Argo Blockchain (NASDAQ:ARBK) — General Meeting

0:01 Good afternoon, ladies and gentlemen. Welcome to the ARGO BLOCKCHAIN General Meeting. Our apologies for the delay in starting. Throughout today's recorded presentation, attendees will be in listen only mode. Your questions are encouraged. They could be submitted just using the Q and A tab situated on the right hand corner of your screen. I'd now like to hand over to David Robinson, partner from Flatgate. Good afternoon. Thanks, Mark. Hello, everyone. As Mark said, this meeting is being recorded.

0:25 We have a court meeting with Justin Nolan, the company CEO, holding proxy votes. We're also a representative of JPMorgan here as as well, so we are court for this meeting. We have Computershare sitting here as well, our company's registrars.

0:48 Justin, do you want to start? Sure. Ladies and gentlemen, good afternoon. Welcome to the general meeting of ARGO BLOCKCHAIN PLC. I am Justin Nolan, director and chief executive officer of ARGO BLOCKCHAIN PLC. It has been noted that one of the earlier announcements erroneously referred to this meeting occurring at 3PM In the interest of ensuring all members have an opportunity to attend and vote, we will delay the formal business of the meeting until 3PM. So what what we'll do in the interim is just deal with questions that have been asked. So the first one is I just want to understand the history of what went wrong with ARGO. Other similar companies followed the same trends and survived with ARGO's clinking on with knits, fingertips. So what went wrong for ARGO that didn't go wrong for

1:38 others? Now I think I answered this question in the town hall meeting that we had a week or so ago. I think ARGO's principal problem was its debt burden. It took on 40,000,000 of debt, and that, in hindsight, was probably the...

1:59 Not the right call. Maybe the company should have raised equity at the time and doubled its shareholders rather than raising debt. It's great to be rising with with hindsight. The debt burden has been the the real issue for the company. Justin, do you want to add anything to that in terms of general trading being okay. But I think I think that's that's exactly right. The debt was too much. And it wasn't just this debt, the 40,000,000 that we're talking about. There was the debt with... For for the build out of Helios and so on. So there was a tremendous amount of debt,

2:33 and, they were able to get their way out of some of it, but not all of it. That's why we're here today. K. Next question is I would like you to remain on the LSE. You have a loyal following. I myself hold lots of shares and lots lots lots of money with good marketing. You could generate a lot more recent investors, which you reconsider.

2:56 I think at at this stage, it isn't really for the company to reconsider. I mean, the company has enjoyed being on the LSE. It's had a number of challenges, but it's it's... It it has had, as you say, a loyal following. It's raised lots of money on the LSE. The issue for the company is that its financial future is somewhat out of its hands and that it's reliant now on Growlr to fund it through the restructuring and to provide capital to develop the business going forward. And Growlr's objective was to... One of its objectives was to maintain the Nasdaq listing, and it wasn't particularly interested in maintaining London and the costs associated with remaining on the London market.

3:44 So whilst, you know, the the ARGO directors could have said, yes. Let's stay on LSE, and that was a debate that was had. At the end of the day, Gramma said, no. We don't want to. And given that Gramma controls the purse strings and the the future of the company, because without Gramma's money, the company would have no future. It was very much Gramma's decision on on the LSE. We we have tried to assist shareholders by providing the JP Jenkins match bargain platform, except that it isn't the same as being on the LSE, but it is a forum in which shareholders can can trade. And there is the option to convert to ADSs, which are tradable on Nasdaq should the company be compliant with Nasdaq listing requirements going forward.

4:42 One for you, Justin. What will be the expected cost of mining 1 Bitcoin going forward? That's that's moved around a lot lately. So I... I'm gonna punt on that and come back just to make sure we have accurate numbers. Okay.

5:04 Most UK brokers do not handle ADSs. I've already flagged this to John. Four brokers have refused to do it, and I've spoken to JP Morgan Chase directly. They're unable to offer any alternative solutions. What are the other options that our our holdings are not completely worthless? Plus ADS conversion will cost more. Is there a simple solution for UK shareholders? Thank you.

5:26 We we are aware that some brokers won't handle ADSs, but we're we're also aware that other brokers will because lots of shareholders have moved. So lots of... A number of shares have moved from ordinary shares to ADSs using UK brokers. Those UK brokers will have a correspondent relationship with the broker in The US, and those transfers, conversions are happening almost every day. So there are certainly brokers doing that. We can look up some names for you and provide names if that would be would be helpful.

6:05 On the cost of conversion, yes, there there is a cost to conversion that... There's no escaping it. There always has been ever since the ADS facility was established. So that there's no change there, and there's not very much we can do about that because j... JPMorgan is offering this as a service, and, obviously, won't need... Needs to charge for for its service. Next question is how will the company build equity value post restructuring?

6:35 Are there additional powered land sites in development, and what are their energization timelines? Can you provide more detail on the CapEx outlined by your financial advisers? Specifically, what will it fund? So I... I'll deal with the CapEx point first. That... The CapEx was merely an illustration. It wasn't a projection or promise as to what is going to be spent in the future. It really said, if you were to do this, this is what it would look like rather than anything else. Correct. Do you want to talk about the the the the first piece of the question? In terms of the company's plans post restructuring, it's very difficult to to nail that down until you are through the restructuring. Talking to investors about hypotheticals is is difficult, challenging.

7:22 So while we have an idea of where we wanna head, I think we will, be able to to really nail that down post restructuring so that we can have concrete conversations with investors. And the company will be on NASDAQ. It will have disclosure obligations and will lead to reports to the market, so that will become public. Yes. Question from a note holder here. Assuming the plan is approved by the court, what is the timeline expectation for converting notes to new co equity? A it's a few days, I I I think. Mozzie, are you able to comment on the timeline for converting notes to Nothing to take this time. It depends on receipt of ordinary shares.

8:14 The whole process of what sort of ordinary shares can probably do. Nearly three to five days. Okay. So that... The the answer was given in respect of shares, but it's going to be similar in respect of notes. So from the point at which JPMorgan's given the instruction, it's three to five days to get the the ADSs out to the new holders. I think you should be thinking about probably a week from the point at which if the court sanctions the scheme. We're having the hearing on Monday the eighth, so next Monday. There's no guarantee we will get a court order or decision on the day. It could be the following day if the judge decides he wants time to think about it or wants to put it in writing immediately. So it may not be for a day or two until we get a formal court order.

9:08 That needs to be filed at company's house, which we can't do in London, unfortunately. We have to do in Cardiff in person. So it's going to take a few days to finalize the restructuring plan and get it sank... Get it formally lodged before we can do the final steps of transferring its assets, converting its debt to equity, and converting the the the noteholders to equity. So it's it's gonna it's gonna take a a few days. Next question. When did it become obvious the company was failing? And what steps did the board pursue? The the the directors have been considering the company's financial position for a substantial period of time because they could see that they had the...

10:06 The company had the obligation to repay 40,000,000 of debt plus interest next November. And certainly for the last two years, I think, the company's been looking at its options to repay that debt and looking at fundraising options and others.

10:23 And the inevitable question is is, what happens if we can't do it? So for a period, there were a number of options on the table, including raising equity, and that that was done. And then there there there became a point earlier this year, really, when it became clearer that there was a higher risk that the company wouldn't be able to raise equity or other debt to refinance the existing debt. And at that stage, more drastic options like this restructuring plan were were considered. So the company has been putting into the market information about its financial position.

11:10 It made it clear earlier this year that without raising further capital, there was an issue of a going concern. So

11:18 the brief answer is that this has been on the director's radar for some time, but the point at which it became clear that there really weren't any other options was probably during spring, summer this year.

11:40 Someone's just commenting that Interactive Brokers trading two one two Barclays have refused conversion to ADSs. K. Well, comment about... No surprise about the business flops, but, yeah, I don't think anyone's happy about the position, not at least the board.

12:11 There aren't any other questions there. Any any questions in the room? Options that were granted. Yeah. It's not not going forward. What's gonna happen with those? The the options are still there. Right. So But they will like the equity shareholders. The value of those options is massively massively diluted. It's after the same dilution. And I think some of them are full performance rated. Yeah. I'm not sure. They're they're performance related, and those performance conditions wouldn't have been satisfied. So the likelihood is is those options are under underwater, massively diluted, and probably worthless. They haven't they haven't formally been terminated.

12:58 So they get do you want some of the new restructured ATS? No. There's been no there's been no discussion yet regarding the remuneration or incentive packages for the directors going forward. --. Are they? What? Are they gonna get a stake in the company? Are they It it has not. You gonna get a the company? Not not... Nothing's been discussed. Nothing's been discussed because it's been a... Be be... Because it's been a very low priority. The priority's been getting the plan through and saving the company and not the directors looking for their own position. I... And I promise you that, that we've we've certainly been party to no discussions. And Justin's here saying there've been no discussions. Literally not.

13:47 And we had we had to I'm sorry. Forget me if I find that hard to read that. You know? Is it... You know?

13:53 It's like You you could you could I mean, you think, well, you're not gonna get steak or some kind of, you know, the company? You're doing all this. You think you've... You know, you're just gonna work as a wage, you know, wage employee? Is that what you... Is that what you're gonna be? 100% of our effort has been to try and get through this restructure. There's been... There is no company without the restructuring. So what are we fighting over?

14:22 What are we discussing? You must have had a discussion with them about some kind of, like, you know There... There's been incentive plan. There's been zero discussions around any incentive plans. Right. So have they made any guarantees about No guarantees. Nothing.

14:38 So they could come in and just kick your order? Is that what you're saying? Sure. The the the the the the phrase is from from Growlr has been, trust me, trust us. That's it. And neither ARGO nor its management are in a position to dictate terms here.

15:04 There there was a degree of negotiation around the restructuring plan and and and its terms. But at the end of the day Terms included remuneration?

15:12 No. No. No. The the the terms were the terms upon which Grana would lend money to the company to fund the restructuring plan, and that was the negotiation. That there there has not been negotiation on anything else. There are no agreements in place. I'm not aware of any understandings being in place. And when

15:34 we we ask Growler to be specific on certain points, it came down to Stampate, who's the principal of Growler, to saying, trust me. I'm I'm your man. I will I will get this sorted out, but you gotta trust me. It says one thing I've learned in life is never trust anyone who says trust me. Well That's the kind of thing To be fair to Growler, they've, you know, they've they've come through so far. I mean, yeah, yes, is there an agreement, but they have they have certain amount of discretion to to withhold payments. And they have... They've they've come to the plate. And, yeah, this has been an expensive exercise for them. Extremely expensive. They have support... They have supported the company. And word Growler, the company would have gone under probably in October. Probably. Yeah. Or possibly earlier. Yeah.

16:26 Next question is, as a prospective equity holder, I'd appreciate your insights into the company's post restructuring direction and plans for remaining a going concern. Given the financial advisers' projections are purely could you help me understand in simple terms how ARGO intends to generate revenue going forward? How you ensure that doesn't ultimately end up in a liquidation? Sure. I mean, you know, the the hash rate we have is about 1.4, and it's going to two. We're almost doubling the number of megawatts. Growler's contributing, mining machine assets that are not currently in use as well. So, you know, with the right site, we would be able to expand. But sites cost money,

17:10 and it's very difficult to have concrete conversations, as I said before, around a plan to go forward when you don't know the results of the restructuring yet. So we have to get to the restructuring before we can figure out the next step. Although we know where we wanna go, which is increasing megawatts, increasing hash rate, potentially looking at treasury strategies or other things like that. But, ultimately, you know, megawatts are the key, and that's what we wanna go after. And Growler's machines are all newer than yours. They are. Yeah. Yes. Can you talk about that? Well, it's... You know, we... We're we're gonna... ARGO will be more profitable with Growlr's assets. So, we will be a profitable company, which is That that is not a project... That's not a profit forecast. Correct. At the moment, we would be a profitable company.

17:57 And we look to continue to grow our assets and to maximize value from those assets as well.

18:05 No further questions at the moment. We'll just wait four minutes, then we can move through to the formal business of the meeting. Growlr's funding. I'm not sure exactly how that's coming through. Growlr is a private company. We're dealing with Growlr. How they're set up behind that is up to them.

19:09 But they've made you promises about No. No?

19:12 Nothing. Oh, no promises. What's gonna happen going forward. Well, he's asking about who's behind Growler. I said, we're just dealing with Growler. How Growlers Well setup is not Well, it's it's stamp...

19:57 Stampede behind Growler. Well, there's there's a bit of detail in the in the rule nine circular about stamp page, and you you can Google him. He's the person behind it. So as far as we're aware, there's no one else there. He he is a a known entrepreneur in in in the region and very much his own man. And and the reason it's... Yeah. You use Wood Opaque. The the company isn't hiding information from you. It's that at the moment, we're not party to what Growlr's intentions are. They've they've made some very broad statements about supporting the company, growing the business together using their assets, using similar strategies as the company's used previously.

20:50 But we're not party to a wider discussion about development of the business at the moment. And as I say, once that is known, then suitable announcement will be made. Do you have a timeline for when that might be known and one released? Don't. Yeah. I don't. Please can you provide a contact mister Wall, his new ex... New experience about the management of ARGO? It's well before your time, isn't it? Well, I was there in a different capacity under mister Wall, but I don't know what else to say about that. When you say grow the assets, what shape does that take? Well, are we maximizing profit at our Bay Como facility? The answer is not at the moment.

21:45 There are things we can do that would maximize the profits. We'd love to do that. We'd love to acquire sites, grow megawatts, whether we're hosting, whether we are, moving into the a... HPC AI, business. These are all different opportunities that I think are available to us. So we will work with Growlr to,

22:07 put a plan for. K. Next question was, is there a concrete deadline for ADS conversion? No. There isn't a deadline. That can happen at any time whilst the ADSs are still there. They can be converted. How much trust trust do you have in the restructure strategy? Oh, we're here. The... As we've said previously, Growlr's funded the company and Complete complete trust in Growlr. Yeah. Other than reading Stan's responses in the published bundles, when can we expect to hear from Stan? I hope as soon as possible. Stan's an incredible guy. It'd be great to get him on here. Yep. Well, it's 03:00. Should we move on to the... That's the formal business? It's now 3PM, and I declare that there is a quorum of members present and that we can proceed to the business to be transacted at this meeting.

22:58 With the consent of the meeting, I will take the notice of the general meeting as read. Is that agreed?

23:08 K. Shareholders attending by their proxies can exercise all rights to attend, speak, and vote on the resolution of this meeting. Proxy counts for the resolution to be proposed at the meeting will be available at the registration desk at the end of the meeting. I will now formally propose the resolution to the meeting. The full text, the resolution is set out in the notice of meeting, a copy of which you will have received. In accordance with article 19.8 of the company's articles association, the resolution will be taken on a poll. In order to run the meeting as efficiently as possible, I will announce the resolution and direct the poll to be taken. The results of the poll will be announced by RNS as soon as practical following the conclusion of the meeting. Where votes are at my discretion, I will be exercising with my discretion to vote in favor of the resolution.

23:59 Resolution is proposed as an ordinary resolution requires a simple majority to be passed. The resolution is an ordinary resolution of the company to approve the rule nine waiver granted by the takeover panel of the obligation that would otherwise arise on Growler Mining Tuscaloosa LLC. This being the obligation to make mandatory offer to the shareholders of the company as a result of the restructuring plan as described in the company's circular shareholders. Are there any questions in relation to this resolution? I now propose the resolution be taken on a poll. K. We've got poll votes here plus Betty's just need to --. I'll give the medicine.

24:46 So you can just sign up. Just a minute. Thank you. So you're all voting.. Yeah. So the registrars will check the the proxy voting numbers or voting numbers. Ladies and gentlemen, the resolution has now been put to the meeting. Please fill in your poll cards and return them to the company registrars. At the back of the meeting, we will announce the results of the meeting as soon as possible by RNS. That concludes today's formal business. On behalf of the board, I'd like to thank you all for your attendance, and I declare this general meeting closed.

25:36 Thanks very much, everyone. We'll announce the result next week. That's great. Thank you very much indeed. We will now disconnect investors, and you can provide any feedback. Thank you. Thanks.