BTCS Inc.: Form 10-Q for the period ended Sep 30, 2025

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 section 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 September 30, 2025 and September 30, 2024, respectively. When we refer to the “2025 Period” and the “2024 Period” we are referring to the nine months ended September 30, 2025 and September 30, 2024, respectively.

Company Overview

BTCS Inc. (“BTCS” or the “Company”), short for Blockchain Technology Consensus Solutions, is a publicly traded, Ethereum-first blockchain technology and digital asset company focused on scalable revenue generation and ETH accumulation through its integrated blockchain infrastructure and decentralized finance (DeFi) operations. The Company’s operations are built around its DeFi/TradFi Flywheel strategy, a capital-formation and reinvestment framework that seeks to connect decentralized on-chain finance (DeFi) and traditional capital markets (“TradFi”) to create a self-reinforcing cycle of growth, ETH accumulation, and shareholder value creation.

Under this model, BTCS combines revenue generation from its blockchain operations, NodeOps (staking), Builder+ (block building), and Imperium (DeFi), with complementary capital-formation activities, including At-The-Market (“ATM”) equity offerings, structured convertible debt, and on-chain borrowings through DeFi protocols. This integrated approach is designed to allow BTCS to reinvest capital efficiently across its operating infrastructure with a goal of accelerating ETH-based revenue growth, enhancing ETH-per-share metrics, and minimizing shareholder dilution. Through this strategy, BTCS provides leveraged exposure to Ethereum (ETH) by combining scalable revenue generation with a structured ETH accumulation model.

DeFi/TradFi Flywheel Funding Strategy

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. 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.

Blockchain Operations: NodeOps (staking), Builder+ (block building), and Imperium (DeFi)

NodeOps

BTCS operates Ethereum validator nodes through its NodeOps initiative, earning ETH-denominated staking rewards for performing validation and consensus activities that secure the network. These activities form a core component of BTCS’s blockchain infrastructure operations, providing a recurring stream of on-chain ETH rewards that scale with the amount of staked assets, network transaction volume, and validator performance uptime.

Builder+

BTCS’s proprietary block builder, Builder+, constructs and submits optimized blocks to blockchain networks that have implemented a Proposer-Builder Separation (“PBS”) framework, including Ethereum and Binance Smart Chain (“BSC”). On these networks, Builder+ leverages algorithmic transaction-bundling, pricing, and block-optimization strategies to compete in decentralized block-space marketplaces and capture native-token-denominated execution-layer fees and maximal extractable value (“MEV”) rewards.

On Ethereum, Builder+ engages in the competitive block-building process by constructing bundles of transactions drawn from both the public mempool and private order flow. Revenues are generated primarily from transaction fees, priority tips, and MEV opportunities embedded within successfully proposed and finalized blocks.

On BSC, Builder+ participates in a similar block-construction process, earning BNB-denominated transaction and searcher-tip rewards when its proposed blocks are selected and finalized by validators. The BSC deployment leverages the same underlying Builder+ technology stack, enabling efficient cross-network scalability and diversification of transaction-fee revenue beyond the Ethereum ecosystem.

Builder+ represents a core driver of BTCS’s growth strategy and demonstrates the scalability of its infrastructure technology across multiple EVM-compatible blockchains. Its ability to operate across both Ethereum’s and BSC’s block markets underscores BTCS’s focus on expanding its on-chain presence while maintaining an ETH-centric treasury strategy.

Imperium:

Launched in 2025, Imperium extends BTCS’s on-chain operations into DeFi. Through Imperium, the Company participates as a liquidity provider in decentralized lending markets, primarily Aave, where it supplies ETH and other digital assets to earn token-denominated protocol rewards directly from smart contracts. This DeFi participation model is designed to allow BTCS to deploy its ETH treasury productively, compounding revenue generation through decentralized lending while maintaining full on-chain transparency and control over assets. Imperium complements NodeOps and Builder+ by integrating DeFi reward generation into BTCS’s broader Ethereum-focused operating ecosystem.

Streamlined Focus

BTCS has paused further development of its consumer-facing platform ChainQ to allocate resources toward core on-chain operations and the execution of its DeFi/TradFi Flywheel strategy. Additionally, during the nine months ended September 30, 2025, BTCS completed the wind-down of staking-as-a-service and validator operations on non-Ethereum networks including Avalanche (AVAX), Cosmos (ATOM), Akash (AKT), and Kava (KAVA), and liquidated the majority of its non-Ethereum crypto asset holdings. These actions reflect the Company’s strategic commitment to focus its resources on scalable Ethereum-based operations that directly contribute to ETH accumulation and overall shareholder value.

Crypto Assets

The tables below detail BTCS’s quarterly crypto asset holdings for each quarter from Q1 2024 through Q1 2025.

Crypto Assets Held as of the End of the Following Calendar Quarters:

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Fair Market Value of Crypto Assets as of the End of the Following Calendar Quarters:

Prices of Crypto Assets as of the End of the Following Calendar Quarters:*

* The prices have been rounded to the nearest whole dollar for prices above $100

Crypto Asset Rewards

The tables below detail BTCS’s quarterly crypto assets earned during each of the following quarters:

Crypto assets earned from blockchain infrastructure staking activities through NodeOps

* All or a portion of revenue earned from staking to third-party validator nodes

Crypto assets earned from block building through Builder+

Crypto assets earned from DeFi activities through Imperium

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Fair Market Value of Crypto Asset Rewards Earned and Recognized as Revenue

The following table summarizes the revenues earned from the Company’s operations by revenue segment during the following calendar quarters:

Revenue by Segment

The tables below detail the fair market value of BTCS’s quarterly crypto assets earned as revenue in each respective segment during the following calendar quarters:

Revenue from blockchain infrastructure staking activities through NodeOps

* All or a portion of revenue earned from staking to third-party validator nodes

Revenue from block building through Builder+

Revenue from DeFi activities through Imperium

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Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

The following tables reflect our operating results for the three and nine months ended September 30, 2025 and 2024:

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Revenues

Revenue for the 2025 Quarter and 2025 Period increased significantly compared to the corresponding 2024 periods, primarily due to the continued expansion of our Builder+ operations, which focus on block-building activities across the Ethereum and Binance Smart Chain (BSC) networks, and the addition of Imperium DeFi activities during the period.

During the 2025 Quarter, Builder+ operations accounted for approximately 77% of total revenue, NodeOps contributed approximately 15%, and Imperium DeFi revenue represented the remaining 8%. The year-over-year increase reflects the scaling of Builder+ operations and the commencement of block building on BSC, which together resulted in a substantial increase in block rewards earned during the period. Increases in NodeOps and Imperium revenues were supported by the deployment of additional crypto assets acquired through capital-raising activities during the 2025 Quarter.

While we anticipate continued growth across Builder+, NodeOps, and Imperium as we expand block-building, staking, and DeFi activities, the fair value of rewards may fluctuate due to the inherent volatility of crypto asset markets. Accordingly, revenue recognized in future periods may be materially affected by changes in the market prices of the underlying crypto assets at the time of reward receipt or recognition.

Cost of Revenues

Cost of revenues increased for both the 2025 Quarter and 2025 Period compared to the corresponding 2024 periods, primarily due to higher Validator Payments made to external parties to secure block space as part of our Builder+ block-building activities. The increase also reflects higher blockchain infrastructure and network operation costs associated with the expansion of block-building and DeFi activities.

These higher costs were partially offset by efficiencies realized within our validating infrastructure, including lower hosting fees and reduced reliance on third-party service providers. Gross profit improved year-over-year as higher revenue from NodeOps and Imperium activities, combined with the scaling of Builder+, outpaced the growth in related costs.

We expect cost of revenues to continue to rise in line with the scaling of Builder+ and DeFi operations. Gross margins may fluctuate depending on the level of Validator Payments required to secure block inclusion and on broader crypto market conditions that influence block reward values.

Operating Expenses

Professional fees

Professional fees increased for both the 2025 Quarter and 2025 Period compared to the corresponding 2024 periods, primarily due to higher legal and accounting costs associated with the Company’s new Form S-3 registration statement and the expansion of its at-the-market (“ATM”) program during the 2025 Quarter. The increase also reflects higher investor relations expenses, including campaign initiatives and related consulting services.

We expect professional fees to decrease in future quarters, as the corporate activities related to the S-3 filing and ATM program are non-recurring. Investor relations expenses may continue to fluctuate based on timing, opportunities, and the scope of shareholder engagement initiatives.

General and Administrative Expenses

General and administrative expenses increased during the 2025 Quarter and 2025 Period compared to the corresponding 2024 periods, primarily due to higher payments for order flow incurred in connection with supporting the Company’s expanding Builder+ block-building activities, as well as SEC filing fees associated with the filing of the new Form S-3 registration statement. These increases were partially offset by continued discipline in overall administrative spending.

We expect general and administrative expenses to fluctuate based on operational growth, regulatory filing activity, and the level of block-building and order flow support required as operations continue to scale.

Research and Development Expenses

Research and development expenses decreased for the 2025 Quarter compared to the 2024 Quarter, primarily due to lower third-party development costs, but increased slightly on a year-to-date basis as investment continued in Builder+ and Imperium system enhancements. R&D efforts remained focused on improving block-building efficiency, expanding multi-chain capabilities, and advancing smart-contract automation within Builder+. We expect R&D spending to increase as technical improvements to block-building strategies and DeFi integrations continue.

Compensation and Related Expenses

Compensation and related expenses decreased during the 2025 Quarter and 2025 Period compared to the corresponding 2024 periods, primarily due to the timing of performance-based bonus accruals and a reduction in stock-based compensation expense resulting from the forfeiture of unvested restricted stock following certain executive transitions earlier in the year. On a year-to-date basis, compensation expenses remained relatively consistent, reflecting continued salary and benefits costs associated with core personnel and estimated accruals for performance-based incentives.

The Company continues to utilize equity-based compensation as a key component of its total rewards strategy to align employee incentives with long-term shareholder value. We expect total compensation costs to fluctuate based on headcount changes, the timing of performance-based accruals, and the issuance or forfeiture of equity awards.

Marketing Expenses

Marketing expenses increased during the 2025 Quarter and 2025 Period compared to the corresponding 2024 periods, reflecting expanded advertising campaigns and promotional activities aimed at enhancing brand visibility and supporting business development initiatives. Marketing spend is expected to remain at or above current levels as the Company continues to pursue strategic growth and community engagement efforts.

Realized Losses on Crypto Asset Transactions

Realized losses on crypto asset transactions increased substantially compared to the prior-year periods, primarily due to the sale of non-core, non-ETH crypto assets that had previously carried unrealized losses. These transactions were executed as part of a broader effort to simplify the Company’s asset portfolio and reallocate resources toward core staking and block-building operations. Future realized gains or losses will depend on the timing and market conditions of any additional crypto asset sales.

Loss on Extinguishment of Debt

The Company recorded a loss on extinguishment of debt during the 2025 Quarter related to on-chain debt swaps executed through decentralized finance (DeFi) lending protocols. Future gains or losses from such transactions may vary depending on the timing and structure of debt refinancings or restructurings undertaken within DeFi platforms.

Overall Expense Trend

Total operating expenses increased year-over-year, reflecting ongoing investment in infrastructure, personnel, and public company operations to support the scaling of Builder+, Imperium, and NodeOps. The Company remains focused on maintaining disciplined expense management while continuing to allocate resources toward strategic growth and technology development initiatives.

Other Income (Expenses)

Interest Expense

Interest expense increased during the 2025 Quarter and 2025 Period, primarily due to interest accrued on decentralized borrowings through Aave and other DeFi lending protocols, as well as interest and amortization expense related to the Company’s May and July 2025 convertible notes. This includes both cash interest paid and the amortization of debt discount over the term of the convertible notes.

We expect interest expense to rise in future periods as a result of ongoing utilization of DeFi borrowings and the full-term amortization of outstanding convertible notes.

Change in unrealized appreciation (depreciation) of crypto assets

The Company recognized significant unrealized appreciation in the fair value of its crypto asset holdings during the 2025 Quarter and 2025 Period, compared to unrealized depreciation in the corresponding 2024 periods. The change was primarily driven by the overall recovery in crypto market valuations, particularly for Ethereum and other assets held by the Company at period-end. These fluctuations reflect the inherent volatility of crypto asset prices, which may continue to materially affect the reported fair value of digital assets in future periods.

Change in fair value of warrant liabilities

The Company recognized a non-cash loss resulting from the change in the fair value of warrant liabilities during the 2025 Quarter and 2025 Period, compared to a gain in the corresponding 2024 periods. The change was primarily attributable to movements in the Company’s stock price and related volatility during the period. Because these warrant liabilities are remeasured at fair value each reporting date, future gains or losses will depend on changes in the Company’s share price and other valuation inputs.

Overall Impact

Total other income (net) increased substantially compared to the prior-year periods, driven primarily by unrealized gains on crypto assets, which offset higher interest expense and non-cash losses related to warrant remeasurement. These items contributed significantly to the Company’s profitability for the 2025 Quarter and 2025 Period.

Net income (loss)

The Company reported net income of approximately $65,589,000 for the 2025 Quarter, compared to a net loss of approximately $9,040,000 in the 2024 Quarter, representing a year-over-year improvement of approximately $74,629,000. The increase was primarily driven by unrealized appreciation in the fair value of the Company’s crypto asset holdings, reflecting the broader recovery in digital asset markets during the quarter.

For the 2025 Period, the Company reported net income of approximately $52,202,000, compared to a net loss of approximately $3,511,000 in the 2024 Period. The year-to-date improvement was similarly driven by unrealized gains on crypto assets, partially offset by higher realized losses on crypto asset sales, increased professional and administrative costs, and interest expense associated with convertible note issuances and decentralized borrowing activities.

While the Company benefited from market-wide appreciation in digital asset valuations during the 2025 Quarter, net income may continue to fluctuate significantly in future periods due to volatility in crypto asset prices and related fair value adjustments. Additionally, continued investment in operations and financing activities may contribute to further variability in quarterly results.

Liquidity and Capital Resources

ATM Financing

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, 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.

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 $103,380,000 available for sale under this Form S-3 registration statement.

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.

From September 14, 2021 through November 10, 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.

Share Repurchase Program

On September 4, 2025, the Board authorized a share repurchase program permitting the Company to repurchase up to $50 million of its common stock over a three-year period. Repurchases may be made from time to time in the open market, in privately negotiated transactions, or otherwise, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934 and applicable state law. We have engaged H.C. Wainwright & Co., LLC as the sole broker to implement the program. The program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or discontinued at any time.

From September 14, 2021 through November 10, 2025, the Company repurchased and retired 888,677 shares of our common stock for an aggregate purchase price of approximately $4,000,000. The repurchases were funded from available cash on hand and are presented as a financing cash outflow in our statement of cash flows. All repurchased shares were immediately retired and are no longer considered issued or outstanding. As of November 10, 2025, approximately $46,000,000 remained available for repurchases under the authorization.

The Company expect that any future repurchases will be subject to our liquidity position, prevailing market conditions, and other capital allocation priorities, including funding of operations and strategic initiatives.

DeFi Borrowing

From April 2025 through November 10, 2025, the Company borrowed an aggregate of approximately $61,447,000 in stablecoins through Aave, a DeFi lending protocol, using Ethereum (ETH) as collateral, and repaid approximately $1,447,000 during the same period. These borrowings included transactions executed in connection with on-chain debt refinancing activities. As of November 10, 2025, the Company had approximately $61,052,000 in outstanding borrowings, inclusive of accrued interest, collateralized by approximately 39,077 ETH with an aggregate fair market value of $138,988,000, based on the closing price of $3,557 per ETH on that date.

Borrowings through Aave accrue interest at variable rates determined by Aave’s on-chain smart contracts, which adjust dynamically based on protocol liquidity and market utilization. ETH collateral posted to Aave simultaneously accrues variable interest at rates that fluctuate based on the same market factors. These rates are publicly available and updated in real time on the Aave protocol’s website. As a result, the Company’s net cost of capital may vary depending on prevailing protocol-level conditions. The Company has no control over these rate adjustments and is subject to the risk of significant rate increases. As of November 10, 2025, the USDT borrowing rate was approximately 6.07% per annum.

Convertible Notes Payable

In May 2025, the Company completed a private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $7,811,000, for net cash proceeds of approximately $7,306,000. 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.

In July 2025, the Company completed an additional private placement of Senior Secured Convertible Notes in the aggregate principal amount of approximately $10,050,000, for net cash proceeds of approximately $9,538,000. 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.

The Company used or 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. The notes from the May and July 2025 offerings are secured by all of the Company’s assets as collateral, except for Ethereum deposited as collateral for USDT borrowings on Aave and certain other exclusions.

Dividends and Capital Distributions

On August 1, 2025, the Board approved a special dividend of $0.05 per share (the “Bividend”), payable to stockholders of record on September 26, 2025. Holders of our common stock could elect to receive the dividend in either cash or Ethereum (ETH), while holders of our Series V Preferred Stock were entitled to receive the dividend solely in cash. As of September 30, 2025, dividends payable totaled approximately $3,176,000, which was recorded as dividends payable within stockholders’ equity. The Bividend was subsequently settled in early October 2025 through aggregate cash payments of approximately $2,680,000 and distributions of approximately 123 ETH to stockholders who elected to receive ETH.

As of September 30, 2025, the Company’s outstanding convertible notes entitle the holders, upon any conversion, to participate in dividends or other distributions on the Company’s common stock declared while the notes are outstanding, to the same extent as if the notes had been converted prior to the record date of such distribution. At September 30, 2025, there were 2,107,757 shares of common stock underlying the outstanding convertible notes that would be entitled to the dividend payments if converted in accordance with the note terms, representing a potential contingent distribution totaling approximately $105,000. Because this obligation is contingent on future conversions, no liability has been recorded.

In addition to the Bividend, the Board also authorized a one-time loyalty payment of $0.35 per share (the “Loyalty Payment”), payable solely in ETH. The Loyalty Payment is available only to holders of our common stock who were record holders on September 26, 2025, who completed the required ETH Opt-In, and who continue to hold their shares through January 26, 2026. Holders of Series V Preferred Stock are not eligible for the Loyalty Payment.

The Loyalty Payment is contingent on continued share ownership through January 26, 2026 and therefore did not give rise to a liability as of September 30, 2025. The number of ETH units per share for both the Bividend and Loyalty Payment was fixed on the record date based on the ETH/USD exchange rate of $4,035.89. As of September 30, 2025, shareholders owning approximately 3.9 million shares had completed the Opt-In process and were held at our transfer agent. If all such shares remain eligible through January 26, 2026, the hypothetical maximum Loyalty Payment would be approximately $1,350,000, or about 335 ETH. The actual payout, if any, will depend on the final number of qualifying shares and ETH settlement terms at the time of eligibility.

Liquidity

The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

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 September 30, 2025, the Company had approximately $4,486,000 of cash and cash equivalents and working capital of approximately $235,993,000.

As of November 10, 2025, the Company had approximately $2,787,000 of cash and stablecoins, and the fair market value of the Company’s crypto assets was approximately $252,777,000.

As of November 10, 2025, the Company had total debt obligations of approximately $78,891,000, consisting of approximately $61,030,000 under its lending arrangement with Aave Protocol and approximately $17,861,000 convertible notes payable.

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.

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 or liquidate them to the extent desired, which could materially and adversely impact our liquidity position. Additionally, technical issues, network congestion, or regulatory changes could further restrict our ability to access or liquidate these assets. As of November 10, 2025, lock-up periods for our staked crypto assets range from several hours to seven days, though these periods may change based on protocol upgrades or network conditions. 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.

Cash Flows

Cash Used in Operating Activities

Cash used in operating activities was approximately $6,032,000 during the 2025 Period, compared to approximately $2,388,000 for the 2024 Period. The increase primarily reflects the impact of non-cash items and changes in working capital arising from the Company’s expanding operations.

Significant non-cash adjustments impacting operating cash flows included:

• Stock-based compensation expense of approximately $3,851,000, primarily reflecting issuance and ongoing amortization of equity-based awards to employees, including performance-based grants.
• Non-cash Validator Payments of approximately $8,116,000 made in native crypto tokens to external validators as part of block-building activities.
• Realized losses on crypto asset transactions of approximately $8,568,000, primarily from the sale of non-Ethereum crypto asset holdings.
• Amortization of debt discount and issuance costs of approximately $754,000 related to the outstanding convertible notes.
• A non-cash adjustment of approximately $67,987,000 from the unrealized appreciation in the fair value of crypto assets, particularly Ethereum.

Operating cash flows were further affected by a $2,855,000 reduction in accrued compensation resulting from the payment of previously accrued performance-based bonuses.

As Builder+ and Imperium operations continue to scale, we expect non-cash adjustments such as crypto-denominated revenues, validator payments, and fair value changes in digital assets to continue to have a significant effect on reported operating cash flows. The magnitude and direction of these effects will depend on market conditions and the timing of crypto asset-related transactions.

Cash Used in Investing Activities

Net cash used in investing activities was approximately $196,833,000 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 $199,858,000 of crypto assets, primarily Ethereum (ETH), to support validator (NodeOps) and DeFi (Imperium) operations and to advance the Company’s long-term ETH accumulation strategy.

Investing cash outflows also included $400,000 of investments in two private blockchain-based technology companies during the 2025 Period, partially offset by proceeds of approximately $3,431,000 from sales of non-core productive crypto assets as we continue to streamline operations.

We expect purchases of ETH and other productive crypto assets to continue in future periods as the Company executes on its ETH treasury accumulation and operational scaling strategies.

Cash Provided by Financing Activities

Cash provided by financing activities was approximately $205,373,000 during the 2025 Period, compared to approximately $653,000 in the 2024 Period. Financing inflows during the 2025 Period were primarily driven by:

• Net proceeds of approximately $135,161,000 from common stock sales under the Company’s At-the-Market (“ATM”) equity program.
• Net proceeds of approximately $16,844,000 from the May and July 2025 issuances of senior secured convertible notes and related five-year warrants
• Net borrowings of approximately $56,500,000 in stablecoins via Aave, a decentralized finance (DeFi) lending protocol.

The Company also paid approximately $3,000,000 for share repurchases of the Company’s common stock and debt issuance costs of approximately $131,000 during the 2025 Period.

We anticipate future financing activity may include additional DeFi borrowings and capital raised through the ATM program or through other financing instruments, as we continue to scale blockchain infrastructure and DeFi operations, enhance liquidity, and accumulate ETH in support of long-term growth.

Off Balance Sheet Transactions

As of September 30, 2025, there were no off-balance sheet arrangements and we were not a party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

Critical Accounting Policies and Estimates

We discussed the material accounting policies that are critical in making the estimates and judgments in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under the caption “Management’s Discussion and Analysis—Critical Accounting Policies and Estimates”. There has been no material change in critical accounting policies or estimates during the period covered by this report.

RECENT ACCOUNTING PRONOUNCEMENTS

For information on recent accounting pronouncements, see Note 3 - Summary of Significant Accounting Policies to the Unaudited Condensed Financial Statements.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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.

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, including potential classification of crypto assets as securities and changing regulatory frameworks; (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; (vii) risks associated with DeFi lending protocols including smart contract vulnerabilities, liquidation risks, and lack of regulatory protections; (viii) counterparty risks in decentralized finance transactions; and (ix) 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.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, management concluded that our disclosure controls and procedures were effective as of September 30, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.