What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-13 compared with 2024-08-19 · 244 added, 184 removed, 733 unchanged (37% of the section changed)

1 Financial Statements

September 30,

Current assets:

2 unchanged sentences

Staked crypto assets

Prepaid compensation

Prepaid expenses

14 unchanged sentences

Series V preferred stock:

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

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

Preferred stock, value

Common stock, 975,000,000 shares authorized at $ 0.001 par value, 16,555,221 and 15,320,281 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

7 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Blockchain infrastructure revenues (net of fees)

11 unchanged sentences

( 7,396,380 )

( 2,914,029 )

Change in fair value of warrant liabilities

1 unchanged sentence

( 7,314,943 )

( 2,629,029 )

Net income (loss)

1 unchanged sentence

$ ( 3,283,557 )

$ ( 3,511,070 )

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

4 unchanged sentences

of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2024

the Nine Months Ended September 30, 2024

Preferred Stock

6 unchanged sentences

Net income (loss)

Balance June 30, 2024

( 3,511,070 )

the Six Months Ended June 30, 2023

Balance September 30, 2024

$ 164,803,541

$ ( 142,188,173 )

the Nine Months Ended September 30, 2023

Preferred Stock

8 unchanged sentences

Net income (loss)

Balance June 30, 2023

Balance September 30, 2023

$ 160,410,794

2 unchanged sentences

See Note 4 for further details.

the Three Months Ended June 30, 2024

the Three Months Ended September 30, 2024

Preferred Stock

Stockholders’

Balance March 31, 2024

Balance Ju ne 30, 2024

$ 163,681,450

5 unchanged sentences

( 9,039,787 )

Balance June 30, 2024

Balance September 30, 2024

$ 164,803,541

$ ( 142,188,173 )

the Three Months Ended June 30, 2023

the Three Months Ended September 30, 2023

Preferred Stock

Stockholders’

Balance March 31, 2023

Balance June 30, 2023

$ 159,955,610

3 unchanged sentences

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

Issuance of Series V preferred stock

( 2,559,533 )

Stock-based compensation

2 unchanged sentences

( 3,283,557 )

Balance June 30, 2023

Balance September 30, 2023

$ 160,410,794

4 unchanged sentences

of Cash Flows

For the Six Months Ended

For the Nine Months Ended

September 30,

Net Cash flows used from operating activities:

Net income (loss)

$ ( 3,511,070 )

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

3 unchanged sentences

( 1,751,735 )

( 1,013,503 )

Builder payments (non-cash)

Change in fair value of warrant liabilities

Realized gains on crypto assets transactions

Realized (gains) losses on crypto assets transactions

Change in unrealized (appreciation) depreciation on crypto assets

( 3,734,213 )

( 6,648,240 )

Changes in operating assets and liabilities:

10 unchanged sentences

Sale of productive crypto assets

Purchase of property and equipment

Sale of property and equipment

Net cash provided by (used in) investing activities

4 unchanged sentences

( 1,203,861 )

( 1,393,550 )

Cash, beginning of period

5 unchanged sentences

1 - Business Organization and Nature of Operations

(“BTCS” or the “Company”), a Nevada corporation listed on Nasdaq, has operated in the blockchain technology

sector since 2014 with a primary focus on blockchain infrastructure.

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

by participating in network consensus mechanisms through staking (or “delegating”) their crypto assets to BTCS-operated validator

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.

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

analyze their portfolios across exchanges and wallets.

It includes tracking capabilities utilizing application programming interfaces

(APIs) as well as educational features, offering users guidance on the delegation of their crypto assets to our non-custodial validator

nodes, along with the ability to monitor such delegation activities through data analysis.

StakeSeeker is an informational monitoring

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 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.

(“BTCS” or the “Company”), a Nevada corporation listed on Nasdaq, is a U.S.-based blockchain technology

company focused on blockchain infrastructure, with its primary operations currently centered on the Ethereum network.

Since its inception

in 2014, BTCS has developed a diverse set of blockchain-related operations, with a current emphasis on block building and validator

node operation (as a “Validator”) on various proof-of-stake (“PoS”) and delegated proof-of-stake (“dPoS”)

Company’s core operations include the management of cloud-based validator nodes on PoS-based blockchain networks.

These nodes participate

in network consensus mechanisms by providing transaction validation (“attestation”) and block proposal services as a Validator.

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

“crypto assets”, “digital assets”, or “tokens”) to validator nodes operated by both BTCS and third-parties.

conducts its Ethereum block-building operations under the Builder+ brand, which commenced in 2024.

Builder+ uses advanced algorithms

to acquire block space and optimize the construction of blocks for on-chain validation, with a focus on maximizing gas fee revenue.

represents a central component of BTCS’s blockchain infrastructure operations, driving scalable revenue growth through its efficient

block optimization processes.

also operates as a non-custodial Staking-as-a-Service (“StaaS”) provider for certain dPoS networks, allowing third-party

crypto asset holders to delegate their tokens to BTCS-operated validator nodes (or “nodes”), earning validator node fees

as a percentage of staking rewards earned on delegated crypto assets.

Company has also developed and maintains crypto focused technology solutions, such as ChainQ, an AI-powered blockchain analytics tool

currently in beta, and StakeSeeker, a crypto portfolio monitoring tool.

These platforms complement BTCS’s blockchain infrastructure

Company’s operations are subject to regulatory uncertainties, market volatility, and technological risks associated with blockchain

technology and crypto assets.

Future success depends on the continued adoption of blockchain technology and the Company’s ability

to grow both its Ethereum block-building operations and its broader blockchain infrastructure operations.

2 - Basis of Presentation

6 unchanged sentences

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

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

Interim results for the three and nine months ended September

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.

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

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

As of June 30, 2024 and

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

As of September 30, 2024

and December 31, 2023, the Company had approximately $ 254,000 and $ 1,458,000 in cash.

The Company has not experienced any losses in such

3 unchanged sentences

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

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.

As of September 30, 2024 and

December 31, 2023, the Company had approximately $ 0 and $ 933,000 in excess of the FDIC insured limit, respectively.

Company holds stablecoins, such as USDT (Tether) and USDC (USD Coin), which are crypto assets that are pegged to the value of one U.S.

57 unchanged sentences

of to calculate the gain or loss on its sale.

Realized gain (loss) on sale of crypto assets are included in other income (expense) in

the statements of operations.

Realized gains (losses) on sale of crypto assets are included in other income (expenses)

in the statements of operations.

The Company recorded realized gains (losses) on crypto assets of approximately ($ 122,000 ) and ($ 44,000 )

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.

for the three months ended September 30, 2024 and 2023, respectively, and approximately $ 176,000 and ($ 604,000 ) for the nine months ended

September 30, 2024 and 2023, respectively.

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

67 unchanged sentences

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

following table summarizes the revenues earned from the Company’s operations for the three and nine months ended September 30,

2024 and 2023.

Schedule of Revenues Earned from Company’s Operations

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Revenues from blockchain infrastructure operations

2 unchanged sentences

Total revenues

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.

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

months ended September 30, 2024 and 2023.

Revenues are derived from three primary sources:

2 unchanged sentences

(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

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

and (3) block rewards generated by BTCS Builders.

2 unchanged sentences

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Token Rewards

12 unchanged sentences

Evmos (EVMOS)

Total earned from BTCS blockchain infrastructure operations

assets earned from Ethereum block building through Builder+

Schedule of Crypto Assets Earned From

Total earned from BTCS validator nodes

assets earned from staking to third-party validator nodes

Schedule of Crypto Assets Earned From Third Party

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Token Rewards

6 unchanged sentences

Revenue ($USD)

Ethereum (ETH)

Total earned from Ethereum block building through Builder+

assets earned from staking to third-party validator nodes

Schedule of Crypto Assets Earned From Third Party

Axie Infinity (AXS)

Polygon (POL fka MATIC)

Polkadot (DOT)

Evmos (EVMOS)

Cardano (ADA)

NEAR Protocol (NEAR)

Total earned from staking to third-party validator nodes

assets earned from Ethereum block building through Builder+

Schedule of Crypto Assets Earned From

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Token Rewards

6 unchanged sentences

Revenue ($USD)

Axie Infinity (AXS)

Polygon (MATIC)

Polkadot (DOT)

Evmos (EVMOS)

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

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.

Ethereum (ETH)

Total earned from Ethereum block building through Builder+

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.

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 nine months ended September 30, 2024 and 2023.

Schedule of Costs of Revenues

For the Three Months Ended

For the Six Months Ended

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Cost of staking revenues

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and Equipment

and equipment consists of computer, equipment and office furniture and fixtures, all of which are recorded at cost.

and equipment consists of computers, equipment and office furniture and fixtures, all of which are recorded at cost.

Depreciation and

100 unchanged sentences

Advertising and marketing expenses amounted to approximately $ 56,000

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.

and $ 2,000 for the three months ended September 30, 2024 and 2023, respectively, and approximately $ 142,000 and $ 11,000 for the nine

months ended September 30, 2024 and 2023, respectively.

Income (Loss) per Share

7 unchanged sentences

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

following financial instruments were not included in the diluted loss per share calculation for the three and nine months ended September

30, 2024 and 2023 because their effect was anti-dilutive:

of Earnings Per Share Anti-diluted

As of June 30,

As of September 30,

Warrants to purchase common stock

3 unchanged sentences

December 2023, the FASB issued ASU No.

2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60) , which

is intended to improve the accounting for and disclosure of crypto assets.

The ASU requires entities to subsequently measure crypto assets

that meet specific criteria at fair value, with changes recognized in net income each reporting period.

The ASU also the requires specific

presentation of cash receipts arising from crypto assets that are received as noncash consideration in the ordinary course of business

and are converted nearly immediately into cash.

The amendments in this update are effective for all entities for fiscal years beginning

after December 15, 2024, with early adoption permitted.

2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60) ,

which is intended to improve the accounting for and disclosure of crypto assets.

The ASU requires entities to subsequently measure

crypto assets that meet specific criteria at fair value, with changes recognized in net income each reporting period.

requires specific presentation of cash receipts arising from crypto assets that are received as noncash consideration in the

ordinary course of business and are converted nearly immediately into cash.

The amendments in this update are effective for all

entities for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU No.

2023-08 effective January 1, 2023, which had a material

impact to its financial statement and related disclosures, which are further discussed in Note 4.

effective January 1, 2023, which had a material impact to its financial statement and related disclosures, which are further

discussed in Note 4.

recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public

2 unchanged sentences

4 - Changes in Accounting Principle

Fair Value Accounting for Crypto Assets

- Adoption of ASU No.

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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This change in accounting principle is

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

pursuant to 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.

1 unchanged sentence

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,

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.

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.

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

As reported on

As revised resulting

from change in

accounting principle

For the Three Months Ending

1 unchanged sentence

As reported on

As revised resulting from change in

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.

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

3 unchanged sentences

5 – Crypto Assets

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

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

Schedule of Crypto Assets Held

4 unchanged sentences

Axie Infinity (AXS)

Polygon (Matic)

Oasis Network (ROSE)

Polygon (POL fka MATIC)

NEAR Protocol (NEAR)

3 unchanged sentences

Band Protocol (BAND)

Rocket Pool (RPL)

6 – Fair Value of Financial Assets and Liabilities

17 unchanged sentences

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 June 30, 2024 and December 31, 2023:

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

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

Fair Value Measured at June 30, 2024

Fair Value Measured at September 30, 2024

September 30,

Quoted prices in

active markets

Significant other

observable inputs

Crypto Assets

1 unchanged sentence

Fair Value Measured at December 31, 2023

Quoted prices in

active markets

Significant other

observable inputs

Crypto Assets

Warrant Liabilities

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

Company did not make any transfers between the levels of the fair value hierarchy during the nine months ended September 30, 2024 and

3 Valuation Techniques

3 financial assets consist of private equity investments for which there is no current public market for these securities such that the

determination of fair value requires significant judgment or estimation.

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 .

The Company has elected to apply the

measurement alternative under ASC 321, Investments—Equity Securities , for these investments.

3 financial assets consist of private equity investments for which there is no current public market for these securities such that

the determination of fair value requires significant judgment or estimation.

As of September 30, 2024 and December 31, 2023, the

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

The Company has elected to apply the measurement alternative under ASC 321, Investments—Equity Securities , for these

3 financial liabilities consist of the warrant liabilities for which there is no current market for these securities such that the determination

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or assumptions and recorded as appropriate.

significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a

significant decrease in volatility or a significant decrease in the Company’s stock price, in isolation, would result in a

significantly lower fair value measurement.

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were initially classified in equity.

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

As of September 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 June 30, 2024

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

2024 and December 31, 2023, is as follows:

Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities

September 30, 2024

December 31, 2023

Risk-free rate of interest

12 unchanged sentences

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 six months ended June 30, 2024 and 2023, that are measured at fair value on a recurring basis:

for the nine months ended September 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

September 30,

Beginning balance

2 unchanged sentences

Fair Value of Level 3 Financial Liabilities

September 30,

Beginning balance

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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, 2024, the Company sold a total of 163,831 shares of Common Stock under the ATM Agreement for aggregate

a result of the SEC’s baby shelf requirements, the Company is currently limited in its sales of Common Stock under the ATM Agreement

to one-third of its public float during the 12 calendar months immediately prior to the sale.

As of the filing date of this Form 10-Q,

the Company would be limited in its sales under the ATM Agreement to approximately $ 2,618,000 of shares.

the nine months ended September 30, 2024, the Company sold a total of 443,727 shares of Common Stock under the ATM Agreement for aggregate

total gross proceeds of approximately $ 682,000 at an average selling price of $ 1.54 per share, resulting in net proceeds of approximately

1 unchanged sentence

Based Payments

January 19, 2023, the Board of Directors of the Company approved the annual issuance of $ 50,000 of common stock to each independent director.

The shares will be issued in four equal installments ($ 12,500 ) at the end of each calendar quarter beginning March 31 st , subject

to continued service on each applicable issuance date.

The number of shares issuable will be based on the closing price of the Company’s

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

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

shares of common stock were issued to independent directors.

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 19, 2023, the Board approved the annual issuance of $ 50,000 of common stock to each independent director.

The shares will be

issued in four equal installments ($ 12,500 ) at the end of each calendar quarter beginning March 31 st , subject to continued

service on each applicable issuance date.

The number of shares issuable will be based on the closing price of the Company’s common

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

For the nine months ended September 30, 2024, 72,315

shares of common stock approximating $ 98,000 were issued to independent directors related to the quarterly approved issuances.

September 12, 2024, the Board approved a resolution to allow all employees, officers, and directors of the Company to elect to receive

up to three months of their cash compensation in advance in the form of restricted common stock.

This decision aimed to prevent disruptions

in operations that could arise from the need to unstake and sell cryptocurrency to meet upcoming cash requirements.

On September 13,

2024, in a collective effort to support the Company’s operations and strategy, all employees, directors, and officers (collectively

9 individuals) accepted part of their compensation as equity.

This resulted in the issuance of 380,399 restricted common stock shares

approximating $ 430,000 .

Of the shares issued, 32,429 were returned to net settle the issuance and pay related taxes, resulting in a net

share issuance of 347,970 shares.

the nine months ended September 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 shares.

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

basis to the Company’s shareholders (including restricted stock unit holders and warrant holders).

The distribution of Series V

shares was approved and completed on June 2, 2023 to shareholders as of the record date of May 12, 2023.

The Series V:

(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).

distribution of Series V shares was approved and completed on June 2, 2023 to shareholders as of the record date of May 12, 2023.

(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) .

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

to shareholders on June 2, 2023.

On September 6, 2024, at the 2024 Annual Meeting the Company’s stockholders voted to approve

an amendment to the Certificate of Designation of the Series V to provide the Board the discretion to convert each share of the Series

V into one share of Common Stock.

The Board has not filed an amendment to the Series V Certificate of Designation nor chosen to convert

the Series V.

fair value of the Series V as of the record date, May 12, 2023, amounted to approximately $ 2,560,000 .

7 unchanged sentences

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 six

months ended June 30, 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 nine

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

Weighted-Average Assumptions Used to Estimate Fair Value

Six Months Ended

Nine Months Ended

September 30,

Exercise price

18 unchanged sentences

using a Monte-Carlo simulation.

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 under the Company’s stock option plan for nine months ended September 30, 2024 is presented below:

Summary of Option Activity

Number of Shares

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life (in years)

Life (in years)

Outstanding as of December 31, 2023

1 unchanged sentence

Employee options expired

Outstanding as of June 30, 2024

Options vested and exercisable as of June 30, 2024

Outstanding as of September 30, 2024

Options vested and exercisable as of September 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 six months ended June 30, 2024 are as follows:

summary of the Company’s restricted stock units granted under the 2021 Plan during the nine months ended September 30, 2024 are

Summary of Restricted Stock

Number of Restricted Stock Units

Weighted Average Grant Date Fair Value

Average Grant

Date Fair Value

Nonvested at December 31, 2023

Nonvested at June 30, 2024

Nonvested at September 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 and six months ended June 30, 2024 and 2023 was as follows:

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

Schedule of Stock-based Compensation Expense

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Employee stock option awards

Employee restricted stock unit awards

Employee share-based salary payments

Non-employee restricted stock awards

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of Accrued Expenses

December 31, 2023

Accrued compensation

Accounts payable and accrued expenses

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

compensation includes approximately $ 1,053,000 and $ 710,000 related to performance bonus accruals as of September 30, 2024 and December

31, 2023, respectively.

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up to 100 % of employee contributions.

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.

For the nine months ended September 30, 2024 and 2023, the Company made contributions to the 401(k)

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

10 – Liquidity

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

$ 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.

$ 142,188,000 at September 30, 2024, and net cash used in operating activities of approximately $ 2,388,000 for the reporting period then

The Company is implementing its business plan and generating revenue;

however, the Company’s cash position and liquid crypto assets

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.

however, the Company’s cash position and liquid crypto

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

11 – Subsequent Events

3 unchanged sentences

in the financial statements other than disclosed.

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.

the period from October 1, 2024 to November 12, 2024, the Company sold a total of 470,061

shares of Common Stock under the ATM Agreement

for aggregate total gross proceeds of approximately $ 1,238,000

at an average selling price of $ 2.63

per share, resulting in net proceeds of approximately

after deducting commissions and other transaction

the expiration of the Company’s prior Form S-3, the Company filed a new Form S-3, which became effective October 4, 2024.

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