BTCS - BTCS Reports Q2 2023 Results
Silver Spring, MD, Aug. 14, 2023 (GLOBE NEWSWIRE) -- BTCS Inc. (Nasdaq: BTCS) (“BTCS” or the “Company”), a blockchain technology-focused company, announced its results for the second quarter ending June 30, 2023 (“Q2 2023”).
Second Quarter 2023 Financial Highlights
Q2 2023 revenue improved 21% over Q1 2023 to $0.4 million but remained lower than Q2 2022 by 25% as a result of the depressed crypto asset prices.
Gross margins for Q2 2023 were 71% compared to 74% for Q1 2022, with gross margins of 72% for the first half of 2023.
Net loss for Q2 2023 decreased to $1.0 million ($0.07 per share) compared to $1.4 million ($0.10 per share) for Q1 2023 and $7.7 million ($0.61 per share) for Q2 2022.
Net loss for the first half of 2023 was $2.4 million ($0.18 per share) compared to $13.5 million ($1.08 per share) for the first half of 2022. Net losses during the first half of 2022 were largely driven by $12.2 million crypto asset impairment losses realized, compared to only $0.9 million impairment charges in the first half of 2023.
As of June 30, 2023, the Company had $0.9 million in cash.
The fair value of our crypto assets increased 63% YoY to $19.4 million in Q2 2023.
The fair value of our crypto assets together with our cash equated to approximately $1.47 per share as of June 30, 2023.
Management Commentary
Business Update
In Q2 2023, BTCS continued its momentum from the successful beta launch of the StakeSeeker platform in January. Through our StakeSeeker platform, a comprehensive crypto dashboard and education center for crypto asset holders, and our blockchain infrastructure operations we believe we’ve laid the core foundation for significant growth into key blockchain verticals that leverage the knowledge and expertise we’ve honed over the last few years. Our team is dedicated and hard at work, developing new initiatives built on our core expertise, and look forward to sharing these initiatives later in the year.
Industry Commentary
While crypto prices have been relatively flat on average in Q2 2023. Ethereum and other cryptos held by BTCS have seen substantial price increases since 2022 lows underscoring the potential and opportunities within the cryptocurrency market.
We are aware of recent incidents that have raised concerns about regulatory clarity and the need for greater transparency within the crypto sphere. At BTCS, we firmly support the need for a robust regulatory framework that fosters innovation while safeguarding investors' interests. As a company focused on non-custodial staking and other regulatory light operations, we adhere to industry best practices, ensuring compliance and transparency in our operations.
Our flagship StakeSeeker platform, with its non-custodial staking-as-a-service solution, sets us apart from others in the staking market. By allowing users to maintain control over their crypto assets while participating in the network's consensus mechanism, we ensure greater security and promote a stronger sense of trust in the crypto community. We remain committed to educating the public about emerging blockchain technologies and the benefits of self-custody of crypto assets. As we believe that blockchain technologies are still in their early stages, we are dedicated to driving awareness and adoption across various sectors.
Looking ahead, we remain optimistic about both the future of the crypto industry and BTCS. We’re enthusiastic about driving new innovations that contribute to the broader adoption and acceptance of blockchain technologies, providing value to our shareholders. With our dedication and focus, we aim to continue positioning ourselves as leaders in this dynamic landscape.
About BTCS:
BTCS Inc. is a Nasdaq listed company operating in the blockchain technology space since 2014 and is one of the first U.S. publicly traded companies with a primary focus on blockchain infrastructure and staking. BTCS secures and operates validator nodes on disruptive next-generation blockchain networks that power Web 3, earning native token rewards by staking our proof-of-stake crypto assets. “StakeSeeker” is BTCS’ newly introduced proprietary Cryptocurrency Dashboard and Staking-as-a-Service platform, developed to empower users to better understand and grow their crypto holdings with innovative portfolio analytics and a non-custodial process to earn staking rewards on crypto asset holdings. Users can easily link and monitor their cryptocurrency portfolios across exchanges, wallets, validator nodes, and other sources; and have access to a suite of data analytic tools such as performance and reward tracking. StakeSeeker’s Staking Hub allows users to earn rewards by directly participating in network consensus mechanisms by staking and delegating their cryptocurrencies to company-operated validator nodes for a growing number of supported blockchains. As a non-custodial validator operator, BTCS receives a percentage of token holders staking rewards generated as a validator node fee, creating the potential opportunity for a highly scalable business with limited additional costs. For more information visit: www.btcs.com .
Forward-Looking Statements:
Certain statements in this press release, constitute “forward-looking statements” within the meaning of the federal securities laws including statements regarding the growth of our StakeSeeker use base, our beliefs regarding the transformational potential of blockchain technologies, the potential and opportunities within the cryptocurrency market, developing new inns built on our core expertise, leveraging our knowledge and expertise, and the optimism regarding delivering shareholder value. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation regulatory issues unexpected issues with our proprietary Digital Asset Analytic and Staking-as-a-Service Platform: StakeSeeker, regulatory issues, unexpected issues with our Staking-as-a-Service Platform and the reluctance of users to try or accept our product, as well as risks set forth in the Company’s filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2022 which was filed on March 31, 2023. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements, whether as a result of new information, future events or otherwise, except as required by law.
Investor Relations:
ir@btcs.com
Financials
The tables below are derived from the Company’s financial statements included in its Form 10-Q filed on August 14, 2023 with the Securities and Exchange Commission. Please refer to the Form 10-Q for complete financial statements and further information regarding the Company’s results of operations and financial condition relating to the fiscal quarter ended June 30, 2023 and 2022. Please also refer to the Company’s Form 10-K for a discussion of risk factors applicable to the Company and its business.
BTCS Inc.
Balance Sheets
| June 30, |
| December 31, |
| 2023 |
| 2022 |
| (Unaudited) |
| Assets: |
| Current assets: |
| Cash |
| 943,418 |
| $ |
| 2,146,783 |
| Crypto assets/currencies |
| 948 |
| 982 |
| Investments, at value (Cost $100,000) |
| 100,000 |
| 100,000 |
| Staked crypto assets/currencies |
| 8,185,089 |
| 1,826,307 |
| Prepaid expense |
| 175,395 |
| 123,727 |
| Total current assets |
| 9,404,850 |
| 4,197,799 |
| Other assets: |
| Property and equipment, net |
| 8,834 |
| 11,152 |
| Staked crypto assets/currencies - long term |
| - |
| 5,708,624 |
| Total other assets |
| 8,834 |
| 5,719,776 |
| Total Assets |
| $ |
| 9,413,684 |
| $ |
| 9,917,575 |
| Liabilities and Stockholders' Equity: |
| Accounts payable and accrued expense |
| $ |
| 188,144 |
| $ |
| 76,727 |
| Accrued compensation |
| 253,995 |
| 295,935 |
| Warrant liabilities |
| 356,250 |
| 213,750 |
| Total current liabilities |
| 798,389 |
| 586,412 |
| Stockholders' equity: |
| Preferred stock; 20,000,000 shares authorized at $0.001 par value: |
| - |
| - |
| Series V Preferred stock: 14,542,803 and 0 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |
| 2,559,533 |
| - |
| Common stock, 97,500,000 shares authorized at $0.001 par value, 14,181,410 and 13,107,149 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |
| 14,182 |
| 13,108 |
| Additional paid in capital |
| 159,955,610 |
| 160,800,263 |
| Accumulated deficit |
| (153,914,030 |
| ) |
| (151,482,208 |
| ) |
| Total stockholders' equity |
| 8,615,295 |
| 9,331,163 |
| Total Liabilities and Stockholders' Equity |
| $ |
| 9,413,684 |
| $ |
| 9,917,575 |
BTCS Inc.
Statements of Operations
(Unaudited)
| For the Three Months Ended |
| For the Six Months Ended |
| June 30, |
| June 30, |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| Revenues |
| Validator revenue (net of fees) |
| $ |
| 385,753 |
| $ |
| 514,349 |
| $ |
| 697,261 |
| $ |
| 1,077,364 |
| Total revenues |
| 385,753 |
| 514,349 |
| 697,261 |
| 1,077,364 |
| Cost of revenues |
| Validator expense |
| 113,612 |
| 93,900 |
| 195,626 |
| $ |
| 231,769 |
| Gross profit |
| 272,141 |
| 420,449 |
| 501,635 |
| 845,595 |
| Operating expenses: |
| General and administrative |
| $ |
| 617,569 |
| $ |
| 512,051 |
| $ |
| 1,227,398 |
| $ |
| 1,162,340 |
| Research and development |
| 180,903 |
| 185,004 |
| 382,528 |
| 321,722 |
| Compensation and related expenses |
| 578,496 |
| 638,025 |
| 1,040,586 |
| 2,061,921 |
| Marketing |
| 2,723 |
| 23,691 |
| 8,966 |
| 65,484 |
| Impairment loss on crypto assets/currencies |
| 784,602 |
| 8,894,797 |
| 879,509 |
| 12,202,225 |
| Realized gains on crypto asset/currency transactions |
| (731,199 |
| ) |
| (398,446 |
| ) |
| (748,030 |
| ) |
| (469,556 |
| ) |
| Total operating expenses |
| 1,433,094 |
| 9,855,122 |
| 2,790,957 |
| 15,344,136 |
| Other income (expenses): |
| Change in fair value of warrant liabilities |
| 142,500 |
| 1,710,000 |
| (142,500 |
| ) |
| 1,068,750 |
| Distributions to warrant holders |
| - |
| - |
| - |
| (35,625 |
| ) |
| Total other income (expenses) |
| 142,500 |
| 1,710,000 |
| (142,500 |
| ) |
| 1,033,125 |
| Net loss |
| $ |
| (1,018,453 |
| ) |
| $ |
| (7,724,673 |
| ) |
| $ |
| (2,431,822 |
| ) |
| $ |
| (13,465,416 |
| ) |
| Net loss per share attributable to common stockholders, basic and diluted |
| $ |
| (0.07 |
| ) |
| $ |
| (0.61 |
| ) |
| $ |
| (0.18 |
| ) |
| $ |
| (1.08 |
| ) |
| Weighted average number of common shares outstanding, basic and diluted |
| 13,873,331 |
| 12,644,719 |
| 13,773,782 |
| 12,446,102 |
BTCS Inc.
Statements of Cash Flows
(Unaudited)
| For the Six Months Ended |
| June 30, |
| 2023 |
| 2022 |
| Net Cash flows used from operating activities: |
| Net loss |
| $ |
| (2,431,822 |
| ) |
| $ |
| (13,465,416 |
| ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
| Depreciation expense |
| 2,318 |
| 1,727 |
| Stock-based compensation |
| 789,453 |
| 1,782,802 |
| Validator revenue |
| (697,261 |
| ) |
| (1,077,364 |
| ) |
| Blockchain network fees (non-cash) |
| - |
| 1,321 |
| Change in fair value of warrant liabilities |
| 142,500 |
| (1,068,750 |
| ) |
| Sale of non-productive crypto assets/currencies |
| - |
| 2,547,322 |
| Realized gain on crypto assets/currencies transactions |
| (748,030 |
| ) |
| (469,556 |
| ) |
| Impairment loss on crypto assets/currencies |
| 879,509 |
| 12,202,225 |
| Changes in operating assets and liabilities: |
| - |
| Prepaid expenses and other current assets |
| (51,668 |
| ) |
| 63,376 |
| Accounts payable and accrued expenses |
| 111,417 |
| 565 |
| Accrued compensation |
| (41,940 |
| ) |
| 132,853 |
| Net cash used in operating activities |
| (2,045,524 |
| ) |
| 651,105 |
| Net cash used in investing activities: |
| Purchase of productive crypto assets/currencies for validating |
| (1,804,213 |
| ) |
| (9,141,785 |
| ) |
| Sale of productive crypto assets/currencies |
| 1,719,871 |
| 310,149 |
| Purchase of investments |
| - |
| - |
| Purchase of property and equipment |
| - |
| (2,558 |
| ) |
| Net cash used in investing activities |
| (84,342 |
| ) |
| (8,834,194 |
| ) |
| Net cash provided by financing activities: |
| Dividend distributions |
| - |
| (630,801 |
| ) |
| Net proceeds from issuance common stock/ At-the-market offering |
| 926,501 |
| 10,604,441 |
| Net cash provided by financing activities |
| 926,501 |
| 9,973,640 |
| Net increase in cash |
| (1,203,365 |
| ) |
| 1,790,551 |
| Cash, beginning of period |
| 2,146,783 |
| 1,400,867 |
| Cash, end of period |
| $ |
| 943,418 |
| $ |
| 3,191,418 |
| Supplemental disclosure of non-cash financing and investing activities: |
| Series V Preferred Stock Distribution |
| $ |
| 2,559,533 |
| $ |
| - |