BTCS Inc.
For the period ended Dec 31, 2024. Filed Mar 20, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 20, 2025
BTCS$0.93+6.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-21.
0001493152-24-010797
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-20.
0001493152-25-010973
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (93)
Current report
BTCS Inc., a Nasdaq-listed U.S.-based blockchain technology company, focuses on advancing blockchain infrastructure. With a primary emphasis on the Ethereum network, BTCS drives scalable growth through block-building and validator node operations, leveraging advanced technology and robust operational expertise.
Current report
BTCS’s blockchain infrastructure center on supporting the validation of transactions and securing proof-of-stake (“PoS”) and delegated proof-of-stake (“dPoS”) blockchain networks. The Company manages a network of cloud-based validator nodes that perform essential network functions, including 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 parties.
Current report
Ethereum Block Building – Builder+
Current report
A central focus of BTCS’s current operations is its Ethereum block-building initiatives under Builder+, which commenced operations in 2024. Through Builder+ we purchase block space and leverage advanced algorithmic processes to construct blocks for on-chain validation. The goal of 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 block space.
Current report
Builder+ has rapidly become a key driver of BTCS’s revenue growth, leveraging its scalable and efficient technology to expand its operational footprint within the Ethereum ecosystem. While Builder+ currently operates exclusively on Ethereum, its flexible design enables potential adaptation to other blockchain networks, aligning with BTCS’s vision to diversify its infrastructure operations over time.
Current report
Staking-as-a-Service – NodeOps
Current report
Supporting Platforms: ChainQ
Current report
As of December 27, 2024, BTCS has discontinued its StakeSeeker platform to focus on Builder+ and NodeOps, reflecting the Company’s strategic emphasis on scalable blockchain infrastructure.
Current report
Crypto Assets Held at the End of the Following Calendar Quarters:
Current report
Fair Market Value of Crypto Assets at the End of the Following Calendar Quarters:
Current report
Prices of Crypto Assets at the End of the Following Calendar Quarters:*
Current report
The prices have been rounded to the nearest whole dollar for prices above $100
Current report
Crypto assets earned from blockchain infrastructure staking activities through NodeOps
Current report
Crypto assets earned from Ethereum block-building through Builder+
Current report
The following table summarizes the revenues earned from the Company’s operations by revenue segment during the following calendar quarters:
Current report
Revenue by Segment
Current report
The 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:
Current report
Revenue from blockchain infrastructure staking activities through NodeOps
Current report
Revenue from Ethereum block-building through Builder+
Current report
Revenues
Current report
For the year ended December 31, 2024, revenue increased to approximately $4,073,000 compared to approximately $1,340,000 in 2023, primarily driven by the expansion of Builder+ operations. Builder+ contributed approximately $2,453,000 in revenue in 2024, while NodeOps revenue grew to approximately $1,620,000.
Current report
The significant increase in revenue during Fiscal 2024 was primarily due to the launch and scaling of BTCS’s Ethereum block-building operations under Builder+, which resulted in a substantial increase in block rewards earned. Additionally, higher market prices for crypto assets during Fiscal 2024 contributed to the increased fair value of crypto asset rewards earned from both staking (NodeOps) and block-building (Builder+). While we anticipate continued growth in the number of block rewards and staking rewards earned, crypto asset market volatility may impact the fair value of rewards earned and recognized in future periods.
Current report
Cost of revenues increased during Fiscal 2024, primarily due to higher Validator Payments made for purchasing block space as part of our Ethereum block-building activities under Builder+. Validator Payments totaled approximately $2,766,000 in 2024. These increased costs were partially offset by efficiency improvements in web service hosting fees related to NodeOps, which were reduced from approximately $325,000 in 2023 to approximately $142,000 in 2024. Cloud and server hosting costs related to Builder+ totaled approximately $125,000 in 2024.
Current report
As we continue to expand block-building operations and increase block production, we expect cost of revenues to rise correspondingly. However, costs may grow at a greater rate than revenue in Fiscal 2025, likely reducing gross margins.
Current report
General and Administrative Expenses
Current report
These increases were partially offset by a $119,000 reduction in legal fees, which were elevated in Fiscal 2023 due to services related to the Series V Preferred Distribution and its related listing on the Upstream Exchange.
Current report
We anticipate that audit fees may continue to rise due to expanding operational scope, while legal and proxy-related expenses are expected to decline in Fiscal 2025. Additionally, we anticipate future increases in order flow expenditures as we scale our block-building operations.
Current report
Research and Development Expenses
Current report
Compensation and Related Expenses
Current report
Compensation and related expenses increased significantly in Fiscal 2024, primarily due to higher equity-based compensation expenses, which totaled approximately $5,340,000, compared to approximately $1,643,000 for Fiscal 2023.
Current report
A substantial portion of the equity-based compensation expense relates to performance bonus accruals for Fiscal 2024. These accruals primarily increased due to the Company’s exceeding the maximum revenue performance milestone of $3,712,500 during the year, triggering equity-based awards under employee incentive plans.
Current report
While the total bonus amounts for officers approved for Fiscal 2024 were approximately $1,917,000 (as disclosed in Note 7 –Executive Compensation), the portion allocated to incentive stock options was recognized at a higher GAAP expense, as required under U.S. GAAP. The stock-based compensation charges for the options component were determined using the Black-Scholes valuation model, resulting in a higher accrued amount.
Current report
As part of the payment of accrued bonus compensation for the year ended December 31, 2024, the Company issued 1,312,068 options to employees and officers. The fair value of the options was estimated at approximately $2,872,000 using the Black-Scholes valuation model.
Current report
Additionally, the increase in equity-based compensation expenses includes approximately $380,000 in payroll taxes primarily driven by costs related to the net settlement of shares issued upon the vesting of certain RSUs as well as increased salaries in Fiscal 2024.
Current report
Looking ahead, we anticipate compensation expenses may decrease as the balance of unamortized stock-based compensation related to prior grants, as well as the balance of unvested RSUs, declines. However, equity-based incentives remain a key component of our compensation strategy, and future fluctuations in expense levels may occur based on the timing and structure of future grants.
Current report
Marketing Costs
Current report
Marketing expenses rose during Fiscal 2024 due to additional ad campaigns executed. We anticipate similar to more significant increases in advertising spend in Fiscal 2025.
Current report
Realized losses on crypto asset transactions increased during Fiscal 2024 due to Validator Payments for block-building and sales of crypto assets to fund operations. The Company may realize additional gains or losses in the future depending on the sale of crypto assets to meet operational and cash needs as well as market conditions.
Current report
Changes in other income for Fiscal 2024 were primarily attributed to the recognition of unrealized appreciation on crypto assets due to favorable market conditions. However, the unrealized appreciation in Fiscal 2024 was lower compared to Fiscal 2023, which experienced greater increases in crypto asset market values. Changes in unrealized appreciation or depreciation of crypto assets are directly influenced by crypto market volatility, which can be challenging for management to predict. This volatility can significantly impact other income in future reporting periods.
Current report
The decline in net income for Fiscal 2024 compared to Fiscal 2023 is primarily due to smaller increases in the fair value of crypto assets during Fiscal 2024. Additionally, increased compensation expenses, including larger performance bonus accruals related to revenue milestones, contributed to the decline. Net income or loss may continue to fluctuate significantly due to crypto asset market volatility, impacting changes in fair value during future periods.
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Removed paragraphs (50)
Previous report
BTCS Inc. 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.
Previous report
The Company specializes in operating validator nodes on various delegated proof-of-stake and proof-of-stake based blockchain networks, with an emphasis on Ethereum. 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. Subject to available capital and the restrictions of certain blockchains, BTCS intends to expand its blockchain infrastructure operations to secure other disruptive blockchain protocols that allow for delegating, which presents a significant growth opportunity for the Company.
Previous report
StakeSeeker – Staking-as-a-Service
Previous report
The 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; conversely, 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 so is not currently generating revenue. The Company is not a broker-dealer or an investment advisor and does not provide any such related services.
Previous report
Builder+ – Ethereum Block Building
Previous report
In January 2024, we introduced “Builder+”, an Ethereum block builder. Builder+ utilizes advanced algorithms to maximize validator earnings by constructing optimized blocks for on-chain validation. We believe Builder+ should enhance our Ethereum blockchain infrastructure and create opportunities for new scalable revenue streams on Ethereum’s blockchain. Builder+ did not have a material impact to 2023 operations.
Previous report
ChainQ – AI Analytics
Previous report
Crypto Assets Held at Period End
Previous report
Fair Market Value of Crypto Assets at Period End
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Prices of Crypto Assets at Period End
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Crypto assets earned from staking to BTCS validator nodes
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Revenue earned from staking to BTCS validator nodes
Previous report
Prior to the Company’s adoption of ASU No. 2023-08,Intangibles—Goodwill and Other—Crypto Assets during Fiscal 2023, the Company accounted for all crypto asset holdings as long-lived intangible assets, carrying them at their impaired cost value. The following table presents the Fair Market Value of crypto assets held compared to the GAAP Book Value reported on the Company’s balance sheet in Fiscal 2022.
Previous report
The adoption of ASU No. 2023-08 required an adjustment to the Company’s opening Retained Earnings balance, which is included in the ‘Accumulated Deficit’ line on the statement of stockholder’s equity for Fiscal 2023. This adjustment was made during the year of adoption (Fiscal 2023) to recognize the cumulative effect of initially applying the change in accounting principle to the previous periods. Specifically, it accounted for the difference between the Fiscal 2022 ending book value of crypto assets and their fair market value, as disclosed in the table above.
Previous report
Validator Revenue
Previous report
The decrease in revenue during Fiscal 2023 as compared to Fiscal 2022 is primarily due to a drop in the fair value of our crypto assets earned as rewards for staking since the market’s highs in the first quarter of 2022. Despite the late upswing in market prices of crypto assets at the end of Fiscal 2023, revenue was recognized throughout the year at lower average prices than Fiscal 2022. Although we believe the number of crypto assets we earn from staking and revenue recognized may 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.
Previous report
The decrease in cost of revenues during Fiscal 2023 as compared to Fiscal 2022 is due to efficiencies realized in our blockchain infrastructure validating operating costs, including streamlining of web service hosting fees and reduction of services provided by third-party vendors. We believe our cost of revenues will increase as we continue to ramp up our business. However, we believe gross margin may improve as we add scale to our blockchain infrastructure operations and reduce costs as a result of increased operational efficiencies, leading to improved gross profits.
Previous report
Compensation and related expenses decreased during Fiscal 2023 primarily due to approximately $2,825,000 non-cash equity-based contingent bonuses granted to employees during Fiscal 2022 for the achievement of performance milestones compared to only approximately $1,643,000 non-cash equity-based compensation during Fiscal 2023. We believe our compensation expenses will increase from those reported in Fiscal 2023 as the Company continues to utilize equity-based compensation incentives as a core part of our compensation strategy.
Previous report
Marketing costs decreased during Fiscal 2023 as the Company focused on cost-reduction efforts.
Previous report
The decrease in operating expenses during Fiscal 2023 can be attributed primarily to the Company’s change in accounting principles resulting from its adoption of ASU No. 2023-08 in Fiscal 2023. This accounting change permits the Company to value its crypto assets at their fair market value and eliminates the necessity to recognize impairment losses on crypto assets, which had been a significant contributor to net losses in prior years. Notably, in Fiscal 2022, the Company recorded an impairment loss of approximately $13,349,000 on crypto assets, which is no longer required under the revised accounting treatment.
Previous report
The Company realized losses on sale of crypto assets during Fiscal 2023, compared to gains realized in Fiscal 2022, primarily resulting from the Company’s sale of approximately 968 ETH earned as crypto rewards from our staking operations at prices below their original cost after liquidity was unlocked in April 2023 as part of Ethereum’s Shanghai upgrade.
Previous report
The changes in other income for Fiscal 2023 were primarily attributed to the recognition of the change in unrealized appreciation on crypto assets resulting from the Company’s adoption of ASU No. 2023-08 for Fiscal 2023. This adoption allows the Company to account for its crypto assets at their fair market value. Prior to its adoption in Fiscal 2023, the Company accounted for its crypto assets as long-lived intangible assets with carrying values based on the original cost, less any impairment. 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.
Previous report
Furthermore, the changes in other income for Fiscal 2022 were primarily driven by the decrease in the fair value of warrant liabilities throughout the year. 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.
Previous report
The increase in net income for Fiscal 2023, compared to the net loss in Fiscal 2022, is primarily attributable to a change in accounting principle resulting from the Company’s adoption of ASU No. 2023-08 during Fiscal 2023. This change had significant implications for crypto assets, including the elimination of the need for the Company to recognize impairment losses on its crypto assets, which had been a primary contributor to net losses in previous years. Additionally, this change allowed the Company to account for its crypto assets at their fair market value and include the change in fair market value of crypto assets as part of net income for the fiscal year. 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.
Previous report
Recent Financing
Previous report
Cash used in operating activities was approximately $3,562,000 during Fiscal 2023 compared to approximately $777,000 during Fiscal 2022. The sale of our remaining bitcoin holdings during 2022 was the primary contributor to the approximately $2,547,000 operating cash inflows from the sale of non-productive crypto assets during the Fiscal 2022 compared to $0 in Fiscal 2023. We do not anticipate any future material cash inflows from the sale of non-productive assets, as our blockchain infrastructure strategy focuses primarily on acquiring and staking productive proof-of-stake blockchain networks. Additional non-cash adjustments to our operating cash flows consisted of approximately $13,349,000 impairment loss on crypto assets (“Crypto Asset Impairment”) during Fiscal 2022 compared to $0 in Fiscal 2023. Due to the Company’s change in accounting principle resulting from its adoption of ASU No. 2023-08 in Fiscal 2023, the Company will no longer be required to recognize impairment on its crypto assets in future reporting periods. This is partially offset by the approximately $2,688,000 equity-based contingent bonuses granted to employees during Fiscal 2022 for the achievement of performance milestones compared to only approximately $1,342,000 equity-based compensation in Fiscal 2023. We anticipate similar levels of equity-based compensation in future periods as reported in Fiscal 2023.
Previous report
Cash provided by investing activities was approximately $186,000 during Fiscal 2023 compared to cash used in investing activities of approximately $8,973,000 for Fiscal 2022. Net cash outflows for investing activities were used primarily for the purchase of crypto assets for blockchain infrastructure operations. We anticipate purchase activity to remain lower and consistent with the levels reported during Fiscal 2023 as we focus our strategies on technical developments. Fiscal 2022 included large purchases of productive crypto assets to build on our blockchain infrastructure operations. Fiscal 2023 included a higher than typical volume of sales of crypto assets, primarily driven by the re-allocation of Ethereum rewards earned to other productive crypto assets which were subsequently staked.
Previous report
To determine the fair value of its crypto assets, the Company relies primarily on coinmarketcap.com (“CoinMarketCap”) as the principal pricing source. The selection of CoinMarketCap is the result of thorough due diligence, which identified it as the most reliable source for consistently obtaining timely and accurate crypto asset price data, covering all the crypto assets held by the Company. The real-time pricing from CoinMarketCap is notably aligned with the bid/ask quotes observed on the Company’s primary exchange and principal market, Kraken.
Previous report
Prior to the Company’s adoption of ASU No. 2023-08, the Company accounted for its crypto assets as indefinite-lived intangible assets in accordance with ASC 350,Intangibles –Goodwill and Other. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.
Previous report
Prior to the Company’s adoption of ASU No. 2023-08, on a quarterly basis, crypto assets were measured at carrying value, net of any impairment losses incurred since receipt. The Company recorded impairment losses as the fair value fell below the carrying value of the crypto assets at any time during the period, as determined using the lowest intraday U.S. dollar spot price of the related crypto asset subsequent to its acquisition. The crypto assets could only be marked down when impaired and not marked up when their value increases. Impairment losses could not be recovered for any subsequent increase in fair value until the sale or disposal of the asset. Such impairment in the value of crypto assets was recorded as a component of costs and expenses in our statements of operations. The Company recorded impairment losses of approximately $0 and $13,349,000 related to crypto assets during the years ended December 31, 2023 and 2022, respectively.
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Cost of Revenue
Previous report
Effective January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by ASU 2016-09. Ultimately, the actual expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures.
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COVID-19
Previous report
The COVID-19 pandemic has created significant national and global economic disruptions, which may adversely affect our business. However, based on our current assessment, we do not expect any material impact on our long-term development, our operations, or our liquidity due to the worldwide spread of COVID-19. We are actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, and the industry.
Previous report
We have a limited operating history, and only recently commenced our blockchain infrastructure operations in 2021. Further, we lack an operating history with respect to our crypto asset analytics and staking-as-a-service platform’s functions and operations. In addition, the PoS blockchain networks on which our operations are centered are a relatively new and evolving means of validating crypto asset transactions. In addition to the relative novelty of our business and industry generally, we also launched Builder+ which is designed to enhance validator earnings by deploying algorithms to identify and access optimized blockers to increase reward fees in February 2024. We are in the process of developing ChainQ, an AI-powered blockchain data and analytics platform with the goal of launching later in 2024. The performance and results of these developments, and their impact on our business and financial condition, has yet to be determined. Therefore, there is limited historical financial information upon which to base an evaluation of our performance. Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations in general, and in the cryptocurrency industry in particular with itself remains a relatively new space imbued with risk and uncertainty. While we generated a net gain of $7.8 million for the year ended December 31, 2023, we generated a net loss of $15.9 million for the year ended December 31, 2022. We expect to incur additional net losses over the next several years as we seek to expand operations. The amount of future losses and when, if ever, we will achieve profitability are uncertain. If we are unsuccessful at executing our business plan, our business, prospects, and results of operations may be materially adversely affected.
Previous report
A number of companies that engage in crypto asset and/or other cryptocurrency-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions in response to government action, including in China where regulatory response to cryptocurrencies has been to exclude their use for ordinary consumer transactions within China. Government action in the U.S. involving crypto assets and related activities may cause this trend to expand in the U.S. We also may be unable to obtain or maintain these services for our business. Many businesses that provide cryptocurrency-related activities may continue to have difficulties in finding banks and financial institutions willing to provide them services which may decrease the usefulness of cryptocurrencies as a payment system and harm public perception of cryptocurrencies, and could decrease their usefulness.
Previous report
As an example of adverse events affecting the crypto landscape, in November 2023 Binance, the world’s largest crypto exchange, undertook to exit the U.S. and paid a $4.4 billion fine to settle charges by the U.S. Department of Justice, Treasury, and the Commodity Futures Trading Commission that the exchange violated sanctions and facilitated human and narcotics trafficking. Further, in March 2023 two large financial institutions in the U.S., Silicon Valley Bank and Signature Bank, which both serviced customers involved with crypto assets, collapsed as continued negative economic prospects and failures to obtain payment from borrowers, together with a large number of withdrawals, caused these banks to encounter substantial financial difficulty leading up to their failures. In response to these events, the Federal Deposit Insurance Corporation (“FDIC”) transferred all the deposits, both insured and uninsured, of these banks to corresponding “bridge banks” operated by the FDIC as it markets the institution to potential bidders. The impact of these developments on the Company and on the crypto asset industry and the economy in general, and whether and to what extent they signal a continuing trend impacting the industry and potentially our business, remain unclear.
Previous report
The usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if crypto exchanges and other industry participants exit the U.S. markets, and if banks or financial institutions were to close the accounts of businesses engaging in cryptocurrency-related activities, which contingencies may become more likely in the future if and to the extent crypto assets are considered a significant factor in the financial crises or criminal activity such as those described above. This could occur as a result of compliance risk, cost, government regulation, or public pressure. The risk applies to securities firms, clearance and settlement firms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company, which, if any of such entities adopts or implements similar policies, rules or regulations, could negatively affect our relationships with financial institutions and impede our ability to convert cryptocurrencies to fiat currencies. Such factors could have a material adverse effect on our ability to continue as a going concern or to pursue our strategy at all, which could have a material adverse effect on our business, prospects, or operations and harm investors.
Previous report
We have no plans with regard to another business opportunity and our shareholders may not have any opportunity to vote on any new business, unless our common stock remains listed on the Nasdaq Capital Market and its rules require it.
Previous report
Because of the recent volatility in the cryptocurrency market and other adverse developments and publicity surrounding the industry, our business plans may not be successful and our business and financial condition may be adversely affected.
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Reworded paragraphs (87)
Previous wording
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our historical financial statements and the notes to those statements that appear elsewhere in this report. Certain statements in the discussion contain forward-looking statements based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors” and elsewhere in this report. When we refer to the “Fiscal 2023” and the “Fiscal 2022” we are referring to the years ended December 31, 2023 and December 31, 2022, respectively.
Current wording
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our historical financial statements and the notes to those statements that appear elsewhere in this report. Certain statements in the discussion contain forward-looking statements based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth underRisk Factors and elsewhere in this report. When we refer to the “Fiscal 2025”, “Fiscal 2024” and the “Fiscal 2023” we are referring to the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively.
Previous wording
Our evaluation of blockchain networks involves comprehensive due diligence procedures, including assessments of blockchain quality, reward potential, and the technical challenges associated with running validator nodes. Criteria for assessing blockchain quality encompass factors such as i) market and on-chain statistics, ii) liquidity, iii) potential blockchain utility, iv) history and milestones, v) growth and development roadmap, vi) use cases, vii) community interest, vii) quality of documentation, viii) decentralization, and ix) any other publicly available information.
Current wording
Our evaluation of blockchain networks involves comprehensive due diligence procedures, including assessments of blockchain quality, reward potential, and the technical challenges associated with running validator nodes. Criteria for assessing blockchain quality encompass factors such as i) market and on-chain statistics, ii) liquidity, iii) potential blockchain utility, iv) history and milestones, v) growth and development roadmap, vi) use cases, vii) community interest, viii) quality of documentation, ix) decentralization, and x) any other publicly available information. This process ensures BTCS focuses on high-potential blockchain networks while mitigating technical and operational risks.
Previous wording
BTCS’s 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.
Current wording
BTCS operates a non-custodial Staking-as-a-Service (“StaaS”) business model that enables crypto asset holders to participate in network consensus mechanisms by staking and delegating to BTCS-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.
Previous wording
A StaaS provider maintains a ministerial role in validating transactions on a given dPoS network on behalf of its Delegators by (1) arranging transactions using open-source software to stake the relevant crypto assets; (2) monitoring the nodes it is operating to ensure the computers remain online to validate transactions; and (3) verifying transactions on the network when required.
Current wording
A StaaS provider maintains a ministerial role in validating transactions on a given dPoS network on behalf of its Delegators by (1) using open-source software to stake the relevant crypto assets; (2) monitoring and maintaining the nodes it is operating to ensure the computers remain online to validate transactions; and (3) verifying transactions on the network when required.
Previous wording
As a non-custodial StaaS provider, we do not hold or take possession of any Delegator funds, crypto assets, or crypto asset rewards at any point during the staking or delegation process. Delegation does not involve the transfer of crypto asset ownership to a Validator. During the process of staking, delegated crypto assets remain in the Delegator’s digital wallets. The blockchain network calculates rewards earned, which are then distributed directly to the Delegator’s wallet. At no point does the Validator gain access, control, or custody of the original staked crypto assets or the earned crypto rewards through staking to its node. Therefore, the Company does not have any exposure to the custodial risks that a crypto exchange would have related to excessive redemptions or withdrawals of crypto assets, suspension of redemptions, or withdrawals. Further, we do not issue or hold crypto assets on behalf of third parties and have no exposure to the risks an exchange would have with respect to loans, rehypothecation, or margin.
Current wording
As a non-custodial StaaS provider, we do not hold or take possession of any Delegator funds, crypto assets, or crypto asset rewards at any point during the staking or delegation process. Delegation does not involve the transfer of crypto asset ownership to a Validator. During the process of staking, delegated crypto assets remain in the Delegator’s digital wallets. The blockchain network calculates rewards earned, which are then distributed directly to the Delegator’s wallet. The blockchain network does not distribute any of the Delegator’s earned crypto rewards to BTCS. At no point does the Validator gain access, control, or custody of the original staked crypto assets or the earned crypto rewards through staking to its node. Therefore, the Company does not have any exposure to the custodial risks that a crypto exchange would have related to excessive redemptions or withdrawals of crypto assets, suspension of redemptions, or withdrawals. Further, we do not issue or hold crypto assets on behalf of third parties and have no exposure to the risks an exchange would have with respect to loans, rehypothecation, or margin.
Previous wording
The following table sets forth the number of third-party crypto assets delegated to our non-custodial validator nodes as of December 31, 2023:
Current wording
The 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 December 31, 2024.
Previous wording
ChainQ is an under-developed 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.
Current wording
To complement our core blockchain infrastructure, BTCS has developed “ChainQ,” an AI-powered blockchain data and analytics platform designed to increase accessibility and transparency within the blockchain ecosystem. Currently in beta, ChainQ simplifies on-chain data access and analysis for cryptocurrency holders, delivering deeper insights into blockchain activity. By indexing public data from our blockchain infrastructure operations, ChainQ provides an intuitive platform for exploring on-chain data.
Previous wording
The tables below describes BTCS’s quarterly crypto assets holdings as of the end of Fiscal 2022 through the end of Fiscal 2023.
Current wording
The tables below detail BTCS’s quarterly crypto assets holdings as of the end of each fiscal quarter from the fourth quarter of Fiscal 2023 through the end of Fiscal 2024.
Previous wording
The tables below detail BTCS’s quarterly crypto assets earned as staking rewards during Fiscal 2023.
Current wording
The tables below detail BTCS’s quarterly crypto assets earned during each of the following quarters:
Previous wording
Revenue earned from staking to third-party validator nodes
Current wording
All or a portion of revenue earned from staking to third-party validator nodes
Previous wording
Fair Value of Crypto Asset Rewards Earned Recognized as Revenue
Current wording
Fair Market Value of Crypto Asset Rewards Earned Recognized as Revenue
Previous wording
Crypto assets earned from staking to third-party validator nodes
Current wording
All or a portion of revenue earned from staking to third-party validator nodes
Previous wording
General and administrative expenses consist of director compensation, legal and professional fees, and other personnel and related costs. These expenses decreased slightly during Fiscal 2023 compared to Fiscal 2022 as a result of cost-cutting measures employed by management in numerous areas, including investor relation related as the Company focused on cost management and transitioning related efforts in-house from third-party engagements. These decreases were partially offset by increases in legal service costs during Fiscal 2023, driven primarily by services surrounding the Series V Preferred Stock distribution and related listing on Upstream Exchange.
Current wording
General and administrative expenses increased during Fiscal 2024, primarily due to:
Previous wording
Research and development expenses increased during Fiscal 2023 as the Company focused on the beta release of our proprietary StakeSeeker platform, including responding to user feedback and continued planned feature development and incorporation onto the platform. We anticipate research and development costs to remain consistent as we continue to expand on technological solutions in the blockchain sector, including the development of Builder+ and ChainQ with a focus on cost management of our third-party development team.
Current wording
Research and development expenses increased during Fiscal 2024 as resources shifted from the beta release of our StakeSeeker platform in Fiscal 2023 to the launch of Builder+ operations and continued development of ChainQ, which launched in July 2024. We expect research and development costs to either increase or remain consistent, with a focus on cost management for third-party development services.
Previous wording
Beginning with the collapse of TerraUSD and Luna in 2022 and the bankruptcy filings of FTX and its subsidiaries, Three Arrows Capital, Celsius Network, Voyager Digital, Genesis Global and BlockFi, as well as alleged violations of law brought against other industry participants, have resulted in calls for heightened scrutiny and regulation of the crypto asset industry, with a specific focus on crypto asset exchanges, platforms, and custodians. Federal and state legislatures and regulatory agencies are expected to introduce and enact new laws and regulations to regulate crypto asset intermediaries, such as crypto asset exchanges and custodians. The March 2023 collapses of Silicon Valley Bank, Silvergate Bank, and Signature Bank are believed to have also contributed to these trends. The U.S. regulatory regime – namely the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the CFTC, FinCEN, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Bureau of Investigation) as well as the White House have issued reports and releases concerning crypto assets, including Bitcoin and crypto asset markets, and have formed coalitions aimed at addressing the perceived threats posed by crypto assets and activities involving them. However, the extent and content of any forthcoming laws, regulations and government actions are not yet ascertainable with certainty, and it may not be ascertainable in the near future. A divided Congress makes any prediction difficult. Further the SEC seems to have changed tactics as it has sued multiple crypto asset companies for selling, operating exchanges, and engaging in other prohibited activities involving unregistered securities. We cannot predict how these and other related events will affect us or the crypto asset business generally. We cannot assure you that future legislation or regulation will not have an adverse effect upon us. It is possible that new laws and increased regulation and regulatory scrutiny may require the Company to comply with certain regulatory regimes, which could result in new costs for the Company. The Company may have to devote increased time and attention to regulatory matters, which could increase costs to the Company. New laws, regulations, and regulatory actions could significantly restrict or eliminate the market for, or uses of, crypto assets including Ethereum, which could have a negative effect on the value of Ethereum, which in turn would have a negative effect on the value of the Company’s shares.
Current wording
Realized Losses on Crypto Asset Transactions
Previous wording
On September 14, 2021, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as agent (“H.C. Wainwright”), pursuant to which the Company may offer and sell, 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 March 19, 2024, the Company sold a total of 4,346,748 shares of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $17,256,000 at an average selling price of $3.97 per share, resulting in net proceeds of approximately $16,696,000 after deducting commissions and other transaction costs.
Current wording
On September 14, 2021, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as agent (“H.C. Wainwright”), pursuant to which the Company may offer and sell, from time-to-time, shares of its Common Stock through H.C. Wainwright. Initially, the aggregate offering price of shares issuable under the ATM Agreement was $98,767,500.
Previous wording
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.
Current wording
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 settlement of liabilities in the normal course of business.
Previous wording
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. At December 31, 2023, the Company had approximately $1,458,000 of cash and working capital of approximately $26,055,000.
Current wording
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. At December 31, 2024, the Company had approximately $1,978,000 of cash and working capital of approximately $33,893,000.
Previous wording
As of March 19, 2024, the Company had approximately $870,000 of cash and the fair market value of the Company’s liquid crypto assets was approximately $35,665,000. The Company has no outstanding debt. As of March 19, 2024, the Company also has approximately $5.5 million available under the ATM Agreement over the next twelve months under the Form S-3 baby shelf rules, although, the amount that we may raise under the Form S-3 may increase or decrease based upon our stock price. The Company believes that the existing cash and liquid crypto assets held by us, in addition to the funds available to the Company from the issuance of additional stock through the ATM Agreement, provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures and contractual obligations for at least the next twelve months.
Current wording
As of March 17, 2025, the Company had approximately $261,000 of cash and cash equivalents and the fair market value of the Company’s liquid crypto assets was approximately $21,440,000. The Company has no outstanding debt.
Previous wording
Certain of our staked crypto assets may be locked up for varying durations, depending on the specific blockchain protocol, and we may be unable to unstake them in a timely manner in order to liquidate to the extent desired. Lock-up periods for our staked crypto assets range from several hours to six months. During times of instability in the market of crypto assets, we may not be able to sell our crypto assets at reasonable prices or at all. As a result, our crypto assets may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
Current wording
Certain of our staked crypto assets may be locked up for varying durations, depending on the specific blockchain protocol, and we may be unable to unstake them in a timely manner to liquidate to the extent desired, which could materially impact our liquidity position. Additionally, technical issues, network congestion, or regulatory changes could further restrict our ability to access or liquidate these assets. Lock-up periods for our staked crypto assets range from several hours to six months. During times of instability in the cryptocurrency markets, the Company may not be able to sell its crypto assets at prices reflecting their perceived value or at all, which could result in substantial losses given the historical volatility of cryptocurrency prices. As a result, our crypto assets may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
Previous wording
Cash provided by financing activities was approximately $2,688,000 during Fiscal 2023 compared to approximately $10,496,000 during Fiscal 2022. The cash inflows from financing activities in Fiscal 2023 and Fiscal 2022 were entirely from proceeds of Common Stock sold pursuant to the ATM Agreement. The cash inflows from financing activities during Fiscal 2022 was partially offset by a one-time return of capital distribution of $631,000 made to record holders as of March 17, 2022. The Company has plans to continue to raise proceeds from the sale of Common Stock to fund operations as needed.
Current wording
Cash provided by financing activities was approximately $6,682,000 for Fiscal 2024 compared to approximately $2,688,000 for Fiscal 2023. The cash inflows from financing activities in Fiscal 2024 and Fiscal 2023 were entirely from proceeds of Common Stock sold pursuant to the ATM Agreement.
Previous wording
The Company’s fair value measurement for its crypto assets is guided by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 -Fair Value Measurement. According to ASC 820, fair value is defined as the price that would be received for an asset in a current sale, assuming an orderly transaction between market participants on the measurement date. It requires the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal market, the most advantageous market. In this context, market participants are considered to be independent, knowledgeable, and willing and able to transact.
Current wording
The 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. ASC 820 defines fair value as the price that would be received for an asset in a current sale, assuming an orderly transaction between market participants on the measurement date. Market participants are considered to be independent, knowledgeable, and willing and able to transact. It requires the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal market, the most advantageous market.
Previous wording
Kraken has been identified as the principal market for the Company’s crypto assets, serving as the Company’s primary cryptocurrency exchange for both purchases and sales. This determination is based on a comprehensive evaluation process that considers various factors, including regulatory compliance, trading activity, and price stability. The Company places significant trust in Kraken’s well-established reliability and robust capabilities.
Current wording
Kraken serves as the principal market for the Company’s crypto assets, being the Company’s primary cryptocurrency exchange for both purchases and sales. Coinbase is designated as the secondary principal market. This determination results from a comprehensive evaluation considering various factors, including compliance, trading activity, and price stability.
Previous wording
While Kraken is designated as the primary exchange, the Company maintains the flexibility to engage in cryptocurrency transactions on other exchanges where it maintains accounts. This flexibility allows the Company to adapt to changing market conditions and explore alternative platforms when necessary to ensure cost-effective execution and fair value measurement using the most advantageous market.
Current wording
While Kraken is designated as the primary exchange, the Company retains flexibility to conduct cryptocurrency transactions on other exchanges where it maintains accounts. This flexibility allows the Company to adapt to changing market conditions and explore alternative platforms when necessary to ensure cost-effective execution and fair value measurement using the most advantageous market.
Previous wording
The determination of Kraken as the principal market reflects the Company’s commitment to making informed decisions based on regulatory compliance, trading activity, and price stability and achieving the most accurate representation of fair value for its crypto assets. The Company regularly reviews and assesses its choice of principal market to ensure it aligns with its objectives and the evolving landscape of the cryptocurrency market.
Current wording
The selection of Kraken as the principal market reflects the Company’s commitment to informed decision-making and achieving the most accurate representation of fair value for its crypto assets. Regular reviews ensure alignment with the Company’s objectives and cryptocurrency market dynamics.
Previous wording
The cost basis of the Company’s crypto assets is initially recorded at their fair value using the U.S. dollar spot price of the related crypto asset at 4:00 p.m., New York time, on the date of receipt (or “carrying value”).
Current wording
The 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.
Previous wording
Crypto 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.
Current wording
Crypto assets are measured at their 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.
Previous wording
The 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. 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 sheet. 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.
Current wording
The 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 sheet. 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.
Previous wording
Effective 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 3.
Current wording
Effective 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 3 -Changes in Accounting Principle.
Previous wording
Realized gain (loss) on sale of crypto assets are included in other income (expense) in the statements of operations. The Company recorded realized gains (losses) on crypto assets of approximately ($604,000) and $507,000 during the years ended December 31, 2023 and 2022, respectively.
Current wording
The 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 consolidated statements of operations. The Company recorded realized losses on crypto assets of approximately $766,000 and $604,000 during the years ended December 31, 2024 and 2023, respectively.
Previous wording
Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates revenue through staking rewards generated from its blockchain infrastructure operations.
Current wording
Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. 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 consolidated statements of operations.
Previous wording
The 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. The fair value of the crypto asset award received is determined using the U.S. dollar spot price of the related crypto asset at 4:00 p.m., New York time, on the date of receipt.
Current wording
The 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.
Previous wording
The Company engages in network-based smart contracts by running its own crypto asset validator nodes as well as by staking (or “delegating”) crypto assets directly to both its own validator nodes and nodes run by third-party operators. Through these contracts, the Company provides crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network. The 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 crypto assets staked remain locked up during the duration of the smart contract.
Current wording
The Company engages in network-based smart contracts by running its own crypto asset validator nodes as well as by staking (or “delegating”) crypto assets directly to both its own validator nodes and nodes run by third-party operators. Through these contracts, the Company provides crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network. The 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 the duration of the smart contract.
Previous wording
In exchange for staking the crypto assets and validating transactions on blockchain networks, the Company is entitled to all of the fixed 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.
Current wording
In 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.
Previous wording
The Company’s cost of revenue related to its blockchain infrastructure operations primarily includes direct production costs associated with transaction validation on the network, cloud-based server hosting expenses related to our validator nodes, and allocated employee salaries dedicated to node maintenance and support. Additionally, the cost of revenue encompasses fees, including equity compensation stock-based fees paid to third parties for their assistance in software maintenance and node operations. These costs directly related to production of revenues are collectively summarized as “Validator expenses” in the statements of operations.
Current wording
The Company’s cost of revenues related to its blockchain infrastructure operations primarily includes direct production costs associated with transaction validation on the network, cloud-based server hosting expenses related to our validator nodes and Builders, and allocated employee salaries dedicated to node maintenance and support. Additionally, the cost of revenues encompasses Validator Payments made from our Builder to Validators as well as fees paid to third parties for their assistance in software maintenance and node operations. These costs directly related to the production of revenues are collectively termed ‘Blockchain infrastructure expenses’ in the consolidated statements of operations.
Previous wording
Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. These options often vest over a one-year period.
Current wording
Stock options issued under the Company’s equity incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant.
Previous wording
See Note 3 to the financial statements for a discussion of recent accounting standards and pronouncements.
Current wording
See Note 3 -Changes in Accounting Principleto the financial statements for a discussion of recent accounting standards and pronouncements.
Previous wording
In addition to the impacts of COVID-19, we have experienced, and are experiencing, the impact of domestic and global inflationary pressures largely outside of our control. This inflationary pressure impacts our cost structure, leading to operational adjustments, and increasing the cost of retaining talent and certain professional costs, despite our continued focus on controlling our costs where possible. Management is unable to accurately predict when, or if, these national and global inflationary pressures will subside, or their long-term impacts on our business and results of operations. We are actively monitoring the situation and assessing potential mitigation strategies.
Current wording
We have experienced, and are experiencing, the impact of domestic and global inflationary pressures largely outside of our control. This inflationary pressure impacts our cost structure, leading to operational adjustments, and increasing the cost of retaining talent and certain professional costs, despite our continued focus on controlling our costs where possible. Management is unable to accurately predict when, or if, these national and global inflationary pressures will subside, or their long-term impacts on our business and results of operations. We are actively monitoring the situation and assessing potential mitigation strategies.
Previous wording
There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our Common Stock could decline and investors could lose all or part of their investment.
Current wording
There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. The risks described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also materially adversely affect our business. If any of these risks actually occur, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our Common Stock could decline substantially and investors could lose all or part of their investment.
Previous wording
We have a limited operating history, particularly with respect to our blockchain infrastructure operations, including certain features and service offerings which recently commenced and our platform and staking-as-a-service business model, and we have a history of operating losses, and expect to incur significant additional operating losses.
Current wording
We have a history of operating losses and expect to incur additional operating losses as we scale our business.
Showing the first 40 of 87 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
From the period September 14, 2021 through March 17, 2025, the Company sold a total of 6,401,461 shares of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $24,230,000 at an average selling price of $3.79 per share, resulting in net proceeds of approximately $23,445,000 after deducting commissions and other transaction costs.
Current report — wording carried from elsewhere
The Company believes that its existing cash and liquid crypto assets, in addition to the funds available to the Company from the issuance of additional stock through the ATM Agreement, provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures and contractual obligations for at least the next twelve months from the filing date of this report. However, this belief is based on current market conditions, regulatory environment, and operational plans, all of which are subject to change.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Expected Volatility – 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.
Previous report — wording carried elsewhere
Similarly, in March 2023 the New York Attorney General became the first U.S. regulator to claim in court that Ethereum, one of the major crypto assets which we hold and stake, is a security in its lawsuit against KuCoin, a crypto asset exchange. If we become subject to regulatory scrutiny or enforcement actions by securities regulators, it could result in expensive litigation and penalties and cessation of the allegedly noncompliant operations, which would materially adversely harm us, including due to our recent shift of focus to our non-custodial staking-as-a-service business and the costs and efforts deployed towards its development. These or additional developments that may arise underscore the risks in our business, particularly its reliance on the use of crypto assets and staking of users’ crypto asset holdings.