[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section details the company's financial statements, management's analysis, market risk, and internal controls for the period [Financial Statements](index=5&type=section&id=ITEM%201%20Financial%20Statements) For the first quarter of 2025, BTCS Inc. reported a net loss of $17.3 million, a stark contrast to the $12.3 million net income in the same period of 2024. This shift was primarily driven by a $14.5 million unrealized depreciation of its crypto asset holdings. Total assets decreased significantly from $38.2 million at the end of 2024 to $21.0 million as of March 31, 2025, reflecting the market volatility of cryptocurrencies. Despite the loss, revenues grew to $1.7 million, propelled by the company's block-building operations [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheet (Unaudited) | | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $20,678,133 | $38,137,940 | | *Staked crypto assets* | *$19,738,958* | *$35,410,144* | | *Cash and cash equivalents* | *$269,929* | *$1,977,778* | | **Total Assets** | **$21,034,648** | **$38,245,389** | | **Total Current Liabilities** | $476,127 | $4,245,435 | | **Total Stockholders' Equity** | **$20,558,521** | **$33,999,954** | Condensed Consolidated Statement of Operations (Unaudited, Three Months Ended March 31) | | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | **Total Revenues** | **$1,688,935** | **$451,386** | | Gross Profit | $120,276 | $290,761 | | Total Operating Expenses | $3,083,301 | $1,136,842 | | Change in unrealized appreciation (depreciation) of crypto assets | ($14,530,822) | $13,102,667 | | **Net Income (Loss)** | **($17,268,697)** | **$12,256,586** | | **Basic Net Income (Loss) Per Share** | **($0.86)** | **$0.78** | Condensed Consolidated Statement of Cash Flows (Unaudited, Three Months Ended March 31) | | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,902,417) | ($769,014) | | Net cash provided by (used in) investing activities | ($34,387) | ($18,719) | | Net cash provided by financing activities | $228,955 | $0 | | **Net (decrease)/increase in cash** | **($1,707,849)** | **($787,733)** | | **Cash, end of period** | **$269,929** | **$670,594** | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details the company's operations, accounting policies, revenue breakdown, and crypto asset holdings - The company's primary operations focus on Ethereum block-building (Builder+) and validator node operations (NodeOps)[27](index=27&type=chunk)[29](index=29&type=chunk) - In 2024, the company launched its Builder+ operations, which has become a central revenue driver[29](index=29&type=chunk) - Effective January 1, 2025, the company adopted the Last-In, First-Out (LIFO) method for determining the cost basis of crypto assets disposed of, replacing the specific identification method, applied prospectively[47](index=47&type=chunk)[48](index=48&type=chunk) Revenue Breakdown (Three Months Ended March 31) | Revenue Source | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | NodeOps | $339,291 | $418,353 | | Builder+ | $1,349,644 | $33,033 | | **Total Revenues** | **$1,688,935** | **$451,386** | Crypto Asset Holdings (as of March 31, 2025) | Asset | Fair Market Value ($) | | :--- | :--- | | Ethereum (ETH) | $16,529,501 | | Cosmos (ATOM) | $1,482,550 | | Solana (SOL) | $891,270 | | Other | $1,230,321 | | **Total** | **$20,133,572** | - The company operates as a single reportable segment (blockchain infrastructure) with two main activities: NodeOps, which generated a gross profit of **$292,525**, and Builder+, which incurred a gross loss of **($172,249)** for the quarter[149](index=149&type=chunk)[150](index=150&type=chunk) - Subsequent to the quarter's end, the company issued **$7.8 million** in 5% Original Issue Discount Senior Secured Convertible Notes and borrowed **$0.32 million USDT** from the AAVE decentralized finance protocol[154](index=154&type=chunk)[156](index=156&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=ITEM%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights a 274% year-over-year revenue increase in Q1 2025, driven by the successful scaling of its Ethereum block-building (Builder+) operations. However, this growth was accompanied by an 877% surge in cost of revenues, primarily from Validator Payments. The quarter resulted in a net loss of $17.3 million, largely due to a $27.6 million negative swing in the unrealized value of crypto assets compared to the prior year. Despite market volatility, the company secured significant post-quarter financing, which management believes provides sufficient liquidity for at least the next twelve months [Company Overview and Strategy](index=34&type=section&id=Company%20Overview%20and%20Strategy) This section outlines BTCS's core business in Ethereum infrastructure, including Builder+ and NodeOps, and its Staking-as-a-Service model - BTCS is a U.S.-based blockchain technology company with a core focus on Ethereum infrastructure, including block-building (Builder+) and validator node operations (NodeOps)[161](index=161&type=chunk) - The Builder+ initiative, which commenced in 2024, has rapidly become a key revenue driver, with the company expanding its block-building operations to the Binance Smart Chain[164](index=164&type=chunk)[165](index=165&type=chunk) - The company operates a non-custodial Staking-as-a-Service (StaaS) model, allowing third-party crypto asset holders to delegate to BTCS-operated validator nodes, with approximately **$0.62 million** in third-party assets delegated as of March 31, 2025[166](index=166&type=chunk)[169](index=169&type=chunk) [Crypto Asset Analysis](index=36&type=section&id=Crypto%20Asset%20Analysis) This section analyzes the fair market value of crypto assets and quarterly revenue by segment Fair Market Value of Crypto Assets (End of Quarter) | Quarter | Total Fair Market Value ($) | QoQ Change | | :--- | :--- | :--- | | Q4 2024 | $36,056,683 | +40% | | Q1 2025 | $20,133,572 | -44% | Quarterly Revenue by Segment | Quarter | NodeOps Revenue ($) | Builder+ Revenue ($) | Total Revenue ($) | | :--- | :--- | :--- | :--- | | Q4 2024 | $381,958 | $1,939,825 | $2,321,783 | | Q1 2025 | $339,291 | $1,349,644 | $1,688,935 | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) This section details financial performance, highlighting revenue growth, increased costs, and net loss drivers - Revenue for Q1 2025 increased by **274%** to approximately **$1.7 million** compared to Q1 2024, primarily due to the expansion of Builder+ operations, which contributed **$1.35 million**[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - Cost of revenues surged **877%** to **$1.57 million**, driven by approximately **$1.48 million** in Validator Payments required for the Builder+ block-building activities[179](index=179&type=chunk)[183](index=183&type=chunk) - The net loss of **$17.3 million** was primarily caused by a **$14.5 million** unrealized depreciation of crypto assets, a significant reversal from the **$13.1 million** unrealized appreciation in Q1 2024[179](index=179&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - Operating expenses increased by **171%**, driven by higher compensation (including performance bonus accruals), marketing, and a **$1.3 million** realized loss on the sale of Kusama (KSM) crypto assets[179](index=179&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash, crypto assets, recent financing, and liquidity assessment - As of May 13, 2025, following recent financing, the company had approximately **$7.7 million** in cash and cash equivalents and crypto assets with a fair market value of approximately **$30.7 million**[203](index=203&type=chunk) - On May 13, 2025, the company raised **$7.42 million** in proceeds by issuing **$7.8 million** in 5% Original Issue Discount Senior Secured Convertible Notes[204](index=204&type=chunk) - Management believes that existing cash, crypto assets, and proceeds from recent financing provide sufficient liquidity to meet working capital requirements for at least the next twelve months[205](index=205&type=chunk) - Cash used in operating activities was approximately **$1.9 million** for Q1 2025, a significant increase from **$0.8 million** in Q1 2024[207](index=207&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=ITEM%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as per the report - Not applicable[218](index=218&type=chunk) [Controls and Procedures](index=46&type=section&id=ITEM%204%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of March 31, 2025. The report also confirms that no material changes occurred in the company's internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[219](index=219&type=chunk) - There were no changes during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[220](index=220&type=chunk) [PART II - OTHER INFORMATION](index=47&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section of the report confirms that during the first quarter of 2025, BTCS Inc. had no legal proceedings, unregistered sales of equity securities, or defaults upon senior securities. As a smaller reporting company, it is not required to provide risk factor updates in its quarterly report. Additionally, no officers or directors adopted or terminated Rule 10b5-1 trading plans [Other Disclosures](index=47&type=section&id=Other%20Disclosures) The company reports no legal proceedings, defaults, or unregistered sales of equity securities for the period. Risk factor disclosures are noted as not applicable for a smaller reporting company in a 10-Q. No new or terminated officer/director trading plans were reported for the quarter - The company reports no legal proceedings[223](index=223&type=chunk) - Risk factor disclosures are not applicable as the company is a smaller reporting company[224](index=224&type=chunk) - No officers or directors adopted or terminated any Rule 10b5-1 trading arrangement during the fiscal quarter[228](index=228&type=chunk)

BTCS Inc. Arranges Financing to Buy up to $57.8 Million of Ether ($ETH) for Continued StrategyFirst tranche of $7.8 million - CEO Participates in FundingMay 14, 2025 8:30 AM EDT | Source: BTCS Inc.Silver Spring, Maryland--(Newsfile Corp. - May 14, 2025) - BTCS Inc. (NASDAQ: BTCS) ("BTCS" or the "Company"), a blockchain technology-focused company, today announced that it has entered into an agreement for the issuance of convertible notes (the “Agreement”) through a facility of up to $57.8 milli ...

Core Insights - BTCS Inc. successfully implemented the Ethereum network upgrade, Pectra, on May 7, 2025, marking a significant milestone in Ethereum's evolution and showcasing its resilience and user-focused innovation [1][3] Group 1: Pectra Upgrade Features - The Pectra upgrade enhances validator performance by increasing the maximum effective stake per validator from 32 ETH to 2,048 ETH, which addresses operational inefficiencies for large stakers [2] - The upgrade introduces advanced wallet functionality, allowing Externally Owned Accounts to temporarily behave like smart contracts, which enhances user experience [3][7] Group 2: Strategic Initiatives - Following the Pectra upgrade, BTCS plans to launch its Staker Protection Plan (SPP) aimed at improving transaction inclusion, enhancing staking efficiency, and ensuring regulatory compliance [4] - BTCS has partnered with Figment and WonderFi Technologies Inc. to bring the SPP to market, addressing the needs of the dynamic staking environment [4] Group 3: Company Overview - BTCS Inc. focuses on scalable revenue growth through blockchain infrastructure operations, specializing in block building and validator node management [5] - The company operates a branded block-building operation, Builder+, which optimizes block construction for on-chain validation, maximizing gas fee revenues [5] - BTCS also supports multiple proof-of-stake networks by operating validator nodes and has developed ChainQ, an AI-powered blockchain data analytics platform [5]

Core Viewpoint - BTCS Inc. is strategically expanding its Ethereum holdings and staking operations by leveraging decentralized finance (DeFi) through borrowing on AAVE, aiming to capitalize on current market conditions [2][3][4]. Group 1: Strategic Initiatives - The company is borrowing USDT via AAVE, using ETH as collateral, to acquire additional ETH and enhance its staking operations [3][4]. - BTCS believes that Ethereum is at or near a cyclical bottom, presenting a compelling opportunity for investment [3][4]. Group 2: Financial Strategy - By utilizing AAVE for borrowing, BTCS can access capital at attractive rates, historically below 5%, without diluting equity, thus preserving shareholder value [4]. - The initiative is part of a broader strategy to grow revenue and improve margins through increased participation in Ethereum's consensus mechanism [5]. Group 3: Company Overview - BTCS Inc. focuses on blockchain infrastructure technology, particularly in block building and validator node management, and operates a branded block-building operation called Builder+ [6]. - The company also supports other blockchain networks by operating validator nodes and staking crypto assets across multiple proof-of-stake networks [6].

Core Insights - BTCS Inc. has expanded its AI-powered blockchain analytics platform, ChainQ, by integrating complete historical Bitcoin blockchain data, enhancing its capabilities for data exploration and analysis [1][2][3] Group 1: Product Enhancements - The integration of Bitcoin's complete historical blockchain dataset allows users to analyze transactions, addresses, and patterns from the 2009 genesis block, providing a powerful tool for researchers, investors, and developers [2] - Significant performance upgrades have been implemented to accelerate data processing and query execution, enabling faster insights and deep blockchain research [3][7] - Key features of ChainQ include faster search speeds, optimized AI-driven indexing, scalability improvements, AI-driven search capabilities, enhanced performance, visualizations for data interpretation, and SQL query support for advanced analysis [7] Group 2: Company Overview - BTCS Inc. is focused on driving scalable revenue growth through its blockchain infrastructure operations, particularly in block building and validator node management [8] - The company operates a branded block-building operation, Builder+, which optimizes block construction for on-chain validation to maximize gas fee revenues [8] - BTCS is committed to innovation and adaptability, strategically positioning itself to expand its blockchain operations beyond Ethereum as the ecosystem evolves [8]

BTCS Inc. Partners with Lehigh University's Masters in Financial Engineering Program for Capstone Research ProjectApril 09, 2025 8:30 AM EDT | Source: BTCS Inc.Silver Spring, Maryland--(Newsfile Corp. - April 9, 2025) - BTCS Inc. (NASDAQ: BTCS) ("BTCS" or the "Company"), a leader in blockchain infrastructure and technology, is excited to announce its partnership with Lehigh University's Masters in Financial Engineering ("MFE") program to support a capstone research project. This collaboration ...

BTCS Inc. Releases Ethereum Blockchain Investor and Analyst PrimerMarch 26, 2025 8:30 AM EDT | Source: BTCS Inc.Silver Spring, Maryland--(Newsfile Corp. - March 26, 2025) - BTCS Inc. (NASDAQ: BTCS) ("BTCS" or the "Company"), a leader in blockchain infrastructure and technology, today released its Ethereum Blockchain Investor and Analyst Primer (the "Primer"), a comprehensive report aimed at providing investors, analysts, and stakeholders with an in-depth understanding of the Ethereum ecosystem ...

Company Overview - BTCS Inc. reported record financial results for the year ended December 31, 2024, with a revenue of $4.1 million, representing a 204% increase from $1.3 million in 2023 [3][4] - The company solidified its position as a leading publicly traded Ethereum infrastructure company, focusing on block-building operations at scale [4][10] Financial Performance - Quarterly revenue for Q4 2024 reached $2.3 million, a 612% increase over Q4 2023, and a 214% increase from Q3 2024 [3] - Gross margin was reported at 23%, reflecting the scaling of Builder+, BTCS's Ethereum block-building operations [3] - The company reported a net loss of $1.3 million, or $0.08 per share, compared to a net income of $7.8 million, or $0.55 per share, in 2023 [3][15] Cash and Cryptocurrency Holdings - Cash and cryptocurrency holdings amounted to $38.1 million as of December 31, 2024, up 43% from $26.7 million at year-end 2023 [3] Strategic Initiatives - The company aims to drive shareholder value by growing revenue and improving margins through enhancing its tech stack, increasing order flow, and controlling block space [5][6] - Key developments in 2024 included transitioning to Rust, moving servers to bare metal, and implementing a data lake [6] Market and Industry Commentary - The cryptocurrency market saw significant developments in late 2024 and early 2025, including enhanced scalability and improved regulatory clarity, which are expected to drive long-term growth [8][9] - The upcoming Pectra upgrade in 2025 is anticipated to enhance Ethereum's speed and reduce costs, strengthening its competitive edge [9] - Ethereum ETF approvals in 2024 marked a major milestone for institutional investment in digital assets, increasing accessibility for traditional investors [9]

Blockchain Operations - BTCS's Ethereum block-building operations under the Builder+ brand launched in 2024, focusing on maximizing transaction value and gas fee revenue [20][21] - Builder+ aims to expand to other blockchain networks, aligning with BTCS's long-term diversification strategy [22] - The company discontinued its StakeSeeker platform on December 27, 2024, to concentrate resources on Builder+ and validator node operations [32] - BTCS charges a Validator Fee, calculated as a percentage of crypto asset rewards earned, creating scalable revenue opportunities [28] - BTCS aims to grow revenue and margins by scaling Ethereum block-building under Builder+ and expanding NodeOps, focusing on enhancing technology, increasing order flow, and gaining control over block space [71][74] - BTCS is focused on increasing Builder+ order flow through strategic partnerships and network integrations to enhance profitability [73] - BTCS's strategic initiatives are designed to position it as a leader in blockchain infrastructure, leveraging its Builder+ operations and validator expertise [75] Asset Management and Security - As of December 31, 2024, 98% of BTCS's crypto assets were held in cold storage wallets, ensuring maximum protection against breaches [33] - The company prioritizes the secure custody of its crypto assets, maintaining less than 0.1% on exchanges at any time [33] - The Company has determined that if over 40% of its assets are considered securities, it may be classified as a 1940 Act company, which could adversely affect its operations [56] - The company targets maintaining over 60% of its total assets in Ethereum to avoid classification as an investment company under the 1940 Act [54] Technology and Innovation - ChainQ, an AI-powered blockchain data and analytics platform, is currently in beta, enhancing transparency in the blockchain ecosystem [31] - The Company is committed to enhancing its technology stack to optimize efficiency and scalability, which is essential for maintaining a competitive edge in the blockchain industry [72] - The Company relies on proprietary technology and intellectual property critical to its blockchain operations, protected through various legal measures [64][65] Market Environment - The blockchain and cryptocurrency industry is maturing, with increased institutional participation and regulatory scrutiny shaping its trajectory [42] - The competitive landscape includes significant challenges from established cryptocurrency exchanges and specialized crypto asset companies, which have greater financial resources and brand recognition [60][62] - The regulatory landscape for crypto assets is rapidly evolving, which may materially affect the Company's operations and financial performance [58] Workforce and Structure - As of December 31, 2024, BTCS had seven full-time employees, emphasizing a remote-first work environment to attract a larger talent pool [66] - As of March 17, 2025, the total common shares diluted amount to 23,530,049, with 20,087,981 common stock issued and outstanding [78]

BTCS Inc. to Launch New Partnership with Wharton's Mack InstituteMarch 18, 2025 8:30 AM EDT | Source: BTCS Inc.Silver Spring, Maryland--(Newsfile Corp. - March 18, 2025) - BTCS Inc. (Nasdaq: BTCS) ("BTCS" or the "Company"), a leader in blockchain infrastructure and technology, today announced it is joining the Mack Institute for Innovation Management at The Wharton School as a corporate partner. This initiative will be conducted through Wharton's Mack Institute for Innovation Management, the p ...