BTCS(US:BTCS)2022-08-10 16:00Financial Performance - Total current assets increased to $5,948,264 in 2022 from $5,466,532 in 2021, representing an increase of 8.8%[17] - Validator revenue for the three months ended June 30, 2022, was $514,349, up 35.1% from $380,499 in the same period of 2021[19] - Gross profit for the six months ended June 30, 2022, was $845,595, compared to $378,778 in the same period of 2021, indicating a significant increase of 123.8%[19] - Total operating expenses for the three months ended June 30, 2022, were $9,855,122, up from $4,530,813 in the same period of 2021, reflecting an increase of 117.5%[19] - Net loss for the three months ended June 30, 2022, was $(7,724,673), compared to a net loss of $(4,842,073) in the same period of 2021, representing a deterioration of 59.5%[19] - For the six months ended June 30, 2022, the net loss was $13,465,416, compared to a net loss of $11,624,248 for the same period in 2021, reflecting an increase in losses of approximately 15.9%[28] - The company reported stock-based compensation of $1,782,802 for the six months ended June 30, 2022, compared to $9,226,702 for the same period in 2021, representing a decrease of approximately 80.7%[28] - The company reported a net loss and net cash used in operating activities for the reporting period ending June 30, 2022, but has sufficient cash and liquid Digital Assets to support operations for the next twelve months[110] Asset and Equity Changes - Total assets decreased to $11,457,687 in 2022 from $14,101,993 in 2021, a decline of 18.5%[17] - Total stockholders' equity as of June 30, 2022, was $10,390,713, down from $12,103,443 in 2021, a decrease of 14.1%[17] - As of June 30, 2022, total stockholders' equity was $10,390,713, down from $12,990,551 as of June 30, 2021, indicating a decrease of approximately 19.9%[24] - The weighted average number of common shares outstanding increased to 12,644,719 in 2022 from 5,667,229 in 2021, an increase of 123.3%[19] Digital Asset Impairments - Impairment loss on digital assets/currencies for the three months ended June 30, 2022, was $8,894,797, compared to $2,267,374 in the same period of 2021, an increase of 292.5%[19] - The company incurred an impairment loss on digital assets/currencies of $12,202,225 for the six months ended June 30, 2022, compared to an impairment loss of $3,569,138 for the same period in 2021, reflecting an increase of approximately 241.5%[28] - The company reported an impairment loss on digital assets of $8,894,797, a 292% increase from $2,267,374 in the same period last year[133] - Digital asset impairment losses for 2022 amounted to $12,202,225, compared to $3,569,138 in 2021[139] Cash and Financing Activities - The cash balance at the end of the period was $3,191,418, an increase of $1,790,551 from the beginning cash balance of $1,400,867[28] - The net cash provided by financing activities for the six months ended June 30, 2022, was $9,973,640, compared to $14,179,133 for the same period in 2021, indicating a decrease of approximately 29.0%[28] - The company had approximately $3.2 million in cash and $4.4 million in liquid digital assets as of August 8, 2022[148] - The company plans to continue raising proceeds from the sale of common stock to fund operations as needed, with $10.6 million raised from the ATM Agreement in the first half of 2022[150] Revenue Recognition and Operations - The company recognizes revenue through staking rewards, with revenue recognized when control of the promised goods or services is transferred to customers[43] - The company’s cost of revenue primarily consists of direct production costs related to validating transactions on the network, which may impact overall profitability[47] - The company has shifted its focus towards blockchain and digital currency ecosystems, with a specific emphasis on transaction verification services and validator nodes[31] - The Company operates validator nodes on various proof of stake-based blockchain networks, including Ethereum's Beacon Chain, Cosmos, and Cardano[123] Strategic Developments - The company is developing a Digital Asset Platform to aggregate users' Digital Asset portfolio holdings and is planning to integrate a proprietary Staking-as-a-Service feature[32] - The company is developing a proprietary Digital Asset Platform to enhance user experience and portfolio management[130] - A Staking-as-a-Service feature is being integrated into the Digital Asset Platform to allow users to earn annual percentage yield on staked assets[131] - The company anticipates that net loss will increase due to rising costs associated with the development of its digital asset platform[143] Stock and Compensation - The Company declared a non-recurring special dividend of $0.05 per share, resulting in total distributions of $635,000 for the six months ended June 30, 2022, compared to $0 in the same period of 2021[68] - The 2021 Equity Incentive Plan was approved, reserving 7,000,000 shares of Common Stock for issuance, reflecting an increase from the initial 2,000,000 shares[92] - The Company granted RSUs to executive officers with vesting terms based on achieving market capitalization thresholds of $100 million, $150 million, $200 million, and $400 million[96] - For the six months ended June 30, 2022, stock-based compensation expense totaled approximately $1.9 million, compared to $9 million for the same period in 2021[106] Market Performance - Total revenues for Q2 2022 were $514,349, a 35% increase from $380,499 in Q2 2021[133] - Validator revenue increased by $133,850, representing a 35% growth year-over-year[133] - Gross profit for Q2 2022 was $420,449, up 31% from $321,250 in Q2 2021[133] - Realized gains on the sale of Digital Assets were approximately $470,000 for the six months ended June 30, 2022, down from $3.1 million in the same period in 2021, indicating a decline in trading performance[50]