BTCS Inc
For the period ended Mar 31, 2025. Filed May 15, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 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-Q
Period ended 2024-09-30; filed 2024-11-13.
0001493152-24-045124
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001641172-25-010401
Item 2. 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.
Compared 85 previous paragraphs and 99 current paragraphs.
34 unchanged; 28 reworded; 36 added; 23 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Block Building – Builder+
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+ operated exclusively on Ethereum prior to April 1, 2025, we have since expanded into block-building on Binance Smart Chain. Builder+’s 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
During the three months ended March 31, 2025, BTCS ceased operating validator nodes on Avalanche (AVAX). In April 2025, BTCS also ceased operating validator nodes on Akash (AKT) and Kava (KAVA) networks.
Current report
Supporting Platforms: ChainQ
Current report
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 testing phase, ChainQ simplifies on-chain data access and analysis for cryptocurrency holders, delivering deeper insights into blockchain activity while adhering to data privacy standards. By indexing public data from our blockchain infrastructure operations, ChainQ provides an intuitive platform for exploring on-chain data.
Current report
The tables below detail BTCS’s quarterly crypto asset holdingsfor each quarter from Q1 2024 through Q1 2025.
Current report
Crypto assets earned from blockchain infrastructure staking activities through NodeOps
Current report
Revenue from blockchain infrastructure staking activities through NodeOps
Current report
Revenue for the 2025 Quarter increased to approximately $1,689,000 compared to approximately $451,000 in the 2024 Quarter. The increase was primarily attributable to the expansion of our Builder+ operations, which focus on Ethereum block-building activities.
Current report
During the 2025 Quarter, Builder+ operations contributed approximately $1,350,000 of total revenue, while our NodeOps business contributed approximately $339,000. The significant year-over-year increase in revenue reflects the continued scaling of our Builder+ operations, which resulted in a substantial increase in block rewards earned during the period.
Current report
While we anticipate continued growth in both the number of block rewards and staking rewards earned, the fair value of such rewards may fluctuate due to the inherent volatility of crypto asset markets. As a result, the amount of revenue recognized in future periods may be materially impacted by market price movements of the underlying crypto assets at the time of reward receipt or recognition.
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, likely reducing gross margins.
Current report
General and Administrative Expenses
Current report
General and administrative expenses increased during the 2025 Quarter compared to the 2024 Quarter. The increase was primarily attributable to higher payments for order flow associated with supporting Ethereum block-building activities, expanded investor relations services, and higher accounting fees, including increases in audit fees.
Current report
The growth in general and administrative expenses reflects the Company’s ongoing investment in operational infrastructure to support Builder+ activities and broader public company compliance efforts. We expect general and administrative expenses to fluctuate based on business needs, with potential increases in audit fees as well as order flow costs as operations continue to scale.
Current report
Research and Development Expenses
Current report
Research and development expenses increased during the 2025 Quarter compared to the 2024 Quarter, primarily due to continued investment in Builder+ strategies and development. The Company also continued the development of ChainQ during the period, although the primary focus of research and development activities remained centered on enhancing Builder+ operations. We expect research and development costs to remain consistent or moderately increase in future periods, with an emphasis on disciplined cost management, particularly for third-party development services.
Current report
Compensation and Related Expenses
Current report
Marketing Expenses
Current report
Marketing expenses increased during the 2025 Quarter compared to the 2024 Quarter, primarily due to expanded advertising campaigns and promotional activities aimed at enhancing brand visibility and supporting business development initiatives. The Company expects that marketing spend are expected to remain at current or higher levels in future periods, in line with strategic growth objectives and broader customer engagement efforts.
Current report
Realized losses on crypto asset transactions during the 2025 Quarter were primarily driven by the sale of Kusama (KSM), which the Company had held with a long-standing unrealized loss totaling approximately $1.3 million that was recognized upon sale. This transaction reflects the Company’s strategic exit from its KSM-related operations and holdings. Additional realized gains or losses may be recognized in future periods based on the timing and pricing of crypto asset sales to support operational or liquidity needs.
Current report
Other income (expense) for the 2025 Quarter was primarily impacted by changes in the fair value of the Company’s crypto assets and warrant liabilities.
Current report
The recognition of unrealized depreciation of crypto assets during the 2025 Quarter, compared to unrealized appreciation during the 2024 Quarter, contributed significantly to the year-over-year change. These fluctuations reflect movements in the fair market value of the Company’s crypto asset holdings, which are directly influenced by the volatility of crypto markets. Market volatility remains difficult to predict and can materially affect the value of assets reported on our balance sheet and the related effects on our results of operations.
Current report
Additionally, the decrease in the fair value of warrant liabilities during the 2025 Quarter contributed to a reduction in non-cash expense. The valuation of warrant liabilities is primarily influenced by changes in the Company’s stock price as of each reporting period end, which may fluctuate based on market conditions beyond management’s control.
Current report
The decline in net income for the 2025 Quarter compared to the 2024 Quarter was primarily driven by a sharp reversal in the fair value of crypto assets, resulting in significant unrealized losses during the period. In contrast, the prior-year quarter benefited from substantial unrealized gains. This swing in non-cash fair value adjustments reflects ongoing crypto market volatility, which may continue to materially impact results in future periods.
Current report
Operating expenses also increased meaningfully, led by higher compensation costs—including increased performance bonus accruals tied to revenue growth—and a rise in marketing spend to support strategic growth initiatives. Additionally, the Company recognized realized losses on crypto asset transactions during the 2025 Quarter, compared to immaterial realized gains in the prior-year period.
Current report
The combined impact of these factors contributed to a substantial year-over-year decrease in net income.
Current report
As disclosed in Note 11 –Subsequent Events, on May 13, 2025, the Company issued $7,810,526 of 5% Original Issue Discount Senior Secured Convertible Notes for a purchase price of $7,420,000. The notes: (i) are convertible into shares of the Company’s common stock at a conversion price of $5.85 per share, (ii) mature on May 13, 2027, and (iii) accrue interest at a rate of 6% per annum, which may be paid on a quarterly basis in either cash or freely tradable shares of the Company’s common stock. The Company also had approximately $320,000 in debt obligations outstanding under its lending arrangement with AAVE Protocol as of May 13, 2025.
Current report
The Company believes that its existing cash and crypto assets, together with the proceeds from the May 13 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 report
Cash Used in Operating Activities
Current report
Cash used in operating activities was approximately $1,902,000 during the 2025 Quarter compared to approximately $769,000 for the 2024 Quarter. Significant non-cash adjustments impacting operating cash flows included:
Current report
We anticipate that equity-based compensation will decrease during Fiscal 2025, as the achievement of performance-based awards has become more challenging due to the recent pullback in crypto market values and related revenue impacts. Non-cash adjustments related to revenue earned in native crypto assets and Validator Payments are expected to grow as we continue scaling our Ethereum block-building operations. However, the magnitude of these non-cash adjustments will continue to be influenced by the inherent volatility of crypto markets, which can materially impact both asset valuations and operational outputs.
Current report
Cash Used in Investing Activities
Current report
Cash Provided by Financing Activities
Current report
The Company anticipates continuing to raise proceeds through Common Stock sales under the ATM Agreement to fund operational needs. Future financing activities will remain aligned with our strategic priorities, including the scaling of block-building operations and ongoing blockchain infrastructure development.
Removed paragraphs (23)
Previous report
Ethereum Block Building – Builder+
Previous report
Builder+ is now a central driver of BTCS’s growth strategy, reflecting the Company’s emphasis on scalable and efficient revenue generation through advanced blockchain technology.
Previous report
While Builder+ currently operates within the Ethereum ecosystem, it has been designed to adapt to a broader blockchain landscape, allowing for potential expansion to other networks in the future. This flexibility aligns with BTCS’s strategic vision to maintain a robust blockchain infrastructure that is not limited to any single network, even as Ethereum remains a primary area of focus.
Previous report
Staking-as-a-Service
Previous report
Supporting Platforms: ChainQ and StakeSeeker
Previous report
To complement our core blockchain infrastructure, we have developed crypto-focused technology solutions aimed at increasing accessibility and transparency within the blockchain ecosystem. These solutions include “ChainQ”, an AI-powered blockchain data and analytics platform currently in beta, and “StakeSeeker”, a portfolio monitoring tool designed for cryptocurrency holders.
Previous report
ChainQ simplifies the process of accessing and analyzing blockchain data, enabling deeper insights into on-chain activity. Through comprehensive indexing of public blockchain data from our Blockchain Infrastructure operations, ChainQ is intended to provide an intuitive and straightforward platform for users to access on-chain data.
Previous report
StakeSeeker is a personal finance software and education center with a comprehensive crypto dashboard providing tools for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets in a single analytics platform. StakeSeeker does not provide or facilitate direct, crypto asset delegation or transaction execution on our platform. The StakeSeeker platform is currently free-to-use for registered users and is not currently generating revenue. The Company is not a broker-dealer or an investment advisor and does not provide any such related services.
Previous report
Both the ChainQ and StakeSeeker platforms contribute to the overall value BTCS offers within the blockchain space, supporting its infrastructure operations and expanding user engagement and awareness.
Previous report
The tables below detail BTCS’s quarterly crypto asset holdings as of the end of each quarter beginning with the 2023 Quarter and ending the 2024 Quarter.
Previous report
Crypto assets earned from BTCS validator nodes
Previous report
Revenue from BTCS validator nodes
Previous report
The increase in revenue during the 2024 Quarter and 2024 Period as compared to the 2023 Quarter and 2023 Period is primarily due to the increase in the block rewards earned from our Ethereum block-building activities during the 2024 Quarter and 2024 Period. The increase is also partially due to the increase in fair value of our crypto assets earned as rewards for staking as the market prices of crypto assets continued to be elevated during 2024 Period compared to 2023 Period. Although we believe the number of block rewards and tokens we earn from staking and revenue recognized will increase as we continue to expand our blockchain infrastructure efforts, we recognize that volatility in the crypto asset markets may impact the market prices of the crypto assets we earn from staking.
Previous report
As detailed above, in the 2024 Quarter, the Company earned approximately 217 ETH from its Builder+ and Validator operations. During the period from October 1, 2024 to November 12, 2024, the Company has earned approximately 541 ETH from its Builder+ and Validator operations. As such, the Company expects its revenue to significantly increase in the fourth quarter. During this time period, our associated costs of revenues have also increased at a larger percentage than our revenue growth, resulting in lower gross margins.
Previous report
Summary of Accounting Principle Change in Ethereum Block Building Revenues and Costs
Previous report
During the second Quarter of 2024, the Company implemented a change in accounting principle related to the presentation of revenues and costs associated with our Ethereum bloc- building operations. This change, made under ASC 606, now presents gas fees earned as gross revenue and Validator Payments as cost of revenues, rather than netting them against each other. This correction, applied retrospectively, better reflects the economic substance of our transactions and provides enhanced transparency. The change does not impact gross profit, net income, or balance sheet items, but it does result in increased reported revenues and costs for the three months ended March 31, 2024.
Previous report
General and administrative expenses consist of director compensation, legal and professional fees and other personnel and related costs. The increase in the 2024 Period was primarily due to an increase of approximately $200,000 in proxy service fees related to our 2024 annual meeting as well as a decrease of approximately $140,000 in legal fees and related administrative costs from the 2023 Period, driven primarily by services surrounding the Series V Preferred Distribution and related listing on Upstream Exchange incurred during the first half of 2023. We are uncertain as to whether our future legal expenses related to the SEC’s current investigation of the Company will have a material impact on our operating expenses during the remainder of 2024, or thereafter. Additionally, we incurred higher accounting fees related to our audits and Form S-3 registration during the 2024 Period, which is partially offset by other reduced costs resulting from cost cutting measures for other professional fees during the 2024 Period.
Previous report
Research and development expenses decreased slightly during the 2024 Period from the 2023 Period as the Company shifted efforts dedicated to the beta release of our proprietary StakeSeeker platform in the 2023 Period to focus on the launch of Builder+ operations as well as the further development of ChainQ, which launched in July 2024. We anticipate research and development costs to remain consistent as we continue to expand on technological solutions in the blockchain sector with a focus on cost management of our third-party development team.
Previous report
Marketing costs increased during the 2024 Period as the Company incurred costs associated with the purchase of transaction traffic to bolster Ethereum block production as part of the ramp up of Builder+ operations. The Company may have additional expenditures for transaction traffic in order to further increase Ethereum block-building activities.
Previous report
The changes in other income for the 2024 Quarter and 2024 Period were primarily attributed to the recognition of the change in unrealized appreciation on crypto assets resulting from the increase in the fair market value of the Company’s crypto assets during the 2024 Period compared to the 2023 Period and the decrease in the fair market value of the Company’s crypto assets during the 2024 Quarter. Changes in the unrealized appreciation or depreciation of crypto assets are directly influenced by the volatility in crypto markets, which can be challenging for management to predict.
Previous report
Furthermore, the changes in other income for the 2024 Quarter was partially driven by the decrease in the fair value of warrant liabilities throughout the period. 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
After the expiration of the Company’s prior Form S-3, the Company filed a new Form S-3, which became effective October 4, 2024.
Previous report
Cash used in operating activities was approximately $2,388,000 during the 2024 Period compared to approximately $2,693,000 for the 2023 Period. The largest recurring non-cash adjustments to our operating cash flows consisted of approximately $1,888,000 in stock-based compensation as well as approximately $1,752,000 of revenue earned in native token crypto assets.
Reworded paragraphs (28)
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 contained in our Annual Report on Form 10-K for the year ended December 31, 2023. When we refer to the “2024 Quarter” and the “2023 Quarter” we are referring to the three months ended September 30, 2024 and September 30, 2023, respectively. When we refer to the “2024 Period” and the “2023 Period” we are referring to the nine months ended September 30, 2024 and September 30, 2023, 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 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 March 31, 2025 and March 31, 2024, respectively.
Previous wording
BTCS’s core business centers on its blockchain infrastructure, which supports the validation of transactions and security of multiple proof-of-stake (PoS) and delegated proof-of-stake (dPoS) blockchain networks. The Company manages a network of cloud-based validator nodes, which play a key role in network consensus by performing transaction validation (“attestation”) activities and proposing new blocks. Through these activities, BTCS earns native token rewards by staking its own crypto assets on validator nodes operated by BTCS and third parties.
Current wording
BTCS’s blockchain infrastructure centers 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.
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
A central focus of BTCS’s current operations is its Ethereum block-building initiative, branded as Builder+, launched 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 wording
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 revenue by optimizing the contents and structure of each block. The Company aims to maximize the value of tokens earned by increasing the number of blocks we purchase while minimizing the payments to validators required for purchasing block space.
Previous wording
BTCS’s non-custodial Staking-as-a-Service (“StaaS”) business model allows for crypto asset holders to earn token rewards by participating in network consensus mechanisms through staking and delegating their crypto assets to Company operated validator nodes. As a non-custodial validator operator, the Company receives a percentage of a crypto asset holders’ staking rewards generated as a validator node fee, for our ministerial role in hosting the validator node. This creates an opportunity for scalable revenue and business growth with limited additional costs. The Company’s StaaS strategy provides a more accessible and cost-effective alternative for crypto asset holders to participate in blockchain networks’ consensus mechanisms, promoting the growth and adoption of blockchain technology.
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
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.
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. All Delegator assets remain under the sole control of the Delegator. 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
Looking forward, BTCS remains committed to enhancing its blockchain infrastructure capabilities, with a strong emphasis on its Ethereum block-building operations. The Company is poised to leverage its expertise in validator node management and block-building optimization as it seeks scalable opportunities within the rapidly evolving blockchain ecosystem. While Ethereum is currently the primary network for BTCS’s operations, the Company may expand its infrastructure to accommodate additional blockchain networks.
Current wording
Looking forward, BTCS remains committed to enhancing its blockchain infrastructure capabilities, with a strong emphasis on its Ethereum block-building operations. The Company is poised to leverage its expertise in validator node management and block-building optimization as it seeks scalable opportunities within the rapidly evolving blockchain ecosystem.
Previous wording
Revenue from staking to third-party validator nodes
Current wording
Revenue includes amounts earned from staking to third-party validator nodes.
Previous wording
Crypto assets earned from Ethereum block building through Builder+
Current wording
Crypto assets earned from block-building through Builder+
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
Revenue from Ethereum block building through Builder+
Current wording
Revenue from block building through Builder+
Previous wording
Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Results of Operations for the Three Months Ended March 31, 2025 and 2024
Previous wording
The following tables reflect our operating results for the three and nine months ended September 30, 2024 and 2023:
Current wording
The following tables reflect our operating results for the three months ended March 31, 2025 and 2024:
Previous wording
The increase in the cost of revenues during the 2024 Period as compared to the 2023 Period is due to the increase in Validator Payments made to purchase block space as part of our Ethereum block-building activities during the 2024 Quarter and Period. These additional costs are partially offset by the efficiencies realized in our blockchain infrastructure validating operating costs, including streamlining of web service hosting fees and reduction of services provided by vendors. We believe our cost of revenues will increase as we continue to ramp up our business, particularly our strategy to increase the number and value of block production, requiring additional purchases of block space from Validators.
Current wording
Cost of revenues increased during the 2025 Quarter, primarily due to higher Validator Payments made to external parties to secure block space for purchasing block space as part of our block-building activities under Builder+. Validator Payments totaled approximately $1,480,000 during the 2025 Quarter. These additional costs are partially offset by the efficiencies realized in our blockchain infrastructure validating operating costs, including streamlining of web service hosting fees and reduction of services provided by vendors.
Previous wording
Compensation and related expenses increased during the 2024 Period resulting from the addition of employee headcount during the 2024 Quarter as well as larger accruals for estimated performance bonuses for 2024. We believe our compensation expenses will increase from those reported in the 2024 Period as the Company continues to utilize non-cash equity-based compensation incentives as a core part of our compensation strategy and anticipate additional accruals for 2024 performance-based bonus incentives in future reporting periods and may bring on additional staff.
Current wording
Compensation and related expenses increased during the 2025 Quarter compared to the 2024 Quarter, primarily due to the addition of employee headcount and larger accruals for estimated performance-based bonuses tied to operational and financial milestones. The Company continues to rely on non-cash equity-based compensation as a core element of its overall compensation strategy, and we expect total compensation costs to increase in future periods as additional personnel are added and as further accruals for performance-based incentives are recognized.
Previous wording
The realized losses on crypto asset transactions increased during the 2024 Period as the Company sold certain crypto assets from our blockchain infrastructure operations in order to fund operating activities. The Company may realize additional gains (losses) in the future resulting from the sale of crypto assets to meet operational and cash needs.
Current wording
Realized Losses on Crypto Asset Transactions
Previous wording
The decrease in net income for the 2024 Period compared to the 2023 Period is primarily attributable to larger increases in fair value of our crypto assets during the 2024 Period compared to the 2023 Period. The decrease in net loss for the 2024 Quarter compared to the 2023 Quarter is primarily attributable to the decline of crypto market prices during the 2024 Quarter, resulting in decreased values of our crypto assets and reporting of unrealized depreciation in the 2024 Quarter. We acknowledge that our net income (loss) may exhibit significant fluctuations due to the volatility in the crypto asset markets, impacting changes in the fair value of crypto assets during future reporting periods.
Current wording
Net income (loss) may continue to fluctuate significantly due to the volatility in the crypto asset markets, impacting changes in the fair value of crypto assets during future reporting 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 (assuming an effective registration statement on Form S-3), from time-to-time, through H.C. Wainwright, shares of the Company’s Common Stock having an aggregate offering price of up to $98,767,500. From September 14, 2021 through November 12, 2024, the Company sold a total of 5,260,536 shares of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $19,176,000 at an average selling price of $3.65 per share, resulting in net proceeds of approximately $18,548,000 after deducting commissions and other transaction costs.
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 (assuming an effective registration statement on Form S-3), from time-to-time, through H.C. Wainwright, shares of the Company’s Common Stock having an aggregate offering price of up to $98,767,500.
Previous wording
As a result of the SEC’s baby shelf requirements, the Company is currently limited in its sales of Common Stock under the ATM Agreement to one-third of its public float during the 12 calendar months immediately prior to the sale. As of the filing date of this Form 10-Q, the Company would be limited in its sales under the ATM Agreement to approximately $$2,618,000 of shares.
Current wording
However, due to the SEC’s baby shelf requirements, the Company is currently limited in its sales of Common Stock under the ATM Agreement to no more than one-third of its public float (calculated as the aggregate market value of outstanding Common Stock held by non-affiliates) during any 12-month period, provided that the amount of securities that may be sold under the Form S-3 may fluctuate based on changes in the Company’s public float and stock price. As of May 13, 2025, the Company would be limited in its sale of shares under the ATM Agreement to approximately $12,138,000, subject to ongoing changes in the Company’s public float and stock price.
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 liquidation 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. As of September 30, 2024, the Company had approximately $254,000 of cash and working capital of approximately $25,090,000.
Current 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 March 31, 2025, the Company had approximately $270,000 of cash and working capital of approximately $20,202,000.
Previous wording
As of November 12, 2024, the Company had approximately $1,466,000 of cash and cash equivalents and the fair market value of the Company’s liquid crypto assets was approximately $31,548,000. The Company has no outstanding debt. The Company believes that the existing cash and liquid crypto assets held by us provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures and contractual obligations for at least the next 12 months.
Current wording
As of May 13, 2025, subsequent to the financing described below, the Company had approximately $7,747,000 of cash and cash equivalents, and the fair market value of the Company’s crypto assets was approximately $30,741,000.
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 nine 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 investing activities was approximately $531,000 during the 2024 Period compared to cash used in investing activities of approximately $186,000 for the 2023 Period. Net cash inflows from investing activities resulted from the sale of crypto assets. We anticipate similar levels of crypto assets sales in future quarters to fund operating activities.
Current wording
Cash used in investing activities was approximately $34,000 during the 2025 Quarter compared to approximately $19,000 for the 2024 Quarter. Net cash inflows from investing activities resulted from the sale and purchase of crypto assets. We anticipate similar levels of crypto assets sales in future quarters to fund operating activities.
Previous wording
Cash provided by financing activities was approximately $653,000 during the 2024 Period compared to approximately $1,114,000 for the 2023 Period. The cash inflows from financing activities were entirely from proceeds of Common Stock sold pursuant to the ATM Agreement. The Company plans to continue to raise proceeds from the sale of Common Stock to fund operations as needed.
Current wording
Cash provided by financing activities was approximately $229,000 during the 2025 Quarter compared to approximately $0 for the 2024 Quarter. The cash inflows from financing activities were entirely from proceeds of Common Stock sold pursuant to the ATM Agreement.
Previous wording
For information on recent accounting pronouncements, see Note 3 to the Unaudited Condensed Financial Statements.
Current wording
For information on recent accounting pronouncements, see Note 3 -Summary of Significant Accounting Policies to the Unaudited Consolidated Condensed Financial Statements.
Previous wording
This report contains forward-looking statements, including our liquidity, our belief that our blockchain infrastructure efforts will form the core growth for our business, including but not limited to Builder+, StakeSeeker, and ChainQ, plans to expand our PoS operations, growth opportunities for the Company, our belief regarding blockchain, expected increase in our revenues and gross margins and 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, including statements regarding our liquidity, our belief that our blockchain infrastructure efforts will form the core growth for our business, including but not limited to Builder+, StakeSeeker, and ChainQ, plans to expand our PoS operations, potential growth opportunities for the Company, our views regarding blockchain technology, 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.
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 the rewards and costs associated with staking or validating transactions on blockchains and successfully building blocks on Ethereum’s blockchain, regulatory issues related to our business model, a drop in the price of our crypto assets, significant decrease in the value of our crypto assets and rewards, loss or theft of the private withdrawal keys resulting in the complete loss of crypto assets and reward, and others which are contained in our filings with the SEC, including our Form 10-K for the year ended December 31, 2023. Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required 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: (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; (iii) fluctuations in the price of our crypto assets; (iv) potential decreases in the value of our crypto assets and rewards; (v) risks related to the loss or theft of private withdrawal keys resulting in the complete loss of crypto assets and rewards; and (vi) 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
From September 14, 2021 through May 13, 2025, the Company sold a total of 7,383,868 shares of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $25,839,000 at an average selling price of $3.50 per share, resulting in net proceeds of approximately $24,997,000 after deducting commissions and other transaction costs.