BTCS(US:BTCS)2025-05-14 22:15PART I - FINANCIAL INFORMATION This section details the company's financial statements, management's analysis, market risk, and internal controls for the period Financial Statements 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 $1.7 million, propelled by the company's block-building operations Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheet (Unaudited) | | March 31, 2025 ($) | 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 | $670,594 | Notes to Financial Statements This section details the company's operations, accounting policies, revenue breakdown, and crypto asset holdings - The company's primary operations focus on Ethereum block-building (Builder+) and validator node operations (NodeOps)2729 - In 2024, the company launched its Builder+ operations, which has become a central revenue driver29 - Effective January 1, 2025, the company adopted the Last-In, First-Out (LIFO) method for determining the cost basis of crypto assets disposed of, replacing the specific identification method, applied prospectively4748 Revenue Breakdown (Three Months Ended March 31) | Revenue Source | 2025 ($) | 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 quarter149150 - 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 protocol154156 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) 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 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 - 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 Chain164165 - 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 $0.62 million in third-party assets delegated as of March 31, 2025166169 Crypto Asset Analysis This section analyzes the fair market value of crypto assets and quarterly revenue by segment Fair Market Value of Crypto Assets (End of Quarter) | Quarter | Total Fair Market Value ($) | 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 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 million179180181 - Cost of revenues surged 877% to $1.57 million, driven by approximately $1.48 million in Validator Payments required for the Builder+ block-building activities179183 - 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 2024179193195 - 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 assets179189191 Liquidity and Capital Resources 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 million203 - 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 Notes204 - 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 months205 - Cash used in operating activities was approximately $1.9 million for Q1 2025, a significant increase from $0.8 million in Q1 2024207 Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as per the report - Not applicable218 Controls and Procedures 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, 2025219 - There were no changes during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting220 PART II - OTHER INFORMATION 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 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 proceedings223 - Risk factor disclosures are not applicable as the company is a smaller reporting company224 - No officers or directors adopted or terminated any Rule 10b5-1 trading arrangement during the fiscal quarter228