BTCS(BTCS) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenues for Q2 2024 reached $561,192, an increase of 45.5% compared to $385,753 in Q2 2023[6] - Gross profit for the first half of 2024 was $683,105, up 36.2% from $501,635 in the same period of 2023[6] - Net loss for Q2 2024 was $(6,727,869), compared to a loss of $(1,178,048) in Q2 2023, reflecting a significant increase in operating expenses[6] - For the six months ended June 30, 2024, net income was $5,528,717, compared to $3,787,420 for the same period in 2023, representing an increase of approximately 46%[11] - Total revenues for the six months ended June 30, 2024, reached $1,012,578, an increase of 45.2% from $697,261 in the same period of 2023[40] - The company reported a basic net loss per share of $(0.43) for Q2 2024, compared to $(0.08) in Q2 2023[6] Assets and Liabilities - Total current assets as of June 30, 2024, were $33,715,986, a 24.8% increase from $27,036,201 at the end of 2023[5] - Total stockholders' equity rose to $33,112,897, a 26.5% increase from $26,165,791 at the end of 2023[5] - Total liabilities decreased to $710,589 as of June 30, 2024, down from $980,900 at the end of 2023, reflecting improved financial management[5] - As of June 30, 2024, the company held approximately $537,000 in cash, down from $1,458,000 at the end of 2023[19] - As of June 30, 2024, the Company held crypto assets valued at $32,983,588, up from $25,202,929 as of December 31, 2023, indicating a significant increase in asset value[74][75] Operating Expenses - Operating expenses for Q2 2024 totaled $1,319,374, down 32.3% from $1,947,722 in Q2 2023[6] - Research and development expenses decreased to $163,777 in Q2 2024, compared to $180,903 in Q2 2023, indicating a focus on cost management[6] - Advertising and marketing expenses for the three months ended June 30, 2024, were approximately $28,000, compared to $3,000 in 2023, reflecting an increase of 833.3%[60] - Stock-based compensation expense for the six months ended June 30, 2024, totaled $573,471, compared to $515,221 for the same period in 2023, reflecting an increase[96] Revenue Sources - Total revenues from blockchain infrastructure operations for the three months ended June 30, 2024, were $561,192, compared to $385,753 for the same period in 2023, representing a year-over-year increase of 45.5%[40] - Revenue from staking to BTCS nodes was $407,287 for the three months ended June 30, 2024, up from $346,721 in the same period of 2023, reflecting a growth of 17.4%[40] - The Company earned $75,853 in gas fees from Ethereum block building through Builder+ for the three months ended June 30, 2024, with no revenue reported for the same period in 2023[40] - The total earned from staking to third-party validator nodes for the six months ended June 30, 2024, was $152,494, compared to $89,832 in the same period of 2023, representing a 69.7% increase[43] Crypto Assets and Staking - The company operates a non-custodial Staking-as-a-Service (StaaS) business, allowing crypto asset holders to earn staking rewards[13] - The Staking-as-a-Service model allows crypto asset holders to earn token rewards by delegating their assets to the Company's validator nodes, creating scalable revenue opportunities[106] - The Validator fee percentage for all blockchain networks operated by BTCS is consistently set at 5%[111] - The company has no exposure to custodial risks associated with crypto exchanges, as it does not hold or take possession of any Delegator funds or crypto assets[110] Changes in Accounting and Reporting - The adoption of ASU No. 2023-08 resulted in a cumulative adjustment of approximately $4,986,000 to the Company's opening Retained Earnings balance as of January 1, 2023[67] - The Company recognized that gas fees earned by Ethereum block builders should be presented as gross revenue, aligning with ASC 606, which reflects a change in accounting principle[68] - Basic income (loss) per share is calculated by dividing net income or loss applicable to common shares by the weighted average number of common shares outstanding during the period[61] Future Plans and Growth - The company is focused on expanding its blockchain infrastructure operations and StaaS offerings to capitalize on the growth of the crypto asset market[15] - The company plans to continue raising proceeds from the sale of Common Stock to fund operations as needed[141] - The company anticipates similar levels of sales of additional crypto assets in future quarters to fund operating activities from staking revenues[140] - The company believes its blockchain infrastructure efforts, including Builder+, StakeSeeker, and ChainQ, will be core to its growth[146]