BTCS Inc.

BTCS Inc. (“BTCS” or the “Company”) is a U.S.-based, Nasdaq-listed blockchain technology company focused on revenue generation through blockchain infrastructure and decentralized finance (“DeFi”) activities, primarily on the Ethereum network. BTCS operates as an active participant in the Ethereum ecosystem, generating digital asset denominated on-chain revenues through its operations.

The Company’s business model is centered on providing core blockchain infrastructure services, participating in transaction validation and block construction, and engaging in decentralized finance activities to generate revenue. While BTCS maintains significant Ethereum (“ETH”) holdings, the Company does not operate as a passive digital asset holder. Instead, ETH serves as an operating asset that supports revenue generation across the Company’s business lines.

Business Lines

BTCS operates through three primary, complementary business lines:

Validator Node Operations (“NodeOps”)

BTCS operates validator nodes on the Ethereum network as a validator (“Validator”). Validator nodes perform validation and consensus-related activities (“attestation”) as well as block proposal functions that contribute to network security and block finalization. In exchange, BTCS earns ETH-denominated staking revenue, which include protocol-defined rewards and execution layer transaction fees. Validator operations represent a foundational component of the Company’s blockchain infrastructure activities.

Block Building (“Builder+”)

Through its Builder+ operations, BTCS participates in the blockspace value chain by operating proprietary block builders (“Builders”) that construct optimized transaction blocks for submission to Validators. Builder+ revenues are derived from the fees earned when BTCS-constructed blocks are successfully proposed on-chain. In connection with these activities, the Company makes payments to the block proposing validator (“Validator Payments”) to external validators as part of the block-proposal process in order to secure block inclusion on the network. Validator Payments are made in digital assets and represent a direct cost associated with the Company’s block-building operations.

Builder+ has become an increasingly significant contributor to the Company’s revenues as BTCS has expanded private order flow integrations, enhanced infrastructure efficiency, and increased participation across Ethereum blockspace markets.

Decentralized Finance Operations (“Imperium”)

In 2025, BTCS launched Imperium, a business line focused on deploying digital assets into decentralized finance protocols as a liquidity provider and market participant. Through Imperium, the Company deploys ETH and stablecoins into smart contract-based protocols that facilitate decentralized lending, borrowing, liquidity provision, and other on-chain financial activities. Revenues earned through Imperium are variable and depend on protocol utilization, market conditions, and the performance of deployed assets.

Imperium is designed to complement BTCS’s blockchain infrastructure activities by enabling more flexible and capital-efficient deployment of digital assets. In contrast to traditional staking, which is subject to constraints by protocol-defined reward structures and lock-up requirements, DeFi participation allows the Company to dynamically allocate assets across protocols and strategies based on prevailing market conditions, risk considerations, and liquidity needs.

NodeOps and Builder+ collectively comprise the Company’s blockchain infrastructure activities, while Imperium represents a distinct DeFi operating segment. Revenues from blockchain infrastructure activities and DeFi activities are presented separately in the Company’s financial statements.

Business Evolution and Strategic Focus

During 2025, BTCS completed a strategic repositioning to concentrate its operations and capital allocation on Ethereum focused activities. As part of this transition, the Company discontinued validator node operations on non-Ethereum blockchains and liquidated the majority of its non-Ethereum digital asset holdings. The Company also discontinued the development and operation of legacy technology service platforms, including StakeSeeker in 2024 and ChainQ in 2025, in order to focus resources on scalable, revenue-generating blockchain infrastructure and DeFi activities.

These actions reflect BTCS’s emphasis on operational execution, capital efficiency, and alignment with Ethereum-native opportunities. While the Company may continue to hold non-Ethereum digital assets in support of specific infrastructure or operational activities, Ethereum remains the core network underpinning BTCS’s business model.

Capital Strategy and Operations

A core element of BTCS’s business model is its integrated capital strategy, which combines decentralized finance mechanisms with traditional capital markets activities (the “DeFi/TradFi Flywheel”). The Company utilizes tools such as at-the-market (“ATM”) equity offerings, structured convertible notes, and ETH-backed DeFi borrowing to fund operations, scale infrastructure, and deploy digital assets while seeking to manage liquidity and shareholder dilution. The use of ATM offerings and convertible notes may result in significant dilution to existing shareholders. Additionally, ETH-backed DeFi borrowing subjects the Company to liquidation risk if the value of ETH declines, and the risk of loss of collateral, which could materially harm the Company’s financial condition.

BTCS actively allocates capital and digital assets across staking, block-building support, and DeFi deployments based on expected returns, risk considerations, and prevailing market conditions. This flexible approach allows the Company to adapt its operating footprint and asset deployment strategy as opportunities evolve within the Ethereum ecosystem.

Digital Asset Security and Custody

The Company prioritizes the secure self-custody of its digital assets as a core component of its operating model. BTCS maintains internal controls and security practices designed to safeguard digital assets and minimize exposure to third-party custody and counterparty risks.

BTCS primarily holds its digital assets in Company-controlled wallets, including a combination of cold storage wallets and hot wallets. Cold storage wallets, which are maintained offline, are used for the long-term safeguarding of digital assets, while hot wallets are utilized on a limited basis to support operational, transactional, and liquidity management activities. The Company utilizes third-party wallet infrastructure providers to support secure wallet management, access controls, and transaction workflows.

BTCS utilizes cryptocurrency exchanges and over-the-counter trading desks on a limited basis for transactional purposes, such as asset conversions, liquidity management, or operational needs. The Company does not engage in margin trading, leveraged transactions, or similar arrangements with cryptocurrency exchanges.

The Company currently does not maintain any insurance policies that provide coverage for potential losses of digital assets in cases of theft, lost keys, or other events that could result in the loss of digital assets held in its wallets.

The Company’s approach to digital asset custody and security is intended to support operational flexibility while mitigating risks associated with centralized platforms and third-party failures. These practices are subject to ongoing review and may evolve as market conditions, regulatory considerations, and operational requirements change.

GROWTH STRATEGY

BTCS’s growth strategy is centered on expanding high-margin scalable revenue opportunities. The Company’s strategy emphasizes operational scalability, and long-term shareholder value creation.

Scaling Blockchain Infrastructure Operations

BTCS intends to continue expanding its Builder+ operations by increasing private order flow integrations, enhancing block-building efficiency, and deepening relationships with participants across the Ethereum transaction ecosystem. The Company believes that block building represents a scalable, technology-driven revenue opportunity and expects Builder+ to remain a significant contributor to revenue growth.

Validator node operations are expected to remain a core component of the Company’s infrastructure strategy, providing recurring ETH-denominated rewards while supporting network security. BTCS will continue to evaluate Validator deployment strategies based on expected revenue, network conditions, and capital requirements.

Expansion of Imperium and DeFi Activities

The Company expects Imperium to represent an increasingly important component of its operations. BTCS plans to expand asset deployments into DeFi protocols and pursue additional integrations to broaden its on-chain activities. Imperium is intended to support scalable, high-margin, high-growth revenue while reinforcing BTCS’s integrated position within the Ethereum ecosystem.

BTCS anticipates that DeFi revenues will contribute a growing percentage of total revenue in 2026 and beyond, subject to market conditions and protocol performance.

Capital Formation and Use of Digital Assets

BTCS seeks to expand its operations by accessing capital through a combination of traditional and decentralized financing arrangements that support the growth of its revenue-generating activities.

While BTCS holds significant Ethereum assets, they are primarily maintained as operating assets that support the Company’s revenue-generating activities, infrastructure participation, and DeFi activities. BTCS expects to continue utilizing ETH across its operations as it expands its business.

Long-Term Strategic Objectives

BTCS’s long-term objectives include expanding its participation across Ethereum-related infrastructure activities, growing recurring on-chain revenues, improving operating leverage, and enhancing shareholder value. The Company believes that its operating model, infrastructure capabilities, and flexible capital raising strategies position it to participate meaningfully in the continued adoption and growth of decentralized technologies and to drive sustainable, long-term value for shareholders as decentralized networks continue to scale.

INDUSTRY AND MARKET OVERVIEW (DIGITAL ASSETS AND BLOCKCHAIN TECHNOLOGIES)

Overview of Blockchain Networks and Digital Assets

Blockchain networks are decentralized systems that enable the recording, validation, and settlement of transactions without reliance on a central intermediary. These networks rely on distributed participants operating software and infrastructure to maintain a shared ledger, enforce protocol rules, and provide network security. Digital assets, such as ETH, function as native units of value within these networks and are used to incentivize participation, pay transaction fees, and support network operations.

Public blockchains, including Ethereum, support a broad range of applications beyond simple value transfer, such as smart contracts, decentralized finance protocols, non-fungible tokens, and other on-chain services. The growth of these applications has increased demand for reliable infrastructure providers that support transaction processing, block construction, and network security.

Proof-of-Stake and Network Infrastructure Participants

Many modern blockchain networks, including Ethereum, operate under proof-of-stake (“PoS”) consensus mechanisms. Under PoS, network security and transaction validation are performed by Validators that commit digital assets to the network and operate specialized software and infrastructure. Validators are selected by the network to propose and attest to blocks, and in return earn protocol-defined rewards and transaction fees.

In addition to Validators, blockchain ecosystems include other specialized participants that support transaction execution and block formation. These participants include Builders, which assemble and optimize transactions into blocks, and other infrastructure providers that facilitate transaction submission, routing, and settlement. Together, these participants contribute to the efficient operation and scalability of blockchain networks.

Block Building and Transaction Execution

Following the implementation of proposer-builder separation (“PBS”) on certain blockchain networks, including Ethereum, block building has emerged as a distinct function within these ecosystems. Builders compete to assemble transaction blocks that maximize the economic value of included transactions, taking into account transaction fees, ordering constraints, and execution considerations. Validators may choose to select blocks constructed by competing Builders through auction-based mechanisms, typically proposing the block associated with the highest bid and enabling Builders to capture the transaction fees and other value associated with the block when those blocks are successfully included on-chain.

The evolution of block building has contributed to the development of more specialized infrastructure and software designed to improve transaction efficiency, reduce latency, and optimize block outcomes. As transaction activity on blockchain networks increases, block-building and related infrastructure services are expected to play an increasingly important role in network performance and economics.

Decentralized Finance Ecosystems

Decentralized finance refers to a category of blockchain-based applications that provide financial services through smart contracts rather than centralized intermediaries. DeFi protocols enable activities such as lending, borrowing, trading, liquidity provision, and revenue generation using digital assets. Participants in DeFi ecosystems may earn variable returns based on protocol utilization, market conditions, and risk parameters defined by the underlying smart contracts.

DeFi ecosystems continue to evolve as new protocols, products, and risk management mechanisms are introduced. Participation in DeFi requires technical infrastructure, proprietary strategies for utilizing digital assets, and an understanding of protocol-specific risks. As DeFi adoption grows, demand for participants capable of deploying capital and infrastructure efficiently is expected to increase.

Market Trends and Industry Dynamics

The digital asset and blockchain technology markets are characterized by rapid technological change, evolving regulatory frameworks, and significant market volatility. Adoption of blockchain-based applications has expanded across financial services, payments, and digital commerce, driving increased transaction volumes and infrastructure demand on networks such as Ethereum.

At the same time, increased competition among infrastructure providers, protocol changes, and shifts in network economics may affect the profitability and sustainability of blockchain-based operations. Companies operating in this space must continuously adapt their technology, strategies, and risk management practices in response to these dynamics.

BTCS operates within this evolving industry landscape by focusing on infrastructure participation and other on-chain activities that support the continued growth of blockchain networks, which the Company believes is important to the long-term expansion of its operations.

COMPETITION

The blockchain infrastructure and decentralized finance markets in which BTCS operates are highly competitive and characterized by rapid technological evolution, low barriers to entry for certain activities, and continuous innovation. Competition exists across each of the Company’s business lines and includes a diverse set of participants ranging from individual operators to well-capitalized technology companies and financial institutions.

Validator Node Operations Competition

In its validator node operations, BTCS competes with other independent node operators, infrastructure providers, and institutional participants that operate validator infrastructure on the Ethereum network. Competitive factors in this area include technical reliability, operational uptime, security practices, and cost efficiency. Because validator rewards are largely protocol-defined, competition is primarily driven by operational performance rather than pricing discretion. However, protocol changes, network upgrades, or changes in validator economics could alter the competitive dynamics in this market.

Block Building Competition

Within block building, BTCS competes with other Builders and infrastructure providers that participate in Ethereum’s transaction execution ecosystem. Competition in block building is driven by technology performance, access to transaction flow, execution efficiency, latency, and the ability to consistently construct high-value blocks. The block-building market is dynamic, and competitive positions may change rapidly as network conditions, protocol rules, participant behavior, regulatory requirements, and technological capabilities evolve.

Decentralized Finance Competition

Through its Imperium operations, BTCS competes with a broad range of market participants deploying digital assets into decentralized finance protocols, including individual liquidity providers, proprietary trading firms, digital asset funds, and other infrastructure-focused companies. Competitive factors in DeFi participation include capital availability, risk management capabilities, technological sophistication, and the ability to efficiently allocate assets across protocols and strategies.

Unlike traditional financial markets, DeFi ecosystems are generally open and permissionless, which can increase competition and compress returns over time. As a result, participants must continuously evaluate deployment strategies, protocol risks, and market conditions to remain competitive.

Competitive Position

BTCS seeks to compete by leveraging its operating model across blockchain infrastructure and DeFi activities, disciplined capital allocation, and a focus on operational efficiency. The Company believes that its experience operating validator and block-building infrastructure, combined with its ability to actively deploy digital assets, provides a differentiated approach relative to participants focused solely on a single segment of the blockchain ecosystem.

Competition in the Company’s markets is further influenced by the potential for new entrants and industry consolidation. New participants may enter certain segments with limited upfront investment, while consolidation through mergers, alliances, or capital aggregation may strengthen the competitive positions of existing participants by pooling resources and expanding capabilities.

In addition, many competitors are privately held and therefore are not subject to the regulatory, reporting, and compliance requirements applicable to public companies. As a result, such competitors may be able to pursue certain initiatives more rapidly or at a greater scale than BTCS.

The Company faces competition from entities that may have greater financial resources, technological capabilities, and market reach. There can be no assurance that BTCS will be able to maintain or improve its competitive position as the blockchain and digital asset markets continue to evolve.

INTELLECTUAL PROPERTY AND TRADE SECRETS

BTCS relies on proprietary technology, software configurations, and operational know-how to support its blockchain infrastructure and decentralized finance activities. These include internally developed tools, systems, and processes used in connection with validator node operations, block building through Builder+, and the operation and development of the Company’s Imperium platform and related on-chain activities.

The Company’s intellectual property primarily consists of trade secrets, software configurations, proprietary algorithms, workflows, and internal systems, as well as trademarks and domain names associated with its brand. While certain components of the Company’s operations rely on open-source software, BTCS believes that its proprietary implementations, integrations, and operational expertise provide differentiation in its infrastructure activities.

BTCS seeks to protect its intellectual property and trade secrets through confidentiality and proprietary rights agreements with employees and certain contractors, non-disclosure agreements with consultants and other third parties, and applicable trademark and domain name protections. The Company believes these measures are appropriate to safeguard its proprietary information and support its competitive position.

HUMAN CAPITAL / EMPLOYEES

As of March 22, 2026, the Company had nine full-time employees. The Company’s limited workforce presents operational risks, including dependence on key personnel, limited redundancy in critical functions, and potential challenges in scaling operations. None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement. In addition to its employees, BTCS engages third-party contractors and consultants on an as-needed basis to support its operations.

BTCS operates as a remote-first company and believes that this approach provides access to a broader talent pool and enhances its ability to attract and retain skilled professionals. The Company’s workforce includes employees with expertise in blockchain infrastructure, software development, finance, and operations.

Human capital management is an important component of the Company’s business strategy. BTCS seeks to foster an engaged and motivated workforce by promoting a culture of accountability, professional development, and respect. The Company is committed to providing equal employment opportunities and maintaining a work environment free from discrimination, harassment, or retaliation, in compliance with applicable laws and regulations.

The Compensation Committee of the Board of Directors (the “Board”) oversees executive compensation and succession planning. The Company seeks to offer compensation arrangements that are competitive and appropriate for a company of its size and stage of development. BTCS offers employees access to health insurance and a 401(k) retirement plan with employer matching contributions, subject to applicable limits, as well as other employee benefits consistent with market practice.

CAPITALIZATION

The following table details the Company’s capitalization as of March 22, 2026.

(1) As of March 22, 2026, a total of 3,069,272 shares of restricted common stock and 2,681,835 restricted stock units remain unvested and subject to forfeiture. These awards are subject to a combination of performance-based vesting conditions, including market capitalization and stock price thresholds, as well as time-based service conditions. Certain awards require the achievement of performance conditions alone, while others require both performance and continued service. In addition, the settlement of certain restricted stock units is subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s equity incentive plan. If the applicable vesting conditions or stockholder approval requirements are not satisfied, the awards will be forfeited or will not be settled in shares.

(2) As of March 22, 2026, a total of 278,375 shares of restricted Series V preferred stock remain subject to forfeiture and have not yet vested. These shares are subject to a combination of performance-based vesting conditions, including market capitalization thresholds as well as time-based service conditions. Certain awards require both performance and continued service. If the applicable vesting conditions are not satisfied, the shares will be forfeited and returned to the Company.

Cautionary Note Regarding Forward Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, and any other statements that are not statements of historical fact. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “may,” “might,” “will,” “would,” “could,” “should,” “potential,” “continues,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects,” “forecasts,” “targets,” “outlook,” “guidance” and similar references to future periods, or by the use of the negative of such terms or other comparable terminology.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, capital markets, regulatory environment and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements, and you should not place undue reliance on any forward-looking statement. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include, but are not limited to, the risks described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report. Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.