What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-13 compared with 2024-08-19 · 206 added, 189 removed, 189 unchanged (68% of the section changed)

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When we refer to the “2024 Quarter” and the “2023 Quarter” we are referring to

the three months ended June 30, 2024 and June 30, 2023, respectively.

the three months ended September 30, 2024 and September 30, 2023, respectively.

When we refer to the “2024 Period” and the

Period” we are referring to the six months ended June 30, 2024 and June 30, 2023, respectively.

is a Nasdaq listed company operating in the blockchain technology sector since 2014 and is one of the only U.S.

publicly traded

companies with a primary focus on proof-of-stake blockchain infrastructure.

Our core focus is on driving scalable growth through a diverse

range of business streams leveraging and built on top of our core and proven blockchain infrastructure operations.

“2023 Period” we are referring to the nine months ended September 30, 2024 and September 30, 2023, respectively.

is a Nasdaq-listed U.S.-based blockchain technology company focused on blockchain infrastructure, with its primary operations currently

centered on the Ethereum network.

Our core focus is on driving scalable growth through a diverse range of blockchain-focused technological

solutions, emphasizing Ethereum infrastructure, including block-building and validator node operations.

Infrastructure

Company operates validator nodes on various delegated proof-of-stake and proof-of-stake based blockchain networks, with an emphasis on

We earn native token rewards by validating transactions across various blockchain networks by staking our crypto assets on

validator nodes operated by BTCS and third parties.

core business centers on its blockchain infrastructure, which supports the validation of transactions and security of multiple proof-of-stake

(PoS) and delegated proof-of-stake (dPoS) blockchain networks.

The Company manages a network of cloud-based validator nodes, which play

a key role in network consensus by performing transaction validation (“attestation”) activities and proposing new blocks.

Through these activities, BTCS earns native token rewards by staking its own crypto assets on validator nodes operated by BTCS and third

evaluation of blockchain networks involves comprehensive due diligence procedures, including assessments of blockchain quality, reward

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publicly available information.

Block Building – Builder+

central focus of BTCS’s current operations is its Ethereum block-building initiative, branded as Builder+, launched in 2024.

Builder+ we purchase block space and leverage advanced algorithmic processes to construct blocks for on-chain validation.

Builder+ is to maximize gas fee revenue by optimizing the contents and structure of each block.

The Company aims to maximize the value

of gas fees earned by increasing the number of blocks we purchase while minimizing the payments to validators required for purchasing

is now a central driver of BTCS’s growth strategy, reflecting the Company’s emphasis on scalable and efficient revenue generation

through advanced blockchain technology.

Builder+ currently operates within the Ethereum ecosystem, it has been designed to adapt to a broader blockchain landscape, allowing

for potential expansion to other networks in the future.

This flexibility aligns with BTCS’s strategic vision to maintain a robust

blockchain infrastructure that is not limited to any single network, even as Ethereum remains a primary area of focus.

Staking-as-a-Service

Staking-as-a-Service (“StaaS”) business model allows for crypto asset holders to earn token rewards by participating in network

consensus mechanisms through staking and delegating their crypto assets to Company operated validator nodes.

As a non-custodial validator

operator, the Company receives a percentage of a crypto asset holders’ staking rewards generated as a validator node fee, for our

ministerial role in hosting the validator node.

This creates an opportunity for scalable revenue and business growth with limited additional

The Company’s StaaS strategy provides a more accessible and cost-effective alternative for crypto asset holders to participate

in blockchain networks’ consensus mechanisms, promoting the growth and adoption of blockchain technology.

Company’s internally-developed “StakeSeeker” platform is a personal finance software and education center with a comprehensive

crypto dashboard for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets

in a single analytics platform.

The StakeSeeker dashboard reads user data from digital wallets and utilizes application programming interfaces

(APIs) to read data from crypto exchanges and does not allow for the trading or custody of crypto assets.

StakeSeeker’s Stake Hub

functions as an educational center, 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 does not provide or facilitate direct,

crypto asset delegation or transaction execution on our platform.

The Stake Hub’s primary role is to offer instructional support

and tracking capabilities.

There is no active process for crypto asset delegation through the Stake Hub dashboard;

it is primarily a

monitoring tool.

Crypto asset holders are able to delegate to our validator nodes without signing up for our StakeSeeker platform;

crypto asset holders can delegate to validator nodes not operated by the Company and sign up for StakeSeeker to utilize our software

and data analytics.

The StakeSeeker platform is currently free-to-use for registered users and is not currently generating revenue.

Company is not a broker-dealer or an investment advisor and does not provide any such related services.

non-custodial Staking-as-a-Service (“StaaS”) business model allows for crypto asset holders to earn token rewards by participating

in network consensus mechanisms through staking and delegating their crypto assets to Company operated validator nodes.

As a non-custodial

validator operator, the Company receives a percentage of a crypto asset holders’ staking rewards generated as a validator node

fee, for our ministerial role in hosting the validator node.

This creates an opportunity for scalable revenue and business growth with

limited additional costs.

The Company’s StaaS strategy provides a more accessible and cost-effective alternative for crypto asset

holders to participate in blockchain networks’ consensus mechanisms, promoting the growth and adoption of blockchain technology.

StaaS provider maintains a ministerial role in validating transactions on a given dPoS network on behalf of its Delegators by (1) using

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following table details the blockchain networks on which BTCS operates nodes that support third-party delegations as part of our staking-as-a-service

operations, including the amount of third-party crypto assets delegated to our non-custodial validator nodes, as of June 30, 2024:

Validator Fee

Delegated Crypto Assets

operations, including the amount of third-party crypto assets delegated to our non-custodial validator nodes, as of September 30, 2024:

Blockchain Network

Validator Fee

Crypto Assets

(Native Tokens)

Delegated Crypto Assets ($USD)

3,052,000 ROSE

indicates the minimum required by the blockchain network.

– Ethereum Block Building

January 2024, we introduced “Builder+”, an Ethereum block builder.

Builder+ utilizes algorithms to construct optimized

blocks for on-chain validation.

The Company aims to maximize the value of gas fees earned by increasing the number of blocks we

purchase while minimizing Validator Payments required for purchasing block space.

following table further details the operational results of Builder+ for the three and six months ended June 30, 2024.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Ethereum (ETH)

Gas fees earned from blocks proposed

Validator payments for block space

Net ETH earned from Ethereum block building through Builder+

– AI Analytics

July 10, 2024, the Company announced the public launch of the ChainQ beta.

ChainQ is an AI-powered blockchain data and analytics platform,

designed to allow users to query real-time and historical on-chain blockchain data.

Through comprehensive indexing of public blockchain

data from our Blockchain Infrastructure operations, ChainQ is intended to provide an intuitive and straightforward platform for users

to access on-chain data.

ChainQ and StakeSeeker

complement our core blockchain infrastructure, we have developed crypto-focused technology solutions aimed at increasing accessibility

and transparency within the blockchain ecosystem.

These solutions include “ChainQ”, an AI-powered blockchain data and analytics

platform currently in beta, and “StakeSeeker”, a portfolio monitoring tool designed for cryptocurrency holders.

simplifies the process of accessing and analyzing blockchain data, enabling deeper insights into on-chain activity.

Through comprehensive

indexing of public blockchain data from our Blockchain Infrastructure operations, ChainQ is intended to provide an intuitive and straightforward

platform for users to access on-chain data.

is a personal finance software and education center with a comprehensive crypto dashboard providing tools for crypto asset holders to

connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets in a single analytics platform.

does not provide or facilitate direct, crypto asset delegation or transaction execution on our platform.

The StakeSeeker platform is

currently free-to-use for registered users and is not currently generating revenue.

The Company is not a broker-dealer or an investment

advisor and does not provide any such related services.

the ChainQ and StakeSeeker platforms contribute to the overall value BTCS offers within the blockchain space, supporting its infrastructure

operations and expanding user engagement and awareness.

forward, BTCS remains committed to enhancing its blockchain infrastructure capabilities, with a strong emphasis on its Ethereum block-building

The Company is poised to leverage its expertise in validator node management and block-building optimization as it seeks

scalable opportunities within the rapidly evolving blockchain ecosystem.

While Ethereum is currently the primary network for BTCS’s

operations, the Company may expand its infrastructure to accommodate additional blockchain networks.

is dedicated to remaining at the forefront of blockchain innovation and staying adaptable to opportunities across the broader blockchain

This strategic agility positions BTCS to navigate the evolving blockchain landscape while maximizing its impact.

tables below detail BTCS’s quarterly crypto asset holdings as of the end of each quarter beginning with the 2023 Quarter and ending

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Cosmos (ATOM)

Polygon (MATIC)

Polygon (POL fka MATIC)

Avalanche (AVAX)

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Evmos (EVMOS)

Rocket Pool (RPL)

Market Value of Crypto Assets at the End of the Following Calendar Quarters:

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Cosmos (ATOM)

Polygon (MATIC)

Polygon (POL fka MATIC)

Avalanche (AVAX)

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Evmos (EVMOS)

Rocket Pool (RPL)

of Crypto Assets at the End of the Following Calendar Quarters:*

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Cosmos (ATOM)

Polygon (MATIC)

Polygon (POL fka MATIC)

Avalanche (AVAX)

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Evmos (EVMOS)

Rocket Pool (RPL)

The prices have been rounded to the nearest whole dollar for prices above $100

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Evmos (EVMOS)

assets earned from Ethereum block building through Builder+

Ethereum (ETH)

assets earned from staking to third-party validator nodes

Crypto assets earned from staking to third-party

validator nodes

Axie Infinity (AXS)

Polygon (MATIC)

Polygon (POL fka MATIC)

Polkadot (DOT)

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NEAR Protocol (NEAR)

assets earned from Ethereum block building through Builder+

Ethereum (ETH)

Market Value of Crypto Asset Rewards Earned Recognized as Revenue

tables below detail the fair market value of BTCS’s quarterly crypto assets earned as revenue during the following calendar quarters:

earned from BTCS validator nodes

The following table summarizes the revenues earned from the Company’s

operations by revenue segment during the following calendar quarters:

Revenue by Segment

Total revenue

from BTCS blockchain infrastructure operations

Total revenue from staking

to third-party validator nodes

revenue from Ethereum block building through Builder+

tables below detail the fair market value of BTCS’s quarterly crypto assets earned as revenue in each respective segment

during the following calendar quarters:

Revenue from BTCS validator nodes

Ethereum (ETH)

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Evmos (EVMOS)

Total revenue earned from BTCS blockchain infrastructure operations

earned from Ethereum block building through Builder+

Ethereum (ETH)

Total revenue earned from Ethereum block building through Builder+

earned from staking to third-party validator nodes

Axie Infinity (AXS)

Polygon (MATIC)

Total revenue from BTCS validator

Revenue from staking to third-party validator nodes

Axie Infinity

Polygon (POL fka MATIC)

Polkadot (DOT)

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Cardano (ADA)

NEAR Protocol (NEAR)

Total revenue earned from staking to third-party validator nodes

Total revenue earned

of Operations for the Three and Six Months Ended June 30, 2024 and 2023

following tables reflect our operating results for the three and six months ended June 30, 2024 and 2023:

Protocol (NEAR)

revenue from staking to third-party validator nodes

from Ethereum block building through Builder+

Ethereum (ETH)

Total revenue

from Ethereum block building through Builder+

of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

following tables reflect our operating results for the three and nine months ended September 30, 2024 and 2023:

For the Three Months Ended

September 30,

Blockchain infrastructure revenues (net of fees)

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$ (3,283,557 )

For the Six Months Ended

For the Nine Months Ended

September 30,

Validator revenue

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Total other income (expenses)

$ (3,511,070 )

increase in revenue during the 2024 Quarter and 2024 Period as compared to the 2023 Quarter and 2023 Period is primarily due to the increase

in fair value of our crypto assets earned as rewards for staking as the market prices of crypto assets continued to be elevated

during 2024 Period compared to 2023 Period.

The increase is also partially due to an increase in the block rewards earned from our

Ethereum block building activities during the 2024 Quarter and 2024 Period.

Although we believe the number of block rewards and

tokens we earn from staking and revenue recognized will increase as we continue to expand our blockchain infrastructure efforts, we

recognize that volatility in the crypto asset markets may impact the market prices of the crypto assets we earn from

increase in the cost of revenues during the 2024 Period as compared to the 2023 Period is due to the Validator Payments made to purchase block space as part of our Ethereum block building activities during the

2024 Quarter and Period.

Thes additional costs are partially offset by the efficiencies realized in our blockchain

infrastructure validating operating costs, including streamlining of web service hosting fees and reduction of services provided by vendors.

We believe our cost of revenues will increase as we continue to ramp up our business, particularly our strategy to increase the number and value of block production, requiring additional purchases

in the block rewards earned from our Ethereum block-building activities during the 2024 Quarter and 2024 Period.

The increase is also

partially due to the increase in fair value of our crypto assets earned as rewards for staking as the market prices of crypto assets

continued to be elevated during 2024 Period compared to 2023 Period.

Although we believe the number of block rewards and tokens we earn

from staking and revenue recognized will increase as we continue to expand our blockchain infrastructure efforts, we recognize that volatility

in the crypto asset markets may impact the market prices of the crypto assets we earn from staking.

above, in the 2024 Quarter, the Company earned approximately 217 ETH from its Builder+ and Validator operations.

the period from October 1, 2024 to November 12, 2024, the Company has earned approximately 541 ETH from its Builder+ and

Validator operations.

As such, the Company expects its revenue to significantly increase in the fourth quarter.

During this time

period, our associated costs of revenues have also increased at a larger percentage than our revenue growth, resulting in lower

gross margins.

increase in the cost of revenues during the 2024 Period as compared to the 2023 Period is due to the increase in Validator Payments made

to purchase block space as part of our Ethereum block-building activities during the 2024 Quarter and Period.

These additional costs

are partially offset by the efficiencies realized in our blockchain infrastructure validating operating costs, including streamlining

of web service hosting fees and reduction of services provided by vendors.

We believe our cost of revenues will increase as we continue

to ramp up our business, particularly our strategy to increase the number and value of block production, requiring additional purchases

of block space from Validators.

Summary of Accounting Principle Change

in Ethereum Block Building Revenues and Costs

During the second 2024 Quarter,

the Company implemented a change in accounting principle related to the presentation of revenues and costs associated with our Ethereum

block building operations.

This change, made under ASC 606, now presents gas fees earned as gross revenue and Validator Payments as cost

of revenues, rather than netting them against each other.

This correction, applied retrospectively, better reflects the economic substance

of our transactions and provides enhanced transparency.

The change does not impact gross profit, net income, or balance sheet items, but

it does result in increased reported revenues and costs for the three months ended March 31, 2024.

of Accounting Principle Change in Ethereum Block Building Revenues and Costs

the second Quarter of 2024, the Company implemented a change in accounting principle related to the presentation of revenues and

costs associated with our Ethereum bloc- building operations.

This change, made under ASC 606, now presents gas fees earned as gross

revenue and Validator Payments as cost of revenues, rather than netting them against each other.

This correction, applied

retrospectively, better reflects the economic substance of our transactions and provides enhanced transparency.

The change does not

impact gross profit, net income, or balance sheet items, but it does result in increased reported revenues and costs for the three

months ended March 31, 2024.

and administrative expenses consist of director compensation, legal and professional fees and other personnel and related costs.

decrease in the 2024 Period was primarily due to a decrease of approximately $140,000 in legal service and related administrative costs

from the 2023 Period, driven primarily by services surrounding the Series V Preferred Distribution and related listing on Upstream Exchange

incurred during the first half of 2023.

We are uncertain as to whether our future investigation legal expenses related to the SEC’s

current investigation of the Company will have a material impact on our operating expenses during the balance of 2024 or thereafter.

Additionally, we incurred higher accounting fees related to our audits and Form S-3 registration during the 2024 Period, which is partially

offset by other reduced costs resulting from cost cutting measures for other professional fees during the 2024 Period.

and development expenses decreased during the 2024 Period from the 2023 Period as the Company focused on the beta release of our proprietary

StakeSeeker platform in the first quarter 2023, including responding to user feedback and continued planned feature development and incorporation

onto the platform.

Research and development in the 2024 Period focused on the launch of Builder+ operations as well as the further development

of ChainQ, which launched in July 2024.

We anticipate research and development costs to remain consistent as we continue to expand on

technological solutions in the blockchain sector with a focus on cost management of our third-party development team.

and related expenses increased during the 2024 Period resulting from the addition of employee headcount during the 2024 Quarter.

our compensation expenses will increase from those reported in the 2024 Period as the Company continues to utilize non-cash equity-based

compensation incentives as a core part of our compensation strategy and anticipate accruals for 2024 performance-based bonus incentives

in future reporting periods.

increase in the 2024 Period was primarily due to an increase of approximately $200,000 in proxy service fees related to our 2024 annual

meeting as well as a decrease of approximately $140,000 in legal fees and related administrative costs from the 2023 Period, driven primarily

by services surrounding the Series V Preferred Distribution and related listing on Upstream Exchange incurred during the first half of

We are uncertain as to whether our future legal expenses related to the SEC’s current investigation of the Company will have

a material impact on our operating expenses during the remainder of 2024, or thereafter.

Additionally, we incurred higher accounting

fees related to our audits and Form S-3 registration during the 2024 Period, which is partially offset by other reduced costs resulting

from cost cutting measures for other professional fees during the 2024 Period.

and development expenses decreased slightly during the 2024 Period from the 2023 Period as the Company shifted efforts dedicated to

the beta release of our proprietary StakeSeeker platform in the 2023 Period to focus on the launch of Builder+ operations as well as

the further development of ChainQ, which launched in July 2024.

We anticipate research and development costs to remain consistent as

we continue to expand on technological solutions in the blockchain sector with a focus on cost management of our third-party

development team.

and related expenses increased during the 2024 Period resulting from the addition of employee headcount during the 2024 Quarter as well

as larger accruals for estimated performance bonuses for 2024.

We believe our compensation expenses will increase from those reported

in the 2024 Period as the Company continues to utilize non-cash equity-based compensation incentives as a core part of our compensation

strategy and anticipate additional accruals for 2024 performance-based bonus incentives in future reporting periods and may bring on additional staff.

costs increased during the 2024 Period as the Company incurred costs associated with the purchase of transaction traffic to bolster Ethereum

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in order to further increase Ethereum block-building activities.

realized gains on crypto asset transactions increased during the 2024 Period as the Company sold certain crypto assets from our blockchain

realized losses on crypto asset transactions increased during the 2024 Period as the Company sold certain crypto assets from our blockchain

infrastructure operations in order to fund operating activities.

The Company may realize additional gains (losses) in the future resulting

from the sale of crypto assets earned are sold to meet cash needs.

The Company may realize additional gains (losses) in the future resulting from the sale of crypto assets to meet operational and cash needs.

Income (Expenses)

changes in other income for the 2024 Quarter and Period were primarily attributed to the recognition of the change in unrealized appreciation

on crypto assets resulting from the increase in the fair market value of the Company’s crypto assets during the 2024 Period compared

to the 2023 Period and the decrease in the fair market value of the Company’s crypto assets during the 2024 Quarter.

the unrealized appreciation or depreciation of crypto assets are directly influenced by the volatility in crypto markets, which can be

challenging for management to predict.

the changes in other income for the 2024 Quarter were partially driven by the decrease in the fair value of warrant liabilities throughout

changes in other income for the 2024 Quarter and 2024 Period were primarily attributed to the recognition of the change in unrealized

appreciation on crypto assets resulting from the increase in the fair market value of the Company’s crypto assets during the 2024

Period compared to the 2023 Period and the decrease in the fair market value of the Company’s crypto assets during the 2024 Quarter.

Changes in the unrealized appreciation or depreciation of crypto assets are directly influenced by the volatility in crypto markets,

which can be challenging for management to predict.

the changes in other income for the 2024 Quarter was partially driven by the decrease in the fair value of warrant liabilities throughout

This non-cash expense is influenced by the value of our stock price at the end of each quarter, a factor that we cannot predict.

income (loss)

increase in net income for the 2024 Period compared to the 2023 Period is primarily attributable to larger increases in fair value of

decrease in net income for the 2024 Period compared to the 2023 Period is primarily attributable to larger increases in fair value of

our crypto assets during the 2024 Period compared to the 2023 Period.

The decrease in net loss for the 2024 Quarter compared to the 2023

Quarter is primarily attributable to the peel back of the crypto market during the 2024 Quarter, resulting in declines in the market

prices of our crypto assets and reporting of unrealized depreciation in the 2024 Quarter.

We acknowledge that our net income (loss) may

exhibit significant fluctuations due to the volatility in the crypto asset markets, impacting changes in the fair value of crypto assets

during future reporting periods.

Quarter is primarily attributable to the decline of crypto market prices during the 2024 Quarter, resulting in decreased values of our

crypto assets and reporting of unrealized depreciation in the 2024 Quarter.

We acknowledge that our net income (loss) may exhibit significant

fluctuations due to the volatility in the crypto asset markets, impacting changes in the fair value of crypto assets during future reporting

and Capital Resources

On September 14, 2021, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”)

Wainwright & Co., LLC, as agent (“H.C.

Wainwright”), pursuant to which the Company may offer and sell (assuming

an effective registration statement on Form S-3), from time-to-time, through H.C.

Wainwright, shares of the Company’s Common Stock

having an aggregate offering price of up to $98,767,500.

From the period September 14, 2021 through August 16, 2024, the Company sold a

total of 4,790,475 shares of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $17,938,000 at an

average selling price of $3.74 per share, resulting in net proceeds of approximately $17,350,000 after deducting commissions and other

transaction costs.

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.

September 14, 2021, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C.

& Co., LLC, as agent (“H.C.

Wainwright”), pursuant to which the Company may offer and sell (assuming an effective registration

statement on Form S-3), from time-to-time, through H.C.

Wainwright, shares of the Company’s Common Stock having an aggregate offering

price of up to $98,767,500.

From September 14, 2021 through November 12, 2024, the Company sold a total of 5,260,536 shares

of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $19, 176 ,000 at an average selling price

of $3.65 per share, resulting in net proceeds of approximately $18,548,000 after deducting commissions and other transaction costs.

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

Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity

2 unchanged sentences

on an ongoing basis.

As of June 30, 2024, the Company had approximately $537,000 of cash and working capital of approximately $33,005,000.

of August 16, 2024, the Company had approximately $562,000 of cash and cash equivalents and the fair market value of the Company’s

As of September 30, 2024, the Company had approximately $254,000 of cash and working capital of approximately $25,090,000.

of November 12, 2024, the Company had approximately $1,466,000 of cash and cash equivalents and the fair market value of the Company’s

liquid crypto assets was approximately $31,548,000.

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Lock-up periods for our staked crypto assets range from

several hours to six months.

several hours to nine months.

During times of instability in the market of crypto assets, we may not be able to sell our crypto assets

3 unchanged sentences

used in operating activities was approximately $2,388,000 during the 2024 Period compared to approximately $2,693,000 for the 2023 Period.

The largest non-cash adjustment to our operating cash flows consisted of approximately $7,159,000 change in in unrealized appreciation

on crypto assets during the 2024 Period, which is based on volatility in the crypto asset market and cannot be accurately predicted.

The largest recurring non-cash adjustments to our operating cash flows consisted of approximately $1,888,000 in stock-based compensation

as well as approximately $1,752,000 of revenue earned in native token crypto assets.

provided by investing activities was approximately $531,000 during the 2024 Period compared to cash used in investing activities of approximately

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We anticipate similar

levels of sales of additional crypto assets in future quarters as we fund operating activities from crypto earned as staking revenues.

provided by financing activities was approximately $240,000 during the 2024 Period compared to approximately $927,000 for the 2023 Period.

The cash inflows from financing activities were entirely from proceeds from the Common Stock sold pursuant to the ATM Agreement.

Company plans to continue to raise proceeds from the sale of Common Stock to fund operations as needed.

levels of crypto assets sales in future quarters to fund operating activities.

provided by financing activities was approximately $653,000 during the 2024 Period compared to approximately $1,114,000 for the 2023

The cash inflows from financing activities were entirely from proceeds of Common Stock sold pursuant to the ATM Agreement.

The Company plans to continue to raise proceeds from the sale of Common Stock to fund operations as needed.

Balance Sheet Transactions

of June 30, 2024, there were no off-balance sheet arrangements and we were not a party to any off-balance sheet transactions.

no guarantees or obligations other than those which arise out of normal business operations.

of September 30, 2024, there were no off-balance sheet arrangements and we were not a party to any off-balance sheet transactions.

have no guarantees or obligations other than those which arise out of normal business operations.

Accounting Policies and Estimates

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statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions.

forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that

are difficult to predict.

Our actual results may differ materially from those contemplated by the forward-looking statements.

you therefore against relying on any of these forward-looking statements.

They are neither statements of historical fact nor guarantees

or assurances of future performance.

The results anticipated by any or all of these forward-looking statements might not occur.

factors that could cause actual results to differ materially from those in the forward-looking statements include the rewards and costs

associated with staking or validating transactions on blockchains, regulatory issues related to our business model, a drop in the price

of our crypto assets, significant decrease in the value of our crypto assets and rewards, loss or theft of the private withdrawal keys

resulting in the complete loss of crypto assets and reward, and others which are contained in our filings with the SEC, including our

Form 10-K for the year ended December 31, 2023.

Any forward-looking statement made by us speaks only as of the date on which it is made.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict

We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future

developments or otherwise, except as may be required by law.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in

circumstances that are difficult to predict.

Our actual results may differ materially from those contemplated by the forward-looking

We caution you therefore against relying on any of these forward-looking statements.

They are neither statements of

historical fact nor guarantees or assurances of future performance.

The results anticipated by any or all of these forward-looking

statements might not occur.

Important factors that could cause actual results to differ materially from those in the forward-looking

statements include the rewards and costs associated with staking or validating transactions on blockchains and successfully building blocks on Ethereum’s blockchain, regulatory issues

related to our business model, a drop in the price of our crypto assets, significant decrease in the value of our crypto assets and

rewards, loss or theft of the private withdrawal keys resulting in the complete loss of crypto assets and reward, and others which

are contained in our filings with the SEC, including our Form 10-K for the year ended December 31, 2023.

Any forward-looking

statement made by us speaks only as of the date on which it is made.

Factors or events that could cause our actual results to differ

may emerge from time to time, and it is not possible for us to predict all of them.

We undertake no obligation to publicly update

any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required

3 Quantitative and Qualitative Disclosures About Market Risk

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 2. Management’s Discussion and Analysis