BTCS Inc.
For the period ended Jun 30, 2025. Filed Aug 13, 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.
Jun 30, 2025 · Filed Aug 13, 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 2025-03-31; filed 2025-05-15.
0001641172-25-010401
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001641172-25-023517
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 99 previous paragraphs and 107 current paragraphs.
42 unchanged; 29 reworded; 34 added; 28 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 11 previous and 14 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 (34)
Current report
BTCS Inc. (“BTCS” or the “Company”), short for Blockchain Technology Consensus Solutions, is a publicly traded, Ethereum-first blockchain infrastructure and digital asset treasury company committed to driving scalable revenue and ETH accumulation through its unique capital formation and blockchain infrastructure strategies, collectively referred to as the DeFi/TradFi Flywheel. By combining decentralized finance (“DeFi”) and traditional finance (“TradFi”) mechanisms with its blockchain infrastructure operations, comprising NodeOps (staking) and Builder+ (block building), BTCS provides leveraged exposure to Ethereum (ETH) by integrating scalable revenue generation with a structured, yield-focused ETH accumulation strategy.
Current report
DeFi/TradFi Flywheel Funding Strategy
Current report
The DeFi/TradFi Flywheel represents a transformative extension of BTCS’s Ethereum-first strategy, combining innovative financing mechanisms from both decentralized and traditional markets to optimize capital efficiency and grow its ETH treasury. The Company’s planned capital formation approach includes At-The-Market (“ATM”) equity offerings, above market convertible debt issuance, and on-chain borrowing through DeFi protocols, such as Aave. These capital sources are strategically aligned with BTCS’s operating infrastructure, staking rewards from NodeOps, and ETH transaction fees captured through Builder+, creating a self-reinforcing flywheel designed to increase ETH per share while minimizing shareholder dilution. This approach reflects BTCS’s commitment to revenue scalability, ETH accumulation, and capital stewardship.
Current report
Blockchain Infrastructure: NodeOps (staking) and Builder+ (block building)
Current report
*NodeOps:*BTCS operates Ethereum validator nodes through its NodeOps initiative, earning ETH-denominated staking rewards for securing the network.
Current report
*Builder+:*BTCS’s proprietary block builder, Builder+, constructs and submits optimized blocks to Ethereum’s blockchain. By leveraging algorithmic strategies, Builder+ competes in the decentralized block space marketplace to capture ETH-denominated transaction fees. It is designed for scalable revenue generation, and its architecture allows for efficient deployment across select EVM-compatible ecosystems, such as Binance Smart Chain (“BSC”). This enables BTCS to expand its infrastructure footprint and generate additional revenue while maintaining a core focus on ETH accumulation. Builder+ is a central driver of BTCS’s growth strategy, reflecting the Company’s emphasis on scalable and efficient revenue generation.
Current report
Streamlined Focus
Current report
BTCS has paused further development of its consumer-facing platform ChainQ. Additionally, during the six months ended June 30, 2025, BTCS completed the wind-down of staking-as-a-service and validator operations on Avalanche (AVAX), Cosmos (ATOM), Akash (AKT), and Kava (KAVA), and liquidated the majority of its alt-coin holdings, which also included Axie Infinity (AXS) and NEAR protocol (NEAR). These moves were part of a strategic focus to concentrate on Ethereum-based revenue and ETH accumulation.
Current report
Crypto Assets Held as of the End of the Following Calendar Quarters:
Current report
Fair Market Value of Crypto Assets as of the End of the Following Calendar Quarters:
Current report
For the 2025 Period, revenue increased to approximately $4,461,000 from approximately $1,013,000 in the 2024 Period, driven by the same factors described above.
Current report
Interest Income
Current report
Interest income earned on ETH deposited as collateral on the Aave DeFi lending protocol was a new source of other income during the 2025 Quarter. While the impact of interest income was not significant for the 2025 Quarter, we anticipate it to increase in future periods as we increase the amount of ETH deposited as collateral in connection with our planned expanded leverage on DeFi protocol lending.
Current report
Interest Expense
Current report
Interest expense during the 2025 Quarter and 2025 Period reflects interest accrued on borrowings under the Aave DeFi lending protocol, as well as interest incurred in connection with the issuance of the May 2025 convertible note. This includes both cash interest paid and the amortization of debt discount over the term of the convertible note.
Current report
We expect interest expense to increase significantly in future periods as we continue to utilize decentralized borrowings through platforms such as Aave, and as a result of the issuance of an additional $10,000,000 convertible note in July 2025 with terms similar to the May 2025 note.
Current report
Change in unrealized appreciation (depreciation) of crypto assets
Current report
Net income for the 2025 Quarter increased to approximately $3,882,000, compared to a net loss of approximately $6,728,000 in the 2024 Quarter, resulting in a year-over-year improvement of approximately $10,610,000. The improvement was primarily driven by the positive change in the fair value of the Company’s crypto asset holdings, as crypto markets experienced an uptick during the 2025 Quarter. This resulted in significant unrealized gains on crypto assets, contributing substantially to the net income.
Current report
Despite this quarterly gain, the Company reported a net loss of approximately $13,387,000 for the 2025 Period, compared to net income of approximately $5,529,000 in the 2024 Period. The six-month loss reflects a carryover of unrealized depreciation recorded in the first quarter of 2025, when markets experienced notable weakness. In addition, realized losses on the sale of several non-ETH crypto asset holdings contributed to the year-to-date net loss.
Current report
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 $104,341,000 available for sale under this Form S-3 registration statement.
Current report
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 report
DeFi Borrowing (Aave)
Current report
From April 2025 through August 12, 2025, the Company borrowed a total of approximately $52,947,000 in USDT through Aave, a decentralized finance protocol, using Ethereum (ETH) as collateral, and repaid approximately $1,447,000 during the same period. As of August 12, 2025, the Company had approximately $51,702,000 in outstanding borrowings, inclusive of accrued interest, collateralized by approximately 38,400 ETH with a fair market value of approximately $176,062,000, based on the ETH closing price of $4,584 on that date.
Current report
Borrowings accrue interest at variable rates determined by Aave’s on-chain smart contracts, which adjust dynamically based on protocol liquidity and market demand. ETH collateral posted also accrues variable interest. These rates are published and updated in real-time at aave.com, and the net cost of capital may fluctuate based on protocol-level market conditions.
Current report
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 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 report
In July 2025, the Company entered into an additional private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $10.0 million, for net cash proceeds of approximately $9.5 million. 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 report
The Company 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.
Current report
As of August 12, 2025, the Company had total debt obligations of approximately $69,563,000, consisting of approximately $51,702,000 under its lending arrangement with Aave Protocol and approximately $17,861,000 convertible notes payable.
Current report
We expect non-cash adjustments such as Validator Payments and crypto-denominated revenue to continue growing as Builder+ operations scale across Ethereum and Binance Smart Chain. However, the magnitude of these adjustments will remain sensitive to market conditions and crypto asset price fluctuations. The use of performance-based equity compensation may continue, and given the Company’s recent fundraising efforts and operational scaling, the pace of such accruals could increase in future periods.
Current report
Net cash used in investing activities was approximately $13,366,000 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 $14,179,000 of crypto assets, including approximately $14,130,000 of Ethereum to support validator operations and the Company’s long-term accumulation strategy. The Company also invested $250,000 in a private blockchain-based technology company during the 2025 Period. These purchases were partially offset by proceeds of approximately $1,065,000 from sales of non-core productive crypto assets as we continue to streamline operations.
Current report
We expect that purchases of ETH and other productive crypto assets will continue in future periods as the Company executes on its ETH treasury accumulation and validator scaling strategies.
Current report
Cash provided by financing activities was approximately $15,263,000 during the 2025 Period, compared to approximately $240,000 in the 2024 Period. Financing inflows during the 2025 Period were primarily driven by:
Current report
The Company also paid debt issuance costs of approximately $123,000 during the 2025 Period.
Current report
The Company anticipates future financing activity may include additional DeFi borrowings and capital raised through the ATM program or convertible instruments, aligned with its strategy to scale blockchain infrastructure operations and accumulate ETH.
Removed paragraphs (28)
Previous report
BTCS Inc. is a Nasdaq-listed U.S.-based blockchain technology company focused on blockchain infrastructure, with its primary operations currently centered on the Ethereum network. Our core focus is on driving scalable growth through a diverse range of blockchain-focused technological solutions, emphasizing Ethereum infrastructure, including block-building and validator node operations.
Previous report
Blockchain Infrastructure
Previous report
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 report
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 report
Block Building – Builder+
Previous report
A central focus of BTCS’s current operations is its Ethereum block-building initiatives under Builder+, which commenced operations in 2024. Through Builder+ we purchase block space and leverage advanced algorithmic processes to construct blocks for on-chain validation. The goal of Builder+ is to maximize 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 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.
Previous report
Staking-as-a-Service – NodeOps
Previous report
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 report
A StaaS provider maintains a ministerial role in validating transactions on a given dPoS network on behalf of its Delegators by (1) using open-source software to stake the relevant crypto assets; (2) monitoring and maintaining the nodes it is operating to ensure the computers remain online to validate transactions; and (3) verifying transactions on the network when required.
Previous report
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 report
The following table details the blockchain networks on which BTCS operates nodes that support third-party delegations as part of our staking-as-a-service operations, including the amount of third-party crypto assets delegated to our non-custodial validator nodes, as of March 31, 2025:
Previous 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.
Previous report
Supporting Platforms: ChainQ
Previous 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.
Previous report
Strategic Outlook
Previous report
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 report
BTCS is dedicated to remaining at the forefront of blockchain innovation and staying adaptable to opportunities across the broader blockchain ecosystem. This strategic agility positions BTCS to navigate the evolving blockchain landscape while maximizing its impact.
Previous report
Crypto Assets Held at the End of the Following Calendar Quarters:
Previous report
Fair Market Value of Crypto Assets at the End of the Following Calendar Quarters:
Previous 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.
Previous report
The combined impact of these factors contributed to a substantial year-over-year decrease in net income.
Previous report
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 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.
Previous 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.
Previous report
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 report
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 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.
Reworded paragraphs (29)
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, 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.
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 June 30, 2025 and June 30, 2024, respectively. When we refer to the “2025 Period” and the “2024 Period” we are referring to the six months ended June 30, 2025 and June 30, 2024, respectively.
Previous wording
The tables below detail BTCS’s quarterly crypto asset holdingsfor each quarter from Q1 2024 through Q1 2025.
Current wording
The tables below detail BTCS’s quarterly crypto asset holdings for each quarter from Q1 2024 through Q1 2025.
Previous wording
Prices of Crypto Assets at the End of the Following Calendar Quarters:*
Current wording
Prices of Crypto Assets as of the End of the Following Calendar Quarters:*
Previous wording
Revenue includes amounts 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
Results of Operations for the Three Months Ended March 31, 2025 and 2024
Current wording
Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024
Previous wording
The following tables reflect our operating results for the three months ended March 31, 2025 and 2024:
Current wording
The following tables reflect our operating results for the three and six months ended June 30, 2025 and 2024:
Previous wording
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 wording
Revenue for the 2025 Quarter increased to approximately $2,772,000 compared to approximately $561,000 in the 2024 Quarter. The increase was primarily attributable to the continued expansion of our Builder+ operations, which focus on block-building activities across Ethereum and Binance Smart Chain (BSC).
Previous wording
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 wording
During the 2025 Quarter, Builder+ operations contributed approximately $2,509,000 of total revenue, while our NodeOps business contributed approximately $263,000. The significant year-over-year increase in revenue reflects the continued scaling of our Builder+ operations and the commencement of Binance Smart Chain (BSC) block building, which together resulted in a substantial increase in block rewards earned during the period. Block building on BSC contributed approximately $408,000, representing approximately 16% of Builder+ revenue and 15% of overall revenue for the 2025 Quarter.
Previous wording
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 wording
While we anticipate continued growth in both the number of block rewards and staking rewards earned due to scaling of staked ETH, 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.
Previous 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.
Current wording
Cost of revenues increased during the 2025 Quarter and 2025 Period, primarily due to higher Validator Payments made to external parties to secure block space as part of our block-building activities under Builder+. Validator Payments totaled approximately $2,813,000 during the 2025 Quarter and approximately $4,293,000 during the 2025 Period.
Previous wording
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 wording
As we continue to expand block-building operations and increase block production, we expect cost of revenues to rise correspondingly. During the 2025 Quarter, we incurred negative gross margins, as the losses from Builder+ activities outweighed the positive gross margins from our high-margin NodeOps operations. Costs may grow at a greater rate than revenue, particularly in periods of aggressive expansion, which could further pressure gross margins.
Previous wording
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 wording
General and administrative expenses increased during the 2025 Quarter and 2025 Period compared to the corresponding periods in 2024. The increase was primarily attributable to higher payments for order flow associated with supporting block-building activities, expanded investor relations services, and higher accounting fees, including increases in audit fees.
Previous wording
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 wording
Research and development expenses increased during the 2025 Quarter and 2025 Period compared to the prior-year periods, primarily due to continued investment in Builder+ strategies and development. The primary focus of research and development activities remained centered on enhancing Builder+ operations, including the commencement of block building on Binance Smart Chain (BSC) during the 2025 Quarter. 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.
Previous 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.
Current wording
Compensation and related expenses decreased during the 2025 Quarter but increased during the 2025 Period compared to the prior-year periods. The decrease in the Quarter was primarily attributable to timing differences in performance-based bonus accruals, while the increase in the Period reflects the addition of employee headcount and 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
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 wording
Marketing expenses increased during the 2025 Period compared to the 2024 Period, 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 will remain at current or higher levels in future periods, in line with strategic growth objectives and broader customer engagement efforts.
Previous wording
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 wording
Realized losses on crypto asset transactions during the 2025 Quarter and 2025 Period were primarily driven by the sale of non-ETH crypto asset holdings, which the Company had held with long-standing unrealized losses that were recognized upon sale. These transactions reflect the Company’s strategic exit from its non-core 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.
Previous wording
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 wording
Other income (expense) for the 2025 Quarter and 2025 Period was primarily impacted by changes in the fair value of the Company’s crypto assets and warrant liabilities.
Previous wording
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 wording
The recognition of unrealized depreciation of crypto assets during the 2025 Period, compared to unrealized appreciation during the 2024 Period, 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.
Previous wording
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 wording
Additionally, the decrease in the fair value of warrant liabilities during the 2025 Period 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.
Previous wording
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 wording
Operating expenses also increased meaningfully, led by higher compensation costs, including increased performance bonus accruals tied to revenue growth and asset values, and a rise in marketing spend to support strategic growth initiatives.
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.
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, 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.
Previous wording
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.
Current wording
From September 14, 2021 through August 12, 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.
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 March 31, 2025, the Company had approximately $270,000 of cash and working capital of approximately $20,202,000.
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 June 30, 2025, the Company had approximately $639,000 of cash and working capital of approximately $35,514,000.
Previous 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.
Current wording
As of August 12, 2025, subsequent to the financing described below, the Company had approximately $4,211,000 of cash and cash equivalents, and the fair market value of the Company’s crypto assets was approximately $323,043,000.
Previous wording
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 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.
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 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.
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 30 days. 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 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 wording
Cash used in operating activities was approximately $3,236,000 during the 2025 Period, compared to approximately $1,693,000 for the 2024 Period. Significant non-cash adjustments impacting operating cash flows included:
Previous 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.
Current 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.
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; (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.
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) competition, (vi) risks related to the loss or theft of private withdrawal keys resulting in the complete loss of crypto assets and rewards; and (vii) 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 (2)
Current report — wording carried from elsewhere
These costs are partially offset by the efficiencies realized in our blockchain infrastructure validating operating costs, including streamlining of infrastructure hosting fees and reduction of services provided by vendors.
Current report — wording carried from elsewhere
Change in fair value of warrant liabilities