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Since joining NACA, it's kind of interesting 'cause I actually have been quite the naysayer about Bitcoin treasuries as just this overall strategy.

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I know that sounds like an insane statement because we raised a lot of money to buy Bitcoin, and we did exactly that. Yeah. The way I look at it is Treasury is the foundation to doing something bigger.

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That's exactly why I liked Nakamoto from the beginning. Their thought process was different. From day one, they said, "We're planning on rolling in these operating businesses."

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And so I think, you know, we all believe in Bitcoin. We all believe that Bitcoin has and will continue to shape the financial infrastructure of the future, right? But just holding Bitcoin is not enough.

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As a NASDAQ-listed company, you really need a strategy that has businesses with reoccurring revenue and the plan to grow.

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The market will have to adjust and evolve, just like they have in the past, for how to think about a Bitcoin operating business that is specific to Bitcoin. And this is... This isn't new.

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Like, we're not like it, it-- Like, this happened, like you said, with miners. This happened with, like, even at Galaxy, right? Like, it was, like, Galaxy's a diversified crypto business.

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We're a diversified Bitcoin business, and so it's hard to think about who the peers are that you would, like, mark yourselves against.

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My expectation is that we'll be looked at as a sum of the parts, and that's, like, how we're thinking about presenting financials, right? So you can see, like- Yeah...

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how each business line did and, and then judge us based on that. And our job is to just really build a company that provides shareholder value year over year and quarter over quarter, and that's what we plan to do.

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[upbeat music] Hey, welcome back to the Blockspace Podcast, presented by CleanSpark. More on them during the show. In this audio-only exclusive, we are joined by Amanda Fabiano.

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She is the COO of Nakamoto Holdings, which just executed on a large transaction to bring BTC Inc., the parent company of the Bitcoin Conference and Bitcoin Magazine, plus UTXO Management and Bitcoin for Corporations, inside Nakamoto.

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While this has been telegraphed for a while, ever since David Bailey raised for Nakamoto, the actual transaction only executed this week.

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There's a lot of questions on X and other platforms around how this transaction was actually executed and what it means for NACA shareholders going into the future, so we get into those mechanics.

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On our podcast, we typically don't get into the rage bait or the tweets that are out there floating around a company, but we get into the filings and talk with the actual operators behind the scene, so expect that in this conversation with Amanda.

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On Amanda, she's a longtime friend of the show and also a, a longtime operator in the space with stops at Fidelity, Galaxy Digital, and most recently, her own advisory shop, Second Gate Advisory.

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She joined Nakamoto this summer to help mature some of its Wall Street and operation flows as a publicly listed company.

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In today's conversation, we discuss how Wall Street might rate NACA into the future, since it has so many business lines underneath its hood, why they chose to raise debt and purchase Bitcoin this summer in the ways they did, and lastly, how they plan on getting back into compliance with NASDAQ mandates, given that they are under one dollar per share threshold.

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Thanks so much for listening to the show. A few words about our next OpNext Technical Series Conference in New York, and then onto the conversation with Amanda. [upbeat music] Hey, Charlie here. Guess what?

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We just announced our next Bitcoin technical conference, OpNext. That's right, y'all. OpNext is back for 2026.

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We're running it back after a successful event at Strategies HQ in Tysons, Virginia, last year, and this year, we are bringing it to the Big Apple at the iconic Times Center in Midtown Manhattan.

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We're hosting the big names and projects that you recognize, like Robin Linus of BitVM, Nick Jonas of Blockstream, Antoine Ponce of Chaincode Labs, and Calay of BitChat will also be present.

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And this isn't just for the devs. We have institutions talking with the developers. That's what OpNext is all about. We have Robert Michnik, Head of Digital Assets for BlackRock, in the building.

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We've got folks from mining pools, investor funds, Bitcoin startups, and other groups. With a ticket, of course, you'll get access to all the high-signal programming and networking you could want.

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You'll also get coffee, catered lunch, and access to the after-party at Pub Key. If you wanna go VIP, you'll also get access to the speaker dinner following the event and an investor brunch on Friday.

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Tickets are capped at three hundred, and early bird tickets are already sold out. If you wanna save yourself a spot, go to opnext.dev. That is O-P-N-E-X-T dot D-E-V.

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Use code PODCAST to save twenty percent off a GA ticket to the event. Ticket prices go up every few weeks, so don't wait, y'all. Lock in that ticket today. We'll see you April 16th at the Times Center in New York City.

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[upbeat music] Amanda, welcome back to the show. It's been about two years. How you doing this morning? Doing good. How are you? Thank you for having me. I'm doing well. I'm doing well.

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Got some coffee, warming up, waking up. Um, you guys closed a huge transaction this week that's been telegraphed for a bit, so congrats on closing that. Thank- Yeah. Thank you. We're really excited about it.

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I think we've been working on it for a while. Couldn't obviously talk that much about it as you're getting through diligence and all the puzzle pieces and putting them together.

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But yeah, it's, it's-- it should be a really exciting... It brings us into an operating company now- Mm-hmm... which transforms how I think the world should think about Nakamoto.

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And that's why you came to Nakamoto in the first place, so that might be a good place to start. I mean, you've been in the Bitcoin industry for a long time.

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For listeners who are not familiar, started at Fidelity and then Galaxy, and then you started your own advisory company, uh, Second Gate, that was then folded into NACA this summer.

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Uh, so tell me a little bit about why you went from your advisory company, which was a private company, but by all metrics of my knowledge about it, doing pretty successful.

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Why would you want to join NACA, and what was, like, the-- what was the natural business integration, even for NACA, doing what you guys were doing? Yeah. SoWe were doing our own thing, it was great.

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It was me and Brandon Bailey, and we had a lot of fun, and it still is going on. Like, Second Gate still exists, but it's just, like, within the world of Nakamoto.

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And we decided to come to Nakamoto because I really liked what the plan was for Nakamoto.

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It was, "Hey, we have this public company with this large treasury, and we also are planning on folding in these operating businesses that have been established and around for a while."

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And, you know, I, I think all miners in that background, like, you are a natural operator. You wanna, you know, do really cool things and build businesses.

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And one of the reasons why I started my own advisory company was because I really enjoyed building businesses that were, like, the zero to three-year phase of things. And so Nakamoto has this really interesting...

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You know, it, it is a new business. We- it's six months old, which I think the world kind of forgets.

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But now with rolling and operating businesses, we have operating businesses that are not six months old, and we have this new vision and this new strategy of, hey, this is where we think everything is going to go.

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So that messiness of building a company from the very beginning and making all the puzzle pieces make sense is where I find that I love to spend my time, and so that's why we decided to join.

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How does it fit into, like, the business model of Naka, which we'll go into in a second, 'cause Naka- Yeah... has the treasury component part, which, you know, not truly a good business.

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Like, some people have been able to, like, form it into a, a few different, like, Wall Street games that, like, do increase, like, Bitcoin per share, those sort of metrics. Laying that aside, so there's the Bitcoin part.

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There's UTXO Management, which is an awesome hedge fund- Mm-hmm... and has been really successful last, um, since 2019. There's BTC Inc. with a million different brands underneath it. 27, actually.

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[laughs] How does the... A ton. It's, like, a ton of different brands underneath it, and, uh, the numbers, you know, very profitable. But all those companies, as mentioned, are very profitable.

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For Second Gate, like, where does that fit into this holding company? Like, how does that fit into a media brand and a hedge fund? Yeah.

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So since joining Naka, it's kinda interesting, 'cause I actually have been quite the naysayer about internally about Bitcoin Treasuries as just this overall strategy, right? I think...

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I know that sounds like an insane statement, because we raised a lot of money to buy Bitcoin, and we did exactly that. Yeah.

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But the way I look at it is Treasury is the foundation to doing something bigger, and that's exactly why I liked Nakamoto from the beginning. Their thought process was different.

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From day one, they said, "We're planning on rolling in these operating businesses." And so I think, you know, we all believe in Bitcoin.

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We all believe that Bitcoin has and will continue to shape the financial infrastructure of the future, right? But just holding Bitcoin is not enough. So- Yeah...

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obviously there's, there's some things, especially with UTXO, that they've been doing where they look at different jurisdictions and jurisdictional arbitrage, and there's certainly different restrictions and opportunities that exist, and I still do believe there's a lot of value in that.

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But as a NASDAQ-listed company, you really need a strategy that has businesses with reoccurring revenue and the plan to grow, and so that's what made me excited about Nakamoto and the merger.

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So, like you said, Bitcoin Inc. is the largest Bitcoin and media events business.

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They've shaped the discussion around Bitcoin on a global stage, and we've had some of the largest influential people get to the stage to talk about Bitcoin.

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They talk about, like, their thoughts, their opinions, et cetera. And then you think about UTXO, UTXO has performed, outperformed Bitcoin annually, and they've been backing Bitcoin companies since 2019.

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And i- it's crazy, because they performed, outperformed Bitcoin by 59% last year, but they've done it since 2019. Yeah. So now Nakamoto's shareholders have access to that.

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And then on the advisory side, you have Bitcoin For Corporations, which is, like, the newer product within Bitcoin Inc., and then you have the contracts that we have at Second Gate.

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And we think that that's gonna be, like, an area that we grow, but Bitcoin For Corporations has, like, 40 different members. Yeah.

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And then, you know, for the smaller, more, the smaller companies that, like, we've been working with, where it's advisory, the way that we approached it were two totally different ways.

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Like, Bitcoin For Corporations said, "Hey, corporations, you need to understand the business world."

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And what Second Gate said was, "Hey, Bitcoin companies, let us help you, like, get a little bit, like, cleaner on things," right? And- Yeah...

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now we have, like, a bottom-up and a top-down situation in, in advisory business. So when you think about how all of those things kinda merge into one, it really creates this, like...

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And I ha- I absolutely hate this word, but it is a word that, like, we use, flywheel. So you have this media and information- Oh, I thought you were gonna say synergy. No, no. Okay. Kinda a little concerned there.

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That, that and platform are just, like, words that cannot come out, out of my mouth- [laughs]... 'cause I hate them. So you have this media and information business where you have this aud- this massive audience, right?

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That then translates into clients, which is, like, this global book of clients and partners all around the world, that then transfer into users of our products and services, which then hopefully transfers into revenue, right?

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And it just kinda keeps going and going. So these three different verticals are, we think, you know, for lack of a better term, synergistic [laughs] with one- Heard that... with one another. Hey, end of the podcast.

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I had to do it. You, you, you lied me... You, you laid me up, you know? I had to do it. So we think that it's, all of these things really work well together, um, to create, like, an, a Bitcoin operating business.

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And so when you think about it at a high level, what we did to, was really just bring together these three things that were growing in parallel under one roof.

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The other thing to think about for Nakamoto is most public companies really look at Bitcoin, and they think about how to, like, how to monetize Bitcoin volatility, but we're really thinking about Bitcoin adoption.

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And so when you think about how Bitcoin adoption would grow, which we think it has and will continue, we do think that these verticals make a lot of sense with it under one roof, with this treasury- YeahOkay, so now that we have the context for everything, I wanna talk about some of, like, the discreet ways we value companies on Wall Street, or at least how, like, how Wall Street kind of picks apart businesses.

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Mm-hmm. And that's the weird thing with holding companies, right? Because you can have so many different things underneath it.

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When I'm looking at BTC Inc, I'm thinking about, uh, what the multiples we'll see on, like, New York Times or some of the other larger publishers out there.

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You know, there are some media companies that are just, like, essentially pure-play conferences, which I'd argue... I haven't looked at all the, the books obviously, because you guys haven't published everything.

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We'll see that in the future. But I would assume most of the revenue for BTC Inc is coming from the conference line, and so, like, we're gonna give a multiple on that based on, like, w- how Wall Street sees that.

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UTXO Management's gonna be completely different, right? And then Second Gate Advisory is gonna be completely different. Mm-hmm.

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How are you guys thinking about that when you're pitching to the street or you're pitching to s- anyone else about, like, your stock? This is how we kind of view it.

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When we look at the AI HPC landscape or the Bitcoin mining landscape, which you and I are very familiar with- Mm-hmm...

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like, there was a clear reason to move out of Bitcoin mining because you just got re-rated immediately once you started moving and, well, executing on AI HPC. Mm-hmm.

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How do you guys see this, uh, the multiple changing for you guys once you have all these things inside the house, or do you even see it changing? Yeah.

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I think it's an interesting question, and it's one that we've talked about a lot when we think about peers. So obviously, like, internally, we're like, "Who, who are our peers and who are we marketing ourselves to?"

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It's-- it is challenging because you have these three different verticals, and then you have, like, the vertical of, like, the, the DAS.

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I think, you know, how we think about it is just really the market will have to adjust and evolve just like they have in the past for how to think about a Bitcoin operating business that is specific to Bitcoin.

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And this is-- this isn't new. Like, we're not like... Y- like, this happened, like you said, with miners. This happened with, like, even at Galaxy, right? Like it was, like, Galaxy's a diversified crypto business.

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We're a diversified Bitcoin business, and so it's hard to think about who the peers are that you would, like, mark yourselves against.

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My expectation is that we'll be looked at as a sum of the parts, and that's, like, how we're thinking about presenting financials, right? So you can see, like- Yeah...

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how each business line did and, and then judge us based on that. Yeah, it's really interesting.

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Like, I, I truly think you guys are closer to a pure play media, even with the hedge fund aspect and with the advisory, because that and fintech, a lot of traditional media companies.

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And so I wonder if, like, that's how the street, like, ends up. Obviously, it's still really early. You just executed the transaction this week. So- [laughs]... we'll see what happens. But I am curious- Yeah.

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I, I also think that's, like, a state and time situation, right? Yeah. So when we think about these three verticals, yes, Bitcoin Inc. in the, the conference business is the thing that you will think about, right?

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But- Yep... we have stated three different, very distinct things that we're going to do, and I think that this is just the beginning of what we're doing in that. Yeah.

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A- and so I, I would assume that over time, the business that we are today even will, will evolve, and those verticals might become deeper. There might be other things that we look at buying.

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There might be other things that we look at building.

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And so that doesn't really answer your question on, like, how does the street view you or judge you, but I think that's, you know, why analysts and bankers exist, to be able to make those decisions.

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Our job is to just really build a company that provides shareholder value year over year and quarter over quarter, and that's what we plan to do. [gentle music] We are CleanSpark,

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America's Bitcoin miner, a publicly traded company with the largest operating hash rate, powered entirely by self-operated infrastructure across four states. This is our proof of work.

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We are setting the standard for what's next. Learn more about the intersection of energy and Bitcoin at cleanspark.com. You guys took, like, a pretty interesting way to go public.

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Um, you know, you guys had NACA Holdings be created and then merge with KindlyMD, and then through that, you guys were able to get listed quickly, and then you're able to take advantage of a few different things that being listed enables you to do.

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Put out a five billion dollar ATM, just like the shelf is there, not necessarily exercising it. I think you guys exercised it perhaps a little bit this summer.

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There was a convertible note that was exercised in order to purchase Bitcoin, and then later we had, like, the... Well, it was in the initial build out, you guys were gonna buy BTC Inc.

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and UTXO and all those things, but that took a little bit longer, right? Like, the due diligence process for that takes quite a while.

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Why did you guys not do more of, like, a traditional IPO or just roll for NACA Holdings to get listed? Why did you guys go through, like, this KindlyMD method?

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And do you, looking back, think that was a mistake or do you think that was just, like, a hard path because of where we're at in the, the cycle of Bitcoin? Yeah.

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I think, like, in reality, the path companies take to go public is often driven by very practical and very unexciting- Mm-hmm... things, right? Yeah.

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So things like financial statement readiness, audit timeline, overall market conditions at the time, right?

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There's, I think, sometimes a perception that companies just choose a simple route, but each path to the public market has structural and timing constraints that you have to consider.

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I also think people underestimate how much work goes into transactions, right? So for example, M&A processes do require a lot of diligence. Mm-hmm.

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There's legal, there's financial, there's operational, there's governance, right? That level of scrutiny, regardless of whatever path you're trying to pursue, is-- takes time, right?

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So there's lots of months of preparation, audits, disclosures, like, lots of considerations- Mm-hmm... around different paths that you take.

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And I think you look at that, and you look at all the facts in front of you, and you choose what you think makes the most sense in that timeframe.

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So I think it was really finding-Or trying to find a structure that positions the combined companies, uh- Yeah... for, you know, long-term success for the public markets. And so access to capital is, like, a big deal.

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Sometimes certain structures that you have don't allow you to have access to a WC for over a year. Yeah. At the time that this was happening, obviously there was a lot of money being raised to buy Bitcoin. Yeah.

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That would have not been great. We saw some mining companies that did mergers and didn't have access to raise capital in the public markets through that type of thing and, and they fell behind others.

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Some made it back, some didn't, right? Mm-hmm.

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So I, I think you have to look at all the facts in front of you and choose what you think would make the most sense in the timeframe that you're trying to do what you do with the constraints that you have.

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Yeah, no, it's, it's tough because looking backwards, like, I'm just gonna add some commentary. You don't necessarily have to pick it up as a question. But looking backwards, you could say, like, UTXO and B- BTD Inc.

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have really strong financials, right? Like, really- Mm-hmm... strong financials over the last few years.

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And why couldn't those companies just go under a holding company of some sort and then be able to pursue a public listing just cleanly? Right now that's easier to say.

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Looking back a year ago, there was a lot of money that was available just to go and purchase Bitcoin, and the market was certainly rewarding that.

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Now, like, hindsight's 20/20, a lot of those companies have been, you know, punished for purchasing Bitcoin or, or rushing to purchase Bitcoin.

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Um, and so you'd say, like, that was probably not the, uh, the wisest path looking backwards. But it's just kinda hard to say at the moment.

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This is kinda like a roundabout way to get to one of my questions, which is just kinda like how you guys are being valued right now, which I would say looking at just a very unintelligent,

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which is me looking at the numbers- [laughs]... being like, "Hey, you have this much Bitcoin in your balance sheet. You have this much debt. This is what the market's telling you."

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You did just execute on this new transaction, which essentially is worth, you know, whatever the multiple you wanna assign to the 80 million in revenue, combined revenue, I think UTXO and BTC Inc. bring in.

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Um, I think that's gonna be added on to the market cap later.

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But when you're looking at this and you're looking at, like, the Bitcoin minus the debt and how the market's valuing you guys, what are some steps you guys are looking towards next to fix that problem right now where the market's not valuing the other business lines that you have?

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Is it just a time thing? Is it, uh, an awareness thing for the street? Is it an awareness thing for investors? Is it, like, getting rid of this debt?

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Well, how are you guys kinda thinking about, like, next steps to, to solve that sort of, uh, market valuation problem?

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Yeah, it's, it's a good question, and definitely, you know, where we're at is something that keeps me up at night because it doesn't make sense to me either. We have more...

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I, I think we have been punished for, for things. And I also think, you know, we kind of are the poster child for debts in a way. Um, so- Mm-hmm... I, I, I don't-- Like I said, I don't think we're a debt.

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I think, you know, the market will see us as an operating company, and that's what we've been talking to- Yeah... the street about.

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So we've been really focusing on more on the institutional investor side and, and building our relationships there. So I think that,

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you know, when we-- We had a lot of really great feedback this week from, you know, our, like, institutional investors that own our stock, which aren't on Twitter every, every minute of every day.

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Um, so, you know, that's, like, the audience that I- Institutional investors are not on Twitter? You know, some of them are. Really? Some of them are.

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But I think that, you know, we've had calls with analysts after this went out. Yeah. And things are...

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Y- I think that the way that we're seeing them value us from a Wall Street perspective is, is going to get better, hopefully, and that's, like, our goal. Yeah.

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So o- on, on that topic, like, the way you guys raised debt- Mm... might be a consideration for the future. Um, in the past, obviously, you guys have done the convertible note. Yep.

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Um, I think you guys did an, uh, a brief ATM. I don't quite remember, and you can probably fill in some of those details in a second.

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And then more recently, you guys have used, uh, a credit facility that's kind of gone through a few different folks. Uh, and then lastly, the pipe as well. Yep.

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Looking at all the different ways you guys have raised capital, can you tell me a little bit about, like, how you guys think about the success of those in the pipe side of things?

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Like, there's been a lot of pipes over the last 18 months for Bitcoin treasury companies, Bitcoin miners. I think looking backwards, like, I'm not a huge fan of pipes. I understand why they exist. I do.

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Like, I, I understand the method for it, and it can make sense maybe on a long-term horizon. But they do seem to suppress share price going forward due to the amount of, uh, sales that are baked into these pipes.

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But looking at all the different ways you guys raise capital, how do you think about, like, the efficacy of, of these methods? Yeah. So for... We'll start with the pipe.

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So for the pipe, I think that what's challenging is I, I have mixed feelings about the pipe, if I'm being, like- Yeah... totally honest.

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I think on one hand, it's encouraging that at the p- at that time, th- that investors recognized the value of the strategy, what was, what was being sold, right?

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And I think that they were willing to commit a meaningful amount of capital, uh, to execute on buying Bitcoin and rolling in these businesses, right? Like, that's what was, was talked about in the pipe.

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A- and that's exactly what it did. The, the pipe accomplished its primary objective, right? Like, it got Bitcoin on balance sheet, and it allowed us to scale our Bitcoin position, and that was-- that happened.

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Now, that said, pipes naturally come with different sorts of complexities around things like liquidity and exit dynamics, and I, I think the outcome really of, of the whole thing has to be viewed in the broader context of a lot of different factors.

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So you have one who, like... You think about, like, who typically participates in a pipe financing, right? Like, what's their investment time horizon and their return objectives? You don't,

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you don't know that when you're participating in it or when you're buying it. Mm-hmm.You also need to think about the state of Bitcoin and Bitcoin market at the time of the PIPE unlock.

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You have to think about the sentiment towards the company, type, the type of company at also the time unlock, and then more broadly, like macro trends.

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Like all of those things you have to think about when thinking about PIPE, right?

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So when we think about more broadly, all financing options really have like these positive and negatives, and companies have to determine with all the information available to them that isn't always all the information that is available to everyone, right?

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Like, what the best option is. Yeah. And so the PIPE allowed us to raise seven hundred and fifty million dollars and buy Bitcoin. Yes. We have that on balance sheet.

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Now, there, it, there was a lot of things that people didn't understand about a PIPE, and that's fair, but that's why, you know, PIPE holders have to be accredited investors, right?

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And they have to understand what they're investing in. So I think it allowed us to start and to build, but, you know, then,

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you know, the, it-- I, I put the PIPE in a different category than what you're talking about with like the convert and the debt, 'cause those were two different things. Yeah. So then you had the convert, right?

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Which also was raised at the same time. So I think that's why, like, you're probably mixing them together, right? And so we had the convert raised at the same time, and then, yes, we switched to a Bitcoin-backed loan.

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For that pool of capital, I'd frame it less about like, you know, why did, like why did you choose one versus the other, and like which one is better versus the other, and it's more about like what are the tools that are available to us in the market environment that we have in the moment, and how do we optimize, right, for what we're trying to do there.

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So the convert also at the time shared, served, it really served an important purpose, right? Yeah. It allowed us to move quickly, get that full amount of Bitcoin that we said we were going to get, right?

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And then, you know, the company evolved and market condition changed, and it made finance... It, it made sense for us to refinance that exposure, right? Yeah. And so that's, that's what we did.

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I think from my perspective going forward, we're not philosophically tied to any single form of financing, right?

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I think we're, we're gonna evaluate, like all the different options available to us and then figure out what aligns with like the overall strategy and where we're at in the market. Yeah.

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I also think, you know, there, there's other things that, like yield generation on your Bitcoin, right? Which I know is like a, a sensitive topic to a lot of people, but, like that does exist too.

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So I think we're just gonna continue to use whatever combination of financing and strategies we think make the best, like risk-adjusted outcome for shareholders. Yeah. Um, and you know, I think w- when we...

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Uh, the question that we get the most is like why did you convert from a convert [laughs] to a Bitcoin- Yeah... backed loan? It's, it's a really fair question, right? 'Cause you, you introduce a senior secure loan,

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you're, you now are switching to collateralized. Economically though, it was the same thing for us, right? So- Yeah... like it was both, they were both backed by Bitcoin.

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So the way that we looked at it is like when you think about a convert, you really have to think about potential dilution, trading hedges around the convert, like uncertain convert, conversion behavior, and then stock supply overhangs.

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Yep. So when we thought about that at the time that we're at, like we were way too immature of a company for anyone to price that risk out. Yeah.

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So a Bitcoin-backed loan was asset-backed financing with defined collateral with very clear terms, right? That the market could look at and make, like that risk a little bit more legible.

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A- and so because like, you know, we, we were thinking about it, we're like, okay, this, this, there's an uncertainty around like how a convert structure works- Mm-hmm...

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whereas like a Bitcoin-backed loan is very clear in what it is. And so, you know, we, we think that that was the right choice. You know, we didn't really change the risk there.

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We kinda made it more, like legible for people to- Mm-hmm... to understand. From an economics per- perspective, both structures, both the convert and the Bitcoin-backed debt were supported by Bitcoin. Yeah.

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So the difference was how we think about the market might understand them and price them in the long term.

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So converts tend to get really viewed through like an equity lens where investors have to focus on, like dilution dynamics, right? Trading behavior. Yeah.

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Whereas an explicit Bitcoin-backed loan facility is much more fa- straightforward for people to underwrite and understand.

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You know a lot more about this than I do, so I'm just gonna toss some, like ignorant questions your way.

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But like from this Wall Street perspective, like it might be more simple, but is it also like a harder product to work around in the future because, like there's a very clear senior debt obligation going forward?

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So right now you guys are with Kraken, I believe for this- We are with Kraken. Yep. Yeah. We, we... I think that Krak- Kraken has been an incredible partner to us on the Bitcoin-backed facility. I think, you know,

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it goes to a moment in time, right? Yeah. So, like at the time that we are, we are still like as, like we have these... Now we just folded in these operating businesses literally yesterday, right? Mm-hmm.

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But we were a, a very early stage company that had a convert that wanted to switch it to a different sort of, of debt structure because of all of the things that I talked about that a convert does, and we s- we have Bitcoin- Yeah...

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and we can use that as collateral. Now we can also, like we can decide, hey, we're gonna... We, there's so many different things that you can decide to do with that, right? Like you could pay it off.

185
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It's very quick to do that. Like, there's different things that, that you could consider Bitcoin price might appreciate, you would have like less collateral out there.

186
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So I think the way that we look at it is like the Treasury is really just like the foundation of, of Nakamoto, and there is like a whole, like, like we have a CIO, he manages that treasury. Yeah.

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There's ways to generate more yield off of, off of that, and we've issued a press release off of some of the things that we're doing with Kraken there.

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But it's not like theIt's not the end of the world to have a Bitcoin-backed facility. Like, they have existed for a while. It's how you manage it. Definitely.

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And we have-- Like, we feel comfortable with the, the, the risk at that at this point. Okay.

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Does it- And that might, like, that might change in six months when we have operating business rolled in, and, you know- Yeah... we have a gen-- we're generating revenue, and we're like, "You know what?

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We wanna risk off a little bit here." But for right now, we think that this makes the most sense. Does the senior debt obligation there, like, limit the ability to raise capital in different ways on Wall Street?

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Like, from any of the analyst conversations, have, have they been like, "Hey, you guys have, like, this debt obligation. It's gonna be difficult to do another convert. It's gonna be difficult to do XYZ," or not so much?

193
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I think con-converts from... Like, I'm not a convert expert at all. Mm-hmm. But it seems like it's more related to, like, market cap size when the companies- Yeah...

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will talk to-- Like, real convert companies will talk to you. So I don't know if-- Like, I think our job right now is to build up this company and make it a really great operating business, and then- Yeah...

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we'll use, like, whatever tools we can that are, are, like, options to us. I think- Yeah... you know, different pools of cap-capital become really relevant at different stages of companies.

196
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And so right now, I think with, with folding in these operating businesses, we are in a, in a different position than we were three months ago. Yeah. Definitely.

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Yeah, I mean, I've heard from some folks, I'm not a convert expert either. It's why I run a podcast. But, uh, the volume on a daily basis is really important- Yeah... for being able to- Exactly. And, and you-...

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have a healthy convert... you wanna, like, because of the structure of how a convert works, you wanna have a little bit more- Yeah... sizing. Size is size.

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Yeah, we've, we've seen a few miners, like, really press on the converts. And MicroStrategy obviously like did this for quite a while. Yeah. Twenty-one, twenty-two, twenty-three.

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Like, they used the convert program quite aggressively. Uh, I haven't seen as many sh- of these debts, or whatever you wanna call them, using converts as often.

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They've more gone, like, the preferred equity route recently with their digital credit thesis. Mm-hmm. Um, I wanna ask a question about that in a second.

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But to the convert side, we've seen a few companies still press it. Bitdeer is one that's really pressed on the convert recently, and I think Wall Street has been... hasn't loved it.

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Most of the times we've seen the convert note announcements come out from Bitdeer. And I'm just using them as like, 'cause they're a similar classification as, like, a Bitcoin company on Wall Street.

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We've seen the share price just, like, kinda nuke after they've, they've issued those.

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Uh, to the preferred equity route, is that something that you guys would ever look at doing now that Naka's kind of completely whole and has everything underneath it?

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Would you guys look at issuing some sort of preferred equity to fund growth or, you know, even bring back some, like, wind, um, behind Naka's, like, main share price? Yeah.

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I, I, mean, I think we're open to looking at all of the different options available to us, right? So, uh, like, we'll share with the market when we can on the different options that we have been exploring. But there's...

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Yeah, I, I mean, I think we're, like, day one- Mm-hmm...

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of having these operating businesses, and so from my perspective of, like, we have to roll in all these things, all, like, everything has to kinda merge together while we're also thinking about these capital market strategies.

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And so we-- like, the full team is thinking about all of these things. Yeah. It does get kinda interesting when you're looking at some of the peers that you guys have.

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So if MicroStrategy obviously has, like, its stretch, I think it's, like, ten percent, and then- Mm-hmm... uh, Strive has Sata, which gives, like, eleven to twelve percent.

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And it seems like the yield for those are just generally based on dilution, and then they pay out the dilution benefits as a yield to all the preferreds.

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For you guys, though, since you have, you know, multiple businesses with operating capital, it's more of like a dividend structure from actual, you know, value creation for, for shareholders.

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So that could be interesting. Would you guys ever consider doing some sort of dividend with Naka directly or some-something similar in the future? You can decline to comment, obviously.

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[laughs] But my brain's kinda like going a few places now. I'm thinking about- No, no, it's okay. It's good. The-- I, I think, like I said, like, the only thing that I can really say here is- Yeah...

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that we'll look at all the different things, right? And then when we do them, we'll announce them to the market. And so- Yeah... I think that there's a big toolkit of options for you as a public company.

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And so we have, and we will continue to look at what we think makes the most sense- Yeah... at any given time for, like, the, the market conditions, the size, the type of company that we are.

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So a few more questions for you. David Bailey, the CEO of Naka, uh, and then also the, would you say former chairman, BTC Inc, or is it, is it kind of like folded into the point- Yeah... it doesn't exist? Yep. Former.

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Yep, that's right. [chuckles] Okay. Uh, so he went on Bloomberg- And founder. He found- Founder... he co-founded Bitcoin Inc. He's got a few hats. A few hats. Yeah, he has. But he's on the big wig, uh, at, at Naka.

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He went on Bloomberg and said that, uh, he had to pay out a... Well, actually, this was on Twitter Spaces, so I have a separate Bloomberg question I'll ask in a second.

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But he went on Twitter Spaces and said he personally paid out eleven million dollars to BTC Inc. shareholders to get the Naka deal across the line. Uh, I'd love to hear more about this.

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For context, for listeners, BTC Inc. shareholders, there's obviously more shareholders than just David Bailey in there.

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The company's been operating for quite a while, and so I don't know the history of private raises for BTC Inc., but I'm assuming that there's a grouping of people in there.

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He was saying that on this, on the Spaces and a few other places, that truly Naka shareholders won out the day in this situation over BTC Inc. shareholders, and that's why he had to pay out the eleven million.

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Obviously, the strike price of the deal was a buck twelve for Naka when this was first agreed upon, and then Naka went down to around twenty-eight cents, I think, is where, like, it ended up being paid.

226
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And so you guys paid, like, a dollar on value for revenue at the end of the day for the company, which is great for Naka.

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Like-It's a slam dunk for Naka shareholders, and I don't-- I honestly don't know how anyone is getting that twisted on the timeline. For BTC Inc, that is tough for, for those shareholders.

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Um, I'd love to hear more about, like, David's fiduciary duty to beat Naka, his fiduciary duty to Bitcoin Inc. shareholders, and how that was sort of reconciled behind the scenes to as much as you can speak about it.

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Obviously, the deal went through, so, like, people are happy if, if the deal went through, like, the deal happened.

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But I'd love to hear more about, like, how you guys consider, like, his two roles there and how he's representing both sides of the books.

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I try not to spend too much time on Twitter 'cause there's a lot of noise around transactions like this, and it's not grounded in actual facts of public disclosures, and it's more about getting engagement versus reading about something and doing your own diligence, which is if you're buying stock is what you should be doing.

232
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But what I can t-speak to is the process. So what really mattered, like you said, was it was really from a fiduciary standpoint.

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So David was the largest shareholder of Bitcoin Inc., and because of the potential conflicts that it created, he was really removed from the decision-making process at Nakamoto. So- Mm-hmm...

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the Nakamoto board established their own special committee comprised entirely of independent directors to evaluate the decision in the transaction.

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That committee had its own independent legal counsel and financial advisors separate from management.

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And then Nakamoto management had our own independent legal and financial advisors, and the original negotiated terms of the transaction, which were fully disclosed in, in the filings last year,

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were also reviewed by an additional financial advisor. Mm-hmm.

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So in total, we had multiple independent advisors evaluating the businesses and the transaction from different perspectives and looking at, is this fair to the shareholders on all sides? Yeah.

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The, uh, I think the key point here is that this was not driven by a single individual. It was, like, structured. It was an independent process that was- Yeah...

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designed s-specifically because of all of the related party transaction here to address the fiduciary duties and the conflicts, and that had legal and financial oversight at every single stage of the process, both- Mm-hmm...

241
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for Nakamoto and for Bitcoin Inc. shareholders. So any action that was taken from shareholders at Bitcoin Inc. were separate from and, and definitely not dictated

242
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f-related to the independent review and approval process of governing the transaction, right? Yeah. So I think that's, like, a really important thing to, to understand is, like, this...

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And so when we go to, like, hey, there's a lot that goes into an M&A transaction like we were talking about earlier, right? There's a lot of people, like, uh, pulling together, and all hands for this was a lot, right?

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[laughs] Like, so there's, like, a lot of things that- Yeah...

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have to happen to make sure that you're looking at everything from everyone's perspective and saying, "Is this fair to every shareholder that's part of this?" And it-- that can create tension, right? And that's natural.

246
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But from a fiduciary standpoint, I think we got that one covered.

247
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So reading between the lines, perhaps that eleven million dollar payment David was speaking about came from his position as the majority shareholder and less so from, like, some sort of...

248
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The way it sounded was, like, some sort of personal obligation to kinda make some of those minority shareholders feel whole or good about this transaction. Um, do you have- Yeah. It's hard-...

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any, like, details about that? It's hard for me to, like, comment on that other than- Yeah... what you put out there 'cause I didn't listen to the spaces, so I don't wanna...

250
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I don't really know exactly the context of, of what he- Sure... had said. Yeah.

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I think just for listeners to kinda, like, close the loop on that, it seemed like it came from more, like, a negotiation standpoint of, like, your advisors were like, "Hey, this is kinda what needs to happen to get this deal across the line."

252
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Um, and he was a majority shareholder in that situation. But, uh, maybe David can comment that in the future.

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We'll go to another comment of his which a little less spicy but certainly more interesting for a long-term perspective.

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He was on Bloomberg last Wednesday and said that Naka does plan on buying more Bitcoin in the future, but going forward probably with the business proceeds directly.

255
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So do you guys plan on not using any converts or, or Wall Street financing to purchase Bitcoin going forward? It's mostly just gonna be like, uh, something baked out of, like, the profits of the company?

256
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I think having operating businesses allows you to think about how you would use your capital differently than just having a treasury, right? So that's I think where he was going with that comment. But- Right...

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kind of the capital allocation isn't very ideolog-ideological for us, right? It's analytical. Yeah. So if buying Bitcoin is more accretive, we'll do that. If our stock is a better opportunity, we'll buy back shares.

258
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And so that decision- Yeah... is always really driven by this per share value creation, and that's, like, how we're looking at it.

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So like we talked about before, like, we look at, like, what are all the tools that are available to us, and we're gonna consistently ask the same question, which is, what's the most accretive use of capital for us and for shareholders?

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And so we run that consistently. It's not like something that you run at a moment in time, and you say, like, "This is what we're going to do."

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It's, you know, it will change based on a lot of different factors, and sometimes that may point towards, hey, we should increase our Bitcoin holdings,

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or sometimes it will say, like, "Hey, we should, like, have a share repurchase program going." Um, so we just- Yeah...

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look at what do we think would be the most accretive option from an overall financial perspective and financial health of the company. So would that be like an MNAV? Would that be like a Bitcoin per share?

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We've got- No, I don't-... a lot of metrics- I don't-... created the last years. I like--We have a dashboard that has things on there. Uh-huh. Like NAV. I have my own take on this that is not Nakamoto's take.

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I think that Bitcoin per share and NAV don't make sense for- Yeah... an operating business within Bitcoin. I look at it as a per share value creation. So like, this is not a new concept.

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This is a concept that has been around in how you value companies forever. Yeah. So like, that's how I think that we should be thinking about providing value back. Okay. Yeah, earnings per share, keep it simple.

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[laughs] Everyone can understand that. A- and like we... I, I just think, like, there's been so many... And this happened with mining too, remember? Yeah.

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It was like the cost to mine a coin, and everyone was calculating it differently. It was like some people had a machine- Yeah...

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in there, some people had just electricity, some people had their ASIC costs, some people said ASIC is a sunk cost 'cause they have to replace them. And so it was this, like, weird metric that made no sense.

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It was impossible for the Street to value one by one.

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And then we also saw, like, in mining, there was 21, at some point, different metrics that Brandon had pulled of, like, what mining companies were saying of how to value them. And obviously, like, it's...

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That- [laughs]... that part of the industry is n- I, I mean, a lot of it is AI now, so there's all different- Yeah... types of new metrics.

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But when it was a little bit more civilized, it became easier for analysts to look at one company versus the next and say, "What's real, what's not, and how do I actually think this company's going to perform over time?"

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With the idea of treasury companies that may become operating companies, I don't think we're gonna be the f- the last. I think we might've been the first, right?

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But I think most treasury companies on the Nasdaq have to have a different plan, and we're already seeing- I hear... some kind of allude to that, right?

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Analysts are gonna have to figure out, how do we decide if this company is, is worth it or not? And so it'll be very similar.

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Like, I see a ton of similarities between what happened when there was a bunch of mining companies that went public versus what happened with a bunch of companies that have these treasuries that may turn into operating businesses 'cause they need to.

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They, they need something, right, to go public. All right, last question for you. Just around going to June, you guys have a delisting notice as of November or so.

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Um, you have six months to bring your share price above $1. That's how just the Nasdaq operates. For historic context, there's been a lot of Bitcoin companies that have been in this situation before.

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From my purview of having covered a lot of these companies, it's, like, not abnormal. Um, and most companies are able to get back past that threshold.

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How are you guys thinking about it in terms of getting there from a business perspective? What are some, like, concrete action steps? Obviously, the execution of transaction w- this week was huge.

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Having a really good conference in Vegas is a big part of that.

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But can you speak to any sort of other things that you guys are expecting to, like, push on from a strategy standpoint to get you guys back to that, um, solid placement on the Nasdaq?

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Yeah, so I think, you know, one underlying theme here is that public companies do have a number of, like, tools available to them to address the listing requirements.

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But in my experience as either an operator or a board member or an advisor to companies, what you have to think about is sustainable stock price performance ultimately comes down to the fundamentals of the business.

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And so markets wanna see a real operating business with clear strategy, with recurring revenues, and with the ability to perform across market cycles. And so yeah, raising capital obviously was a, uh, was...

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to build a Bitcoin position was really important, and the team executed on that successfully. But long term, like we've been talking about, like, just simply holding Bitcoin i- isn't itself a complete operating model.

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So- Yeah... you know, these investors want a company that combines strong assets with a durable business that generates cash flow and creates growth opportunities, and most importantly, has execution over time.

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And so the focus for us is, is not really on this, like, short-term mechanism to move the stock. It's on continuing to build operating businesses that, you know, work together. Like, we talked about that flywheel, right?

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That like, how- Mm-hmm... how do we make all these things work together?

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And then delivering those fundamentals to the market that then, then they can underwrite, and they could see, like, okay, w- like, this makes sense, right? Or like, this doesn't make sense, whatever they decide. Mm-hmm.

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So I think when companies show consistent execution in a very clean and clear path that has been outlined to value creation, capital markets tend to follow. And so that's why BTC Inc. and UTXO, bringing them in is our...

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is a huge first step, right? Like- Mm-hmm... we put out investor materials, and we talk about how we're building this company around the three main verticals.

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And, you know, within each of those verticals, like I alluded to earlier, where, uh, we tend to continue to expand them, and we'll expand the operating businesses over time.

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And so, you know, institutional capital, which is the, uh, I think a primary market that we're focused on, I don't think they necessarily judge companies on a single quarter.

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I think they look for a year-over-year execution, a very clear plan, and then management ex- like, management following through with that plan.

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And so for us, that, like, that focus on building that operating company is where, like, I spend my time, because I think that that's what investors can underwrite, and I think that we're building something really cool here.

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No, I, I, I agree. I think in terms of performance and the history of Bitcoin mining companies or others that have struggled with the listing notice, there's obviously a bunch of tools you guys could do to- Yeah...

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in the short term bring it back. And like, Naka- Nakamoto is new, but, like, Bitcoin and UTXO are not. Yeah. So Bitcoin Inc. has spent more than a decade being, like, really the front door to Bitcoin. Yeah. They've...

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Through the Bitcoin magazine, you have global cons- conferences, you have this institutional education, right? It's-It's where I think Wall Street has really come to learn a- more about Bitcoin.

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And, you know, that, that business generates roughly 65 million in, in revenue- Mm... last year, which really strong margins. It's- Yeah... relatively asset light, not to use a mining term, but it is.

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And it's built really around brand and distribution and community. Yeah. And then UTXO represents this capital allocation side, which has been a Bitcoin-focused asset management platform f- since 2019.

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And, you know, I, I think the outperformance of the funds related to Bitcoin is, like, really an incredible metric. Mm-hmm. And it's, it's not, you know, not something that... That's, that's real alpha.

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It's not just passive exposure. And now Nakamoto investors get access to that.

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A- and then you have Bitcoin for corporations, which is, you know, in, in the advisory thing, which is the, the baby of the company right now, but I think there's an enormous amount of growth there.

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Um, and it- they've already started. Like, the, what George has done with Bitcoin for corporations has been incredible.

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And so I think that there's a lot of opportunity to really be, like, the, the group that people go to to learn about Bitcoin and also help grow their businesses.

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And so I'm super bullish on all three of those different verticals. I think we can close out there. A- any last thoughts from you?

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Where can people go and learn more about Naka, uh, or any of the other dealings with the transaction? Yeah. So if you wanna learn more, I encourage you to look at nakamoto.com.

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We have a pretty jazzy new website that reflects all of the- Oh, nice... updated information and that we, we closed on yesterday. So yeah. I, I think that's- Well, it looks great... the best place to go. Thank you. Yeah.

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All the news for investors will come out on, on the investor page on nakamoto.com. A- all the real news, I should say.

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Only t- [laughs] You're not gonna have a, a live feed for your, uh, tweet haters that every company has? [laughs] Uh, only- I don't think it's worth the time, to be honest. [laughs] We got enough to do.

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[laughs] Some of the tweets have been pretty unhinged. The only critique I have about the website, there's no click-over to the merch. I want a bullfrog hat. Ah, there. So. Good. We- What- We'll get you one. Okay.

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Yeah, just to, to address the Twitter hate, I am fine if people have constructive criticism that are based in facts and reality.

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When Twitter decides to make it about engagement bait versus facts and reality, that's when I think it becomes a little on the reader to do their own homework. That's why Blockspace exists.

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That's why, uh, Naka exists as well with all the media companies it has under its, under its wing. Yeah. But thanks for joining us, Amanda. I really appreciate your time this morning. Thank you, Will.

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It's great to see you. [upbeat music] Hey, this is Charlie and Colin from Blockspace Media, and you're listening to the Blockspace Podcast, a show about emerging tech in Bitcoin, AI, energy, and markets.

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We publish two interviews weekly with CEOs, investors, analysts, and anyone else of consequence within these spaces. Plus, we have a weekly news roundup for all the important stories you might have missed from that week.

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This show is perfect for retail and institutional investors, analysts, and really anyone who wants to keep their finger on the pulse of the stories that are moving Bitcoin, energy, and data markets.

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And if you have any feedback or comments to give us or shows that you would like to see and topics you would like us to cover, hit us up at hello@blockspace.media. [upbeat music]