What changed in this filing

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Item 1. Financial Statements

2024-08-19 compared with 2024-05-14 · 259 added, 192 removed, 658 unchanged (41% of the section changed)

1 Financial Statements

March 31, 2024

December 31, 2023

Current assets:

18 unchanged sentences

Series V preferred stock:

14,567,829 and 14,567,829 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Preferred stock value

Common stock, 975,000,000 shares authorized at $ 0.001 par value, 15,705,415 and 15,320,281 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

14,567,829 and 14,567,829 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Common stock, 975,000,000 shares authorized at $ 0.001 par value, 15,895,027 and 15,320,281 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid in capital

7 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Blockchain infrastructure revenues (net of fees)

10 unchanged sentences

Change in unrealized appreciation (depreciation) on crypto assets

( 5,943,339 )

Change in fair value of warrant liabilities

Total other income (expenses)

( 5,800,839 )

Net income (loss)

$ ( 6,727,869 )

$ ( 1,178,048 )

Basic net income (loss) per share attributable to common stockholders

1 unchanged sentence

Basic weighted average number of common shares outstanding

Diluted weighted average number of common shares outstanding

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 Three Months Ended March 31, 2024

the Six Months Ended June 30, 2024

Preferred Stock

Additional Paid-in

Total Stockholders’

Stockholders’

Balance December 31, 2023

1 unchanged sentence

$ ( 138,677,103 )

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

Stock-based compensation

Balance March 31, 2024

Net income (loss)

Balance June 30, 2024

$ 163,681,450

$ ( 133,148,386 )

the Three Months Ended March 31, 2023

Additional Paid-in

Total Stockholders’

the Six Months Ended June 30, 2023

Preferred Stock

Stockholders’

Balance December 31, 2022, as adjusted

1 unchanged sentence

$ ( 146,495,831 )

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

Issuance of Series V preferred stock

( 2,559,533 )

Stock-based compensation

Net income (loss)

Balance June 30, 2023

$ 159,955,610

$ ( 142,708,411 )

an adjustment to the opening balance of $ 4,986,377 resulting from a change in accounting principle.

See Note 4 for further details.

the Three Months Ended June 30, 2024

Preferred Stock

Stockholders’

Balance March 31, 2024

$ 163,141,291

$ ( 126,420,517 )

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

Stock-based compensation

Net income (loss)

( 6,727,869 )

Balance June 30, 2024

$ 163,681,450

$ ( 133,148,386 )

the Three Months Ended June 30, 2023

Preferred Stock

Stockholders’

Balance March 31, 2023

3 unchanged sentences

$ ( 141,530,363 )

Includes an adjustment to the opening balance of $ 4,986,377 resulting from a change in accounting principle.

See Note 4 for further details.

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

Issuance of Series V preferred stock

( 2,559,533 )

Stock-based compensation

Net income (loss)

( 1,178,048 )

Balance June 30, 2023

$ 159,955,610

$ ( 142,708,411 )

$ 159,955,610

$ ( 142,708,411 )

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

of Cash Flows

For the Three Months Ended

For the Six Months Ended

Net Cash flows used from operating activities:

3 unchanged sentences

Blockchain infrastructure revenue

( 1,012,578 )

Builder payments (non-cash)

Change in fair value of warrant liabilities

10 unchanged sentences

( 1,693,099 )

( 2,045,524 )

Cash flows from investing activities:

Purchase of productive crypto assets for validating

( 1,804,213 )

Sale of productive crypto assets

4 unchanged sentences

Net (decrease)/increase in cash

( 1,203,365 )

Cash, beginning of period

Cash, end of period

Supplemental disclosure of non-cash financing and investing activities:

Series V Preferred Stock Distribution

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

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sector since 2014 with a primary focus on blockchain infrastructure.

secures and operates validator nodes (as a “Validator”) on various proof-of-stake (“PoS”) and delegated

proof-of-stake (“dPoS”) based blockchain networks earning native token rewards by staking our proof-of-stake crypto

assets (also referred to “cryptocurrencies”, “crypto”, “crypto assets”, “digital

assets”, or “tokens”), with an emphasis on Ethereum.

The Company secures and operates validator nodes (as a “Validator”)

on various proof-of-stake (“PoS”) and delegated proof-of-stake (“dPoS”) based blockchain networks earning native

token rewards by staking our proof-of-stake crypto assets (also referred to “cryptocurrencies”, “crypto”, “crypto

assets”, “digital assets”, or “tokens”), with an emphasis on Ethereum.

Company’s non-custodial Staking-as-a-Service (“StaaS”) business allows crypto asset holders to earn staking rewards

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nodes (or “nodes”).

As a non-custodial Validator, BTCS may charge a validator node fee, typically determined

as a percent of the crypto asset rewards earned on crypto assets delegated to its node, creating the opportunity for potential scalable

revenue and business growth with limited additional costs.

As a non-custodial Validator, BTCS may charge a validator node fee, typically determined as a percent

of the crypto asset rewards earned on crypto assets delegated to its node, creating the opportunity for potential scalable revenue and

business growth with limited additional costs.

internally developed “StakeSeeker” platform is a personal finance software that allows crypto asset holders to monitor and

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tool and does not facilitate trading, delegation or custody of crypto assets on the platform.

Company developed “Builder+”, an Ethereum block builder (“Builder”) that utilizes algorithms to optimize

block construction for on-chain validation and maximize revenue.

Company’s business is subject to various risks, including regulatory uncertainties, crypto asset price volatility, and the

adoption of blockchain technology.

Future success depends on the growth of the crypto asset market and the Company’s ability

to effectively grow its StaaS and blockchain infrastructure operations.

Company developed “Builder+”, an Ethereum block builder (“Builder”) that utilizes algorithms to optimize block

construction for on-chain validation and maximize gas fees.

Company’s business is subject to various risks, including regulatory uncertainties, crypto asset price volatility, and the adoption

of blockchain technology.

Future success depends on the growth of the crypto asset market and the Company’s ability to effectively

grow its StaaS and blockchain infrastructure operations.

2 - Basis of Presentation

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

Interim results for the three months ended March 31, 2024 are

not necessarily indicative of results for the full year ended December 31, 2023.

The unaudited condensed financial statements and notes

should be read in conjunction with the financial statements and notes for the year ended December 31, 2023.

Interim results for the three and six months ended June 30, 2024

are not necessarily indicative of results for the full year ending December 31, 2024.

The unaudited condensed financial statements and

notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2023.

Reclassifications

Certain prior period amounts have been reclassified in order to conform with the current period presentation in the

unaudited condensed financial statements and accompanying notes.

The reclassifications did not have a material impact on the Company’s

unaudited condensed financial statements and related disclosures.

prior period amounts have been reclassified in order to conform with the current period presentation in the unaudited condensed financial

statements and accompanying notes.

The reclassifications did not have a material impact on the Company’s unaudited condensed financial

statements and related disclosures.

The impact on any prior period disclosures was immaterial.

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The Company maintains cash and cash equivalent balances at financial institutions that are insured by the FDIC.

As of March 31, 2024

and December 31, 2023, the Company had approximately $ 670,000 and $ 1,458,000 in cash.

As of June 30, 2024 and

December 31, 2023, the Company had approximately $ 537,000 and $ 1,458,000 in cash.

The Company has not experienced any losses in such

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

As of March 31, 2024 and December

As of June 30, 2024 and December

31, 2023, the Company had approximately $ 61,000 and $ 933,000 in excess of the FDIC insured limit, respectively.

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primarily to facilitate crypto asset transactions, including, but not limited to, payments to third-party vendors.

Company accounts for its stablecoins as indefinite-lived intangible assets in accordance with Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other .

While not accounted for as

cash or cash equivalents, these stablecoins are considered a liquidity resource.

While not accounted

for as cash or cash equivalents, these stablecoins are considered a liquidity resource.

Value Measurement

Company’s accounts for the fair value measurement for its crypto assets in accordance with ASC 820, Fair Value Measurement .

ASC 820 defines fair value as the price that would be received for an asset in a current sale, assuming an orderly transaction between

market participants on the measurement date.

Market participants are considered to be independent, knowledgeable, and willing and able

It requires the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal

market, the most advantageous market.

Company’s accounts for the fair value measurement for its crypto assets in accordance with Financial Accounting Standards Board

(“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement .

ASC 820 defines fair value

as the price that would be received for an asset in a current sale, assuming an orderly transaction between market participants on the

measurement date.

Market participants are considered to be independent, knowledgeable, and willing and able to transact.

the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal market, the most advantageous

serves as the principal market for the Company’s crypto assets, being the Company’s primary cryptocurrency exchange for both

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the statements of operations.

The Company recorded realized gains (losses) on crypto assets of approximately $ 11,000 and $ 8,000 during

the three months ended March 31, 2024 and 2023, respectively.

The Company recorded realized gains (losses) on crypto assets of approximately $ 287,000 and ($ 568,000 )

for the three months ended June 30, 2024 and 2023, respectively, and approximately $ 298,000 and ($ 560,000 ) for the six months ended June

30, 2024 and 2023, respectively.

Company recognizes revenue under ASC 606 , Revenue from Contracts with Customers .

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to achieve that core principle:

Identify the contract

with the customer

Identify the performance

obligations in the contract

Determine the transaction

Allocate the transaction

price to the performance obligations in the contract

Recognize revenue

when the Company satisfies a performance obligation

Identify the contract with the customer

Identify the performance obligations in the contract

Determine the transaction price

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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Block Building (Builder+)

Company participates in the Ethereum blockchain network by engaging in the construction of blocks (“block building”)

containing strategically bundled transactions from the Ethereum mempool and from searchers who connect to the Company’s

endpoint with the intent of the Company’s builder proposing their transactions.

Revenue recognition for these

activities, conducted through Builder+, entails the recognition of gas fees (or “transaction fees”) earned in

exchange for successfully constructing blocks of bundled transactions and having these blocks selected and proposed by a validator to the Ethereum

network for validation.

These gas fees

are earned as a direct result of the Company’s fulfillment of its performance obligations, which include the construction of

blocks by bundling transactions to maximize the value of the included fees and the proposal of that block to a Validator.

constructed block under a smart contract with the Ethereum network signifies a distinct performance obligation.

part of the block construction and proposal process, the Company’s Builder purchases block space through a fixed

non-negotiable fee paid to a Validator (a “Validator Payment”) embedded in each proposed block.

The Validator Payment,

predetermined by the Builder, is paid to Validators as compensation for selecting and proposing the Company’s block to the

network for validation.

The Validator Payment is intrinsically linked to the Company’s performance obligations and is

only disbursed when a block constructed by the Builder is selected by a Validator, proposed, and successfully finalized on the Ethereum

It represents a direct and fixed pre-determined cost.

satisfaction of the performance obligation occurs at a point in time when the constructed block is proposed by a Validator and successfully

Company participates in the Ethereum blockchain network by engaging in the construction of blocks (“block building”) containing

strategically bundled transactions from the Ethereum mempool and from searchers who connect to the Company’s endpoint with the

intent of the Company’s builder proposing their transactions.

Revenue recognition for these activities, conducted through Builder+,

entails the recognition of gas fees (or “transaction fees”) earned in exchange for successfully constructing blocks of bundled

transactions and having these blocks selected and proposed by a validator to the Ethereum network for validation and successfully finalized

on the network.

gas fees are earned as a direct result of the Company’s fulfillment of its performance obligations, which include the construction

of blocks by bundling transactions to maximize the value of the included fees and the proposal of that block by a Validator.

Each constructed

block under a smart contract with the Ethereum network signifies a distinct performance obligation.

part of the block construction and proposal process, the Company’s Builder purchases block space through a fixed non-negotiable

fee paid to a Validator (a “Validator Payment”) embedded in each proposed block.

The Validator Payment, predetermined by

the Builder, is paid to Validators as compensation for selecting and proposing the Company’s block to the network for validation.

The Validator Payment is intrinsically linked to the Company’s performance obligations and is disbursed in the block constructed

by the Builder if our Builder’s block is both selected by a Validator and successfully proposed to, and finalized on, the Ethereum

otherwise, our Validator Payment may be included in a subsequent block.

The Validator Payment represents a direct and fixed

pre-determined cost.

satisfaction of the performance obligation occurs at a point in time when the constructed block is both proposed by a Validator and successfully

finalized on the Ethereum network.

At this juncture, the Company has fulfilled its obligations, and the gas fees associated with the

transactions included in the block become available and are transferred to the Company’s digital wallet, simultaneous with the

disbursement of the related Validator payment.

Company recognizes revenue, reflecting the fair value of the total gas fees earned from the constructed block net of the related

Validator Payments disbursed.

For the three months ended March 31, 2024 this resulted in the recognition of negative revenue, as Validator Payments exceed the total value of the gas fees associated with proposed blocks.

following table summarizes the revenues earned from the Company’s operations for the three months ended March 31, 2024 and 2023.

transactions included in the block become available and are transferred to the Company’s digital wallet.

Company recognizes revenue, reflecting the fair value of the total gas fees earned from the constructed block.

following table summarizes the revenues earned from the Company’s operations for the three and six months ended June 30, 2024 and

Schedule of Revenues Earned from Company’s Operations

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Revenues from blockchain infrastructure operations

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Total revenues

following tables detail the native token rewards and their respective fair market value recognized as revenue for the three months ended

March 31, 2024 and 2023.

The tables differentiate between three sources of revenue:

token rewards earned through delegating cryptocurrency

assets to validator nodes operated by third parties, and revenue generated from BTCS blockchain infrastructure operations, which includes

token rewards earned from staking crypto assets to validator nodes operated by BTCS, Validator Fees calculated as a percentage of rewards

earned from crypto assets delegated by third-parties to BTCS nodes, as well as block rewards earned by BTCS Builders.

The following tables detail the

native token rewards and their respective fair market value recognized as revenue for the three months ended March 31, 2024 and 2023.

following tables detail the native token rewards and their respective fair market value recognized as revenue for the three and six

months ended June 30, 2024 and 2023.

Revenues are derived from three primary sources:

(1) token rewards earned from the delegation of cryptocurrency assets to third-party

validator nodes;

(2) token rewards derived from BTCS-operated validator nodes, which include staking of the Company’s crypto assets

to BTCS nodes as well as Validator Fees earned from third parties asset delegations to our nodes;

and (3) net block rewards accrued generated

by BTCS Builders.

(1) token rewards earned from the delegation

of cryptocurrency assets to third-party validator nodes;

(2) token rewards derived from BTCS-operated validator nodes, which include

staking of the Company’s crypto assets to BTCS nodes as well as Validator Fees earned from third parties asset delegations to

and (3) block rewards generated by BTCS Builders.

assets earned from BTCS validator nodes

Schedule of Crypto Assets Earned From Validator Nodes

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Token Rewards

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Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Ethereum (ETH)

Cosmos (Atom)

NEAR Protocol (NEAR)

Oasis Network (ROSE)

Total earned from BTCS validator nodes

Avalanche (Avax)

NEAR Protocol (NEAR)

Evmos (EVMOS)

Total earned from BTCS blockchain infrastructure operations

assets earned from Ethereum block building through Builder+

Schedule of Crypto Assets Earned From

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Token Rewards

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Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Ethereum (ETH)

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Schedule of Crypto Assets Earned From Third Party

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Token Rewards

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Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Axie Infinity (AXS)

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Cardano (ADA)

NEAR Protocol (NEAR)

Total earned from staking to third-party validator nodes

Total revenue earned

Company’s cost of revenues related to its blockchain infrastructure operations primarily includes direct production costs associated

with transaction validation on the network, cloud-based server hosting expenses related to our validator nodes and Builders, and allocated

employee salaries dedicated to node maintenance and support.

Additionally, the cost of revenues encompasses fees paid to third parties

for their assistance in software maintenance and node operations.

These costs directly related to the production of revenues are collectively

termed ‘ Blockchain infrastructure expenses ’ in the statements of operations.

following table further details the costs of revenues for the three months ended March 31, 2024 and 2023.

Company’s cost of revenues related to its blockchain infrastructure operations primarily includes direct production costs

associated with transaction validation on the network, cloud-based server hosting expenses related to our validator nodes and

Builders, and allocated employee salaries dedicated to node maintenance and support.

Additionally, the cost of revenues encompasses

Validator Payments made from our Builder to Validators as well as fees paid to third parties for their assistance in software

maintenance and node operations.

These costs directly related to the production of revenues are collectively termed

‘ Blockchain infrastructure expenses ’ in the statements of operations.

following table further details the costs of revenues for the three and six months ended June 30, 2024 and 2023.

Schedule of Costs of Revenues

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Cost of staking revenues

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Developed Software

developed software consists of the core technology of the Company’s StakeSeeker platform, which is being designed to allow users

to track, monitor and analyze their aggregate cryptocurrency portfolio holdings by connecting their crypto exchanges and digital wallets

as well as providing a non-custodial delegation process to earn staking rewards on crypto asset holdings.

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 StakeSeeker and ChainQ platforms.

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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Advertising and marketing expenses amounted to approximately $ 28,000

and $ 6,000 for the three months ended March 31, 2024 and 2023, respectively.

and $ 3,000 for the three months ended June 30, 2024 and 2023, respectively, and approximately $ 86,000 and $ 9,000 for the six months ended June 30, 2024 and 2023, respectively.

Income (Loss) per Share

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notes and warrants from the calculation of net income (loss) per share if their effect would be anti-dilutive.

following financial instruments were not included in the diluted loss per share calculation for the three months ended June 30, 2024

and 2023 because their effect was anti-dilutive:

of Earnings Per Share Anti-diluted

As of June 30,

Warrants to purchase common stock

Non-vested restricted stock awards units

Anti-dilutive securities

Accounting Pronouncements

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4 - Changes in Accounting Principle

Fair Value Accounting for Crypto Assets

- Adoption of ASU No.

January 1, 2023, the Company has elected to early adopt ASU No.

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to approximately $ 4,986,000 .

of Ethereum Block Building Revenues and Costs – ASC 606

the second quarter of 2024, the Company elected to change its accounting principle related to the presentation of revenue and cost of

revenues associated with its Ethereum block building operations, as conducted through Builder+.

This change in accounting principle is

pursuant to the ASC 606, Revenue from Contracts with Customers .

re-evaluation, the Company determined that gas fees earned by our Ethereum block builders should be recognized as gross revenue.

Validator Payments, which are fees paid to the validator nodes for the contractual rights to control transaction bundles within the blocks,

should be presented separately as cost of revenues.

The Company previously presented the net amount of gas fees, after netting

off the Validator Payments made, as revenue.

This change from a net to a gross presentation aligns more closely with the economic

realities of our business operations and the transaction structure within the Ethereum network.

The Company has

retrospectively applied this change in accounting principle to the financial statements for the three months ended March 31, 2024,

to ensure comparability across all periods presented.

The effect of this change results in an increase in the presentation of both

revenues and cost of revenues by $ 65,614 for the three months ended March 31, 2024.

The effect of this change in accounting

principle is immaterial and does not impact the reported gross profit, net income (loss), or any balance sheet items for the current

or prior periods.

impacts for the three months ended March 31, 2024, are presented in the following table:

of Changes Affects in Current and Prior Periods

For the Three Months Ending

March 31, 2024

As reported on

As revised resulting from change in

accounting principle

Cost of revenues

Based on an analysis of ASC 250,

Accounting Changes and Error Corrections , and Staff Accounting Bulletin 99, Materiality , the Company has determined that

the effect of this change was immaterial to the previously issued financial statements for the three months ended March 31, 2024.

Company elected to implement this change in accounting principle as it provides a more accurate and transparent view of our Ethereum

block building operations.

This change enhances stakeholders’ understanding of the operational performance and the financial aspects

of our block building activities under Builder+.

5 – Crypto Assets

following table presents the Company’s crypto assets held as of March 31, 2024:

following table presents the Company’s crypto assets held as of June 30, 2024:

Schedule of Crypto Assets Held

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following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and the Company’s

estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2024 and December 31, 2023:

estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2024 and December 31, 2023:

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

Fair Value Measured at March 31, 2024

Total at March 31,

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Fair Value Measured at June 30, 2024

Crypto Assets

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Fair Value Measured at December 31, 2023

Total at December 31,

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Crypto Assets

Warrant Liabilities

Company did not make any transfers between the levels of the fair value hierarchy during the three months ended March 31, 2024 and 2023.

Company did not make any transfers between the levels of the fair value hierarchy during the six months ended June 30, 2024 and 2023.

3 Valuation Techniques

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determination of fair value requires significant judgment or estimation.

As of March 31, 2024 and December 31, 2023, the Company’s

As of June 30, 2024 and December 31, 2023, the Company’s

Level 3 investments were carried at original cost of the investments, with a value of $ 100,000 .

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were initially classified in equity.

As of March 31, 2024, the Company no longer maintained control of certain fundamental transactions

As of June 30, 2024, the Company no longer maintained control of certain fundamental transactions

as they did not control a majority of shareholder votes.

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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 March 31, 2024

warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and, as of June 30, 2024

and December 31, 2023, is as follows:

Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities

March 31, 2024

December 31, 2023

Risk-free rate of interest

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

for the Three Months ended March 31, 2024 and 2023, that are measured at fair value on a recurring basis:

for the six months ended June 30, 2024 and 2023, 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 Assets

March 31, 2024

March 31, 2023

Beginning balance

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Fair Value of Level 3 Financial Liabilities

March 31, 2024

March 31, 2023

Beginning balance

Warrant liabilities classification

Fair value adjustment of warrant liabilities

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

the three months ended March 31, 2024, the Company did not sell any shares of Common Stock under the ATM Agreement.

the six months ended June 30, 2024, the Company sold a total of 163,831 shares of Common Stock under the ATM Agreement for aggregate

total gross proceeds of approximately $ 252,000 at an average selling price of $ 1.54 per share, resulting in net proceeds of approximately

$ 240,000 after deducting commissions and other transaction costs.

Based Payments

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common stock on the last trading day prior to the end of the applicable calendar quarter.

For the three months ended March 31, 2024,

For the six months ended June 30, 2024, 39,987

shares of common stock were issued to independent directors.

the three months ended March 31, 2024, 414,148 shares of common stock were issued to officers related to payment of 2023 accrued bonus

compensation totaling approximately $ 675,000 .

the six months ended June 30, 2024, 414,148

shares of common stock were issued to officers related to payment of 2023 accrued bonus compensation totaling approximately $ 675,000 .

Of the shares issued, 43,220 were returned to net settle the issuance and pay related taxes, resulting in a net share

issuance of 370,928 .

January 27, 2023, the Board approved the issuance of a newly designated Series V Preferred Stock (“Series V”) on a one-for-one

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(i) is non-convertible,

(ii) has a 20% liquidation preference over the shares of common stock, (iii) is non-voting and (iv) has certain rights to dividends and

distributions (at the discretion of the Board of Directors) .

(ii) has a 20% liquidation preference over the shares of common stock, (iii) is non-voting, and (iv) has certain rights to dividends

and distributions (at the discretion of the Board of Directors).

A total of 14,542,803 shares of Series V Preferred Stock were distributed

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valuation model to determine the fair value of the preferred stock.

the year ended December 31, 2023, an additional 25,026 shares of Series V were issued related to the vesting of eligible employee RSUs.

Equity Incentive Plan

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amount under the 2021 Plan from 7,000,000 shares to 12,000,000 shares.

following weighted-average assumptions were used to estimate the fair value of options granted on the deemed grant date during the three

months ended March 31, 2024 and 2023 for the Black-Scholes formula:

following weighted-average assumptions were used to estimate the fair value of options granted on the deemed grant date during the six

months ended June 30, 2024 and 2023 for the Black-Scholes formula:

Weighted-Average Assumptions Used to Estimate Fair Value

Three Months Ended

Six Months Ended

Exercise price

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using a Monte-Carlo simulation.

summary of option activity under the Company’s stock option plan for three months ended March 31, 2024 is presented below:

summary of option activity under the Company’s stock option plan for six months ended June 30, 2024 is presented below:

Summary of Option Activity

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Employee options granted

Employee options forfeited

Outstanding as of March 31 ,2024

Options vested and exercisable as of March 31 ,2024

Employee options expired

Outstanding as of June 30, 2024

Options vested and exercisable as of June 30, 2024

December 29, 2023, upon recommendation of the Compensation Committee, the Board of BTCS Inc.

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the one-year anniversary of the first vesting date, subject to continued employment on each applicable vesting date.

summary of the Company’s restricted stock units granted under the 2021 Plan during the three months ended March 31, 2024 are as

summary of the Company’s restricted stock units granted under the 2021 Plan during the six months ended June 30, 2024 are as follows:

Summary of Restricted Stock

Number of Restricted Stock Units

Weighted Average Grant

Date Fair Value

Weighted Average Grant Date Fair Value

Nonvested at December 31, 2023

Nonvested at March 31, 2024

Nonvested at June 30, 2024

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 months ended March 31, 2024 and 2023 was as follows:

Stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 was as follows:

Schedule of Stock-based Compensation Expense

For the Three Months

Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Employee stock option awards

4 unchanged sentences

of Accrued Expenses

March 31, 2024

December 31, 2023

Accrued compensation

Accounts payable and accrued expenses

compensation includes approximately $ 0 and $ 710,000 related to performance bonus accruals as of March 31, 2024 and December 31, 2023,

compensation includes approximately $ 505,000 and $ 710,000 related to performance bonus accruals as of June 30, 2024 and December 31,

2023, respectively.

4 unchanged sentences

up to 100 % of employee contributions.

For the three months ended March 31, 2024 and 2023, the Company made contributions to the 401(k)

Plan of $ 109,000 and $ 95,000 , respectively.

For the six months ended June 30, 2024 and 2023, the Company made contributions to the 401(k) Plan

of $ 109,000 and $ 95,000 , respectively.

10 – Liquidity

6 unchanged sentences

reflected in the financial statements, the Company has historically incurred a net loss and has an accumulated deficit of approximately

$ 126,421,000 at March 31, 2024, and net cash used in operating activities of approximately $ 769,000 for the reporting period then ended.

$ 133,148,000 at June 30, 2024, and net cash used in operating activities of approximately $ 1,693,000 for the reporting period then ended.

The Company is implementing its business plan and generating revenue;

1 unchanged sentence

are sufficient to support its daily operations over the next twelve months.

Our Form S-3 expired on August 14, 2024.

The Company filed a new Form S-3 on February 14, 2024.

of SEC comments, the new Form S-3 has not yet gone effective and therefore we may not sell shares under the ATM Agreement.

11 – Subsequent Events

3 unchanged sentences

in the financial statements other than disclosed.

April 11, 2024, the Board of Directors of the Company, upon recommendation of the Compensation Committee, approved a performance based

Annual Cash Incentive Plan for the Company’s executives for fiscal year 2024.

If an executive meets their performance milestones,

the executive will receive a bonus, payable in cash and/or equity at the discretion of the Board, in an amount up to 163 % to 195 % of

the applicable executive’s base salary , as detailed below:

Charles Allen, the Company’s

Chief Executive Officer, is eligible to receive up to 195 % of his base salary.

Allen’s current base salary is $ 429,933 ;

Michal Handerhan, the Company’s

Chief Operating Officer, is eligible to receive up to 179 % of his base salary.

Handerhan’s base salary is $ 300,307 ;

Michael Prevoznik, the

Company’s Chief Financial Officer, is eligible to receive up to 163 % of his base salary.

Prevoznik’s base salary

is $ 245,706 ;

Manish Paranjape, the Company’s

Chief Technology Officer is eligible to receive up to 163 % of his base salary.

Paranjape’s base salary is $ 245,706 .

During the period from July 1, 2024 to August 16, 2024, the Company sold a total of 279,896 shares of Common Stock

under the ATM Agreement for aggregate total gross proceeds of approximately $ 431,000 at an average selling price of $ 1.54 per share, resulting

in net proceeds of approximately $ 413,000 after deducting commissions and other transaction costs.

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