What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-15 compared with 2024-11-13 · 546 added, 509 removed, 468 unchanged (69% of the section changed)

1 Financial Statements

September 30,

Consolidated Balance Sheets

Current assets:

2 unchanged sentences

Staked crypto assets

Prepaid compensation

Prepaid expenses

Receivable for capital shares sold

Total current assets

9 unchanged sentences

Stockholders’ equity:

Preferred stock:

20,000,000 shares authorized at $ 0.001 par value:

Preferred Stock, $ 0.001 par value per share;

shares authorized;

Series V Preferred Stock;

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

16,004,738 and 15,033,231 shares issued and outstanding as of March 31, 2025 and December 31, 2024, 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

Common Stock, $ 0.001 par value per share;

shares authorized;

20,206,880 and 18,717,743

shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

4 unchanged sentences

Total Liabilities and Stockholders’ Equity

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

of Operations

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

Consolidated Statements of Operations

For the Three Months Ended

For the Nine Months Ended

September 30,

Blockchain infrastructure revenues (net of fees)

Blockchain infrastructure revenues

Total revenues

8 unchanged sentences

Other income (expenses):

Change in unrealized appreciation (depreciation) on crypto assets

( 7,396,380 )

Change in unrealized appreciation (depreciation) of crypto assets

( 14,530,822 )

2 unchanged sentences

( 14,305,672 )

( 2,629,029 )

Net income (loss)

$ ( 17,268,697 )

$ ( 3,283,557 )

$ ( 3,511,070 )

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

2 unchanged sentences

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 Nine Months Ended September 30, 2024

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

Consolidated Statements of Changes in Stockholders’ Equity

the Three Months Ended March 31, 2025

Preferred Stock

3 unchanged sentences

18,717,743 (2)

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

Stock-based compensation

Net income (loss)

$ 171,283,199

$ ( 139,948,277 )

Balance September 30, 2024

$ 164,803,541

$ ( 142,188,173 )

the Nine Months Ended September 30, 2023

Preferred Stock

Stockholders’

Balance December 31, 2022, as adjusted

$ 160,800,263

$ ( 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

Forfeiture of stock-based awards

Net income (loss)

Balance September 30, 2023

( 17,268,697 )

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 September 30, 2024

Preferred Stock

Stockholders’

Balance Ju ne 30, 2024

$ 163,681,450

$ ( 133,148,386 )

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

Stock-based compensation

Net income (loss)

Balance March 31, 2025

16,004,738 (1)

20,206,880 (2)

Balance September 30, 2024

$ 174,937,017

$ ( 157,216,974 )

the Three Months Ended September 30, 2023

restricted shares of Series

V Preferred Stock held by employees that remain subject to forfeiture based on time-based vesting conditions.

Stockholders’ Equity (Deficit) for further details.

restricted shares of Common

Stock held by employees that remain subject to forfeiture based on time-based vesting conditions.

See Note 6 – Stockholders’

Equity (Deficit) for further details.

the Three Months Ended March 31, 2024

Preferred Stock

Stockholders’

Balance June 30, 2023

Balance December 31, 2023

$ 162,263,634

2 unchanged sentences

$ ( 138,677,103 )

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

Stock-based compensation

Net income (loss)

( 3,283,557 )

Balance September 30, 2023

Balance March 31, 2024

$ 163,141,291

2 unchanged sentences

$ ( 126,420,517 )

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

of Cash Flows

For the Nine Months Ended

September 30,

Net Cash flows used from operating activities:

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

Consolidated Statements of Cash Flows

For the Three Months Ended

Net Cash flows used in operating activities:

Net income (loss)

5 unchanged sentences

( 1,688,935 )

( 1,013,503 )

Builder payments (non-cash)

Blockchain network fees (non-cash)

Change in fair value of warrant liabilities

Realized (gains) losses on crypto assets transactions

Change in unrealized (appreciation) depreciation on crypto assets

Realized losses on crypto assets transactions

Change in unrealized (appreciation) depreciation of crypto assets

( 13,102,667 )

4 unchanged sentences

Accrued compensation

Net cash used in operating activities

( 3,595,028 )

Net cash used in operating activities

( 1,902,417 )

1 unchanged sentence

Purchase of productive crypto assets for validating

( 1,804,482 )

Sale of productive crypto assets

Purchase of investments

Purchase of property and equipment

6 unchanged sentences

( 1,707,849 )

( 1,393,550 )

Cash, beginning of period

2 unchanged sentences

Series V Preferred Stock Distribution

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

to Unaudited Condensed Financial Statements

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

to Unaudited Condensed Consolidated Financial Statements

1 - Business Organization and Nature of 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

company focused on blockchain infrastructure.

The Company’s primary operations center on the Ethereum network, reflecting its strategic

emphasis on Ethereum block-building (“Builder+”) and validator node operations (“NodeOps”) across various proof-of-stake

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

operates non-custodial validator nodes (or “nodes”) that participate in blockchain network consensus by performing transaction

validation (“attestation”) and block proposal services.

The Company earns native token rewards by staking its PoS crypto

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

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

Additionally, on certain dPoS networks, BTCS enables

third-party crypto asset holders to delegate their assets to its validator nodes, earning validator node fees as a percentage of staking

rewards generated from delegated crypto assets.

2024, BTCS launched its Builder+ operations, a core component of its blockchain infrastructure strategy.

Builder+ leverages advanced

algorithms to optimize the construction of Ethereum blocks for on-chain validation, focusing on maximizing gas fee revenue.

has become a central revenue driver for BTCS, positioning the Company as an integral participant in Ethereum’s transaction cycle.

addition to its blockchain infrastructure operations, BTCS has developed ChainQ, an AI-powered blockchain data and analytics platform

designed to enhance transparency and accessibility within the blockchain ecosystem.

Currently in beta, ChainQ provides intuitive tools

for exploring and analyzing on-chain data, leveraging insights from BTCS’s blockchain infrastructure activities.

Company’s operations are subject to regulatory uncertainties, technological risks and market volatility inherent to 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.

BTCS’s future success depends on the continued adoption of blockchain technology as well as the Company’s

ability to scale its Ethereum block-building operations and expand its broader blockchain infrastructure operations.

2 - Basis of Presentation

of Presentation

accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted

in the United States (“GAAP”) for interim financial information, the instructions to Form 10-Q and the rules and regulations

Accordingly, since they are interim statements, the accompanying unaudited condensed financial statements do not include

all of the information and notes required by GAAP for annual financial statements, but in the opinion of the Company’s management,

reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position,

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

Interim results for the three and nine months ended September

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States (“GAAP”) for interim financial information, the instructions to Form 10-Q and the rules and

regulations of the SEC.

Accordingly, since they are interim statements, the accompanying unaudited condensed consolidated financial statements

do not include all of the information and notes required by GAAP for annual financial statements, but in the opinion of the Company’s

management, reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial

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

Interim results for the three months ended March 31,

2025 are not necessarily indicative of results for the full year ending December 31, 2025.

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 consolidated financial

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

Reclassifications

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 consolidated

financial statements and accompanying notes.

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

consolidated financial statements and related disclosures.

The impact on any prior period disclosures was immaterial.

1 unchanged sentence

have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2024 Annual

Report on the Company’s Form 10-K filed with the Securities and Exchange Commission.

and Cash Equivalents

1 unchanged sentence

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

As of September 30, 2024

As of March 31, 2025

and December 31, 2024, the Company had approximately $ 270,000 and $ 1,978,000 in cash.

4 unchanged sentences

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

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.

As of March 31, 2025 and December

31, 2024, the Company had approximately $ 0 and $ 1,474,000 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.

5 unchanged sentences

Value Measurement

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

Company 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 .

20 unchanged sentences

for Crypto Assets

cost basis of the Company’s crypto assets is initially recorded at their fair value using the last close price of the day in the

UTC (Coordinated Universal Time) time zone on the date of receipt.

assets are measured at their fair respective fair market values at each reporting period end on the balance sheets and classified as

either ‘Staked Crypto Assets’ or ‘Crypto Assets’ to distinguish their nature within the respective balances.

Staked crypto assets are presented as current assets if their lock-up periods are less than 12 months, and as long-term other assets

if the lock-up extends beyond one year.

The majority of our crypto assets are staked, typically with lock-up periods of less than 21

days, and are considered current assets in accordance with ASC 210-10-20, Balance Sheet , due to the Company’s ability to

sell them in a liquid marketplace, as we have a reasonable expectation that they will be realized in cash or sold or consumed during

the normal operating cycle of our business to support operations when needed.

classification of purchases and sales in the statements of cash flows is determined based on the nature of the crypto assets, which can

be categorized as ‘productive’ (i.e.

acquired for purposes of staking) or ‘non-productive’ (e.g.

of non-productive crypto assets are treated as operating activities, while acquisitions of productive crypto assets are classified as

investing activities in accordance with ASC 230-10-20, Investing activities .

Productive crypto assets staked with lock-up periods

of less than 12 months are listed as current assets in the ‘Staked Crypto Assets’ line item on the balance sheet.

crypto assets with lock-up periods exceeding 12 months are categorized as long-term other assets.

Non-productive crypto assets are included

in the ‘Crypto Assets’ line item on the balance sheet.

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

2023-08 , resulting in a material change in accounting principle

related to the Company’s accounting treatment of crypto assets.

The impacts of the change in accounting principle are discussed

further in Note 4.

Company employs the specific identification method to determine the cost basis of our assets for the computation of gains and losses,

in accordance with ASC 350-60-50-2a.

This method involves identifying and using the actual cost of each individual asset sold or disposed

of to calculate the gain or loss on its sale.

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

September 30, 2024 and 2023, respectively.

assets are measured at their respective fair market values using the last close price of the day in the UTC time zone at each reporting

period end on the balance sheets and classified as either ‘Staked Crypto Assets’ or ‘Crypto Assets’ to distinguish

their nature within the respective balances.

Staked crypto assets are presented as current assets if their lock-up periods are less than

12 months, and as long-term other assets if the lock-up extends beyond one year.

The majority of our crypto assets are staked, typically

with lock-up periods of less than 28 days, and are considered current assets in accordance with ASC 210-10-20, Balance Sheet ,

due to the Company’s ability to sell them in a liquid marketplace, as we have a reasonable expectation that they will be realized

in cash or sold or consumed during the normal operating cycle of our business to support operations when needed

January 1, 2025, the Company enhanced its accounting systems and processes related to the receipt and valuation of crypto assets.

a result of these enhancements, the Company updated its accounting policy for determining the cost basis of crypto assets received.

cost basis is now measured at fair value based on the spot price at the time of receipt, consistent with the applicable guidance under ASC 350-60.

to January 1, 2025, the cost basis of crypto assets was measured using the last close price of the day in the UTC (Coordinated Universal

Time) time zone on the date of receipt.

change has been applied prospectively and did not have a material impact on the Company’s financial statements.

Relief in Determining Realized Gains and Losses

conjunction with ongoing system and process enhancements, the Company updated its method for determining the cost basis of crypto assets

used in computing realized gains and losses.

Effective January 1, 2025, the Company adopted the Last-In, First-Out (“LIFO”)

method for determining the cost basis of crypto assets disposed of.

This method assumes that the most recently acquired assets are sold

or used first and replaces the Company’s previous use of the specific identification method, which tracked the actual cost of each

individual asset sold.

Company determined that the change in accounting principle is preferable as it better aligns with the Company’s operational systems

and financial reporting objectives.

The change has been applied prospectively beginning January 1, 2025, as retrospective application

was deemed impracticable due to the nature of prior lot-level selection processes under the specific identification method.

gains (losses) on sale of crypto assets are included in other income (expenses) in the consolidated statements of operations.

recorded realized gains (losses) on crypto assets of approximately ($1,382,000) and $11,000 for the three months ended March 31, 2025

and 2024, respectively.

Company does not believe the change materially impacts comparability of results.

While the realized loss for the three months ended March

31, 2025, reflects application of the new LIFO method, it is not practicable to quantify the exact impact of the change as compared to

the prior method, given the subjective lot selection involved in specific identification.

Based on this assessment, the Company does

not believe the change has a material effect on the consolidated financial statements.

Presentation of Crypto Assets in Financial Statements

classification of purchases and sales in the consolidated statements of cash flows is determined based on the nature of the crypto assets,

which can be categorized as ‘productive’ (i.e.

acquired for purposes of staking) or ‘non-productive’ (e.g., bitcoin).

Acquisitions of non-productive crypto assets are treated as operating activities, while acquisitions of productive crypto assets are

classified as investing activities in accordance with ASC 230-10-20, Investing activities .

Productive crypto assets staked with

lock-up periods of less than 12 months are listed as current assets in the ‘Staked Crypto Assets’ line item on the balance

Staked crypto assets with lock-up periods exceeding 12 months are categorized as long-term other assets.

Non-productive crypto

assets are included in the ‘Crypto Assets’ line item on the balance sheet.

Company’s blockchain infrastructure operations include two primary revenue-generating activities:

Ethereum block building (“Builder+”)

and validator node operations (“NodeOps”).

Company’s Chief Operating Decision Maker (“CODM”) is comprised of several members of its executive management team,

including the Chief Executive Officer (“CEO”), Chief Operating Officer (“COO”) and Chief Financial Officer (“CFO”),

who are responsible for evaluating the Company’s financial performance, managing operations, and allocating capital and resources.

CODM regularly reviews discrete financial information related to Builder+ and NodeOps, assessing financial performance based on gross

profit (loss), direct operating expenses, and key financial metrics.

These financial reviews direct operational decisions and shape capital

deployment strategies for each activity.

the CODM evaluates Builder+ and NodeOps separately, these activities share common economic characteristics, infrastructure, and operational

oversight and are therefore aggregated into a single operating segment under ASC 280, Segment Reporting.

with ASU 2023-07, the Company discloses significant segment expenses that are regularly provided to the CODM for decision-making purposes.

See Note 10 – Segment Information for more information.

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

12 unchanged sentences

The Company generates revenue through 1) staking rewards

generated from its blockchain infrastructure operations, and 2) gas fees earned from successful Ethereum block building through Builder+.

These revenues are collectively termed ‘Blockchain infrastructure revenues’ in the statements of operations.

generated from its blockchain infrastructure operations (NodeOps), and 2) gas fees earned from successful Ethereum block-building through

These revenues are collectively termed ‘Blockchain infrastructure revenues’ in the consolidated statements of operations.

transaction consideration the Company receives - the crypto asset awards and gas fees - are a non-cash consideration, which the Company

measures at fair value on the date received.

Infrastructure

Infrastructure (NodeOps)

Company engages in network-based smart contracts by running its own crypto asset validator nodes as well as by staking (or “delegating”)

2 unchanged sentences

crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network.

term of a smart contract can vary based on the rules of the respective blockchain and typically last from a few days to several weeks

after it is cancelled (or “un-staked”) by the delegator and requires that the staked crypto assets remain locked up during

term of a smart contract can vary based on the rules of the respective blockchain and typically lasts from a few days to several weeks

after it is cancelled (or “un-staked”) by the delegator and requires that the crypto assets staked remain locked up during

the duration of the smart contract.

exchange for staking the crypto assets and validating transactions on blockchain networks, the Company is entitled to all of the fixed

crypto asset awards earned from the network when delegating to the Company’s own node and is entitled to a fractional share of

the fixed crypto asset awards a third-party node operator receives (less crypto asset transaction fees payable to the node operator,

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

The Company’s fractional share of awards received from delegating to a third-party validator node is proportionate to the crypto

assets staked by the Company compared to the total crypto assets staked by all Delegators to that node at that time.

crypto asset award earned from the network when delegating to the Company’s own node and is entitled to a fractional share of the

fixed crypto asset award a third-party node operator receives (less crypto asset transaction fees payable to the node operator, which

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

The Company’s

fractional share of awards received from delegating to a third-party validator node is proportionate to the crypto assets staked by the

Company compared to the total crypto assets staked by all Delegators to that node at that time.

certain blockchain networks on which the Company operates a validator node, the Company earns a validator node fee (“Validator

35 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 nine months ended September 30,

2024 and 2023.

following table summarizes the revenues earned from the Company’s operations for the three months ended March 31, 2025 and 2024.

Schedule of Revenues Earned from Company’s Operations

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Revenues from blockchain infrastructure operations

Staking to BTCS nodes

Staking to third-party nodes

Total revenues

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:

(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

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

September 30,

For the Nine Months Ended

September 30,

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

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

March 31, 2025 and 2024.

Revenues earned from blockchain infrastructure staking activities through NodeOps include token rewards earned

from the delegation of cryptocurrency assets to third-party validator nodes as well as token rewards derived from BTCS-operated validator

nodes, which include staking of the Company’s crypto assets to BTCS nodes and Validator Fees earned from third-parties asset delegations

to our nodes.

Revenues earned from Ethereum block-building through Builder+ includes block rewards generated by BTCS Builders.

assets earned from blockchain infrastructure staking activities through NodeOps

of Crypto Assets Earned from Blockchain Infrastructure Staking Activities

For the Three Months Ended March 31,

Token Rewards

4 unchanged sentences

Cosmos (ATOM)

Oasis Network (ROSE)

Avalanche (AVAX)

NEAR Protocol (NEAR)

Evmos (EVMOS)

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

September 30,

For the Nine Months Ended

September 30,

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Solana (SOL)*

Axie Infinity (AXS)*

Polygon (POL fka MATIC)

NEAR Protocol (NEAR)*

Avalanche (AVAX)

Polkadot (DOT)*

Evmos (EVMOS)

Rocket Pool (RPL)*

Polygon (POL)*

Oasis Network (ROSE)

Cardano (ADA)*

NEAR Protocol (NEAR)

Total earned from staking to third-party validator nodes

assets earned from Ethereum block building through Builder+

Evmos (EVMOS)*

Total earned from blockchain infrastructure staking activities through NodeOps

or a portion of revenue earned from staking to third-party validator nodes

assets earned from block-building through Builder+

Schedule of Crypto Assets Earned From

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

Token Rewards

Revenue ($USD)

For the Three Months Ended March 31,

Ethereum (ETH)

Total earned from Ethereum block building through Builder+

Total earned from block-building through Builder+

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

3 unchanged sentences

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.

costs directly related to the production of revenues are collectively termed ‘Blockchain infrastructure expenses’ in the

consolidated statements of operations.

following table further details the costs of revenues for the three months ended March 31, 2025 and 2024.

Schedule of Costs of Revenues

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

For the Three Months Ended

Cost of staking revenues

29 unchanged sentences

Depreciation and

amortization are recorded using the straight-line method over the respective useful lives of the assets ranging from three to five years .

Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may

not be recoverable.

accompanying financial statements have been prepared in conformity with U.S.

This requires management to make estimates and assumptions

that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the

financial statements, and the reported amounts of revenue and expenses during the period.

The Company’s significant estimates and

assumptions include the recoverability and useful lives of indefinite life intangible assets, stock-based compensation, and the valuation

allowance related to the Company’s deferred tax assets.

Certain of the Company’s estimates, including the carrying amount

of the indefinite life intangible assets, could be affected by external conditions, including those unique to the Company and general

economic conditions.

It is reasonably possible that these external factors could have an effect on the Company’s estimates and

could cause actual results to differ from those estimates and assumptions.

amortization are recorded using the straight-line method over the respective useful lives of the assets ranging from three 3

Long-lived assets are reviewed for impairment

whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.

accompanying consolidated financial statements have been prepared in conformity with U.S.

This requires management to make estimates

and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at

the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period.

The Company’s

significant estimates and assumptions include the recoverability and useful lives of indefinite life intangible assets, stock-based compensation,

and the valuation allowance related to the Company’s deferred tax assets.

Certain of the Company’s estimates, including the

carrying amount of the indefinite life intangible assets, could be affected by external conditions, including those unique to the Company

and general economic conditions.

It is reasonably possible that these external factors could have an effect on the Company’s estimates

and could cause actual results to differ from those estimates and assumptions.

Company recognizes income taxes on an accrual basis based on tax positions taken or expected to be taken in its tax returns.

8 unchanged sentences

approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that

have been recognized in the Company’s financial statements or tax returns.

A valuation allowance is established to reduce deferred

tax assets if all, or some portion, of such assets will more than likely not be realized.

Should they occur, the Company’s policy

is to classify interest and penalties related to tax positions as income tax expense.

Since the Company’s inception, no such interest

or penalties have been incurred.

have been recognized in the Company’s consolidated financial statements or tax returns.

A valuation allowance is established to

reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized.

Should they occur, the Company’s

policy is to classify interest and penalties related to tax positions as income tax expense.

Since the Company’s inception, no

such interest or penalties have been incurred.

Company accounts for the issuance of Common Stock purchase warrants issued in connection with the equity offerings in accordance with

18 unchanged sentences

at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized as “change in

the fair value of warrant liabilities” in the statements of operations.

The fair value of the warrants has been estimated using

a Black-Scholes valuation model (see Note 6).

the fair value of warrant liabilities” in the consolidated statements of operations.

The fair value of the warrants has been estimated

using a Black-Scholes valuation model (see Note 5 - Fair Value of Financial Assets and Liabilities ).

Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation .

11 unchanged sentences

of management’s judgment.

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

options granted prior to January 1, 2025, historical volatility was based on the most recent volatility of the stock price over a period equivalent

to the expected term of the option.

For options granted on or after January 1, 2025, historical volatility is

determined using a two-year lookback period.

Management selected this approach to better reflect the Company’s current market

conditions and exclude periods of non-representative volatility associated with significant changes in the Company’s business,

market conditions, and capital structure.

The two-year lookback period balances capturing industry and market cycles with avoiding

outdated and non-representative data.

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

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

grant for the expected term of the option.

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

expected to be outstanding.

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

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

Dividend – The Company has not historically declared or paid any cash dividends on its common shares and does not plan to pay

any recurring cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

Stock Units (RSUs)

10 unchanged sentences

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

January 27, 2023, the Company’s Board of Directors (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 who were entitled to such distribution).

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) .

A total of 14,542,803 shares of Series V Preferred Stock were distributed to shareholders on June 2, 2023.

In June 2023,

the Series V shares commenced trading on Upstream, a Merj Exchange market (“Upstream”).

In November 2023, Upstream announced

that it was no longer providing U.S.

individuals with the ability to trade on Upstream.

All Series V shares owned by U.S investors were

returned to the transfer agent.

Company will evaluate the appropriateness of potential future dividends as the Company continues to grow its operations.

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

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

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

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

grant for the expected term of the RSUs.

Term – The Company’s expected term represents the weighted-average period that the Company’s RSUs are expected

to be outstanding.

The expected term is based on the stipulated 5-year period from the grant date until the market-based criteria are

If the market-based criteria are not achieved within the five-year period from the grant date, the RSUs will not vest and shall

Hurdle Price – The vesting hurdle prices are determined by taking the vesting Market Cap criteria divided by the shares outstanding

as of the valuation dates

1 unchanged sentence

Advertising and marketing expenses amounted to approximately $ 245,000

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.

and $ 58,000 for the three months ended March 31, 2025 and 2024, respectively.

Income (Loss) per Share

5 unchanged sentences

stock units, options and warrants.

Diluted income (loss) per share excludes the shares issuable upon the conversion of preferred stock,

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 and nine months ended September

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

Diluted loss per share excludes the shares issuable upon the conversion of preferred stock and warrants

from the calculation of net loss per share if their effect would be anti-dilutive.

the three months ended March 31, 2025, diluted loss per share excludes all potential common shares, including restricted stock units,

options, warrants, and other convertible instruments, as their inclusion would be anti-dilutive due to the net loss reported for the

the three months ended March 31, 2024, the Company reported net income.

As a result, diluted net income per share included potential

common shares that were dilutive during the period.

following financial instruments were excluded from the calculation of diluted loss per share for the three months ended March 31,

2024, as their effect was anti-dilutive:

of Earnings Per Share Anti-diluted

As of September 30,

March 31, 2025

Warrants to purchase common stock

Non-vested restricted stock awards units

Non-vested restricted stock unit awards

Non-vested restricted common stock

Anti-dilutive securities

Accounting Pronouncements

December 2023, the FASB issued ASU No.

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

Company continually assesses new accounting pronouncements to determine their applicability.

When it is determined that a new accounting

pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of such change

to its Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Company’s Consolidated

Financial Statements properly reflect the change.

December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60) (“ASU

2023-08”), 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

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.

also 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 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.

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

discussed in Note 4.

2023-08 effective January

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU

ASU 2023-07 is intended to enhance reportable segment disclosures by requiring disclosures of significant segment expenses

regularly provided to the CODM, requiring disclosure of the title and position of the CODM and explanation of how the reported measures

of segment profit and loss are used by the CODM in assessing segment performance and a location of resources.

ASU 2023-07 is effective

for the Company for annual periods beginning after December 31, 2023.

The Company adopted ASU 2023-07 for the year ended December 31,

As a result of the adoption, the Company expanded its disclosures in Note 10 – Segment Information , to present significant

expenses that are included within cost of revenue, by reportable segment, which are presented to the CODM.

December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to enhance the

transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 provide improvements primarily related

to the rate reconciliation and income taxes paid information included in income tax disclosures.

The Company is required to disclose

additional information regarding reconciling items equal to or greater than five percent of the amount computed by multiplying pretax

income (loss) by the applicable statutory tax rate.

Similarly, the Company is required to disclose income taxes paid (net of refunds

received) equal to or greater than five percent of total income taxes paid (net of refunds received).

The amendments in ASU 2023-09

are effective January 1, 2025.

Early adoption is permitted for annual financial statements that have not yet been issued or made available

for issuance.

The Company is currently evaluating the impacts of ASU 2023-09 on its financial statements.

December 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40) (“ASU 2024-03”).

ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified

information about certain costs and expenses specified in the updated guidance.

ASU 2024-03 is effective for annual reporting periods

beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

Company is evaluating the impact the updated guidance will have on its disclosures.

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

1 unchanged sentence

present or future financial statements.

4 - Changes in Accounting Principle

Value Accounting for Crypto Assets - Adoption of ASU No.

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

2023-08, resulting in a material change in accounting principles related

to the Company’s accounting treatment of crypto assets.

a result of the adoption of ASU No.

2023-08, crypto assets are recorded at their fair market value on its balance sheet and changes in

the fair market value of its crypto assets during reporting periods are recorded within its statements of operations as unrealized appreciation

(depreciation).

Prior to adopting ASU No.

2023-08, crypto assets were accounted for as intangible assets with an indefinite life in accordance

with ASC 350, Intangibles –Goodwill and Other , carrying them at their impaired value and recognizing impairment losses during

reporting periods.

Adoption of the fair market value guidance contained within ASU No.

2023-08 eliminates the need to calculate impairment

losses on crypto assets for the period of adoption and moving forward.

Company elected to early adopt the guidance contained with ASU No.

2023-08 as we believe that the specified changes in financial reporting

better reflect the economic realities of the Company’s business model and the value of the crypto assets held, enhancing the transparency

and accuracy of the financial statements.

adoption of ASU No.

2023-08 required an adjustment to the Company’s opening Retained Earnings balance as of January 1, 2023, to

recognize the cumulative effect of initially applying the change in accounting principle to previous periods.

The adjustment accounts

for the difference between the December 31, 2022 ending book value of crypto assets and their respective fair market value, which amounted

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 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.

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

As reported on

As revised resulting

from change in

accounting principle

For the Three Months Ending

March 31, 2024

As reported on

As revised resulting

from change in

accounting principle

Cost of revenues

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+.

4 – Crypto Assets

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

following table presents the Company’s crypto assets held as of March 31, 2025:

Schedule of Crypto Assets Held

4 unchanged sentences

Axie Infinity (AXS)

Polygon (POL fka MATIC)

NEAR Protocol (NEAR)

Cardano (ADA)

Polkadot (DOT)

Evmos (EVMOS)

Band Protocol (BAND)

BNB Chain (BNB)

Rocket Pool (RPL)

18 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 September 30, 2024 and December 31, 2023:

estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2025 and December 31, 2024:

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

Fair Value Measured at September 30, 2024

September 30,

Quoted prices in

active markets

Significant other

observable inputs

Fair Value Measured at March 31, 2025

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Crypto Assets

1 unchanged sentence

Fair Value Measured at December 31, 2024

Quoted prices in

active markets

Significant other

observable inputs

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 nine months ended September 30, 2024 and

Company did not make any transfers between the levels of the fair value hierarchy during the three months ended March 31, 2025 and 2024.

3 Valuation Techniques

1 unchanged sentence

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 .

As of March 31, 2025 and December 31, 2024, the

Company’s Level 3 investments were carried at the original cost of the investments, with a value of $ 350,000 and $ 100,000 , respectively.

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

3 unchanged sentences

or assumptions and recorded as appropriate.

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.

Changes in the values of the warrant liabilities are recorded in “change in fair value

of warrant liabilities” in the Company’s statements of operations.

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.

Changes in the values of the warrant liabilities are recorded in “change in fair value of warrant

liabilities” in the Company’s consolidated statements of operations.

March 2, 2021, the Company entered into a securities purchase agreement with certain purchasers which closed on March 4, 2021 pursuant

2 unchanged sentences

Warrants require, at the option of the holder, a net-cash settlement following certain fundamental transactions (as defined in the Warrants).

at the Company.

At the time of issuance, the Company maintained control of certain fundamental transactions and as such the Warrants

were initially classified in equity.

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.

As of March 31, 2025, the Company no longer maintained control of certain fundamental transactions

because it did not hold a majority of shareholder voting power.

As such, the Company may be required to cash settle the Warrants if a fundamental

10 unchanged sentences

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 September 30,

warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and, as of March 31, 2025

and December 31, 2024, is as follows:

Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities

September 30, 2024

March 31, 2025

December 31, 2024

6 unchanged sentences

volatility, giving primary consideration to the historical volatility of its Common Stock.

The general expected volatility is based on

The expected volatility is calculated using

the standard deviation of the Company’s underlying stock price’s daily logarithmic returns.

4 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 nine months ended September 30, 2024 and 2023, that are measured at fair value on a recurring basis:

for the three months ended March 31, 2025 and 2024, 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

2 unchanged sentences

6 – Stockholders’ Equity

Company received shareholder approval on July 11, 2023 to amend our Articles of Incorporation to increase the number of authorized shares

of common stock from 97,500,000 shares to 975,000,000 .

On July 12, 2023, the Company filed a Certificate of Amendment to the Articles

of Incorporation to effectuate the increase of our authorized shares of common stock to 975,000,000 .

of March 31, 2025, the Company had 975,000,000

shares of common stock, $ 0.001 par value, authorized, of which

20,206,880 shares

were issued and outstanding.

At-The-Market

2 unchanged sentences

& Co., LLC, as agent (“H.C.

Wainwright”), pursuant to which the Company may offer and sell, from time-to-time through

Wainwright, shares of the Company’s Common Stock having an aggregate offering price of up to $ 98,767,500 (the “Shares”).

The Company will pay H.C.

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

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

Wainwright”), pursuant to which the Company may offer and sell, from time-to-time, shares

of the Company’s Common Stock through H.C.

Wainwright, as agent.

Initially, the aggregate offering price of shares issuable under

the ATM Agreement was $ 98,767,500 (the “Shares”).

October 4, 2024, the Company’s new Form S-3 registration statement became effective, increasing the total amount of securities

that may be offered and sold under the prospectus to $ 250,000,000 .

Company shall pay H.C.

Wainwright a commission equal to 3.0 %

of the aggregate gross proceeds from each sale of Shares under the ATM Agreement.

the three months ended March 31, 2025, the Company sold a total of 127,249 shares of Common Stock under the ATM Agreement for aggregate

total gross proceeds of approximately $ 238,000 at an average selling price of $ 1.87 per share, resulting in net proceeds of approximately

1 unchanged sentence

Based Payments

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).

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

Company issues $ 12,500 of common stock to each independent director at the end of each calendar quarter, subject to continued service.

The number of shares is determined based on the closing price of the Company’s common stock on the last trading day of the applicable

For the three months ended March 31, 2025, the Company issued 25,002 shares of common stock with a grant date fair value of

approximately $ 38,000 to independent directors.

Bonus Payments

the three months ended March 31, 2025, the Company issued 329,110 shares of common stock to officers and employees as part of the payment

of accrued bonus compensation for the year ended December 31, 2024.

The total fair value of the shares issued was approximately $ 813,000

based on the Company’s closing stock price on the issuance date.

Of the shares issued, 33,731 were returned to net settle the issuance

and pay related taxes, resulting in a net share issuance of 295,379 shares of common stock.

V Preferred Stock

Company previously designated and issued 14,542,803 shares of Series V Preferred Stock (“Series V”) on June 2, 2023 to shareholders

of record as of May 12, 2023.

The Series V:

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

The Company used a probability

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.

(i) is non-convertible (subject to potential conversion rights, as described below), (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) .

September 6, 2024, at the Company’s 2024 Annual Meeting, stockholders approved an amendment to the Series V Certificate of Designation

granting the Board the discretion to convert each share of Series V into one share of common stock.

As of March 31, 2025, the Board has

not filed the amendment or elected to convert any Series V shares.

the three months ended March 31, 2025, the Company issued 1,020,834

restricted shares of Series V in connection with the vesting of employee restricted stock units (“RSUs”).

restricted shares remain subject to forfeiture if specified market capitalization thresholds are not achieved within the applicable

performance measurement period.

Of this amount, 166,668

shares are also subject to time-based vesting conditions requiring continued service over the vesting period.

February 3, 2025, 49,327 restricted shares of Series V were forfeited following the resignation of the Company’s Chief Technology

These shares were returned to the Company and are no longer outstanding.

of March 31, 2025, a total of 971,507 restricted shares of Series V Preferred Stock were issued and outstanding.

Of these, 48,967 shares

remain subject solely to time-based vesting conditions, which extend over a one- to three-year period, with full vesting expected by

December 31, 2027.

Equity Incentive Plan

3 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 nine

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

summary of stock option activity under the Company’s 2021 Equity Incentive Plan for the three months ended March 31, 2025 and

2024 is presented below:

Summary of Option Activity

Average Exercise

Average Remaining Contractual Life (in

outstanding as of December 31, 2024

options granted

outstanding as of March 31, 2025

vested and exercisable as of March 31, 2025

Average Exercise

Average Remaining Contractual Life (in

as of December 31, 2023

options granted

options forfeited

as of March 31 ,2024

vested and exercisable as of March 31, 2024

following weighted-average assumptions were used to estimate the fair value of options granted during the three months ended March 31,

2025 and 2024, using the Black-Scholes option pricing model:

Weighted-Average Assumptions Used to Estimate Fair Value

Nine Months Ended

September 30,

Exercise price

the Three Months Ended March 31,

stock price volatility

rate of interest

assumptions are consistent with the methods described in Note 3 – Summary of Significant Accounting Policies .

Stock Units (RSUs)

Incentive Plan (LTI) RSUs

January 1, 2025, the Board approved the grant of 150,000 RSUs under the Company’s Long-Term Incentive Plan (“LTI”)

to a non-officer employee.

These RSUs are subject to both market capitalization and time-based vesting conditions.

RSUs vest in three equal tranches of 50,000 RSUs each, based on the Company achieving and sustaining specific market capitalization thresholds

for 30 consecutive days on or before December 31, 2026, as follows:

Schedule of Restricted Stock Units

Market Cap Vesting Thresholds

RSUs for which the market capitalization condition is not met by December 31, 2026, will be forfeited and automatically terminate without consideration.

any tranche in which the market capitalization condition is achieved, the RSUs remain subject to a time-based vesting schedule, with

20 % of eligible RSUs vesting annually over five years , beginning on each December 31, 2025 through 2029, provided the grantee remains

in continuous service through each vesting date.

fair value of these market-based RSUs was determined using a Monte Carlo simulation and totaled approximately $ 181,000 as of the grant

The following assumptions were used to determine fair value as of the grant date, January 1, 2025:

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

January 1, 2025

Vesting Hurdle Price

$ 5.26 - $ 15.79

Expected stock price volatility

Risk-free rate of interest

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

Historical volatility

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

Interest Rate :

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

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

the expected term of the option.

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

to be outstanding.

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

The Company uses

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

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

of grant was immediately recognized.

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

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

using a Monte-Carlo simulation.

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

Summary of Option Activity

Life (in years)

Outstanding as of December 31, 2023

Employee options granted

Employee options expired

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.

approved the grant of 50,000 RSUs to each

of its executive officers (Mr.

Handerhan, Mr.

Prevoznik and Mr.

Paranjape), effective January 1, 2024.

The RSUs granted vest

annually over a 5-year period (10,000 per year) with the first vesting date of December 31, 2024 and each subsequent vesting on the one-year

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

January 12, 2024, Messrs.

Allen and Handerhan both informed the Compensation Committee, that for personal reasons, they each do not accept,

and forfeit, the 50,000 restricted stock units granted to them each by the Company effective January 1, 2024.

Subsequently, effective

January 12, 2024, the Compensation Committee approved the grant of 50,000 additional RSUs to Mr.

Prevoznik and Mr.

Paranjape, each, which

vest annually over a 5-year period (10,000 per year) with the first vesting date of December 31, 2024 and each subsequent vesting on

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 nine months ended September 30, 2024 are

Company will recognize compensation expense for these RSUs over the requisite service period, subject to acceleration upon meeting the

market capitalization criteria.

Vesting of RSUs and Conversion to Restricted Common Stock

January 13, 2025, the Company accelerated the vesting of all previously outstanding long-term incentive (“LTI”) restricted

stock units (“RSUs”), totaling 1,170,834 RSUs granted to executive officers and employees.

These RSUs were settled through

the issuance of restricted shares of common stock.

Because a portion of these RSUs were entitled to the previously declared Series V

preferred stock dividend, 1,020,834 restricted shares of Series V were also issued.

restricted shares of common stock and Series V preferred stock issued upon acceleration remain subject to the original market capitalization-based

performance conditions and applicable time-based vesting schedules, which range from one 1

of LTI RSUs and Restricted Shares of Common Stock

February 3, 2025, upon the voluntary resignation of the Company’s Chief Technology Officer, 120,137

unvested LTI RSUs and 129,327

restricted shares of common stock were forfeited in accordance with the terms of the applicable award agreements.

In accordance with ASC 718, Compensation—Stock Compensation , the Company reversed

approximately $ 262,000

of previously recognized stock-based compensation expense during the three months ended March 31, 2025.

No further expense will be

recognized for these forfeited awards.

Activity Summary

following table summarizes RSU activity under the 2021 Plan for the three months ended March 31, 2025:

Summary of Restricted Stock

Average Grant

Date Fair Value

Nonvested at December 31, 2023

Nonvested at September 30, 2024

Nonvested as of December 31, 2024

Vested and converted to restricted common shares

( 1,170,834 )

Nonvested as of March 31, 2025

Shares of Common Stock Activity Summary

following table summarizes restricted Common Stock activity under the 2021 Plan for the three months ended March 31, 2025:

of Restricted Stock

Outstanding and nonvested as of December 31, 2024

Converted from restricted stock units

Outstanding and nonvested as of March 31, 2025

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 nine months ended September 30, 2024 and 2023 was as follows:

compensation expenses are allocated among general and administrative expenses, compensation expenses and cost of revenues.

compensation expense for the three months ended March 31, 2025 and 2024 was as follows:

Schedule of Stock-based Compensation Expense

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

Forfeiture of employee restricted stock unit and share awards

Non-employee restricted stock awards

Stock-based compensation

Purchase Warrants

following is a summary of warrant activity for the three months ended March 31, 2025:

Summary of Warrant Activity

Outstanding as of December 31, 2024

Expiration of warrants

Outstanding as of March 31, 2025

7 – Accrued Expenses

1 unchanged sentence

of Accrued Expenses

March 31, 2025

December 31, 2024

1 unchanged sentence

Accounts payable and accrued expenses

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

31, 2023, respectively.

Accrued Expenses

compensation includes performance bonus accruals of approximately $ 309,000

and $ 3,907,000

as of March 31, 2025 and December 31, 2024, respectively.

The significant decrease in bonus accruals reflects bonus payments made during the first quarter of 2025.

8 – Employee Benefit Plans

3 unchanged sentences

up to 100 % of employee contributions.

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

For the three months ended March 31, 2025 and 2024, the Company made contributions to the 401(k)

Plan of $ 122,000 and $ 109,000 , respectively.

3 unchanged sentences

an Entity’s Ability to Continue as a Going Concern ”.

The Company’s financial statements have been prepared assuming

that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities

in the normal course of business.

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

$ 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’s consolidated financial statements have been

prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation

of liabilities in the normal course of business.

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

of approximately $ 157,217,000

at March 31, 2025, and net cash used in operating activities of approximately $ 1,902,000

for the reporting period then ended.

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.

Company’s cash position and liquid crypto assets as of May 13, 2025, management has determined that these resources are

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

10 – Segment Information

Company operates as a single reportable segment focused on blockchain infrastructure, which consists of two primary revenue-generating

Validator Node Operations (“NodeOps”) and Ethereum Block Building (“Builder+”).

NodeOps includes

revenue generated from staking rewards earned by BTCS’s own proof-of-stake crypto assets, as well as validator fees collected from

third-party delegations.

Builder+ generates revenue from gas fees embedded in successfully finalized Ethereum blocks constructed by the

profit (loss) is the primary segment performance measure reviewed by the CODM for operational and capital allocation decisions.

following tables present segment revenue and gross profit (loss), including the significant expense items reviewed by the CODM, for the

three months ended March 31, 2025 and 2024:

of Segment Revenue and Gross Profit (loss)

For the Three Months Ended March 31,

Revenues from blockchain infrastructure operations

Cost of Revenues

Validator Payments

Cloud and server hosting costs

Compensation costs

Third-party contractor support costs

Gross profit (loss)

$ ( 172,249 )

For the Three Months Ended March 31,

Revenues from blockchain infrastructure operations

Cost of Revenues

Validator Payments

Cloud and server hosting costs

Compensation costs

Third-party contractor support costs

Gross profit (loss)

following table reconciles total segment gross profit to consolidated net income (loss):

For the Three Months Ended March 31,

Total operating expenses

( 3,083,301 )

( 1,136,842 )

Other income (expense)

( 14,305,672 )

Net income (loss)

$ ( 17,268,697 )

11 – Subsequent Events

Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

Based upon the

evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure

in the financial statements other than disclosed.

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.

Company evaluates events that have occurred after the balance sheet date but before the consolidated financial statements are issued.

Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment

or disclosure in the consolidated financial statements other than disclosed.

ATM Financing

the period from April 1, 2025 to May 13, 2025, the Company sold a total of 888,510 shares of Common Stock under the ATM Agreement

for aggregate total gross proceeds of approximately $ 1,440,000 at an average selling price of $ 1.62 per share, resulting in net proceeds

of approximately $ 1,390,000 after deducting commissions and other transaction costs.

AAVE Loan Payable

on April 23, 2025, the Company borrowed $ 320,000

USDT from AAVE, a decentralized finance lending protocol.

(i) is collateralized by 446 Ethereum (ETH) with an approximate

value of $ 780,000

based on an ETH price of approximately $ 1,750

(subject to market volatility), and (ii) has no fixed maturity date but is subject to liquidations or partial liquidations if the

health factor (“HF”) falls below one.

The Company faces potential liquidation risk if the value of ETH decreases

significantly relative to the loan amount.

The HF is calculated by taking the total value of the ETH collateral, multiplying it by

its liquidation threshold (approximately 80 %

for ETH), and then dividing that result by the total value of the borrowed USDT, the HF of the Company’s loan was

approximately two upon initiation.

interest rate on the loan is variable and determined by AAVE’s smart contract based on market conditions, with rates published

The interest rate at the time of the loans origination was approximately 3.9 % per annum, subject to variation in accordance

with AAVE’s protocol.

The proceeds from the loan were used to acquire additional ETH.

The Company’s Board of Directors authorized

management to borrow up to $ 500,000 in USDT utilizing AAVE with a loan to value of no more than 40 % at the time of borrowing.

Convertible Notes Payable

2025, the Company entered into a Securities Purchase Agreement (the “SPA”) with three accredited investors (the “Investors”),

pursuant to which the Company issued 5% Original Issue Discount Senior Secured Convertible Notes (the “Notes”) in the aggregate

principal amount of $ 7,810,526 for a purchase price of $ 7,420,000 .

In connection with the issuance of the Notes, the Company also agreed

to issue to the Investors 1,901,916 five-year warrants to purchase shares of the Company’s common stock at an exercise price of

$ 2.75 per share.

(i) are convertible

into shares of the Company’s common stock at a conversion price of $5.85 per share, (ii) mature 24 months from the closing date,

(iii) accrue an interest rate of 6% per annum, which may be paid on a quarterly basis in cash or freely tradable shares, (iv) contain

a 4.99% beneficial ownership conversion blocker, and (v) are secured by all of the Company’s assets as collateral, except for Ethereum

deposited as collateral for USDT borrowings on AAVE and certain other exclusions.

Charles Allen, the Company’s

Chairman of the Board and Chief Executive Officer, invested $ 95,000 in the Offering.

Additionally, a trust of which Mr.

Allen is a beneficiary

but is not the settlor or trustee invested $ 200,000 in the Offering.

An independent committee of the Company’s Board of Directors

Allen’s investment in the Offering.

Co., LLC acted as the Company’s exclusive placement agent in connection with the Offering.

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