Consensus Mining & Seigniorage Corporation

Greetings and good afternoon, everybody. Today is May 7, 2026, and we thank you for joining the first quarter 2026 shareholder call for CMSG, the Consensus Mining and Seniors Corporation, which is quoted on the OTCQX Premier Marketplace under the ticker CMSG. Our first quarter financial results are posted on both the OTC markets and the ConsensusMining.com websites. With us today, we have Alan Williams, Mark Herndon, Kevin McRae, Peter Doyle, and Steven Bregman. Before I turn it over to our speakers today, we remind you that the following discussion, including responses to your questions, apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that any of the transactions referenced today have been or will prove to be profitable or that future investment decisions will be profitable or will equal or exceed the past performance of this investment. This call is recorded today and a replay will be available. To request a replay, please email ir at consensusmining.com. Alan, I will pass on the mic over to you.

Thank you very much, Agustin, and thank you, everyone, for joining us at the first quarter 2026 Consensus Mining and Senior Corporation Investor Update. During this call, first, I'm going to share some initial comments. following which I will hand it over to Mark Herndon, our CFO, who will start a review of the 2026 first quarter annual financial results. I will then provide some context around what's going on in the market, and following that, Kevin McRae, our Chief Technology Officer, will provide an operations update. And then we will finish by responding to some questions. So let me start by saying, you know, by now many of you would have heard the sad news that Murray Stahl, Consensus Mining's Chief Strategy Officer and CEO of Horizon Kinetics, passed away suddenly a few weeks ago. Murray and his co-founders created Horizon Kinetics over 30 years ago, and Murray was the visionary behind Consensus Mining. Initially starting with two private cryptocurrency mining partnerships in 2017 and 2018, Those partnerships merged together in 2021 in conjunction with a capital raise, creating Consensus Mining and Senior Corporation. Murray's strategy of a commitment to a slow and deliberate deployment of capital allowed the mining business to successfully navigate periods of uncertainty and to continue as a company with a strong balance sheet prepared for what the future holds. Indeed, today Consensus sits with approximately $30 million worth of cryptocurrency and $60 million worth of cash. We will all miss Murray, who was incredibly generous with both of his time and his intellect. With his passing, ConsenSys is forming a strategy committee to replace the role of chief strategy officer. That committee will be comprised of myself and Kevin McRae, who you all know, along with two founding partners of Horizon Kinetics, Peter Doyle and Stephen Bregman, who both began their careers with Mary at Bankers Trust and, as I said, co-founded Horizon Kinetics. Peter and Steve are with us here today on the call. I'll hand them over just to say a few words of introduction to those of you who maybe have not yet had the pleasure of meeting them. Peter and Steve.

Good afternoon, everyone. Thank you, Alan. And as Alan pointed out, A bit of a difficult time for us here at Horizon Kinetics, losing Murray. Steven and I have known Murray for 40 plus years. He was a friend, a mentor, just a great person, and a big loss for us and for a lot of other people as well. So, you know, we've been looking at this company now for about a month. We've had four fairly lengthy meetings with it. We've met twice with the board of directors. It was Murray's brainchild. And I think one of the things that he did incredibly well on a relative basis was he deployed the assets very slowly over time and compared to some of the other miners that are out there, bigger ones that basically crashed because they went out and aggressively purchased machines that ultimately became very unprofitable. But in addition to that, What I think we really, what he's done is he's kept people in the game. So initially, I think money was raised for these funds and it was supposed to be fairly modest. And he's been building up the balance of cryptocurrencies over time on behalf of the individual investors. And I think that strategy still has a role for people. And Steve and I will do our best to maintain that. Yeah.

So one of the things anybody who, spoke to Murray at some length would learn and what has been a through line through almost everything we've done and how we structured our company and the ideas we chose to pursue and not is to make strategic decisions first and to think strategically before you act tactically. And particularly in the a world of cryptocurrency mining and ups and downs in the marketplace in general. It's so easy to be reactive and to act tactically or reflexively. And it's almost impossible to not do so unless you have a sense of strategic direction and reasons for that. And so we'll continue to think that way and continue to help operate CMSG in that manner. And it's worked for us in the past. It often requires patience and fortitude, in a sense, so long as you understand why you're doing something and where you're going. So far, from our point of view, it's been showing its worth, and we'll continue going and evaluating as we go, as we always do. Peter, I just wanted to be here and let you know we're here and we'll talk to you again, I'm sure.

Thank you very much, Peter. Thank you, Peter. Thank you, Stephen. We're very much looking forward to working with you as we forge a path forward for consensus mining. So before we move into our regular agenda we wanted to share some important announcements regarding consensus mining the first one is in light of the persistent and current discount at which cmsg shares trade the company is announcing that the the board of directors have approved a stock repurchase program under which the company may repurchase up to five million dollars of our outstanding common stock purchase under the program may be made through a combination of open market purchase in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, block trades, privately negotiated transactions, or other transactions in the discretion of the company. The company may also from time to time enter into Rule 10b-51 plans to facilitate repurchases under this authorization. The volume, price, timing, and manner of any repurchases will be determined at the company's discretion subject to general market conditions and regulatory factors. The program does not obligate the company to repurchase any specific amount of common stock, has no time limit, may be modified, suspended, or discontinued at any time without notice at the discretion of the company. The company expects to fund the program from existing cash and cash equivalents. The program is designed to return value to the shareholders and reduce the company's share count over time. The buyback absolutely reflects management's opinion that the stock remains undervalued in the market and our conviction in the long-term opportunities. In addition, the board of directors further approved the authorization to explore the potential engagement of an advisory or investment banking firm to consider all strategic options for the company. The firm and its balance sheet is well positioned to consider any and all options that could create additional shareholder value. A press release sharing these two announcements will be made shortly after the call has concluded. With that said, at this point, I would like to hand over to Mark Herndon, our CFO, to discuss the quarter's results.

Okay. Thank you, Alan. The first quarter was a continuation of the company's consistent operations and accumulation of Bitcoin strategy However, Bitcoin spot price declines during the quarter resulted in unrealized losses that impacted our quarterly results. The company's quarterly revenues continued to be split up to be approximately 54% Bitcoin and 46% script mining. The Bitcoin portion decreased substantially in comparison to 2025 due to 45% lower volume of Bitcoin rewards, as well as a lower average value for those Bitcoin. The company's activity from script mining also experienced declines relative to the fourth quarter of 2025, also due to a 24% lower volume, as well as a lower average value of Dogecoin rewards, where the average value was approximately 11 cents per Dogecoin this quarter versus 24 cents in the prior quarter. Additionally, the company purchased 0.52 Bitcoin this quarter, resulting in the company's accumulated Bitcoin to total 350, which is worth approximately $23.9 million, based on a quarter end price of $68,222. And total digital assets totaled $24.7 million at March 31st. That includes other digital assets, but primarily Litecoin. Additionally, the company's liquidity remains strong with $60.8 million of cash on hand. Our hosting costs continued to mine, declined to under $0.6 million for the first quarter, which included some transitional costs that we expect will decline further in the second quarter. We'll get into those transitional costs in a minute related to some changes in the vendor hosting arrangements. The company's general and administrative costs have continued to be modest at $0.2 million for the quarter, which was consistent with the fourth quarter of 2025. The company's depreciation expense for our mining activities declined slightly to approximately $555,000 for the first quarter, which was relatively consistent with the prior year's first quarter as well as the more recent fourth quarter. However, we did determine that a non-cash impairment was required related to certain equipment. specifically certain script mining equipment due to the significant drop in the value of Dogecoin and its impact on our projected rewards from that equipment. This impairment totaled $1.1 million. I realize this impairment is disappointing to see. I will also note that a portion of it related to equipment that was already towards the end of its useful life that was expected to expire in late 2026 or 27. And even with respect to the relatively newer equipment, which for accounting purposes is looked at as a single pool or an asset group, that impact has been driven by the drop in Dogecoin spot prices over the last six months. So much of that equipment was producing higher value rewards early in its life, and it will continue to produce mining rewards through 2028, the ultimate value of which is subject to future spot prices of Dogecoin and Litecoin. Continuing on, the company's interest income for the first quarter declined slightly to $555,000. As a reminder, the company continues to use this interest income as a funding mechanism for its hosting and general administrative costs. In addition, the company sells its Dogecoin rewards, which totaled approximately $200,000 this quarter. So those two items in total, about $755,000, funded approximately 99% of the company's cash operating expenses for the quarter. The other cash requirements for any quarter tend to be our discretionary purchases of Bitcoin and our other purchases of additional equipment. This quarter, we did not purchase equipment due in part to the transition of hosting vendors, and we purchased only $40,000 of Bitcoin, which resulted in an additional 0.5 Bitcoin acquired. And as we've indicated in the past, this funding mechanism has been an efficient way to increase the overall Bitcoin holdings. As a result, each quarter, the largest financial impact to the company's financial status for the quarter continues to be the unrealized gains or losses or changes resulting from the fair value changes of Bitcoin itself. So for the first quarter, the spot price of Bitcoin dropped 23%, as I mentioned earlier, to $68,000 to 21%. That decline and other changes in the rest of our digital asset holdings resulted in unrealized losses of $7 million for the first quarter. However, I should also note for you that since the quarter's end, Bitcoin has increased in value to approximately $81,000 earlier today, or about 18.7%. And while a smaller impact, Litecoin is also up about 6% since quarter end. As a reminder, these fair value changes to the company's digital assets also typically result in a corresponding and offsetting changes to the company's deferred tax liability. Those are also non-cash items. So the overall result of these items has resulted in a book value per share of approximately $38.33 as of March 31st. which is down from the year ends, forty one dollars and twenty eight cents. But again, solely from the impact of the Bitcoin value change since year end net of tax, excuse me, since quarter end net of tax, we would expect that net value to be about a dollar and a half, dollar fifty five higher. You can round that off to about forty dollars per share. And to reiterate Alan's announcement, that 35% difference is a driving factor for putting in place a plan to allow for the repurchase of our shares. And I'll also reiterate that our overall liquidity position remains strong with a $60.8 million of cash as of the end of the quarter, which provides us sufficient capital to fund these repurchases. The timing and extent of the repurchases, of course, will vary based on market conditions, as Alan indicated. And that was it. I'll turn it back to you, Alan.

Thank you very much, Mark. I appreciate that.

You know, as Mark shared, amid an environment of depressed cryptocurrency prices, increased hosting provider costs, increased network difficulty, and needing to reduce mining rewards and profitability, our first quarter was somewhat challenging along with the market of the crypto that we hold on our balance sheet. And the first quarter was also somewhat transitional. In light of these increased costs from our hosting providers and the lower mining rewards, much of Q1 activity has been focused on realigning our existing mining equipment to lower cost hosting providers. And Kevin McRae, our Chief Technology Officer, will share more details on that shortly. But these changes are intended to position us well as we move further into 2026. And given the transition of all this equipment, along with the lower crypto prices, our Q1 revenues were subdued. But again, with the transitional activity being pleaded by the end of the first quarter, we anticipate a reversal of that revenue direction, subject, of course, to market conditions. In addition to this realignment of existing equipment, we've been monitoring the marketplace and looking for complementary mining options to pursue. As we have observed, increased profitability pressure on our primary Bitcoin and script mining rigs we have identified mining Zcash as an opportunity to complement our current mining opportunities. Current profitability of mining on the Zcash network allows for a significantly reduced payback period for the capital outlay to purchase the equipment when compared to purchasing Bitcoin or script mining equipment. Zcash has a similar monetary policy to Bitcoin, but has an added layer of privacy in its structure, which is of great interest to a number of market participants. As such, after the end of the quarter, we purchased a small quantity of AntMiner Z15 Pros. This mining equipment is used to mine the Zcash tokens. Our initial purchase, we have kept it intentionally small that we can assess the viability of future purchases of the equipment. And so we will continue to monitor it as the equipment comes online, which we expect to be later this month. It is not a shift away from our mining and holding Bitcoin strategy, but it's another avenue to indirectly buy Bitcoin or other cryptocurrency assets by operating in a different cryptocurrency network. From a market perspective, the prices of Bitcoin have been falling during the quarter, as Mark mentioned, down to around 68,000, and today we're at about 81,000. For mining, Bitcoin hash price itself, which, as you know, is a measure of USD revenues per petahash of mining processing power, ended the quarter at about 32 petahash per day. That fell from around $37 per petahash at the beginning of the quarter. However, with the rise in Bitcoin since the end of the quarter, the Bitcoin hash price has returned to around $38 per petahash today, and we hope to see that to continue to rise as the market evolves. While our operations primarily mine and hold Bitcoin, we continue to mine Litecoin and Dogecoin with our script mining capacity. We continue to convert a portion of the proceeds from Dogecoin earned from script mining into Bitcoin, and as Mark mentioned, use the balance of those proceeds to fund operations and to support additional equipment purchases.

Overall profitability of script mining has also fallen over the quarter, again a reflection of the subdued crypto prices during the quarter.

On the equipment side of things in the market, we were anticipating an influx of next generation equipment for both script and Bitcoin mining in the market. However, we've yet to see any significant amount of this equipment coming to the market, especially in the US where we operate. We'll have to wait and see if and when this equipment does actually come online and impact the network's half rate and difficulty. The prices for this newest generation of equipment is pretty flat uh the script and bitcoin slightly older mining equipment has also remained somewhat stable this has been surprising given the reduced profitability but also given the fact that the new generation equipment isn't coming online this may change in the future when it does show up and start operating in the network With all this in mind, we continue to focus on adding hash rate at a measured pace using the most efficient and profitable equipment on the market and to position the company well for future shifts in the cycle and different profitability levels. This means that we currently continue to focus on reviewing the script mining equipment pricing status and profitability, as well as looking forward to seeing the results of the purchase of our Zcash mining equipment. With that said, we'll now turn to Kevin, who will provide a few more details on our operational update.

Great. Good afternoon. Hope everyone's doing well. I'll give a quick overview of what's been going on with our mining operations over the last few months. At the end of the first quarter, we were running approximately 550 Bitcoin ASICs with a total hash rate of around 108 petahash. And in terms of Doge and Litecoin, at the end of the quarter, we were running around 335 machines with an overall hash rate of 4.8 terahash. We've reduced our overall hash rates during the quarter due to taking some older S19J Pros and L7s offline. From an operational perspective, we've made a few changes to our hosting operations over the last few months to make sure the fleet is well positioned. And as I'd mentioned on our last call, the power and related hosting costs at one of our hosting partners in North Carolina increased last fall. We made the decision to terminate that agreement at the end of the year and took the machines offline as of December 31st. We generally engage in shorter-term contracts, which gives us the ability to make changes as the markets adjust. We moved all of this equipment to a new location of an existing provider of ours in Kansas. We already have some machines up and running with them in Nebraska. We did two different things with the machines that we shipped to Kansas. The newer gen equipment, the L9s and the F21s, we're hosting at a rate which is 18% lower than what we were paying in North Carolina. And the older gen equipment, the L7s, we're running under a reward sharing model. This allows us to run the machines at a much lower rate, but we share some of the rewards with the provider themselves. We're comfortable with this approach, and we operated a similar hosting model with the Antminer S9s a few years ago when they were becoming obsolete. This allowed us to keep the older machines online for a much longer time period. In addition to this, we have some S-19XPs that we were hosting with them in Nebraska. That original contract was fulfilled during the quarter, and we took the opportunity to flip these machines to the rewards sharing model to extend their useful life. We also had some older generation gear running at our original hosting facility in North Carolina. This included some S19J Pros, some S19XPs, and L7s. We took these machines offline in early March, and we're currently in the process of finalizing a deal to sell these machines in the secondary market. But we still do have some S21s and L9s running at this location in North Carolina. In terms of new equipment, as Alan mentioned, we've been watching the Zcash market network closely and we find the current mining economics attractive. The Z15 pros that we ordered are scheduled to come in later this month and we're looking forward to getting them up and running. And as always, we'll continue to monitor the mining and machine markets and we'll look to continue to grow our hash rates across all three networks over time. And that's all I had for updates and I look forward to providing another update in a few months.

Great. Thank you very much, Kevin.

That's the part of the formal presentation. I'd like to hand it back over to Agustin. We have some pre-submitted questions, and listeners who are logged into the GoToWebinar are able to submit additional questions should they wish.

Yep. So thank you so much for submitting these questions ahead of the call. We took the liberty of combining a few similar ones, so to be a little bit more streamlined in the Q&A session here. So the first set of questions. How will the company create enterprise value greater than book value? The share price seems to indicate the company is worth its liquidation value. Related to this question, when are we going to see an increase in the price of the CMSG shares to get us back to break even? And is there any plan to use excess cash to either support the share price with buybacks or return to capital?

Thank you, Agustin. Yeah, I mean, as announced earlier on the call, given the persistent discount to book value that the company is currently trading at, the board did approve the share buyback program that we talked about earlier. You know, with a share buyback program, there's really two elements to it. The first element is the fact that we're essentially reverse diluting shareholders, giving them more value for the shares that they own. So that should increase the value each individual shareholder has relative to book value. But I can't predict this, but there's also a chance that that discount to book value could close within the market. We will have parameters around what we will buy, when we will buy them, sorry, relative to that discount. But it's a clear indication that a management team believes the company is undervalued in the market which is what the questions are leading towards and we're keen to take advantage of that value dislocation and return that value to its shareholders in in addition to the the buyback program you know we we continue to explore additional strategies one of which is our our dipping our toe into the foray into the world of zcash mining that will also create additional value where we can you know mine a currency cryptocurrency whose profitability profile is better than other cryptocurrencies, then we will certainly look to explore them. And if they appear to be valid and potentially lucrative, we will execute on those. And hopefully we would like to see those activities reflected in our share price.

Great, thank you. The next question is related to the first quarter results. And, you know, we noticed that there's a steep decline in mining revenue and negative mining margins. Can you comment on this relative to current plan and future plans to see if this operations continue to make sense?

Yeah, so this quarter, as I mentioned earlier, has been a tough one for consensus from a financial reporting perspective as well as for the industry as a whole. The depressed cryptocurrency prices for the quarter have been the primary driver of the financial statements. As Mark mentioned, our balance sheet consists of a significant amount of cryptocurrency assets, and when the price of those assets falls, we have to take a mark-to-market adjustment to the value of the balance sheet accordingly. So it's a single given point in time at a given price at the end of a quarter, is really not a great way to look at those financial statements. It's really how things progress over time. The other thing as well is revenue on the financial statements is also recorded at the price of that cryptocurrency asset on the day that the revenue is received or the coins are mined. And so during a quarter when the prices of cryptocurrencies are low or depressed, it lowers the revenue number as reported in dollar terms on the financial statements. doesn't necessarily lower the number of coins we're mining. Yes, we did mine less coins, but if we mined four coins at an average price of, say, $70,000 one quarter, and four coins at an average price of $90,000 a different quarter, that dollar revenue that's recorded on the financial statements is very different quarter over quarter. But at the end of the day, we'd mine the same number of cryptocurrency coins. And as cryptocurrency prices change, they go up and go down, that will impact that valuation. So it's an interesting dynamic to see how the revenue number could be depressed, but down the road, the mark to market on the value of that crypto that was mined could become more amplified as the price of cryptocurrencies go up. So, you know, Mark mentioned earlier, since the end of the quarter, prices have increased by something like 20%, you know, which offsets a lot of the negative mark to market in our Q1 financials. but also in the cryptocurrency that we're mining on a day-to-day basis as we mark them as received, they will be marked at a higher price for crypto, meaning that's going to reflect higher revenues in the next quarter. So I think taking one quarter is very difficult to do with a very depressed quarter because over time, things will shake out and we'll end up having greater markets on the crypto we hold if they were originally mined at a lower price and therefore lower revenue recorded number.

Thanks, Alan. The next question is related to our operations here. How does management view merge mining of Bitcoin? What would have been true for this to be economically feasible?

I can take this one. So so the ASIC machines for Bitcoin are specialized and are different from the ASICs used to merge to merge Mind Doge and Litecoin, which also are different than the ASICs for Zcash. And the machines can't be used interchangeably from a practical standpoint. Doge and Litecoin are the only cryptocurrencies that are merge mined today at any real scale. Bitcoin can technically merge mine some smaller, more obscure blockchains like Namecoin and RSK. But to do this, the mining pools, custodians and trading platforms need to support them as well, which ours don't do today. And none of the sort of institutional grade platforms do either. If you were to merge mine Bitcoin with some of these more obscure blockchains, 99 plus percent of the rewards are Bitcoin. So there would be really no impact from the merge mining. But we are in regular communications with both our Bitcoin and Litecoin mining pools. And if any of the other merge mineable chains become profitable to mine, they will add them They'll add them in the event there's demand and it's safe to do so. You know, not all of these blockchains and cryptocurrencies have the proven reputation and security that Bitcoin and Litecoin have. So, you know, we'll see how things evolve. But at the moment, you know, Doge and Litecoin are the only ones that, you know, proactively we can merge mine at the moment.

And this next one is probably for you as well, Kevin. Okay. How do we view Bitcoin? How do we view profit-switching pools as a potential use case for older mining equipment?

Yeah, we do keep an eye on this. There are some profit switching pools. The most common would be between Bitcoin and Bitcoin Cash as an example. But the markets typically do keep these in equilibrium. As an example, the current network hash rate of Bitcoin Cash is only around 5% of Bitcoin's hash rate. But from a profitability standpoint, they both generate the same amount of profitability in dollar terms at the moment. And it does fluctuate a little bit day to day, but they have been in sync for quite some time. So, you know, you can profit share back and forth, but they really do sort of sit in tandem and they have been for quite a while. But having said that, we do generally like the prospects of Bitcoin cash. We have mined it in the past. So it's always in consideration for more hash rate. but we're not really profit sharing at the moment or profit switching.

Got it. The next few questions are related to accounting and reporting. So Mark, perhaps you can take these. I think you touched on this before, but there's a little bit more questions around the impairment loss of 1.1 million. There's a comment that it appears to be a pretty significant loss for the quarter considering that it is excluding the PP&E write-down. Can you provide a little bit more color on this? And if there are certain infrastructure costs that are not currently being absorbed?

Sure. So, yeah, and as I mentioned in the prepared remarks, it was disappointing to see the impairment. It does result in a larger quarterly loss from operations. I'll emphasize that the impairment itself is a non-cash item. And you can think of it in a similar vein as depreciation, right? Depreciation takes the cost of equipment, spreads it out over its life. An impairment is essentially an adjustment to that depreciation life. It's putting what would have been future depreciation into the current period. And I'll also go on to say, I mean, it's important to understand how the reporting model works to really fully address your question. For these types of evaluations, what we do for our mining equipment is accumulate them into various asset groups. To use the accounting technical term, we evaluate them quarterly and compare their remaining net book value to expected future cash flows. During periods of depressed spot prices like we experienced in the first quarter, this expected future cash flows analysis will typically include an extension of the current prices as one possible scenario. It is also impacted by an expectation of our hosting costs, which in our case we do expect to decrease in the short term. However, once the impairment model is tripped, then the write-down is measured and is based on the fair value of the underlying equipment, which for us is typically measured by a resale value. So that's kind of a long-winded way of saying that this does not relate to the absorption costing or infrastructure. but that unfortunately impairments of this nature are a natural element for equipment in industries where the underlying results have significant price volatility. And in our case, the price declines of the last six months have just not been favorable. And this is one of the ways that it manifests itself in our financial statements.

Great.

The next question, I think it sounds like more of a clarification just to ensure that it is in line with how we're reporting things here, Mark. So if you wouldn't mind confirming. So a cash flow statement for a Bitcoin mining company is unique because it must account for the production of a digital asset and acts as both inventory and a cash equivalent, i.e. a mined coin in the digital mining process is booked when awarded as a net income loss. In other words, the Bitcoin is considered as non-cash. In the case of consensus mining and our strategy to hold Bitcoin that we mine, it's the net cash from operating activities which may look lower or even negative despite being profitable on an accrual basis. So that's the first observation that I think requires confirmation. And the second part is how should an investor properly view the mining operation with this backdrop? Can you please help outline the mining profitability for CMSG for the recent quarter?

Sure, I can do that. Well, there's a variety of terms that were used in the question. I'm not going to kind of go over each each term point by point. But I will say that there can be a lot of different ways to view the results of mining operations, especially in terms of cash. I'll let you be the judge of what is proper. But, you know, one of the ways that we think about it, what we've expressed in the past is what I'll go over now. And to reiterate your initial point, you're correct to note. that our mining revenue, excuse me, our mining rewards are non-cash, right? We receive Bitcoin and Doge coins, right? And those have a value and that value is recorded as revenue, right? We record revenue from the Bitcoin mining based on the quantity of the reward times its spot price at the time of mining. And that, you know, by definition does not directly result in cash, right? While our hosting costs and our equipment purchases are they are definitively in cash. And it's been a long term objective of the company to have the operations be self-funding or at least largely self-funding. And as I noted earlier in my remarks. The interest income and proceeds from the sales of Doge essentially fund 99% of our cash operating costs of the business in the first quarter. And that is the hosting and GNA expenses. Our other uses of cash include the purchases of Bitcoin and equipment purchases. So during periods where spot prices of Doge are higher, which we generally in turn sell, the available cash for additional purchases of Bitcoin or equipment are generally higher. So, for example, in calendar year 2025, it was larger. Our cash operating costs were about $3.4 million, but the cash generated from interest in Doge totaled $4.4 million. And that excess allowed for purchases of Bitcoin of about $0.4 million and equipment purchases of $1.7 million. So in that case, our investments in Bitcoin and equipment actually exceeded the cash provided by those two funding mechanisms. And again, overall, that methodology has allowed the company to over the long term to accumulate Bitcoin, which is now up to 350, without substantially impacting the overall liquidity of the company. And I will note and caveat that there are other miscellaneous nuances to cash, including income taxes. But this method that I just described has been the general approach of the company for since inception. That's what I got.

Thank you, Mark. Alan, I think you mentioned this in your remarks. There's an observation regarding the zero spend on PP&E purchases during the quarter. Can you provide a little bit more color on the current equipment market and when our team will consider buying more equipment?

Yes. Thanks, Agustin. You know, during the quarter, a couple of things were going on. The first thing was we were transitioning, as Kevin already provided some detail on, a lot of equipment around to essentially lower our cost of hosting and to provide some additional longevity to the lifespan of some of our older equipment with the new arrangements we have regarding reward sharing. In addition to that, the depressed profitability of mining, you know, with That along with the upcoming halving, it's expected to be sometime in early 2027, so maybe a year away, a year and a half away, something like that. But when you buy equipment, you buy equipment with that in mind. And so historically, we've always only sought to purchase the most efficient and current generation of mining equipment to ensure that we do survive those future cycles of profitability and halvings. As I mentioned earlier, we have been awaiting the delivery of the latest editions of the Ant miners, the S23 for Bitcoin mining, as well as the L11s for script mining. But the rigs themselves, to be honest, seem to be somewhat absent in the market. I'm seeing virtually zero S23 air-cooled machines available today. for resale within the US and just a handful of L11s that come up every now and then. Some are available in Asia, but it doesn't seem to be getting distributed. There are various rumors in the market that manufacturing this equipment may not even be happening or not happening at the same rate as was expected. And some people are skeptical that they may even come to market. make this a statement. You know, these are rumors that we're hearing in the market. So we really want to wait and see how this will play out. You know, if for some reason this current generation of equipment doesn't make it to market and we can't buy them at a price in the U.S. that we're comfortable with, you know, we would consider sticking with the current generation of equipment, the S21s and the L9s. But in addition to that, The move to testing mining Zcash with the Z15 pros is a parallel path that we're adding to what we're doing today to take advantage or not to take advantage of, but to essentially maybe run side by side while waiting for new Bitcoin or script miners to materialize. So we continue to evaluate alternatives, but we're watching the market to see what happens with the latest generation of the Bitmain platform.

miners that are mining Bitcoin and script miners.

Thanks, Alan.

Kevin, there's a technical question for you here. Do we have a perspective on BIP54 consensus cleanup?

Yeah, so for those that aren't familiar, BIP stands for Bitcoin Improvement Proposal, which are design proposals to make a change to the Bitcoin ecosystem. As everyone knows, it's a consensus-driven network, and any proposed changes, there's a whole process to go from concept to through implementation. It can be a long process to try to get consensus for any change that's needed. And at any given time, there are many BIPs under consideration, but a small percentage actually get adopted and implemented. I wouldn't say that we have an official view on BIP54 or an official view on all of the proposals that are out there at any given time. But this one is a proposal to clean up some long-known edge cases, some sort of edge case issues in Bitcoin that have been known for quite some time. It's still in the proposal testing phases, so it's early in the process. It hasn't made it into Bitcoin core software yet. But in general, I would say that over time, we would like to see any known issues like these and any unused functionality to be addressed. You know, the simplicity of Bitcoin is one of its most attractive features and why it's had so much technical success in terms of security and resiliency. So we'll continue to monitor them and see how it plays out. And when it gets to a point you know, where the mining pools and the miners are asked for, you know, voting on consensus. As I said, very few get that far. You know, I think we'll continue to see several bits related to this, as there's a lot of differing opinions at the moment on adding more complex functionality to the protocol versus keeping it focused on its core features. So hopefully that addresses the question. Yep.

And the next question is related to our thought process or criteria as we evaluate other fixed issuance monetary policy cryptocurrencies that are also proof of work, because currently that's our focus in Bitcoin and Litecoin. And I think we addressed it earlier that we started evaluating Zcash, but can we further elaborate on what factors are we looking at and how we are thinking through the process to include any additional coins as part of our mining operation?

Yeah, so as you said, we've already actually, you know, started to look at mining ZCash. So we're currently doing that evaluation. So when we look at cryptocurrencies that we want to mine, there are a number of factors that we look at. You know, we focus on cryptocurrencies that first off are proof of work. um ones that have a fixed monetary policy and have enough adoption to support continued existence um you know there are lots of cryptocurrencies out there small cap cryptocurrencies that may seem attractive but really don't have the um the the network stability behind them to suggest that they could be you know a long-term viable option um so One other thing we also look at is cryptocurrencies that have a potential valid use case. For example, Litecoin is essentially a lighter version of Bitcoin, which could allow for day-to-day transactions, like you go into a store and use Litecoin to buy your groceries or something. Those transaction capabilities, actually, there is speculation that there is a large payment transaction service provider that is already testing Litecoin for this purpose. Zcash, as I mentioned before, that has a privacy overlay to it, which is attractive to certain users. We do mine Dogecoin, which we do not believe is actually a long-term value given its monetary policy, but it does provide us with the ability to mine the Dogecoin and use those proceeds to cover some of our operating expenses and excess cash to acquire additional equipment. know at the end of the day yes we are looking at other cryptocurrencies uh to see which ones could potentially be worth um considering for adding to our mining pool of equipment um and as long as it provides us with positive cash flow to support mining activities we will look to um you know to to participate in those different mining pools so hopefully the fact that we have branched out into zcash is kind of evidence that we are you know open to more than just Bitcoin and Litecoin along with Dogecoin in the script mining from a mining perspective.

The next question is related to our strategy to handle outdated equipment. Have we considered extending the lifetime of less competitive mining equipment by using it to mine alternative currencies where competition might be lower?

Yeah, I mean, as we've all seen, managing outdated equipment is a constant challenge as new, more efficient machines are constantly hitting the market. You know, this is one of the main reasons why we add machines over time, you know, so as not to get overextended on a particular model that may reach obsolescence faster than others, because you never really know when the next generation machines are coming out and what that sort of lead to the next level of efficiency will look like. But as I mentioned earlier, the ASIC machines are engineered for specific algorithms. So you're really limited to which cryptocurrencies you can mine with a specific machine. And as we were discussing earlier, for example, a SHA-256 machine can mine Bitcoin or Bitcoin Cash, but it can't mine, you know, Litecoin and Doge as an example, or Zcash. There are some other very small blockchains that can be mined with these machines, but they're generally they're unproven and not supported by the more mature mining models, mining pools and custodians, and they need to be proven to be secure before we or any of these platforms will support them. So as I mentioned, we'll keep our eye on them. We're always looking for new blockchains and cryptocurrencies to mine. But, you know, so to extend the lifetime of some of the more outdated equipment, you know, we will consider running them in a reward share model, as we mentioned earlier, you know, at a lower hosting rate or look to sell equipment and then roll the proceeds into newer generation equipment. And, you know, both of these approaches we're doing at the moment with some of the older S19s and the L7s.

Great.

There's one follow-up question to the earlier announcement, Alan. I'm not sure we can disclose this yet, but what banker was hired and have they been hired officially yet? And what is it exactly are they going to be asked to evaluate?

So I can absolutely share that information. The board and the company met only just this week to finalize the decision to look to engage with an advisor or banker on potential opportunities. So no one has been hired yet. The first process is going to be to identify who can provide the best value as part of that process. And also, obviously, we understand, want to make sure that the costs associated with that are appropriate and in line. What are they being asked to evaluate? Really, anything is on the table, whether it's consensus mining making an acquisition, consensus mining looking to partner with another company. Really, the idea behind it is to say, look, we want to see what options are out there, and adding additional advice and expertise in that assessment process is what we're looking for. No one has been hired that have actually is so early in the process that we haven't had any talks with any firms yet. But we are going to evaluate firms that would be best positioned to provide us that additional expertise and guidance to help us formulate any potential changes to how we are set up, organizationally structured, future strategy and so on.

Great. And last question for today. I'll summarize it. But if the sole purpose of mining Bitcoin is to acquire Bitcoin at a discount to the value of Bitcoin, it appears that buying Bitcoin outright is a faster path to profit. Do we have any comments on this?

Yes. has previously talked about this on previous investor calls, and I think he talked about it on the annual shareholder meeting. You can buy Bitcoin. Yes, we can go out and buy Bitcoin. We can buy 100 Bitcoin, whatever it is today. But you own 100 Bitcoin. With mining Bitcoin, if you do it in a manner that is, you know, profitable, controlled, deliberate, manages your balance sheet and so on, you're going to add Bitcoin. So once you've spent the money to buy Bitcoin, you don't have any more money to buy any more Bitcoin. But if you're mining for Bitcoin over time, you will have the ability to mine and add more Bitcoin to your balance sheet over a period of time that would be greater than the Bitcoin you could have bought. So if I'm mining Bitcoin today at $80,000 a coin, I'm going to be recording revenue at $80,000 and I'm going to have to mark the markets every quarter. But I'm going to have that Bitcoin I mine today marked to market at the future price of Bitcoin. If I just buy the Bitcoin, I'm limited to the number of Bitcoin I have that will be marked to market. So by mining, I'm adding to the balance sheet over time, as opposed to just having a finite number of Bitcoin, which is essentially going to be an ETF. And I think Murray has explained that very well in the past in the fact that You know, once you buy the Bitcoin, you're stuck with that number of Bitcoin. If you're an ETF, that Bitcoin is actually being eroded with fees. But by mining, you continually add. And at the end of the day, you'll have Bitcoin priced whatever that day is, you know, two, three, five years in the future. It will be priced at that price and valued at that price. But we will have the ability from a mining perspective to continue to add to that Bitcoin balance.

Great. Peter, Steve, do you have any closing remarks?

Sure. I'll say something, Augustine. So anyone who has worked with us over a long period of time within our other products knows that we endeavor to give you good results at a reasonable price. And for this product, it's somewhat new for Stephen and I. And part of what we brought today and what Alan outlined about the share buyback, we're trying to close the discount. And if people want to get out, we're hoping to get them out at NAB. And at most, they would have an opportunity cost if they were unhappy with the return, but at least they wouldn't lose any money. So, we're of the belief that ultimately the Coins that are in the company are ultimately going to have a much higher valuation. And I know Murray was particularly enthusiastic about the potential for Litecoin and Bitcoin Cash. And if we continue to accumulate those over time and have the mining be profitable, you'll end up with quite an attractive result. And returns come in a very episodic way. And sometimes it looks like you're not doing much, but then all of a sudden things work out and some of your returns are stunning. So long way of saying we're committed to this business, but we don't want people, you know, being around or feeling like they're stuck in a stock that they no longer want to be in. So that's kind of what the moves were for. Thank you.

Great. So I think that's all we have today. Thank you so much for your engagement, for all the questions. And as always, if you need to reach us, please feel free to email us through ir at consensusmining.com. And we hope to be able to continue the conversation in a few months' time. Thank you very much, everybody. Take care.