Fortitude Reports $20.9M Revenue as Zcash Rally Boosts Mining Backdrop
Fortitude Mining has reported $20.9 million in second-quarter revenue as a rally in Zcash improves the economics and investor appeal of mining the privacy-focused cryptocurrency.
The DCG subsidiary mined about 33,646 ZEC during the three months through June at an average operating hash rate of 4.0 gigasolutions per second (GSol/s), according to an earnings release on Thursday. Fortitude said recent site and equipment expansions increased its owned-and-operated power portfolio to more than 60 megawatts across seven locations.
The company nevertheless recorded a $9.5 million net loss, largely reflecting a $10.3 million impairment of mining equipment. Its adjusted EBITDA measure also excluded $5.6 million of depreciation and amortization and $3.6 million of transaction-related expenses, among other items. Adjusted EBITDA was equivalent to about 41% of revenue.
The results offer the latest look at Fortitude’s financial performance since it agreed in June to combine with Nasdaq-listed HeartSciences Inc., a small medical-technology company. The transaction is intended to give Fortitude a public listing, with the combined company expected to trade under the ticker TUDE.
Fortitude’s update comes as ZEC stages another sharp advance. The token traded around $553 on Thursday, up about 9.8% over the preceding 24 hours and 12% over seven days. Trading volume more than tripled from a day earlier to roughly $537 million, while its market value reached about $9.3 billion, according to CoinGecko.
Competition for Zcash mining capacity has intensified. Cypherpunk Technologies said on Tuesday that it acquired a US-based fleet with 4.2 GSol/s of live hash rate in a $33.33 million equity transaction with Winklevoss Capital. Cypherpunk said the fleet represents about 18% of the network’s total computing power.
Cypherpunk’s announcement put its current live hash rate slightly above Fortitude’s second-quarter average, although the figures cover different measurement periods.
Cypherpunk has also been building a ZEC treasury. It held 323,394 ZEC as of August 11, acquired at an average price of $341.83, or about 1.92% of the cryptocurrency’s circulating supply, according to its second-quarter update. At Thursday’s market price, that position would be worth roughly $179 million, though its value can change sharply with the token.
Fortitude, meanwhile, has provided HeartSciences with additional funding ahead of their proposed combination. It bought 411,522 HeartSciences shares for about $1 million in an August 12 private placement, paying $2.43 a share. That was a 22% premium to HeartSciences’ closing price that day and gave Fortitude about 9.4% of the company’s outstanding stock.
