BTCS Inc.

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 discussed in the Risk Factors section contained in our Annual Report on Form 10-K for the year ended December 31, 2024. When we refer to the “2025 Quarter” and the “2024 Quarter” we are referring to the three months ended September 30, 2025 and September 30, 2024, respectively. When we refer to the “2025 Period” and the “2024 Period” we are referring to the nine months ended September 30, 2025 and September 30, 2024, 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 discussed in the Risk Factors section contained in our Annual Report on Form 10-K for the year ended December 31, 2025. When we refer to the “2026 Quarter” and the “2025 Quarter” we are referring to the three months ended March 31, 2026 and March 31, 2025, respectively.

Previous wording

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Current wording

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Previous wording

The following tables reflect our operating results for the three and nine months ended September 30, 2025 and 2024:

Current wording

The following table reflects our operating results for the three months ended March 31, 2026 and 2025:

Previous wording

The Company continues to utilize equity-based compensation as a key component of its total rewards strategy to align employee incentives with long-term shareholder value. We expect total compensation costs to fluctuate based on headcount changes, the timing of performance-based accruals, and the issuance or forfeiture of equity awards.

Current wording

Compensation and related expenses for the 2026 Quarter increased compared to the 2025 Quarter, primarily due to equity-based compensation expense related to amortization of unvested employee stock options and restricted stock units issued during the 2026 Quarter. The Company continues to utilize equity-based compensation as a key component of its total rewards strategy to align employee incentives with long-term shareholder value. Total compensation costs may fluctuate based on headcount changes, the timing of performance-based accruals, and the issuance or forfeiture of equity awards.

Previous wording

The Company recognized significant unrealized appreciation in the fair value of its crypto asset holdings during the 2025 Quarter and 2025 Period, compared to unrealized depreciation in the corresponding 2024 periods. The change was primarily driven by the overall recovery in crypto market valuations, particularly for Ethereum and other assets held by the Company at period-end. These fluctuations reflect the inherent volatility of crypto asset prices, which may continue to materially affect the reported fair value of digital assets in future periods.

Current wording

The Company recognized significant unrealized losses in the fair value of its digital asset holdings for the 2026 Quarter compared to the 2025 Quarter. The change was primarily driven by declines in the market prices of Ethereum and other digital assets held and deployed in the Company’s operations during the period, reflecting the inherent volatility of digital asset markets. These fair value adjustments are non-cash in nature but may continue to materially affect the reported fair value of digital assets and impact reported operating results due to the volatility of digital asset markets in future periods.

Previous wording

Interest expense increased during the 2025 Quarter and 2025 Period, primarily due to interest accrued on decentralized borrowings through Aave and other DeFi lending protocols, as well as interest and amortization expense related to the Company’s May and July 2025 convertible notes. This includes both cash interest paid and the amortization of debt discount over the term of the convertible notes.

Current wording

Interest expense for the 2026 Quarter increased compared to the 2025 Quarter, primarily due to interest accrued on decentralized borrowings through DeFi lending arrangements, as well as interest and amortization expense related to the Company’s May 2025 and July 2025 Senior Secured Convertible Notes (the “Notes”). This includes both cash interest paid and the amortization of debt discount over the term of the Notes.

Previous wording

The Company recognized a non-cash loss resulting from the change in the fair value of warrant liabilities during the 2025 Quarter and 2025 Period, compared to a gain in the corresponding 2024 periods. The change was primarily attributable to movements in the Company’s stock price and related volatility during the period. Because these warrant liabilities are remeasured at fair value each reporting date, future gains or losses will depend on changes in the Company’s share price and other valuation inputs.

Current wording

The Company did not recognize any gain or loss related to the change in the fair value of warrant liabilities during 2026 Quarter, as the outstanding warrants expired in the current period and are no longer subject to remeasurement. In 2025 Quarter, the Company recognized a non-cash gain of approximately $225,000 related to the change in the fair value of warrant liabilities. The prior period gain was primarily attributable to movements in the Company’s stock price and related volatility. As there are no remaining warrant liabilities, the Company does not expect to recognize further gains or losses related to this item in future periods.

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, shares of its common stock through H.C. Wainwright, subject to the availability of an effective registration statement on Form S-3. The initial ATM sales were conducted under a $100,000,000 shelf registration statement that became effective in September 2021.

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, subject to the availability of an effective registration statement on Form S-3. The initial ATM sales were conducted under a $100 million shelf registration statement that became effective in September 2021.

Previous wording

On October 4, 2024, a new Form S-3 registration statement became effective, increasing the total amount of securities that may be offered and sold under the Company’s shelf registration to $250,000,000. As of the date of this report, there was approximately $103,380,000 available for sale under this Form S-3 registration statement.

Current wording

On October 4, 2024, a new Form S-3 registration statement became effective, increasing the total amount of securities that may be offered and sold under the Company’s shelf registration to $250 million. As of the date of this report, there was approximately $103.4 million available for sale under this Form S-3 registration statement.

Previous wording

On July 22, 2025, the Company entered into an amendment to its engagement with H.C. Wainwright in connection with a new Form S-3 registration statement filed on July 23, 2025, to register up to $2,000,000,000 of securities for future issuance (the “New Registration Statement”). The New Registration Statement was approved by the SEC and declared effective on August 1, 2025. As of the date of this report, the Company had not sold any securities under the New Registration Statement.

Current wording

On July 22, 2025, the Company entered into an amendment to its engagement with H.C. Wainwright in connection with a new Form S-3 registration statement filed on July 23, 2025, to register up to $2 billion of securities for future issuance (the “New Registration Statement”). The New Registration Statement was approved by the SEC and declared effective on August 1, 2025. As of the date of this report, the Company had not sold any securities under the New Registration Statement.

Previous wording

From September 14, 2021 through November 10, 2025, the Company sold a total of 32,762,523 shares of common stock under the ATM Agreement for aggregate total gross proceeds of approximately $163,597,000 at an average selling price of $4.99 per share, resulting in net proceeds of approximately $158,539,000 after deducting commissions and other transaction costs.

Current wording

From September 14, 2021 through May 14, 2026, the Company sold a total of 32,762,523 shares of common stock under the ATM Agreement for aggregate total gross proceeds of approximately $163.6 million at an average selling price of $4.99 per share, resulting in net proceeds of approximately $158.5 million after deducting commissions and other transaction costs.

Previous wording

From September 14, 2021 through November 10, 2025, the Company repurchased and retired 888,677 shares of our common stock for an aggregate purchase price of approximately $4,000,000. The repurchases were funded from available cash on hand and are presented as a financing cash outflow in our statement of cash flows. All repurchased shares were immediately retired and are no longer considered issued or outstanding. As of November 10, 2025, approximately $46,000,000 remained available for repurchases under the authorization.

Current wording

From September 11, 2025 through May 14, 2026, the Company repurchased and retired 888,677 shares of our common stock for an aggregate purchase price of approximately $4.0 million. The repurchases were funded from available cash on hand and are presented as a financing cash outflow in our statement of cash flows. All repurchased shares were immediately retired and are no longer considered issued or outstanding. As of May 14, 2026, approximately $46.0 million remained available for repurchases under the authorization.

Previous wording

The Company expect that any future repurchases will be subject to our liquidity position, prevailing market conditions, and other capital allocation priorities, including funding of operations and strategic initiatives.

Current wording

The Company expects that any future repurchases will be subject to our liquidity position, prevailing market conditions, and other capital allocation priorities, including funding of operations and strategic initiatives.

Previous wording

From April 2025 through November 10, 2025, the Company borrowed an aggregate of approximately $61,447,000 in stablecoins through Aave, a DeFi lending protocol, using Ethereum (ETH) as collateral, and repaid approximately $1,447,000 during the same period. These borrowings included transactions executed in connection with on-chain debt refinancing activities. As of November 10, 2025, the Company had approximately $61,052,000 in outstanding borrowings, inclusive of accrued interest, collateralized by approximately 39,077 ETH with an aggregate fair market value of $138,988,000, based on the closing price of $3,557 per ETH on that date.

Current wording

From January 1, 2025 through May 11, 2026, the Company borrowed an aggregate of approximately $123.5 million in stablecoins, primarily USDT and GHO, through Aave, a DeFi lending protocol, using ETH as collateral, and repaid approximately $79.7 million during the same period. These borrowings included transactions executed in connection with on-chain debt refinancing activities. As of May 11, 2026, the Company had approximately $44.3 million in outstanding DeFi borrowings, inclusive of accrued interest, collateralized by approximately 50,128 ETH with an aggregate fair value of $117.3 million, based on the closing price of $2,339 per ETH on that date. Because these borrowings are overcollateralized, declines in the market price of ETH could require the Company to post additional collateral or repay a portion of the borrowings to maintain required collateralization levels under the Aave protocol. Management monitors the collateral value and associated loan health factors on an ongoing basis and may add collateral or reduce borrowings in response to significant market movements.

Previous wording

Borrowings through Aave accrue interest at variable rates determined by Aave’s on-chain smart contracts, which adjust dynamically based on protocol liquidity and market utilization. ETH collateral posted to Aave simultaneously accrues variable interest at rates that fluctuate based on the same market factors. These rates are publicly available and updated in real time on the Aave protocol’s website. As a result, the Company’s net cost of capital may vary depending on prevailing protocol-level conditions. The Company has no control over these rate adjustments and is subject to the risk of significant rate increases. As of November 10, 2025, the USDT borrowing rate was approximately 6.07% per annum.

Current wording

Borrowings through Aave accrue interest at variable rates determined by Aave’s on-chain smart contracts, which adjust dynamically based on protocol liquidity and market utilization. ETH collateral posted to Aave simultaneously accrues variable interest at rates that fluctuate based on the same market factors. These rates are determined algorithmically by the protocol based on market conditions and are publicly available through on-chain protocol data. As a result, the Company’s net cost of capital may vary depending on prevailing protocol-level conditions. The Company has no control over these rate adjustments and is subject to the risk of significant rate increases. As of May 11, 2026, the Company had outstanding borrowings denominated in USDT and GHO, with variable borrowing rates on the Aave protocol applicable to those borrowings of approximately 3.94% and 3.82% per annum, respectively.

Previous wording

In May 2025, the Company completed a private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $7,811,000, for net cash proceeds of approximately $7,306,000. In connection with the offering, the Company also issued approximately 1.9 million five-year warrants, exercisable at $2.75 per share. The notes mature in May 2027, bear interest at a rate of 6% per annum, and are convertible into shares of common stock at a conversion price of $5.85 per share.

Current wording

In May 2025, the Company completed a private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $7.8 million, for net cash proceeds of approximately $7.3 million. In connection with the offering, the Company also issued approximately 1.9 million five-year warrants, exercisable at $2.75 per share. The notes mature on May 13, 2027, bear interest at a rate of 6% per annum, and are convertible into shares of common stock at a conversion price of $5.85 per share.

Previous wording

In July 2025, the Company completed an additional private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $10,050,000, for net cash proceeds of approximately $9,538,000. In connection with the offering, the Company agreed to issue approximately 879,000 five-year warrants, exercisable at $8.00 per share. The notes mature in July 2027, bear interest at 6% per annum, and are convertible into shares of common stock at a conversion price of $13.00 per share.

Current wording

In July 2025, the Company completed an additional private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $10.1 million, for net cash proceeds of approximately $9.5 million. In connection with the offering, the Company issued approximately 879,000 five-year warrants, exercisable at $8.00 per share. The notes mature on July 21, 2027, bear interest at 6% per annum, and are convertible into shares of common stock at a conversion price of $13.00 per share.

Previous wording

The Company used or intends to use the proceeds from both offerings primarily to accelerate the accumulation of Ethereum (ETH), expand operational capacity, and support the continued expansion of its blockchain infrastructure operations. The notes from the May and July 2025 offerings are secured by all of the Company’s assets as collateral, except for Ethereum deposited as collateral for USDT borrowings on Aave and certain other exclusions.

Current wording

The Company used the proceeds from both offerings primarily to accelerate the accumulation of ETH, expand operational capacity, and support the continued expansion of its blockchain infrastructure operations. The notes from the May and July 2025 offerings are secured by all of the Company’s assets as collateral, except for Ethereum deposited as collateral for USDT borrowings on Aave and certain other exclusions.

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 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 sufficient funds to support its current and future operations, satisfy its obligations as they come due, and otherwise operate on an ongoing basis. As of September 30, 2025, the Company had approximately $4,486,000 of cash and cash equivalents and working capital of approximately $235,993,000.

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 March 31, 2026, the Company had approximately $0.3 million of cash and cash equivalents and working capital of approximately $84.1 million.

Previous wording

As of November 10, 2025, the Company had total debt obligations of approximately $78,891,000, consisting of approximately $61,030,000 under its lending arrangement with Aave Protocol and approximately $17,861,000 convertible notes payable.

Current wording

As of May 11, 2026, the Company had total debt obligations of approximately $62.1 million, consisting of approximately $44.3 million under its lending arrangement with Aave Protocol and approximately $17.9 million of convertible notes payable. The Company’s DeFi borrowing balances and related collateral values may fluctuate based on borrowing activity, accrued interest, and changes in digital asset market prices.

Previous wording

The Company believes that its existing cash and crypto assets, together with the proceeds from the convertible note financing and the ability to raise additional funds through its ATM Agreement, provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures, strategic funding needs, and contractual obligations for at least the next twelve months from the filing date of this report. This assessment is based on current market conditions, regulatory environment, and the Company’s operational plans, all of which are subject to change.

Current wording

The Company believes that its existing cash and digital assets, together with the proceeds from recent convertible note financings and access to capital through its ATM Agreement, as well as its ability to manage liquidity through DeFi borrowing arrangements, provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures, strategic initiatives, and contractual obligations for at least the next twelve months from the filing date of this report. This assessment is based on current market conditions, regulatory environment, and management’s operational plans, all of which remain subject to change.

Previous wording

As Builder+ and Imperium operations continue to scale, we expect non-cash adjustments such as crypto-denominated revenues, validator payments, and fair value changes in digital assets to continue to have a significant effect on reported operating cash flows. The magnitude and direction of these effects will depend on market conditions and the timing of crypto asset-related transactions.

Current wording

As Builder+ and Imperium operations continue to scale, non-cash adjustments, including digital asset-denominated revenues, Validator Payments, and fair value changes in digital assets, are expected to continue to have a significant impact on reported operating cash flows. Operating cash flows may also be influenced by stablecoin flows and capital deployment associated with DeFi activities, including liquidity pool participation and borrowing arrangements. The magnitude and direction of these effects will depend on market conditions, protocol activity, and the timing of digital asset transactions.

Previous wording

Net cash used in investing activities was approximately $196,833,000 during the 2025 Period, compared to net cash provided by investing activities of approximately $531,000 in the 2024 Period. The 2025 activity primarily reflects the purchase of approximately $199,858,000 of crypto assets, primarily Ethereum (ETH), to support validator (NodeOps) and DeFi (Imperium) operations and to advance the Company’s long-term ETH accumulation strategy.

Current wording

Net cash provided by investing activities was approximately $18.2 million during the 2026 Quarter, compared to net cash used in investing activities of approximately $34 thousand in the 2025 Quarter. The 2026 activity primarily reflects the sale of approximately $18.2 million of digital assets, primarily ETH, to support liquidity management and capital deployment into DeFi and blockchain infrastructure activities.

Previous wording

Cash provided by financing activities was approximately $205,373,000 during the 2025 Period, compared to approximately $653,000 in the 2024 Period. Financing inflows during the 2025 Period were primarily driven by:

Current wording

Net cash used by financing activities was approximately $17.7 million during the 2026 Quarter, compared to net cash provided by financing activities of approximately $0.2 million in the 2025 Quarter. Financing outflows during the 2026 Quarter were primarily driven by:

Previous wording

We anticipate future financing activity may include additional DeFi borrowings and capital raised through the ATM program or through other financing instruments, as we continue to scale blockchain infrastructure and DeFi operations, enhance liquidity, and accumulate ETH in support of long-term growth.

Current wording

We anticipate future financing activity may include additional DeFi borrowings and capital raised through the ATM program or through other financing instruments, as we continue to scale blockchain infrastructure and DeFi operations, enhance liquidity, and support ongoing capital deployment across blockchain infrastructure and DeFi activities.

Previous wording

As of September 30, 2025, there were no off-balance sheet arrangements and we were not a party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

Current wording

As of March 31, 2026, there were no off-balance sheet arrangements, and we were not a party to any off-balance sheet transactions. We have no guarantees or obligations other than those that arise out of normal business operations.

Previous wording

We discussed the material accounting policies that are critical in making the estimates and judgments in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under the caption “Management’s Discussion and Analysis—Critical Accounting Policies and Estimates”. There has been no material change in critical accounting policies or estimates during the period covered by this report.

Current wording

The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that affect the reported amounts and disclosures. Our critical accounting policies and estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2025, under the caption “Management’s Discussion and Analysis—Critical Accounting Policies and Estimates.”

Previous wording

For information on recent accounting pronouncements, see Note 3 -Summary of Significant Accounting Policies to the Unaudited Condensed Financial Statements.

Current wording

See Note 3 -Summary of Significant Accounting Policies to the unaudited condensed financial statements for a discussion of recent accounting standards and pronouncements.

Previous wording

This report contains forward-looking statements, including statements regarding our liquidity, our growth strategy, our ability to generate scalable and efficient revenue, anticipated increases in our revenues and gross margins, and our future business plans. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “may,” “potential,” “continues,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods.

Current wording

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 are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding our liquidity, our growth strategy, our ability to generate scalable and efficient revenue, anticipated increases in our revenues and gross margins, our capital allocation and treasury management strategies, the expected performance of our blockchain infrastructure and DeFi operations and our future business plans. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “may,” “potential,” “continues,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods.

Previous wording

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy 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. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (i) the rewards and costs associated with staking or validating transactions on blockchains and successfully building blocks on Ethereum’s blockchain; (ii) regulatory issues related to our business model, including potential classification of crypto assets as securities and changing regulatory frameworks; (iii) fluctuations in the price of our crypto assets; (iv) potential decreases in the value of our crypto assets and rewards; (v) competition, (vi) risks related to the loss or theft of private withdrawal keys resulting in the complete loss of crypto assets and rewards; (vii) risks associated with DeFi lending protocols including smart contract vulnerabilities, liquidation risks, and lack of regulatory protections; (viii) counterparty risks in decentralized finance transactions; and (ix) other risks and uncertainties described in our filings with the SEC, including our Form 10-K for the year ended December 31, 2024. Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Current wording

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy 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. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: the rewards and costs associated with staking or validating transactions on blockchains and successfully building blocks on Ethereum’s blockchain; regulatory issues related to our business model, including potential classification of digital assets as securities and changing regulatory frameworks; significant volatility in the market prices of digital assets, particularly Ethereum, which serves as both a core operating asset and collateral for our borrowings and which can experience rapid and substantial price fluctuations; failure to maintain required collateralization levels under DeFi borrowing arrangements, which could result in automatic liquidation of assets; competition in blockchain infrastructure markets, including from other validators, block builders, and DeFi platforms, which may reduce our revenues, market share, or access to transaction flow; risks related to the loss, theft, or compromise of private withdrawal keys, digital wallets, or infrastructure systems, which could result in the complete and unrecoverable loss of digital assets; risks associated with DeFi lending protocols, including smart contract vulnerabilities, coding errors, protocol exploits, oracle manipulation, lack of traditional regulatory protections, and the absence of recourse in the event of loss; collateral liquidation risk in DeFi borrowing arrangements, including the potential for automatic liquidation by protocol smart contracts without prior notice if our health factor or collateralization ratio falls below protocol-defined thresholds; cybersecurity risks, including potential breaches, hacking incidents, or system failures affecting our operations or the protocols in which we participate; and other risks and uncertainties described in our filings with the SEC, including our Form 10-K for the year ended December 31, 2025. 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 o…

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