New Era Energy & Digital (NASDAQ:NUAI) held its first-quarter earnings conference call on Monday. Below is the complete transcript from the call.
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Summary
New Era Energy & Digital reported significant progress on their Texas Critical Data Centers (TCDC) project, transitioning from formation to execution phase.
The company raised $120 million in equity and secured a $290 million credit facility with Macquarie, ending April with over $80 million in cash to support Phase 1 of TCDC.
Management highlighted partnerships with Stream Data Centers and Apollo, focusing on a partner-led model to reduce execution risk.
Operational highlights include acquiring additional land, clearing liabilities, and progressing in permitting and site readiness tasks.
Management expressed strong confidence in funding Phase 1 without significant dilution and emphasized concurrent advancement of multiple project work streams.
Full Transcript
OPERATOR
Thank you for standing by and welcome to New Era’s first quarter 2026 earnings conference call. Currently, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 11 on your telephone. To remove yourself from the queue, you may press Star one one again. I would now like to hand the call over to Lincoln Tan from Investor Relations. Please go ahead.
Lincoln Tan (Investor Relations)
Thank you Operator and good afternoon. My name is Lincoln Tan, Investor Relations for New Era. Thank you for joining New Era’s first quarter fiscal 2026 business update call. Joining me today are Will Gray, Chairman and CEO, Charlie Nelson, President and COO, and Ted Warner, Chief Financial Officer. Before we begin, I’d like to remind everyone that today’s call is being recorded and will be available on the Investor Relations section of our website. For those dialed in by phone, you can elect to ask a question through the moderator after our prepared remarks. Please note that during the course of this call we may make forward looking statements. These statements reflect our current views and expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Please refer to slide 2 of the accompanying presentation and our SEC filings for more information. So with that, I’ll now turn the call over to Will Gray. Thank
Will Gray (Chairman and CEO)
you very much and appreciate the introduction. Good morning everyone and welcome. You know, first we want to thank everyone for participating in the New Era’s Q1 earnings call. Because the numbers in the 10Q still largely reflect the legacy natural gas and helium business, we see our current valuation as being tied directly to our data center project. So management will use today’s call to provide a business update on TCDC Texas Critical Data Centers, including what we’ve accomplished since our last update in March and what we’re working on now and what milestones we expect in the coming months, it is our view that the company has moved essentially from platform formation into a much more execution focused phase. We’ve simplified the structure around TCDC, raised a significant amount of capital, signed an LOI with a new development partner, strengthened the team and made progress across several work streams that we think are extremely important to getting the project ready for the next stage. So the goal for today is to walk you through that progress in a practical way. All start with a high level picture of exactly what has changed since our last update. We will then walk through the site, the power plan and what we mean to talk about when we say Phase one Readiness TED will cover capital structure, liquidity and how we’re thinking about funding our Phase one. Then we’ll open it up to questions, get started and before that will Yep.
Charlie Nelson (President and COO)
Again, hey, appreciate it Charlie. And again, just like Lincoln mentioned previously. Before we begin, I’d ask everyone to review the forward looking statements and disclaimer language in the presentation. And let’s go to slide three. Charlie, this is where we really get to the core of what we’re trying to show today. If you compare where we’re at now versus our last update, the picture looks materially different. So just a few months ago the market was looking at shared ownership, the shared AI note overhang lien complexity and uncertainty around near term funding. And that’s not the same picture that we have today. First off, TCDC is now free of the overhang related to the Sharon AI transaction. We’ve cleaned up that short term, that large short term liability, removing what we believe to be the largest overhang on the stock. Second, we brought in stronger institutional counterparties both on the capital side and on the development and execution side. Third, we have a much cleaner, accessible and less dilutive funding path ahead of us. After raising 120 million in equity and closing on a $290 million credit facility with Macquarie, we ended April with more than $80 million in cash on hand, which combined with the funding flexibility from the Macquarie facility, provided sufficient liquidity to support New Era’s equity contribution for TCDC Phase 1 and beyond. Fourth, while the priority itself hasn’t changed, we’ve wanted to get the lease done for some time. The path to getting there is now far more defined as we have begun working closely with our new development partner on power permitting and leasing. And finally, I’d like to point out that the 54 acre corridor acquisition is another good example of that. And we don’t look at that as just adding a little bit more land. It gives us the flexibility around direct power solutions, it helps with interconnection and overall infrastructure design, and it gives us more control over how the site is laid out as we look towards phase one readiness. So for us that’s a practical step forward and it’s not just an acreage headline, it’s a very meaningful thing. Summary these core changes have put us in a stronger position to obtain full suite of permits that we need, move our stream JV to close, advance power related work streams, and ultimately sign the hyperscaler lease that we’re after. Additionally, our financial health, coupled with the current helium and Hydrocarbon markets leave us in a better position to evaluate strategic alternatives for our legacy business assets. And with that, let me turn it over to Will.
Will Gray (Chairman and CEO)
Hey, thanks Charlie, that was a great update there. So again, let’s look at the leadership team that built to match the execution needs. And again, this slide’s really about reinforcing what the team’s about, who we have in place today and how does that match the phase of the businesses, how we’re entering. I’ve talked before about Charlie and Ted, but I think it’s worth revisiting briefly how the leadership structure fits our story today. Especially because this is still a relatively new story for many investors. And for those investors, we very much welcome you and look forward to providing more information. So my role continues to be centered around sponsorship of the platform, management of local relationships in Ector county obviously, which is the Permian Basin here in West Texas where I’m born and raised, energy relationships and helping drive the broader direction of New Era wouldn’t be here without Charlie. Charlie has been here since day one when he joined us as an independent board member, then essentially moved over in the executive capacity as of February this past year leading operations and executing. And that includes the practical work required to move TCDC from concept towards development, readiness and ultimately construction. We believe as midstream and power expertise creates a unique advantage for New Era amongst our peers as it relates to behind-the-meter data center project execution. Again, that’s a key here folks. Again behind the meter power execution. And I think that’s something that we are definitely going to be centering on more towards the future. And Ted, who joined us in March has just been one of our rock stars today. It’s just important because this is very much a finance story. I think we all understand the complexity and the need for capital in this market. His background in capital formation and digital infrastructure financing with many of our peers has already resulted in a complete financial transformation of our company and has essentially positioned us to be able to fully invest alongside in Phase one and beyond with minimal dilution. It will serve us well in the remainder of 2026 as we work towards transformative announcements that will require deep expertise in financing data center development. And finally, we welcome Andy Cazaza. I’ve known Andy for quite some time and very much pleased that he joined our team. So definitely the newest addition. He adds depth corporate integration, governance and execution experience against the types of counterparties and structures we are now working with. His expertise as a former energy CFO bolsters our strength in financing and accounting and please note that we do continue to actively pursue top talent in development, legal, engineering and accounting. You know, with the focus on adding key executives with hyperscaler backgrounds and relationships. So the point here is not simply that we’ve added people. That’s great, don’t get me wrong, but that’s, this is the leadership team that’s putting the foundation that reflects what the business needs right now. Operations, project finance, corporate execution, strategic direction. As we move from formation towards execution, the next question then is how do we actually execute from here? And that’s really what the next slide’s about. And Charlie’s going to walk us through the partner based approach while we’re taking, taking a shot here at TCDC and why we think it matters from an execution standpoint.
Charlie Nelson (President and COO)
Just on everyone’s line, Slide six is where we’re at right now. And it really speaks to something that I’ve talked about before, which is our partner LED model. You know, we’ve been consistent from the beginning. We are not trying to build every piece of this project internally. We also don’t try to boil the ocean. The way that we’re approaching TCDC is by working with the right specialist partners across key parts of the project. And that covers development, capital, power, engineering and manufacturing. At the development operating level, we have Stream Data Centers. Stream is a leading US data center development operating platform backed by Apollo Global Management, one of the largest alternative asset managers in the world. They’ve been around for, you know, Stream’s been around for a long, long time in this space legacy operator and you know, this platform has significant expertise and demonstrating a track record of developing, financing and delivering large scale data center campuses for hyperscales across North America. And that’s why we went with them. This is extremely important because it means we’re not trying to invent the execution model ourselves. And we are not looked at as a first time developer in the eyes of our potential tenants. This is something we feel helps reduce friction and execution risk just kind of across the board. We’re also pleased to onboard a bunch of new investors and financing partners to help support and grow the platform just across the board. And Ted will cover that in a little bit more detail as he goes through our broader funding strategy. And beyond that, we’ve assembled additional capital partners around energy storage behind the meter, power design, engineering and modular manufacturing, which we believe is the future of the data center space. And all of this is important if you want to move a project like this forward efficiently and with less execution risk. For me, this slide isn’t just about logos. This isn’t what we call a NASCAR slide just slapped with logos. It’s about how we’re executing. And this partner led model is how we intend to move the project forward in a practical way. And you know, with the right counterparty is responsible for the different parts of the project which they know best. We view this as a huge risk off standpoint. It also helps to explain why a number of these work streams can move together in parallel. In a more traditional development model, you might finish one step and then move on to the next. Our approach is to advance all of these pieces of the project at the same time. We call ourselves maestros of an orchestra. What this does is that once these key commercial milestones are in place, we’re not starting from zero on design, power, financing and site readiness. It all comes together at the same time. That’s how we’re thinking about the execution of tcdc. That’s how it’s been done in the industries we’ve been in before. Really. That leads into the next slide, which is the project itself. With that, I’ll hand it off to Will.
Will Gray (Chairman and CEO)
Yeah, thanks Charlie. And again, you know, this is kind of goes near and dear to my heart. So today our TCDC remains our flagship execution priority. You know, Today we own 438 acres in Ector County, which is again part of the Permian Basin. And also please note that we’ve entered into the definitive agreements to acquire the previously announced additional 54 acre corridor. TCDC sits in the Permian Basin energy corridor. Again, Midland, Midland, Odessa at the heart of the Permian, adjacent to generation assets operated by Vista and Calpine. So our thesis has been easiest place to build power as we already exist. And that continues to be one of the key things that makes this asset stand out. So from our perspective, that advantage shows up in a few practical ways. It supports speed to power, it gives us more flexibility around direct power solutions, it helps with interconnection and broader infrastructure design. And it gives us a site with the size and continuing continuity that needed to support phase expansion over time. Now, the long term expansion potential towards the 1.4 gigawatt is clearly important and that remains part of the broader TC DC story. But near term the focus is much more specific than that. The focus is Phase one and the focus is getting the commercial and development work streams around Phase one lined up right away. So this slide is really here as a reminder. This is a large, well located power advantage site. And the work we’re doing now is about putting that site in position to Move forward once the key commercial pieces are in place. Moving on to slide seven here. This is another slide that many of you have seen before, so I’m not going to over explain it. This is a very important slide though because it shows how we’re thinking about the development pathway here at TCDC at a high level. This is a phase power development plan. Phase one is 200 megawatts. Key point here is that the initial our deployment is expected to be supported through adjacent generation. In other words, you know, we’re not starting with a traditional grid build out, waiting on the grid or significant new electrical infrastructure to complete our first step. That gives us a more practical path to getting this site ready and moving towards initial commercial execution. Phase two, we’re going to put another 450 megawatts and that’s going to be behind the meter. And that’s supported by a physically diverse gas supply across three pipelines. And we have turbines on order for that as well as recips. And a lot’s gone into that power plan. And I know we’ve talked about that ad nauseam. So the phase three and the final phase is the longer dated expansion towards the complete 1.4 gigawatt, which is what the JV is working towards. And this involved additional behind the meter bi directional grid interconnects. And so it’s a more complex power step here. You know that bidirectional grid interconnection is important because it gives us the ability to put power back on the grid when that makes sense. And it may also support a more streamlined approval path versus a traditional unidirectional interconnect approach. So the big takeaway here is that we’re not waiting around on the typical grid queue to get started. The way we’re approaching this is by engineering around that constraint, we’re using site control, power relationships behind the meter capabilities. And frankly this phase build out model, which is driven by some pretty logical decision making here. And that’s a big part of why we believe this site and this region are differentiated. So when we talk about this phase one readiness, or more narrowly, site readiness, we mean the more practical work that’s required to position the site to move into construction and delivery once the core, commercial and contractual pieces are in place, as we described before. And so we don’t mean that every downstream step is complete and want to be clear about that. But in practical terms, the readiness work, including things like civil engineering, site planning, permitting, pipeline removal and reclamation, site clearing, earthworks, et cetera, et cetera, all of that is underway and generally making sure that those development tasks are aligned with the parallel commercial power and JV work streams. Those are all moving forward. So when we talk about near term milestones, we’re talking about real construction enabling and development enabling activities that enable us to reduce friction and move the project closer to execution. So I hope that gives everyone a sense of how we’re thinking about the site, the phase power strategy, what we mean, and just pretty much what we mean when we talk about phase one readiness. So the next logical question is all around how that gets funded and obviously that’s incredibly important and what does that mean for NUAI at the parent level? And so with that I’m going to pass it off to TED to talk through that.
Ted Warner (Chief Financial Officer)
Thanks Charlie. One of the biggest questions we get from investors is how TCDC gets funded and what that means for Nuai at the parent level. The first point we want to make is the most important one. We are not funding multi billion dollar project capex at Holdco. That is not the model. The model is to raise the vast majority of project capital at the asset level. At the JV level. The way we think about that is a target cap structure of roughly 80% debt and 20% equity with New Era Energy & Digital participating as a sponsor and GP. In practical terms, that means New Era Energy & Digital contributes what is scarce and strategic, which is site control, development work, local execution relationships as well as a maximum co investment. And in return we retain long term material equity ownership in the asset that matters. Because investors should not think about this as a story where New Era Energy & Digital has to fund the entirety of phase one, two and three off its own balance sheet. That is simply not how we intend to build this platform. The second point is that the capital structure around TCDC is materially cleaner than it was before the $120 million in equity that we’ve raised. The repayment of the share in AI note and the removal of all those liens all improve the finance ability of the asset and our company as a whole. The Macquarie facility adds an initial project level funding pathway. Macquarie’s additional $5 million equity investment at a premium is in our view, another meaningful signal of validation around both the asset and the direction of the business from one of the top infrastructure investors in the world. And third, I want to be very clear on this. We believe we are positioned to fund more than our expected share of phase one development without material near term dilution. That’s an important point because we know dilution is top of mind for our investors and understandably so with the amount of capex we talk about when we talk about building data, the way we think about this is straightforward. Two large transactions we did in April were meant to put us in the position to tell our shareholders and any prospective shareholders that based on our current liquidity position and the funding flexibility available to us, we believe we have a path to fund not only our burn until Phase one becomes operational, but also more than our expected share of Phase one without being required to raise additional Nuai equity for that burn. And to make this more tangible, if you assume a 5050 split in the JV as one of our covering analysts has, and a project level capital structure that is 80% debt and 20% equity, then the equity burden that actually lands on Nuai is only a fraction of the total project cost, not the whole thing. 50% of 20%, which is 10% of the total build cost. For illustrative purposes, we assume 1.5 PUE like our covering analysts have, and a $13 million per megawatt critical IT CAPEX. We assume all that and our cash needs for phase one would be roughly $180 million before the credit that we get for the land contribution. Now that is exactly why the GPLP structure matters. Top level equity is there to unlock a much larger pool of project capital, not to fund the asset directly. Finally, on liquidity, we ended April with over 80 million of cash on hand. We view the cash balances giving us real flexibility to support growth and development, while also improving confidence among counterparties that we can meet our obligations as this project advances. And note, we also have access to up to $270 million more from our Macquarie facility, available over time upon certain milestones. So clearly that theoretical $180 million investment is more than covered for phase one. So the takeaway is pretty simple. This is a cleaner structure, better counterparties, a project finance model built around third party capital, and what we believe is sufficient path to fund our expected share of Phase 1 without additional New Era Energy & Digital equity in the near term. So hopefully that gives you a clearer sense of how we’re thinking about capital liquidity and Phase one funding. I’ll turn it back over to Charlie to wrap up with where we are today and what we think the market should be looking for next.
Charlie Nelson (President and COO)
And thanks, Ted. So, just to kind of wrap this up here, this slide kind of ties everything together. You know, we’ve highlighted some of the near term milestones and we’ve highlighted the work streams that are top of mind for the team. So, you know, firstly in terms of commercial milestones, Our continued focus is the definitive JV with stream, the hyperscale of the lease and finalizing power contract. Secondly, on development milestones, it includes the ongoing pipeline removal, reclamation work, earthworks site clearing, the industrial district designation and securing fee development permits. And finally on corporate milestones, we continue to add key people capability. And this is across all core business functions, including development, engineering, operations, finance, FP&A, et cetera, with a focus on talent from hyperscalers. And what we want investors to understand here is that all of these work streams are advancing in parallel. It’s not one after the other. The parallelism is important. We’re not trying to do this the old fashioned sequence where you wait 9 to 12 months to finish lease negotiations that begin design and begin power work and then do the financing. You know, we’re trying to reduce the overall cycle time by moving these work streams together. Obviously some of them are interdependent, so some remain subject to third parties. And that’s something that we do our best to control. But from a management perspective, that is the operating operational philosophy compress the path to readiness by doing things concurrently. So the way I’d summarize all this is pretty simple. The business is moving forward. We’ve simplified tcdc. Structurally, we’ve brought in strong counterparties, we’ve improved the funding pathway. We’re now through the set of commercial development financial milestones that we believe can move TCDC from a well formed concept to a financial executing project. And so with that operator we’ll open the line for questions.
OPERATOR
Thank you. As a reminder to ask a question, you will need to press Star 11 on your telephone to remove yourself from the queue. You may press star 11 again. Please stand by while we compile the Q and A roster. Our first question comes from the line of Mike Grondel of Northland. Please go ahead, Mike.
Mike Grondel
Hey guys. Thank you. You know, clearly Nuai is moving towards near term construction enabling activities. What permits or hurdles still need to happen for you guys to get there? And then secondly, is there a way we should think about the sequence of the stream, jv, the PPA and the lease being finalized?
Charlie Nelson (President and COO)
Yeah, real quick and will feel free to chime in, the lease remains the key commercial priority. But you know, as mentioned here, the work streams are not strictly sequential. So you know, we’re, we’ve got ongoing and have had ongoing permitting work streams. And in all of these pathways that have been ongoing, this includes things like an industrial district designation which has been ongoing for quite some time. That allows us to essentially almost become a pseudo part of a municipality and access some of the, some of the water and sewer and stuff like that. There’s. And so that’s a big piece of it. There’s you know, kind of two other buckets of permits here. We’re talking bucket number one, which is to release early grading. And you need stuff like, you know, we’ve been going through like the SWPPP permit, early grading permit, finalizing the exact site plan with our development partner stream, and then finally to release vertical construction, you know, you just need that full grading permit, you know, subplotting and plat plan approved, recorded building permit, fire protection review and all these things are well underway. I don’t know, Will, do you want to chime in anything else on that?
Will Gray (Chairman and CEO)
Yeah, you know, that’s a good point. Because I think one thing, you know, Mike, this is Will, by the way, that we’ve not really kind of articulated with our investors is where does this property sit? Is it in the county, is it within the municipality? Because I think. Or is it in the buffer zone which is they call ETJ? So I think, you know, what we need to better help understand is that, listen, this sits in what they call an ETJ, right? An Extraterritorial Jurisdiction jurisdiction. So essentially it’s a buffer area. Right. So we’re within a five mile radius of the city of Odessa, Texas, but yet we’re within Ector County. So a lot of the constructs that we’ve been working through have been okay, so if we’re not going to file an industrial district as you warrant previously, then we were just going to have to work within county, county zoning laws, permitting regulations, which are very, very different than the municipality ones, if that makes sense. With having the, the new partner on board, obviously wanting the potential to have the access to the municipality services such as, you know, water, wastewater, fire, that whatnot. We would have to form the industrial district which would be basically a way not to be annexed into the city in lieu of a pilot tax. So as Charlie previously mentioned, the kind of the prelim that we intend on doing, I would think in June, is the preliminary site plan. Because that is basically, which we’ve had that already. But essentially our JV partner stream, which has been doing for 25 plus years, has essentially taken what we’ve built and just basically tailored it specifically to our in tenant. And so by doing that now they’ve kind of taken our ALTA survey, transpose it onto, you know, our, the acreage. So that can be now submitted to the city of Odessa council which you Go through, you know, a minimum of two reviews before approval and then you can start your grading process. But as Charlie mentioned, you know, the three major ones, our site plan, SW3P and then our early grading permit, those things, that is, that’s our, you know, June, July, boom, boom, boom. Let’s get going.
Charlie Nelson (President and COO)
And for what it’s worth, just to chime in on that, these are, you know, these are things we’re dealing with. Even today had multiple calls on this, you know, with the city, et cetera. These are ongoing efforts. So this isn’t something that’s well off in the distant distance that we’re sitting here like staring down. These are, you know, active multiple times a week, going through all of this and locking this all in. So these, these are well underway.
Will Gray (Chairman and CEO)
Yeah, good point. We’ve had meetings with both. My goodness gracious that, you know, county officials, city officials, you know, I work daily still, you know, still part of my, again, as I tell people, near and dear to my heart. I mean, I’m out there on the site, you know, quite often, you know, with all the reclamation we’ve done, because again, this used to be an active oil field. You know, we, we’ve remediated over 13,000 foot of old flow line. We have abandoned and reclaimed old pipelines. I mean, this has all been done site clearing. I mean, there’s a lot of activity moving forward. So even though there may not be active, you know, permits in place, there are still a lot of activities that are ongoing in order to make certain that this thing can actually, you know, be shovel ready once the permit is approved. Permits are approved for me, Mike.
Mike Grondel
Got it. And then the sequence of the jv, the PPA and the lease. Any way to think about that?
Charlie Nelson (President and COO)
Yeah, so just thinking of the sequencing, you know, the JV docs are, you know, well underway. Multiple turns already with the lawyers and, and the lease as well, as well as the ppa. So all of these are, are progressing concurrently. They’re all interdependent. Right. So like, you know, we could, could we execute the JV docs and not the lease? Yes. Can we execute the Power Purchase Agreement (PPA) and not the JV docs? Yes. Do you need all of them to proceed with the project also? Yes. So all of these are progressing, the multiple turns on legal docs already with all of them. So I would think of it as we may execute one before the other one before the others. But you know, with that, like the ppa, for example, you know, we will, you know, we will likely execute that before the others, but all of these, most likely, and this is how it goes with most of these types of industrial developments. You know, concurrent execution, especially when they’re all kind of lining up around the same time, just makes sense. And you just kind of have a signing day, if you will, a very fun day, by the way, for any industrial development. But yeah, I mean all of these are, you know, progressing, you know, fast and logically.
Mike Grondel
Got it. And then, hey, I wanted to ask to, you know, clearly in the media there are some counties, cities, municipalities putting bans on data center development. You know, not in my backyard concerns out there. Any of those issues you’re seeing in Ector County, Odessa area. And how do you feel about your relationships there?
Will Gray (Chairman and CEO)
Mike, this is Will, that’s a great question because obviously we have seen that, you know, you’ve seen, I think it’s Hill county or one of the counties there. I mean, first off, I think it’s, you know, that’s illegal in the state of Texas moratorium. So I think, you know, that’s going to be challenged. But listen, I can’t speak about what other counties are doing. I can speak about what Hector county is doing and they are 100% on board with the development of TCDC and speaking with, you know, Judge Fawcett, speaking with city council members, speaking with the city mayor with the, that’s a development corporation. I mean we interact weekly, daily with this, with these individuals. You know, they were even in a major metropolitan area this past week, both county and city officials meeting with a major hyperscaler to promote Ector County. So again, because I think what, what they’re really focusing on is, listen, we have ample water here through the, through the, you know, technology of the desalinization of the oil filled water. So there’s ample water here. So that’s, that’s not, that’s not really a problem. Not that our data center designs use a lot of water to begin with and then most of everything out here is going to be behind the meter. So we’re not seeing the me too things that you see in other metropolitan areas. So right now we feel very blessed that our backyard is very power friendly. We are the Permian Basin. We power the world. So not just our country, the world. So that’s what we’re doing here. So I don’t think we’re getting much pushback on creating a data center.
Mike Grondel
Got it, Got it. And then one more question, guys. Last week, Friday actually the, your former partner Sharon AI hosted an earnings call and they kind of Called out assigned LOI as it related to TCDC with a HyperScaler back in 2025. Almost I would say implying that, that this hyperscaler walked away, but they, they never use the term lease. Can you help us connect the dots here on, on what this LOI was. Sharon was commenting that that it sounds like you guys entered into last year. Is it the same one, you know, New Era and Stream are sort of working with or is it something else? Any, any help there would be appreciated.
Ted Warner (Chief Financial Officer)
Yeah, Mike, this is Ted. Am I coming through okay? Yes, so glad you asked that because it is something we wanted to clear up today because I’ve had a lot of calls on this today obviously and you know, I can’t speak for sharing directly on why they chose to word the paragraph the way they did, but I can say that I don’t blame investors for being confused. And I can also say that you are very astute for pointing out the fact that the word lease was not included in that paragraph. Though I do think it seemed to be the goal of that seemed to imply, they seem to want to imply that somebody walked away from an LOI with a lease. And so I guess I can just. I mean I’ve had to read this thing a hundred times today, so I know what it is. At first they said we signed a non binding LOI with a hyperscaler. Now that just that statement right there is the core of the confusion. And I’ll say at the least it’s disingenuous for a number of reasons. Now we put out a press release on July 20th or July 1st of 2025 and related to an LOI. And we didn’t say it was with a hyperscaler. Particularly at that time this, this group was not considered a hyperscaler. I don’t think they would be today improved. Sure, but we didn’t call them that then and we’re not calling them that now. And it was a non binding loi. That’s right. However, I bet everyone on this call, just like a lot of the investors that called me today, assumed that when they heard that statement that this LOI was for a lease. Because in this industry when you say I have an LOI with a hyperscaler, you’re typically referring to Elise. But that LOI was not related to Elise and it wasn’t with a hyperscaler. It was related to a sale and us hopefully providing some behind the meter power. And that’s exactly what was written in the press release. So I don’t know why that got reclassified the way it did. And I think, again, leaving out exactly what that LOI was for was confusing to people. But look, that’s what that was. That’s what they’re referring to. And then it’s even more confusing, particularly when the next sentence is, we did a bunch of engineering and design work. It just sort of. It ties it together and it makes it seem as though they’re referring to a lease. But no, that did not happen. And then the sentence after that was, I believe. Let me just find it here. Then they said, we then went into exclusivity with the Hyperscaler. I think the definitive article there, the hyperscaler. So now they’re referring to the same party that they were mistakenly referring to at the beginning. And that is just factually incorrect. And we never announced an exclusivity agreement with a Hyperscaler, though they’re not incorrect about that. We did sign an exclusivity arrangement with a hyperscaler. It was not the party that we were planning to sell to with that loi. After we signed that loi, and then the stock all of a sudden improved dramatically in the near term. We were ecstatic because that meant we didn’t have to sell this piece of land. I mean, it was a great offer on that loi. I saw the price, I knew the party. It was a great offer. But we all know the real value comes from owning the data center and owning the dirt and owning the Net Operating Income (NOI) attached to contracts with IG tenants. So we wanted to move in that direction. We were also getting offers to buy this from actual hyperscalers. And one of those we did. We signed an exclusivity agreement because we kept turning them down on selling, and we wanted to work with them on how can we partner with these to own something here? And essentially it was you got to work with a really reputable developer. We went and tried to find one. And that exact same party, as we’ve said before, sort of led us to a different party. And now here we are with that party stream. They’ve been incredible to work with, just every day checking boxes. It’s been awesome to watch them work. And this same party, that Hyperscaler, is still the person that we hope will be our tenant that our designs are specifically for. So, you know that paragraph that everyone read and heard from that call on Friday, Again, you were hitting the nail on the head. It seemed to be very negative implications that a single Hyperscaler had signed an LOI on a lease and then walked and that was why they walked away. That’s. None of that has happened. So I don’t know why they walked. I mean, we have a different business model than them. We want to own dirt and infrastructure and noi. And with IG tenants, they’re doing cloud computing. So I don’t know why they left, but again, I understand why they could want to make the street think that leaving this deal was a good idea. But obviously we’re very happy that we have all of it now. And I don’t know, I hope that clears it up for you, Mike.
Will Gray (Chairman and CEO)
I think, you know, I don’t know about you, Charlie, but I certainly would pay $70 million for something I think that’s worth about 3 to 5 billion. So. Yeah, I mean, I don’t know what it’ll be worth. Yeah, yeah, but it is. Obviously if we can own a material portion of this whole project, it’s going to be worth a lot more than what that initial LOI was in July, which we’re very happy. We, we were never forced to go through with that deal, so. And again, that is different from the exclusivity arrangement and neither of them were related to a lease and no one has walked away from anything, so. Hope that’s helpful, Mike.
Mike Grondel
All right. Hey, that is guys, and best of luck over the summer. Thank you.
OPERATOR
Thank you. Our next question comes from the line of Derek Whitfield of Texas Capital. Your line is open, Derek.
Derek Whitfield
Thank you. Good afternoon all and thanks for your time. Maybe a bigger picture question for you guys regarding your project schedule on Slide 15 of the PowerPoint. I think you previously discussed initiating Phase 1 construction by the end of 2Q and first power by year end 2027. Where does that likely stand now and how much cushion do you have in your schedule to meet your year end 2027 objective?
Charlie Nelson (President and COO)
Well, I would say, you know, just talking about the schedule, I mean, look, our schedule is largely driven by power availability and the power that we have available in phases one and two is in second half of 27. So everything that we’re doing is kind of back solving from those dates. And so, you know, for what it’s worth, you know, everything is relatively, I mean it’s on track right now. And you know, the inclusion of Stream into as an execution partner into the deal significantly enables us to accelerate those schedules. I mean everything from having pre approved designs with this particular hyperscaler, which is why we were guided into the relationship with them, frankly, to the fact that they house long clean dam equipment that goes towards these projects and It’s a rinse and repeat design. All of this, look, it boils down to General Contractor (GC) availability, you know, just construction crew availability, all of those things. You know, that’s everything that when you talk about working through the permits, we’re talking about like everything concurrently is being worked through on those as well. So we still feel good about, you know, the, you know, second half of 27, you know, in service date for the first phases of this.
Derek Whitfield
Great. And maybe just with regard to your commercial discussions, how are you guys thinking about the potential to earn fit out payments based on the progression of your discussions?
Charlie Nelson (President and COO)
Sorry, can you, can you read that question? Say that one part again. To earn what payments?
Derek Whitfield
Fit out payments, Technical fit out payments based on the progression of your discussions?
Charlie Nelson (President and COO)
Oh, I mean the. I don’t think that we factored in technical fit out payments but Ted, you want to chime in on that?
Ted Warner (Chief Financial Officer)
Yeah, I mean I can’t comment publicly on where we are on that front on that level of negotiation and definitely more of Stream’s work at this point. You know, as we transitioned over to them, we had to restart on a lot of things. But now we’re back to being way ahead where we were with an excellent counterparty who or excellent development party who has an excellent relationship with our prospective leads counterparty. So they’re far more knee deep in that than, than we are at the moment. But I mean, it’s a good question. I’m hopeful we can have an update on, you know, how things are progressing on that front in the near term. But like Charles said, I think all things are going to be progressing together. And you know, I’d love to be able to tell people like that, you know, when the lease is close and how far, how far we are, the JV docs and all that stuff. But you know, look, we tried to short circuit the traditional timeline by working with a known developer who has an existing relationship with plenty of hyperscalers. So they have designs and they have commercial agreements with them and that is the most important thing. So we’re really letting them spearhead that front. So I don’t know those details.
Derek Whitfield
Maybe just one more kind of thinking about really the progress that you guys have accomplished over the last six to nine months. And I understand really for now the focus is really on executing on phase one and phase two. But as you guys have had such great progress, how have tenant discussions gone even beyond kind of this first tenant that we’re speaking to now? Have you guys seen a considerable inbound increase in interest just Based on everything
Will Gray (Chairman and CEO)
that’s been announced here recently, it’s been interesting.
Charlie Nelson (President and COO)
There is a will that regarding the inbound is really behind about behind the meter and what we’ve discussed. And I think, you know, that’s where Charlie and I were a bit ahead of our time and you know, trying to better understand, you know, how do you create, you know, an islanded data center. And we’ve had some great discussions thus far around that. So I mean, obviously we want to get this notch on our belt first and foremost and then, you know, then go out and execute on sites 2, 3, 4, etc. Etc. But there has been extreme amount of interest and Charlie, you may want to expand that as well. Yeah, and from, from the tenant side, you know, as this has moved, clearly we, we have gotten out outreach from other prospective tenants as well. But again, we are really, really happy with our development partner. We are really, really happy with our prospective, current prospective and tenant, and we want to work with them. And you know, we’re in exclusivity with them to get this thing done all finished as fast as possible. So we are just head down working with these parties. But yeah, there’s, there’s, there’s definitely been interest in inbounds that we, we can’t entertain and, and you know, at this point, we’re really happy about that because we’re excited by the progress we’re making.
Derek Whitfield
Great update. Thanks. I’ll hop back from queue.
Charlie Nelson (President and COO)
Yep. All right. Thanks a lot, Derek.
OPERATOR
Thank you. I would now like to turn the conference back to management for closing remarks.
Will Gray (Chairman and CEO)
Yeah, appreciate that. So again, you know, listen, as we finish up today, just want to like to leave everyone with a few final thoughts. You know, we recognize, you know, the recent trading activity and share price volatility has been challenging. We understand that and we just, we don’t. Do not take, you know, shareholder support, you know, lightly. You guys have been faithful, supportive, 99% of you. There’s maybe a few that have said some things, but we still, we still like you guys. But again, from our perspective, however, listen, our focus is going to, is still on execution. You know, over the past several months, we’ve taken, I mean, extremely important steps to strengthen the foundation of the business. You know, simplifying the structure around tcdc, you know, improving our liquidity position, aligning with strong institutional counterparties, and obviously advancing the key commercial development and financing, you know, work streams. And we’ve done all this in parallel and we’ve done all of this on the, on a tight shoestring budget. So it’s been pretty, it’s been pretty impressive today. But you know, the conviction, our conviction opportunity remains unchanged. You know, we’re, we’re barreling down the path to believe that TCDC is completely differentiated opportunity given, given its unique location within the Permian, obviously the power advantages development pathway and I think more specifically to the long term, you know, long term scalability. So again, you know, listen, significant work ahead. One priority is to execute methodically against the milestones that we’ve mentioned today and to move the project forward. And again, just from the bottom of our heart, we just appreciate the continued support. You know, as a shareholder, I sit here with you and I wish I could announce who the prospective tenant is and I can’t wait to, to announce it one day. And we’ve been working very, very hard to get there and we continue to do so. And just again, we continue everyone’s patience and understanding and we will continue to communicate as much as we possibly can. And just thank you again for joining us today. And I know summer is about to kick off, so we wish everyone a great summer and thank you very
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