Keel Infrastructure Stock

Good day, and thank you for standing by. Welcome to the Keel Infrastructure Third Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Laine Yonker from Keel Investor Relations. Ma'am, please go ahead.

Thank you, and welcome to Keel Infrastructure's Third Quarter 2026 Conference Call. With me on the call today are Director and Chief Executive Officer, Ben Gagnon; and Chief Financial Officer, Jonathan Mir. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and presentation can be accessed on our website under the Investors section.

Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during this call and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties. I invite you to consult Keel's 10-Q for a complete list, which is available on our website and the SEC website.

Please note that references will be made to certain non-GAAP financial measures and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our filed 10-Q for definitions of the non-GAAP measures and the reconciliations to GAAP measures. Please note that all financial references are denominated in U.S. dollars, unless otherwise noted.

And now turning to Slide 3. It is my pleasure to turn the call over to Ben Gagnon, Director and Chief Executive Officer. Ben, please go ahead.

Thank you, Laine, and good morning, everyone. I want to start today by addressing the macro elephant in the room. The last few months have been challenging for everyone. Rates are surging and the 10-year treasury just hit its highest level in more than 2 decades. Debt markets that were wide open 90 days ago are still functioning, but they are more selective and more expensive today. Equity markets have also been unforgiving and many names in our space have fallen more than 50% from their highs earlier this year. Data centers have become a political lightning rod, even though nearly every American relies on them every single day. And geopolitical tensions have added another layer of uncertainty to global and domestic energy markets. None of this is new to anyone on this call, and none of this is unique to Keel. We have nothing to hide. So let's face it directly.

When we named this company Keel, we said it keel is the backbone of a ship, unseen but essential. Its main purpose is to keep the ship upright and moving forward even in rough water. It's the reason a vessel can hold its course when the wind is blowing hard in the wrong direction. This quarter, the wind blew hard. The seas were rough, yet we held our course. And holding our course means doing what we said we would do. So let me hold us to that.

Last quarter, we told you Moses Lake would finish permitting and start building. It did and is under construction today. We told you we were highly confident in our remaining Pennsylvania permits, and that hasn't changed. At both sites, we have zoning and land development in place, and we're down to our final state environmental permits. They've taken longer than we expected, but to date, not a single permit application has been denied at any of our sites.

We also told you to expect an update on our expansion load studies at Panther Creek and Scrubgrass as early as December or January. These applications continue progressing positively, albeit at a slightly slower speed, and we now expect to give you that update in Q1 2027. If this time line changes, we will tell you directly. None of that is luck. It's the strength of our team keeping us steady and moving us forward even while we're sailing up wind.

Where we haven't delivered on what we told you is leasing. In May, we set a goal to sign 3 leases by year-end. And while we no longer expect to sign 3 this year, demand has never been higher, and we are not wavering on our strategy. All of the recent headlines have one key factor in common. They all further restrict supply of the primary bottleneck on growth across the industry, power. A project blocked here, a moratorium there, a permit paused, a financing pulled, a power plant delayed. In the first half of this year alone, it is estimated that roughly $200 billion of data center projects across the country were blocked or delayed. Every one of those headlines takes '27 and '28 power off the market and makes what is left like our current projects even more scarce and valuable. That's the supply side.

Now let me show you the demand side, in the words of the biggest buyers in the world. Turning to Slide 4. While supply keeps shrinking, demand hasn't blinked. In the last few weeks, the 4 largest buyers of data center capacity in the world, Microsoft, Alphabet, Meta and Amazon all reported. And I'd encourage every investor on this call to read those filings because they reinforce the demand thesis better than we can. Together, they are on track to spend more than $800 billion on CapEx this year, and all 4 have indicated that these investments aren't slowing down anytime soon.

Microsoft, Alphabet and Amazon combined contract backlog has grown by about 2/3 since January to roughly $1.8 trillion. That is demand customers have already signed, waiting on capacity. And all 4 have told their investors in their own words, they don't have enough capacity. Amazon said, we will still not have enough capacity to meet all the demand we have in '26, and I believe this demand will also be true in '27. In fact, the demand we already have for '28 is striking.

Microsoft said customer demand continues to exceed available supply. Last quarter, Microsoft actually spent less than it planned because third-party capacity showed up late. Meta said there's just nowhere near enough compute for all the demand. And Alphabet has started renting third-party compute as what it calls a bridging strategy while it builds up more of its own. NVIDIA says it sees at least $1 trillion of demand for its Blackwells and Rubin platforms through '27, and Morgan Stanley estimates a 70 gigawatt shortfall in U.S. data center power through '28. We are not afraid of this market. To the contrary, it is exactly the market we laid out in our thesis nearly 2 years ago and have been preparing for.

Here's what I think matters most. Between them, the hyperscalers have signed roughly $1 trillion of data center leases that haven't even started yet with much of the power coming online in '28 or later. We continue to see demand exceed supply for ready for service dates through the end of '28 because hyperscalers, neoclouds and many enterprises have already committed to the chips for '27 and '28. And what they are short of is power that is available on the same time line.

So ask yourself this, if the biggest, best capitalized builders in the world don't have enough '27 and '28 power, who does? Keel. While the supply of near-term power is shrinking across the industry, at Keel, our '27 and '28 power is further advanced, more secure and closer to delivery than it was 90 days ago, and our continuous inbound customer demand shows it.

Now turning to Slide 5. On August 18, 1 week after our last call, Governor Shapiro signed an executive order, making Pennsylvania's grid standards for data center development mandatory. The grid standards require data center developers in Pennsylvania to pay their own way for new power capacity and engage communities early and publicly, deliver community and workforce benefits beyond what the law requires and commit to environmental protections with ongoing monitoring. Put simply, pay your own way, be open with and get back to communities, hire locally where possible and protect the land, water and air.

These standards benefit everyone, and we fully endorse the order and the need for responsible data center development. And this is an easy endorsement because the grid standards are largely in line with Keel standards and the work we've been doing since we established our presence in Pennsylvania. So we were able to adapt. But the implementation of the executive order also still brought a lot of new real work for the team. It took a lot of engagement with every relevant regulator and numerous government offices and agencies to first fully understand the executive order and its impact across Keel projects, and then additional engineering by our team and by our potential customers' teams to design solutions. While this took time, this is largely behind us, and we now have clarity in engineered solutions that work.

For investors, here's what the implementation of the order means in practice. One, the permits we have in front of the DEP today are not subject to the order's new requirements, but the order also took data centers out of the state's fast-track permitting program. In plain English, data center permits are no longer eligible for priority review. They move through the DEP standard process. While this does not directly impact our sites as the review of our remaining permits is not dependent on the fast-track program, it does create a larger backlog for the DEP.

Two, backup power. Every one of our Pennsylvania sites was always going to need a backup solution. This was always in the budget, and this was always in the plan. What change is the type of backup. Over the past 3 months, we have engineered a solution, a component of which is centered on battery storage that works for our customers, works for Keel and complies with the order. And most importantly, we don't expect it to meaningfully change the economics or the timing of these projects for tenants.

Three, our planned power delivery schedules under our ESAs have not changed. We expect both Sharon and Panther Creek substations to be energized in 2027. At this stage, RFS dates are directly linked to lease signings and will be a function of when we sign and break ground. Customers understand this and want to get megawatts online as soon as possible with revenues beginning in early 2028 and each site's capacity to ramp through 2028.

But this all misses the spirit of the executive order. The spirit of the order was about communities, and this is an area where Keel leads the pack. Community pushback against data centers comes down to 3 things: a lack of transparency, a lack of safe for the people who live there and no real commitments once the permits are in hand. Across our industry, most developers answer that with a benefits package, and that's where they stop.

We call our answer the Keel standard, and we're backing it with 3 concrete commitments. First, a community benefit agreement or CBA. We're negotiating our first now with the Nesquehoning Borough Council for Panther Creek, and we started that work before Pennsylvania required it. Sharon and Scrubgrass are up next. Our CBA is market-leading and is designed to scale with increasing power on site, which lets the community benefit alongside our success.

Second, a formal way for residents to raise concerns. We're building an agreement process that gives every resident a local point of contact, defined response times and a route to appeal with oversight at the Board level. It launches in Nesquehoning first then at every one of our sites. This is not a hotline or generic e-mail. This is opening of all avenues of communication to the community to tell us what they're seeing, what it is that they're hearing and how they're feeling. With a company mandate behind it to not simply be a good corporate citizen, but to be a good member of the community.

Third, measuring before we build. We've engaged third-party consultants to survey Nesquehoning's residents through a community baseline assessment. Before Panther Creek is built, listening and documenting the community's views on housing, employment, education, income, health, local services and a number of other areas. In November, they're sitting down with residents and in December, every household in the Borough will receive a confidential survey. We'll share the highlights with the Borough Council in '27, repeat the assessment over time and do the same in Sharon and Scrubgrass. That way, we can track what our projects actually change, how we're impacting the community and ultimately make decisions based on evidence rather than assumptions.

Across our industry, most community commitments stop at a benefits package. Few pair it was a formal way for residents to raise concerns. Fewer still measure conditions before and after they build. We're doing all 3. That is what staying accountable after approval looks like in practice. And you can already see it on the ground. In Nesquehoning, through our investment in Panther Valley School District, we fund a full-time community school coordinator, support the after-school programs, fund the school bus system and fund and staff food pantries, which together serve about 500 families and 2,000 individuals monthly. Our team is out there in the community showing up because there are people.

We have also held more than 20 town halls or informational sessions across Nesquehoning, Sharon and Scrubgrass. These sessions have been publicized, socialized and the towns have shown up. More than 500 people attended the events, and they heard directly from our senior team how they explain data centers, explain Keel and walk through what our projects mean for them. This isn't charity and it isn't public relations. It's being a good neighbor and being a good neighbor is good business.

Infrastructure projects backed by strong community support get built and survive the test of time. And so because of these standards, both Panther Creek and Sharon secured their zoning approvals before the executive order was even discussed. And when the order was signed, we didn't actually have to change a single thing about how we engage with the community. Frankly, this is one of the most rewarding parts of the job, and we did not need an executive order to tell us to do the right thing. We have been doing it since Day 1. And our team regularly receives feedback from all levels of government about our community engagement and the benefits of conducting ourselves the way we do. What we did have to do, though, was work through the new requirements with regulators, our engineers and our customers.

And that brings me to leasing because I know it's top of mind. In May, we set a goal to sign 3 leases by year-end. The new regulatory framework in Pennsylvania has moved our permitting and commercial time lines back by months, and we no longer expect to sign 3 leases this year. Yet we have not wavered on our commercial strategy. We're seeing unprecedented demand for our sites and in an industry where some of the largest developers are facing delays of a year or more, a delay measured in months is one our customers understand. To date, no potential customer has walked away for this, and new parties keep coming to the table. We strongly believe that securing strong leases is not a question of if, but when. And as I've said many times before, a lease is not a trophy for a press release. It's a 15-year commitment, and we will not sign the wrong lease at the wrong price just to hit a date.

Conditions in the financial markets have been far more volatile than conditions on the ground. And because we haven't signed a lease yet, every lease we sign will be priced at prevailing market terms and price to the tenant-specific requirements. What matters is that these projects are priced and judged on a yield on cost. Cost for newer technology, materials and labor may rise or fall and so may the cost of capital. When they do, we plan to reflect these in the lease economics so that to minimize the risk to our shareholders.

So here is our commitment going forward. We won't give you a date for a lease. We will give you clear, transparent updates on every site as development progresses. And when we sign, it will be the right lease with the right customer at the right economics, including the cost of financing it. That is how we stay the course and maximize long-term value for shareholders.

Turning to Slide 6. Now to the sites starting at Moses Lake. During Q3, we received every approval we needed to begin construction, and we broke ground. Moses Lake remains on track to be our first site energized in '27 and our first site to generate HPC revenues. It's modular, it's built to suit and the path to energization is shorter than a traditional build. Everything critical was already bought, contracted or in manufacturing before we even broke ground, and we have engineered a path for Moses Lake to move from GB300s to Vera Rubin at a marginal incremental cost, giving tenants more flexibility and making Keel an even more valuable solution.

Moses Lake is the only site fully funded from our balance sheet. Our goal there, as everywhere, would be to announce the lease and its financing together. However, we don't need a lease or project financing to finish Moses Lake, which means we are under no pressure to finance it on disadvantageous terms. Near-term power in the Pacific Northwest is as scarce as ever, and we have multiple parties engaged at Moses Lake that need megawatts now. Moses Lake is our smallest site, less than 4% of our near-term megawatts and a site this size better fits a fast-growing AI or cloud company rather than a hyperscaler. We will hold it to the same standard as every other site, a structure that protects our returns, credit support that matches the customer and financing that matches the lease. Smaller on, we know a Moses Lake lease will be read as a signal of how we execute, and we are treating it that way.

Turning to Slide 7. As I just mentioned, commercial tension continues to build across our Pennsylvania sites. Over the past 3 months, we have completed a significant amount of technical diligence with multiple prospective tenants, advanced LOI negotiations with multiple parties at both sites and most importantly, kept our power delivery schedules under the ESAs intact despite a new regulatory framework.

Let me start with Sharon. Sharon is 110 megawatts of secured power FirstEnergy. It is our most advanced Pennsylvania site down to its final state environmental permit, which the DEP has already issued and draft. At 110 megawatts, Sharon's scale fits a wide range of customers from hyperscalers to fast-growing AI companies, and that's the mix we're seeing at the table. It's also why credit structure matters so much there. Pairing a fast-growing AI company with investment-grade credit support is what turns a strong customer into a financeable long-term lease.

Panther Creek is our flagship. It has 350 megawatts of secured power of PPL with potential room to grow to 500 megawatts or more in one of the most sought-after AI corridors in the country. That scale is why the conversations at Panther Creek are with the very largest buyers of capacity. Zoning and land development are in place, and we're working through our final state environmental permits, which 1 of the 3 is already in draft and the other 2 are in standard technical review with the DEP. For a campus this size, the counterparty matters more than anything. The bigger the customer, the more they value certainty on power, permits and delivery. And with every permit that lands, Panther Creek becomes something only a handful of sites in America can offer, '27 and '28 power at scale in PJM with room to grow for years.

Unlike Moses Lake, both Pennsylvania sites are large enough to require project financing. And that is why at both Sharon and Panther Creek, we have been disciplined and will continue to be selective in all of our potential tenant discussions. We are focusing on signing with an investment-grade tenant or a counterparty backed by an investment-grade wrap.

Turning to Slide 8. Now I want to step back because I think this is the most important slide in the deck. There are a handful of things I believe this company should be judged by today. How many megawatts do we have? How secure are they? How confident are we in their time lines? How far along are they in permitting, design and construction? And how much demand is there for them. By every one of those measures, Keel is better off today than it was 90 days ago.

Start with the near term. Our 478 megawatts at Moses Lake, Sharon and Panther Creek advanced on every front. Moses Lake went from approved under construction. Pennsylvania is down to its final environmental permits and our designs are updated for the new grid framework. And we have advanced leasing discussions across all 3 with new potential tenants still coming to the table.

Then look at what's coming behind them. Our expansion capacity represents the opportunity for us to quadruple our currently secured capacity. At Panther Creek, we are working with PPL and Blackstone Infrastructure joint venture to support the build-out of natural gas generation and expand the campus beyond 350 megawatts towards 500 megawatts or more. This scale is a key selling point to the world's most discerning tenants.

At Scrubgrass, we are progressing well on securing our expansion capacity of up to 1.3 gigawatts, and we did it the Keel way. Land secured a detailed load study underway, horizontal lateral planning progressing with our development partner and 5 community sessions held before filing a single permit. And in Quebec, we have received the local approvals required in order to advance our 96-megawatt site and are now awaiting final ministerial approval.

You may have also seen recent press reports about a site in Allentown, Pennsylvania. As we have previously discussed, we continue looking for opportunities to grow our portfolio and create value for shareholders and customers. This site in Allentown is a potential opportunity that we are exploring that would allow us to acquire a fully constructed power shell and 75 megawatts of 27 PPL power. We are conducting detailed diligence with the current owners and local and state regulators, and we'll keep our investors updated as the process progresses.

Capital discipline guides how we grow. We are pursuing this new site only as customer demand is clear and we understand the regulatory requirements and the time line to ready for service. Not including Allentown, our expansion portfolio is about 2 gigawatts total. And here's what excites me. Every quarter, more of these megawatts climb the ladder from potential to secured, from secured to permitted, from permitted to designed, from design to under construction and next, from leased to energized. That is how real value gets built in this business, not by announcing megawatts, but by maturing them. And every project in our industry that slips takes more '27 and '28 power off the table, and that makes the power that does get delivered more valuable. While supply keeps shrinking, demand keeps climbing, and we intend to be one of the companies that delivers.

Turning to Slide 9. Let me bring this all together. This was a tough quarter for our sector. I said it at the top, and I'm not going to walk it back now. The water is rough and it's rough for everyone. But here's what actually happened inside Keel this quarter. We broke ground at Moses Lake. We got Pennsylvania down to its final environmental permits under what the governor calls the strictest guardrails in the nation without a single application denied. We set the industry standard for how we engage with our communities as demonstrated by our community benefits agreement, and we've kept every potential customer at the table while new ones keep coming. And our pipeline is more secure and further along than it was 90 days ago.

Things took longer, but nothing was canceled and demand is higher today than there's ever been with increasingly fewer options for customers to grow in '27 and '28. The 4 largest buyers of compute in the world just told their investors, they can't get enough capacity, and we are building exactly what they're missing.

I'll tell you this, the market is proving out the exact thesis our strategic pivot was built on 2 years ago. We anticipated the supply-demand imbalance. We prepared for it. Now it is here. And when supply keeps getting scarcer and demand keeps climbing, the companies holding real near-term power in the right places and developing it in the right way are the ones that will win. That is Keel. We've built this company for exactly this moment, and we are not going to waste it, and we have the balance sheet to see it through.

Jonathan will now take us through it. Turning to Slide 10.

Thank you, Ben, and good morning, everyone. Before talking about our capital allocation and financing strategy, I'll review our third quarter financial results. Turning to Slide 11. For the third quarter of 2026, revenue was $28 million compared to $68 million in the third quarter of 2025. The decrease was largely due to the decommissioning of U.S. Bitcoin mining in the second quarter of this year as well as a decline in average Bitcoin price.

Operating loss for the quarter was $8 million compared to an operating loss of $18 million in the prior year period. And loss from continuing operations was $62 million or $0.10 per share compared to a loss from continuing operations of $11 million in the third quarter of 2025. This change in loss from continuing operations was driven primarily by a $55 million noncash unrealized loss on the fair value of the company's capped calls associated with the 2025 convertible notes offering.

Adjusted EBITDA for the quarter was negative $27 million compared to $19 million in the prior year period, reflecting the previously mentioned wind down of Bitcoin mining operations as well as a decline in average Bitcoin price. For the first 3 quarters of 2026, our cash SG&A has averaged $24 million per quarter. On Bitcoin, we have met our commitments to both substantively exit Bitcoin mining and sell our Bitcoin holdings. During the third quarter, we sold 2,520 Bitcoin for $192 million in proceeds, executing the sales during periods of strength. As of September 30, our Bitcoin holdings were nominal.

In Q2 2026, we decommissioned all of our U.S. mining operations. Only our Canadian Bitcoin mining operations remain active, generating a few Bitcoin a day. We sell production on a regular basis to support our operations and investments. We continue to exclude our small remaining Bitcoin operations in Canada from any liquidity planning. As of November 4, 2026, our liquidity was approximately $780 million, comprised of unrestricted cash. We have an additional $53 million in restricted cash acting as collateral for various letters of credit that we have posted for expansion capacity.

Turning to Slide 12. As we discuss each quarter, the 3 pillars of our financial strategy are capital allocation, capital formation and capital structure. This strategy informs important operating principles as we look to maximize long-term risk-adjusted shareholder value. First, we do not build speculatively. Second, we value strong liquidity reserves. And third, we will use prudent amounts of leverage in financing our projects and lock in financing terms as closely as possible to lease signing in order to avoid basis risk from trying to time markets. These are first principles of infrastructure investing, and Keel is an infrastructure company.

As detailed in our 10-Q, our current pre-lease capital commitments are $380 million in total through the end of 2028. This spending includes items such as engineering agreements, procurement and manufacturing and site management. We will selectively invest to ensure we can move at the speed our customers want. As a reminder, these pre-lease investments taking place now will be part of our equity contribution in support of our eventual project financings. The dollars we spent now represent avoided holdco level debt and/or equity needs at a later time.

Additionally, proceeds from a project financing at Moses Lake will allow us to recycle capital into the equity required for Sharon and Panther Creek. Every dollar we raise at Moses Lake eliminates the need for dollar of outside equity. This type of capital rotation is a core part of our strategy. We will continually look across our assets for opportunities to use their value to both reduce or avoid external equity financing and ensure balance sheet strength.

As has been the case, we have more than enough liquidity to fund all of our capital expenditures required before leasing and construction as well as our cash SG&A through 2028. We will be selective in respect of all spending ahead of leasing and construction to ensure we maintain the benefits of a strong liquidity position. We currently do not see the need for any external debt or equity financing in advance of signing a lease. In highly volatile markets, it is incumbent on us to act prudently and raise capital when we see an alignment of attractive use of proceeds and reasonable financial terms as was the case this summer and then use that capital in a transparent manner for the benefit of shareholders.

In this regard, one question we receive from shareholders is how we govern and prioritize our pre-lease spending. We do not fund projects based on speculation without predefined plans, limits and without confidence in value creation. We fund projects across what we call 3 stage gates. Each gate has a defined scope, a defined spend, and a defined set of conditions that must be met before we move to the next one. That structure is what allows us to advance and derisk our sites at the pace our customers require without committing shareholder capital ahead of the information that justifies it.

Stage 1 is securing power and permits. It's the smallest spend, and it creates the most value per dollar because it turns an energy position into a permitted buildable asset. Stage 2 is locking in long lead time equipment that sets the delivery date, such as transformers, substations and fiber as permitting and approvals near completion. These investments make our ready for service dates real to customers. Stage 3 is the full build, which is where the bulk of the capital is spent. We only commit that capital against a signed lease when the economics are contracted and we have secured project financing that locks in an attractive return for our shareholders.

We fund Stages 1 and 2 from our balance sheet, and we fund Stage 3 with project financing when a lease is signed. Capital goes in as risk comes out. In respect of project financing, we believe the best outcome is to lock in financing economics at the time of lease signing and minimize basis risk. We will not attempt to time the market. Our objective is to lock in a spread for our investors that delivers attractive returns. We are keenly aware of the sensitivities in the economic model of our business and the current financing environment. We speak almost daily with our financial advisers to ensure we understand real time the likely financing terms associated with any specific customer's potential lease, and this information is a key component of our evaluative process.

Moses Lake has been the one deliberate exception to this strategy. It's small, it's modular, and it puts our first megawatts on the grid earlier in 2027. Again, once the site is leased, proceeds from its project financing will be recycled into the equity requirements for Sharon and Panther Creek. Because of its small size, we expect that Moses Lake will be leased to a customer that is smaller than those we are discussing with Sharon and Panther Creek. And again, because of size, we expect to raise financing via private credit solution rather than via the high-yield bond market. We believe that our lease pricing at Moses Lake will provide reasonable risk-adjusted returns even in the current financing market.

We reiterate the commitment made on every earnings call. Whenever we raise external capital, we will be clear on the uses of that capital and why we believe the associated long-term risk-adjusted returns create value for shareholders. The stage-gate structure is the process we use to hold ourselves to that commitment. Capital goes in as risk comes out and not before. We do not anticipate the need for any debt or equity financing before signing a lease.

As we have demonstrated over hundreds of investor calls, when investors ask for additional explanation or clarity on any aspect of our business, we'll provide that in our discussions and continue our practice of having Ben and me readily accessible to our shareholders.

I'll leave you with the following thoughts. Keel has many paths to success. We have multiple sites, we have multiple potential customers. We have multiple ways to structure leases and financing. We are not dependent on any single project. We operate in geographies that are supportive of responsible data center development. We have kept our infrastructure-only business model simple and easy for investors to understand, secure power, advance it through permitting and construction, lease it to creditworthy customers and finance it on the strength of those leases. And the time of volatility, we're focused on the fundamentals and those matters within our control with the consistency of a strong balance sheet, a disciplined strategy and plans that are easy for investors to understand.

And with that, operator, let's open the line for questions.

[Operator Instructions] And wow we're going to take our first question. And it comes from the line of Mike Grondahl from Northland.

In your discussion or discussions with tenants, can you kind of talk about how you're seeing lease structures and terms evolving over the last 90 or 180 days?

Mike, yes, absolutely. It's a great question. The terms that we're looking at across the sites do vary quite a bit based Moses Lake, Sharon versus Panther Creek. I think generally speaking, the tension tends to be building across all 3 sites because we continue to advance the sites and bring them closer and closer to the time line. The sensitivities I think that people have right now are increasingly focused on permits, community and financing, obviously. The permits and the community side of things, I think we've given our potential tenants great confidence in our path and our success and our continued path forward.

And in terms of the financing, that's something that we're working through with all the various counterparties. And we're quite selective in terms of the various counterparties that we are working with and speaking with because we're only focused on good quality counterparties that are going to be financeable. But generally speaking, I think the terms are getting a little bit more competitive and a little bit more tense in the negotiations as we get closer and closer to our commissioning dates and most of the market seems to be -- most of the market supply seems to be shrinking.

Got it. And then maybe just as a follow-up to that. On a relative basis, can you kind of rank your 3 sites just in terms of demand at each one?

So the way you think about kind of relative demand amongst the customers per site, it really depends on the scale. And so what we spoke to in the earnings call a few months ago is that the kind of counterparties at Moses Lake and Panther Creek are wholly different. While at Moses Lake, it's going to be more of a -- probably more of an emerging company. At Panther Creek, there's only a few buyers in the world who could afford that scale and are really interested in that capacity. And so when we're speaking with the biggest developers in the world, the biggest buyers of compute, their focus is Panther and Sharon. And then when we're looking at more of the neoclouds or emerging companies, language labs, those sorts of things, their priority is either going to be on Moses or Sharon depending on their scale and secondarily, their time to energy requirement.

Now we're going to take our next question. And it comes from the line of Greg Lewis from BTIG.

It's been a long week, guys. I did have a question. I really appreciated the way you laid out kind of how you advance the project with some initial CapEx and then we kind of wait to kind of wait for the lease before we start spending. I guess as I think about other existing sites that are -- that we're working through developing. Any kind of sense for what that CapEx to get it from to Stage 2? Is there any way to kind of think about what that CapEx is going to look like over the next 12 months?

Yes. So over the next -- so between now and the end of 2028, we have capital commitments totaling about $380 million. About half of that is related to finishing Moses Creek. And then most of the rest is related to substation work and fiber work at Sharon and Panther Creek, both. In terms of the Stage 1 development costs, those are very modest. Those are -- it tends to be people and a key space, folks in conference rooms. So by the time we get to the end of a Stage Gate 2, setting aside the decision to purchase long lead time equipment, it would take quite a bit of effort to spend $1 million a megawatt to have a site ready to go. So the dollars in Stages 1 and 2 are quite small compared to the overall project construction cost. And we are very careful in how we think about allocating those dollars across longer-term projects like Scrubgrass, for example.

Okay. Super helpful for that. And then just as I think about the -- I mean, obviously, we're looking to expand power at all the site -- well not all the sites, a few of the sites. Could you walk us through the process? Obviously, we're doing the detailed load study that's ongoing at Panther Creek. But kind of like post the detailed load study, then what does that process look like for final approval of that extra 150?

Yes, happy to go through that. So once the detailed load study is complete, that basically confirms all the engineering requirements, the financial requirements, the timing for delivery of the power by what estimated kind of date. Then what happens is there's going to be a negotiation period usually around maybe 3 months to negotiate the ESA. And within the ESA, we'll work through the final negotiations on power delivery schedule, upfront requirements in terms of initial deposits, letter of credits and everything else that's needed to fund the infrastructure and that'll be about 3 months.

And the next question comes from the line of Michael Colonnese from H.C. Wainwright.

First one for me, I was hoping to get a little bit more color around the expected timing of securing the remaining permits at Sharon and Panther Creek. And is it safe to say that those milestones could be considered the closing conditions for you securing contracts with prospective tenants?

Mike, so in terms of the remaining schedule for the permits, at Sharon, we just are down to our last final environmental permit, as I said on the call, and that's in the draft form. And draft form effectively means that they've done extensive review. They effectively think that this is likely going to be approved and they intend to approve it, but there's still a review process and a window that they need to work before it's final and before it's actually done. And they could always revise and change and could extend that a little bit should they need to. But we would expect that once things are progressing at this stage that they're likely going to come. It's just a matter of time.

When it comes to Panther Creek, we have 3 remaining, one in draft and 2 in technical review. So everything has been submitted, Everything is being processed. Everything is moving forward. We've given no red flags or indication that any permits are going to have issues or faults, but it's a little hard to guide on the time line now given the backlog at the DEP, and that's kind of a changing condition in real time. I think that the positive thing here is that we were so far advanced on our permits before the executive order came out, that the impact on us is pretty minimal because we were down to our final permits already, and most of those were already in process.

Very helpful color, Ben. Appreciate that. And just a quick one on the mining business. Just remind us where the hash rate stands today and an update around the expected wind down of mining from here?

It's about 5 or 6 exahash, Mike. It's not very meaningful. It's all in Quebec, and that generates a couple of Bitcoins a day. It still generates positive free cash flow, but it's pretty marginal, and we don't include it in our liquidity forecast planning, as Jonathan mentioned on the call. We would expect that that's going to continue to get smaller as we get the approvals from Quebec that we're hoping to get and work through over the coming months and quarters. And until we have a clear path forward on the conversion of the Quebec assets, we intend to keep running the Bitcoin mining, but we do not plan to invest further in it. No more dollars are going to be spent to buy more miners or upgrade. We're just going to continue running it until we have confirmed the conversion or the convertibility of those sites.

Now we're going to take our next question. And it comes from the line of Michael Donovan from Compass Point.

I see you increased contracted power at Baie-Comeau to 30 megawatts from '22. How are you thinking about developing the site for HPC? What additional approvals would be needed? And how might it delivery time line compare with Sherbrooke?

Yes. So the path that we have in Quebec is we're following our Sherbrooke playbook. So that was our lowest identified hanging fruit. It's the community where we have the best relations, the most scale and the best potential location for an HPC site. So that's our first project that we're moving forward with. And we -- as we have communicated previously, we've got all the local approvals, and we're just waiting on the final ministerial sign-off.

When that happens, we're waiting for that to happen. And then what we do is we'd replicate the same playbook from Sherbrooke across Baie-Comeau. And we had an opportunity to effectively acquire a small expansion for no cost, and we could acquire the right to get an additional 8 megawatts at the Baie-Comeau site for effectively no dollars out the door. So it was a very interesting option for us, assuming that we get the Sherbrooke playbook done. We have a slightly more compelling site at Baie-Comeau to develop.

Appreciate that. And then to follow up on Mike's question, as deal structures continue to evolve, would you consider a powered land lease at any of your sites? Or are you focused on delivering the full facility?

Yes. We'd be open to doing a powered land lease. We have looked at powered land, powered shell, full colo, as well as the cloud model. And we think that there's a fit for each one of these business models for different companies. We specifically have chosen not to pursue the highest rung of that ladder, which is the full compute. But going powered shell, powered land or colo, all of those are interesting options that are on the table.

[Operator Instructions] And now we're going to take our next question. And the question comes from the line of Brian Kinstlinger from Alliance Global Partners.

As it relates to Moses Lake, with permitting done in September and unprecedented demand, what has held back moving forward with the lease there? And should we expect that before year-end? Or is that more of a first quarter 2027 event?

Brian, thanks for the question. As we said on the call, we're not going to provide any sort of guidance on lease timings for any of the sites from here on out. But the site has a tremendous amount of interest and demand and the competitive tension there at that site. And one of the things that's been very helpful for us at Moses Lake is that because we are funding this site off of our balance sheet, we've been able to continue moving forward with the site, continue to develop every day we move forward, every beam of steel that goes up continues to derisk the project and create more value for the end customers. And so that's helping us to maintain a very high level of tension in Moses Lake, and we're highly confident that we're going to get a very good deal done there. But we don't want to provide or we're not going to be providing any sort of expectations as to the timing of that.

My follow-up, just to be clear, it's lease ready. There's nothing you need to do to get it prepared for lease at this point. Is that right?

We do not require any other permits or any other engineering work to get a lease done. And we're under very extensive technical diligence and negotiations with multiple counterparties at this point during the commercial process.

Now we're going to take our next question. And the question comes from the line of Bill Papanastasiou from Chardan Capital Markets.

Apologies in advance. I was disconnected earlier when I raised my hand. First, maybe you can provide an update on how the team is navigating the supply chain environment for long lead time equipment, just given the level of demand for data centers and restricted supply.

Bill, it's a great question. So what we've done is kind of a few things. First, we secured all the long lead time equipment that we need for the power connection, right? So everything that we need for the substation transformers and building out the actual powered land piece of it, we have all of those long lead time items secured across all 3 of our sites. At Moses Lake, we obviously have everything secured and contracted and on the way, a lot of it already received and in hand.

And then for the longer lead time item equipment for building out the data center at Sharon and Panther Creek, what we don't want to do is actually lock ourselves into long lead time item equipment purchases that may not ultimately be what the end tenant wants. If you think about kind of time line to RFS is a very simplified Gantt chart with 3 buckets. There's obviously permitting and planning. There's another bucket, which would be the leasing. And then the third bucket would be the long lead time item equipment.

And given this stage in the permitting process across Panther Creek, the critical path is going to be leasing. And the way that we can keep the critical path on leasing is because instead of committing to long lead time item equipment, what we try and do is we try and commit to manufacturing slots, which help us to minimize the CapEx or minimize the capital that we commit in terms of deposits to secure time lines and also preserve the flexibility for us to modify the actual equipment that we're purchasing for the end tenant based on their ending needs. So this is a way for us to try and be very capital efficient while we maintain our time lines and maintain our flexibility through the negotiations.

Great. Appreciate that. And then secondly, we've heard that there's been a few major developments in the Canadian data center market, particularly with Anthropic entering the country and what is rumored to be a second major deployment. Curious if you've seen any uptick in demand in this geography and how you think Frontier AI lab exposure in Canada will develop over time?

So in Canada, it's a very, very different market than the United States. I don't think we've seen as many frontier labs in Canada just because it has been harder to develop new data center capacity in Canada. When you look at actually how many GPUs are plugged in around the country, there are numerous data centers in the United States that have more GPUs plugged in than the entirety of Canada for HPC and AI purposes. So it's relatively small scale at this point.

I think the really interesting opportunity with Canada, something we've talked about a few different times, is that there is this legislative drive for data sovereignty and compute sovereignty in Canada, both nationally and provincially. And because there is such a stricter bottleneck on growth and supply of data centers and GPUs in Canada and you have the legislative capture to keep that compute demand local, there tends to be significantly higher premiums associated with compute in Canada than for the same compute in the United States. And so it provides a great opportunity for many companies to be coming into Canada. I don't think it's necessarily limited to or maybe even focused on language labs. I think there's probably some really interesting -- maybe more interesting opportunities with the major Canadian corporations and the government than there may be with the language labs who have the flexibility to go anywhere.

[Operator Instructions] And now we're going to take our next question. And the question comes from the line of Nick Giles from B. Riley Securities.

I just wanted to ask about your appetite to enter into exclusivity, if that's something you'd consider? Or should we expect that you really would just want to sign a lease? And then if you prefer to just sign a lease and not go into exclusivity, would you consider some sort of expansion option or ROFR on additional capacity Panther Creek comes to mind?

Thanks, Nick. Yes, it's a great question. At the various sites, we do our best to maintain as much competitive tension in the process by not signing exclusivities or by signing limited exclusivities that give us the ability to continue negotiations and marketing the site. That's our preferred strategy because obviously, it gives us the best probably adjusted outcome, right? It keeps as many people at the table. It keeps everyone focused and it keeps everyone kind of on their toes that if they don't lock up the lease, then somebody else will.

This is something that, for example, at Moses Lake has really helped us to drive the progress forward with various tenants because they know that they're in a competition to get that power and to get those time lines. So as much as possible, that's going to be our intent. Now that's not always going to be possible, Nick, especially with some of the biggest players, but we're going to do our best to keep exclusivity limited, tension as high as possible and to keep as many people at the table.

Makes a lot of sense. I appreciate that, Ben. And maybe just a follow-up on electricity costs. You don't hear as much about electricity costs as we did in the Bitcoin mining days. But I was wondering if you could just touch on kind of where your sites sit from an electricity cost perspective and to what extent tenants really have sensitivity to electricity costs in your discussions?

Thanks, Nick. Frankly, it really does not come up very much. The electricity costs are really quite small relative to the operating margins of the GPUs themselves. And everyone is so focused on time line to power that there's very -- there's way less sensitivity around the price of the electricity itself. It's always around the time line and the risk of deployment and the risk to deploy on time that everyone is focusing on first and foremost.

We probably will see energy cost considerations come in, in the future. But I would think that the bottleneck on growth would need to be alleviated. I would think that supply would need to overtake demand for those economic sensitivities to start being the prevailing thing that people are focusing on. I think if people are focused on cost, they are focused on the financing costs, not on the energy costs.

Now we're going to take out next question, and the question comes from the line of Brian Dobson from Clear Street LLC.

Thanks for the great color on the lead in and the call. As you're speaking to potential clients and understanding that -- I don't want specifics, just in general, how are these potential customers reacting to rising building costs and rising financing costs? Do you think ultimately, that gets passed through and the yield on the contract remains relatively similar to what we've been seeing or might, given the potential for regulation might see better pricing?

Brian, thanks for the question. When it comes to changing costs, I think that there's a couple of different things going on. And I can understand why investors in the market is a little bit confused around this because the numbers that you'll see out there in the market are pretty wide ranging. You might see solutions as low as $5 million a megawatt. You might see solutions maybe upwards of $20 million a megawatt. And there is no real defined rule of thumb that I think you can apply to all sites. Scale, location, timing, design, equipment, uptime requirements, everything is going to factor into the cost.

What we think and what we mentioned on the call is that these projects are judged by a yield on cost, both by the tenant and by us as the developer. As costs for the construction do go up, we do reflect those in the lease economics so that the yield costs or the yield economics remain competitive. And when the costs went down, the lease economics would also be reflected in the same way. So there is a little bit of a natural inbuilt kind of hedge, you might say, in the way that these contracts are negotiated and structured. Where you get into, I think, a big problem is when you sign a lease without having everything contracted on the back end. And then there is a gap between the price that you've signed and then the price that you're actually fulfilling at.

And what we've been able to do so far, we've been very conservative in how we're moving forward with these sites and what we're committing to so that we don't have that problem, and we don't have that mismatch between signing a lease and actually pricing out all the individual components within it. So that's our best hedge against rising prices is just trying to best time the lease and everything together, which is the strategy we've been executing on.

Now we're going to take our next question. And it comes from the line of Martin Toner from ATB Cormark.

Do your comments today preclude signing a lease before year-end?

As I said on the call, we don't want to provide any sort of guidance as to timing, and that's positive or negative. We don't want to provide any sort of guiding on that. What we will say is that the tension is as high as it's ever been. We continue to progress the sites. We had good progress even this morning. So we're continuing to advance. It's on a daily basis. These are all being developed and negotiated in real time. And so we'll provide updates to the market when appropriate and when we're able to do so, but we're not going to provide any sort of guiding expectations on time.

Fair enough. How about a couple of questions about politics. The state Senate in PA has flipped. Do you think that will result in legislation around data centers that could create -- and then what would that do to time line?

So it's hard for us, and we generally don't like to comment on politics, especially when the midterms were so recent. I think what we will say is that the Governor Shapiro, he won in a land slide as he was expected to. And he's remained very supportive of building data centers, but under what he has put in his own words as the strictest guardrails in the nation.

I think when you look around at the states that were impacted by midterms, Pennsylvania is probably better off than many, many other states over the last couple of days. And I think the reality of the situation is that data centers will continue to be a political subject for some time. I don't think it ends at the midterms. But what we do think is that we have been operating effectively under the Keel standard, which is basically very similar to the grid standard since we started in Pennsylvania. And we think that we're going to be very, very well positioned for whatever is coming up in the next year or 2. We have received great positive feedback from permitting offices, regulatory agencies, government offices, the local state senators and politicians. We received positive feedback up and down, and we expect to continue to progress on our good work in Pennsylvania.

Last one. Can politicians take action to prevent you from getting the remaining permit that Panther Creek or Sharon?

I don't know what a politician could do to stop that process because these are very technical permits, and they're really not political. I think what Governor Shapiro has already put in place with the strictest guardrails in the nation are very, very strong principles. And I don't think that we should expect that there needs to be further action in the immediate coming weeks. But we believe we have high confidence -- we still have high confidence in closing out our permits. I don't know -- I don't believe that there's anything that anyone could do at this time to stop that.

Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Ben Gagnon, for any closing remarks.

Thank you all for joining us today, and thank you to the entire Keel team. This was a quarter that tested everyone. We will see you next quarter, further along. Thank you.

That does conclude our conference for today. Thank you for participation. You may now disconnect. Have a nice day.

Ladies and gentlemen, thank you for standing by. Welcome to Keel Infrastructure Corp. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to Laine Yonker, Keel Infrastructure Investor Relations. Please go ahead.

Thank you, and welcome to Keel Infrastructure's Second Quarter 2026 Conference Call. With me on the call today are Director and Chief Executive Officer, Ben Gagnon; and Chief Financial Officer, Jonathan Mir.

Before we begin, please note, this call is being webcast with an accompanying slide presentation. Today's press release and presentation can be accessed on our website under the Investors section.

Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during this call and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties. I invite you to consult Keel's 10-Q for a complete list, which will be available on our website and the SEC website.

Please note that references will be made to certain non-GAAP financial measures, and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our filed 10-Q for definitions of the non-GAAP measures and their reconciliations to GAAP measures.

Please note that all financial references are denominated in U.S. dollars, unless otherwise noted.

And now turning to Slide 3. It is my pleasure to turn the call over to Ben Gagnon, member of the Keel Board of Directors and our Chief Executive Officer. Ben, please go ahead.

Thank you, Laine, and good morning, everyone. 18 months ago, we laid out a clear vision for both Keel and the data center industry. We told you that the defining constraint of the most important technology of our lifetime was not chips or capital, it was power. And we told you that by the end of 2026, power would be even more constrained and even higher demand. We laid out a clear investment thesis that focusing on developing power in the right places on time lines that matter would be incredibly valuable to prospective tenants and value maximizing for shareholders.

We explained the necessary work ahead of time, and we kept you informed step by step exactly how we would transform this company into a premier regional data center developer. We said we would exit Latin America and Bitcoin and become an American HPC and AI company. We did. We said we would rebuild the balance sheet to enable our transition to an HPC and AI infrastructure company. We did. We said we would be ready to monetize our assets when power was scarcer and demand was stronger. We are. Throughout this transition, we've delivered on our commitments, either on time or early. If time lines moved, we told you why, we told you what it meant, and we told you what did and did not change. That's not luck. That's a track record reflecting strategic discipline and consistent execution.

Turning to Slide 4. In May, we shared that management was focused on 3 things this year: one, advancing permitting and leasing across all 3 priority sites; two, securing our expansion capacity; and three, delivering energized megawatts as quickly as possible for our customers. 90 days later here is where each one stands. First, on permitting and leasing. I will walk through each site's permitting and leasing update individually in a moment, but I'd like to first highlight the main takeaways here: one, we further advanced permitting across all 3 priority sites this quarter and have clear visibility on permit completion at each site; and two, near-term power is scarce and our sites have it. That scarcity is doing the work for us. It's why all 3 sites have multiple potential customers engaged and negotiating, and it's why these conversations start from a very different place than they would have 2 years ago. This is an important distinction because when your sites solve the hardest and most valuable problem potential tenants have, power, timing and location, the commercial process stops being a pitch and it starts being a negotiation.

And so to lead this next pivotal phase, last month, we welcomed Ganesh Aiyer as President of Keel. Ganesh has spent his career at the intersection of infrastructure and commercial strategy and joins us after nearly 7 years as Chief Business Officer of Digital Realty. He is now leading our commercial efforts. And while he has only been with us about a month, he has already hit the ground running.

Second, on expansion capacity. Last quarter, we explained our thesis that the market was not ascribing much value to the unsecured megawatts in our expansion capacity. We also explained that securing these megawatts was an important focus for management and a key value driver for shareholders.

So first, in Pennsylvania, we've been working closely with both of our utility partners to advance our power applications for expanded capacity. While we can't provide details today, we are increasingly confident in our ability to convert potential expansion capacity from our 2-gigawatt Pennsylvania pipeline into more signed ESAs, delivering energized megawatts for HPC through 2030. We expect we should be able to provide investors with a fulsome update as early as December or January.

Additionally, we advanced our Sherbrooke data center plans during the quarter, securing all necessary local approvals from the city and the local utility, with only provincial approval outstanding. We are excited to significantly expand our relationship with Sherbrooke, where, over the past 7 years, we have generated substantial revenues, taxes, jobs and community benefits. If approved, we will consolidate our 3 legacy Bitcoin power purchase agreements into a single 96-megawatt HPC and AI power purchase agreement for a new data center development in Sherbrooke, a market where new data center energy capacity is nearly impossible to secure and is in high demand. Sherbrooke will be designed from the ground up to support the next generation of hardware and has the potential to become one of the most technologically advanced data centers in all of Quebec upon completion.

Third, delivering energized infrastructure as soon as possible. Every commercial negotiation comes down to the same 2 questions: how fast can I get my first megawatts, and how fast and far can I keep growing with you after that? So in parallel with every commercial negotiation, we are working constantly with our partners, our manufacturers and our supply chains to protect the time lines our customers are underwriting.

Turning to Slide 5. Let me share some examples because most of this work never makes a press release. This quarter alone, we accepted delivery of long lead time items and the first Vertiv modules at Moses Lake. And we'll be conducting further factory and predelivery inspections with Vertiv as modules come off the assembly line. We completed inspections for backup generation equipment in Moses Lake. We took delivery of several long lead time items in Sharon, including multiple transformers. We began executing final fiber contracts across our 3 sites, ensuring multiple path redundancy and connectivity will be available before the sites are online. We continue to update our data center designs, improving power density specs so that we can meet customers' hardware requirements.

We completed the first phase of construction across all 3 sites, which is the decommissioning of all U.S. Bitcoin mining operations. And most importantly, we significantly deepened our bench of subject matter experts across construction, power, fiber, engineering, controls and other critical disciplines, and we continue to add talent in these areas. Clear deliberate steps to derisk our project time lines and ensure we can deliver state-of-the-art infrastructure within the time frames and budgets our customers require. These steps mark the difference between a promise and a delivery date.

Step back and look at what all of this adds up to. 18 months ago, we laid out our thesis and our strategy. Today, we are exactly where we said we wanted to be. The market is where we anticipated it would be. We are now active in the commercial process with the sites we wanted to bring to market, at the moment we wanted to bring them to market. We are doing so from a position of financial strength and with permitting largely derisked. We followed through on our promise not to cap upside by signing leases prematurely and that patience is now paying for itself.

This is our goldilocks phase, not too early to matter, not too late to win, exactly the window we built this company to hit.

Now let me show you what execution looks like on the ground starting at Moses Lake.

Turning to Slide 6. Moses Lake is shaping up to be a milestone site for Keel. It will likely be the first sight fully permitted, the first site to come online, the first site to generate HPC revenues, and upon commissioning, we expect it to return significant equity capital to our balance sheet and become our first source of durable free cash flow.

Permitting in Washington works a bit differently than in Pennsylvania, and has allowed us to start site development while we finish the go vertical permitting process, which we expect will wrap up later this quarter. The Bitcoin mine that stood there before is gone, completely removed. Today, the site is being prepared for the Vertiv modules with every piece of critical long-lead equipment secured and being actively manufactured. In fact, the first Vertiv modules have already arrived on site with deliveries continuing from here.

When you look at that rendering on the slide, understand that everything in it is bought, contracted or already being manufactured, including the building itself. We look forward to delivering Moses Lake as our first fully commissioned and energized data center in 2027. And the commercial process reflects this. Moses Lake has interest from exactly the potential tenants you would want, leading AI companies, GPU clouds and enterprises that need power now. Inbound activity and negotiations have accelerated throughout the quarter, reflecting just how scarce near-term power is in the Pacific Northwest.

Moses Lake serves a different customer profile than our Pennsylvania sites, faster-moving companies that value speed and a fully operated facility. So due to that customer demand, we may structure leases here on a modified gross basis rather than triple net with credit support structured to match. That approach lets these tenants move at the speed they need, keeps Keel on operational control and creates more value for a site with the size and scope of Moses Lake.

Turning to Slide 7. As Sharon momentum continues to build, we secured a full zoning in April. Land development was approved during the quarter and our final environmental permits are submitted and progressing on track with only a few environmental permits remaining before Sharon is cleared. We also iterated on the designs throughout the quarter, evaluating how to best consolidate the compute capacity, which we believe would be a simpler, less complex build and an overall stronger product. Sharon is in active commercial discussions today with multiple parties engaging on the site simultaneously and evaluating it for exactly what it is, rare, uncontracted 2027 power in PJM.

The structures under discussion here are focused on triple net and include pairing fast-growing AI companies with investment-grade credit support, exactly the kind of structure that enables a high-growth customer to deliver a financeable long-term lease.

Turning to Slide 8. And then there's Panther Creek. 350 megawatts of secured utility capacity with PPL, 2 hours from New York and Philadelphia in the middle of one of the most sought after AI corridors in America. This quarter, we secured zoning, we secured conditional land development approval and we refined the data center design for higher density deployments because with potential expansion capacity to 500 megawatts or more, that is where customer demand is going, not just solving for near-term power, but power that can keep scaling for years to come.

On permits, we are in the final stages of our last few environmental permits. All have been submitted and are progressing. However, the final process with regulators is taking a few months longer than originally anticipated.

For investors, I would like to clarify what this means: one, the final DEP permitting does not change our planned power delivery schedule under the ESA; two, it does not change the anticipated economics of the project; and most importantly, three, it has not slowed commercial progress or interest. As of today, our earliest RFS date continues to be 2027. And for the customers that we are speaking to, we don't believe this will have an impact. Commercial interest at Panther Creek is high, and we believe recent broader market dynamics are also beneficial for the site.

Because of the scale of the Panther Creek campus, engagement is led by large, sophisticated AI companies, and we expect interest from the very largest players to deepen as the site reaches execution-ready status on permitting. That is the pattern in this market. The bigger the counterparty, the more they value certainty. And with every permit that lands, Panther Creek becomes something only a handful of sites in America can offer, near-term power, at scale with room to keep growing for years.

Today, we have multiple potential customers negotiating across multiple sites simultaneously. Interest across the portfolio far exceeds the capacity we have to lease. And these are the counterparties you would want at the table, hyperscalers, leading AI companies, GPU cloud and large enterprise. While I cannot name names or reveal particulars, I want you to understand that there's competitive tension in this process and our challenge is not finding customer demand, but in choosing among it.

I also want to be direct about how we think about signing. We have been very clear for the past 18 months about our commercial time line. We did not rush to the finish line, but rather took the time to derisk our sites, build commercial interest and ensure we secure the best economics possible for our shareholders. A lease is not a trophy for a press release, it is a 15-year commitment of infrastructure, credit and trust. And the difference between a good lease and a great one is measured in hundreds of millions of dollars over its life. Holding the bottleneck everyone needs to grow means we are negotiating from strength, and we will focus on optimizing across customers, economics and cost of capital. We are not going to cap the upside of a generational asset in order to deliver a headline.

We remain very optimistic and increasingly confident from the engaged and active tenants in our commercial process. The intensity makes clear that our portfolio is exceptionally well positioned to solve a wide variety of customers' problems. Secured power available in 2027, attractive locations and proven delivery partners remain the differentiators driving every customer conversation we're having.

Turning to Slide 9. And with that, I'll turn it over to Jonathan to discuss our Q2 financial results.

Thanks, Ben, and good morning, everyone. I'd like to open with a simple message reiterating what I communicated on our Q1 call. We are better capitalized today than at any point in this company's history and that capital position gives us something invaluable in this market, the ability to both advance and derisk our sites at the pace our customers require and to make commercial decisions driven by our objective of delivering the best possible long-term risk-adjusted shareholder returns rather than being driven by time-pressured liquidity position.

I'll walk through our capital strategy in more detail, but first, I'll review our Q2 results.

Turning to Slide 10. For the second quarter of 2026, revenue was $30 million compared to $61 million in the second quarter of 2025. The change was largely due to the decrease in average Bitcoin price and the shutdown of the Moses Lake cryptocurrency mining operations during the quarter.

Operating loss for the quarter was $141 million compared to operating income of $11 million in the prior year period. This change includes $63 million of accelerated depreciation relating to mining rig shutdown at the Panther Creek and Scrubgrass sites, change in fair value of Bitcoin and realized loss in Bitcoin was $20 million compared to a gain of $32 million in Q2 2025.

Loss from continuing operations of $64 million or $0.11 a share compared to income from continuing operations of $13 million in Q2 '25.

Adjusted EBITDA for the quarter was negative $24 million compared to $7 million in the prior year period. This decrease in operating margins reflects a decline in the Bitcoin price and increase in G&A related to senior subject matter expert hires as we scale up to the next stage of our business and an increase in stock-based compensation year-over-year.

Our cash SG&A for the first half of 2026 and averaged $23 million per quarter, and we are currently tracking $100 million of cash SG&A for the year. Again, the increase versus prior year is driven largely by the high-quality selective senior hires needed to support the commercialization phase of our strategy.

The company sold 1,085 Bitcoin for $75 million in proceeds during the period beginning April 1, 2026, and ending August 7, 2026. As of August 7, 2026, the company's Bitcoin balance stands at 1,861 Bitcoin. As previously discussed, our intent is to liquidate our Bitcoin position in 2026.

Turning to Slide 11. I'll now cover some capital market observations as well as the liquidity update. In June, we closed a $458 million offering of convertible senior notes upsized from an initial $350 million, having received strong investor demand, which we greatly appreciate. This investor demand allowed us to be thoughtful about who we brought on to our cap table, and we're pleased to have added several high-quality, long-term oriented investors as a result. Investor feedback has been positive regarding our clarity on how we will use this new capital. This isn't discretionary or speculative capital that is earmarked to expand power capacity at 2 of our derisked owned sites, Panther Creek and Scrubgrass.

We're not using these proceeds to take on new development risk. We're using them to build incremental power capacity at existing sites. Whenever we need external capital, our commitment is to be clear on the uses of that capital and why we believe the associated long-term risk-adjusted returns create value for our shareholders. Taken together, we see the convert offering as having been both a vote of confidence from the market and the direct enabler of the next phase of our strategy execution, including pipeline growth through expansion capacity.

Moving on to liquidity. Total liquidity as of August 7 was $819 million compared to $533 million reported at the beginning of May. To reiterate, we believe our current liquidity supports site development through lease signing, expansion capacity opportunity and fully funds our cash SG&A through 2028.

Before we open the call to Q&A, let me touch on observations about capital markets conditions as they bear directly on how we plan to fund construction of our sites.

First, in respect to the project level high-yield debt financing, we're comfortable with current market conditions. Even with spreads widening, we believe there is adequate depth for the amounts we would raise and prospective returns to equity capital remain attractive. Second, an investment-grade offtake directly or wrap remains critical to obtaining efficient debt financing. The cost of financing against a noninvestment-grade partner is meaningfully higher and has less market depth. However, at least for now, capacity is available in the market to finance both against investment grade and selective noninvestment-grade customers. We continue to believe that an investment-grade customer wrap with durable lease terms is the best choice for shareholders in those circumstances.

Lastly, our liquidity position enabled us to evaluate any potential capital requirements on a post-lease basis when we expect our cost of capital to decrease.

In summary, we believe that current market conditions leave us well positioned to finance each site's construction smoothly and on terms that will create value for our shareholders.

Turning to Slide 12, I'll turn it back to Ben for some closing comments.

Thank you, Jonathan. Before we open the line for questions, I want to say a quick word about why Keel is doing all of this. Every generation builds its defining infrastructure, and it always gets built before the world agrees it should be. The railroads, the electric grid, the highways, the Internet, intelligence is ours. Work is no longer measured in jewels, it is measured in tokens. And while the price of a token has a ceiling, the value of one does not. We named this company Keel for a reason. The infrastructure we are building is the foundation that enables the next generation. We are not competing with anyone's ideas about AI, we are powering the people who have them.

18 months ago, this was just a thesis for Keel. Today, we are a company executing in exactly the window we saw coming.

Operator, please open the line for questions.

[Operator Instructions] And first question is going to come from Gareth Gacetta with Cantor.

it's Gareth on for Brett. I was hoping you could touch on kind of the political environment around data centers kind of across the U.S. I know you mentioned that these kind of developments haven't really changed the power delivery schedule or also kind of the commercial progress among potential tenants. But can you just talk about how these potential tenants are looking at the regulatory backdrop and what that might be impacted on their timeframe?

Yes, happy to do that, and thanks for the question, Gareth. The regulatory backdrop and the political backdrop is something that we obviously are watching very, very closely. Clearly, there's a lot of headlines around the U.S. right now with moratoriums and regulatory actions and kind of new frameworks or new policies or new tariffs that are being proposed and being suggested. I think the reality is, is that every time that, that happens in a place, it's going to increase the value of the other sites that are not impacted by those regulations.

And obviously, in a market dynamic where there's so much growth happening so fast, sometimes some markets need a little bit of time to catch up. I think one of the advantages that we have here in Pennsylvania is Pennsylvania is kind of enjoying the second mover advantage. It definitely wasn't the first to jump up there and start building data centers. They've really had a lot more permits and rules and different steps and hoops to jump through in the first place.

And so I think that the reactions that you're seeing across the country are due to the huge influx of data center demand in applications. And I think Pennsylvania had a pretty good framework in place already for large industry, large manufacturers, very large kind of consumers coming in to build industrial capacity. And I think it sets us up, and I think it probably can create some value to Pennsylvania to see these actions taking place in other sites because that capacity still needs to come in the United States. And those are the areas that there's going to be continued opportunity in.

Great. That's super helpful. And then maybe just a quick follow-up. Could you touch on your current pipeline? I think it's about 480 megawatts you guys have secured. But could you just provide any color on how much of that pipeline is exposed to this application process?

So we've got 2 different buckets of energy. We've got our secured and we've got our expansion capacity. As of right now, all of our secured capacity, we believe is unimpacted to date, and we're going to continue to monitor that very, very closely. The expansion capacity may be impacted by future changes or future policy implications. But right now, everything is progressing incredibly well on securing our expansion capacity.

I mentioned it briefly on the call. We're working with our utilities on a daily basis. Our applications to secure our expansion capacity, which is almost 2 gigawatts across the state, is going very, very well. And we're increasingly confident that we're going to be able to secure additional power and look forward to giving investors the update as early as December or January.

And our next question will come from Greg Lewis with BTIG.

I was hoping to kind of talk a little bit about the permitting process. I noticed you talked about some of the environmental permitting, just I's that we have to dot and Q's we have to cross, as you're working with your data center [ customers ], I'm curious, is there like a dual process around how we could address some permitting issues? And the reason I'm asking is one of the things that we've heard is sometimes the backup power generation, if it's diesel or natural gas, tends to trigger some environmental permitting challenges or just things we need to address versus maybe using backup batteries as a solution. Just kind of curious if that's something that we're exploring just in case the environmental permitting takes longer or is just a slower moving process maybe than we thought?

Yes. Thanks, Greg. So to answer your question, you're certainly right that when going for environmental permits, especially on the backup generators, those can be challenging. And there are ways that you can manage that. I mean there are different quality of generator efficiencies and quality of emission controls. So certain generators are easier to get permitted, certain generators are more difficult. Really, it depends on how much you expect to use the generators and the associated emissions over the year.

So the data center project can have the same backup generator, but based on what its expected uptime, could have 2 very different permits. So it's a bit of a complex and nuanced situation. But we're always striving to find the ways to speed up and compress those time lines, especially if it's something like permitting. So we do evaluate all of the solutions out there with regards to BESS or different generator solutions to try and keep that process as quick and as efficient as possible.

Okay. Great. And then I was hoping, Ben, you can talk a little bit about Sherbrooke. I guess just now that the power has, I guess, been across the site or however that's used by potential customers, [indiscernible] I guess, the 9,600 megawatts [indiscernible] plus 1 site. How does that -- what does that actually mean from a marketing perspective for Keel?

Yes, that's a great question, Greg, and I'm happy to speak about the Sherbrooke project. So we've got a decent-sized portfolio in Quebec, and Quebec represents a market that is very captive. There's a lot of legislation in both Canada as a country and Quebec as a province that really strongly incentivizes data sovereignty at the national and at the provincial level. But unfortunately, it's just been very, very hard to secure new electrical capacity for data centers.

What we have in the province of Quebec is we've got a huge energy portfolio, but specifically approved for Bitcoin mining. And what the approval that we received on Sherbrooke was for consolidating 3 different Bitcoin mining power purchase agreements we have into a new single power purchase agreement, specifically for HPC and AI. And that one piece there, the change in the industrial use case is the big change here that enables us to actually move forward with developing an HPC and AI data center once we have the last sign off from the provincial minister.

And the reality is, is that because the legislation is there and because the demand is captive, we think that Canada and Quebec largely can charge a little bit of a premium on the exact same compute because they just are that much more captive and the capacity is just that much more scarce.

And the next question will come from Mike Grondahl with Northland Capital Markets.

This is Logan on for Mike. Ben, first, can you provide a formal update if Keel is still targeting 3 leases announced in 2026, given the extended time line now for Panther Creek? And maybe just an update on how demand has evolved over the last 90 days since that target was announced?

Yes, happy to cover that, Logan. We're still in active due diligence and negotiations at all 3 of our sites. I think the commercial process is going incredibly well. At every 3 of our priority sites, we've got a lot of very interesting and sticky potential tenants who are working through the negotiation process. And I think at this time, while we're working through the negotiations, we're just going to continue to focus on working through those negotiations and the multiple parties as trying to give a clue or an indication as to where any particular negotiation for any particular site or tenant is at. But we remain incredibly optimistic and confident based on the commercial process so far, based on the continued process that we have with permitting across all 3 sites as well as the other background works with the engineers, the supply chains, the fiber contracts, everything is continuing to move forward.

And I think the closer you get to energization date, the more valuable your energy becomes by the day. And so it becomes an easier and easier commercial process when you're working through a 2027 delivery date as opposed to a '28 or 2029. And so that continues to keep us incredibly confident, optimistic and it also helps to keep our potential tenants very engaged.

Great. Yes, I appreciate the insight there. Then one more from us. Can you kind of formally update us on the Scrubgrass site, where that's at today, how that site is progressing and the demand you're seeing for that 2028 plus power?

Yes, sure. Happy to give an update on Scrubgrass, although there isn't much of a substantive update to give. Scrubgrass is what we call a pipeline site. So this is a very exciting 1 gigawatt plus campus in Western Pennsylvania. But right now, the process for Scrubgrass is really in the energy application stage. So we have been working with the local utility there for a detailed load study for 750 megawatts. And we've also been working on the pipeline and engineering, as many investors know, for a pipeline to support 550 megawatts of on-site generation with CCGTs and an IPP who would come in and deploy the turbines, finance, operate and sell the power to the end customer.

At this stage, we are still working on securing the power. And until we have secured the power, and we have a firm final understanding of how big the site is going to be by what time, we're not doing the engineering work for building out the data centers or planning out the data centers. We have not submitted any permits or any proposals at this time. We're really focused on securing the power and working through what we call a mass grading plan and kind of a site campus layout plan so that we can know, as soon as we get the power approved, where we're going to want to build buildings, how we want to build buildings, the size of the buildings, the number of the buildings, the cadence and that sort of thing. But at this stage, it's still really in the energy application phase, and we should be able to provide investors an update as early as December or January.

And our next question is going to come from Michael Donovan with Compass Point.

On Sharon, I was hoping we could discuss the cadence for RFS. Are you still expecting 30 megawatts for the first data center and then expanding it by the 80 megawatts?

So we've been working on that, Mike, and we've been working on how do we compress our time lines as much as possible. And also how do we improve our power density. As of right now, we haven't updated it, but we are looking at ways that we can compress it into 1, 110-megawatt phase.

Okay. That's helpful. And then at Moses Lake, is an additional 10 megawatts at the site still an option?

No, we've decided to give up that option, and we are just focusing on the 18 megawatts in Moses Lake at this time, and we have given up the option.

And our next question is going to come from Bill Papanastasiou with Chardan.

Can we please double-click on the environmental permitting process. Are you seeing a higher bar being set given the recent political headwinds on building data center capacity? And more specifically, how would you assess the likelihood of environmental permitting approvals today relative to prior quarters?

Thanks, Bill. Yes, happy to dig into that a little bit. I mean, really, when you look at our permits across both Sharon and Panther Creek, they're really kind of the same permits at both facilities. They're all environmental. It's largely associated with sewage, which is a pretty standard permit to apply for and get. It's not one that tends to be controversial as well as kind of the ground stuff. So things that deal with erosion, water, storm water is basically what the rest of the permits entail.

So these are engineering focused. Like I said, they're not generally politically sensitive or subject to a whole lot of opinion. It's really just the engineering work. And one of the things that we've mentioned on previous calls, I think people have asked about our relationship with the OTO, which is Pennsylvania's Fast Track Office, so Governor Shapiro has a fast track office for permitting. That's actually run out of the DEP because the DEP is well known for kind of taking the longest line item in the permitting process. And that's actually split up into 2 departments. There's a Eastern DEP and there's a Western DEP, and it's the Eastern DEP that tends to be the one that's a bit more overworked and it takes a bit longer to go through the permitting process than the Western one.

And so it's really just a matter of working through the backlogs. But this is a well-known -- these are pretty standard permits. This is a well-known process, and we remain incredibly confident, most confident we've ever been on completing our permits for both Panther Creek and Sharon today.

Appreciate that. And apologies if this was mentioned, Ben, but the conditional approval at Panther Creek, what are the conditions attached to that?

There's too many conditions to name, but to give you kind of like some examples, conditional approval will include things like you need to adjust your setbacks or maybe you need to adjust the height from 62 down to 60 or just something like that. They're pretty standard recommendations. It will be very specific. They will usually be very numeric, and it's make the following recommendations or implement the following systems or achieve the following conditions. They are not hard to comply with. And the real advantage of having that conditional approval, it's a very clear checklist of everything that you need to do so that, that conditional goes away and you are just fully permitted.

And so it's a very clear prescription or recipe or however you want to think about it for getting there. If you're -- if they don't want to get you approved then they wouldn't be providing such a clear road map for that success.

Understood. And then there was a prior question on Quebec. Can you talk about that opportunity? How ripe is the sovereign AI market in the province? And how do you see Keel capitalizing on that?

Yes. So we've spoken with a number of different industry experts, especially in the province. We think that rates generally in Canada are higher than they are in the United States, but it's hard to put a firm figure on that. But generally speaking, they are higher. And what we see is that there's some nice diversification benefits for us as a company. We have the U.S./Canada diversification element. So there is the element where, in Canada, you don't have to worry about regulatory changes with regards to tariffs and all of those other items, which might impact the cost of a data center. So we think that delivery in Canada could potentially be cheaper than in the United States, and we think the market could potentially be worth more than it is in the United States.

The challenge with Canada is the same challenge we've always had with Canada. It's just a very hard market to grow in organically. And so if you're looking to achieve a 1 gigawatt growth in Canada, that's probably a very, very, very high hanging fruit and much higher hanging fruit than trying to achieve 1 gigawatt at a campus like Scrubgrass in Pennsylvania. But for the power that we have, we believe that working through to get that approval, working forward to make sure that we have the clear path, all the permits, all the support needed and secured for us to develop a data center, we believe we can generate some pretty attractive yields in Canada.

[Operator Instructions] And our next question will come from Stephen Glagola with KBW.

Ben, how should investors think about the significance of the August 20 Department of Environmental Protection meeting for Panther Creek, and what are the key decisions or milestones that need to come out of that meeting?

It's very routine meeting. I don't think you should be thinking about this as a special or a unique thing. It's just another routine meeting.

Okay. All right. That's good to know. And I guess a higher-level question for you would be, when you're evaluating prospective tenants, to what extent does your view of the long-term model or landscape influence your willingness to partner with a particular AI lab?

Well, that's a very interesting question, one that we actually think about a lot because the market is changing quite quickly. Even just last week actually, we were talking about the entire company, Keel has adopted Claude for our enterprise AI solution, but a year ago, none of us were using Anthropic, we were all using ChatGPT and now that's completely changed. So I think that model -- or I think the market is going to continue to change and adjust.

This is a market where the incentive is very high. There's a lot of people who want to push for the top, and we do expect it's going to continue to change. We think that Anthropic has found a nice niche in the enterprise market, which is the one that we've always been identifying as the one that's really going to be driving this industry forward as opposed to retail is going to be the enterprise consumers and maybe they develop a little bit of a moat here. But we're going to try and stay as agnostic as possible with regards to the models because as we've said before, a lease is really not a trophy for a press release, it's a 15-year commitment. And the gap between a good one and a bad one is measured in hundreds of millions of dollars.

We're not in this for the company who can only pay their rents for 1 year, right? We're in this to find the companies who are going to be able to give us long-term contracted, predictable revenue for 1 to 2 decades.

And our next question is going to come from Nick Chiles with B. Riley Securities.

A lot of good questions asked already. So I just wanted to zoom out and ask, Ben, what do you really see as some of the biggest risks at this point? It seems like you made some progress on the supply chain front, but curious if there's any kind of further mitigation you can do there?

Thanks, Nick. I think the biggest risk at this point is probably just broader macro. The reality is, is that there's still very little 2027 power that's available in the market. And we have a really strong position because we have a very reasonable amount of the 2027 leasable capacity remaining. So I think, broadly speaking, that keeps a lot of our -- well actually keeps all of our potential tenants incredibly engaged. It keeps them incredibly sticky. They're all looking to solve the exact same deployment problems. And so there's a real strong advantage there towards having that 2027 power that everyone is so focused on delivering.

I think the broader market is probably what we're watching the most, how our capital markets evolving and changing, how are the financing opportunities for the market changing, what's happening with interest rates and broader risk-on, risk-off sentiment, how is the market processing, the increasing amount of intercompany financing that we're seeing across the industry? I think those are the things that were really the bigger risk factors for the business. And fortunately, those are things that the entire industry kind of equally faces together. But given we have that 2027 power that's in high demand, we're incredibly highly confident with our portfolio and moving forward with the commercial processes for all of our sites.

Great. And that's good to hear. And then just maybe on the CapEx side, I was curious if you kind of have any rough sense for where that could shake out? And if there's a kind of development cost or a certain yield to cost hurdle that you're looking to achieve on any signing?

This is Jonathan. Thanks for the question and good to talk to you this morning. We continue to suggest that you use the rule of thumb industry averages that you might see in equity research for purposes of your own modeling in terms of construction costs and yield on costs and that should work well for you.

Fair enough. I appreciate that, Jonathan. And then just one more, if I could. I think all the BTC sites have been decommissioned now. So should we really be zeroing out revenues for the balance of the year?

So at the beginning of the year, we made clear from our liquidity forecast that we were assuming there would be no cash contribution from BTC embedded in any of our forecasting. We still do have rigs up in Canada as a practical matter. They might contribute 2 or 3 Bitcoin a day. But again, all of our discussion around liquidity and projected liquidity assumes that the Bitcoin business provides no cash over the course of the year.

And the next question is going to come from Martin Toner with ATB.

Congrats on the progress. A question about timing. Now that Panther Creek, which is the flagship or crown jewel asset, not to put words in your mouth, is delayed relative -- likely relative to the others. How do you think that changes timing for deal announcements? I mean, is it possible a tenant wants all 3, and therefore, it will take a little bit longer to sign it? Or which one do you think will go first?

Thanks, Martin. It's -- we have an internal betting pool in terms of which site is going to go first, but it's really, really hard to pinpoint exactly where that's going to land out. You don't really know what's going on in the background with each customer. And generally speaking, they're going to be as aggressive as their back pipeline of demand is there. So they're going to be quite aggressive depending on what's unique to them.

With regards to a timing for Moses, Sharon, Panther Creek and whether or not 1 potential tenant could be interested in all 3, I mean, I can confirm that we have multiple tenants who want all 3 sites. But that doesn't mean that's how we want to run the process or that's how we necessarily want to be building our portfolio. We'd rather be looking at trying to keep tenants focusing on individual sites, get them focused on one site that they can take down and then look at how they can build potentially a pipeline of growth with us beyond that first asset.

So many of the things that -- many of the tenants that we've been speaking to recently are not just interested in an asset, they're interested in finding a development partner that they can continue to scale with predictably over time. And so that's how a lot of these conversations are going is how do we get on with Moses Lake first, but then how do we also sign up for a second site or continued expansion in '28 and '29 with you. Same thing with Sharon and same thing with Panther Creek.

Whether or not that impacts the timing for Panther Creek is not certain right now because the commercial process is still incredibly active and nobody seems to be batting an eye. As long as our RFS date remains 2027, I don't think there will be any impact here on our commercial process.

That's very helpful. Has the RFS date within 2027 changed for any of the sites?

For Panther Creek, we've always been end of year '27 and same year for Sharon, end of year '27. So I don't believe that we'd push back our Pennsylvania sites. I think Moses Lake has been delayed maybe a couple of months since our original guidance, but it's still going to be the first site that we expect to have online in next year.

And the next question is going to come from Brian Dobson with Clear Street.

I guess as you're looking at your portfolio, where would you like to add additional resources or expand in existing ones? I suppose, are there certain geographies that you're favoring more than others at this point?

Thanks, Brian. That's a great question because we are looking at how we continue to grow our pipeline beyond '27 through '28, '29 and 2030. We do still have a global view, but we do have a strong, I think, preference for the East Coast, specifically the U.S. Northeast and the Midwest areas. We think those areas have tremendous energy resources and tremendous inference potential over the next couple of years and is going to be likely the areas where we see the greatest opportunities for HPC and AI infrastructure build-out. But it's early days. There can always be amazing opportunities outside of those areas, and we're certainly not going to be closed off to those amazing opportunities. But I think, generally speaking, that's going to be where we focus.

Great. And then I guess in recent weeks, you've seen governors from New York and Texas, I guess, draw -- put an increased level of scrutiny on data centers. Do you think that this is something that we might start to see in other important energy regions? And ultimately, do you think it favors established players like yourselves?

Thanks, Brian. The trend right now or the winds right now indicate we probably are going to see a few more headlines like this in the coming months. I think Pennsylvania represents a really, really unique centrist state in our view. This is a state that is very, very focused on energy and heavy industry. It's very, very blue in the major cities, and it's very red everywhere else. And so when you look at Governor Shapiro and kind of the politics of Pennsylvania, they do represent a very unique kind of centrist position for the United States these days.

It is one of the least polarizing states in my view in terms of the politics because they do know that they need to balance out the trades, the industry, the energy, all of those sort of employment opportunities, which is what drives Pennsylvania with the other concerns on the other side of the hall. So we think that this is a great place to be is in Pennsylvania. We think that if states want to block themselves off from the best economic opportunity for development in decades and could be for the next couple of decades than we think that's pretty shortsighted because when you look at what one of these data center investments does for communities, for revenues, for employment opportunities, for tax budgets, for the schools and for the roads and what have you, these are transformative for the communities that we're investing in. And we think that they're very, very excited about the projects because of those investments because somebody is actually looking to do that.

So we think it's pretty shortsighted, but we'll probably continue to see a few more. And generally speaking, we think Pennsylvania is in a sweet spot.

I am showing no further questions at this time. I will now turn the call back over to Ben for closing remarks.

Thank you all for joining us today, and thank you to the entire Keel team whose work this quarter speaks louder than anything I've said on the call. We'll see you all in November with more to show you. Thank you.

Grace, you want to put up the disclosure slide for us while I do introductions. My name is Brian Kinstlinger. I'm the Director of Research at Alliance Global Partners, where I also publish research on technology stocks. Joining me today from Keel Infrastructure is their CFO, Jonathan Mir. For background, Keel's legacy business is a Bitcoin mining, and it's slowly winding that business down.

With its portfolio of power capacity, the company is shifting to an HPC AI focus with the development of data centers. For investors, feel free to type in questions if you have them as we go along. If not, we'll be having a Q&A here between Jonathan and I. So welcome, Jonathan.

Good morning, Brian, and thank you for having me. We appreciate it, and I appreciate the chance to catch up with all of the investors on the line. I'll take the liberty of assuming that you all are familiar with the story. Keel started like many of our peers some years back, 8 years ago, as a Bitcoin mining company, and that is an element of our past.

We're winding down and decommissioning right now our remaining Bitcoin activities. We have some Bitcoin on the balance sheet. We've committed to investors to liquidate the entire Bitcoin position by the end of the year. To us, the focus of the company right now and for investors, the focus of the company right now is in our HPC AI data center strategy going forward. And that's built around the idea that we have the most constrained element of the supply chain, which is power.

At Q1, we announced that we were going to market to lease 3 sites: Moses Lake in Washington, Sharon in Pennsylvania and Panther Creek in Pennsylvania. Each of these sites, which are fully zoned, have ESAs in place. That is to say we have firm capacity and power available for our customers.

And that is typically the most complicated element, the most time-consuming element of a data center strategy, and we've solved that already for our potential customers. With that, I'm going to allow Ben Gagnon, our CEO, who just joined, to go through our strategy and our objectives in the months ahead.

And welcome. How are you?

Thank you, Brian. And sorry, I'm late. I had a couple of Internet issues, had to...

No need to apologize. You got a busy time right now. I'm going to ask you a question to help you. We've got a lot of investors on -- some are quite familiar with the story and some might not be. I want to start -- I mean, we hear about so many companies all the time. They've got energy capacity, have 0 to 100 megawatts, 500 megawatts, all sorts of long-term large leases. What separates your sites? Why are they so attractive in this time where power is so important? But what separates your sites? And what should investors be excited about?

Yes. I think the easiest way to answer that question, Brian, is right power, right timeline, right locations. Just because you have power doesn't necessarily give it a tremendous amount of strategic value, right? We always say a megawatt is not a megawatt because if you have a megawatt in a place like downtown Manhattan versus a place like in the Yukon or somewhere in Central East Asia, it's just worth a different amount of value.

And where we have our power, we have focused on areas that are outside of major metro areas. We focused on high barrier to entry markets. And we focus on areas that all the hyperscalers have underwritten for a while and a long time as kind of their area that they want to focus on, but they're having trouble growing in those areas because the barriers take years to overcome.

And when you look at power and power secured, I think power pipeline is probably one of those definitions that has the most wide-ranging amount of potential answers across the industry. We like to say there's probably 20 companies doing this transition from Bitcoin mining to HPC and AI, but there's probably 30 different definitions of power pipeline. Everyone has a different view. For us, it's either -- it's a combination of the power that's currently online and running through a meter, the power that's secured through an ESA, as Jonathan just mentioned, or power that has significant work behind it from the company.

It's going through a detailed load study, for instance, at a place like Panther Creek, which already have months of work to complete the conceptual load study confirm the power is there. It gives us a really high confidence that we're going to be able to continue to secure those megawatts in the future as we execute.

And so when you look at our power, it's 2027 power. When you look at our locations, it's outside of New York, it's outside of Philadelphia, it's outside of Seattle, it's outside of Portland, it's outside of Montreal.

These are really major areas, really high-value markets and really hard to grow. And so when you see our timelines of 2027, most of the market is already kind of moving on from '27 thinking that they're not going to be able to get 2027 power anymore.

This becomes a very, very strategic opportunity for companies who are looking to grow, looking to scale, especially in these markets that have very high barrier to entry. And the best way to do that is with a company like Keel who has it secured and can cut years off their timeline.

Great. Now as it relates to Moses Lake, Sharon and Panther Creek, what has Keel done thus far to prepare for leasing on these locations? And what needs to happen for you to move forward with lease agreements?

Yes, it's a great question. And each site is a little bit different. So we've taken a different strategy at the 3 sites. I'll just go from West to East or from smallest to biggest. At our Moses Lake site in Washington, 18 megawatts, that's a relatively smaller site.

That's a site that has a very different kind of customer profile. That's more like an emerging neo cloud or probably an enterprise customer. It could also be maybe a government agency, but they tend to take a lot longer to negotiate and to work through the steps to getting an agreement in place. And so for a potential customer like that, we took a different strategy. There, we underwrote a lot of the long lead time -- well, all of the long lead time item equipments to go from a piece of dirt to a fully functioning data center minus the actual compute racks themselves.

So our understanding was with an enterprise customer or an emerging neo cloud, they wouldn't have the specificity that a hyperscaler would have that says, this is my exact build. This is how I want it. I'm not going to vary from this, and I'm not going to be able to accept your backup generator choice or something like that. Emerging neo clouds are much more flexible. They don't have those requirements. They also don't have these long supply chains secured like the hyperscalers do.

So we've gone and underwritten all of that off of our own balance sheet, and we're executing that as kind of a turnkey package. The last things that really are in place is clearing the remainder of the last few permits, Brian. That's something that we've outlined for investors a few different times. It should be done really mid-, late-summer time frame for all 3 sites. And Moses Lake realistically might be the first one fully permitted and out there breaking ground, moving shovels and should be the first site fully online. So really between now and that site coming online, the only thing that we're waiting to clear is kind of a milestone that investors would be aware of is just clearing the final permits.

The next site that we have, Sharon, which is in Western Pennsylvania. Sharon, we've got zoning and preliminary development cleared. So we're really, really far advanced on the sorry, conditional development cleared for the development bucket. So we're very far advanced at Sharon for the permits. For that one, the market is very different. At 110 megawatts, you're really looking at established neo clouds, hyperscalers and large-scale enterprise recently, who are starting to integrate AI into their businesses in a much more significant way, and they are looking to take control of the compute themselves because this has become an increasingly crucial part of their business and their corporate DNA.

That -- those sites, we've taken a different approach. It's advanced the sites all the way through permitting. And once you get through the more controversial permitting steps like zoning, which we've already cleared, that enables us to have a lot more confidence going into negotiations.

Same thing for investors to look out for is clearing the final permits, which is expected a similar timeline, mid- to late summer time frame. And this site is actively under commercialization. So everything is moving forward there. We'll put out press releases when we clear all the remaining permits, and that will be the last kind of noticeable timeline for investors. And then at Panther Creek, which is our flagship site, the 350-megawatt site outside of New York and Philadelphia. We've done basically the exact same thing.

We've cleared all the permits and trying to derisk the site through the planning and the engineering and the design to give us as flexible of the development package as possible. We've also cleared zoning and preliminary or conditional development at Panther Creek, and we're just waiting on the last few permits to clear in the mid- to late summer time frames. Active under commercialization. And for a site like this, this is -- the reason why this is our flagship, not just because of the size, it's because of the location. When you've got 350 megawatts outside of New York and Philadelphia, close to Virginia and data center alley, that's a really, really hard to reproduce site based on its location, scale and timelines.

And so that's attracted a lot of interest from the hyperscalers, the largest language labs. And those are really the kind of customers that I think most of the investors really want to see land as tenants, and those are the customers who would be actively competing over a site like Panther Creek.

Great. So as you mentioned, hyperscalers, they're spending billions in time to power, it's so important. It sounds like leasing is -- sorry, it sounds like permitting is close. Once you have a lease in place, how much time will it take for you to become operational at those sites? And given these -- well, you already mentioned the second half of my question, so sorry. Yes, just maybe what is time to readiness for each of these locations?

So for energization and commissioning of the data centers, Moses Lake should be the first site fully online, and that should be done probably in the first half of 2027. With Sharon, that will be the first site fully online in Pennsylvania.

Power should be coming online in the first quarter -- or sorry, the fourth quarter when we've commissioned the first building. And then at Panther Creek, the 350 megawatts, the first building we plan to commission in the end of Q4 2027, with subsequent buildings being commissioned in 2028 to enable kind of a smooth and scaled ramp-up schedule over time.

It kind of ranges based on the size of the facility, how quickly you can get to readiness. Is that right?

Well, it's definitely smaller is easier and faster to construct than larger. There's also just deployments for the tenants, right, where most of the tenants don't necessarily want to drop down 350 megawatts of equipment on 1 day. They want to have a more normalized schedule of this is a month-over-month, this is a quarter-over-quarter general ramp because that's how they secure their supply chains as well.

Got you. Now when you say 18 megawatts it's like 350 for Panther Creek and 110 for Sharon. I'm assuming this is energized capacity. So what is expected load capacity? How should we think about economics? How they're different in each location? And are there any proxies for competitors who have announced deals of how investors should think broadly about what that means for Keel?

Yes. It's a multifaceted question. In terms of market data for the locations that we have, I'd say it's very few and far between, right? Most of the market data that we've seen in the industry so far has been in Texas and a few other locations. In Pennsylvania, Washington and Quebec specifically, I don't think there's been any market transactions that I can point to. There's been a number of hyperscalers underwriting the area.

Notably, Amazon has invested in 2 sites within about a 45-minute to an hour drive of our Panther Creek site. So they acquired the Susquehanna site from Talen Energy as well as another site nearby. I believe it's CoreWeave, who invested on a 300-megawatt site kind of southwest of our Panther Creek location.

So there's been a lot of developments happening, but I don't think there's been a lot of tenant contracts that I've seen in Pennsylvania or Washington. But what we've seen is that there's kind of been a segment in the industry where everyone is really focused on training.

And I think the emphasis at the beginning of the industry maybe 2 years ago, really starting on this ride has been how do you get as much training online as fast as possible because there's a race. And if AI is improving at an exponential rate, maybe if you don't start now, you're never going to be able to catch up, right? And so I think that was what was driving the industry at first.

What the industry is going to eventually be driven on, and we're seeing that shift taking place now with the enterprise is actual utilization of AI and implementation of AI because these businesses are not making money training AI.

It's just a huge area of expenditure for them. They make their money through the inference of the AI. And so as we see the market shift over from training demand over to inference demand, I think that's going to probably change the economics. I think it's going to provide greater emphasis on the locations.

And we'll see that probably coming over the next year or 2 as the industry starts to shift over. The best emphasis that -- the best example that I can point to right now is just the enterprise demand that we're seeing, where we're seeing more and more large-scale enterprise figuring out how to implement AI into their businesses.

And for them, it's a very different set of economics, right? For hyperscalers and for clouds, there's kind of a ceiling on what they can charge for their compute capacity. For a business applying AI, there is no ceiling on the value that they can create by applying AI, right? They can improve efficiency. They can reduce headcount. They can reduce costs. They can drive revenue. They can create whole new business lines. They can find correlation across 10 different asset categories that nobody has been able to understand the data on.

They can prevent massive shoplifting through real-time detection of shoplifting through CCTV cameras. There's just no limit on that value. And so I think that inference is going to be the dominant player. And I think that's when it does, and it's going to be a gradual transition over the next couple of years. The sites that we have based on the location should have more and more value.

Right. So if I'm hearing it right, I look at data center announcements and lease agreements in Texas and other locations. Maybe it's not as centrally located to some of the biggest cities as yours in Pennsylvania. In addition, you've got the Vera Rubins where they're using the older Blackwell technology. So if I'm hearing you right, those economics may be a little bit lower than you'd hope to achieve.

I don't want to point to any specific level of economics that I think we'll achieve through our leasing efforts. But what we've said for a long time is that the economics continue to improve for landlords. And I think that trend has been really clear for the last 2 years. I don't see that trend changing. The landscape is such that we are solving really high-value problems for the tenants. The tenants really want these problems to be solved. And I think what we've seen is an evolution of the industry and a maturation of the industry where terms have continued to improve.

Creativity has really been abundant where people are taking really different approaches to how do you solve the credit problem, how do you solve the financing of these really, really large programs. I think that's played out. I think that's continuing to play out in our favor. And I think as the movement of the industry over to inference continues to take hold, I think that's going to continue that trend as well.

And then just to the other question I asked, how do I think about efficiency? What -- I mean, generally, I think the economics of any agreement is based on load capacity. How do I think about the efficiency of your locations? And do I have it right?

So when you think about load capacity and efficiency, where that really comes out is in something called power usage effectiveness, so PUE ratio. And basically, what that means, Brian, for all the other investors is that, let's say, I've got 1,000 megawatts.

If I have a PUE of 1.5, that means for every megawatt I'm using on compute, I'm actually spending 0.5 megawatt on all the other support operations. So that could be cooling, it could be lighting, it could be the bathroom automatic sensors, it's absolutely everything that goes into that data center. And so if you have a PUE of 1.5 on 1,000 megawatts, you don't have 1,000 megawatts available for compute. You actually have 666 megawatts available. You've got 333 megawatts available for everything else to support the 666.

Now when you're in a place like Texas, where it's naturally a lot hotter, the temperature is a lot more extreme, that is kind of where you should probably expect your PUE to be. I think an efficient PUE in Texas is probably going to be like a 1.4 and more of a normalized is going to be around 1.5.

Now if you look at our sites in -- we have sites in Pennsylvania, Washington, Quebec, nothing is below 40 degrees north. We expect that we should have probably closer to a 1.25 PUE, plus or minus, just because the natural environment is so much colder. So if you take that on 1,000 megawatts, that means that we would have 800 megawatts available for compute capacity as opposed to 666.

So that's a huge improvement. The 800 over 666, that's a 20% increase in the power available for compute. And no one gets paid, like no one is creating value on the PUE megawatts, right? You're only creating value on the compute megawatts. So minimizing the PUE, maximizing the available capacity for compute is what's going to be really valuable for tenants. And all of our sites because they're so far north, should have kind of an estimated PUE of 1.25 plus or minus about 10%.

That's great. That's super useful. Now you mentioned derisking. I'm sure there's investors who are clamoring for you to announce a tenant. You made a strategic decision a long time ago not to rush to sign a tenant and instead to derisk the site. Can you explain to some that might not understand why that's so important, why that's critical long term for your company?

Yes. I mean this is a strategy that we embarked on 18 months ago approximately when we acquired the sites. So we acquired the Pennsylvania sites from Stronghold in March of last year. I think we closed on the transaction on March 14. And the sites weren't properly zoned. The sites didn't have the permits for development. The sites are current existing Bitcoin mines and power plants, but that doesn't mean that they have the permitted status to develop a data center. And what happens in these lease negotiations is the tenant doesn't want to underwrite any risk.

And so if you have a site that doesn't have a clear path forward, you're going to pay for that in the lease. And you could go out there and potentially sign a lease, but you would, one, get a much lower level of economics because the tenant doesn't want to underwrite the risk and the uncertainty associated with permits and development time lines and actual delivery dates. Two, the business would actually face a liability that we would have to deliver by a certain date, and then we wouldn't even be able to secure the permits to be able to deliver by that date. And so the best way for us as a business to create value out of these sites was to derisk the sites through continued design, engineering, permitting, which is exactly what we've done, bring them to the point where our confidence on the sites rolling forward and our timelines for the sites became incredibly high and verifiable.

And so that's exactly what we've done. And now when you go into these lease conversations, we're really in the sweet spot because you don't -- if we're starting too early, we're going to undersell everything that we have. If you start too late, you're going to lose out on that timeline to energization, which is so valuable for the tenant.

But if you start in kind of this Goldilocks phase where you're through the more controversial pieces and you have a very high confidence, clear path forward, that's your optimal, and that's exactly where we are. I think that's played out well from the business perspective.

And then we also have a general macro perspective that the lease economics continue to get better. The supply capacity is going to be -- continue to be constrained. And all of those things should result in overall better economics than trying to sign today.

And our primary goal when you're looking to sign leases like this is maximizing our return on equity, maximizing our net operating income because we're really going for that margin expansion that comes from the huge increase in the value that we create per the megawatt, the contracted revenues for a long period of time and that multiple expansion that goes from a Bitcoin miner to an HPC and AI infrastructure company. And so maximizing on lease economics is a key part of that strategy. I think we communicated that early. I think we were unique in that approach. I think maybe the market didn't really like it necessarily when we first announced it. But what that means is now where we are right now, it's an absolute Goldilocks phase where everything is lining up and everything is coming into place where a lot of companies have all of this in the rearview, we have all of this in our front view.

Great. Now the company just raised $458 million in the convertible note. Maybe talk about your liquidity today and what's the total remaining CapEx for the 3 main sites that you still have remaining? How should we think about that?

Sure. I'll go through our liquidity guidance as of Q1 and then how that is impacted by the convert we just did. So as of Q1, our guidance was we had $533 million of liquidity on the balance sheet. And that was enough liquidity to get us through leasing and then have all of our cash SG&A fully funded for 2027 and 2028. And we're assuming cash SG&A of about $100 million a year. That will move around because of various divestitures and wind down of certain businesses, but that's a reasonable assumption for now.

That guidance remains completely unchanged. So even if we hadn't done the convert, that would still be our guidance that we're fully funded on a cash SG&A basis through 2028. We did the -- we issued the convert the week before last because we had some very specific uses of capital that were going to be available sooner or later, and we wanted to raise the funds at an opportune time, particularly during a benign market environment.

The use of those funds will be around power capacity expansion, some of it at Panther Creek, some of it around natural gas infrastructure at Scrubgrass. These sorts of expansions are extremely attractive to shareholders because it is adding additional capital spend to derisked projects.

So rather than taking de novo development risk, we're simply adding to the numerator on which we earn a cost of capital. So one has to be ready to make these investments as soon as they come up and lock them in. At Panther Creek, it's -- we've discussed publicly our objective of increasing the capacity available on our ESA from 350 to potentially as much as 500, although I think we'd be quite pleased if we could actually achieve that.

Nevertheless, increasing that sort of capacity involves building additional substation capacity, calling away custom transformers, additional transmission upgrades and significant LCs -- excuse me [indiscernible] significant LCs with utilities, similarly in Scrubgrass, we're looking to enhance the delivery potential of natural gas to the site so that it can support behind-the-meter CCGT scale generation with -- that we would do with a generation partner.

So again, some tens of millions for CapEx build-out as well as a variety of LCs. And we wanted to have that money immediately available because of the attractiveness of the investments rather than trying to urgently scramble around at the time it was needed. So again, this second convert has specific use of funds in mind, appreciating money is fungible. As to the cost, the full CapEx costs of each site that we really think of as taking on after a lease, suggest folks use sort of industry rules of thumb as a reasonable convention for their own modeling purposes.

Okay. And what do you think the rule of thumb on kind of cost per megawatt is in the range?

$11 million to $13 million is probably...

$11 million to $13 million...

Rule of thumb or at least how we think of where [indiscernible] come out.

Now we've talked about -- and we got some questions, I'll get to them. We've talked about the 3 main sites. Maybe you can talk about other pieces in your portfolio. You have -- like you said, Scrubgrass is an exceptionally large potentially game-changing location. Maybe talk about that. One of the questions we got is there's been some news in Scrubgrass. How does that impact Keel? So maybe you can address that at the same time.

Sure. We continue to move forward on all the sites. What we've outlined with Scrubgrass is that this is a pipeline site that we're focusing on securing the energy. And this is probably our longest out project. This is probably a '28, '29 time frame at the earliest for the first commissioning of the first buildings. When it comes to the things that are happening legislatively and kind of regulatorily, those might actually establish some potential moats for us and make these higher barrier to entry markets even higher barrier to entry.

And the reality is that a lot of what they're recommending and proposing through these legislative frameworks, which right now, nothing is in place and nothing impacts project scope or timeline or scale, a lot of it we're already doing for sites like Scrubgrass, right, like bringing behind-the-meter generation in addition to a large interconnect, that was already the strategy. And so for us, it doesn't impact our plans. Maybe it potentially helps to speed up the process. Maybe it's a neutral is kind of how we're thinking about it. But we're going to continue to keep an eye on all of those different developments.

I think the reality is that we've got a really supportive community around our 2 main projects that we're focusing on in Pennsylvania and Panther Creek and Sharon. And I think that's been a huge part of our strategy going into this is engaging early and trying to be transparent and trying to be answering as many questions and putting the face time there.

I think that's paid a lot of dividends. And I think that really ensures that we're going to have a successful project at both of those sites and high confidence on Scrubgrass as well.

Great. Now your data centers, like I mentioned, are at least mostly going to be using the Vera Rubins. The Blackwells have only been in production for so many years, but we've got better technology. What happens in 3 to 4 years when the next generations of GPUs come? What happens to the data centers that are running on Blackwells? And is there an upgrade? Who's going to bear that cost? Just maybe go through the evolution of technology and what happens to these data centers.

Yes. It's a great question, Brian. The compute market has constantly been innovating and evolving and driving efficiencies in compute. If you look at the supply of compute over time, there's never been a reduction in the supply of compute on a year-over-year basis, right? Every year, the amount of data center capacity, the amount of compute capacity increases. Every year, the chips get better, they get more efficient, they get more productive. And in parallel, so too does the utilization and the demands on that hardware, right?

And so there's been a fairly nice balance between the increase in productive efficiency of compute and the increase in demand for that compute as the cost and the efficiency has gone down. Jevons paradox, as everyone is probably aware of. Most of these data centers haven't been growing at this kind of a rate that we've seen over the last couple of years. Like the traditional data center CAGR is like a teens kind of percentage CAGR and the technology wasn't evolving the way that it is right now with AI. It was 10 to 15 kilowatts per rack for a very, very long period of time.

And upgrades were really on the compute side and you make an economic calculation, okay, this is the value of the compute on the books. This is the value that we can generate from running it. Here's the margin relative to the operating cost. Does it make sense for us to upgrade and sell this or keep this one running. That's been a determination that people have run for a very, very long time. A lot of people do this also in their daily lives with their personal laptops or their smartphones, right? They say, hey, there's a new one out there. It's bigger, it's faster.

Do I really need it? Some people may want to pay the $1,000 or whatever to upgrade their iPhone every year. Some people may be totally fine letting it run for 5 years and just happy with the device. So it's really specific to the customers and how they're positioning.

But what I think what matters for our investors is that we're not signing contracts that expose us to a 3-year upgrade cycle at our expense, right? You're looking to sign contracts for 10 or 15 years, which enable us to recover our investment in the infrastructure and make a nice return, and we shouldn't be held responsible for the costs associated with upgrading, which means that customers will just determine whether or not it makes sense.

And this is something that will likely take place if the power capacity continues to be in severe shortage, the more severe the shortage, the more incentivized people will be to upgrade. The less severe the shortage on energy capacity, the more likely is that they'll just continue to let things run and they'll just deploy their compute in a new location.

Great. I guess to end it, maybe your message to shareholders, there is a number of companies, stocks that they can invest in to invest essentially in the opportunity for data centers and the need for power. Why should they invest in Keel?

Yes, it's the fundamental question that every investor needs to be asking. I'm not trying to convince people around AI or the AI trade or infrastructure or semis better than infrastructure. I think if you're looking at Keel right now, you've probably already made up your mind around the AI trade. You're probably looking for what are the best ways to get that exposure.

There's been a number of companies who've had an incredibly successful run and have followed a very clear playbook around signing leases and executing against the development and the construction of those facilities and the delivery of those facilities and unlocking the value that all of that creates.

I think the good opportunity with Keel is that we've been doing all of this work to get us ready to this point, but we haven't executed any of these major catalysts that we should be -- that we've been working towards and that we've been guiding towards, and I think all of that is in the front view. And so if you're looking for the rotation from NVIDIA or something, CoreWeave or whatever it is that you've been running up for the last 2, 3 years, you'd probably be looking at those companies who don't have the catalysts already executed against and have that in their front view because that's what you're looking for in terms of the opportunity set.

I think there's very few companies who compare with Keel in terms of the opportunities that we have to execute against over the next 2, 3 years. And I would direct every investor to our quarterly earnings deck where we have a slide that tries to explain how we're creating value for shareholders and what the potential implications that could be as we execute against advancing the sites through permitting and leasing, securing additional expansion capacity, which we don't believe we're getting little or any value for and then delivering the site and continuing to scale the business from there on. I think we're incredibly well positioned, and we have a tremendous set of sites and opportunities ahead of us over the next 6, 12, 18, 24, 36 months.

Great. Well, we appreciate your time. We look forward to hearing the promising news on permitting, right, so we can take that next step. And again, thanks so much.

Thanks for the opportunity to speak with you.

Great, guys.

Good day, and welcome to the Keel Infrastructure First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this call is being recorded. I would now like to turn the call over to Jennifer Drew-Bear from Keel Investor Relations. Please go ahead.

Thank you, and welcome to Keel Infrastructure's First Quarter 2026 Conference Call. With me on the call today are Director and Chief Executive Officer, Ben Gagnon; and Chief Financial Officer, Jonathan Mir. Before we begin, please note this call is being webcast with an accompanying slide deck. Today's press release and our presentation can be accessed on our website under the Investors section.

Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during this call and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties. I invite you to consult Keel's 10-Q for a complete list, which will be available on our website and the SEC website.

Please note that references will be made to certain non-GAAP financial measures and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our filed 10-Q for definitions on the aforementioned non-GAAP measures and the reconciliations to GAAP measures. Please note that all financial references are denominated in U.S. dollars, unless otherwise noted. And now turning to Slide 3. It is my pleasure to turn the call over to Ben Gagnon, member of the Keel Board of Directors and our Chief Executive Officer. Ben, please go ahead.

Good morning, everyone, and welcome to our first quarter 2026 earnings call. Today is a meaningful day for us. This is our first earnings call presenting as Keel Infrastructure. And for those tracking the story closely, I want to take a moment to acknowledge what that represents. Two years ago, we outlined a deliberate multiyear plan to transform this company, wind down Bitcoin, build out our team and repositioned every megawatt we control towards the most significant infrastructure opportunity of our generation. That plan is now fully in motion. And since our last call just over a month ago, we have also completed our redomiciliation to the United States, officially rebranded as Keel Infrastructure and closed the sale of our Paso Pe site.

For those of you joining us for the first time, let me give you a clear picture of who Keel Infrastructure is and what we are building. Keel Infrastructure is a North American digital infrastructure company. We own large-scale powered land sites across Pennsylvania, Quebec and Washington that we are actively developing into over 2 gigawatts of high-performance computing campuses for leased to investment-grade hyperscalers, neocloud, enterprise and government clients. The Keel name captures who and what we are. The Keel is the structural backbone of a ship, unseen but essential converting energy into forward motion. That is exactly what we do for our tenants. We enable and accelerate the data center growth that makes tomorrow's economy possible.

Turning to Slide 4. Let me take a step back now and talk about why we are attracting so much attention from potential tenants and why we're set up to create tremendous value for customers. The conversation in HPC and AI infrastructure has shifted fundamentally over the past 12 months. Customers are not asking, can you build data centers? They are asking when can you deliver power in the right location on a time line that actually matters to my deployment schedule? And how are you ensuring you can deliver? The answer to those questions is what separates sites that get leased from sites that sit empty.

Our strategy is customer-centric and is structured around solving their highest value constraints. One, short time lines to power. Our sites have secured power available starting in 2027, enabling customers to accelerate deployment relative to building out interconnections organically. In PJM, Quebec and Washington, a new large load interconnection can take between 4 to 10 years. We have already done that work. That time line advantage is not incremental. It is transformational for customers trying to deploy compute at scale. Two, prime locations. Panther Creek, our flagship campus is a great example of the value our locations bring. The site sits 2 hours away from Philadelphia and New York in the PJM energy market, surrounded by established hyperscaler and neocloud data center infrastructure.

Our other campuses follow the same principle, proximity to metro areas and surrounded by our customers' established infrastructure. These are not secondary energy markets. These are primary markets where our customers are actively trying to expand and finding that supply at this time does not exist. Three, a proven permitting strategy built on transparent stakeholder relations. While strong community engagement and support has always been a pillar of our culture at Keel, recent headlines are reinforcing just how critical this is. Our permitting team has decades of regional experience, and we proactively build genuine relationships with the communities around our sites. That approach produces results.

Zoning is now complete at all 3 near-term sites. Land development and environmental permits are on track, including our preliminary land development approval at Sharon. Customers who have watched other developers miss permit milestones appreciate what this means for Keel's execution certainty. Four, proven delivery partners with hyperscaler grade track records. With power, land and community support, we have the foundation in place for success. However, customer confidence ultimately comes from execution, which is why we've built a partner ecosystem designed to deliver that certainty.

Working with Turner Construction, Corgan, Vertiv and T5, our customers do not need to take development execution risk on an untested team. Potential customers are looking at our construction and engineering partner roster and seeing our collaboration with best-in-class infrastructure and construction partners that have demonstrated experience delivering for hyperscalers. And five, future-proof designs. We are advancing architecture and engineering in parallel with customer conversations, which means that when a customer is ready to commit, we will be ready to easily adapt to their final specifications. We are also thinking ahead with rapidly evolving technology, it has never been more critical to future-proof our data center development. We are thinking about our customer needs in 2027 and beyond, not just what they need now. Customers value that.

Turning to Slide 5. Our portfolio is focused on high barrier to entry markets in Pennsylvania, Washington and Quebec. In these markets, our ability to accelerate time lines and enable regional growth creates real value for customers. Our 2026 priority is clear: sign 3 leases by year-end, one at Panther Creek, one at Sharon and one at Moses Lake. We have the right power in the right places with the right time lines. And as Jonathan will walk through, we are better capitalized than at any point in this company's history with more than enough liquidity to advance all 3 sites through permitting and lease execution.

Across all 3 of our near-term development sites, we are running 3 work streams simultaneously, finalizing permits, advancing architecture and engineering aligned with customer specifications and actively commercializing to secure highly financeable leases with investment-grade tenants. That parallel execution model is intentional. In this market, customers are making site decisions now. They are looking for partners who can show them a clear credible path to power, and we create that visibility by working with great partners and advancing all 3 work streams together. So when customer is ready to commit, we are ready to build.

Now let me take you through each of our 3 near-term sites. Turning to Slide 6. Starting with Panther Creek, our flagship campus in Eastern Pennsylvania and the centerpiece of our near-term development plan. We have 350 megawatts of secured gross capacity with PPL under an ESA. Development is structured in phases with an expected ready-for-service date in 2027 and additional expansion capacity beyond that. Permitting is a subject I know investors track closely. So let me walk through our approach with precision. Permits fall into 3 broad categories: zoning, development and environmental. Full permitting requires completion across all 3. Our execution strategy is built around local expertise and proactive engagement, planning and transparency. We have assembled a team with deep regional knowledge anchored by a head of permitting with decades of Pennsylvania experience, and that local presence allows us to move efficiently through jurisdictional requirements and just as importantly, to engage productively with the communities around these sites who are always key partners in Keel developments.

On the permitting progress, zoning approvals were completed in February, including the data center ordinance approval by the Nesquehoning Borough, a meaningful community milestone. Land development and environmental permits remain in process and are on track. With zoning secured and a clear line of sight on development time lines, we are active in commercialization. To be clear, we do not need to wait nor are we waiting for every permit to negotiate leases. We give customers the visibility they need to make decisions and the certainty that they need to commit.

In terms of the customer profile for the site, the scale and location of Panther Creek positions its squarely for hyperscalers and the largest neocloud operators. 2 hours from New York City with 8 fiber metro networks within 10 miles and direct proximity to established data center clusters, this is the kind of site that gets on a short list quickly. We are in active conversations with multiple potential customers and the engagement quality has been strong. Finally, beyond the 350 megawatts of secured power at this campus, we are currently evaluating the conversion of our existing 60-megawatt ISA to firm service, which could bring total gross capacity upwards of 400 or 430 megawatts.

In addition, a new load study conducted in 2025 supports potential expansion beyond 500 megawatts for the overall campus over the longer term. We will provide updates as that conversion evaluation progresses. The point is Panther Creek is a unique asset. It has the proximity and scale to service East Coast inference and training markets for years to come. Turning to Slide 7. Moving to Sharon and Western PA. We have 110 megawatts secured by an ESA with First Energy. A 30-megawatt substation is operational today with an additional 80-megawatt substation under development. Sharon received full zoning permits last month. That is a significant milestone, and it gives customers increasing confidence in our delivery time line. Land development has been preliminarily approved and environmental permits are in progress and on track. This site is actively being commercialized with an expected ready for service date as early as 2027.

Sharon sits within the PJM market with strong fiber infrastructure across 9 metro networks within 10 miles in proximity to Pittsburgh and Cleveland, 2 markets that are underserved relative to the East Coast. In terms of customer profile, the capacity and location makes Sharon a strong fit for a hyperscaler, neocloud operator or large enterprise customers looking to establish a position in Western PJM. We are in active conversations with multiple potential customers and the response to our permitting progress has been positive.

Turning to Slide 8. Finally, Moses Lake, our 18-megawatt site in Washington State. Small but mighty, Moses Lake is located adjacent to one of the most proven data center markets in the United States, the Quincy, Washington corridor, which has been home to hyperscaler infrastructure for nearly 2 decades. Power availability in this region has become one of the most constrained in the country. The combination of existing cluster density and tightening power supply means that operators who need megawatts here have very limited options to grow organically. We are one of those options to establish a footprint or expand an already established operation.

Moses is the only site where we made a deliberate capital decision ahead of commercialization. We purchased critical modular data center equipment in advance. That decision enables us to offer customers an accelerated deployment time line that is not available through a traditional stick build approach. Speed matters to our customers, and we engineered our deployment model to deliver it. Zoning in Moses is complete. Land development and environmental permits are in progress and on track, and the Bitcoin mining operations are actively being decommissioned. Like our Pennsylvania sites, Moses Lake is actively being commercialized with strong inbound interest and ongoing engagement with multiple counterparties.

In terms of customer profile, the scale of the site positions it as an ideal fit for emerging neoclouds, enterprise and government customers who need fast, reliable access to the Pacific Northwest market and do not require a campus scale commitment to do so. Faster time line, smaller megawatt commitment, right market, that is a compelling combination. Across all 3 sites, we have clear line of sight to full permitting, active commercialization and tangible momentum towards signed leases in 2026. We look forward to keeping everyone updated on our progress.

Turning to Slide 9. From a value creation standpoint, a signed lease is the single most important inflection point for our business. As signed lease does 3 things: it converts our development assets into long-term contracted cash flows. It unlocks access to low-cost nondilutive project financing, and it significantly reduces execution risk for every stakeholder in our capital structure. There is a reason we are intensely focused on getting 3 leases signed this year, where we expect each lease to be an event that reshapes how this company is valued. We are executing against all 3 simultaneously right now.

The second value driver we are executing this year is to increase our secured capacity from both expansion capacity and new organic growth opportunities. The third value driver will be delivering on megawatts in 2027. We believe that these 3 inflection points are key drivers of value creation for our shareholders in the near term and long term. And with that, I'll turn it over to Jonathan to walk through our financial position and strategy.

Thanks, Ben. Turning to Slide 10. I want to open with a simple message. We are better capitalized today than at any point in this company's history, and our liquidity position gives us something invaluable in this market, the ability to both advance and derisk our sites at the pace our customers require and to make commercial decisions from a position of strength, not necessity. As discussed during our last call, our financial strategy rests on 3 principles: capital allocation, capital formation and capital structure, each directly supports our ability to execute our goal of signing 3 leases this year.

Before I walk you through our strategy in more detail, I'll briefly go over our results for the quarter. Turning to Slide 11. As a reminder, as of Q3 2025, the Paso Pe facility in Paraguay has been classified as held for sale. As a result, all revenues, operating costs and asset balances associated with Paso Pe are treated as discontinued operations in our Q1 2026 financials. So when I refer to continuing operations, I'm speaking exclusively about our North American platform, which is the foundation of all our transition into HPC and AI infrastructure.

With that, revenue for first quarter 2026 was $37 million, down 23% year-over-year. Operating loss for the quarter was $98 million, including noncash depreciation of $28 million compared to an operating loss of $35 million in Q1 2025, which included $18 million of noncash depreciation. The year-over-year change primarily reflects a $41 million loss related to change in fair value of digital assets in Q1 2026 compared to a loss of $23 million in Q1 2025. Loss from continuing operations was $128 million or $0.21 loss per basic and diluted share compared to a loss of $38 million or an $0.08 loss per basic and diluted share in Q1 2025. The changes reflect the increase in operating loss and a $22 million loss from the extinguishment of the Macquarie credit facility in Q1 2026. For the first quarter of 2026, our adjusted EBITDA up was negative $17 million, down from $7 million in 2025. The difference was largely due to an increase in energy and infrastructure expenses of $15 million and an unfavorable change of $7 million in the gain or loss from the sale of digital assets.

Turning to Slide 12. Now let me turn to our capital position. Since our last call, we have taken 2 actions that further strengthened our balance sheet. First, we closed the sale of our Paso Pe site, which brought forward roughly 2 to 3 years of estimated cash flow under current market conditions in cash and upfront. Second, we have continued to actively manage our Bitcoin holdings, selling into strength and methodically converting a volatile asset into the stable capital our development business requires. During the period beginning January 1, 2026, and ending May 8, 2026, we sold 269 Bitcoin for $20 million in proceeds as part of our previously communicated plans to sell our Bitcoin holdings in 2026.

Current liquidity as of May 8, 2026, stood at approximately $533 million in cash and Bitcoin. Let me put that number into context. This fully funds the capital required to advance Panther Creek, Sharon and Moses Lake through lease execution as well as the start of construction at Moses Lake and covers our G&A through 2028. We believe this liquidity is a strategic advantage. We can continue developing at the speed our customers require while maintaining discipline and deploying capital where the returns are most compelling.

Let me now walk through the 3 principles that guide our financial strategy. First, capital allocation. Every dollar we are deploying today is advancing our 3 priority sites toward lease execution. We believe it is the highest return use of capital available to us at this stage of the company's development. Second, capital formation. As I noted, we have the liquidity to reach lease execution across all 3 sites without the need to tap into debt or equity capital markets. That said, we will remain opportunistic if attractive opportunities arise.

Once we execute leases, we would expect to transition to project level financing model supported by long-term contracted cash flows, enabling us to fund construction with a high proportion of nonrecourse capital while preserving flexibility at the corporate level. The institutional financing market for HPC/AI infrastructure continues to strengthen, and we believe we're well positioned to access it on favorable terms at the appropriate time. And third, capital structure. we operate with a disciplined liquidity strategy so that we can remain flexible when making commercial decisions.

As I mentioned a few moments ago, we have more than adequate liquidity today to execute against our strategy without the need to tap into capital markets. That said, we'll always take the necessary steps to ensure a strong balance sheet, and we would envision having a credit line and/or an ATM in place at some point this year as we believe these are prudent tools for any public company to have available. Again, liquidity and capital strength are directly supportive of our commercial strategy.

Thanks, Jonathan. Before we open for questions, I want to drive home a few things. This company has done what it said it would do. We said we would build a North American infrastructure platform. We built it. We said we would exit Latin American megawatts, done. We said we would redomicile to the United States and rebrand, complete. We said we would position our megawatts in the most capacity-constrained high-demand markets in North America, and this is exactly where 100% of our portfolio sits today.

The case for Keel Infrastructure is direct. Power availability is the single biggest bottleneck constraining the growth of the AI economy. We control scarce deliverable power in 3 of the most supply-constrained markets in North America, allowing us to work alongside our customers to solve that challenge together. We have the sites, the team, the permits in progress, the partners and the balance sheet to execute, and we are executing now. 3 leases signed by year-end, revenue commencing in 2027. That is the plan, and that is what we are focused on delivering. I want to close by acknowledging our fantastic team. The pace and the precision with which we have executed this transformation, the transactions, the hires, the permitting progress, the commercialization is not the result of any one decision. It is the result of hundreds of well-made decisions by a team that is fully committed to this mission. I've never had more confidence in our team and our ability to deliver. I look forward to continuing to update you on our progress. And with that, I would like to open the call to Q&A. Operator, please go ahead.

[Operator Instructions] Our first question comes from Mike Grondahl with Northland.

Ben, maybe specifically on Sharon, you had kind of talked about hyperscaler customers, neoclouds and large enterprises. Can you talk a little bit about the pros and cons or the terms from each category and kind of how -- what metrics you're going to use to decide on a lease?

Thanks, Mike, and it's a great question. When you're looking at all the different available potential tenants for these sites, there's obviously going to be a pros and cons across the various categories. I think broadly speaking, what you see from a hyperscaler client is probably a little bit tighter on the economics, but that's largely offset by the quality of the credit and the confidence in the long-term contract there. Neoclouds are generally paying a bit of a higher price, but they also come with a higher cost of capital. And so there's a balancing act. For us, really, it's about finding the right balancing act between the counterparty, the economics of the contract and the cost of capital, but not specifically trying to get a hyperscaler over a neocloud, but really trying to optimize across those 3 variables.

And any sense where you're leaning today?

I don't want to get into exactly where we're going to go. But on the slides, what we did indicate for each site was the potential kind of a tenant profiles. So that should give you an indication of kind of where we're leaning for each site because most of the sites scale is determining the kind of customer demand that we're receiving.

Got it. Then just lastly, how has demand changed over the last 90 days?

I don't think it has changed, Mike. It's still present. It's still incredibly strong. There is some emerging questions around kind of global investments in HPC and AI versus the U.S. given what's happened in the Middle East and given the geopolitical uncertainty of investing everywhere else. But I don't think we've seen a real change in demand. It's more or less a reinforcement of what was already there before the conflict, a preference to invest in the United States. Now we're seeing just a much stronger reinforcement of that. But I think demand is as strong as it was 90 days ago or 120 days ago.

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

On Panther Creek, which seems to kind of be like the largest initial site for you guys or the flagship site. And I know the slide deck we're kind of waiting on environmental and land. Could you maybe just help with the time line on that? Is that still a 3Q event? Could it happen sooner? And is that absolutely necessary, call it, to happen pre-lease execution?

So it's great question, Brett. We're still tracking on the exact same time line that we indicated on the last Q4 call a couple of weeks ago, which is kind of a mid-late summer time frame. This is what we're lining up for right now. What we want to make clear in terms of the process is lease negotiations and permitting are a parallel process. It's not as if you need those in hand to begin a successful lease negotiation, but you have to be able to show a very confident and credible pathway with a high confidence that you'll achieve it on the time lines you're going to achieve it to be successful in those lease negotiations.

And we achieved that earlier this year, which is why we've been active in the commercialization strategy across all 3 of those different sites. So we shouldn't expect that the timing of the permits is going to have a slowdown in terms of the lease execution. Those are simultaneous, and we would be looking to complete the permits before executing the final lease, but the negotiation and the permit applications continue in parallel.

Awesome. And then maybe just as a follow-up, I think what we're hearing across most of the space is that kind of capacity for 2026 is sold out. So anything with an RFS date in 2027 should be relatively attractive. And then you guys are also designing -- at least sharing for Vera Rubin. Are you seeing any change in conversation given it's a Vera Rubin kind of design relative to maybe other sites that might be maybe Blackwell? I'm just curious if you're seeing like an uptick in demand for what would be a Vera Rubin site?

So the Vera Rubin technology is very different than Blackwells. The engineering requirements are a magnitude of order more complex and sophisticated than the Blackwells. So the conversations are relatively different. I think the -- in terms of Blackwells, nobody has actually received their first allotment -- or sorry, in terms of Vera Rubin, nobody has actually received their first deliveries of Vera Rubin. So the conversation with Vera Rubin is much more about planning for the future and trying to accommodate for the equipment that is really just kind of coming off the first lines of the production run right now, whereas Blackwell is more of a known technology and a known engineering standpoint.

I would say from a demand perspective, we see more demand for Vera Rubin with our time lines of '27. But the biggest difference in the conversation is really just the changing in real-time engineering requirements from NVIDIA for the Vera Rubin technology stack because this is just starting to emerge in the market now.

Our next question comes from Bill Papanastasiou with Chardan Capital Markets.

Previously, I believe management mentioned that time lines for clearing permitting would be mid- to late summer. I'm not sure if this was mentioned on the call, but how is that trending? And has that time line shifted at all now that you have zoning at all 3 sites?

Bill, thanks for the question. Yes, we mentioned that on the Q4 call. And since we've had the Q4 call, we've cleared out on a few more permits, including zoning and preliminary land development at Sharon. So everything is tracking according to our plan. We still have high confidence on a mid- to late summer time frame across those 3 sites. It's permitting, obviously, things can go a little bit faster, a little bit slower, but we've got high confidence on those time lines.

And then can you just speak to your Bitcoin mining operations, where steady state today? I believe in Q4, it was around 14 exahash. How should we think about that throughout the remainder of the year?

Yes, it's still around 14 exahash, and it should continue to trickle downward over time. Right now, the Washington site is being decommissioned. So that's our first U.S. site where we've actively decommissioned Bitcoin mining before it was all coming out of Latin America. As we break ground and work on development across Panther Creek and Sharon, we will also be decommissioning Bitcoin mining at those sites. But we're going to try and line up the Bitcoin mining decommissioning as best as possible with the construction schedule and mining economics so that we can try and optimize and maximize the capture of the value and the cash flows there. But we'll continue to provide an update to the market as we move forward throughout the year, Bill. But you should expect it to trickle down from 14 to probably somewhere around, I think, 5 exahash around the end of the year.

Our next question comes from Michael Donovan with Compass Point.

On Moses Lake, the slide deck states there is a secured option to acquire neighboring property with additional capacity. Can you size the potential expansion opportunity beyond the current 18 megawatts? And what needs to happen for that option to move forward?

So we have a secured option for an additional 10 megawatts in the area. Nothing really needs to happen other than our desire to exercise the option. The power is there, it's secure, the land is there, the due diligence is done. Really, it's just about us wanting to exercise the option. When you go out and you do market for these sites, one of the strategic features to have in these conversations is not only to have secured power today, but to have the ability to expand that infrastructure and expand that capacity over time. And so securing the option as of right now is a great marketing benefit for us when we're going through the commercialization strategy that gives us and the customers a potential to continue to scale up in that region.

Also on Washington, can you unpack the scope of the May 3 purchase commitment and clarify whether all major long lead equipment has been acquired?

We've secured basically everything that we need to do for the site with regards to the modular infrastructure from Vertiv, the transformers and the backup gens. Last thing that we really needed was the backup gens, which is the last thing that we had secured. So Moses Lake has got all of its equipment that it needs for its development. There's a few odds and ends, but all of the key critical pieces have been secured.

Our next question comes from Martin Toner with ATB Cormark.

Congrats on your progress. SG&A picked up this quarter. Can you maybe talk to what we can expect for the rest of the year? And just in general, maybe...

Martin, it's Jonathan. How are you? Could you repeat the back half of your question? I did hear you ask about expectations for SG&A for the remainder of the year. I missed a bit at the end.

Yes. Just talk a little bit about what investment that increase in SG&A represents?

Thank you. That's very clear. So we'd expect our run rate cash SG&A to run about $25 million a quarter or $100 million a year, plus or minus. At the SG&A level, we've got a number of offsetting factors related on the one hand to the wind down of elements of the Bitcoin business and then on the other hand, adding specialized expertise in respect of the HPC/AI data center build-out.

Perfect. Can you talk a little bit about Quebec...

It was a little hard to hear that, Martin, but I believe the question was just an update on Quebec site and Sherbrooke. Is that correct?

Yes, please.

So we continue to make good progress with our 96-megawatt campus in Sherbrooke. We're hoping to have an update on today's call, but we should have an update on the Q2 call, which would include our plans for consolidating our 3 Bitcoin mining sites in Sherbrooke, our 48-megawatt bunker site as well as our 30 and our 18-megawatt sites Leisure and Garlock to a single 96-megawatt site in the same town. We're continuing to progress those conversations with the city of Sherbrooke and Hydro-Sherbrooke, have high confidence that we're going to be able to get all of those -- i's dotted and t's crossed to wrap this up and to be able to provide our plans to the public. But we're getting quite excited about our plans in Sherbrooke. We think that it represents one of the few permitted HPC/AI campuses in Quebec that will be under construction in the near term.

[Operator Instructions] Our next question comes from Brian Dobson with Clear Street.

So thanks for the positive commentary on the demand environment. But do you think you could maybe give us a little bit of color on what you see as the biggest gating factors for your growth over the next few years? And if there are any long lead time obstacles that you're trying to overcome?

So I think the biggest gating factor, Brian, is just bandwidth, to be honest with you. We've built a great team. We're continuing to build a great team, but we have 2 gigawatts worth of development pipeline to execute against. And there's a tremendous amount of technical details and complexity associated with these projects. We've done a great job in terms of increasing our bandwidth with adding more people, selling off noncore assets, completing these structural things, which really help to simplify the business and the administration of the business like redoming off to the United States and completing our pivot out of Canada and LatAm. So all of that stuff is adding into that.

We've also had a lot of success with early integrations of AI into people's workflows and to people's work streams, which is helping productivity as well. But I think that's probably just the biggest constraint is bandwidth. And that's something that we're continuing to improve upon as we continue to add people to the team, continue to add great partners like Turner Construction and Corgan on A&E and all these other different areas. I think we've got a very good pathway to address those and to execute across all of our different campuses.

Our next question comes from Mike Colonnese with H.C. Wainwright & Company.

Just one for me today. If you could just talk about the pricing dynamics that you're seeing for negotiations with prospective tenants here. Is it fair to assume that Keel could secure better economics on a lease than what we've seen in the marketplace recently, specifically given the location of your sites in PJM and Washington and paired with your data center design, which sounds like it's aiming to support the Vera Rubin deployments?

Thanks, Mike. It's one of the questions that we're paying very, very close attention to, and it's one of the things that we've been talking about for some time now that we believe that the economics are continuing to improve as the scarcity continues to get worse and demand continues to accelerate. I don't want to get locked in on any sort of fixed numbers with lease economics, but I think the broad trend is quite clear. I don't think it's changed or slowed down at all. The market demand for this growth is very, very high. We're seeing hyperscalers reconfirm their commitments, in some cases, increase their commitments, in some cases, making pretty loud statements on quarterly calls around the opportunity cost of the missed revenue for not having that compute in place. So we do think that this is probably going to be a trend that continues to play out for years to come. And we look forward to taking advantage of our energy position in an increasingly energy-constrained market.

Very helpful, Ben. If I could just squeeze one more in, actually. On the CapEx side, as you've gotten further along in your basis of design with your various campuses, has your capital requirements or CapEx deployment needs changed at all since your initial framework when it comes to deploying these data centers?

It's Jonathan, Mike. Generally speaking, no, our views on CapEx deployment have not changed since our initial framework. And so we're comfortable with our current plans and people always ask about guidance on this topic, and we'd say the figure is generally used as a rule of thumb throughout the industry. should be fine for -- as a practical matter.

Our next question comes from Nick Giles with B. Riley Securities.

Today's discussion has centered on your first 3 sites, but I wanted to ask about Scrubgrass. Can you just give us a sense for progress there specifically? And what do you see as the key milestones for that site over the next 6 to 12 months?

Thanks, Nick, and I appreciate your enthusiasm for Scrubgrass, which is an enthusiasm that I share. I find Scrubgrass to be a really exciting project for us. It's likely going to be the crown jewel of the company in the coming years, but there's still a lot of work for us to execute against before it can achieve that kind of status. The reality is that this is going to be one of the largest data center campuses in Pennsylvania, but we've got to get power secured from a couple of different angles and it's just going to take some more time to do that.

So on the grid connection side, the detailed load study is continuing forward. We should expect to have an indication as to what the results of that are sometime around the very end of the year in Q4. And then we're working on securing the energy pipeline lateral construction and the energy contracts as well as the agreements with either an IPP or a similar firm to come out and deploy nat gas turbines on site, even evaluating options for us to do it ourselves. So it's a little too early to really say exactly what's going to happen or when it's going to happen, but we do share your enthusiasm for that site and its potential. We do think it's going to be one of the more transformative value creation opportunities for the business and for shareholders. So it is one of our big focuses for the company and for management this year is to secure the megawatts at Scrubgrass and pull them out of that expansion bucket into the secured bucket.

That would more than double our secured capacity by doing so and would give us a real, real powerful giga campus in Pennsylvania. And if I could just build on that for one brief moment, what we've seen in the market is that the giga campuses are fiercely contested, especially if you have a giga campus outside of Texas, which are increasingly rare, those sites have a more competitive tension-filled process when they're going through the commercialization stage. And we would look forward to taking full advantage of that in a capacity-constrained market.

That's super helpful. Just to clarify, how much power does the detailed load study cover?

The detailed load study is for 750 megawatts.

I'm showing no further questions at this time. I'd like to turn the call over to Ben Gagnon, CEO, for closing remarks.

Thank you, everyone, for attending our Q1 call. At this time, we'll go ahead and end the call, but we'll continue to provide updates for you on our website and through the normal investor channels. Thank you.

Thank you for your participation. You may now disconnect. Everyone, have a great day.