What changed in this filing

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Item 1. Financial Statements

2022-11-10 compared with 2022-08-11 · 330 added, 226 removed, 488 unchanged (53% of the section changed)

1 Financial Statements

assets/currencies

digital assets/currencies

September 30,

Current assets:

and equipment, net

digital assets/currencies - long term

and Stockholders’ Equity:

payable and accrued expense

current liabilities

Stockholders’

stock, 97,500,000 shares authorized at $ 0.001 par value, 12,703,794 and 10,528,212 shares issued and outstanding at June 30, 2022

and December 31, 2021, respectively

paid in capital

Digital assets/currencies

Staked digital assets/currencies

Prepaid expense

Total current assets

Other assets:

Property and equipment, net

Staked digital assets/currencies - long term

Total other assets

Liabilities and Stockholders’ Equity:

Accounts payable and accrued expense

Accrued compensation

Warrant liabilities

Total current liabilities

Stockholders’ equity:

Common stock, 97,500,000 shares authorized at $ 0.001 par value, 13,053,712 and 10,528,212 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid in capital

Accumulated deficit

( 150,085,134 )

( 135,589,470 )

stockholders’ equity

Liabilities and Stockholders’ Equity

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

accompanying notes are an integral part of these unaudited condensed financial statements.

of Operations

the Three Months Ended

the Six Months Ended

revenue (net of fees)

and administrative

and development

and related expenses

loss on digital assets/currencies

gains on digital asset/currency transactions

( 3,054,418 )

For the Three Months Ended

For the Nine Months Ended

September 30,

Validator revenue (net of fees)

Total revenues

Cost of revenues

Validator expense

Operating expenses:

income (expenses):

on debt discount

General and administrative

Research and development

Compensation and related expenses

Impairment loss on digital assets/currencies

Realized gains on digital asset/currency transactions

( 3,054,418 )

in fair value of warrant liabilities

Distributions

to warrant holders

Total operating expenses

Other income (expenses):

Interest expense

Amortization on debt discount

( 1,716,744 )

Change in fair value of warrant liabilities

Distributions to warrant holders

Total other income (expenses)

$ ( 1,030,248 )

2 unchanged sentences

$ ( 15,466,585 )

dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock

dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock

Deemed dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock

Deemed dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock

( 5,020,883 )

loss attributable to common stockholders

Net loss attributable to common stockholders

$ ( 1,030,248 )

2 unchanged sentences

$ ( 20,533,009 )

loss per share attributable to common stockholders, basic and diluted

average number of common shares outstanding, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

Weighted average number of common shares outstanding, basic and diluted

accompanying notes are an integral part of these unaudited condensed financial statements.

of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2022

the Nine Months Ended September 30, 2022

Stockholders’

December 31, 2021

Balance December 31, 2021

$ 147,682,384

$ ( 135,589,470 )

of common stock, net of offering cost / At-the-market offering

distributions

Issuance of common stock, net of offering cost / At-the-market offering

Stock-based compensation

Dividend distributions

( 14,495,664 )

June 30, 2022

Balance September 30, 2022

$ 160,374,041

$ ( 150,085,134 )

the Six Months Ended June 30, 2021

C-1 Convertible

C-2 Convertible

Stockholders’

December 31, 2020

the Nine Months Ended September 30, 2021

Series C-1 Convertible

Series C-2 Convertible

Total Stockholders’

Balance December 31, 2020

$ 120,578,944

$ ( 119,539,887 )

stock issued including equity commitment fee, net

of common stock and warrants for cash, net

of Series C-2 convertible preferred stock

Common stock issued including equity commitment fee, net

Issuance of common stock, net of offering cost / At-the-market offering

Issuance of common stock and warrants for cash, net

Warrant liabilities value related to Issuance of common stock

( 5,771,250 )

Issuance of Series C-2 convertible preferred stock

Conversion of Series C-1 Convertible Preferred stock

Conversion of Series C-2 Convertible Preferred stock

( 1,100,000 )

( 6,216,289 )

Beneficial conversion features associated with convertible notes payable

Beneficial conversion feature of Series C-2 convertible preferred stock

Deemed dividends related to amortization of beneficial conversion feature

of Series C-2 convertible preferred stock

conversion features associated with convertible notes payable

conversion feature of Series C-2 convertible preferred stock

dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock

dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock

Deemed dividends related to recognition of downround adjustment to conversion

amount for Series C-2 convertible preferred stock

( 5,020,883 )

compensation in connection with issuance of Series C-2 convertible preferred stock

Fractional shares adjusted for reverse split

Warrant exercise

Stock-based compensation

Stock-based compensation in connection with issuance of Series C-2 convertible

preferred stock

( 15,466,585 )

June 30, 2021

Balance September 30, 2021

$ 143,472,733

$ ( 135,006,472 )

the Three Months Ended June 30, 2022

the Three Months Ended September 30, 2022

Stockholders’

March 31, 2022

Balance June 30, 2022

$ 159,432,894

$ ( 149,054,886 )

of common stock, net of offering cost / At-the-market offering

distributions

Issuance of common stock, net of offering cost / At-the-market offering

Stock-based compensation

Dividend distributions

( 1,030,248 )

June 30, 2022

Balance September 30, 2022

$ 160,374,041

$ ( 150,085,134 )

the Three Months Ended June 30, 2021

C-1 Convertible

C-2 Convertible

the Three Months Ended September 30, 2021

Series C-1 Convertible

Series C-2 Convertible

Stockholders’

March 31, 2021

Balance June 30, 2021

$ 137,959,473

$ ( 131,164,135 )

stock issued including equity commitment fee, net

dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock

dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock

Common stock issued including equity commitment fee, net

Issuance of common stock, net of offering cost / At-the-market offering

Warrant liabilities value related to Issuance of common stock

( 5,771,250 )

June 30, 2021

Conversion of Series C-2 Convertible Preferred stock

( 1,100,000 )

( 6,216,289 )

Deemed dividends related to amortization of beneficial conversion feature

of Series C-2 convertible preferred stock

Fractional shares adjusted for reverse split

Stock-based compensation

( 3,842,337 )

Balance September 30, 2021

$ 143,472,733

$ ( 135,006,472 )

accompanying notes are an integral part of these unaudited condensed financial statements.

of Cash Flows

the Six Months Ended

Cash flows used from operating activities:

accompanying notes are an integral part of these unaudited condensed financial statements.

For the Nine Months Ended

September 30,

Net Cash flows used from operating activities:

$ ( 14,495,664 )

$ ( 15,466,585 )

to reconcile net loss to net cash provided by (used in) operating activities:

on debt discount

compensation in connection with issuance of Series C-2 convertible preferred stock

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Amortization on debt discount

Stock-based compensation

Stock-based compensation in connection with issuance of Series C-2 convertible preferred stock

Validator revenue

( 1,421,560 )

network fees (non-cash)

in fair value of warrant liabilities

Blockchain network fees (non-cash)

Change in fair value of warrant liabilities

( 1,140,000 )

of non-productive digital assets/currencies

( 2,066,250 )

of non-productive digital assets/currencies

gains on digital assets/currencies transactions

Purchase of non-productive digital assets/currencies

( 5,761,550 )

loss on digital assets/currencies

in operating assets and liabilities:

expenses and other current assets

payable and accrued expenses

cash provided by (used in) operating activities

Sale of non-productive digital assets/currencies

Realized gain on digital assets/currencies transactions

( 3,054,418 )

cash used in investing activities:

of productive digital assets/currencies for validating

Impairment loss on digital assets/currencies

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Accrued compensation

Net cash used in operating activities

( 3,904,421 )

Net cash used in investing activities:

Purchase of productive digital assets/currencies for validating

( 9,274,055 )

of productive digital assets/currencies

of property and equipment

cash used in investing activities

( 9,462,279 )

Sale of productive digital assets/currencies

Purchase of property and equipment

Net cash used in investing activities

( 8,846,747 )

cash provided by financing activities:

distributions

from exercise of warrants

from issuance of Series C-2 convertible preferred stock

proceeds from issuance of convertible notes

proceeds from issuance of common stock and warrants for cash

proceeds from issuance of common stock

proceeds from issuance common stock/ At-the-market offering

to convertible notes principle

cash provided by financing activities

increase in cash

beginning of period

end of period

disclosure of non-cash financing and investing activities:

dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock

dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock

of Series C-1 Preferred Stock

conversion feature of Series C-2 convertible preferred stock

conversion features associated with convertible notes payable

( 9,466,822 )

Net cash provided by financing activities:

Dividend distributions

Proceeds from exercise of warrants

Proceeds from issuance of Series C-2 convertible preferred stock

Net proceeds from issuance of convertible notes

Net proceeds from issuance of common stock and warrants for cash

Net proceeds from issuance of common stock

Net proceeds from issuance common stock/ At-the-market offering

Payment to convertible notes principle

( 1,092,712 )

Net cash provided by financing activities

Net increase in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosure of non-cash financing and investing activities:

Deemed dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock

Deemed dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock

Conversion of Series C-1 Preferred Stock

Conversion of Series C-2 Preferred Stock

Beneficial conversion feature of Series C-2 convertible preferred stock

Beneficial conversion features associated with convertible notes payable

accompanying notes are an integral part of these unaudited condensed financial statements.

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domain to better reflect its broadened strategy.

The Company recently released its new website which included broader information on

its strategy.

The Company released a new website which included broader information on its strategy.

Company’s blockchain infrastructure operations focuses on securing next-generation blockchains and operating validator nodes on

various proof of stake-based blockchain networks, earning rewards of additional Digital Assets by actively validating transactions on

the networks.

The Company is developing a Digital Asset Platform that would enable users to aggregate their Digital Asset portfolio holdings

from multiple exchanges and wallets into a single platform to view and analyze performance, risk metrics, and potential tax implications.

The internally developed platform utilizes Digital Asset exchange APIs to read user data and does not allow for the trading of assets.

We also are developing and plan to integrate into the Digital Asset Platform a proprietary Staking-as-a-Service feature that would enable

users participate in asset leveraging through securing blockchain protocols and to stake and delegating supported cryptocurrencies to

BTCS operated validator nodes through a non-custodial platform.

various proof of stake-based blockchain networks, earning rewards of additional Digital Assets by authenticating and validating transactions

on the networks.

The Company is in the late stages of developing a Digital Asset Platform that would enable users to aggregate their

Digital Asset portfolio holdings from multiple exchanges and wallets into a single platform to view and analyze performance, risk metrics,

and potential tax implications.

The internally developed platform utilizes Digital Asset exchange APIs to read user data and does not

allow for the trading of assets.

We also are developing an integrated proprietary Staking-as-a-Service feature on the Digital Asset Platform

that would enable users to participate in asset leveraging through securing blockchain protocols and to stake and delegating supported

cryptocurrencies to BTCS operated validator nodes through a non-custodial platform.

market is rapidly evolving and there can be no assurances that we will be competitive with industry participants that have or may have

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results of operations and cash flows for the interim periods presented.

Interim results for the three and six months ended June 30, 2022

Interim results for the three and nine months ended September

30, 2022 are not necessarily indicative of results for the full year ended December 31, 2022.

The unaudited condensed financial statements and

notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2021.

The unaudited condensed financial statements

and notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2021.

3 - Summary of Significant Accounting Policies

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The Company considers all

highly liquid investments with original maturities of six months or less when purchased to be cash and cash equivalents.

As of June 30,

highly liquid investments with original maturities of nine months or less when purchased to be cash and cash equivalents.

As of September

30, 2022 and December 31, 2021, the Company had approximately $ 2.9 million and $ 1.4 million in cash.

The Company has not experienced any

losses in such accounts and believes it is not exposed to any significant credit risk on cash.

The Company has not experienced

any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits.

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institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

As of June 30, 2022 and December

31, 2021, the Company had approximately $ 2.7 million and $ 0.9 million in excess of the FDIC insured limit, respectively.

As of September 30, 2022 and

December 31, 2021, the Company had approximately $ 2.5 million and $ 0.9 million in excess of the FDIC insured limit, respectively.

Company recognizes revenue under Accounting Standards Codification (“ASC”) 606 , Revenue from Contracts with Customers .

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Identify the contract with the customer

Identify the performance obligations in the contract

Identify the performance obligations in the

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the Company satisfies a performance obligation

Allocate the transaction price to the performance

obligations in the contract

Recognize revenue when the Company satisfies

a performance obligation

is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration

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award a third-party staking pool operator receives (less digital asset transaction fees payable to the pool operator or exchanges, which

are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain.

are immaterial and are recorded as a deduction from revenue), for successfully validating or adding a block to the blockchain.

The Company’s

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impairment in the value of Digital Assets are recorded as a component of costs and expenses in our statements of operations.

recorded impairment losses related to Digital Assets of approximately $ 12.2 million and $ 3.6 million during the six months ended June

recorded impairment losses related to Digital Assets of approximately $ 12.3 million and $ 3.8 million during the nine months ended September

30, 2022, and 2021, respectively

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The Company recorded realized gains (losses)

on Digital Assets of approximately $ 470,000 and $ 3.1 million during the six months ended June 30, 2022 and 2021, respectively.

on Digital Assets of approximately $ 490,000 and $ 3.1 million during the nine months ended September 30, 2022 and 2021, respectively.

presentation of purchases and sales of Digital Assets on the Statement of Cash Flows is determined by the nature of the Digital Assets,

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Developed Software

developed software consisting of the core technology of the Company’s Digital Asset Platform which is being designed to allow user

to aggregate and analyze data from Digital Asset exchanges.

For internally developed software, the Company uses both its own employees

as well as the services of external vendors and independent contractors.

The Company accounts for computer software used in the business

in accordance with ASC 985-20 and ASC 350.

developed software consists of the core technology of the Company’s Digital Asset Platform, which is being designed to allow users

to track, monitor and analyze their aggregate cryptocurrency portfolio holdings by connecting their Digital Asset exchanges and digital

wallets as well as providing a non-custodial delegation process to earn staking rewards on Digital Asset holdings.

For internally developed

software, the Company uses both its own employees as well as the services of external vendors and independent contractors.

accounts for computer software used in the business in accordance with ASC 985-20 and ASC 350.

985-20, Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed, requires that software development costs

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Dividend distributions amounted to $ 635,000 and $ 0 during

the six months ended June 30, 2022 and 2021, respectively.

the nine months ended September 30, 2022 and 2021, respectively.

1 unchanged sentence

Advertising and marketing expenses amounted to approximately $ 74,000

and $ 3,000 for the six months ended June 30, 2022 and 2021, respectively.

and $ 10,000 for the nine months ended September 30, 2022 and 2021, respectively.

Loss per Share

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of preferred stock, notes and warrants from the calculation of net loss per share if their effect would be anti-dilutive.

following financial instruments were not included in the diluted loss per share calculation as of June 30, 2022 and 2021 because their

effect was anti-dilutive:

following financial instruments were not included in the diluted loss per share calculation as of September 30, 2022 and 2021 because

their effect was anti-dilutive:

Schedule of Earnings Per Share Anti-diluted

to purchase common stock

C-1 Convertible Preferred stock

restricted stock awards units

As of September 30,

Warrants to purchase common stock

Convertible notes

Non-vested restricted stock awards units

Accounting Pronouncements

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3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

following table presents the Company’s assets and liabilities that are measured at fair value at June 30, 2022 and December 31,

Schedule of Fair Value of Assets and Liabilities Valued on Recurring Basis

value measured at June 30, 2022

prices in active markets

other observable inputs

unobservable inputs

value measured at December 31, 2021

at December 31,

prices in active markets

following table presents the Company’s assets and liabilities that are measured at fair value at September 30, 2022 and December

Schedule of Fair Value of Assets and

Liabilities Valued on Recurring Basis

Fair value measured at September 30, 2022

September 30,

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Warrant Liabilities

Fair value measured at December 31, 2021

Total at December 31,

Quoted prices in active markets

Significant other

observable inputs

unobservable inputs

Significant unobservable inputs

Warrant Liabilities

3 Valuation Techniques

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summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company’s

warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and, as of June 30, 2022

warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and, as of September 30,

2022 and December 31, 2021, is as follows:

Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities

rate of interest

life (in years)

dividend yield

Summary of Valuation

Methodology and Significant Unobservable Inputs Warrant Liabilities

September 30,

Risk-free rate of interest

Expected volatility

Expected life (in years)

Expected dividend yield

risk-free interest rate was based on rates established by the Federal Reserve Bank.

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paid dividends on its Common Stock and does not expect to pay recurring dividends on its Common Stock in the future.

following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the six

months ended June 30, 2022 and 2021, that are measured at fair value on a recurring basis:

Schedule of Changes in Fair Value and Other Adjustments of Warrants

Value of Level 3 financial liabilities

liabilities classification

value adjustment of warrant liabilities

following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the nine

months ended September 30, 2022 and 2021, that are measured at fair value on a recurring basis:

Schedule of Changes in Fair Value and Other

Adjustments of Warrants

Fair Value of Level 3 financial liabilities

September 30,

Beginning balance

Warrant liabilities classification

Fair value adjustment of warrant liabilities

( 1,140,000 )

Ending balance

5 - Stockholders’ Equity

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Wainwright a commission rate equal to 3.0 % of the aggregate gross proceeds from each sale of Shares.

the six months ended June 30, 2022, the Company sold a total of 1,830,588 shares of Common Stock under the ATM Agreement for aggregate

the nine months ended September 30, 2022, the Company sold a total of 2,148,658 shares of Common Stock under the ATM Agreement for aggregate

total gross proceeds of approximately $ 11,454,000 at an average selling price of $ 5.33 per share, resulting in net proceeds of approximately

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Company’s 2021 Equity Incentive Plan (the “2021 Plan”) was effective on January 1, 2021 and approved by shareholders

on March 31, 2021.

The Company has reserved 2,000,000 shares of Common Stock for issuance pursuant to the 2021 Plan.

The Company received

shareholder approval on June 13, 2022 to increase the reserved amount under the 2021 Plan to 7,000,000 shares.

January 1, 2021, the Board of Directors of the Company approved the grant of 1.2 million stock options with an exercise price of $ 1.90

under the Company’s 2021 Plan to Messrs.

David Garrity a director, and Charles Allen and Michal Handerhan, executive officers and

directors of the Company.

Effective as of January 1, 2021, the Company and each optionee executed Stock Option Agreements evidencing

the option grants.

While stockholder approval (or ratification) of the grants was not required (under either the Stock Option Agreements

or by the resolutions of the Board of Directors approving such grants), the Board of Directors voluntarily caused the Company to seek

shareholder ratification of the grants to limit any potential exposure to breach of fiduciary duty claims.

As a result, based on the

guidance in ASC 718, the date the stockholders ratified the grants (March 31, 2021) is the deemed grant date solely with respect to GAAP

for those stock options.

Of the stock options:

(i) 480,000 options vested on January 1, 2022 and (ii) the remaining options vested (prior

to March 31, 2021) based upon the Company’s stock price meeting certain milestones.

summary of option activity under the Company’s stock option plan for six months ended June 30, 2022 is presented below:

on March 31, 2021 and amended on June 13, 2022.

The Company has reserved 7,000,000 shares of Common Stock for issuance pursuant to the

the three months ended September 30, 2022, the Company granted 50,000 stock options with a weighted average exercise price of $ 1.51 to

non-executive employees.

The following weighted-average assumptions were used to estimate the fair value of options granted on the deemed

grant date during the nine months ended September 30, 2022 and 2021 for both the Black-Scholes formula and the Monte-Carlo simulation

formula, applicable to 2021 options granted:

Weighted-average Assumptions Used to Estimate Fair Value

the nine months ended September 30,

Exercise price

Expected stock price volatility

Risk-free rate of interest

The Company uses historical volatility as it provides a reasonable estimate of the expected volatility.

Historical volatility

is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the option.

Interest Rate :

The risk-free interest rate is based on the U.S.

treasury zero-coupon yield curve in effect at the time of grant for

the expected term of the option.

The Company’s expected term represents the weighted-average period that the Company’s stock options are expected

to be outstanding.

The expected term is based on the expected time to post-vesting exercise of options by employees.

The Company uses

historical exercise patterns of previously granted options to derive employee behavioral patterns used to forecast expected exercise

awards vesting upon the achievement of the market conditions which were met at the date of grant, compensation cost measured on the date

of grant was immediately recognized.

For awards vesting upon the achievement of the market conditions which were not met at the date

of grant, compensation cost measured on the grant date will be recognized on a straight-line basis over the vesting period based on estimation

using a Monte-Carlo simulation.

summary of option activity under the Company’s stock option plan for nine months ended September 30, 2022 is presented below:

Summary of Option Activity

Intrinsic Value

Average Remaining Contractual Life

as of December 31, 2021

options granted

as of June 30, 2022

vested and exercisable as of June 30, 2022

Number of Shares

Weighted Average

Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life

Outstanding as of December 31, 2021

Employee options granted

Outstanding as of September 30, 2022

Options vested and exercisable as of September 30, 2022

January 2, 2022, the Board of Directors of the Company ratified the following arrangements approved by its Compensation Committee:

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the end of each calendar quarter in 2022.

As of March 31, 2022, 23,886 RSUs vested and are reflected as capital shares payable on the

Balance Sheet amounting to approximately $ 75,000 .

Company’s executive officers were granted RSUs as part of a long-term incentive plan (“LTI”), with vesting terms set

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Schedule of Restricted Stock Units

Cap Vesting Thresholds

Executive Officer

Operations Officer

Financial Officer

Technology Officer

Market Cap Vesting Thresholds

$ 100 million

$ 150 million

$ 200 million

$ 400 million

Charles Allen

Chief Executive Officer

Michal Handerhan

Chief Operations Officer

Michael Prevoznik

Chief Financial Officer

Manish Paranjape

Chief Technology Officer

the extent any market capitalization targets set forth above for Mr.

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subject to the following five-year vesting schedule:

of the LTI RSUs which have met a market capitalization criteria will vest on the one-year anniversary of the grant date, and the remaining

of the LTI RSUs which have met a market capitalization criteria will vest monthly over the four years following the one year anniversary

of the grant date.

20 % of the LTI RSUs which have met a market capitalization criteria will vest on

the one-year anniversary of the grant date, and the remaining 80 % of the LTI RSUs which have met a market capitalization criteria will

vest monthly over the four years following the one year anniversary of the grant date.

awards vesting upon the achievement of a service condition, compensation cost measured on the grant date will be recognized on a straight-line

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incorporates pricing inputs covering the period from the grant date through the end of the derived service period.

following weighted-average assumptions were used to estimate the fair value of options granted during the six months ended June 30, 2022

following weighted-average assumptions were used to estimate the fair value of options granted during the nine months ended September

30, 2022 and 2021 for the Monte-Carlo simulation:

Schedule of Weighted-average Assumptions Used to estimate Fair Value

stock price volatility

rate of interest

Weighted-Average Assumptions Used to Estimate Fair Value

Nine Months Ended

September 30,

Vesting Hurdle Price

Expected stock price volatility

Risk-free rate of interest

The Company uses historical volatility as it provides a reasonable estimate of the expected volatility.

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as of the valuation dates.

summary of the Company’s restricted stock units granted under the 2021 Plan during the six months ended June 30, 2022 are as follows:

September 30, 2022, Mr.

David Garrity resigned as a director of BTCS, Inc.

The Board of Directors of the Company agreed to fully vest

Garrity’s remaining unvested restricted stock units ( 7,962 shares) and pay Mr.

Garrity approximately $ 5,600 , which represents

the remaining 2022 director fees.

summary of the Company’s restricted stock units granted under the 2021 Plan during the nine months ended September 30, 2022 are

Summary of Restricted Stock

of Restricted Stock Units

Average Grant Day Fair Value

at December 31, 2021

at June 30, 2022

Number of Restricted Stock Units

Weighted Average Grant Day Fair Value

Nonvested at December 31, 2021

Nonvested at September 30, 2022

Based Compensation

compensation expense is recorded as a part of selling, general and administrative expenses, compensation expenses and cost of revenues.

Stock-based compensation expense for the three and six months ended June 30, 2022 and 2021 was as follows:

Stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021 was as follows:

Schedule of Stock-based Compensation Expense

the Three Months Ended June 30,

the Six Months Ended June 30,

bonus stock awards

stock option awards

restricted stock unit awards

restricted stock awards

C-2 Allocation

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Employee bonus stock awards

Employee stock option awards

Employee restricted stock unit awards

Non-employee restricted stock awards

Series C-2 Allocation

Stock-based compensation

6 – Accrued Expenses

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Schedule of Accrued Expenses

and related expenses

compensation and related expenses include approximately $ 139,000

related to performance bonus accruals as of June 30, 2022.

September 30, 2022

Compensation and related expenses

Accounts Payable

Accrued Expenses

compensation and related expenses include approximately $ 209,000 related to performance bonus accruals as of September 30, 2022.

7 - Employee Benefit Plans

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up to 100 % of employee contributions.

For the six months ended June 30, 2022, the Company made contributions to the 401(k) Plan of $ 45,000 .

For the nine months ended September 30, 2022, the Company made contributions to the 401(k) Plan

of $ 45,000 .

8 – Liquidity

5 unchanged sentences

in the normal course of business.

reflected in the financial statements, the Company has historically incurred a net loss and has an accumulated deficit at June 30, 2022,

reflected in the financial statements, the Company has historically incurred a net loss and has an accumulated deficit at September 30,

2022, a net loss and net cash used in operating activities for the reporting period then ended.

The Company is implementing its business plan

and generating revenue;

however, the Company’s cash position and liquid Digital Assets are sufficient to support its daily operations

over the next twelve months.

The Company is implementing its business

plan and generating revenue;

however, the Company’s cash position and liquid Digital Assets are sufficient to support its daily

operations over the next twelve months.

9 - Subsequent Events

3 unchanged sentences

in the financial statements other than disclosed.

the period from July 1, 2022 to August 8, 2022, the Company sold a total of 261,743 shares of Common Stock under the ATM Agreement

the period from October 1, 2022 to November 8, 2022, the Company sold a total of 23,678 shares of Common Stock under the ATM Agreement

for aggregate total gross proceeds of approximately $ 33,000 at an average selling price of $ 1.38 per share, resulting in net proceeds

of approximately $ 31,000 after deducting commissions and other transaction costs.

October 1, 2022, the Board of Directors of BTCS Inc.

appointed Melanie Pump as a new independent director of the Board.

also appointed as the Chairperson of the Audit and Compensation Committees.

As compensation for her service as a director and Chairperson

of the Committees, Ms.

Pump will receive:

(i) annual cash compensation of $ 25,000 and $ 5,000 for each Committee ($ 10,000 in total), and

(ii) 7,962 restricted stock units which will vest on December 31, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements