Bitcoin Cash Per Share (BPS) is a key performance indicator (“KPI”) that represents the ratio between the Company’s Bitcoin Cash (Hereinafter referred to as: BCH) holdings and its total basic shares outstanding.

“Basic Shares Outstanding” reflects the actual class A common stock and class B common stock outstanding as of the dates presented. For purposes of this calculation, outstanding shares of such stock are deemed to include shares, if any, that were sold under at-the-market equity offering programs.

BCH Yield is a KPI that represents the percentage change in BPS from the beginning of a period to the end of such period.

BCH #Gain is a KPI that represents the number of BCH held by the Company at the beginning of a period multiplied by the BCH Yield for such period.

BCH $Gain is a KPI that represents the dollar value of the BCH Gain calculated by multiplying the BCH Gain by the market price of BCH. For determining BCH $Gain QTD and YTD, unless otherwise specified, the Company uses the current market price of BCH. For determining BCH $Gain for a past fiscal year or other past period, the Company uses the market price of BCH as of midnight UTC as reported on the Alpha Vantage on the last day of the applicable period. The Company uses these market prices of BCH for this calculation solely for the purpose of facilitating this illustrative calculation.

The Company uses BPS, BCH Yield, BCH #Gain, and BCH $Gain as KPIs to help assess the performance of its strategy of acquiring BCH in a manner the Company believes is accretive to shareholders. The Company believes these KPIs can supplement investors’ understanding of how the Company chooses to fund BCH purchases and the value created in a period by:

in the case of BPS, measuring the ratio of the Company’s BCH holdings to all basic shares outstanding, which provides investors a baseline with which to assess the Company’s achievement of its strategy of acquiring BCH in an accretive manner over a given period;
in the case of BCH Yield, measuring the percentage change in BPS from the beginning of such period to the end of such period, which helps investors assess how the Company’s achievement of its strategy of acquiring BCH in an accretive manner varies across periods;
in the case of BCH #Gain, hypothetically expressing the percentage change reflected in the BCH Yield metric as if it reflected an increase in the amount of BCH held at the end of the applicable period as compared to the beginning of such period, which provides investors with visibility into the absolute change in the Company’s BCH holdings resulting from its BCH Yield; and
in the case of BCH $Gain, further expressing that change as an illustrative dollar value by multiplying that BCH-denominated change by the market price of BCH at the end of the applicable period as described above.

BPS, BCH Yield, BCH #Gain, and BCH $Gain are not, and should not be understood as, financial performance, valuation or liquidity measures. Specifically:

BPS does not represent (i) the ability of the Company to satisfy the Company’s financial obligations, or (ii) the Company’s book value per share. Ownership of a share of common stock of the Company does not represent an ownership interest in the BCH held by the Company.
BCH Yield is not equivalent to “yield” in the traditional financial context. It is not a measure of the return on investment the Company’s shareholders may have achieved historically or can achieve in the future by purchasing stock of the Company, or a measure of income generated by the Company’s operations or its BCH holdings, return on investment on its BCH holdings, or any other similar financial measure of the performance of its business or assets.
BCH #Gain and BCH $Gain are not equivalent to “gain” in the traditional financial context. They also are not measures of the return on investment the Company’s shareholders may have achieved historically or can achieve in the future by purchasing stock of the Company, or measures of income generated by the Company’s operations or its BCH holdings, return on investment on its BCH holdings, or any other similar financial measure of the performance of its business or assets. It should also be understood that BCH $Gain does not represent a fair value gain of the Company’s BCH holdings, and BCH $Gain may be positive during periods when the Company has incurred fair value losses on its BCH holdings.

The trading price of the Company’s class A common stock is informed by numerous factors in addition to the Company’s BCH holdings and its actual or potential shares of class A common stock outstanding, and as a result, the trading price of the Company’s securities can deviate significantly from the market value of the Company’s BCH, and none of BPS, BCH Yield, BCH #Gain or BCH $Gain are indicative or predictive of the trading price of the Company’s securities.

Investors should rely on the financial statements and other disclosures contained in the Company’s SEC filings. In particular, the Company has adopted Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which requires that the Company measure its BCH at fair value in its statement of financial position as of the end of a reported period, and recognize gains losses from changes in the fair value in net income for the reported period. As a result, we may incur unrealized gain or loss on digital assets based on changes in the market price of BCH during a period, which would not be reflected in BPS, BCH Yield, BCH #Gain or BCH $Gain. For example, if we increase our BCH holdings relative to our basic shares outstanding during a reported period, we would achieve increased BPS and positive BCH Yield, BCH #Gain and BCH $Gain even if we report significant unrealized loss on digital assets for the period. Similarly, if we increase our basic shares outstanding at a faster rate than our BCH holdings, then we would experience decreased BPS and negative BCH Yield, BCH #Gain, and BCH $Gain, even if we report significant unrealized gain on digital assets for the period.

As noted above, these KPIs are narrow in their purpose and are used by management to assist it in assessing whether the Company is raising and deploying capital in a manner accretive to shareholders solely as it pertains to its BCH holdings.

The Company determines its KPI targets based on its history and future goals. The Company’s ability to maintain any given level of BPS, or achieve positive BCH Yield, BCH #Gain, or BCH $Gain may depend on a variety of factors, including factors outside of its control, such as the price of BCH, and the availability of potential debt and equity financing on favorable terms. Past performance is not indicative of future results.

These KPIs are merely supplements, not substitutes, to the financial statements and other disclosures contained in the Company’s SEC filings. They should be used only by sophisticated investors who understand their limited purpose and many limitations.