David Conley: There are two different things to think about. Energy companies have two different types of budgets. They have OPEX budgets and CAPEX budgets. They have this other mechanism that they use called AFE. AFE is essentially investor Money in a well. These operators are raising money and putting that money into the upfront cost to build a well and amortize that over time. They can depreciate all of their losses immediately. It’s a special tax treatment that they have.

We get in and we are built into the foundation of the site. We get in at the AFE money level where they’ll cut us a check upfront for our services as opposed to a monthly or annual billing cycle. Because of that, there’s an additional budget that we can get into. As we grow, how do we unlock the things that have already been running? There’s no AFE money, it’s all on LOE (lease operating expenses).

How can we do what we do with less expensive equipment, and more scalable hardware? That’s an exciting piece that we can get into as we explore all these sensing technologies to put an all-in-one sensor.

Sramana Mitra: You’re bootstrapping so far?

David Conley: Right.

Sramana Mitra: You seem to not need to raise money.

David Conley: We do have liability with our contracts. There’s hardware involved. We do have some hardware that sits on our books. Our contract size is big. We’re at 91 margin on software and we’ll sit up 40 margin in cameras. Looking at our numbers, I’ve seen a couple of different scenarios play out with our blended margin. If we were to raise money, it would be to offset liabilities on our books and take acceleration capital to finish building out our milestones. Then we’d IPO or get acquired. We have a long way to go.

Sramana Mitra: Very interesting. What are the open problems? You are deep in the throes of this market.

David Conley: One unique thing that we’re doing is a Web 3 component. We’re building out a premium for gas. Because it is now so important to meet regulations for “greenness”, they better be able to prove it. The CEO or Chairman of Deutsche Bank got arrested for some of his portfolio comments and misleading shareholders. That is a huge problem.

What we’re doing to solve that is taking our data and minting it into an NFT. That NFT will serve as an energy certificate. The macro trend that I’m seeing is AI plus Web 3. Providence is going to be a big deal – where things come from. Where things come from is important.

My wife will go to the grocery store and she’ll buy eggs. There are a couple of different types – cage-free, regular, and pasture-raised. She does the research. The only acceptable type is pasture-raised. All the rest are marketing buzzwords. A solution that would track how eggs were laid with the providence data.

The name of our providence is Blockchain Prove Zero. If you have a Prove Zero stamped facility, you’re truly getting net zero energy. I see that as a macro. Food is a huge opportunity. Solving those types of trust issues. Consumers are driving this. People want to know where the things that they’re getting come from. I see a huge demand for providence technology. The idea of taking Web 3 and data produced by computer vision or AI/ML is powerful.

Sramana Mitra: Thank you for your time.