to be cautious, and at the same time, this is the best time to expand. This is the best time to grow. We have opportunities. It's the right time. We know how to do it. We have the team how to do it. We've been doing it for the past five years. We want to do it bigger and faster, always focusing on High-Performance Computing, not only for Bitcoin mining but also for AI and HPC. AI and HPC is not only a marketing stint.
We really believe we have something to play in the market, into providing a solution that will be able to do hosting and that, and, and computing se, computing power for both. We have the team ready to go. We are super excited and energized to always talk to you. To finish, just a quick update of the kind of events where you will be able to see us. Right now in Surfin' Bitcoin, we have Simon Glatz, our Chief Bitcoin, with at the conference. On September seventh, we will be in Zurich. September eleventh, thirteen, H.C. Wainwright, we are part of the annual global investment conference they are doing in New York City. It's a three day event. We will be able to present one-to-one to investors.
If you're in New York, come meet us. September 12th, we will participate with True Global Ventures. This is the 66th conference. The True Global Ventures is a huge firm from Singapore investing in Web3, and the investors that participated into the listing we did in 2021 is the major shareholders, we will be participating to this event, I think with a table with Ledger, for example. It's gonna be very interesting. September 21st in Montreal. October 12th, I will be speaking in Bitcoin Amsterdam, if you are in Europe, also come meet us. October 25, there is a blockchain summit in Toronto. We will be in Dubai on October 31st. Meet us there, contact us.
We have here our QR codes, our names. You can find us online, and we'll be able to meet. Thank you very much. We'll now go to the question and answers. We will start with two questions we received in advance. Maybe those one could be for you, Ben, or you, Kyle. The first one is: Why is there such a big difference in the operating cash flow from $900,000 in Q1 to $345,000 in Q2 2023?
When looking at the financial statement, there's two components that would explain the difference, the decrease, I mean. The first thing would be that we sold for almost $400,000 less of Bitcoin, so we kept those on the balance sheet instead. That would explain part of the difference. The second thing would be that, as I mentioned before, we had a rate hike of 6.5%, so it directly affects our gross margin for every single Bitcoin that we mine. When we take these two elements into account, plus the difficulty network hashrate that went up, this explains why we have less positive cash flow for the Q2 .
Thank you. There is another question, which is: Why is there a change in average electricity cost to mine one Bitcoin from Q1 to Q2? I think you addressed, Ben, this, this question during your presentation. Maybe you wanna add one or two things about it.
I think I pretty much went over the, the whole thing. Maybe, once again, the 6.5% was assigned to all business customers throughout the province of Quebec, so it's not only for crypto miners, but every single company that operates in the province of Quebec had to face those hikes relating to the inflation, except, really restricted category of Rate L companies that got the a 4.2% hike, but those are major, major aluminum and so on.
It's a rare augmentation. I mean, this, this kind of augmentation that is across the whole province of Quebec is not happening every year. We have a fixed price. That's part of our electricity. Our, our, our, our contract is fixed, fixed price and stable energy, and that's why we've been able to be very efficient when we mine Bitcoin. Not only because we have the access to this electricity, but also because we transform it the right way by managing our heat, by managing our software, that manage our computers and all these kind of things. it's great to be in Quebec, and we now want to continue growing as much as we can. I don't see question in the chat. We will wait a few minutes if people want to ask more questions.
If not, we will close the presentation. We will make it available on our YouTube. You can find the link from our website. You have our address here. We have a new question. The question is: You mentioned 10 times expansion, which is in 200 MW. Can you expand on where this energy will potentially come from? Are you looking at energy sources from outside of Quebec? The answer is, is yes. We, we would like to grow in Quebec as much as we can. We believe in the province, we believe in the energy, we believe in the people. We are from Quebec originally. Today, we have about 20 MW of energy for crypto mining, and we believe we will be able to have more energy for AI and HPC.
At the same time, as a company, we want to be in different places. It's important to be distributed, because you never know what will happen in one jurisdiction. We are looking at expanding and finding this energy in various ways. The first way would be to sign a PPA, it has been done before. We can sign some. Ideally, we would like to stay in North America and maybe some places in Europe, because it's what we understand, this is where we are, and this is a kind of type of territories that we want to address. It's good to be distributed, so we're looking at different ways to find this energy.
We have lots of opportunities, doing acquisition of sites, signing PPAs, doing hosting deals if we need. A lot of things is, is, is among us. It's a difficult market for Bitcoin miners today. Again, the difficulty is high, the price is not going through the roof. It will change, the dynamics change. It's always changing at some point. We are built to pass the up and downs. We've done it since 2017, we want to continue doing it. This time, we just want to do it bigger. We have the team, we have the knowledge, we have everything to be able to grow that way, but it's gonna take the next 12, 15, 24 months, in order to operate this 200 MW or more. I hope this answered your question. Is there any more question in the chat?
If there is no more question, we will terminate the session. I would like to thank you again for coming and participating.