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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2023

 or

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from _____________ to ______________

 Commissions
file number 001-40792

 BTCS
Inc.

 (Exact
name of registrant as specified in its charter)

 Nevada

 90-1096644

 (State
 or other jurisdiction

 (I.R.S.
 Employer

 of
 Incorporation or organization)

 Identification
 No.)

 9466
 Georgia Avenue #124, Silver Spring, MD

 20910

 (Address
 of principal executive offices)

 (Zip
 Code)

 Registrant's
telephone number, including area code (202) 430-6576

 Securities
registered under Section 12(b) of the Exchange Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 Stock, par value $0.001

 BTCS

 The
 Nasdaq Stock Market

 (The
 Nasdaq Capital Market)

 Securities
registered under Section 12(g) of the Exchange Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller
reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The
aggregate market value of voting and non-voting stock held by non-affiliates of the registrant was approximately $ 11.0 million, based
on the closing sales price of Common Stock of $1.19 on June 30, 2023.

 As
of March 19, 2024, there were 15,691,209 shares of common stock, par value $0.001, issued and outstanding.

 Documents
Incorporated By Reference

 Portions
of the registrant's Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated herein by reference in Part III
of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission
(the "SEC") within 120 days of the registrant's fiscal year ended December 31, 2023.

 BTCS
INC.

 TABLE
OF CONTENTS

 Page

 Item
 1.

 Business

 Item
 1A.

 Risk
 Factors

 Item
 2.

 Properties

 Item
 3.

 Legal
 Proceedings

 Item
 4.

 Mine
 Safety Disclosures

 PART
 II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative
 And Qualitative Disclosures About Market Risk

 Item
 8.

 Financial
 Statements and Supplementary Data

 Item
 9.

 Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls
 and Procedures

 Item
 9B.

 Other
 Information

 Item
 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance

 Item
 11.

 Executive

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain
 Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal
 Accounting Fees and Services

 PART
 IV

 Item
 15.

 Exhibits
 and Financial Statement Schedules

 Item
 16.

 Form
 10-K Summary

 PART
I

 ITEM
1. BUSINESS

 BTCS
Inc. ("BTCS" or the "Company") is a Nasdaq listed company operating in the blockchain technology sector since
2014 and is one of the only U.S. publicly traded companies with a primary focus on proof-of-stake blockchain infrastructure. Our core
focus is on driving scalable growth through a diverse range of business streams leveraging and built on top of our core and proven blockchain
infrastructure operations. BTCS secures and operates validator nodes on cutting-edge blockchain networks that power Web 3, earning native
token rewards by staking our proof-of-stake crypto assets (also referred to "cryptocurrencies", "crypto", "crypto
assets", "digital assets", or "tokens"), with an emphasis on Ethereum. Our innovative "StakeSeeker"
platform empowers crypto holders with an analytics-focused cryptocurrency dashboard. We also offer a non-custodial Staking-as-a-Service
solution, enabling users to earn staking rewards, while we earn a percentage of token holders' rewards, creating the potential
for scalable revenue with limited additional costs. We recently introduced "Builder+", an Ethereum block builder. Builder+
leverages advanced algorithms to maximize profit through optimized block construction and creates opportunities for new scalable revenue
streams.

 OUR
BUSINESS

Infrastructure

 BTCS's
blockchain infrastructure entails operating validator nodes (or "nodes") on various proof-of-stake ("PoS") and
delegated proof-of-stake ("dPoS")-based blockchain networks. In connection with the validation of transactions occurring
on those blockchain networks, BTCS stakes (or "delegates") blockchain-based crypto assets native to those blockchains networks
("native crypto assets") to earn staking rewards. We also specialize in operating validator nodes on various PoS and dPoS-based
blockchain networks, including Ethereum, Cosmos, Kava, Tezos, Avalanche, Kusama, Mina, Akash, Evmos, Oasis, and NEAR Protocol.

 BTCS
utilizes cloud infrastructure to operate and run its validator nodes and does not operate a data center or own physical assets such as
servers. In addition to staking our crypto assets to our nodes, we also stake certain crypto assets to nodes operated by third-parties.

 PoS
blockchain infrastructure is akin to Bitcoin's proof-of-work ("PoW") mining consensus mechanism but differs in a few
key ways. PoW is a consensus mechanism that requires nodes to dedicate computational resources to validate transactions on a blockchain.
In PoW, miners use energy-consuming computers to do "work," and they are rewarded with crypto assets for validating transactions
on the blockchain. The reward is comprised of transaction fees and crypto assets. Conversely, PoS is a consensus mechanism that requires
validator nodes to dedicate financial resources in the form of crypto assets, which are staked to participate in the consensus algorithm.
Validators, the equivalent of miners in PoW networks, operate nodes and validate transactions on the blockchain. Validators are rewarded
in crypto assets for aligning behavior with the rules of the algorithm.

 We
primarily earn crypto assets through the operation of our non-custodial validator nodes, with the intention of enhancing our production
of crypto assets in various blockchain networks. While we have no formal policy, our primary objective is to hold and re-stake these
earned crypto assets for network security and additional production opportunities, we may, on occasion, sell a portion for cash to meet
operational needs. Our primary cryptocurrency exchange is Kraken; however, we also have basic accounts with multiple alternative cryptocurrency
exchanges and OTC desks. As of the filing date, we have no exclusive agreements with any cryptocurrency exchanges, nor do we maintain
margin or other type accounts that could create additional liability for the Company. Our approach to our crypto asset holdings remains
adaptable to evolving market conditions and operational requirements.

 Details
of the Company's crypto asset held can be found under "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations."

 Staking-as-a-Service

 Through
BTCS's blockchain infrastructure operations, we validate transactions on behalf of those who delegate their crypto holdings (or
"Stake") to BTCS-operated validator nodes (referred to as "Staking as a Service" or "StaaS") on dPoS
blockchains.

 Delegation
is a non-custodial process that allows token holders ("Delegators", or "customers") to maintain control of their
private keys and revoke their delegation at any time (subject to the rules of a particular blockchain). There is no transfer of ownership,
often referred to as "private keys", of any Delegator's crypto assets as part of the Delegation process. Delegation
provides a method for token holders to designate to a validator node operator the ministerial task of running a validator node while
still participating in the network consensus mechanism and earning rewards.

 StaaS
providers are operators of computer infrastructure and validation software that allow them and their Delegators to stake certain native
crypto assets utilizing a dPoS consensus protocol. dPoS protocols provide for the validation of transactions on the related network
as well as a "sybil resistance" mechanism to help secure the network.

 The
nodes comprising a blockchain network use a protocol (or set of rules) to reach an agreement as to whether a given transaction proposed
by a user of the network is valid under the rules of the protocol and should be added to the ledger (such agreement being referred to
as "consensus"). Protocols typically group transactions into blocks that can only be added to the common ledger when validated
by a sufficient percentage of a dispersed network of unrelated computers or servers called "nodes" in the network. A complete
record (or "blockchain") is maintained on the ledger by adding these groups (or "blocks") of transactions to
the chain, and the nodes constantly automatically monitor the blocks to ensure record accuracy.

 dPoS
networks rely on validators who own native crypto assets and operate nodes for the network to confirm the validity of the transactions
comprising each block to be added to the network ledger. The dPoS protocol software run by the relevant network nodes generally determines
the validator node for each block at random, though each blockchain may have differing selection criteria. To be eligible to validate
transactions and to write new blocks to the chain, validators are required to "stake" the relevant native crypto assets whereby
validators commit value (in the form of the native crypto asset) to the underlying network and lock their native crypto assets, preventing
them from otherwise transacting with those native crypto assets while they are staked. The dPoS mechanism is a sybil-resistance tool
(fights against attacks on nodes) that incentivizes validators to confirm transactions that conform to the rules of the protocol at the
risk of losing their staked crypto assets ("slashing"). Validators utilizing their native crypto assets to participate in
dPoS protocols secure the relevant network and receive staking rewards for doing so.

 As
a non-custodial Validator operator, BTCS may charge a validator node fee, typically determined as a percent of the crypto asset rewards
earned on crypto assets delegated to its node, creating the opportunity for potential scalable revenue and business growth with limited
additional costs. This fee is broadcast by the Validator to the network and publicly available. Both the crypto reward paid to the Delegator
and the crypto fee paid to the Validator are distributed by the blockchain network. These "validator fees" in the dPoS network
encourage validators to participate in the network and thereby help to secure and decentralize the network.

 A
StaaS provider maintains a ministerial role in validating transactions on a given dPoS network on behalf of its Delegators by: (1) arranging
transactions using open-source software to stake the relevant crypto assets; (2) monitoring the nodes it is operating to ensure the computers
remain online to validate transactions; and (3) verifying transactions on the network when required.

 As
a StaaS provider, BTCS does not take custody of or pool Delegator crypto assets or Delegator crypto rewards (i.e. BTCS does not take
possession of users' private "keys" or "crypto"). The rewards earned on delegated crypto assets are sent
directly to Delegators by the respective blockchain network and are never in BTCS's possession. Therefore, BTCS does not obtain
custody or facilitate transfers of any third-party crypto assets in its role as a Validator or StaaS provider.

 StakeSeeker
Platform

 The
Company's internally developed "StakeSeeker" platform is a personal finance software and education center with a
comprehensive crypto dashboard for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across
exchanges and wallets in a single analytics platform. The StakeSeeker dashboard reads user data from digital wallets and utilizes
application programming interfaces (APIs) to read data from crypto exchanges and is non-custodial, meaning it does not allow for the
trading or custody of crypto assets. StakeSeeker's Stake Hub functions as an educational center, offering users guidance on
how to delegate their crypto assets to our non-custodial validator nodes, along with the ability to monitor such delegation
activities through data analysis. StakeSeeker does not provide or facilitate direct crypto asset delegation through its StakeHub,
nor does it facilitate transaction execution on our platform. Stake Hub's primary role is to offer instructional support and
monitoring capabilities. Crypto asset holders are able to delegate to our validator nodes without signing up for our StakeSeeker
platform; conversely, crypto asset holders can delegate to validator nodes not operated by the Company and utilize our StakeSeeker
software and data analytics. The StakeSeeker platform is currently free-to-use for registered users so is not currently generating
revenue. The Company is not a broker-dealer or an investment advisor and does not provide any such related services. StakeSeeker operates exclusively as an informational and educational resource for the monitoring and analysis of
crypto assets, with its non-custodial and non-transactional approach ensuring compliance with federal securities laws, thereby precluding
any regulatory concerns as the platform continues to develop.

 StakeSeeker
provides a valuable analytical platform to crypto enthusiasts and strategically seeks to entice users with its features. One underlying
strategic objective of the platform is to drive the expansion of Delegators to our validator nodes. The growth of the size of delegations
is central to the scalability of BTCS's StaaS business strategy. The Company believes that StaaS provides a more accessible and
cost-effective way for crypto asset holders to participate in blockchain network consensus, thereby promoting the growth and adoption
of blockchain technology.

 The
estimated staking rewards, expressed as the Annual Percentage Reward (APR), as displayed on StakeSeeker's Stake Hub and our StakeSeeker
website (www.stakeseeker.com), are determined using the most recent network data obtained through API data pulls from www.stakingrewards.com,
a third-party blockchain data provider. To ensure accuracy and consistency, BTCS conducts periodic checks to validate the APR data obtained
against the data reported on each respective blockchain network's blockchain explorer. Disclosure on StakeSeeker's website
clearly states that the APR presented is not guaranteed and does not include StakeSeeker's validator fee. The APR figures are provided
for informational purposes and are subject to change based on the dynamics of the underlying blockchain networks.

 The
Company anticipates taking the StaaS Platform out of beta prior to the end of 2024. The current functionality allows crypto asset holders
to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets in a single analytics platform. In the future
we may add support for additional blockchains and provide other analytic tools. We are also exploring the feasibility of adding Ethereum
non-custodial staking to StakeSeeker in 2024. We anticipate the costs associated with doing so would be in line with our historical research
and development costs.

 Ethereum
Block Building

 On
February 1, 2024, we introduced Builder+, a newly developed Ethereum block builder ("Builder") to maximize validator earnings
by utilizing advanced algorithms to construct optimized blocks for on-chain validation. Builders actively monitor the Ethereum transaction
queue, known as the "mempool", for pending transactions and strategically reorder them to create 'optimized blocks' containing
transactions with the highest fees. Builders pay a fee to Validators for block space in order to increase the chances of their blocks
being selected by a validator and, in return, earn the associated crypto transaction fees.

 Builder+
represents an innovative extension of our core Ethereum blockchain infrastructure operations, aimed at driving scalable revenue growth
by leveraging our current Ethereum validator operations. We seek to capture a larger share of the Builder market within the Ethereum
ecosystem with Builder+ and secure a share of the crypto rewards generated by Ethereum validators who use Builder+. We believe this market
offers significant potential for scalable revenue growth.

 Builder+
was in the development and testing phase in 2023 and did not have a material impact on our operations or 2023 financial results.

 ChainQ

 ChainQ
is an under-development AI-powered blockchain data and analytics platform, designed to allow users to query real-time and historical
on-chain blockchain data. Through comprehensive indexing of public blockchain data from our Blockchain Infrastructure operations, ChainQ
is intended to provide an intuitive and straightforward platform for users to access on-chain data. We continue to incur costs associated
with the research and development of ChainQ, with a goal to publicly launch in 2024.

 Custody
and Key Storage

 BTCS
prioritizes self-custody of its crypto assets through secure storage of most of its crypto assets in cold digital wallets, with the goal
of typically maintaining less than 0.1% of its crypto assets on crypto exchanges at any given time, except during necessary transfers
between wallets and exchanges for sales or purchases. Occasionally, we may use hot wallets or move crypto assets to exchanges for operational
or transactional requirements. Additionally, we regularly transfer crypto assets to more secure cold wallets when appropriate. As of
December 31, 2023, 97% of BTCS's crypto assets were held in cold storage wallets and 3% of crypto assets were held in other storage
wallets, including hot wallets.

 The
Company currently does not maintain any insurance policies that provide coverage for potential losses of crypto assets in cases of theft,
lost keys, or any other events that might lead to the loss of private keys or crypto assets held within our secure digital wallets.

 Our
cold wallet private keys are protected through a variety of methods, including key sharding, key encryption, and offline encrypted key
storage in safety deposit boxes situated across multiple geographic locations. We believe this multi-layered approach ensures the utmost
security for our crypto assets.

 As
a result of our prioritizing the self-custody of our crypto assets, our exposure to crypto related companies that have declared bankruptcy
such as FTX, BlockFi, and Celsius has been limited to the negative impact these platforms had on the value of our assets in the crypto
markets.

 INDUSTRY
AND MARKET OVERVIEW (CRYPTO ASSET AND BLOCKCHAIN TECHNOLOGIES)

and Cryptocurrencies

 BTCS
prioritizes self-custody of its crypto assets through secure storage of most of its crypto assets in cold digital wallets, with the goal
of typically maintaining less than 0.1% of its crypto assets on crypto exchanges at any given time, except during necessary transfers
between wallets and exchanges for sales or purchases. Occasionally, we may use hot wallets or move crypto assets to exchanges for operational
or transactional requirements. Additionally, we regularly transfer crypto assets to more secure cold wallets when appropriate. As of
December 31, 2023, 97% of BTCS's crypto assets were held in cold storage wallets and 3% of crypto assets were held in other storage
wallets.

 The
Company currently does not maintain any insurance policies that provide coverage for potential losses of crypto assets in cases of theft,
lost keys, or any other events that might lead to the loss of private keys or crypto assets held within our secure digital wallets.

 Our
cold wallet private keys are protected through a variety of methods, including key sharding, key encryption, and offline encrypted key
storage in safety deposit boxes situated across multiple geographic locations. We believe this multi-layered approach ensures the utmost
security for our crypto assets.

 As
a result of our prioritizing the self-custody of our crypto assets, our exposure to crypto related companies that have declared bankruptcy
such as FTX, BlockFi, and Celsius has been limited to the negative impact these platforms had on the value of our assets in the crypto
markets.

 Business
Profile and Risks

 The
decision to pursue blockchain and crypto asset businesses exposes the Company to risks associated with a new and untested strategic direction.
The prices of crypto assets have experienced substantial volatility, which may reflect "bubble" type volatility, meaning
that high or low prices may have little or no merit, are subject to rapidly changing investor sentiment, and may be influenced by factors
such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting.

 Government
Oversight

networks are a relatively new technological innovation and the regulatory schemes to which crypto assets and their blockchain networks
are or may be subject, including both the interpretation and applicability of existing laws and regulations and the potential establishment
of new laws and regulations, have not been fully explored or developed.

 Recent
actions taken by the SEC, including enforcement actions brought against crypto asset companies with a focus on custodial staking, are
more particularly described under certain "Risk Factors", demonstrate the SEC's position that many, if not most, crypto
assets may be securities and therefore reflect the reality that we will likely face increased government regulation and oversight as
our industry and government treatment of the crypto assets on which our operations are based continue to evolve. These developments follow
the SEC's July 25, 2017, DAO Report, wherein its Chairman expressed concerns about the "Wild West" nature of the cryptocurrency
market. More recently, the SEC Enforcement Division has taken action against crypto asset focused enterprises, and if the interpretations
of federal securities laws are further expanded to apply to the Company, it would adversely affect the Company's future acquisition
of crypto assets by limiting the amount of crypto asset securities ("Digital Securities") it may acquire, potentially limiting
or precluding the use of its blockchain infrastructure and other operations, and creating increased compliance and legal costs. In October
2020 the U.S. Department of Justice ("DOJ") published a report entitled "Cryptocurrency: An Enforcement Framework"
that detailed the DOJ's strategies and abilities to handle the threats posed by digital assets. In January 2023, the House of Representatives
created the Financial Services Subcommittee on Digital Assets with the goal to develop rules and policies covering digital assets. In
addition, each state has its own securities laws and regulations with varying provisions and effects, any of which may require us to
alter or reduce our current or planned operations in the future. We continue to monitor legislative matters related to our industry.

of the foregoing or other regulatory developments, in the future, before we acquire or transact in crypto assets, we may be required
to examine how they were originally offered to determine if they were offered as an investment contract or other type of security. Because
of legal uncertainties, careful examination of the results of our compliance review will be required by experienced securities counsel.
Because we must stay under the requirement under Investment Company Act of 1940 (the "1940 Act") that no more than 40% of
our assets (excluding cash items) constitute investment securities to avoid being deemed an investment company, we will limit the amount
of Digital Securities we acquire. Further, while we believe our operations and platform are meaningfully different than Kraken's
and Coinbase's custodial staking platforms that were subject to SEC enforcement proceedings in 2023, that development or future
positions the SEC may take, including potentially against us and our business, may demonstrate a differing view and require us to adjust,
reduce, limit or even cease some or all of our operations or business plans. If our compliance procedures and legal reviews prove to
be incorrect, we may incur the likelihood of prohibitive SEC penalties and/or private lawsuit defense costs and adverse rulings.

 Gary
Gensler, the current SEC Chairman, has continued to voice his concerns about and continued intention to regulate crypto assets, referring
to decentralized finance, or DeFi, platforms that focus on crypto assets as well as the crypto assets themselves, and concluding by stating
that the SEC would "continue to take our authorities as far as they go." In late 2023, Mr. Gensler stated that cryptocurrency
entrepreneurs have "generally built a business model around noncompliance with the law." There has not been any definitive
guidance provided as of the date of this Report, however a number of regulatory proceedings and enforcement actions have been brought
against crypto assets developers and their proponents such as Coinbase, Binance, and Kraken.

 The
Company may acquire additional crypto assets and continues to develop and expand upon its StakeSeeker, Builder+, and ChainQ platforms
to enable it to offer a wider range of functions and availability for use with a greater variety of crypto assets. The Company currently
owns and plans to expand its crypto asset holdings, both through staking its existing crypto asset holdings on PoS blockchain networks
and potentially through other means. To avoid being inadvertently classified as an investment company under the 1940 Act, we actively
focus, in consultation with legal counsel, on ensuring that our ownership of assets that are not considered securities under the 1940
Act always exceed 60% of our total assets, excluding cash items. In separate SEC complaints, the SEC identified Cardano, Tezos, Solana,
Cosmos, Polygon, Axie Infinity, and NEAR Protocol crypto assets as securities. As a matter of practice the Company typically targets
keeping in excess of 60% of the Company's total assets (excluding cash and government securities) in Ethereum. Therefore, to the
extent the SEC identified all other crypto assets held by the Company excluding Ethereum as securities, the Company would still not meet
the definition of an "investment company" under Section 3(a)(1)(C) of the 1940 Act. By doing so, we can avoid being subject
to the regulatory requirements and oversight that apply to investment companies.

 The
Company has conducted a detailed legal analysis which has led us to determine that certain crypto assets that are identified as
securities by the SEC should not impact our business, financial condition, and results of operations. Provided, however, if over 40%
of our assets are considered securities, excluding cash, we may be considered a 1940 Act company (see the risk factor on page 12
herein). Further, the aforementioned assessments are risk-based judgments and not a legal standard or determination binding on any
regulatory body or court. To the extent a regulatory body or court finds that our conclusions are incorrect, we may seek to cease
certain of our operations. Any such action may adversely affect an investment in us.

 In
addition to the securities laws and investment company considerations, as our business model and operations continue to evolve, including
StakeSeeker, Builder+, and ChainQ we may become subject to additional laws and regulations. For example, to the extent we collect, analyze,
distribute, or otherwise use data concerning individuals or entities and their holdings and transactions, we may become subject to the
ever-growing number of data privacy and security laws within and without the U.S. which often have far-reaching implications for businesses.
In general these laws require disclosure and preventative measures designed to protect users from unauthorized access or disclosure of
their personal information, and impose fines and sanctions for failure to comply with their requirements. On the other hand, because
transactions in crypto assets often provide a reasonable degree of anonymity, they are susceptible to misuse for criminal activities,
such as money laundering. This misuse, or the perception of such misuse (even if untrue), could lead to greater regulatory oversight
of crypto platforms and operations such as ours, and there is the possibility that regulators could close crypto platforms or other crypto
asset-related technology and infrastructure with little or no notice or opportunity for challenge, and prevent users of custodial platforms
from accessing or retrieving crypto assets held on or connected to such platforms or infrastructure. For example, lawmakers and regulators
have in recent years expressed views that government oversight is needed, including with a view to curtailing the use of crypto asset
use for malign and illegal activities.

 Many
PoW crypto assets have also been subject to skepticism due to concerns about the high energy consumption used in mining on blockchain
networks. In the U.S., in March 2022 President Biden issued Executive Order 14067 on Ensuring the Responsible Development of Digital
Assets, which prioritized the responsible development of crypto assets in a manner which includes reducing negative climate impacts
and environmental pollution. In November 2022, the Governor of New York signed a law banning certain bitcoin mining operations that run
on carbon-based power sources for two years. While our focus is currently on PoS blockchain networks which use significantly lower amounts
of energy when compared to PoW, future regulations may arise in response to these concerns that could apply to us and the cryptocurrency
industry as a whole.

 Given
the growing interest by regulators and other stakeholders, we anticipate that legislation and regulation of crypto assets is forthcoming
and will intensify in the future.

 Given
the above developments, both our current and planned operations, and the cryptocurrency industry in general, continue to be subject to
expanding, complex and uncertain government oversight. See "Risk Factors" beginning on page 12
 and "Business" beginning on page 3 for more information.

 As
both the regulatory landscape develops and journalistic familiarity with crypto assets increases, mainstream media's understanding
of them and the regulation thereof may improve. Regulation of crypto assets varies from country to country as well as within countries.
An increase in the regulation of crypto assets may affect our proposed business by increasing compliance costs or prohibiting certain
or all of our proposed activities.

 COMPETITION

 The
Company's current and future competition is centered on the following areas:

 Exchange-Based
 Companies: Companies in the exchange industry that offer both custodial and non-custodial staking solutions as well as other
 blockchain infrastructure and data analytics pose a significant competitive challenge. These exchanges often boast substantial customer
 bases, making it easier for them to attract those looking for integrated staking services, portfolio tracking, and position them
 well to enter blockchain infrastructure operations. Additionally, they may possess greater resources, allowing them to enhance their
 custodial or non-custodial staking offerings and other offerings in the future.

 Asset-Focused Companies and Node Operators: Numerous companies and node operators specializing in crypto assets compete with
 our non-custodial crypto asset staking services and validator node operation. Key competitors in this space include companies such
 as Blockdaemon, Allnodes, Everstake, Figment, P2P, Foundry, Stakin, and Stakefish.

 Analytic
 Services Providers: Various mobile applications, websites, and niche aggregation sites, such as CoinTracker, Koinly, CoinLedger,
 and Rotki, offer similar analytic services. These competitors provide tools and insights that may overlap with StakeSeeker's
 offerings.

 Secure
 Storage Solution Providers: Providers of mobile applications and websites that offer secure storage solutions for crypto assets
 represent another category of competition.

 Traditional
 Financial Service and Data Analytics Firms: Established financial service firms and data analytics companies serving traditional
 asset markets may choose to enter the market by offering data analytic solutions as well as their own custodial or non-custodial
 staking for crypto assets. These entities can leverage their extensive resources, market presence, and expertise to enter the market.

 Cryptocurrency-Focused
 Companies: Companies specializing in cryptocurrency-related services, including exchanges, payment processing, and financial
 services, are formidable competitors in the crypto asset space.

 On-Chain
 Blockchain Data Providers: Companies offering data analytics and insights services, with accessible on-chain blockchain data
 and user-friendly interfaces, like Chainalysis and Elliptic, pose competition in providing vital data and insights for crypto assets.

 Ethereum
 Block Builders and Relay Providers: Competition also exists for Builder+, our block building initiative, from other Ethereum
 block builders or relay providers who currently have significant market share.

 Many
of our current and potential competitors enjoy advantages such as greater financial resources, longer operational histories, larger user
bases, bigger teams, and stronger brand recognition. Most are also not burdened with the additional costs and time commitments required
of being an exchange-listed public company. These competitors may allocate more substantial resources to technology development, infrastructure
enhancement, and marketing efforts. Moreover, they may be able to develop and deploy solutions more rapidly than us.

 In
addition to existing competitors, the Company must contend with the potential of new entrants to the industry and the possibility of
industry consolidation through business combinations and alliances, which could further strengthen the competitive positions of our rivals.
Given our small team and relative lack of capital to many peers, we acknowledge that we face a competitive disadvantage in this landscape.

 ASSETS

 The
Company's primary assets consist of its crypto assets and cash as well as its human capital and intellectual property noted below.

 INTELLECTUAL
PROPERTY AND TRADE SECRETS

 Our
business depends in large part on our proprietary technology, particularly with regards to StakeSeeker, the operation of validator nodes
as part of our blockchain infrastructure, our efforts and development with respect to our initiatives, and our brand. We rely on, and
expect to continue to rely on, a combination of trademark, domain name, and trade secret laws, as well as confidentiality and license
agreements with our employees, contractors, consultants, and third parties with whom we have relationships, to establish and protect
our brand and intellectual property rights.

 GROWTH
STRATEGY

 BTCS
remains steadfast in its commitment to its core business of blockchain infrastructure operation, validation, and data analytics. Our
growth strategy is structured around expanding our infrastructure, attracting a larger Delegator base, tapping into the Ethereum MEV
market through Builder+, and launching ChainQ as a revenue-generating platform. These initiatives are discussed further below and are
designed to position us for sustainable growth in the dynamic and evolving blockchain industry. We will continue to monitor and adapt
our strategy to remain competitive and capitalize on emerging opportunities in the blockchain space.

 Expansion
of Blockchain Infrastructure:

 Our
primary objective is to expand our presence in the blockchain ecosystem by operating validator nodes on PoS and dPoS-based blockchain
networks. To achieve this, subject to available capital, we plan to continue to identify promising blockchain networks and allocate resources
towards the development and operation of validator nodes.

 Growth
of Delegator Base and Assets:

 A
critical component of our growth strategy is to increase the number of Delegators and crypto assets delegated to our validator nodes
including our own. We plan to achieve this by: 1) acquiring more crypto assets and staking them to our nodes, and 2) enhancing the StakeSeeker
platform's capabilities as an educational center and analytical tool. We believe that leveraging StakeSeeker's capabilities
to provide insights and guidance will foster trust and confidence among potential Delegators.

 Penetrating
Ethereum Block Builders Market with Builder+:

 We
believe we are strategically positioned to capture a large share of the Builder market within the Ethereum ecosystem and available MEV
rewards through the introduction of Builder+. Builder+ is an innovative solution designed to optimize validator earnings by actively
monitoring the Ethereum mempool and strategically reordering transactions to create optimized blocks. To achieve this, we plan to promote
Builder+ and will seek to build strategic relationships to expand its adoption. Continuous refinement of Builder+ algorithms and strategy
will be a priority to ensure competitiveness and maximize rewards for validators.

 Roll
Out Subscription-Based ChainQ Offering:

 We
are actively developing ChainQ, an AI-powered blockchain data and analytics platform, with the goal of launching it as a subscription-based
service in 2024. ChainQ plans to provide users with access to real-time and historical on-chain blockchain data. To achieve this, we
plan to work towards the completion of the development of ChainQ, potentially establish partnerships and collaborations with other blockchain
projects for integration, and implement a subscription-based pricing model to monetize the platform.

 HUMAN
CAPITAL / EMPLOYEES

 As
of December 31, 2023, we had five full-time employees, all of whom work full-time, none of which are covered by a collective bargaining
agreement. We engage third-party contractors and consultants on an as-needed basis.

 We
are a remote-first Company. We believe that allowing our employees to work in the location that best suits them provides us access to
a larger talent pool and a sustained advantage in hiring and retaining employees and consultants in the United States and worldwide.

 Human
capital management is critical to our ongoing business success, which requires investing in our people. Our aim is to create a highly
engaged and motivated workforce where employees are inspired by leadership, engaged in purpose-driven, meaningful work, and have opportunities
for growth and development. We are committed to creating and maintaining a work environment in which employees are treated with respect
and dignity. We value our diverse employees, and provide career and professional development opportunities that foster the success of
our Company.

 We
are committed to the principles of equal employment and complying with all federal, state, and local laws providing equal employment
opportunities, and all other employment laws and regulations. It is our intent to maintain a work environment that is free of harassment,
discrimination, or retaliation because of age, race, color, national origin, ancestry, religion, sex, sexual orientation
(including transgender status, gender identity or expression), pregnancy (including childbirth, lactation, and related medical conditions),
physical or mental disability, genetic information (including testing and characteristics), veteran status, uniformed servicemember status,
or any other status protected by federal, state, or local laws. We are dedicated to the fulfillment of this policy in regard to all aspects
of employment, including but not limited to recruiting, hiring, placement, transfer, training, promotion, rates of pay, and other compensation,
termination, and all other terms, conditions, and privileges of employment.

 Our
Compensation Committee is also actively involved in reviewing and approving executive compensation, and succession plans so that we have
leadership in place with the requisite skills and experience to deliver results the right way. We offer fair, competitive compensation
and benefits appropriate for a company of our size that supports our employees. While we do not offer health benefits, we do offer 401(k)
plans with 100% matching of employees' contributions subject to IRS limitations.

 CAPITALIZATION

 The
following table details the Company's capitalization as of March 19, 2024.

 Class of Security

 Shares of Common
 Stock as Converted

 Common Stock Issued and Outstanding

 15,691,209

 Restricted Stock Units Issued (Not Vested)

 1,806,373

 Options to Purchase Common Stock (weighted average exercise price of $2.04)

 1,200,000

 Warrants to Purchase Common Stock (weighted average exercise price of $11.50)

 712,500

 Total Common Shares Diluted

 19,410,082

 Series V Preferred Stock (non-convertible)

 14,567,829

 The
table above describes the shares of Common Stock and Preferred Stock which are outstanding and/or are issuable under outstanding
securities. The Series V preferred Stock is perpetual and does not convert into shares of the Company's Common Stock.

 Cautionary
Note Regarding Forward Looking Statements

 This
report contains forward-looking statements, including our liquidity, our belief that our blockchain infrastructure efforts will form
the core growth for our business, including but not limited to Builder+, StakeSeeker, and Chain, plans to expand our PoS operations,
growth opportunities for the Company, our belief regarding blockchain, expected increase in our revenues and gross margins and 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, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements are contained
in the Risk Factors below. 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.

 ITEM
1A. RISK FACTORS

 Not
applicable to smaller reporting companies. However, our principal risk factors are described under "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations."

 ITEM
1B. UNRESOLVED STAFF COMMENTS

 Not applicable.

 ITEM
1C. CYBERSECURITY

 We
are subject to various cyber and other security threats, including attempts to gain unauthorized access to sensitive information and
networks; virtual and cyber threats to our directors, officers, and employees; and threats to the security of our infrastructure and
assets. To mitigate the threats to our business, we take a comprehensive approach to cybersecurity risk management. Our Board and our
management oversee our risk management program, including the management of cybersecurity risks. We have established policies, standards,
processes, and practices for assessing, identifying, and managing material risks from cybersecurity threats, including those discussed
in our Risk Factors, and have integrated these processes into our overall risk management systems and processes. We have devoted financial
and personnel resources to implement and maintain security measures to meet regulatory requirements and stakeholder expectations, and
we intend to continue to make investments as may be required to maintain the security of our data and cybersecurity infrastructure. While
there can be no guarantee that our policies and procedures will be properly followed in every instance or that those policies and procedures
will be effective, we believe that the Company's sustained investment in people and technologies has contributed to a culture of
continuous improvement that has put the Company in a position to protect against potential compromises.

 As
of the date of this report, we are not aware of any cybersecurity threats, including as a result of any previous cybersecurity incidents,
that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations,
or financial condition. We can provide no assurance that there will not be incidents in the future or that past or future attacks will
not materially affect us, including our business strategy, results of operations, or financial condition.

 Risk
Management and Strategy

 Our
cybersecurity risk management program ("cybersecurity program") is designed and assessed by leveraging the National Institute
of Standards and Technology Cybersecurity Framework ("NIST CSF"), customized to align with our entity size, risk profile,
and industry best practices. This does not imply that we meet any particular technical standards, specifications, or requirements, only
that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.

 The
key objectives for the Company's cybersecurity program are to implement and sustain effective security controls to stop intrusion
attempts and to maintain and continuously improve its ability to respond to attacks and incidents. Success in achieving these objectives
relies upon using quality technology solutions, cultivating and maintaining a team of skilled professionals, and continuously improving
processes. Our cybersecurity program in particular focuses on the following key areas:

 Risk
Assessment: We conduct risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change
in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments
are designed to identify reasonably foreseeable internal and external material cybersecurity risks to our critical systems, information,
products, services, and our broader Company-wide IT environment, the likelihood and potential damage that could result from such risks,
and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks. Risk assessments take into
account information from internal stakeholders, known information security vulnerabilities, and information from external sources, including
reported security incidents that have impacted other companies, industry trends, and evaluations by third parties and consultants as
needed. The results of our assessments are used to develop initiatives to enhance our security controls, make recommendations to improve
processes, and inform a broader Company-wide risk assessment that is then periodically reported to our Board and Audit Committee.

 Technical
Safeguards: We regularly assess and deploy technical safeguards designed to protect our information systems from cybersecurity threats.
Such safeguards are regularly evaluated and improved based on vulnerability assessments, cybersecurity threat intelligence, and incident
response experience.

 Incident
Response and Recovery Planning: We have established a comprehensive incident response and recovery plan that guides our response
in the event of a cybersecurity incident.

 Vendor
Risk Management: We have implemented a robust vendor risk management program, which is designed to identify and mitigate cybersecurity
threats associated with our use of third-party service providers. Such providers are subject to security risk assessments at the time
of onboarding, contract renewal, and upon detection of an increase in risk profile. We use a variety of inputs in such risk assessments,
including information supplied by providers in response to questionnaires and meetings as well as information from third parties. In
addition, we require our providers to meet appropriate security requirements, controls and responsibilities, and investigate security
incidents that have impacted our third-party providers, as appropriate. We also obtain and review
Systems and Organization Control ("SOC") reports from several of our key service providers.

 Education
and Awareness: Our policies require each of our employees to contribute to our data security efforts. We regularly remind employees
and third-party contractors of the importance of handling and protecting data, including through privacy and security training to enhance
employee awareness of how to detect and respond to cybersecurity threats. All employees and third-party contractors are directed to report
to our senior management any irregular or suspicious activity that could indicate a cybersecurity threat or incident.

 Governance

 Our
senior management team, led by our Chief Financial Officer and Chief Technology Officer, is responsible for assessing and managing our
material risks from cybersecurity threats. Our management team supervises efforts to prevent, detect,
mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel;
threat intelligence, and other information obtained from governmental, public, or private sources, including external consultants engaged
by us; and alerts and reports produced by security tools deployed in the IT environment.

 The
Audit Committee of our Board of Directors considers cybersecurity risks and other information technology risks as part of its risk oversight
function and evaluates our risk assessment and management policies, including periodic discussions with our senior officers. In addition,
management updates the Board of Directors, as necessary, regarding any material cybersecurity incidents, as well as any incidents with
lesser impact potential. Our Audit Committee also meets at least quarterly with our independent registered accounting firm and communicates
with them regarding any cybersecurity-related risks.

 ITEM
2. PROPERTIES.

 As
of the date of this report, the Company did not have any owned or leased properties.

 ITEM
3. LEGAL PROCEEDINGS.

 From
time to time, we are party to certain legal proceedings that arise in the ordinary course and are incidental to our business. We know
of no material, active or pending legal proceedings against us.

 ITEM
4. MINE SAFETY DISCLOSURES.

 Not
applicable.

 PART
II

 ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 MARKET
INFORMATION

 Our
Common Stock is listed and traded on the Nasdaq Stock Market under the symbol "BTCS". The last reported sale price of our
Common Stock on March 19, 2024 was $1.22.

 HOLDERS

 As
of March 19, 2024, there were 177 stockholders of record of our Common Stock, one of which is Cede & Co., a nominee for Depository
Trust Company, or DTC. Shares of Common Stock that are held by financial institutions as nominees for beneficial owners are deposited
into participant accounts at DTC and are considered to be held of record by Cede & Co. as one stockholder.

 DIVIDENDS

January 27, 2023, the Company's Board of Directors (the "Board") approved the issuance of a newly designated Series
V Preferred Stock ("Series V") on a one-for-one basis to the Company's shareholders (including restricted stock unit
holders and warrant holders who were entitled to such distribution). The distribution of Series V shares was approved and completed on
June 2, 2023 to shareholders as of the record date of May 12, 2023. The Series V: (i) is non-convertible, (ii) has a 20% liquidation
preference over the shares of common stock, (iii) is non-voting and (iv) has certain rights to dividends and distributions (at the discretion
of the Board). A total of 14,542,803 shares of Series V Preferred Stock were distributed to shareholders on June 2, 2023. In June 2023,
the Series V shares commenced trading on Upstream, a Merj Exchange market ("Upstream"). In November 2023, Upstream announced
that it was no longer providing U.S. individuals with the ability to trade on Upstream. All Series V shares owned by U.S investors were
returned to the transfer agent.

 On
January 5, 2022, the Board declared a non-recurring special dividend of $0.05 for each outstanding share of Common Stock of the Company,
payable to holders of record as of the close of business on March 17, 2022. Shareholders were provided the option to receive proceeds
of their dividend payable in either cash or Bitcoin. The dividend distributions were considered a return of capital distribution for
IRS income tax purposes as the value was in excess of the Company's current and accumulated earnings and profits. The return of
capital distribution reduces the Company's additional paid in capital balance. The total value of dividends paid in 2022 was approximately
$631,000. The Company will evaluate the appropriateness of potential future dividends as the Company continues to grow its operations.

 RECENT
SALES OF UNREGISTERED SECURITIES

 In
addition to those unregistered securities previously disclosed in reports filed with the SEC, during the year ended December 31, 2023,
we have issued securities without registration under the Securities Act of 1933 (the "Securities Act"), as described below.

 Name
 or Class of Investor

 Date
 of Sale

 No.
 of Securities

 Reason
 for Issuance

 Executive
 Officers (1)

 January
 1, 2023

 354,713
 shares of restricted stock

 Performance
 awards

 Executive
 Officers (1)

 January
 1, 2023

 50,000
 shares of restricted stock units

 Non-Employee
 Directors (1)

 March

 27,576
 shares of restricted stock

 Non-Employee
 Directors (1)

 June
 30, 2023

 31,647
 shares of restricted stock

 Non-Employee
 Directors (1)

 September
 29, 2023

 39,894
 shares of restricted stock

 Non-Employee
 Director (1)

 29, 2023

 23,007 shares of restricted stock

 (1)

 Exempt
 under Section 4(a)(2) of the Securities Act and Regulation 506(b) thereunder. The securities were issued to an accredited investor
 and there was no general solicitation.

 ITEM
6. [RESERVED]

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 INTRODUCTION

 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 set forth under "Risk Factors" and elsewhere in this report. When we
refer to the "Fiscal 2023" and the "Fiscal 2022" we are referring to the years ended December 31, 2023 and December
31, 2022, respectively.

 COMPANY
OVERVIEW

 BTCS
Inc. is a Nasdaq listed company operating in the blockchain technology sector since 2014 and is one of the only U.S. publicly traded
companies with a primary focus on proof-of-stake blockchain infrastructure. Our core focus is on driving scalable growth through a diverse
range of business streams leveraging and built on top of our core and proven blockchain infrastructure operations.

Infrastructure

 The
Company specializes in operating validator nodes on various delegated proof-of-stake and proof-of-stake based blockchain networks, with
an emphasis on Ethereum. We earn native token rewards by validating transactions across various blockchain networks by staking our crypto
assets on validator nodes operated by BTCS and third parties. Subject to available capital and the restrictions of certain blockchains,
BTCS intends to expand its blockchain infrastructure operations to secure other disruptive blockchain protocols that allow for delegating,
which presents a significant growth opportunity for the Company.

 Our
evaluation of blockchain networks involves comprehensive due diligence procedures, including assessments of blockchain quality, reward
potential, and the technical challenges associated with running validator nodes. Criteria for assessing blockchain quality encompass
factors such as i) market and on-chain statistics, ii) liquidity, iii) potential blockchain utility, iv) history and milestones, v) growth
and development roadmap, vi) use cases, vii) community interest, vii) quality of documentation, viii) decentralization, and ix) any other
publicly available information.

 StakeSeeker
– Staking-as-a-Service

 BTCS's
Staking-as-a-Service ("StaaS") business model allows for crypto asset holders to earn token rewards by participating in network
consensus mechanisms through staking and delegating their crypto assets to Company operated validator nodes. As a non-custodial validator
operator, the Company receives a percentage of a crypto asset holders' staking rewards generated as a validator node fee, for our
ministerial role in hosting the validator node. This creates an opportunity for scalable revenue and business growth with limited additional
costs. The Company's StaaS strategy provides a more accessible and cost-effective alternative for crypto asset holders to participate
in blockchain networks' consensus mechanisms, promoting the growth and adoption of blockchain technology.

 The
Company's internally-developed "StakeSeeker" platform is a personal finance software and education center with a comprehensive
crypto dashboard for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets
in a single analytics platform. The StakeSeeker dashboard reads user data from digital wallets and utilizes application programming interfaces
(APIs) to read data from crypto exchanges and does not allow for the trading or custody of crypto assets. StakeSeeker's Stake Hub
functions as an educational center, offering users guidance on the delegation of their crypto assets to our non-custodial validator nodes,
along with the ability to monitor such delegation activities through data analysis. StakeSeeker does not provide or facilitate direct,
crypto asset delegation or transaction execution on our platform. The Stake Hub's primary role is to offer instructional support
and tracking capabilities. There is no active process for crypto asset delegation through the Stake Hub dashboard; it is primarily a
monitoring tool. Crypto asset holders are able to delegate to our validator nodes without signing up for our StakeSeeker platform; conversely,
crypto asset holders can delegate to validator nodes not operated by the Company and sign up for StakeSeeker to utilize our software
and data analytics. The StakeSeeker platform is currently free-to-use for registered users so is not currently generating revenue. The
Company is not a broker-dealer or an investment advisor and does not provide any such related services.

 A
StaaS provider maintains a ministerial role in validating transactions on a given dPoS network on behalf of its Delegators by (1) arranging
transactions using open-source software to stake the relevant crypto assets; (2) monitoring the nodes it is operating to ensure the computers
remain online to validate transactions; and (3) verifying transactions on the network when required.

 As
a non-custodial StaaS provider, we do not hold or take possession of any Delegator funds, crypto assets, or crypto asset rewards at any
point during the staking or delegation process. Delegation does not involve the transfer of crypto asset ownership to a Validator. During
the process of staking, delegated crypto assets remain in the Delegator's digital wallets. The blockchain network calculates rewards
earned, which are then distributed directly to the Delegator's wallet. At no point does the Validator gain access, control, or
custody of the original staked crypto assets or the earned crypto rewards through staking to its node. Therefore, the Company does not
have any exposure to the custodial risks that a crypto exchange would have related to excessive redemptions or withdrawals of crypto
assets, suspension of redemptions, or withdrawals. Further, we do not issue or hold crypto assets on behalf of third parties and have
no exposure to the risks an exchange would have with respect to loans, rehypothecation, or margin.

 The
following table sets forth the number of third-party crypto assets delegated to our non-custodial validator nodes as of December 31,
2023:

 Delegated
 Crypto Assets
 (Native
 Tokens)

 Delegated
 Crypto Assets
 ($USD)

 Cosmos

 81,000 ATOM

 $
 858,000

 Akash

 190,000 AKT

 $
 465,000

 Near protocol

 89,000 NEAR

 $
 325,000

 Oasis

 1548,000 ROSE

 $
 213,000

 Avalanche

 1,000 AVAX

 $
 39,000

 Kava

 34,000 KAVA

 $
 30,000

 Total

 $
 1,930,000

 Builder+
– Ethereum Block Building

 In
January 2024, we introduced "Builder+", an Ethereum block builder. Builder+ utilizes advanced algorithms to maximize validator
earnings by constructing optimized blocks for on-chain validation. We believe Builder+ should enhance our Ethereum blockchain infrastructure
and create opportunities for new scalable revenue streams on Ethereum's blockchain. Builder+ did not have a material impact to 2023 operations.

 ChainQ
– AI Analytics

 ChainQ
is an under-developed AI-powered blockchain data and analytics platform, designed to allow users to query real-time and historical
on-chain blockchain data. Through comprehensive indexing of public blockchain data from our Blockchain Infrastructure operations, ChainQ
is intended to provide an intuitive and straightforward platform for users to access on-chain data.

Assets

 The
tables below describes BTCS's quarterly crypto assets holdings as of the end of Fiscal 2022 through the end of Fiscal 2023.

Assets Held at Period End

 Asset

 2022 Q4

 8,454

 8,524

 7,833

 7,748

 7,815

 262,860

 262,860

 263,293

 264,751

 265,254

 6,493

 6,767

 6,946

 7,246

 7,313

 73,486

 74,765

 25,375

 25,760

 26,174

 7,371

 7,493

 7,621

 7,752

 7,845

 7,280

 7,526

 7,882

 8,284

 8,650

 96,318

 102,298

 243,472

 256,784

 270,098

 480,825

 486,806

 492,965

 499,548

 506,010

 17,178

 17,178

 17,824

 17,824

 17,842

 42,030

 46,482

 50,955

 55,584

 60,552

 290,909

 304,968

 315,362

 327,862

 345,394

 74,177

 79,937

 81,377

 84,257

 90,017

 359,607

 2,569,991

 2,600,279

 2,626,600

 2,647,629

 107,405

 110,213

 113,063

 115,735

 119,071

 74,702

 75,724

 77,389

 79,067

 80,267

 -

 -

 295,422

 322,693

 345,777

 Fair
Market Value of Crypto Assets at Period End

 Asset

 2022 Q4

 10,117,237

 15,530,133

 15,141,859

 12,948,491

 17,829,264

 64,786

 104,861

 75,553

 67,259

 157,615

 149,981

 236,070

 175,352

 138,166

 329,353

 52,720

 83,614

 20,452

 17,569

 26,379

 73,426

 158,625

 144,010

 165,849

 796,327

 31,410

 47,720

 40,763

 34,009

 70,879

 900,440

 1,144,459

 2,261,411

 1,859,407

 2,860,870

 364,714

 544,815

 325,857

 266,400

 491,138

 187,286

 304,341

 231,941

 164,759

 687,713

 253,943

 389,893

 302,966

 254,967

 535,546

 166,752

 270,486

 305,501

 207,289

 301,429

 1,396

 1,857

 1,260

 1,121

 2,174

 32,187

 62,101

 39,579

 32,095

 122,007

 12,291

 156,698

 128,686

 109,516

 363,571

 19,938

 34,510

 63,311

 94,686

 291,574

 93,785

 150,854

 107,088

 89,660

 293,204

 -

 -

 26,069

 24,089

 43,886

 Total

 12,522,292

 19,221,037

 19,391,658

 16,475,332

 QoQ Change

 -15
 %

 %

 %

 -15
 %

 %

 YoY Change

 -61
 %

 -48
 %

 %

 %

 %

 Prices
of Crypto Assets at Period End

 Asset

 2022 Q4

 $
 1,197

 $
 1,822

 $
 1,933

 $
 1,671

 $
 2,281

 $
 0.25

 $
 0.40

 $
 0.29

 $
 0.25

 $
 0.59

 $
 23.10

 $
 34.89

 $
 25.24

 $
 19.07

 $
 45.04

 $
 0.72

 $
 1.12

 $
 0.81

 $
 0.68

 $
 1.01

 $
 9.96

 $
 21.17

 $
 18.90

 $
 21.40

 $

 $
 4.31

 $
 6.34

 $
 5.17

 $
 4.11

 $
 8.19

 $
 9.35

 $
 11.19

 $
 9.29

 $
 7.24

 $
 10.59

 $
 0.76

 $
 1.12

 $
 0.66

 $
 0.53

 $
 0.97

 $
 10.90

 $
 17.72

 $
 13.01

 $
 9.24

 $
 38.54

 $
 6.04

 $
 8.39

 $
 5.95

 $
 4.59

 $
 8.84

 $
 0.57

 $
 0.89

 $
 0.97

 $
 0.63

 $
 0.87

 $
 1.41

 $
 1.87

 $
 1.27

 $
 1.13

 $
 2.19

 $
 0.43

 $
 0.78

 $
 0.49

 $
 0.38

 $
 1.36

 $
 0.03

 $
 0.06

 $
 0.05

 $
 0.04

 $
 0.14

 $
 0.19

 $
 0.31

 $
 0.56

 $
 0.82

 $
 2.45

 $
 1.26

 $
 1.99

 $
 1.38

 $
 1.13

 $
 3.65

 $
 -

 $
 -

 $
 0.09

 $
 0.07

 $
 0.13

 The
tables below detail BTCS's quarterly crypto assets earned as staking rewards during Fiscal 2023.

Asset Rewards

 Crypto assets earned from staking to BTCS validator nodes

 Asset

 2023
 Q1

 2023
 Q2

 2023
 Q3

 2023
 Q4

 Ethereum
 (ETH)

 Cosmos
 (ATOM)

 5,980

 10,662

 13,312

 13,314

 Kava
 (KAVA)

 13,008

 10,394

 12,500

 17,532

 Kusama
 (KSM)

 Mina
 (MINA)

 5,760

 1,440

 2,880

 5,760

 Evmos
 (EVMOS)

 -

 32,236

 27,271

 30,084

 Akash
 (AKT)

 2,807

 2,851

 2,671

 3,337

 Avalanche
 (AVAX)

 -

 -

 Oasis
 Network (ROSE)

 20,364

 30,287

 26,321

 21,029

 NEAR
 Protocol (NEAR)

 1,022

 1,665

 1,606

 1,200

 Tezos
 (XTZ)

 1,179

 Crypto assets earned from staking to third-party validator nodes

 Asset

 4,452

 4,474

 4,629

 4,967

 5,981

 6,158

 6,276

 6,462

 -

 1,458

 Fair
Value of Crypto Asset Rewards Earned Recognized as Revenue

earned from staking to BTCS validator nodes

 Asset

 $
 154,634

 $
 201,121

 $
 151,699

 $
 131,903

 75,469

 109,787

 106,982

 116,726

 11,735

 9,351

 9,523

 13,033

 9,412

 4,960

 6,416

 1,193

 3,837

 1,070

 1,234

 4,818

 -

 5,862

 2,016

 2,929

 1,045

 1,159

 2,263

 5,341

 -

 8,403

 -

 1,196

 1,735

 1,183

 1,688

 2,111

 2,841

 2,050

 1,834

 1,269

 Total revenue earned from staking to BTCS validator nodes

 $
 260,708

 $
 346,721

 $
 283,654

 $
 280,516

earned from staking to third-party validator nodes

 Asset

 $
 40,028

 $
 29,313

 $
 23,755

 $
 34,595

 6,737

 5,057

 3,676

 5,143

 2,531

 2,581

 2,860

 3,620

 1,504

 1,957

 1,898

 1,999

 -

 Total revenue earned from staking to third-party validator nodes

 $
 50,800

 $
 39,032

 $
 32,588

 $
 45,609

 Total

 $
 311,508

 $
 385,753

 $
 316,242

 $
 326,125

 Prior
to the Company's adoption of ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets during Fiscal 2023,
the Company accounted for all crypto asset holdings as long-lived intangible assets, carrying them at their impaired cost value. The
following table presents the Fair Market Value of crypto assets held compared to the GAAP Book Value reported on the Company's
balance sheet in Fiscal 2022.

 December 31, 2022

 Asset

 Book
 Value

 Fair Value

 $
 5,708,624

 $
 10,117,237

 63,178

 64,786

 142,242

 149,981

 51,651

 52,720

 60,012

 73,426

 30,859

 31,410

 568,359

 900,440

 161,293

 364,714

 182,964

 187,286

 245,443

 253,943

 165,426

 166,752

 1,396

 32,002

 32,187

 12,045

 12,291

 17,993

 19,938

 92,840

 93,785

 Total

 $
 7,535,913

 $
 12,522,292

 The
adoption of ASU No. 2023-08 required an adjustment to the Company's opening Retained Earnings balance, which is included in the
'Accumulated Deficit' line on the statement of stockholder's equity for Fiscal 2023. This adjustment was made during
the year of adoption (Fiscal 2023) to recognize the cumulative effect of initially applying the change in accounting principle to the
previous periods. Specifically, it accounted for the difference between the Fiscal 2022 ending book value of crypto assets and their
fair market value, as disclosed in the table above.

 Results
of Operations for the Years Ended December 31, 2023 and 2022

 The
following tables reflect our operating results for the years ended December 31, 2023 and 2022:

 For the Year Ended

 $ Change

 % Change

 2023

 2022

 2023

 2023

 Revenues

 Validator revenue (net of fees)

 $

 $

 $
 (352,826
)

 (21
)%

 Total revenues

 (352,826
)

 (21
)%

 Cost of revenues

 Validator expenses

 359,778

 426,440

 (66,662
)

 (16
)%

 Gross profit

 979,850

 1,266,014

 (286,164
)

 (23
)%

 Operating expenses:

 General and administrative

 $
 1,863,916

 $
 1,916,193

 $
 (52,277
)

 (3
)%

 Research and development

 687,288

 611,758

 75,530

 %

 Compensation and related expenses

 2,129,144

 3,313,638

 (1,184,494
)

 (36
)%

 Marketing

 12,153

 78,171

 (66,018
)

 (84
)%

 Impairment loss on crypto assets

 -

 13,348,874

 (13,348,874
)

 (100
)%

 Realized (gains) losses on crypto asset transactions

 604,269

 (506,757
)

 1,111,026

 (219
)%

 Total operating expenses

 5,296,770

 18,761,877

 (13,465,107
)

 (72
)%

 Other income (expenses):

 Change in unrealized appreciation (depreciation) on crypto assets

 -

 %

 Change in fair value of warrant liabilities

 -

 1,638,750

 (1,638,750
)

 (100
)%

 Distributions to warrant holders

 -

 (35,625
)

 35,625

 (100
)%

 Total other income (expenses)

 1,603,125

 10,532,523

 %

 Net income (loss)

 $

 $
 (15,892,738
)

 23,711,466

 %

 Validator

 The
decrease in revenue during Fiscal 2023 as compared to Fiscal 2022 is primarily due to a drop in the fair value of our crypto assets earned
as rewards for staking since the market's highs in the first quarter of 2022. Despite the late upswing in market prices of crypto
assets at the end of Fiscal 2023, revenue was recognized throughout the year at lower average prices than Fiscal 2022. Although we believe
the number of crypto assets we earn from staking and revenue recognized may increase as we continue to expand our blockchain infrastructure
efforts, we recognize that volatility in the crypto asset markets may impact the market prices of the crypto assets we earn from staking.

 Cost
of Revenues

 The
decrease in cost of revenues during Fiscal 2023 as compared to Fiscal 2022 is due to efficiencies realized in our blockchain infrastructure
validating operating costs, including streamlining of web service hosting fees and reduction of services provided by third-party vendors.
We believe our cost of revenues will increase as we continue to ramp up our business. However, we believe gross margin may improve as
we add scale to our blockchain infrastructure operations and reduce costs as a result of increased operational efficiencies, leading
to improved gross profits.

 Operating
expenses

 General
and administrative expenses consist of director compensation, legal and professional fees, and other personnel and related costs. These
expenses decreased slightly during Fiscal 2023 compared to Fiscal 2022 as a result of cost-cutting measures employed by management in
numerous areas, including investor relation related as the Company focused on cost management and transitioning related efforts in-house
from third-party engagements. These decreases were partially offset by increases in legal service costs during Fiscal 2023, driven primarily
by services surrounding the Series V Preferred Stock distribution and related listing on Upstream Exchange.

 Research
and development expenses increased during Fiscal 2023 as the Company focused on the beta release of our proprietary StakeSeeker platform,
including responding to user feedback and continued planned feature development and incorporation onto the platform. We anticipate research
and development costs to remain consistent as we continue to expand on technological solutions in the blockchain sector, including the
development of Builder+ and ChainQ with a focus on cost management of our third-party development team.

and related expenses decreased during Fiscal 2023 primarily due to approximately $2,825,000 non-cash equity-based contingent bonuses
granted to employees during Fiscal 2022 for the achievement of performance milestones compared to only approximately $1,643,000 non-cash
equity-based compensation during Fiscal 2023. We believe our compensation expenses will increase from those reported in Fiscal 2023 as
the Company continues to utilize equity-based compensation incentives as a core part of our compensation strategy.

 Marketing
costs decreased during Fiscal 2023 as the Company focused on cost-reduction efforts.

 The
decrease in operating expenses during Fiscal 2023 can be attributed primarily to the Company's change in accounting principles
resulting from its adoption of ASU No. 2023-08 in Fiscal 2023. This accounting change permits the Company to value its crypto assets
at their fair market value and eliminates the necessity to recognize impairment losses on crypto assets, which had been a
significant contributor to net losses in prior years. Notably, in Fiscal 2022, the Company recorded an impairment loss of
approximately $13,349,000 on crypto assets, which is no longer required under the revised accounting treatment.

 The
Company realized losses on sale of crypto assets during Fiscal 2023, compared to gains realized in Fiscal 2022, primarily resulting
from the Company's sale of approximately 968 ETH earned as crypto rewards from our staking operations at prices below their
original cost after liquidity was unlocked in April 2023 as part of Ethereum's Shanghai upgrade.

 Other
income (expense)

 The
changes in other income for Fiscal 2023 were primarily attributed to the recognition of the change in unrealized appreciation on
crypto assets resulting from the Company's adoption of ASU No. 2023-08 for Fiscal 2023. This adoption allows the Company to
account for its crypto assets at their fair market value. Prior to its adoption in Fiscal 2023, the Company accounted for its crypto
assets as long-lived intangible assets with carrying values based on the original cost, less any impairment. Changes in the
unrealized appreciation or depreciation of crypto assets are directly influenced by the volatility in crypto markets, which can be
challenging for management to predict.

 Furthermore,
the changes in other income for Fiscal 2022 were primarily driven by the decrease in the fair value of warrant liabilities throughout
the year. This non-cash expense is influenced by the value of our stock price at the end of each quarter, a factor that we cannot predict.

 Net
income (loss)

 The
increase in net income for Fiscal 2023, compared to the net loss in Fiscal 2022, is primarily attributable to a change in accounting
principle resulting from the Company's adoption of ASU No. 2023-08 during Fiscal 2023. This change had significant
implications for crypto assets, including the elimination of the need for the Company to recognize impairment losses on its crypto
assets, which had been a primary contributor to net losses in previous years. Additionally, this change allowed the Company to
account for its crypto assets at their fair market value and include the change in fair market value of crypto assets as part of net
income for the fiscal year. We acknowledge that our net income (loss) may exhibit significant fluctuations due to the volatility in
the crypto asset markets, impacting changes in the fair value of crypto assets during future reporting periods.

 LIQUIDITY
AND CAPITAL RESOURCES

 Recent
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 through
H.C. Wainwright, shares of the Company's Common Stock having an aggregate offering price of up to $98,767,500. From the period
September 14, 2021 through March 19, 2024, the Company sold a total of 4,346,748 shares of Common Stock under the ATM Agreement for
aggregate total gross proceeds of approximately $17,256,000 at an average selling price of $3.97 per share, resulting in net proceeds
of approximately $16,696,000 after deducting commissions and other transaction costs.

 Liquidit y

 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 funds to support its current and future operations, satisfy its obligations, and otherwise operate
on an ongoing basis. At December 31, 2023, the Company had approximately $1,458,000 of cash and working capital of approximately $26,055,000.

 As
of March 19, 2024, the Company had approximately $870,000 of cash and the fair market value of the Company's liquid crypto
assets was approximately $35,665,000. The Company has no outstanding debt. As of March 19, 2024, the Company also has approximately
$5.5 million available under the ATM Agreement over the next twelve months under the Form S-3 baby shelf rules, although, the amount
that we may raise under the Form S-3 may increase or decrease based upon our stock price. The Company believes that the existing cash
and liquid crypto assets held by us, in addition to the funds available to the Company from the issuance of additional stock through
the ATM Agreement, provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures and contractual
obligations for at least the next twelve months.

 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 in order to liquidate to the extent desired. Lock-up periods for our staked crypto assets range from
several hours to six months. During times of instability in the market of crypto assets, we may not be able to sell our crypto assets
at reasonable prices or at all. 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 was approximately $3,562,000 during Fiscal 2023 compared to approximately $777,000 during Fiscal 2022.
The sale of our remaining bitcoin holdings during 2022 was the primary contributor to the approximately $2,547,000 operating cash
inflows from the sale of non-productive crypto assets during the Fiscal 2022 compared to $0 in Fiscal 2023. We do not anticipate any
future material cash inflows from the sale of non-productive assets, as our blockchain infrastructure strategy focuses primarily on
acquiring and staking productive proof-of-stake blockchain networks. Additional non-cash adjustments to our operating cash flows
consisted of approximately $13,349,000 impairment loss on crypto assets ("Crypto Asset Impairment") during Fiscal 2022
compared to $0 in Fiscal 2023. Due to the Company's change in accounting principle resulting from its adoption of ASU No.
2023-08 in Fiscal 2023, the Company will no longer be required to recognize impairment on its crypto assets in future reporting
periods. This is partially offset by the approximately $2,688,000 equity-based contingent bonuses granted to employees during Fiscal
2022 for the achievement of performance milestones compared to only approximately $1,342,000 equity-based compensation in Fiscal
2023. We anticipate similar levels of equity-based compensation in future periods as reported in Fiscal 2023.

 Cash
provided by investing activities was approximately $186,000 during Fiscal 2023 compared to cash used in investing activities of approximately
$8,973,000 for Fiscal 2022. Net cash outflows for investing activities were used primarily for the purchase of crypto assets for blockchain
infrastructure operations. We anticipate purchase activity to remain lower and consistent with the levels reported during Fiscal 2023
as we focus our strategies on technical developments. Fiscal 2022 included large purchases of productive crypto assets to build on our
blockchain infrastructure operations. Fiscal 2023 included a higher than typical volume of sales of crypto assets, primarily driven by
the re-allocation of Ethereum rewards earned to other productive crypto assets which were subsequently staked.

 Cash
provided by financing activities was approximately $2,688,000 during Fiscal 2023 compared to approximately $10,496,000 during Fiscal
2022. The cash inflows from financing activities in Fiscal 2023 and Fiscal 2022 were entirely from proceeds of Common Stock sold pursuant
to the ATM Agreement. The cash inflows from financing activities during Fiscal 2022 was partially offset by a one-time return of capital
distribution of $631,000 made to record holders as of March 17, 2022. The Company has plans to continue to raise proceeds from the sale
of Common Stock to fund operations as needed.

 Off
Balance Sheet Transactions

 As
of December 31, 2023, 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
believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management
discussion and analysis:

 Accounting
Treatment of Crypto Assets

 Fair
Value Measurement

 The
Company's fair value measurement for its crypto assets is guided by Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 820 - Fair Value Measurement. According to ASC 820, fair value is defined as the price
that would be received for an asset in a current sale, assuming an orderly transaction between market participants on the measurement
date. It requires the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal market,
the most advantageous market. In this context, market participants are considered to be independent, knowledgeable, and willing and able
to transact.

 Kraken
has been identified as the principal market for the Company's crypto assets, serving as the Company's primary cryptocurrency
exchange for both purchases and sales. This determination is based on a comprehensive evaluation process that considers various factors,
including regulatory compliance, trading activity, and price stability. The Company places significant trust in Kraken's well-established
reliability and robust capabilities.

 To
determine the fair value of its crypto assets, the Company relies primarily on coinmarketcap.com ("CoinMarketCap") as the
principal pricing source. The selection of CoinMarketCap is the result of thorough due diligence, which identified it as the most reliable
source for consistently obtaining timely and accurate crypto asset price data, covering all the crypto assets held by the Company. The
real-time pricing from CoinMarketCap is notably aligned with the bid/ask quotes observed on the Company's primary exchange and
principal market, Kraken.

 While
Kraken is designated as the primary exchange, the Company maintains the flexibility to engage in cryptocurrency transactions on other
exchanges where it maintains accounts. This flexibility allows the Company to adapt to changing market conditions and explore alternative
platforms when necessary to ensure cost-effective execution and fair value measurement using the most advantageous market.

 The
determination of Kraken as the principal market reflects the Company's commitment to making informed decisions based on regulatory
compliance, trading activity, and price stability and achieving the most accurate representation of fair value for its crypto assets.
The Company regularly reviews and assesses its choice of principal market to ensure it aligns with its objectives and the evolving landscape
of the cryptocurrency market.

 Accounting
for Crypto Assets

 The
cost basis of the Company's crypto assets is initially recorded at their fair value using the U.S. dollar spot price of the related
crypto asset at 4:00 p.m., New York time, on the date of receipt (or "carrying value").

assets are measured at their fair respective fair market values at each reporting period end on the balance sheets and classified as
either 'Staked Crypto Assets' or 'Crypto Assets' to distinguish their nature within the respective balances.
Staked crypto assets are presented as current assets if their lock-up periods are less than 12 months, and as long-term other assets
if the lock-up extends beyond one year. The majority of our crypto assets are staked, typically with lock-up periods of less than 21
days, and are considered current assets in accordance with ASC 210-10-20, Balance Sheet,
due to the Company's ability to sell them in a liquid marketplace, as we have a reasonable expectation that they will be
realized in cash or sold or consumed during the normal operating cycle of our business to support operations when needed.

 The
classification of purchases and sales in the statements of cash flows is determined based on the nature of the crypto assets, which can
be categorized as 'productive' (i.e. acquired for purposes of staking) or 'non-productive' (e.g. bitcoin). Acquisitions
of non-productive crypto assets are treated as operating activities, while acquisitions of productive crypto assets are classified as
investing activities in accordance with ASC 230-10-20, Investing activities. Productive crypto assets staked with lock-up periods
of less than 12 months are listed as current assets in the 'Staked Crypto Assets' line item on the balance sheet. Staked
crypto assets with lock-up periods exceeding 12 months are categorized as long-term other assets. Non-productive crypto assets are included
in the 'Crypto Assets' line item on the balance sheet.

January 1, 2023, the Company has elected to early adopt ASU No. 2023-08, resulting in a material change in accounting principle related
to the Company's accounting treatment of crypto assets. The impacts of the change in accounting principle are discussed further
in Note 3.

 Prior
to the Company's adoption of ASU No. 2023-08, the Company accounted for its crypto assets as indefinite-lived intangible
assets in accordance with ASC 350, Intangibles –Goodwill and Other. An intangible asset with an indefinite useful life
is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating
that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its
fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it
is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment
exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a
quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset.
Subsequent reversal of impairment losses is not permitted.

 Prior
to the Company's adoption of ASU No. 2023-08, on a quarterly basis, crypto assets were measured at carrying value, net of any
impairment losses incurred since receipt. The Company recorded impairment losses as the fair value fell below the carrying value of
the crypto assets at any time during the period, as determined using the lowest intraday U.S. dollar spot price of the related
crypto asset subsequent to its acquisition. The crypto assets could only be marked down when impaired and not marked up when their
value increases. Impairment losses could not be recovered for any subsequent increase in fair value until the sale or disposal of
the asset. Such impairment in the value of crypto assets was recorded as a component of costs and expenses in our statements of
operations. The Company recorded impairment losses of approximately $0 and $13,349,000 related to crypto assets during the years
ended December 31, 2023 and 2022, respectively.

gain (loss) on sale of crypto assets are included in other income (expense) in the statements of operations. The Company recorded realized
gains (losses) on crypto assets of approximately ($604,000) and $507,000 during the years ended December 31, 2023 and 2022, respectively.

Recognition

 The
Company recognizes revenue under ASC 606, Revenue from Contracts with Customers.
The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those
goods or services. The following five steps are applied to achieve that core principle:

 Step
 1: Identify the contract with the customer

 Step
 2: Identify the performance obligations in the contract

 Step
 3: Determine the transaction price

 Step
 4: Allocate the transaction price to the performance obligations in the contract

 Step
 5: Recognize revenue when the Company satisfies a performance obligation

is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those goods or services. The Company generates revenue through staking rewards
generated from its blockchain infrastructure operations.

 The
transaction consideration the Company receives – the crypto asset awards and gas fees – are a non-cash consideration, which the Company
measures at fair value on the date received. The fair value of the crypto asset award received is determined using the U.S. dollar spot
price of the related crypto asset at 4:00 p.m., New York time, on the date of receipt.

Infrastructure

 The
Company engages in network-based smart contracts by running its own crypto asset validator nodes as well as by staking (or "delegating")
crypto assets directly to both its own validator nodes and nodes run by third-party operators. Through these contracts, the Company provides
crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network. The
term of a smart contract can vary based on the rules of the respective blockchain and typically last from a few days to several weeks
after it is cancelled (or "un-staked") by the delegator and requires that the crypto assets staked remain locked up during
the duration of the smart contract.

 In
exchange for staking the crypto assets and validating transactions on blockchain networks, the Company is entitled to all of the fixed
crypto asset award earned from the network when delegating to the Company's own node and is entitled to a fractional share of the
fixed crypto asset award a third-party node operator receives (less crypto asset transaction fees payable to the node operator, which
are immaterial and are recorded as a deduction from revenue), for successfully validating or adding a block to the blockchain. The Company's
fractional share of awards received from delegating to a third-party validator node is proportionate to the crypto assets staked by the
Company compared to the total crypto assets staked by all Delegators to that node at that time.

 The
provision of validating blockchain transactions is an output of the Company's ordinary activities. Each separate block creation
or validation under a smart contract with a network represents a performance obligation. The satisfaction of the performance obligation
for processing and validating blockchain transactions occurs at a point in time when confirmation is received from the network indicating
that the validation is complete, and the awards are available for transfer. At that point, revenue is recognized.

 Cost
of Revenue

 The
Company's cost of revenue related to its blockchain infrastructure operations primarily includes direct production costs associated
with transaction validation on the network, cloud-based server hosting expenses related to our validator nodes, and allocated employee
salaries dedicated to node maintenance and support. Additionally, the cost of revenue encompasses fees, including equity compensation
stock-based fees paid to third parties for their assistance in software maintenance and node operations. These costs directly related to production of revenues are collectively summarized as "Validator expenses" in the
statements of operations.

 Stock-Based

 The
Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 addresses all forms of share-based payment awards including shares issued under employee stock purchase plans and
stock incentive shares. Under ASC 718, awards result in a cost that is measured at fair value on the awards' grant date, based on
the estimated number of awards that are expected to vest and will result in a charge to operations.

 Share-based
payment awards exchanged for services are accounted for at the fair value of the award on the estimated grant date.

 Options

 Stock
options issued under the Company's long-term incentive plans are granted with an exercise price equal to no less than the market
price of the Company's stock at the date of grant and expire up to ten years from the date of grant. These options often vest over
a one-year period.

 The
Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating
the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application
of management's judgment.

Volatility – The Company uses historical volatility as it provides a reasonable estimate of the expected volatility. Historical volatility
is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the option.

 Risk-Free
Interest Rate – The risk-free interest rate is based on the U.S. treasury zero-coupon yield curve in effect at the time of grant
for the expected term of the option.

Term – The Company's expected term represents the weighted-average period that the Company's stock options are expected
to be outstanding. The expected term is based on the expected time to post-vesting exercise of options by employees. The Company uses
historical exercise patterns of previously granted options to derive employee behavioral patterns used to forecast expected exercise
patterns.

Dividend – The Company has not historically declared or paid any cash dividends on its common shares and does not plan to pay any
recurring cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

 Restricted
Stock Units (RSUs)

 For
awards vesting upon the achievement of a service condition, compensation cost measured on the grant date will be recognized on a straight-line
basis over the vesting period. Stock-based compensation expense for the market-based restricted stock units with explicit service conditions
is recognized on a straight-line basis over the longer of the derived service period or the explicit service period, regardless of whether
the market condition is satisfied. However, in the event that the explicit service period is not met, previously recognized compensation
cost would be reversed. Market-based restricted stock units subject to market-based performance targets require achievement of the performance
target as well as a service condition in order for these RSUs to vest.

 The
Company estimates the fair value of market-based RSUs as of the grant date and expected derived term using a Monte Carlo simulation that
incorporates pricing inputs covering the period from the grant date through the end of the derived service period.

Volatility – The Company uses historical volatility as it provides a reasonable estimate of the expected volatility. Historical volatility
is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the RSUs.

 Risk-Free
Interest Rate – The risk-free interest rate is based on the U.S. treasury zero-coupon yield curve in effect at the time of grant
for the expected term of the RSUs.

Term – The Company's expected term represents the weighted-average period that the Company's RSUs are expected to be
outstanding. The expected term is based on the stipulated 5-year period from the grant date until the market-based criteria are achieved.
If the market-based criteria are not achieved within the five-year period from the grant date, the RSUs will not vest and shall expire.

 Vesting
Hurdle Price – The vesting hurdle prices are determined by taking the vesting Market Cap criteria divided by the shares outstanding
as of the valuation dates.

January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by ASU 2016-09. Ultimately, the actual
expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated
a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures.

 Recent
Accounting Pronouncements

 See
Note 3 to the financial statements for a discussion of recent accounting standards and pronouncements.

 COVID-19

 The
COVID-19 pandemic has created significant national and global economic disruptions, which may adversely affect our business. However,
based on our current assessment, we do not expect any material impact on our long-term development, our operations, or our liquidity
due to the worldwide spread of COVID-19. We are actively monitoring this situation and the possible effects on its financial condition,
liquidity, operations, suppliers, and the industry.

 Inflation

 In
addition to the impacts of COVID-19, we have experienced, and are experiencing, the impact of domestic and global inflationary pressures
largely outside of our control. This inflationary pressure impacts our cost structure, leading to operational adjustments, and increasing
the cost of retaining talent and certain professional costs, despite our continued focus on controlling our costs where possible. Management
is unable to accurately predict when, or if, these national and global inflationary pressures will subside, or their long-term impacts
on our business and results of operations. We are actively monitoring the situation and assessing potential mitigation strategies.

 RISK
FACTORS

 There
are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur,
our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our
Common Stock could decline and investors could lose all or part of their investment.

 Summary
Risk Factors

 Our
business is subject to numerous risks and uncertainties that you should consider before investing in our common stock. Set forth below
is a summary of the principal risks we face:

 We
 have a limited operating history, particularly with respect to our blockchain infrastructure solutions business, StakeSeeker,
 Builder+, ChainQ and staking-as-a-service operations.

 We
 have an evolving business model which we may be unable to develop, adapt or execute effectively, and we may be unable to manage our
 growth or implement our business plan as intended or at all.

 We
 are highly dependent on our executive officers, particularly Charles Allen, our Chairman and Chief Executive Officer, Michal Handerhan,
 our Chief Operating Officer, Michael Prevoznik, our Chief Financial Officer, and Manish Paranjape, our Chief Technology Officer,
 and the loss of the services of any of these individuals could materially harm our business.

 We
 may be subject to regulatory actions, private causes of actions such as intellectual property infringement claims, and restrictions
 and limited access to banking and financial services due to our operations in the cryptocurrency industry, and regulatory or other
 adverse developments in the cryptocurrency industry could otherwise adversely affect us.

 of our involvement in staking of crypto assets through delegations as part of our StaaS strategy, we are subject to risks inherent
 in engaging in activities involving financial instruments owned by third-party users, notwithstanding the non-custodial nature of
 our platform or other features management believes to constitute meaningful distinctions for regulatory, compliance and other purposes.

 A
 particular crypto asset's status as a "security" in any relevant jurisdiction is subject to a high degree of uncertainty,
 and if we are unable to correctly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, sanctions,
 penalties and other adverse consequences, including potentially becoming subject to the Investment Company Act of 1940 which would
 impose significant regulatory burdens and compliance costs.

 assets and our related activities are characterized by numerous other risks and uncertainties, including the possibility for adverse
 developments such as regulatory actions, bans or restrictions, declines in the price of, demand for or public perception of crypto
 assets, theft, fraud, hacking, manipulation or malicious coding, price volatility, the potential for one cryptocurrency to branch
 into two, variations among and the potential for adverse changes to blockchain algorithms, and other external forces beyond our control
 described more fully below.

 The
 future development and growth of cryptocurrencies is subject to a variety of factors that are difficult to predict and evaluate,
 and the market for the crypto assets we obtain and hold may not grow as we expect or the prices may decline, including due to political
 or economic crises or other factors which we neither predict nor control.

 The
 cryptocurrency space is subject to continuous regulatory uncertainty, and any adverse regulatory changes or other developments with
 respect to our operations or the crypto assets with which we transact may require us to alter our business model or suspend or cease
 some or all of our operations.

 Our
 focus on PoS blockchain networks exposes us to risk of loss due to features unique to those networks, including by virtue of being
 locked in by smart contracts such that we cannot liquidate a portion of the relevant crypto assets for a period of time during and
 after the staking process, during which the price or value of the crypto assets may depreciate.

 We
 are reliant on a single service provider for cloud computing infrastructure deployed in our blockchain infrastructure business,
 and are therefore exposed to the risks which may arise from potential adverse developments that may be caused or experienced by such
 service provider.

 We
 are subject to various other risks and uncertainties relating to our StaaS and other elements of our business, including potential
 loss of revenue if we experience excessive removal of delegated crypto assets on our validator nodes, potential shifts in the block
 building landscape, and competitive forces for Ethereum and other crypto assets for which our services are offered, technical failures,
 bugs, or vulnerabilities in our block builder software, and our efforts with respect to new features and services which were recently
 launched or are still under development.

 Our
 critical accounting policies may prove to be incorrect including due to our adoption of new accounting standards applicable to crypto
 assets in 2023, we may need to implement additional finance and accounting systems, procedures and controls, and we face challenges
 inherent in operating a crypto assets business which is subject to evolving accounting treatment for which there is limited precedent.

 Our
 stock price has in the past and may in the future be subject to significant volatility due to a variety of factors, many of which
 are beyond our control, including its potential connection to the price of one or more of the crypto assets with which we are or
 may become involved.

 Risks
Related to Our Company in General

 We
have a limited operating history, particularly with respect to our blockchain infrastructure operations, including certain features and
service offerings which recently commenced and our platform and staking-as-a-service business model, and we have a history of operating
losses, and expect to incur significant additional operating losses.

 We
have a limited operating history, and only recently commenced our blockchain infrastructure operations in 2021. Further, we lack an operating
history with respect to our crypto asset analytics and staking-as-a-service platform's functions and operations. In addition, the
PoS blockchain networks on which our operations are centered are a relatively new and evolving means of validating crypto asset transactions.
In addition to the relative novelty of our business and industry generally, we also launched Builder+ which is designed to enhance validator
earnings by deploying algorithms to identify and access optimized blockers to increase reward fees in February 2024. We are in the process
of developing ChainQ, an AI-powered blockchain data and analytics platform with the goal of launching later in 2024. The performance
and results of these developments, and their impact on our business and financial condition, has yet to be determined. Therefore, there
is limited historical financial information upon which to base an evaluation of our performance. Our prospects must be considered in
light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations
in general, and in the cryptocurrency industry in particular with itself remains a relatively new space imbued with risk and uncertainty.
While we generated a net gain of $7.8 million for the year ended December 31, 2023, we generated a net loss of $15.9 million for the
year ended December 31, 2022. We expect to incur additional net losses over the next several years as we seek to expand operations. The
amount of future losses and when, if ever, we will achieve profitability are uncertain. If we are unsuccessful at executing our business
plan, our business, prospects, and results of operations may be materially adversely affected.

 We
have an evolving business model which we may be unable to develop, adapt or execute effectively.

 As
and to the extent crypto assets and blockchain technologies become more widely available, we expect the services and products associated
with them to evolve. In 2017, the SEC issued a DAO Report that promoters that use initial coin offerings or token sales to raise capital
may be engaged in the offer and sale of securities in violation of the Securities Act and the Securities Exchange Act of 1934 (the "Exchange
Act"). The SEC has also brought enforcement actions with respect to crypto assets and related activities, including custodial staking-as-a-service
models, and the SEC and courts have issued further orders and guidance as the crypto asset industry continues to develop and evolve,
as more particularly described later in these Risk Factors. These or future developments may force or cause us to potentially change
our future business in order to comply fully with the federal securities laws as well as applicable state securities laws. As a result,
to stay current with the industry, our business model may need to evolve in the future as well. From time to time we may modify aspects
of our business model relating to our product mix and service offerings. For example, a main component of our current business objective
is developing a comprehensive crypto asset analytics and staking-as-a-service platform which enables users to perform or utilize a variety
of functions related to crypto assets, such as portfolio monitoring, and risk assessment all in one place in the hopes of attracting,
maintaining and growing a customer base in the long term. However, our investments into and efforts with respect to this goal may not
come to fruition, including due to adverse developments in regulatory, technological, competitive or other aspects that are beyond our
control. As the crypto industry and technology surrounding it continues to develop, new market entrants offering the same, similar or
alternative products and services to ours could arise, challenging our business model and market share. For example, disruptive technologies
such as generative artificial intelligence (AI) may fundamentally alter the use of crypto assets and related infrastructure in unpredictable
ways.

of the foregoing realities and uncertainties surrounding our business and industry, we may invest substantial resources towards developing
additional platform features or new offerings such as Builder+ that ultimately fail to achieve the goals or benefits sought, or need
to be suspended, due to competitive, regulatory, technological or other conditions or developments beyond our control. Further, any success
we have achieved or may in the future achieve towards our goal could be stifled by these forces, particularly if we are unable to adequately
or quickly adapt to them, which could render some or all of our offerings obsolete. We cannot offer any assurance that our current business
plan or any other modifications or undertakings with respect thereto will be successful or will not result in harm to the business. In
addition, we may not be able to manage our growth effectively, which could damage our reputation, limit our growth and negatively affect
our operating results. If we are unable to effectively develop, execute and adjust our business plan, or successfully manage our growth,
you could lose some or all of your investment.

 The
loss of our executive officers could have a material adverse effect on us.

 Our
success depends on the continued services of our executive officers who have extensive technological and market knowledge and long-standing
industry relationships. In particular, we have relied and will continue to rely on Charles Allen, our Chairman and Chief Executive Officer,
Michal Handerhan, our Chief Operating Officer, Michael Prevoznik, our Chief Financial Officer, and Manish Paranjape, our Chief Technology
Officer, to continue and grow our operations and execute our business plan. Our reputation among and our relationships with key cryptocurrency
industry leaders are the direct result of a significant investment of time and effort by these individuals to build our credibility in
a highly specialized industry. The loss of services of any of our executive officers could diminish our business and growth opportunities
and our relationships with key leaders in the crypto asset industry and could have a material adverse effect on us.

 Banks
and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related
activities, and turmoil among financial institutions arising from or relating to crypto assets or in general can materially adversely
affect us and our industry.

 A
number of companies that engage in crypto asset and/or other cryptocurrency-related activities have been unable to find banks or financial
institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals
or businesses associated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services
discontinued with financial institutions in response to government action, including in China where regulatory response to cryptocurrencies
has been to exclude their use for ordinary consumer transactions within China. Government action in the U.S. involving crypto assets
and related activities may cause this trend to expand in the U.S. We also may be unable to obtain or maintain these services for our
business. Many businesses that provide cryptocurrency-related activities may continue to have difficulties in finding banks and financial
institutions willing to provide them services which may decrease the usefulness of cryptocurrencies as a payment system and harm public
perception of cryptocurrencies, and could decrease their usefulness.

 As
an example of adverse events affecting the crypto landscape, in November 2023 Binance, the world's largest crypto exchange, undertook
to exit the U.S. and paid a $4.4 billion fine to settle charges by the U.S. Department of Justice, Treasury, and the Commodity Futures
Trading Commission that the exchange violated sanctions and facilitated human and narcotics trafficking. Further, in March 2023 two large
financial institutions in the U.S., Silicon Valley Bank and Signature Bank, which both serviced customers involved with crypto assets,
collapsed as continued negative economic prospects and failures to obtain payment from borrowers, together with a large number of withdrawals,
caused these banks to encounter substantial financial difficulty leading up to their failures. In response to these events, the Federal
Deposit Insurance Corporation ("FDIC") transferred all the deposits, both insured and uninsured, of these banks to corresponding
"bridge banks" operated by the FDIC as it markets the institution to potential bidders. The impact of these developments
on the Company and on the crypto asset industry and the economy in general, and whether and to what extent they signal a continuing trend
impacting the industry and potentially our business, remain unclear.

 The
usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if crypto exchanges
and other industry participants exit the U.S. markets, and if banks or financial institutions were to close the accounts of businesses
engaging in cryptocurrency-related activities, which contingencies may become more likely in the future if and to the extent crypto assets
are considered a significant factor in the financial crises or criminal activity such as those described above. This could occur as a
result of compliance risk, cost, government regulation, or public pressure. The risk applies to securities firms, clearance and settlement
firms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company, which,
if any of such entities adopts or implements similar policies, rules or regulations, could negatively affect our relationships with financial
institutions and impede our ability to convert cryptocurrencies to fiat currencies. Such factors could have a material adverse effect
on our ability to continue as a going concern or to pursue our strategy at all, which could have a material adverse effect on our business,
prospects, or operations and harm investors.

 Risks
Related to Crypto Assets

 A
particular crypto asset's status as a "security" in any relevant jurisdiction is subject to a high degree of uncertainty,
with a growing number of regulators taking the position that certain crypto assets are securities and bringing enforcement actions accordingly,
and if we are unable to properly characterize a crypto asset or comply with the applicable regulatory requirements, we may be subject
to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial
condition.

 The
SEC and its staff have taken the position that certain crypto assets fall within the definition of a "security" under the
U.S. federal securities laws. Legal tests to determine whether a crypto asset is a security have been established by the U.S. Supreme
Court case law and the SEC has issued reports, orders, and statements that provide guidance on when a crypto asset may be a security
for purposes of the U.S. federal securities laws. The process of determining whether a specific crypto asset qualifies as a security
involves a nuanced analysis open to interpretation, making the outcome uncertain and challenging to predict.

 Despite
regulatory developments in this field, some ambiguity persists, as the identification of crypto assets as securities or otherwise can
be a complex matter. Notably, the SEC has identified certain crypto assets as securities in the context of legal actions involving industry
participants, such as Ripple, Coinbase, and Binance. The Coinbase action involved alleged securities law violations for its custodial
staking-as-a-service activities, which were followed by actions relating to their staking-as-a-service activities by numerous state regulators
as well. The potential for and resolution of ongoing enforcement actions and legal proceedings are still pending, potentially leaving
room for further clarification to be sought regarding the regulatory treatment of specific crypto assets.

 Moreover,
based upon decided federal court cases, it appears that the federal courts of appeals, and possibly the U.S. Supreme Court, may ultimately
settle unresolved legal issues with respect to the identification of certain crypto assets as securities.

 In
regard to the 2023 cases, in separate SEC complaints, the SEC has alleged several crypto assets we hold, specifically Cardano, Tezos,
Solana, Cosmos, Polygon, Axie Infinity, and NEAR Protocol are securities. The Company has conducted a detailed legal analysis which has
led us to determine that the identification by the SEC of certain crypto assets held by us as securities should not impact our business,
financial condition, and results of operations. However, if our conclusions or any part thereof turn out to be incorrect, or new adverse
regulatory developments occur, we could be adversely impacted and/or be forced to modify or cease certain aspects of our current and
planned operations and business.

 In
February 2023, the SEC charged Kraken with failing to register the offer and sale of its staking-as-a-service program, whereby investors
transferred crypto assets to Kraken for staking in exchange for advertised annual investment returns. Kraken settled this action by agreeing
to cease its custodial staking business and to pay $30 million in disgorgement, prejudgment interest, and civil penalties. While there
are material distinctions between Kraken's staking model and ours, including the fact that we do not take custody of or exert control
over the crypto assets that are staked using our platform, the SEC could disagree with our assessment and seek to enforce the federal
securities laws and regulations against our operations.

 Similarly,
in March 2023 the New York Attorney General became the first U.S. regulator to claim in court that Ethereum, one of the major crypto
assets which we hold and stake, is a security in its lawsuit against KuCoin, a crypto asset exchange. If we become subject to regulatory
scrutiny or enforcement actions by securities regulators, it could result in expensive litigation and penalties and cessation of the
allegedly noncompliant operations, which would materially adversely harm us, including due to our recent shift of focus to our non-custodial
staking-as-a-service business and the costs and efforts deployed towards its development. These or additional developments that may arise
underscore the risks in our business, particularly its reliance on the use of crypto assets and staking of users' crypto asset
holdings.

 Further,
certain crypto assets may be deemed to be a "security" under the laws of some jurisdictions but not others. Various foreign
jurisdictions may, in the future, adopt additional laws, regulations, or directives that affect the characterization of crypto assets
as "securities." As a result of the foregoing recent and potential developments, we may be forced to, or voluntarily elect
to, limit, suspend or cease our staking services operations or certain aspects thereof in order to comply with applicable laws and regulations
and avoid the regulatory scrutiny and adverse consequences that could result. Further, because of how recent these government actions
are and the high probability that further action is forthcoming, we anticipate higher compliance costs and diversion of management's
limited time and attention towards these events until a more definitive regulatory regime is established to govern the crypto asset industry
in which we operate.

 While
we do not currently, nor do we plan to, offer, sell, trade, and clear crypto assets or take custody of crypto assets as part of any potential
staking-as-a-service operations we may undertake, crypto assets we stake and validate transactions for could be deemed to be a "security"
under applicable laws. This could be the case even if we conclude that our activities are compliant with these laws and regulations.
Our blockchain infrastructure operations which entails securing blockchains by validating blockchain transactions (most analogous to
Bitcoin mining) could be construed as facilitating transactions in crypto assets; as such we could be subject to legal or regulatory
action in the event the SEC, a foreign regulatory authority, or a court were to determine that a blockchain we secure is a "security"
under applicable laws. Because our platform is not registered or licensed with the SEC or foreign authorities as a broker-dealer, national
securities exchange, or ATS (or foreign equivalents), and we do not seek to register or rely on an exemption from such registration or
license to secure blockchains. We recognize that the application of securities laws to the specific facts and circumstances of crypto
assets is a complex and often unpredictable process and subject to change, and staking and securing a blockchain, while similar to Bitcoin
mining, does not guarantee any conclusion under the U.S. federal securities laws, particularly given that each crypto asset and blockchain
network is unique. Therefore, if we do conclude that a particular crypto asset is not a security on advice of our legal counsel, and
the SEC or other government agencies or courts disagree with this assessment, we could be held liable for violation of securities laws.
In addition, new laws may be implemented that prevent or hinder us from operating in the manner we currently conduct our business or
plan to conduct our business, in which case our business may be materially harmed.

 Further,
if any crypto asset is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court
of law or otherwise, it may have adverse consequences for such crypto asset. For instance, the networks on which such crypto assets are
utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render
the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the general acceptance
of the crypto asset. Also, such a development may make it difficult for such supported crypto assets to be traded, cleared, and custodied
as compared to other crypto assets that are not considered to be securities. These events could, among things, result in a decline in
the market prices for the crypto assets on which our operations rely, and thereby reduce the demand for our solutions and the revenue
generated therefrom. To the extent we hold crypto assets allegedly identified as securities by the SEC, it could have a material adverse
effect on our business and our stock price.

crypto assets may be determined to be Digital Securities, we may inadvertently violate the 1940 Act and incur large losses as a result
and potentially be required to register as an investment company. This would have a material adverse effect on an investment in us.

 We
hold and plan to acquire a portfolio of crypto assets including Ethereum and other crypto assets. There is an increased regulatory examination
of crypto assets and Digital Securities. This has led to regulatory and enforcement activities. As described elsewhere in these Risk
Factors, the SEC and certain state regulators have in recent years begun to take a more definitive and aggressive stance indicating that
crypto assets and related activities, including custodial staking-based services, entail the offer and sale of securities subject to
applicable securities laws and regulations. We cannot be certain as to how future regulatory developments will impact the treatment of
Ethereum and other crypto assets, or our operations as they relate to such crypto assets or in general, under the law.

 Under
the 1940 Act, a company may be deemed an investment company under if the value of its investment securities is more than 40% of its total
assets (exclusive of government securities and cash items) on a consolidated basis. Crypto assets we may own in the future may be determined
to be Digital Securities by the SEC or a court. Additionally, one or more states may conclude Ethereum, or other crypto assets held by
us in the future are securities under state securities laws which would require registration under state laws including merit review
laws. For example, California defines the term "investment contract" more strictly than the SEC. In addition, the New York
Attorney General has taken the position that Ethereum is a security under New York law, and if this position is upheld it could significantly
impact Ethereum and other crypto assets, as notwithstanding the decentralized nature of crypto assets, a substantially large proportion
of capital markets activities and the U.S. population are located in New York.

 Future
legislation, SEC rulemaking and other regulatory developments, including interpretations released by a regulatory authority, may impact
the manner in which Bitcoin, Ethereum, and other crypto assets are treated for classification and clearing purposes. The SEC's
July 25, 2017 DAO Report expressed its view that crypto assets may be securities depending on the facts and circumstances, and recent
developments have confirmed that the SEC presently considers many if not most crypto assets to be securities.

 If
a crypto asset we hold were later determined to be a Digital Security, we could inadvertently become an investment company, as defined
by the 1940 Act, if the value of the Digital Securities we owned exceeded 40% of our assets excluding cash. We are subject to the following
risks:

 the
 SEC or a court may conclude that Ethereum, or other crypto assets we later acquire to be securities, notwithstanding differing conclusions
 we may draw on advice of counsel;

 based
 on legal advice, we may acquire other crypto assets which we have been advised are not securities but later are held to be securities;
 and

 we
 may knowingly acquire crypto assets that are securities and acquire minority investments in businesses which investments are securities.

 In
the event that the crypto assets held by us exceed 40% of our total assets, exclusive of cash, we may inadvertently become an investment
company.

 In
order to limit our acquisition of Digital Securities to stay within the 40% threshold, we will examine the manner in which a crypto asset
was initially marketed to determine if it may be deemed a Digital Security and subject to federal and state securities laws. Even if
we conclude that a particular crypto asset is not a security under the 1940 Act, certain states take a stricter view which means the
crypto asset may have violated applicable state securities laws.

 Should
the total value of securities which we hold exceed more than 40% of our assets (exclusive of cash) SEC Rule 3a-2 under the 1940 Act allows
an issuer to prevent itself from being deemed an investment company if it reduces its holdings of securities to less than 40% of its
assets (exclusive of cash) and does not go above the 40% threshold more than once every three years. Accordingly, if changes in the classification
of crypto assets causes us to exceed the 40% threshold, we may experience large losses when we liquidate Digital Securities as a result
of continued volatility.

 The
40% requirement may limit our ability to make certain investments or enter into joint ventures that could otherwise have a positive impact
on our earnings. In any event, we do not intend to become an investment company engaged in the business of investing and trading securities.

 To
the extent that crypto assets held by us are deemed by the SEC or a state legislator to fall within the definition of a security, we
may be required to register and comply with additional regulation under the Investment Company Act, including additional periodic reporting
and disclosure standards and requirements and the registration of our Company as an investment company. Such additional registrations:
i) would result in extraordinary, non-recurring expenses, ii) is time consuming and restrictive, iii) would require a restructuring of
our operations, and iv) we would be very constrained in the kind of business we could do as a registered investment company, thereby
materially and adversely impacting an investment in us. Further, if our examination of a crypto asset is incorrect, we may incur regulatory
penalties and private investor liabilities since Section 5 of the Securities Act is a strict liability statute much like selling spoiled
milk and state securities laws generally impose liability for negligence for misrepresentations.

 In
order to comply with the 1940 Act, we anticipate having increased management time and legal expenses in order to analyze which crypto
assets are securities and periodically analyze our total holdings to ensure that we do not maintain more than 40% of our total assets
(exclusive of cash) as securities. If our view that the crypto assets we hold are not securities is challenged by the SEC and courts
uphold the challenge, we may inadvertently violate the 1940 Act and incur substantial legal fees in defending our position. The cost
of such compliance would result in the Company incurring substantial additional expenses, and the failure to register if required would
have a materially adverse impact to conduct our operations.

 If the SEC concludes that our non-custodial
staking business involves the offer and sale of a security in violation of Section 5 of the Securities Act of 1933 and the courts conclude
the SEC is correct, we will be required to cease our staking as a service business and seek another business opportunity and may be subject
to monetary and other penalties.

 The
SEC has been successful in litigating against certain companies and individuals who have offered and sold various cryptocurrencies in
violation of the registration provisions of the Securities Act of 1933 (the "Securities Act") and the anti-fraud provisions
of the Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act"). While we believe that our non-custodial
staking business does not involve the offer or sale of a security, we do not know if the SEC will agree or whether if we seek relief
from the courts, we will be successful. If we are also found to have offered and sold securities in violation of the Securities Act and
the Exchange Act, the SEC could sue us for acting as an unregistered dealer. Further, as discussed in the risk factor noted above, we
may inadvertently violate the 1940 Act.

 Whether
we voluntarily cease our current business or litigate and lose, we would be required to find another business opportunity whether through
an acquisition or otherwise. We may also have to pay a civil monetary penalty if the SEC sues us and is successful or as a condition
of any settlement.

 We have no plans with regard to another business opportunity and our shareholders may not have any opportunity to
vote on any new business, unless our common stock remains listed on the Nasdaq Capital Market and its rules require it.

of the recent volatility in the cryptocurrency market and other adverse developments and publicity surrounding the industry, our business
plans may not be successful and our business and financial condition may be adversely affected.

 Our
business is focused on the cryptocurrency industry, particularly blockchain infrastructure and staking-as-a-service. We also hold and
stake a number of crypto assets to generate revenue from the PoS systems on which they operate. The crypto asset industry is characterized
by a high level of volatility, and the significant decline in the prices of most popular crypto assets such as Bitcoin and Ethereum from
their all-time highs in 2021 has cast doubt on the future of crypto asset-focused businesses such as ours, despite the partial recovery
of those prices as of February 2024. This trend was further impacted by the recent controversy and failure surrounding FTX, a crypto
asset exchange that collapsed after its Chief Executive Officer was accused of fraud and misappropriation of corporate funds in a manner
that has been compared to both Enron and Madoff. Since then certain other crypto asset-focused companies have filed for bankruptcy, in
March 2023 three major U.S. banks with involvement in crypto assets collapsed, and in November 2023 Binance settled charges alleging
violation of sanctions and facilitating human and narcotics trafficking which settlement included its forced exit from the United States.
These developments appear to reflect a broader regulatory landscape, wherein regulators have begun reviewing crypto asset-focused companies
and their operations with greater scrutiny, and have brought enforcement actions seeking to restrict or cease such activities. While
we believe the non-custodial staking model we are pursuing for our platform presents distinctions from custodial methods of holding and
controlling crypto assets such as those that were employed by defendants in past regulatory actions such as FTX and Kraken, holders of
crypto assets, regulators, and other stakeholders may fail to appreciate this distinction or to consider it sufficient to utilize our
services or invest in our business. If we are unable to separate ourselves from the recent adverse developments in the crypto asset space,
or otherwise develop and execute on our business plan and blockchain infrastructure in a manner that enables us to establish and maintain
material revenue sources, our business and financial condition could be materially adversely affected. Further, a perceived lack of stability
in the crypto asset and the closure or suspension shutdown of crypto asset exchanges and networks due to business failure, hackers or
malware, government-mandated regulation, or fraud, may reduce confidence in crypto asset networks and result in greater volatility in
crypto asset values and on our results of operations. Further, our focus on crypto assets, and the above-described past and/or any future
adverse developments with respect to our operations or industry, could result in declines or volatility in our stock price, difficulty
or inability to obtain adequate financing as needed, on favorable terms or at all, reduction in consumer demand for our platform and
services, the risk of increased losses or asset impairments, and the potential for legal proceedings and reputational harm which could
arise from any of the foregoing. Such external developments have the potential to affect us even if we believe our financial condition,
operations and infrastructure our secure. These potential consequences could materially adversely affect an investment in us.

 Past
and recent events have increased the likelihood that U.S. federal and state legislatures and regulatory agencies will enact laws and
regulations to regulate crypto assets and crypto asset intermediaries, such as crypto exchanges and custodians.

 Beginning
with the collapse of TerraUSD and Luna in 2022 and the bankruptcy filings of FTX and its subsidiaries, Three Arrows Capital, Celsius
Network, Voyager Digital, Genesis Global and BlockFi, as well as alleged violations of law brought against other industry participants,
have resulted in calls for heightened scrutiny and regulation of the crypto asset industry, with a specific focus on crypto asset exchanges,
platforms, and custodians. Federal and state legislatures and regulatory agencies are expected to introduce and enact new laws and regulations
to regulate crypto asset intermediaries, such as crypto asset exchanges and custodians. The March 2023 collapses of Silicon Valley Bank,
Silvergate Bank, and Signature Bank are believed to have also contributed to these trends. The U.S. regulatory regime – namely the Federal
Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the CFTC, FinCEN, the Office of the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, and the Federal Bureau of Investigation) as well as the White House have issued reports and
releases concerning crypto assets, including Bitcoin and crypto asset markets, and have formed coalitions aimed at addressing the perceived
threats posed by crypto assets and activities involving them. However, the extent and content of any forthcoming laws, regulations and
government actions are not yet ascertainable with certainty, and it may not be ascertainable in the near future. A divided Congress makes
any prediction difficult. Further the SEC seems to have changed tactics as it has sued multiple crypto asset companies for selling, operating
exchanges, and engaging in other prohibited activities involving unregistered securities. We cannot predict how these and other related
events will affect us or the crypto asset business generally. We cannot assure you that future legislation or regulation will not have
an adverse effect upon us. It is possible that new laws and increased regulation and regulatory scrutiny may require the Company to comply
with certain regulatory regimes, which could result in new costs for the Company. The Company may have to devote increased time and attention
to regulatory matters, which could increase costs to the Company. New laws, regulations, and regulatory actions could significantly restrict
or eliminate the market for, or uses of, crypto assets including Ethereum, which could have a negative effect on the value of Ethereum,
which in turn would have a negative effect on the value of the Company's shares.

our blockchain infrastructure business is dependent on the value of the crypto assets we stake to obtain blockchain rewards, and because
those rewards are paid out in the form of the blockchain's native crypto assets, low market values and/or continued or long-term
declines in crypto asset prices will materially and adversely affect our results of operations.

 As
discussed above, the cryptocurrency market experienced a critical decline in 2022, although prices of some major crypto assets including
Bitcoin and Ethereum have partially recovered in 2023 and thus far in 2024. Prospects of a full recovery declined when the FTX controversy
arose and was subsequently followed by other adverse developments involving crypto-focused companies. Our reliance on staking, which
is expected to increase as we continue to seek to expand our non-custodial staking-as-a-service business, means that if the market values
of the crypto assets we stake continues to decline or remain at the relatively low levels they are currently, which appears possible
given the adverse developments and wide scale sales of and skepticism surrounding crypto assets that have resulted, the revenue we generate
from staking will diminish. This is because the rewards for staking a given crypto asset are paid out in more of that same crypto asset.
Therefore, if the market price for the crypto asset declines while staking is ongoing, unless the price later recovers, the rewards we
receive may not cover the decline in value of the assets. If this trend continues, our operating results and financial condition will
be materially adversely affected.

 Our
business faces significant scaling obstacles due to its dependence on crypto assets and related infrastructure.

assets on which our current and planned operations depend face significant scaling obstacles that can lead to high fees or slow transaction
settlement times, and attempts to increase the volume of transactions may not be effective. Scaling of crypto assets is essential to
the widespread acceptance of crypto assets as a means of payment or other uses that stakeholders have in the past cited in demonstrating
interest in crypto assets. Many crypto asset networks, including those with which we are or may become involved in our operations, face
significant scaling challenges. For example, crypto assets are limited with respect to how many transactions can occur per second. Participants
in the crypto asset ecosystem debate potential approaches to increasing the average number of transactions per second that a network
can handle and have implemented mechanisms or are researching ways to increase scale, such as increasing the allowable sizes of blocks,
and therefore the number of transactions per block, and sharding (a horizontal partition of data in a database or search engine), which
would not require every single transaction to be included in every single validator's block. However, there is no guarantee that
any of the mechanisms in place or being explored for increasing the scale of settlement of crypto asset transactions will be effective.

 If
adoption of crypto assets as a means of payment or other uses does not occur on the schedule or scale anticipated or at all, the demand
for crypto assets may stagnate or decrease, which could adversely affect future prices of crypto assets we hold or otherwise rely upon
in our operations, and our results of operations and financial condition, which could have a material adverse effect on our business
or the market price for our securities.

 The
further development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies,
which represent a rapidly changing industry, are subject to a variety of factors that are difficult to evaluate.

 The
use of crypto assets to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly
evolving industry that employs cryptocurrency assets based upon a computer-generated mathematical and/or cryptographic protocol. Large-scale
acceptance of cryptocurrencies as a means of payment has not, and may never, occur. The growth of the cryptocurrency industry in general,
and the use of crypto assets in particular, is subject to a high degree of uncertainty. The factors affecting the further development
of the cryptocurrency industry, include but are not limited to:

 continued
 worldwide growth in the adoption and use of crypto assets as a medium of exchange;

 government
 and quasi-government regulation of crypto assets and their use, or restrictions on or regulation of access to and operation of the
 crypto assets systems;

 the
 maintenance and development of the open-source software protocol of cryptocurrency networks;

 changes
 in consumer demographics and public tastes and preferences;

 the
 availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat
 currencies and digital forms of fiat currencies;

 general
 economic conditions and the regulatory environment relating to crypto assets; and

 the
 impact of regulators focusing on crypto assets and Digital Securities and the costs associated with such regulatory oversight.

 A
decline in the popularity or acceptance of the Ethereum network or other blockchains networks we have exposure to could adversely affect
an investment in us.

 The
outcome of these factors could have negative effects on our ability to continue as a going concern or to pursue our business strategy
at all, which could have a material adverse effect on our business, prospects or operations as well as potentially negative effect on
the value of any Ethereum or other crypto assets we hold or acquire, which would harm investors in our securities.

 If
a malicious actor or botnet obtains control in excess of 50% control of a cryptocurrency network, it is possible that such actor or botnet
could manipulate a blockchain in a manner that adversely affects an investment in us.

 If
a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions
of the computers) obtains a majority of the processing power or staked assets dedicated to either mining or staking a cryptocurrency,
it may be able to alter blockchains on which transactions of cryptocurrency reside and rely by constructing fraudulent blocks or preventing
certain transactions from completing in a timely manner, or at all. The malicious actor or botnet could control, exclude or modify the
ordering of transactions, though depending on blockchain may not generate new units or transactions using such control. The malicious
actor could "double-spend" its own cryptocurrency (i.e., spend the same crypto asset in more than one transaction) and prevent
the confirmation of other users' transactions for as long as it maintained control. To the extent that such malicious actor or
botnet does not yield its control of the processing power or staked assets on the network, or the cryptocurrency community does not reject
the fraudulent blocks as malicious, reversing any changes made to blockchains may not be possible. The foregoing description is not the
only means by which the entirety of blockchains or cryptocurrencies may be compromised but is only an example and may differ from blockchain
to blockchain.

 The
possible crossing of the 50% threshold indicates a greater risk that a single validator could exert authority over the validation of
network transactions. To the extent that a blockchain ecosystem including other validators do not act to ensure greater decentralization
of validator voting power, the feasibility of a malicious actor obtaining control will increase because the botnet or malicious actor
could compromise more than 50% voting power and thereby gain control of blockchain, whereas if the blockchain remains decentralized it
is inherently more difficult for the botnet of malicious actor to aggregate enough voting power to gain control of the blockchain, may
adversely affect an investment in our Common Stock. Such lack of controls and responses to such circumstances could have a material adverse
effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect
on our business, prospects or operations and potentially the value of any Ethereum or other crypto assets we acquire or hold, and harm
investors.

 The
decentralized nature of crypto asset systems may lead to slow or inadequate responses to crises, which may negatively affect our business.

 The
decentralized nature of the governance of crypto asset systems may lead to ineffective decision making that slows development or prevents
a network from overcoming emergent obstacles. Governance of many crypto asset systems is by voluntary consensus and open competition
with no clear leadership structure or authority. To the extent lack of clarity in corporate governance of cryptocurrency systems leads
to ineffective decision making that slows development and growth of such crypto assets, the value of our Common Stock may be adversely
affected.

exchanges are relatively new and therefore may be more exposed to fraud and failure than established, regulated exchanges for other products.
To the extent that large crypto exchanges representing a substantial portion of the crypto asset volume are involved in fraud or experience
security failures or other operational issues, such exchanges' failures may result in a reduction in the price of crypto assets
and adversely affect an investment in us.

 A
number of crypto exchanges have been closed due to fraud, failure or security breaches. In many of these instances, the customers of
such exchanges were not compensated or made whole for the partial or complete losses of their account balances in such exchanges. While
smaller exchanges are less likely to have the infrastructure and capitalization that make larger exchanges more stable, larger exchanges
are more likely to be appealing targets for hackers and "malware" (i.e., software used or programmed by attackers to disrupt
computer operation, gather sensitive information or gain access to private computer systems). A lack of stability in an exchange market
and the closure or temporary shutdown of larger crypto exchanges due to fraud, business failure, hackers or malware, or government-mandated
regulation may reduce confidence in crypto assets overall and result in greater volatility in crypto asset values. These potential consequences
of an exchange's failure could adversely affect an investment in us.

 There
is a lack of liquid markets, and possible manipulation of blockchain/cryptocurrency-based crypto assets.

assets that are represented and trade on a ledger-based platform may not necessarily benefit from viable trading markets. Stock exchanges
have listing requirements and vet issuers; requiring them to be subjected to rigorous listing standards and rules, and monitor investors
transacting on such platform for fraud and other improprieties. These conditions may not necessarily be replicated on a distributed ledger
platform, depending on the platform's controls and other policies. The laxer a distributed ledger platform is about vetting issuers
of cryptocurrency assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of the ledger
due to a control event. These factors may decrease liquidity or volume or may otherwise increase volatility or other assets trading on
a ledger-based system, which may adversely affect us. Such circumstances could adversely affect an investment in us.

 Political
or economic crises may motivate large-scale sales of crypto assets, which could result in a reduction in crypto asset values and adversely
affect an investment in us.

 Geopolitical
or economic crises may motivate large-scale sales of crypto assets, which could rapidly decrease the price of crypto assets. For example,
market analysts have indicated that in some cases, such as during large scale adverse economic events, trading and market prices of cryptocurrencies
such as Bitcoin and Ethereum have correlated to some extent with the movement of equity markets, regardless of the stock or asset class.
For example, in March 2020, as global shutdowns ramped up in response to the COVID-19 pandemic, the price of Bitcoin, Ethereum and other
crypto assets plummeted together with stock prices globally. Similarly, in 2022 as the Federal Reserve raised interest rates to combat
inflation, crypto asset prices declined with stock prices in the U.S. These trends are contrary to a formerly commonly held conception
that buying and holding crypto assets can be used as a "hedge" to investing in the more conventional equity markets, and
may eventually result in diminished popularity of crypto assets in general by the public. Alternatively, as an emerging asset class with
limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage investment in crypto
assets as investors focus their investment on less volatile asset classes as a means of hedging their investment risk.

 As
an alternative to fiat currencies that are backed by central governments, crypto assets such as Bitcoin and Ethereum, which are relatively
new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling
goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or
economic crises may motivate large-scale acquisitions or sales of crypto assets either globally or locally. Large-scale sales of crypto
assets would result in a reduction in crypto asset values and could adversely affect an investment in us.

 The
price of crypto assets may be affected by the sale of such crypto assets by other vehicles investing in crypto assets or tracking cryptocurrency
markets.

 The
global market for crypto assets is characterized by supply constraints that differ from those present in the markets for commodities
or other assets such as gold and silver. The mathematical protocols under which certain cryptocurrencies are mined or minted permit the
creation of a limited, predetermined amount of currency, while others have no limit established on total supply. To the extent that other
vehicles investing in crypto assets or tracking cryptocurrency markets form and come to represent a significant proportion of the demand
for crypto assets, large redemptions of the securities of those vehicles and the subsequent sale of crypto assets by such vehicles could
negatively affect crypto asset prices and therefore affect the value of our crypto assets. Such events could have a material adverse effect on an investment in us.

 Current
interpretations require the regulation of Bitcoin, Ethereum, and other crypto assets under the CEA by the CFTC, we may be required to
register and comply with such regulations. To the extent that we decide to continue operations, the required registrations and regulatory
compliance steps may result in extraordinary, non-recurring expenses to us. We may also decide to cease certain operations. Any disruption
of our operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.

 Current
and future legislation, CFTC and other regulatory developments, including interpretations released by a regulatory authority, may impact
the manner in which Bitcoin, Ethereum, and other crypto assets are treated for classification and clearing purposes. In particular, derivatives
on these assets are not excluded from the definition of "commodity future" by the CFTC. We cannot be certain as to how future
regulatory developments will impact the treatment of Bitcoin, Ethereum, and other crypto assets under the law.

 Bitcoin
and Ethereum have been deemed to fall within the definition of a commodity and, we may be required to register and comply with additional
regulation under the CEA, including additional periodic report and disclosure standards and requirements. Moreover, we may be required
to register as a commodity pool operator and to register us as a commodity pool with the CFTC through the National Futures Association.
Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment
in us. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our
operations. Any such action may adversely affect an investment in us.

 Our
interactions with a blockchain may expose us to SDN or blocked persons or cause us to violate provisions of law that did not contemplate
distribute ledger technology.

 The
Office of Financial Assets Control of the U.S. Department of Treasury requires us to comply with its sanction program and not
conduct business with persons named on its specially designated nationals ("SDN") list. However, because of the
pseudonymous nature of blockchain transactions we may inadvertently and without our knowledge engage in transactions, to the extent
validation constitutes a transaction, with persons named on OFAC's SDN list. While we don't believe validation
constitutes a transaction, we can provide no assurances regulators will agree with that view. By way of example our Ethereum
validator nodes only use block builders which remove wallet addresses found on the SDN list and Builder+ also screens out these SDN
wallet addresses. Our Company's policy prohibits any transactions with such SDN individuals, but we may not be adequately
capable of determining the ultimate identity of the individual who delegate to our nodes. Additionally, the U.S Department of
Treasury recently has added sanctions that prevent U.S. persons from using cryptocurrencies to circumnavigate financial sanctions
placed on Russia.

our business requires us to download and retain one or more blockchains to effectuate our ongoing business, it is possible that such
digital ledgers contain prohibited depictions without our knowledge or consent. To the extent government enforcement authorities literally
enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, we may be subject to investigation,
administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and affect
the value of our Common Stock.

 If
federal or state legislatures or agencies initiate or release tax determinations that change the classification of Bitcoin, Ethereum
or other crypto assets as property for tax purposes (in the context of when such crypto assets are held as an investment), such determination
could have a negative tax consequence on our Company or our shareholders.

 Current
IRS guidance indicates that crypto assets such as Ethereum should be treated and taxed as property, and that transactions involving the
payment of Ethereum for goods and services should be treated as barter transactions. While this treatment creates a potential tax reporting
requirement for any circumstance where the ownership of an Ethereum passes from one person to another, usually by means of Ethereum transactions
(including off-blockchain transactions), it preserves the right to apply capital gains treatment to those transactions which may have
adversely affect an investment in our Company.

 On
December 5, 2014, the New York State Department of Taxation and Finance issued guidance regarding the application of state tax law to
crypto assets such as Bitcoin and Ethereum. The agency determined that New York State would follow IRS guidance with respect to the treatment
of crypto assets for state income tax purposes. Furthermore, they defined crypto assets to be a form of "intangible property,"
meaning the purchase and sale of crypto assets for fiat currency is not subject to state income tax (although transactions of crypto
assets for other goods and services maybe subject to sales tax under barter transaction treatment). It is unclear if other states will
follow the guidance of the IRS and the New York State Department of Taxation and Finance with respect to the treatment of crypto assets
for income tax and sales tax purposes. If a state adopts a different treatment, such treatment may have negative consequences including
the imposition of greater a greater tax burden on investors in crypto assets or imposing a greater cost on the acquisition and disposition
of crypto assets, generally; in either case potentially having a negative effect on prices in crypto assets and may adversely affect
an investment in our Company.

 Foreign
jurisdictions may also elect to treat crypto assets differently for tax purposes than the IRS or the New York State Department of Taxation
and Finance. To the extent that a foreign jurisdiction with a significant share of the market of crypto asset users imposes onerous tax
burdens crypto users, or imposes sales or value added tax on purchases and sales of crypto assets for fiat currency, such actions could
result in decreased demand for crypto assets in such jurisdiction, which could impact the price of crypto assets and negatively impact
an investment in our Company.

 We
may suffer losses due to staking, delegating, and other related services.

assets which utilize PoS consensus mechanisms enable holders to earn rewards by operating nodes and participating in decentralized governance,
bookkeeping and transaction confirmation activities on their underlying blockchain networks. We stake certain of our crypto assets and
operate nodes on blockchain networks through our blockchain infrastructure operations. Most PoS networks require crypto assets to be
transferred into smart contracts on the underlying blockchain networks not under our or anyone's control. If our validators, any
third-party service providers, or smart contracts fail to behave as expected, suffer cybersecurity attacks, experience security issues,
or encounter other problems, our crypto assets may be irretrievably lost. In addition, most PoS blockchain networks dictate requirements
for participation in the relevant decentralized governance activity, and may impose penalties, or "slashing," if the relevant
activities are not performed correctly, such as if the node operator acts maliciously on the network, "double signs" any
transactions, or experience extended downtimes. Slashing penalties can apply due to prolonged inactivity on a blockchain network and
inadvertent errors such as computing or hardware issues, as well as more serious behavior such as intentional malfeasance. If we are
slashed by an underlying blockchain network, our crypto assets may be confiscated, withdrawn, or burnt by the network, resulting in permanent
losses. Any penalties or slashing events could damage our brand and reputation, cause us to suffer financial losses, and adversely impact
our business.

 Builder+,
ChainQ, and our blockchain infrastructure operations including Company owned and run validator nodes on PoS blockchains, are subject
to concentration risk as they are consolidated on Amazon Web Services.

 The
development and operation of the Company's validator nodes for non-custodial staking, as well as the development of StakeSeeker,
Builder+, and ChainQ, are hosted on cloud computing by Amazon Web Services ("AWS"). The consolidation of our proprietary
technology on AWS subjects the Company to cyber security and other risks that face AWS. We have limited control over AWS, the services
it provides us and the safety and security measures related thereto. If AWS fails to maintain the continuous functionality or security
of its networks and related hardware on which we rely for our operations, we may be unable to generate revenue we otherwise would, and
could suffer substantial losses. For example, some PoS networks implement the slashing penalties described above, wherein the crypto
assets that were staked to allow us to participate in the validation process are taken away from us, if a validator node on which the
crypto asset is staked is offline for a certain amount of time. Additionally, if our Delegators crypto assets become subject to slashing,
we could experience significant losses, from resulting claims against us by them, as well as reputational harm and lost customer relationships.
If any of the foregoing or other adverse developments occur as a result of our reliance on a single service provider for our PoS validating
operations, it could have a material adverse effect on our business, financial condition and results of operations.

assets staked on Proof-of-Stake blockchains are locked in smart contracts and may not be accessible and liquid.

assets which utilize PoS consensus mechanisms are locked in smart contracts while staked which limits liquidity of the underlying crypto
asset. This is because under PoS network protocols, in order to participate in the staking process validators such as us are required
to enter into smart contracts which, among other things, require the validator to continue to keep a specified number of the crypto assets
owned by the validator "locked-up" in the network for a specified period of time before they can again be transferred by
such validator. This lock-up period often extends beyond the time at which the transaction is validated. We currently stake certain of
our crypto assets and operate nodes on blockchain networks through our blockchain infrastructure services business. During times of high
volatility or downturns, which are common among crypto assets for many reasons including those described elsewhere in these Risk Factors,
we may be unable to liquidate certain crypto assets to the extent desired. As such we may experience large losses when and if we are
able to liquidate our crypto assets as a result of continued volatility. Further if we are unable to liquidate our crypto assets we could
suffer material financial losses, which would adversely impact our business.

our current staking-as-a-service business plan and operations depend on consumers investing in crypto assets and staking to our nodes
and monitoring them using our non-custodial platform, economic downturns will materially adversely affect us.

 Our
non-custodial staking-as-a-service strategy depends on consumers purchasing crypto assets from exchanges and holding them long-term,
and staking them to our validator nodes. Therefore, economic downturns or a recession will cause a reduction in delegation traffic to
our nods by causing consumers to reduce spending on investments or non-essential items such as crypto assets. Similarly, a decline in
the popularity or public perception of such crypto assets would yield a similar result. In 2022, the U.S. capital markets in general,
and crypto assets prices in particular, saw significant declines as the Federal Reserve heightened interest rates to combat inflation.
This followed initial declines earlier in 2022 in response to the Ukraine war and worsening supply chain issues and supply shortages.
While the markets have appeared to recover as of February 2024, crypto and stock prices have nonetheless experienced substantial volatility
in recent years, and in the event of adverse market conditions, consumers may elect to sell their crypto assets, or decline to increase
their holdings, rather than hold and stake them to our nodes. Because we and our industry depend on consumers holding and staking crypto
assets long-term, such a trend has the potential to materially adversely harm us and our prospects. Particularly in the event of prolonged
or recurring recessionary or turbulent market conditions.

 Our
obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions is uncertain and untested, and we
are subject to uncertainty with respect to our Ethereum block building and non-custodial staking-as-a-service businesses and we may be
subject to investigations and enforcement actions by U.S. and non-U.S. regulators and governmental authorities.

 In
addition to the securities laws and regulations discussed elsewhere in these Risk Factors, laws regulating financial services, the internet,
mobile technologies, digital, and related technologies inside and outside of the U.S. may impose obligations on us, as well as broader
liability. For example, we are required to comply with laws and regulations related to sanctions and export controls enforced by U.S.
Department of Treasury's Office of Foreign Assets Control, or OFAC, and U.S. anti-money laundering and counter-terrorist financing
laws and regulations, enforced by FinCEN and certain state financial services regulators. U.S. sanctions laws and regulations generally
restrict dealings by persons subject to U.S. jurisdiction with certain governments, countries, or territories that are the target of
comprehensive sanctions, currently the Crimea Region of Ukraine, Russian Federation, Cuba, Iran, North Korea, Syria, and Venezuela as
well as with persons identified on certain prohibited lists. In May 2019, FinCEN issued guidance on the application of FinCEN regulations
to certain business models. While the guidance directly addressed Bitcoin mining, it did not address securing PoS blockchains which while
similar to Bitcoin mining has technical nuanced differences which could potentially alter the analysis. As such, there can be no guarantee
that securing (staking) on PoS blockchain networks will be viewed as compliant, notwithstanding the May 2019 FinCEN guidance. In particular,
the nature of blockchains make it technically impossible in all circumstances to prevent or identify transactions with particular persons
or addresses. Our platform, StakeSeeker, utilizes geo-blocking in an effort to prevent its use by persons located in sanctioned jurisdictions
by employing third-party software, Cloudflare, to automatically identify and restrict log-in attempts to the StakeSeeker platform from
specific countries and jurisdictions These restricted areas include Cuba, Iran, North Korea, the Russian Federation, Syria, and Venezuela.
Any StakeSeeker users detected from these regions will be redirected to a page informing them that their access has been restricted.
In addition, our Builder+ block builder software is equipped with a filtering mechanism that screens transactions initiated by wallet
addresses listed on OFAC's Specially Designated Nationals And Blocked Persons (SDN) list, ensuring transactions from identified
wallets are not included in the blocks we propose to validators. We actively monitor sanctioned jurisdictions to ensure that appropriate
restrictions are maintained. If, notwithstanding these efforts, our current or planned activities are found to constitute "facilitating"
or assisting the actions of non-U.S. persons that would be prohibited for U.S. persons to perform directly due to U.S. sanctions, despite
the fact we don't take custody of staked crypto assets nor pay delegator crypto rewards, it could result in material negative consequences
for us, including costs related to government investigations, harsh financial penalties, and harm to our reputation. The impact on us
related to these matters could be substantial. We've sought and are seeking additional legal guidance on what, if any, controls
and procedures need to be put in place and whether our activities could constitute facilitation of any illicit activities under the current
regulatory framework.

 Regulators
worldwide frequently study each other's approaches to the regulation of the digital economy. Consequently, developments in any
jurisdiction may influence other jurisdictions. New developments in one jurisdiction may be extended to additional services and other
jurisdictions. In addition, digital economies themselves are subject to rapid and unpredictable change that regulators could decide warrants
updates or additions to existing regulatory regimes. As a result, the risks created by any new law or regulation in one jurisdiction
are magnified by the potential that they may be replicated, affecting our business in another place. Conversely, if regulations diverge
worldwide, we may face difficulty adjusting aspects of our business.

 The
complexity of U.S. federal and state and international regulatory and enforcement regimes, coupled with the evolving global regulatory
environment, could result in a single event prompting a large number of overlapping investigations and legal and regulatory proceedings
by multiple government authorities in different jurisdictions. Any of the foregoing could, individually or in the aggregate, harm our
reputation, damage our brands and business, and adversely affect our operating results and financial condition. Due to the uncertain
application of existing laws and regulations, it may be that, despite our planned regulatory and legal analysis that certain products
and services are currently unregulated, such products or services may indeed be subject to financial regulation, licensing, or authorization
obligations that we have not obtained or with which we have not complied. As a result, we are at a heightened risk of enforcement action,
litigation, regulatory, and legal scrutiny which could lead to sanctions, cease, and desist orders, or other penalties and censures which
could significantly and adversely affect our continued operations and financial condition.

 Security
Risks Related to Our Crypto Asset Holdings

 Our
crypto assets may be subject to loss, damage, theft or restriction on access.

 There
is a risk that part or all of our crypto assets could be lost, stolen, destroyed or become inaccessible. We believe that our crypto assets
will be an appealing target to hackers or malware distributors seeking to destroy, damage, or steal our crypto assets. To minimize the
risk of loss, damage and theft, security breaches, and unauthorized access we primarily hold our crypto assets in various cryptocurrency
digital wallets and hold minimal amounts at exchanges. Nevertheless, the digital wallets and exchanges we utilize may not be impenetrable
and may not be free from defect or immune to acts of God, and any loss due to a security breach, software defect or act of God will be
borne by us. Any of these events may adversely affect our operations and, consequently, an investment in us.

 To
the extent that any of our crypto assets are held by crypto exchanges, we may face heightened risks from cybersecurity attacks and the
financial stability of the exchanges.

 All
crypto assets not held in a Company's controlled digital wallet are held at crypto exchanges and subject to the risks encountered
by those exchanges including DdoS Attacks, other malicious hacking, a sale of the exchange, loss of the crypto assets by the exchange,
security breaches, and unauthorized access of our account by hackers. The Company may not maintain a custodian agreement with the exchanges
with which it holds its crypto assets, and such exchanges do not provide insurance and may lack the resources to protect against hacking
and theft. Less than 0.1% of the Company's crypto assets are typically stored at exchanges; however, this may increase at or around
the sales or purchase of crypto assets. We may be materially and adversely affected if the exchanges suffer cyberattacks or incur financial
problems.

 The
loss or destruction of a private key required to access a crypto asset may be irreversible. Our loss of access to our private keys could
adversely affect an investment in our Company.

assets are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet
in which the crypto assets are held. We are required by the operation of the crypto asset network to publish the public key relating
to a digital wallet in use by us when it first verifies a spending transaction from that digital wallet and disseminates such information
into the network. We safeguard and keep private the private keys relating to our crypto assets not held at exchanges by utilizing key
sharing and multi-signature storage techniques; to the extent a private key is lost, destroyed or otherwise compromised and no backup
of the private key is accessible, we will be unable to access the crypto assets held by it and the private key will not be capable of
being restored by the network. Any loss of private keys relating to digital wallets used to store our crypto assets could adversely affect
an investment in us.

 Security
threats to us could result in a loss of Company's crypto assets.

 Any
security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional
malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer
viruses, could harm our business operations or result in loss of our Ethereum and other crypto assets. Any breach of our infrastructure
could result in damage to our reputation which could adversely affect an investment in us. Furthermore, we believe that, as our assets
continue to grow, it may become a more appealing target for security threats such as hackers and malware.

 The
security system and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee
of ours, or otherwise, and, as a result, an unauthorized party may obtain access to our, private keys, data, or Ethereum. Additionally,
outside parties may attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our
infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently,
or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may
be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our security
system occurs, the market perception of the effectiveness of our security system could be harmed, which could adversely affect an investment
in us. In the event of a security breach, we may be forced to cease operations, or suffer a reduction in assets, the occurrence of each
of which could adversely affect an investment in us.

 Incorrect
or fraudulent crypto asset transactions may be irreversible.

asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient
of the transaction. Once a transaction has been verified and recorded in a block that is added to a blockchain, an incorrect transfer
of crypto assets or a theft of crypto assets generally will not be reversible, and we may not be capable of seeking compensation for
any such transfer or theft. It is possible that, through computer or human error, or through theft or criminal action, our crypto assets
could be transferred from us in incorrect amounts or to unauthorized third parties. To the extent that we are unable to seek a corrective
transaction with such third party or are incapable of identifying the third party which has received our crypto assets through error
or theft, we will be unable to revert or otherwise recover incorrectly transferred crypto assets. To the extent that we are unable to
seek redress for such error or theft, such loss could adversely affect an investment in us.

 The
limited rights of legal recourse against us, and our lack of insurance protection expose us and our shareholders to the risk of loss
of our crypto assets for which no person is liable.

 The
crypto assets held by us are not insured. Therefore, a loss may be suffered with respect to our crypto assets which are not covered by
insurance and for which no person is liable in damages which could adversely affect our operations and, consequently, an investment in
us.

assets held by us are not subject to FDIC or SIPC protections.

 We
do not and will not hold our Ethereum and other crypto assets with a banking institution or a member of the FDIC or the Securities Investor
Protection Corporation ("SIPC") and, therefore, our crypto assets are not subject to the protections enjoyed by depositors
with FDIC or SIPC member institutions.

 Risks
Related to Our Development Efforts

 There
is substantial doubt that we will be able to fully develop or commercialize our StakeSeeker platform as intended.

 We
are continuing to develop our StakeSeeker platform with the ultimate goal of consolidating users' information so that it can be
more easily accessed and reviewed by users. We may not successfully fully develop this platform as planned, in a cost-efficient manner,
to the extent sought or at all. If we fail to develop a comprehensive dashboard for StakeSeeker as intended, it could have a material
adverse effect on our business, especially to the extent that we allocate significant capital, labor and other resources to this endeavor
rather than focusing on other business opportunities which may prove to have been more lucrative in hindsight.

 Even
if we do successfully develop our platform and bring it to the marketplace, there is no guarantee that we will attract enough users to
generate revenue or become profitable. Our competitors, most of whom have greater capital and human resources than we do, may develop
technologies that are superior to our platform or commercialize comparable technologies before us, in which case our ability to attract
users and generate revenue therefrom could be rendered unlikely or even impossible. If we fail to obtain users for our platform or find
an alternative means of commercializing our platform to recoup our investment therein, it will have a material adverse effect on our
financial condition. Finally, even if we do fully develop the platform and attract users, events outside of our control such as regulatory
actions against us or crypto assets on which our platform depend, or economic downturns, could force us to cease operating our platform
or render it obsolete. If we fail to fully develop and commercialize our platform in a timely and effective manner, your investment in
us could lose some or all of its value.

 Even
if we develop and commercialize our StakeSeeker platform, we may not be able to generate material revenues.

 The
continued development of StakeSeeker will require significant time and capital. Even if we do develop this platform and acquire a sufficient
number of users to generate revenue, we cannot guarantee the revenue would be material or sufficient to justify the costs we anticipate
incurring to develop the platform. While we are pursuing the development of additional features to make our platform more useful and
attractive to consumers involved in crypto assets, we may fail to develop these features effectively in an efficient manner, or within
a timeframe that enables us to be or remain competitive. Our ability to capitalize on any platform we do develop will depend on a variety
of factors and uncertainties beyond our control, including the competition we face and similar or superior services that may already
exist by the time we begin marketing our platform, the volatile nature of the blockchain industry generally and the unknown demand for
the services we plan to offer through our platform as it is currently envisioned, regulatory developments that have arisen or may arise
in the future, and the advancement of new technologies which could arise in the future and render our platform partially or completely
obsolete. If any of these or other risks come to fruition to prevent our platform from generating material revenue to justify its costs
of production, it would have a material adverse effect on our business.

 We
may experience loss of revenues resulting from excessive removal of delegated crypto assets from our validator nodes.

 To
the extent the Company successfully executes on its business plan and earns material revenue from customers who delegate their crypto
assets to the Company's validator nodes and subsequently experiences excessive removal of customer staked crypto assets from its
validator nodes (i.e. a loss of customers) the Company would lose the related revenue which may have a material adverse impact on the
Company.

 Shifts
in the Ethereum block building landscape and market could increase the difficulty of remaining competitive and increase costs.

 Our
Ethereum block builder, Builder+, faces competition from existing and potential entrants in the expanding market. New and existing competitors
may emerge with superior algorithms or strategies, potentially eroding our current market share, potential growth, and revenue generation
potential. Moreover, changes in the Ethereum ecosystem, including network upgrades or shifts to alternative networks, may impact the
demand for our services. Staying competitive requires continuous innovation and adaptation to market dynamics, which may necessitate
additional investments and resources.

 We
may experience losses resulting from technical failures, bugs, or vulnerabilities in our block builder software.

 The
risk of technical failures, bugs, or vulnerabilities in our block builder software could lead to operational disruptions and potential
financial losses. Our Ethereum block-building process heavily relies on advanced algorithms and technology. The risk of technical failures,
bugs, or vulnerabilities in our block builder software could lead to operational disruptions and potential financial losses. Furthermore,
the security of our operation is paramount, as vulnerabilities in smart contracts, blockchain infrastructure, or the Ethereum network
could result in security breaches, data breaches, and financial harm to our clients and us. Ensuring the ongoing scalability and efficiency
of our algorithms requires continuous investment in research and development.

 The
development of our StakeSeeker and ChainQ platforms will depend on the successful efforts of our employees.

 Our
platform development efforts are completely dependent on our infrastructure. We use internally developed systems for the platforms. Any
future difficulties in developing aspects of our platforms may cause delays in bringing our platforms to market. If our data stored on
AWS and the backups thereof are compromised, our platform and prospects could be harmed. Despite our implementation of network security
measures, our servers are vulnerable to computer viruses, physical or electronic break-ins, and similar disruptions, the occurrence of
any of which could lead to interruptions, delays, loss of critical data, or the inability to launch our platform. The occurrence of any
of the foregoing risks could materially harm our business.

 We
are subject to cyber security risks and may incur delays in platform development in an effort to minimize those risks and to respond
to cyber incidents.

 StakeSeeker
is and will continue to be dependent on the secure operation of our website and systems as well as the operation of the Internet generally.
The platform involves reading user data, and storage of user data, and security breaches could expose us to a risk of loss or misuse
of this information, litigation, and potential liability. A number of large Internet companies have suffered security breaches, some
of which have involved intentional attacks. From time to time, we and many other internet businesses also may be subject to a denial-of-service attacks wherein attackers attempt to block customers' access to our website. If we are unable to avert a denial-of-service
attack for any significant period, we could sustain delays in the development of the platform and when launched risk losing future users
and have user dissatisfaction. We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types
of cyber-attacks. Cyber-attacks may target us, our users, or exchanges we read data from in general or the communication infrastructure
on which we depend. If an actual or perceived attack or breach of our security occurs, user perception of the effectiveness of our security
measures could be harmed and we could lose our future user. Actual or anticipated attacks and risks may cause us to incur increasing
costs, and delay development. A person who is able to circumvent our security measures might be able to misappropriate our or our users'
proprietary information, cause interruption in our operations, damage our computers or those of our users, or otherwise damage our reputation
and platform. Any compromise of our security could result in a violation of applicable privacy and other laws, significant legal and
financial exposure, damage to our reputation, and a loss of confidence in our security measures, which could harm our business.

 We
may become subject to data privacy and data security laws and regulations by virtue of our StakeSeeker platform, which could force us
to incur significant compliance costs and expose us to liabilities.

 By
virtue of our platform, including planned additional functions, we may become subject to the various local, state, federal, and international
laws and regulations that apply to the collection, use, retention, protection, disclosure, transfer, and processing of personal data.
These data protection and privacy laws and regulations and their applicability to our current and future operations and offerings are
subject to uncertainty and continue to evolve in ways that could adversely impact our business. These laws could have a substantial impact
on our operations, depending in large part on the location of our operations, users, employees and other stakeholders with which we are
or become involved.

 In
the United States, state and federal lawmakers and regulatory authorities have increased their attention on the collection and use of
user data. For example, California enacted the California Consumer Privacy Act, or CCPA, which became effective in 2020. The CCPA requires
covered companies to, among other things, provide new disclosures to California users, and affords such users new privacy rights such
as the ability to opt-out of certain sales of personal information and expanded rights to access and require deletion of their personal
information, opt out of certain personal information sharing, and receive detailed information about how their personal information is
collected, used, and shared. The CCPA provides for civil penalties for violations, as well as a private right of action for security
breaches that may increase security breach litigation. Potential uncertainty surrounding the CCPA may increase our compliance costs and
potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including
how we use personal information, our financial condition, the results of our operations or prospects. Since the CCPA was enacted, a growing
number of states have enacted similar legislation designed to protect the personal information of consumers and penalize companies that
fail to comply, and other states have also proposed similar legislation. The costs of compliance with, and other burdens imposed by,
the CCPA, and similar laws may limit our prospective customer base or the use and adoption of our products and services and/or require
us to incur substantial compliance costs, which could have an adverse impact on our business. Additionally, many foreign countries and
governmental bodies in which our users may reside, have laws and regulations concerning the collection, use, processing, storage, and
deletion of personal information obtained from their residents or by businesses operating within their jurisdiction. These laws and regulations
are often more restrictive than those in the United States. Such laws and regulations may require companies to implement new privacy
and security policies, permit individuals to access, correct, and delete personal information stored or maintained by such companies,
inform individuals of security breaches that affect their personal information, require that certain types of data be retained on local
servers within these jurisdictions, and, in some cases, obtain individuals' affirmative opt-in consent to collect and use personal
information for certain purposes.

 There
is a risk that as we develop and offer our platform and other services, we may become subject to one or more of these data privacy and
security laws. Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection,
and information security, including by deploying geo-blocking features to limit the jurisdictions from which our platform can be accessed,
it is possible that our practices, offerings, or platform, or third parties on which we rely, could fail. For instance, the overall regulatory
framework governing the application of privacy laws to blockchain technology is still highly undeveloped and likely to evolve. Further,
given the pseudonymous nature of activities involving crypto assets, we may encounter enhanced difficulties in our compliance efforts
that are not present to the same degree in other business types. Our failure, or the failure by our third-party providers or partners,
to comply with applicable laws or regulations and to prevent unauthorized access to, or use or release of personal data, or the perception
that any of the foregoing types of failure has occurred, even if unfounded, could subject us to audits, inquiries, whistleblower complaints,
adverse media coverage, investigations, potential severe criminal or civil sanctions, fines or damages, reputational harm, or expensive
and time-consuming proceedings by governmental agencies and private claims and litigation, any of which could materially adversely affect
our business, operating results, and financial condition.

 We
may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from
commercializing or increase the costs of commercializing the StakeSeeker platform.

 Our
commercial success depends significantly on our ability to operate without infringing the patents and other intellectual property rights
of third parties however, we may not always be able to determine that we are using or accessing protected information or software. For
example, there could be issued patents of which we are not aware that our products infringe. There also could be patents that we believe
we do not infringe, but that we may ultimately be found to infringe. Moreover, patent applications are in some cases maintained in secrecy
until patents are issued. The publication of discoveries in scientific or patent literature frequently occurs substantially later than
the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue,
there may be currently pending applications of which we are unaware that may later result in issued patents that our products infringe.

of the foregoing, we may be subject to legal claims of alleged infringement of the intellectual property rights of third parties. We
expect this risk to increase as we continue to develop and roll-out additional functions for the StakeSeeker platform and potential StaaS
operations in the future. The ready availability of damages, royalties and the potential for injunctive relief has increased the defense
litigation costs of patent infringement claims, especially those asserted by third parties whose sole or primary business is to assert
such claims. Such claims, even if not meritorious, may result in significant expenditure of financial and managerial resources, and the
payment of damages or settlement amounts.

 Accordingly,
we could expend significant resources defending against patent infringement and other intellectual property right claims, which could
require us to divert resources away from operations. Any damages we are required to pay or injunctions against our continued use of such
intellectual property in resolution of such claims may cause a material adverse effect to our business and operations, which could adversely
affect the trading price of our securities and harm our investors. Additionally, we may become subject to injunctions prohibiting us
from using software or business processes we currently use or may need to use in the future or requiring us to obtain licenses from third
parties when such licenses may not be available on financially feasible terms or terms acceptable to us or at all. In addition, we may
not be able to obtain on favorable terms, or at all, licenses or other rights with respect to intellectual property we do not own in
providing ecommerce services to other businesses and individuals under commercial agreements.

 Risks
Related to Our Public Company Reporting Requirements and Accounting Matters

 We
may need to implement additional finance and accounting systems, procedures and controls as we grow our business and organization and
to satisfy new reporting requirements.

 We
are required to comply with a variety of reporting, accounting, and other rules and regulations. Compliance with existing requirements
is expensive. We may need to implement additional finance and accounting systems, procedures, and controls to satisfy our reporting requirements
and such further requirements may increase our costs and require additional management time and resources. For example, many crypto assets,
including those on PoS blockchain networks with which we are or may become involved, demonstrate novel and unique accounting challenges,
including due to smart contracts affecting the underlying crypto assets. Any deficiencies in our internal control over financial reporting,
should they arise, could cause investors to lose confidence in our reported financial information, negatively affect the market price
of our Common Stock, subject us to regulatory investigations and penalties, and adversely impact our business and financial condition.

 Changes
in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could
significantly affect our financial results.

 Generally
accepted accounting principles and related accounting pronouncements, implementation guidelines and interpretations with regard to a
wide range of matters that are relevant to our business, including but not limited to revenue recognition, estimating valuation
allowances and accrued liabilities (including allowances for returns, credit card chargebacks, doubtful accounts and obsolete and
damaged inventory), internal use software and website development (acquired and developed internally), accounting for income taxes,
valuation of long-lived and intangible assets and goodwill, stock-based compensation and loss contingencies, are highly complex and
involve many subjective assumptions, estimates and judgments by our management. Additional complexities can arise with respect to
crypto asset operations. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments
by our management could significantly change our reported or expected financial performance. Further, in January 2024 we adopted a
new accounting treatment (ASU No. 2023-08) for our crypto assets, which may pose challenges or added expenses in the preparation of
our financial statements, or render a comparison of our financial performance and condition between periods more difficult or
investors, especially given the novelty of this new accounting method for crypto assets.

 If
our estimates or judgment relating to our critical accounting policies prove to be incorrect, our operating results could be adversely
affected.

 The
preparation of financial statements in conformity with generally accepted accounting principles, or GAAP, requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates
on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the
section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting
Policies and Estimates" in Part II, Item 7 of this Annual Report on Form 10-K. The results of these estimates form the basis for
making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily
apparent from other sources. Significant estimates and judgments involve the identification of performance obligations in revenue recognition,
evaluation of tax positions, and the valuation of stock-based awards and crypto assets we hold, among others. Our operating results may
be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our
operating results to fall below the expectations of analysts and investors, resulting in a decline in the trading price of our Common
Stock.

 We
are subject to the information and reporting requirements of the Exchange Act), and other federal securities laws, including compliance
with the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act").

 The
costs of preparing and filing annual and quarterly reports and other information with the SEC and furnishing audited reports to shareholders
will cause our expenses to be higher than they would have been if we were privately held. It may be time-consuming, difficult and costly
for us to develop, implement and maintain the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need
to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal
controls and reporting procedures.

 Public
company compliance may make it more difficult to attract and retain officers and directors.

 The
Sarbanes-Oxley Act and rules implemented by the SEC have required changes in corporate governance practices of public companies. As a
public company, we expect these rules and regulations to increase our compliance costs and make certain activities more time-consuming
and costly. The impact of the SEC's July 25, 2017 report on Digital Securities (the "DAO Report") as well as enforcement
actions and speeches made by the SEC's Chairman will increase our compliance and legal costs. As a public company, we also expect
that these rules and regulations will make it more difficult and expensive for us to obtain director and officer liability insurance
in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same
or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board or as
executive officers, and to maintain insurance at reasonable rates, or at all.

 Risks
Related to our Common Stock

 Our
stock price may be volatile.

 The
market price of our Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various factors,
many of which are beyond our control, including the following:

 changes
 in our industry including changes which adversely affect crypto assets;

 adverse
 regulatory developments such as the recent actions brought by securities regulators on crypto assets activities;

 public
 announcements and corporate events;

 continued
 volatility in the price of crypto assets;

 our
 ability to obtain working capital financing;

 sales
 of our securities or those of other companies, or of crypto assets, due to external forces such as geopolitical turmoil, inflation,
 federal interest rate adjustments or other events;

 additions
 or departures of key personnel including our executive officers;

 sales
 of our Common Stock;

 exercise
 of our warrants and the subsequent sale of the underlying Common Stock;

 conversion
 of our convertible notes and the subsequent sale of the underlying Common Stock;

 our
 ability to execute our business plan;

 operating
 results that fall below expectations;

 loss
 of any strategic relationship; and

 economic
 and other external factors.

 In
addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of
our Common Stock. As a result, you may be unable to resell your shares at a desired price.

 While
we paid a cash dividend in 2022, and declared a Series V Preferred stock ("Series V") dividend in 2023, we do
not expect to pay regular or recurring dividends in the future. Any return on investment may be limited to the value of our Common Stock.

 While
we declared and paid a cash dividend (which came with the option to be paid in Bitcoin if elected by the shareholder) payable to holders
of our Common Stock as of March 17, 2022, and distributed Series V dividend to shareholders of our Common Stock of record as of May 12,
2023, we do not anticipate paying dividends on a regular or recurring basis for the foreseeable future.

 Any
future payment of dividends on our Common Stock will depend on earnings, financial condition and other business and economic factors
affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our Common Stock may be less valuable
because a return on your investment will only occur if our stock price appreciates.

 Our
articles of incorporation allow for our Board to create new series of preferred stock without further approval by our shareholders, which
could adversely affect the rights of the holders of our Common Stock.

 Our
Board has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board also has the authority
to issue preferred stock without further shareholder approval. As a result, our Board could authorize the issuance of a series of preferred
stock that would grant to holders the preferred right to our assets upon liquidation, provide holders of the preferred anti-dilution
protection, the right to receive dividend payments before dividends are distributed to the holders of Common Stock and the right to the
redemption of the shares, together with a premium, prior to the redemption of our Common Stock. For example, we issued a total of 14,542,803
shares of Series V Preferred Stock in June 2023, which preferred stock comes with a 20% liquidation preference over our Common Stock
and also has certain rights to dividend and distributions at the discretion of the Board. In addition, our Board could authorize the
issuance of a series of preferred stock that has greater voting power than our Common Stock or that is convertible into our Common Stock,
which could decrease the relative voting power of our Common Stock or result in dilution to our existing shareholders.

 Substantial
future sales of our Common Stock by us or by our existing shareholders could cause our stock price to fall.

 Additional
equity financings (in addition to the shares issued under the ATM Agreement) or other share issuances by us, including shares issued
in connection with strategic alliances and corporate partnering transactions, could adversely affect the market price of our Common Stock.
Sales by existing shareholders of a large number of shares of our Common Stock in the public market or the perception that additional
sales could occur could cause the market price of our Common Stock to drop.

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this
item.

 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 See
Item 15(a)(1)

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None

 ITEM
9A. CONTROLS AND PROCEDURES

 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 December
31, 2023. 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 December 31, 2023.

 Management's
Annual Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Our internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined effective could provide only reasonable assurance with respect to financial statement
preparation and presentation.

 Our
management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based
on the framework in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the "2013 Internal Control-Integrated Framework"). Based on our evaluation under the 2013 Internal Control-Integrated
Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.

 Changes
in Internal Control Over Financial Reporting

 There
were no changes in our internal control over financial reporting as defined in Rule 13a-15(f) or 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.

 ITEM
9B. OTHER INFORMATION

 On
 November 14, 2023, our Chief Executive Officer, adopted a Rule 10b5-1 trading plan, which is intended to satisfy the
affirmative defense in Rule 10b5-1(c). The trading plan provides for the potential
sale of up to an aggregate of 1.25 million shares of our common stock. The duration of the plan is through October 15,
2024.

 On
 December 5, 2023, our Chief Operating Officer, adopted a Rule 10b5-1 trading plan, which is intended to satisfy the affirmative
defense in Rule 10b5-1(c). The trading plan provides for the potential
sale of up to an aggregate of 750,000 shares of our common stock. The duration of the plan is through October 15, 2024.

 No
other officers, as defined in Rule 16a-1(f), or directors adopted or terminated a "Rule 10b5-1 trading arrangement"
or a "non-Rule 10b5-1 trading arrangement," as defined in Regulation S-K Item 408, during the last fiscal quarter.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not
Applicable.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The
information required by this item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders
to be filed with the SEC within 120 days of the year ended December 31, 2023.

 Our
Board has adopted a Code of Ethics applicable to all officers, directors and employees, which is available on our website (
under "Corporate Governance." We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment
to, or waiver from, a provision of our Code of Ethics and by posting such information on our website at the address and location specified
above.

 ITEM
11. EXECUTIVE COMPENSATION

 The
information required by this item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to
be filed with the SEC within 120 days of the year ended December 31, 2023.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
information required by this item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to
be filed with the SEC within 120 days of the year ended December 31, 2023.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The
information required by this item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to
be filed with the SEC within 120 days of the year ended December 31, 2023.

 ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 The
information required by this item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to
be filed with the SEC within 120 days of the year ended December 31, 2023.

 PART
IV

 ITEM
15. EXHIBITS

 (a)
Documents filed as part of the report.

 (1)
Financial Statements. See Index to Financial Statements, which appears on page F-1 hereof. The financial statements listed in the accompanying
Index to Financial Statements are filed herewith in response to this Item.

 (2)
Financial Statements Schedules. All schedules are omitted because they are not applicable or because the required information is contained
in the financial statements or notes included in this report.

 (3)
Exhibits. See the Exhibit Index.

 EXHIBIT

 Filed/

 Incorporated
 by Reference

 Exhibit

 No.

 Description

 Furnished

 Herewith

 Form

 Exhibit

 No.

 Filing

 Date

 1.1

 At-The-Market Offering Agreement, dated September 14, 2021, 2020, by and between BTCS Inc. and H.C. Wainwright & Co., LLC

 1.1

 9/14/21

 2.1

 Articles
 of Merger

 8-K/A

 3.1

 7/31/15

 2.2

 Agreement
 and Plan of Merger

 8-K/A

 3.2

 7/31/15

 3.1

 Articles
 of Incorporation

 3.1

 3/31/11

 3.1(a)

 Amendment
 No. 1 To Articles of Incorporation

 3.1

 3/25/13

 3.1(b)

 Amendment
 No. 2 To Articles of Incorporation

 3.1

 2/5/14

 3.1(c)

 Certificate
 of Amendment filed February 13, 2017

 3.1

 2/16/17

 3.1(d)

 Amendment
 No. 3 To Articles of Incorporation

 3.1

 4/9/19

 3.1(e)

 Certificate
 of Change – Reverse Split

 3.1

 8/17/21

 3.1(f)

 Certificate
 of Designation – Series V

 3.1

 1/31/23

 3.1(g)

 Certificate of Amendment to the Series V Certificate of Designation

 3.1

 4/19/23

 3.1(h)

 Amendment No. 4 to Articles of Incorporation – Increase Authorized Capital

 3.1

 7/13/23

 3.2

 Bylaws
 of TouchIT Technologies, Inc.

 S-1

 3.2

 5/29/08

 3.2(a)

 Amendment
 No. 1 to the Bylaws

 3.1

 4/12/22

 4.1

 BTCS Inc. 2021 Equity Incentive Plan, as amended

 (2)

 4.1

 8/11/23

 4.2

 Description of Securities

 (1)

 10.1

 Employment Agreement - Charles Allen

 (2)

 10.8

 6/23/17

 10.1(a)

 Amendment to Employment Agreement - Charles Allen

 (2)

 10.15(a)

 3/23/20

 10.2

 Employment Agreement - Michael Handerhan

 (2)

 10.9

 6/23/17

 10.2(a)

 Amendment to Employment Agreement – Michal Handerhan

 (2)

 10.16(a)

 3/23/20

 10.3

 Offer Letter – Michael Prevoznik

 (2)

 10.4

 3/11/22

 10.4

 Offer Letter – Manish Paranjape

 (2)

 10.4

 3/31/23

 19.1

 Insider Trading Policy

 (1)

 21.1

 List of Subsidiaries

 (1)

 23.1

 Consent of RBSM LLP

 (1)

 31.1

 Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 (1)

 31.2

 Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 (1)

 Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 (3)

 97.1

 Clawback Policy

 (1)

 101.INS

 (1)

 101.SCH

 (1)

 101.CAL

 (1)

 101.DEF

 (1)

 101.LAB

 (1)

 101.PRE

 (1)

 Cover

 (1)

 *

 Exhibits
 and/or Schedules have been omitted. The Company hereby agrees to furnish to the SEC upon request any omitted information.

 (1)

 Filed
 herein

 (2)

 Indicates
 a management contract or compensatory plan.

 (3)

 Furnished
 herein

 ITEM
16. FORM 10-K SUMMARY.

 Not
applicable.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on March 21, 2024.

 BTCS
 INC.

 Date:

 March

 /s/
 Charles Allen

 Charles
 W. Allen

 Chief
 Executive Officer (Principal Executive Officer)

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of BTCS
Inc. and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Charles Allen

 Chief
 Executive Officer

 March

 Charles
 W. Allen

 (Principal
 Executive Officer) and Chairman of the Board of Directors

 /s/
 Michael Prevoznik

 Chief
 Financial Officer

 March

 Michael
 Prevoznik

 (Principal
 Financial Officer and Principal Accounting Officer)

 /s/
 Michal Handerhan

 Director

 March

 Michal
 Handerhan

 /s/
 Melanie Pump

 Director

 March

 Melanie
 Pump

 /s/
 Charlie Lee

 Director

 March

 Charlie
 Lee

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Board of Directors and Stockholders of

 BTCS
Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying balance sheets of BTCS Inc. (The "Company") as of December 31, 2023 and 2022 and the related
statements of operations, stockholders' equity, and cash flows for each of the years in the two-year period ended December 31,
2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations
and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally
accepted in the United States of America.

 Change in Accounting Principle

 As discussed in Note 3 to the financial statements, the Company has changed
its method of accounting for digital assets (crypto currencies) to fair value, with changes in fair value recognized in net income, effective
as of January 1, 2023 due to the adoption of Accounting Standards Update ("ASU") No. 2023-08, Intangibles-Goodwill and Other-Crypto
Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08").

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 F- 1

 Critical
Audit Matters

 The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 Evaluation of audit evidence
pertaining to the existence and control of the digital assets

 As discussed in Notes 3 to the
consolidated financial statements, the Company accounts for its digital assets as indefinite-lived intangible assets measured at fair
value pursuant to ASU No. 2023-08. The digital assets are recorded at fair value. As of December 31, 2023, the fair value of the Company's
digital assets was $25.2 million.

 We identified the evaluation
of audit evidence pertaining to the existence of the digital assets and whether the Company controls the digital assets as a critical
audit matter. Especially subjective auditor judgment was involved in determining the nature and extent of evidence required to assess
the existence of the digital assets and whether the Company controls the digital assets, as control over the digital assets is provided
through stored private cryptographic keys. In addition, information technology (IT) professional with specialized skills and knowledge
in IT controls was needed to assist in the evaluation of the sufficiency of certain controls over digital assets.

 The following are the primary
procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls over the digital assets
process, including a control over the comparison of the Company's records of digital assets held to the information on the representative
blockchain via blockchain explorers. This included assessing the controls to prevent unauthorized users from access to the private keys
and to prevent the misuse or misappropriation of crypto assets. We involved IT professional with specialized skills and knowledge in IT
controls, who assisted in evaluating certain internal controls over the digital assets process, related specifically to the control of
the private cryptographic keys, the storing of these keys, and the reconciliation of digital assets per the Company's ledgers to
the public blockchain. We also compared on test basis of the Company's record of digital asset transactions to the records on the
public blockchain using at least two different blockchain explorers. We performed procedures to establish that the Company has controls
over the crypto assets. We evaluated the reasonableness of the prices utilized by the Company to value digital assets by obtaining independent
digital asset prices and comparing those to the prices selected by the Company.

 We applied auditor judgment in determining the nature and extent of audit
evidence required, especially related to assessing the existence of the digital assets and whether the Company controls the digital assets.
We evaluated the sufficiency and appropriateness of audit evidence obtained by assessing the results of procedures performed over the
digital assets.

 /s/
 RBSM LLP

 PCAOB ID 587

 We
 have served as the Company's auditor since 2016.

 Las
 Vegas, Nevada

 March

 F- 2

 BTCS
Inc.

 Balance
Sheets

 2023

 2022

 Assets:

 Current assets:

 Cash and cash equivalents

 $
 1,458,327

 $
 2,146,783

 Stablecoins

 21,044

 -

 Crypto assets

 302,783

 Staked crypto assets

 24,900,146

 1,826,307

 Prepaid expenses

 62,461

 123,727

 Receivable for capital shares sold

 291,440

 -

 Total current assets

 27,036,201

 4,097,799

 Other assets:

 Investments, at value (Cost $ 100,000)

 Property and equipment, net

 10,490

 11,152

 Staked crypto assets - long term

 -

 5,708,624

 Total other assets

 110,490

 5,819,776

 Total Assets

 $
 27,146,691

 $
 9,917,575

 Liabilities and Stockholders' Equity:

 Accounts payable and accrued expenses

 $
 55,058

 $
 76,727

 Accrued compensation

 712,092

 295,935

 Warrant liabilities

 Total current liabilities

 980,900

 586,412

 Stockholders' equity:

 Preferred stock: 20,000,000 shares authorized at $ 0.001 par value:

 -

 -

 Series V preferred stock: 14,567,829 and 0 shares issued and outstanding at December 31, 2023 and 2022, respectively

 2,563,938

 -

 Preferred stock value

 2,563,938

 -

 Common stock, 975,000,000 shares authorized at $ 0.001 par value, 15,320,281 and 13,107,149 shares issued and outstanding at December 31, 2023 and 2022, respectively

 15,322

 13,108

 Additional paid in capital

 162,263,634

 160,800,263

 Accumulated deficit

 ( 138,677,103
)

 ( 151,482,208
)

 Total stockholders' equity

 26,165,791

 9,331,163

 Total Liabilities and Stockholders' Equity

 $
 27,146,691

 $
 9,917,575

 The
accompanying notes are an integral part of these financial statements.

 F- 3

 BTCS
Inc.

 Statements
of Operations

 2023

 2022

 For the Year Ended

 2023

 2022

 Revenues

 Validator revenue (net of fees)

 $

 $

 Total revenues

 Cost of revenues

 Validator expenses

 359,778

 426,440

 Gross profit

 979,850

 1,266,014

 Operating expenses:

 General and administrative

 $
 1,863,916

 $
 1,916,193

 Research and development

 687,288

 611,758

 Compensation and related expenses

 2,129,144

 3,313,638

 Marketing

 12,153

 78,171

 Impairment loss on crypto assets

 -

 13,348,874

 Realized (gains) losses on crypto asset transactions

 604,269

 ( 506,757
)

 Total operating expenses

 5,296,770

 18,761,877

 Other income (expenses):

 Change in unrealized appreciation (depreciation) on crypto assets

 -

 Change in fair value of warrant liabilities

 -

 1,638,750

 Distributions to warrant holders

 -

 ( 35,625
)

 Total other income (expenses)

 1,603,125

 Net income (loss)

 $

 $
 ( 15,892,738
)

 Net income (loss) per share attributable to common stockholders, basic and diluted

 $
 0.55

 $
 ( 1.25
)

 Weighted average number of common shares outstanding, basic and diluted

 14,092,233

 12,732,914

 The
accompanying notes are an integral part of these financial statements.

 F- 4

 BTCS
Inc.

 Statements
of Stockholders' Equity

 For
the Years Ended December 31, 2023 and 2022

 Capital

 Deficit

 Equity

 Additional

 Total

 Stockholders'

 Common Stock

 Paid-in

 Accumulated

(Deficit)

 Capital

 Deficit

 Equity

 Balance December 31, 2021

 -

 10,528,212

 $
 10,529

 $
 147,682,384

 $
 ( 135,589,470
)

 $
 12,103,443

 Issuance of common stock, net of offering cost / At-the-market offering

 2,172,336

 2,172

 11,124,159

 -

 11,126,331

 Stock-based compensation

 -

 406,601

 2,624,863

 -

 2,625,270

 Dividend distributions

 -

 -

 ( 631,143
)

 -

 ( 631,143
)

 Net loss

 -

 -

 -

 ( 15,892,738
)

 ( 15,892,738
)

 Balance December 31, 2022

 -

 13,107,149

 $
 13,108

 $
 160,800,263

 $
 ( 151,482,208
)

 $
 9,331,163

 Capital

 Deficit

 Equity

 Series V

 Additional

 Total

 Preferred Stock

 Common Stock

 Paid-in

 Accumulated

 Stockholders'

 Capital

 Deficit

 Equity

 Balance December 31, 2022, as adjusted

 -

 $
 -

 13,107,149

 $
 13,108

 $
 160,800,263

 $
 ( 146,495,831 (1)
) (1)

 $
 14,317,540 (1)
 (1)

 Balance

 -

 $
 -

 13,107,149

 $
 13,108

 $
 160,800,263

 $
 ( 146,495,831
) (1)

 $
 14,317,540
 (1)

 Issuance of common stock, net of offering cost / At-the-market offering

 -

 -

 1,707,621

 1,708

 2,686,086

 -

 2,687,794

 Issuance of Series V preferred stock

 14,542,803

 2,559,533

 -

 -

 ( 2,559,533
)

 -

 -

 Stock-based compensation

 25,026

 4,405

 505,511

 1,336,818

 -

 1,341,729

 Net income (loss)

 -

 -

 -

 -

 -

 Balance December 31, 2023

 14,567,829

 $
 2,563,938

 15,320,281

 $
 15,322

 $
 162,263,634

 $
 ( 138,677,103
)

 $
 26,165,791

 Balance

 14,567,829

 $
 2,563,938

 15,320,281

 $
 15,322

 $
 162,263,634

 $
 ( 138,677,103
)

 $
 26,165,791

 (1)

 Includes
 an adjustment to the opening balance of $ 4,986,377
 resulting from a change in accounting principle. See Note 3 for further details.

 The
accompanying notes are an integral part of these financial statements.

 F- 5

 BTCS
Inc.

 Statements
of Cash Flows

 2023

 2022

 For the Year Ended

 2023

 2022

 Net Cash flows used from operating activities:

 Net income (loss)

 $

 $
 ( 15,892,738
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Depreciation expense

 5,033

 4,039

 Stock-based compensation

 1,341,729

 2,625,270

 Validator revenue

 ( 1,339,628
)

 ( 1,692,454
)

 Blockchain network fees (non-cash)

 -

 1,321

 Change in fair value of warrant liabilities

 -

 ( 1,638,750
)

 Sale of non-productive crypto assets

 -

 2,547,325

 Realized gain on crypto assets transactions

 604,269

 ( 506,757
)

 Change in unrealized (appreciation) depreciation on crypto assets

 ( 12,135,648
)

 -

 Impairment loss on crypto assets

 -

 13,348,874

 Changes in operating assets and liabilities:

 Stablecoins

 ( 21,044
)

 -

 Prepaid expenses and other current assets

 61,266

 200,824

 Receivable for capital shares sold

 ( 291,440
)

 -

 Accounts payable and accrued expenses

 ( 21,669
)

 ( 62,332
)

 Accrued compensation

 416,157

 288,601

 Net cash used in operating activities

 ( 3,562,247
)

 ( 776,777
)

 Cash flows from investing activities:

 Purchase of productive crypto assets for validating

 ( 1,804,482
)

 ( 9,453,024
)

 Sale of productive crypto assets

 1,994,851

 585,595

 Purchase of investments

 -

 ( 100,000
)

 Purchase of property and equipment

 ( 5,276
)

 ( 5,408
)

 Sale of property and equipment

 -

 Net cash provided by (used in) investing activities

 185,997

 ( 8,972,837
)

 Cash flow from financing activities:

 Dividend distributions

 -

 ( 630,801
)

 Net proceeds from issuance common stock/ At-the-market offering

 2,687,794

 11,126,331

 Net cash provided by financing activities

 2,687,794

 10,495,530

 Net (decrease)/increase in cash

 ( 688,456
)

 745,916

 Cash, beginning of period

 2,146,783

 1,400,867

 Cash, end of period

 $
 1,458,327

 $
 2,146,783

 Supplemental disclosure of non-cash financing and investing activities:

 Series V Preferred Stock Distribution

 $
 2,559,533

 $
 -

 The
accompanying notes are an integral part of these financial statements.

 F- 6

 BTCS
Inc.

 NOTES

 Note
1 - Organization and Description of Business and Recent Developments

 BTCS
Inc. (formerly Bitcoin Shop, Inc.), a Nevada corporation ("BTCS" or the "Company") was incorporated in 2008 and
is a Nasdaq listed company operating in the blockchain technology sector since 2014 with a primary focus on blockchain infrastructure.
Our core focus is on driving scalable growth through a diverse range of business streams leveraging and built on top of our core and
proven blockchain infrastructure operations. The Company secures and operates validator nodes (as a "Validator") on various
proof-of-stake ("PoS") and delegated proof-of-stake ("dPoS") based blockchain networks earning native token rewards
by staking our proof-of-stake crypto assets (also referred to "cryptocurrencies", "crypto", "crypto assets",
"digital assets", or "tokens"), with an emphasis on Ethereum.

 The
Company's non-custodial Staking-as-a-Service ("StaaS") business allows crypto asset holders to earn staking rewards
by participating in network consensus mechanisms through staking (or "delegating") their crypto assets to BTCS-operated validator
nodes (or "nodes"). As a non-custodial Validator and StaaS provider, BTCS may charge a validator node fee, typically determined
as a percent of the crypto asset rewards earned on crypto assets delegated to its node, creating the opportunity for potential scalable
revenue and business growth with limited additional costs. The Company believes that StaaS provides a more accessible and cost-effective
way for crypto asset holders to participate in blockchain network consensus, thereby promoting the growth and adoption of blockchain
technology.

 The
Company's internally-developed "StakeSeeker" platform is a personal finance software and education center with a comprehensive
crypto dashboard for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets
in a single analytics platform. The StakeSeeker dashboard reads user data from digital wallets and utilizes application programming interfaces
(APIs) to read data from crypto exchanges and does not allow for the trading or custody of crypto assets. StakeSeeker's Stake Hub
functions as an educational center, offering users guidance on the delegation of their crypto assets to our non-custodial validator nodes,
along with the ability to monitor such delegation activities through data analysis. StakeSeeker does not provide or facilitate direct,
asset delegation or transaction execution on our platform. Stake Hub's primary purpose is to offer instructional support and tracking
capabilities. There is no active process for asset delegation through the Stake Hub dashboard; it is primarily a monitoring tool. The
StakeSeeker platform is currently free-to-use for registered users so is not currently generating revenue. The Company is not a broker-dealer
or an investment advisor and does not provide any such related services. StakeSeeker provides a valuable analytical platform to crypto
enthusiasts and strategically seeks to entice users with its cutting-edge features. The underlying strategic objective of the platform
is to drive the expansion of Delegators to our validator nodes.

 The
Company anticipates taking the StaaS Platform out of beta prior to the end of 2024. The current functionality allows for crypto asset
holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets in a single analytics platform.
In the future we may add support for additional blockchains and provide other analytic tools. We are also exploring the feasibility of
adding Ethereum non-custodial staking to StakeSeeker in 2024. We anticipate the costs associated with doing so would be in line with
our historical research and development costs.

 The
Company has introduced "Builder+", a newly developed Ethereum block builder ("Builder") that utilizes advanced
algorithms to maximize validator earnings by constructing optimized blocks for on-chain validation. Builders actively monitor the Ethereum
transaction queue, known as the "mempool", for pending transactions and strategically reorder them to create 'optimized
blocks' containing transactions with the highest fees. Builders pay a fee to increase the chances of their blocks being selected
by a validator and, in return, earn the associated crypto transaction fees.

 The
Company's business is subject to various risks and uncertainties, including risks associated with the evolving regulatory landscape
for crypto assets, risks associated with the volatility of crypto asset prices, and risks associated with the development and adoption
of blockchain technology. The Company's future success is dependent on various factors, including the growth of the crypto asset
market, the adoption of blockchain technology, and the Company's ability to effectively operate and grow its blockchain infrastructure
operations and StaaS business.

 F- 7

 BTCS
Inc.

 NOTES

 Note
2 - Summary of Significant Accounting Policies

 Basis
of Presentation

 The
accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP").

 Reclassifications

 Certain
prior period amounts have been reclassified in order to conform with the current period presentation. These reclassifications have no
impact on the Company's previously reported net income (loss).

 Cash
and Cash Equivalents

 The
Company considers all highly liquid investments with original maturities of six months or less when purchased to be cash and cash equivalents.
The Company maintains cash and cash equivalent balances at financial institutions that are insured by the FDIC.As of December 31, 2023
and 2022, the Company had approximately $ 1,458,000 and $ 2,147,000 in cash. The Company has not experienced any losses in such accounts
and believes it is not exposed to any significant credit risk on cash.

 Financial
instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $ 250,000. As of December 31, 2023 and
2022, the Company had approximately $ 933,000 and $ 1,682,000 in excess of the FDIC insured limit, respectively.

 Stablecoins

 The
Company holds stablecoins, such as USDT (Tether) and USDC (USD Coin), which are crypto assets that are pegged to the value of one U.S.
dollar and can be redeemed on demand for one U.S. dollar. Our stablecoins are typically held in secure digital wallets or on crypto asset
exchanges. The Company acquires and holds stablecoins primarily to facilitate crypto asset transactions, including, but not limited to,
payments to third-party vendors.

 The
Company accounts for its stablecoins as indefinite-lived intangible assets in accordance with ASC 350, Intangibles – Goodwill
and Other. While not accounted for as cash or cash equivalents, these stablecoins are considered a liquidity resource.

Assets

 Fair
Value Measurement

 The
Company's fair value measurement for its crypto assets is guided by Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 820, Fair Value Measurement. According to ASC 820, fair value is defined as the price
that would be received for an asset in a current sale, assuming an orderly transaction between market participants on the measurement
date. It requires the Company to assume that its crypto assets are sold in their principal market or, in the absence of a principal market,
the most advantageous market. In this context, market participants are considered to be independent, knowledgeable, and willing and able
to transact.

 Kraken
has been identified as the principal market for the Company's crypto assets, serving as the Company's primary cryptocurrency
exchange for both purchases and sales. This determination is based on a comprehensive evaluation process that considers various factors,
including regulatory compliance, trading activity, and price stability. The Company places significant trust in Kraken's well-established
reliability and robust capabilities.

 To
determine the fair value of its crypto assets, the Company relies primarily on coinmarketcap.com ("CoinMarketCap") as the
principal pricing source. The selection of CoinMarketCap is the result of thorough due diligence, which identified it as the most reliable
source for consistently obtaining timely and accurate crypto asset price data, covering all the crypto assets held by the Company. The
real-time pricing from CoinMarketCap is notably aligned with the bid/ask quotes observed on the Company's primary exchange and
principal market, Kraken.

 While
Kraken is designated as the primary exchange, the Company maintains the flexibility to engage in cryptocurrency transactions on other
exchanges where it maintains accounts. This flexibility allows the Company to adapt to changing market conditions and explore alternative
platforms when necessary to ensure cost-effective execution and fair value measurement using the most advantageous market.

 The
determination of Kraken as the principal market reflects the Company's commitment to making informed decisions based on regulatory
compliance, trading activity, and price stability and achieving the most accurate representation of fair value for its crypto assets.
The Company regularly reviews and assesses its choice of principal market to ensure it aligns with its objectives and the evolving landscape
of the cryptocurrency market.

 F- 8

 Accounting
for Crypto Assets

 The
cost basis of the Company's crypto assets is initially recorded at their fair value using the U.S. dollar spot price of the related
crypto asset at 4:00 p.m., New York time, on the date of receipt (or "carrying value").

assets are measured at their fair respective fair market values at each reporting period end on the balance sheets and classified as
either 'Staked Crypto Assets' or 'Crypto Assets' to distinguish their nature within the respective balances.
Staked crypto assets are presented as current assets if their lock-up periods are less than 12 months, and as long-term other assets
if the lock-up extends beyond one year. The majority of our crypto assets are staked, typically with lock-up periods of less than 21
days, and are considered current assets in accordance with ASC 210-10-20, Balance Sheet,
due to the Company's ability to sell them in a liquid marketplace, as we have a reasonable expectation that they will be
realized in cash or sold or consumed during the normal operating cycle of our business to support operations when needed.

 The
classification of purchases and sales in the statements of cash flows is determined based on the nature of the crypto assets, which can
be categorized as 'productive' (i.e. acquired for purposes of staking) or 'non-productive' (e.g. bitcoin). Acquisitions
of non-productive crypto assets are treated as operating activities, while acquisitions of productive crypto assets are classified as
investing activities in accordance with ASC 230-10-20, Investing activities. Productive crypto assets staked with lock-up periods
of less than 12 months are listed as current assets in the 'Staked Crypto Assets' line item on the balance sheet. Staked
crypto assets with lock-up periods exceeding 12 months are categorized as long-term other assets. Non-productive crypto assets are included
in the 'Crypto Assets' line item on the balance sheet.

January 1, 2023, the Company has elected to early adopt ASU No. 2023-08, resulting in a material change in accounting principle
related to the Company's accounting treatment of crypto assets. The impacts of the change in accounting principle are discussed
further in Note 3.

 Prior
to the Company's adoption of ASU No. 2023-08, the Company accounted for its crypto assets as indefinite-lived intangible
assets in accordance with ASC 350, Intangibles –Goodwill and Other. An intangible asset with an indefinite useful life
is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating
that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its
fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it
is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment
exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a
quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset.
Subsequent reversal of impairment losses is not permitted.

 Prior
to the Company's adoption of ASU No. 2023-08, on a quarterly basis, crypto assets were measured at carrying value, net of any
impairment losses incurred since receipt. The Company recorded impairment losses as the fair value fell below the carrying value of
the crypto assets at any time during the period, as determined using the lowest intraday U.S. dollar spot price of the related
crypto asset subsequent to its acquisition. The crypto assets could only be marked down when impaired and not marked up when their
value increases. Impairment losses could not be recovered for any subsequent increase in fair value until the sale or disposal of
the asset. Such impairment in the value of crypto assets was recorded as a component of costs and expenses in our statements of
operations. The Company recorded impairment losses of approximately $ 0
and $ 13,349,000
related to crypto assets during the years ended December 31, 2023 and 2022, respectively.

gain (loss) on sale of crypto assets are included in other income (expense) in the statements of operations. The Company recorded realized
gains (losses) on crypto assets of approximately ($ 604,000) and $ 507,000 during the years ended December 31, 2023 and 2022, respectively.

 F- 9

Recognition

 The
Company recognizes revenue under ASC 606, Revenue from Contracts with Customers.
The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those
goods or services. The following five steps are applied to achieve that core principle:

 Step
 1: Identify the contract with the customer

 Step
 2: Identify the performance obligations in the contract

 Step
 3: Determine the transaction price

 Step
 4: Allocate the transaction price to the performance obligations in the contract

 Step
 5: Recognize revenue when the Company satisfies a performance obligation

is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those goods or services. The Company generates revenue through staking rewards
generated from its blockchain infrastructure operations.

 The
transaction consideration the Company receives - the crypto asset awards and gas fees - are a non-cash consideration, which the Company
measures at fair value on the date received. The fair value of the crypto asset award received is determined using the U.S. dollar spot
price of the related crypto asset at 4:00 p.m., New York time, on the date of receipt.

Infrastructure

 The
Company engages in network-based smart contracts by running its own crypto asset validator nodes as well as by staking (or "delegating")
crypto assets directly to both its own validator nodes and nodes run by third-party operators. Through these contracts, the Company provides
crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network. The
term of a smart contract can vary based on the rules of the respective blockchain and typically last from a few days to several weeks
after it is cancelled (or "un-staked") by the delegator and requires that the crypto assets staked remain locked up during
the duration of the smart contract.

 In
exchange for staking the crypto assets and validating transactions on blockchain networks, the Company is entitled to all of the fixed
crypto asset award earned from the network when delegating to the Company's own node and is entitled to a fractional share of the
fixed crypto asset award a third-party node operator receives (less crypto asset transaction fees payable to the node operator, which
are immaterial and are recorded as a deduction from revenue), for successfully validating or adding a block to the blockchain. The Company's
fractional share of awards received from delegating to a third-party validator node is proportionate to the crypto assets staked by the
Company compared to the total crypto assets staked by all Delegators to that node at that time.

 The
provision of validating blockchain transactions is an output of the Company's ordinary activities. Each separate block creation
or validation under a smart contract with a network represents a performance obligation. The satisfaction of the performance obligation
for processing and validating blockchain transactions occurs at a point in time when confirmation is received from the network indicating
that the validation is complete, and the awards are available for transfer. At that point, revenue is recognized.

 F- 10

 BTCS
Inc.

 NOTES

 The
following table details the native token rewards and their respective fair market value recognized as revenue during the years ended
December 31, 2023. The tables distinguish between token rewards earned from staking to BTCS run Validator nodes as well as delegating
to validator nodes operated by unaffiliated third-parties.

 Crypto assets earned from staking to BTCS validator nodes

 Schedule Of Crypto Assets Earned From
BitCoins

 FY 2022

 FY 2022

 FY 2023

 FY 2023

 Asset

 Token Rewards

 Revenue ($USD)

 Token Rewards

 Revenue ($USD)

 $
 768,992

 $
 639,357

 Cosmos (Atom)

 15,200

 $
 214,217

 43,268

 $
 408,964

 49,690

 $
 114,603

 53,435

 $
 43,642

 $
 73,138

 $
 21,981

 4,320

 $
 2,594

 15,840

 $
 10,959

 -

 $
 -

 89,591

 $
 10,807

 6,376

 $
 1,459

 11,666

 $
 9,808

 Avalanche (Avax)

 1,051

 $
 30,791

 $
 9,117

 $
 1,512

 5,494

 $
 8,836

 9,758

 $

 98,001

 $
 5,802

 3,620

 $
 7,048

 2,413

 $
 2,326

 Terra (Luna)

 $
 5,401

 -

 $
 -

 Algorand (Algo)

 $

 -

 $
 -

 Total earned from staking to BTCS validator nodes

 -

 $
 1,220,403

 $
 1,171,599

 Crypto assets earned from staking to third-party validator nodes

 Schedule of Crypto Assets Earned From Third
Party

 FY 2022

 FY 2022

 FY 2023

 FY 2023

 Asset

 Token Rewards

 Revenue ($USD)

 Token Rewards

 Revenue ($USD)

 17,392

 $
 385,101

 18,522

 $
 127,691

 Polygon (Matic)

 31,395

 $
 27,826

 24,878

 $
 20,613

 $
 20,428

 $
 11,592

 2,989

 $
 35,658

 1,371

 $
 7,358

 5,102

 $
 3,038

 2,394

 $

 Total earned from staking to third-party validator nodes

 $
 472,051

 $
 168,029

 Total

 $

 $

 Cost
of Revenue

 The
Company's cost of revenue related to its blockchain infrastructure operations primarily includes direct production costs associated
with transaction validation on the network, cloud-based server hosting expenses related to our validator nodes, and allocated employee
salaries dedicated to node maintenance and support. Additionally, the cost of revenue encompasses fees, including equity compensation
stock-based fees paid to third parties for their assistance in software maintenance and node operations. These costs directly related to production of revenues are collectively summarized as "Validator expenses" in the
statements of operations.

 F- 11

 BTCS
Inc.

 NOTES

 Internally
Developed Software

 Internally
developed software consists of the core technology of the Company's StakeSeeker platform, which is being designed to allow users
to track, monitor and analyze their aggregate cryptocurrency portfolio holdings by connecting their crypto exchanges and digital wallets
as well as providing a non-custodial delegation process to earn staking rewards on crypto asset holdings. For internally developed software,
the Company uses both its own employees as well as the services of external vendors and independent contractors. The Company accounts
for computer software used in the business in accordance with ASC 985-20 and ASC 350.

 ASC
985-20, Software-Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed, requires that software development costs
incurred in conjunction with product development be charged to research and development expense until technological feasibility is established.
Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized
cost or net realizable value of the related product. Some companies use a "tested working model" approach to establishing
technological feasibility (i.e., beta version). Under this approach, software under development will pass the technological feasibility
milestone when the Company has completed a version that contains essentially all the functionality and features of the final version
and has tested the version to ensure that it works as expected.

 ASC
350, Intangibles-Goodwill and Other, requires computer software costs associated with internal use software to be charged to operations
as incurred until certain capitalization criteria are met. Costs incurred during the preliminary project stage and the post-implementation
stages are expensed as incurred. Certain qualifying costs incurred during the application development stage are capitalized as property,
equipment and software. These costs generally consist of internal labor during configuration, coding, and testing activities. Capitalization
begins when (i) the preliminary project stage is complete, (ii) management with the relevant authority authorizes and commits to the
funding of the software project, and (iii) it is probable both that the project will be completed and that the software will be used
to perform the function intended.

 Property
and Equipment

 Property
and equipment consist of computer, equipment and office furniture and fixtures, all of which are recorded at cost. Depreciation and
amortization are recorded using the straight-line method over the respective useful lives of the assets ranging from three to five years.
Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may
not be recoverable.

 Use
of Estimates

 The
accompanying financial statements have been prepared in conformity with U.S. GAAP. This requires management to make estimates and assumptions
that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during the period. The Company's significant estimates and
assumptions include the recoverability and useful lives of indefinite life intangible assets, stock-based compensation, and the valuation
allowance related to the Company's deferred tax assets. Certain of the Company's estimates, including the carrying amount
of the indefinite life intangible assets, could be affected by external conditions, including those unique to the Company and general
economic conditions. It is reasonably possible that these external factors could have an effect on the Company's estimates and
could cause actual results to differ from those estimates and assumptions.

 Income
Taxes

 The
Company recognizes income taxes on an accrual basis based on tax positions taken or expected to be taken in its tax returns. A tax position
is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected
in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not
(i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities.
Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of
tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset and liability
approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company's financial statements or tax returns. A valuation allowance is established to reduce deferred
tax assets if all, or some portion, of such assets will more than likely not be realized. Should they occur, the Company's policy
is to classify interest and penalties related to tax positions as income tax expense. Since the Company's inception, no such interest
or penalties have been incurred.

 F- 12

 BTCS
Inc.

 NOTES

 Accounting
for Warrants

 The
Company accounts for the issuance of Common Stock purchase warrants issued in connection with the equity offerings in accordance with
the provisions of ASC 815, Derivatives and Hedging. The Company classifies as equity any contracts that
(i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its
own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require
net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control
of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share
settlement). In addition, Under ASC 815, registered Common Stock warrants that require the issuance of registered shares upon exercise
and do not expressly preclude an implied right to cash settlement are accounted for as derivative liabilities. The Company classifies
these derivative warrant liabilities on the balance sheets as a current liability.

 The
Company assessed the classification of Common Stock purchase warrants as of the date of each offering and determined that such instruments
originally met the criteria for equity classification; however, as a result of the Company no longer being in control of whether the
warrants may be cash settled, the instruments no longer qualify for equity classification. Accordingly, the Company classified the warrants
as a liability at their fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement
at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized as "change in
the fair value of warrant liabilities" in the statements of operations. The fair value of the warrants has been estimated using
a Black-Scholes valuation model (see Note 4).

 Stock-based

 The
Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation.
ASC 718 addresses all forms of share-based payment awards including shares issued under employee stock purchase plans and stock incentive
shares. Under ASC 718, awards result in a cost that is measured at fair value on the awards' grant date, based on the estimated
number of awards that are expected to vest and will result in a charge to operations.

 Share-based
payment awards exchanged for services are accounted for at the fair value of the award on the estimated grant date.

 Options

 Stock
options issued under the Company's long-term incentive plans are granted with an exercise price equal to no less than the market
price of the Company's stock at the date of grant and expire up to ten years from the date of grant.

 The
Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating
the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application
of management's judgment.

 F- 13

 BTCS
Inc.

 NOTES

 Restricted
Stock Units ("RSUs")

 For
awards vesting upon the achievement of a service condition, compensation cost measured on the grant date will be recognized on a straight-line
basis over the vesting period. Stock-based compensation expense for the market-based restricted stock units with explicit service conditions
is recognized on a straight-line basis over the longer of the derived service period or the explicit service period, regardless of whether
the market condition is satisfied. However, in the event that the explicit service period is not met, previously recognized compensation
cost would be reversed. Market-based restricted stock units subject to market-based performance targets require achievement of the performance
target as well as a service condition in order for these RSUs to vest.

 The
Company estimates the fair value of market-based RSUs as of the grant date and expected derived term using a Monte Carlo simulation that
incorporates pricing inputs covering the period from the grant date through the end of the derived service period.

 Dividends

January 27, 2023, the Company's Board of Directors (the "Board") approved the issuance of a newly designated Series
V Preferred Stock ("Series V") on a one-for-one basis to the Company's shareholders (including restricted stock unit
holders and warrant holders who were entitled to such distribution). The distribution of Series V shares was approved and completed on
June 2, 2023 to shareholders as of the record date of May 12, 2023. The Series V: (i) is non-convertible, (ii) has a 20% liquidation
preference over the shares of common stock, (iii) is non-voting and (iv) has certain rights to dividends and distributions (at the discretion
of the Board). A total of 14,542,803 shares of Series V Preferred Stock were distributed to shareholders on June 2, 2023.

 On
January 5, 2022, the Board declared a non-recurring special dividend of $ 0.05 for each outstanding share of Common Stock of the Company,
payable to holders of record as of the close of business on March 17, 2022. The dividend distributions were considered a return of capital
as the distributions were in excess of the Company's current and accumulated earnings and profits. The return of capital distribution
reduces the Company's additional paid in capital balance. Dividend distributions amounted to $ 0 and $ 631,000 during the years
ended December 31, 2023 and 2022, respectively.

 The
Company will evaluate the appropriateness of potential future dividends as the Company continues to grow its operations.

 Advertising
Expense

 Advertisement
costs are expensed as incurred and included in marketing expenses. Advertising and marketing expenses amounted to approximately $ 12,000
and $ 78,000 for the year ended December 31, 2023 and 2022, respectively.

 Net
Income (Loss) per Share

 Basic
income (loss) per share is computed by dividing the net income or loss applicable to common shares by the weighted average number of
common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares
and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the Company's restricted stock units, options and warrants. Diluted loss per share excludes the shares issuable
upon the conversion of preferred stock, notes and warrants from the calculation of net loss per share if their effect would be anti-dilutive.

 The
following financial instruments were not included in the diluted loss per share calculation as of December 31, 2023 and 2022 because
their effect was anti-dilutive:

of Earnings Per Share Anti-diluted

 2023

 2022

 As of December 31,

 2023

 2022

 Warrants to purchase common stock

 712,500

 912,500

 Options

 1,200,000

 1,150,000

 Non-vested restricted stock awards units

 1,606,373

 1,590,553

 Total

 3,518,873

 3,653,053

 Anti-dilutive securities

 3,518,873

 3,653,053

 F- 14

 BTCS
Inc.

 NOTES

 Recent
Accounting Pronouncements

 In
December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60), which
is intended to improve the accounting for and disclosure of crypto assets. The ASU requires entities to subsequently measure crypto assets
that meet specific criteria at fair value, with changes recognized in net income each reporting period. The ASU also the requires specific
presentation of cash receipts arising from crypto assets that are received as noncash consideration in the ordinary course of business
and are converted nearly immediately into cash. The amendments in this update are effective for all entities for fiscal years beginning
after December 15, 2024, with early adoption permitted. The Company adopted ASU No. 2023-08 effective January 1, 2023, which had a material
impact to its financial statement and related disclosures, which are further discussed in Note 3.

 Other
recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public
Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's
present or future financial statements.

 Note
3 - Changes in Accounting Principle

January 1, 2023, the Company has elected to early adopt ASU No. 2023-08, resulting in a material change in accounting principle related
to the Company's accounting treatment of crypto assets.

 As a result of the adoption
of ASU No. 2023-08, crypto assets are recorded at their fair market value on its balance sheet and changes in the fair market value of
its crypto assets during reporting periods are recorded within its statements of operations as unrealized appreciation (depreciation).
Prior to adopting ASU No. 2023-08, crypto assets were accounted for as intangible assets with an indefinite life in accordance with ASC
350, Intangibles –Goodwill and Other, carrying them at their impaired value and recognizing impairment losses during reporting
periods. Adoption of the fair market value guidance contained within ASU No. 2023-08 eliminates the need to calculate impairment losses
on crypto assets for the year of adoption and moving forward.

 The
Company elected to early adopt the guidance contained with ASU No. 2023-08 as we believe that the specified changes in financial reporting
better reflect the economic realities of the Company's business model and the value of the crypto assets held, enhancing the transparency
and accuracy of the financial statements.

 The
adoption of ASU No. 2023-08 required an adjustment to the Company's opening Retained Earnings balance as of January 1, 2023, to
recognize the cumulative effect of initially applying the change in accounting principle to previous periods. The adjustment accounts
for the difference between the December 31, 2022 ending book value of crypto assets and their respective fair market value, which amounted
to approximately $ 4,986,000.

 F- 15

 BTCS
Inc.

 NOTES

 Note
4 – Crypto Assets

 The
following table presents the Company's crypto assets held as of December 31, 2023:

of Crypto Assets Held

 Asset

 Tokens

 Cost

 Fair Market Value

 7,815

 $
 8,862,438

 $
 17,829,264

 Cosmos (Atom)

 270,098

 4,843,231

 2,860,870

 7,845

 535,109

 796,327

 Avalanche (Avax)

 17,842

 1,129,281

 687,713

 60,552

 1,913,988

 535,546

 Polygon (Matic)

 506,010

 848,606

 491,138

 2,647,629

 157,541

 363,571

 7,313

 1,427,083

 329,353

 345,394

 1,089,300

 301,429

 80,267

 162,780

 293,204

 119,071

 46,156

 291,574

 265,254

 402,901

 157,615

 90,017

 63,539

 122,007

 8,650

 139,711

 70,879

 345,777

 97,404

 43,886

 26,174

 73,318

 26,379

 1,500

 2,174

 Total

 -

 $
 21,793,886

 $

 The
following table presents a rollforward of the Company's crypto asset activities for the years ended December 31, 2023 and
2022:

of Crypto Asset Activities

 31, 2021 - Book Value

 $
 12,365,472

 Purchases
 of crypto assets

 9,453,024

 Rewards
 earned from staking

 Sales
 of crypto assets

 ( 3,132,920
)

 gains on sale of crypto assets

 506,757

 Impairment
 loss

 ( 13,348,874
)

 31, 2022 - Book Value

 $
 7,535,913

 Opening
 adjustment for change in accounting principle

 4,986,377

 Purchases
 of crypto assets

 1,804,482

 Rewards
 earned from staking

 Sales
 of crypto assets

 ( 1,994,851
)

 gains on sale of crypto assets

 147,295

 losses on sale of crypto assets

 ( 751,563
)

 Change
 in unrealized appreciation (depreciation) of crypto assets

 31, 2023 - Fair Market Value

 $

 F- 16

 BTCS
Inc.

 NOTES

 Note
5 - Fair Value of Financial Assets and Liabilities

 The
Company measures certain assets and liabilities at fair value. The Company defines fair value as the price that would be received from
selling an asset or paid to transfer a liability (i.e., an 'exit price') in the principal or most advantageous market in
an orderly transaction between market participants at the measurement date.

 Fair
value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and
bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

 Level
1 – Valuations based on unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that are accessible
at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, these
valuations do not entail a significant degree of judgment.

 Level
2 – Valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted
prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.

 Level
3 – Valuations based on inputs that are generally unobservable and typically reflect management's estimate of assumptions
that market participants would use in pricing the asset or liability.

 Financial
instruments, including cash and cash equivalents, accounts and other receivables, accounts payable and accrued liabilities are carried
at cost, which management believes approximates fair value due to the short-term nature of these instruments.

 The
following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis and the Company's
estimated level within the fair value hierarchy of those assets and liabilities as of December 31, 2023 and 2022:

of Fair Value of Assets and Liabilities Valued on Recurring Basis

 Fair Value Measured at December 31, 2023

 Total at

 Quoted prices in active markets

 Significant other observable inputs

 Significant unobservable inputs

 2023

 (Level 1)

 (Level 2)

 (Level 3)

 Assets

 Crypto Assets

 $

 $

 $
 -

 $
 -

 Investments

 -

 -

 Total Assets

 $
 25,302,929

 $

 $
 -

 $

 Liabilities

 Warrant Liabilities

 $

 $
 -

 $
 -

 $

 Fair Value Measured at December 31, 2022

 Total at December 31,

 Quoted prices in active markets

 Significant other observable inputs

 Significant unobservable inputs

 2022

 (Level 1)

 (Level 2)

 (Level 3)

 Assets

 Investments

 $

 $
 -

 $
 -

 $

 Liabilities

 Warrant Liabilities

 $

 $
 -

 $
 -

 $

 The
Company did not make any transfers between the levels of the fair value hierarchy during the years ended December 31, 2023 and 2022.

 F- 17

 The
following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial assets and liabilities
for the years ended December 31, 2023 and 2022, that are measured at fair value on a recurring basis:

 Schedule of Changes in Fair Value and Other
Adjustments of Warrants

 Fair
 Value of Level 3 Financial Assets

 2023

 2022

 Beginning balance

 $

 $
 -

 Purchases

 -

 Unrealized
 appreciation (depreciation)

 -

 -

 Ending balance

 $

 $

 Fair
 Value of Level 3 Financial Liabilities

 2023

 2022

 Beginning balance

 $

 $
 1,852,500

 Warrant liabilities classification

 -

 -

 Fair
 value adjustment of warrant liabilities

 -

 ( 1,638,750
)

 Ending balance

 $

 $

 F- 18

 BTCS
Inc.

 NOTES

 Level
3 Valuation Techniques

 Level
3 financial assets consist of private equity investments for which there is no current public market for these securities such that the
determination of fair value requires significant judgment or estimation. As of December 31, 2023, the Company's Level 3 investments
were carried at original cost of the investments, with a value of $100,000. The Company has elected to apply the measurement alternative
under ASC 321, Investments—Equity Securities, for these investments.

 Level
3 financial liabilities consist of the warrant liabilities for which there is no current market for these securities such that the determination
of fair value requires significant judgment or estimation.

 Changes
in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates
or assumptions and recorded as appropriate.

 A
significant decrease in the volatility or a significant decrease in the Company's stock price, in isolation, would result in a
significantly lower fair value measurement. Changes in the values of the warrant liabilities are recorded in "change in fair value
of warrant liabilities" in the Company's statements of operations.

 On
March 2, 2021, the Company entered into a securities purchase agreement (the "Offering") with certain purchasers pursuant
to which the Company agreed to sell an aggregate of (i) 950,000 shares of Common Stock, and (ii) Common Stock warrants (the "Warrants")
to purchase up to 712,500 shares of Common Stock for gross proceeds of $ 9.5 million in a private placement. The closing of the Offering
occurred on March 4, 2021.

 The
Warrants require, at the option of the holder, a net-cash settlement following certain fundamental transactions (as defined in the Warrants)
at the Company. At the time of issuance, the Company maintained control of certain fundamental transactions and as such the Warrants
were initially classified in equity. As of December 31, 2023, the Company no longer maintained control of certain fundamental transactions
as they did not control a majority of shareholder votes. As such, the Company may be required to cash settle the Warrants if a fundamental
transaction occurs which is outside the Company's control. Accordingly, the Warrants are classified as liabilities. The Warrants
have been recorded at their fair value using the Black-Scholes valuation model, and will be recorded at their respective fair value at
each subsequent balance sheet date. This model incorporates transaction details such as the Company's stock price, contractual
terms, maturity, risk-free rates, as well as volatility.

 The
Warrants require the issuance of registered shares upon exercise, do not expressly preclude an implied right to cash settlement and are
therefore accounted for as derivative liabilities. The Company classifies these derivative warrant liabilities on the balance sheets
as a current liability.

 A
summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's
warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of December 31, 2023 and 2022, is as follows:

 Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities

 31, 2022

 Risk-free rate of interest

 4.23
 %

 3.99
 %

 Expected volatility

 102.81
 %

 152.84
 %

 Expected life (in years)

 2.18

 3.18

 Expected dividend yield

 -

 -

 The
risk-free interest rate was based on rates established by the Federal Reserve Bank. For the Warrants, the Company estimates expected
volatility giving primary consideration to the historical volatility of its Common Stock. The general expected volatility is based on
the standard deviation of the Company's underlying stock price's daily logarithmic returns. The expected life of the warrants
was determined by the expiration date of the warrants. The expected dividend yield was based on the fact that the Company has not historically
paid dividends on its Common Stock and does not expect to pay recurring dividends on its Common Stock in the future.

 F- 19

 BTCS
Inc.

 NOTES

 Note
6 - Stockholders' Equity (Deficit)

 Common
Stock

 The
Company received shareholder approval on July 11, 2023 to amend our Articles of Incorporation to increase the number of authorized shares
of common stock from 97,500,000 shares to 975,000,000. On July 12, 2023, the Company filed a Certificate of Amendment to the Articles
of Incorporation to effectuate the increase of our authorized shares of common stock to 975,000,000.

 At
The Market Offering Agreement

 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 through
H.C. Wainwright, shares of the Company's Common Stock having an aggregate offering price of up to $ 98,767,500 (the "Shares").
The Company will pay H.C. Wainwright a commission rate equal to 3.0 % of the aggregate gross proceeds from each sale of Shares.

the year ended December 31, 2023, the Company sold a total of 1,707,621 shares of Common Stock under the ATM Agreement for aggregate
total gross proceeds of approximately $ 2,790,000 at an average selling price of $ 1.63 per share, resulting in net proceeds of approximately
$ 2,688,000 after deducting commissions and other transaction costs.

the year ended December 31, 2022, the Company sold a total of 2,172,336 shares of Common Stock under the ATM Agreement for aggregate
total gross proceeds of approximately $ 11,487,000 at an average selling price of $ 5.29 per share, resulting in net proceeds of approximately
$ 11,126,000 after deducting commissions and other transaction costs.

 Share
Based Payments

January 19, 2023, The Board approved the issuance of $ 50,000 of common stock to each independent director. The shares will be issued
in four equal installments ($ 12,500 each) at the end of each calendar quarter beginning March 31 st, subject to continued service
on each applicable issuance date. The number of shares issuable will be based on the closing price of the Company's common stock
on the last trading day prior to the end of the applicable calendar quarter. For the year ended December 31, 2023, 122,124 shares of
common stock were issued to independent directors.

 For
the years ended December 31, 2023 and 2022, 354,713 and 284,722 shares of common stock were issued to officers related to payment of
accrued bonus compensation, respectively.

 Issuance
of Restricted Stock to Service Providers

the year ended December 31, 2022, the Company issued to one service provider a total of approximately 12,500 shares of restricted Common
Stock, representing a total fair value of $ 59,000.

 F- 20

 BTCS
Inc.

 NOTES

 Preferred
Stock

 Series
V

January 27, 2023, the Board approved the issuance of a newly designated Series V Preferred Stock ("Series V") on a one-for-one
basis to the Company's shareholders (including restricted stock unit holders and warrant holders). The distribution of Series V
shares was approved and completed on June 2, 2023 to shareholders as of the record date of May 12, 2023. The Series V: (i) is non-convertible,
(ii) has a 20% liquidation preference over the shares of common stock, (iii) is non-voting and (iv) has certain rights to dividends and
distributions (at the discretion of the Board). A total of 14,542,803 shares of Series V Preferred Stock were distributed to shareholders
on June 2, 2023. The Series V is listed to trade on Upstream, the trading app for digital securities and NFTs powered by Horizon Fintex
and MERJ Exchange Limited, under the ticker symbol BTCSP.

 The
fair value of the Preferred stock as of the record date, May 12, 2023, amounted to approximately $ 2,560,000. The Company used a probability
valuation model to determine the fair value of the preferred stock.

 2021
Equity Incentive Plan

 The
Company's 2021 Equity Incentive Plan (the "2021 Plan") was effective on January 1, 2021 and approved by shareholders
on March 31, 2021 and amended on June 13, 2022. The Company received shareholder approval on July 11, 2023 to increase the authorized
amount under the 2021 Plan from 7,000,000 shares to 12,000,000 shares.

 Options

the year ended December 31, 2023, the Company granted 85,000 stock options with a weighted average exercise price of $ 1.29 to non-executive
employees.

the year ended December 31, 2022, the Company granted 50,000 stock options with a weighted average exercise price of $ 1.51 to non-executive
employees.

 The
following weighted-average assumptions were used to estimate the fair value of options granted on the deemed grant date during the years
ended December 31, 2023 and 2022 for the Black-Scholes formula:

 Schedule of
Weighted-Average Assumptions Used to Estimate Fair Value

 Year
 Ended

31,

 2023

 2022

 Exercise price

 $
 1.29

 $
 1.51

 Term (years)

 5.00

 5.00

 Expected stock price volatility

 151.32
 %

 165.79
 %

 Risk-free rate of interest

 3.97
 %

 2.77
 %

Volatility: The Company uses historical volatility as it provides a reasonable estimate of the expected volatility. Historical volatility
is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the option.

 Risk-Free
Interest Rate: The risk-free interest rate is based on the U.S. treasury zero-coupon yield curve in effect at the time of grant for
the expected term of the option.

Term: The Company's expected term represents the weighted-average period that the Company's stock options are expected
to be outstanding. The expected term is based on the expected time to post-vesting exercise of options by employees. The Company uses
historical exercise patterns of previously granted options to derive employee behavioral patterns used to forecast expected exercise
patterns.

 A
summary of options activity under the Company's stock option plan for the years ended December 31, 2023 and 2022 are presented
below:

 Summary of Option Activity

 Number
 of Shares

 Average Exercise Price

 Total
 Intrinsic Value

 Average Remaining Contractual Life (in years)

 Outstanding as of December 31, 2021

 1,235,000

 $
 2.14

 $
 1,488,000

 4.0

 Employee options granted

 50,000

 1.51

 -

 1.4

 Employee options expired

 ( 100,000
)

 1.90

 -

 -

 Employee
 options forfeited

 ( 35,000
)

 1.50

 -

 -

 Outstanding as of December 31, 2022

 1,150,000

 $
 2.15

 $
 -

 3.3

 Options vested and exercisable as of December
 31, 2022

 1,135,000

 $
 2.16

 $
 -

 3.3

 Number
 of Shares

 Average Exercise Price

 Total
 Intrinsic Value

 Average Remaining Contractual Life (in years)

 Outstanding as of December 31, 2022

 1,150,000

 $
 2.15

 $
 -

 3.3

 Employee options granted

 85,000

 1.29

 -

 5.0

 Employee options forfeited

 ( 35,000
)

 1.02

 11,100

 -

 Outstanding as of December 31, 2023

 1,200,000

 $
 2.12

 $
 8,700

 2.4

 Options vested and exercisable as of December

 1,145,000

 $
 2.15

 $
 -

 2.3

 F- 21

 BTCS
Inc.

 NOTES

 RSUs

 On
February 22, 2022, the Company granted 45,767 restricted stock units to the Company's Chief Technology Officer. The restricted
stock units are to vest over a five-year period as follows: 20 % of the 45,767 restricted stock units vested on January 1, 2023, and the
remaining 80% are to vest annually over the following four years with vesting occurring on December 31 st of each respective
year. The grant date fair value of restricted stock units was approximately $ 200,000.

January 2, 2022, the Board ratified grants of RSUs to each independent director. David Garrity, Carol Van Cleef and Charles Lee were
each granted 95,544 restricted stock units (the "2022 Board Grants"). The 2022 Board Grants vest in four equal installments
at the end of each calendar quarter in 2022. As of December 31, 2022, all 95,544 of the restricted stock units vested with a total fair
value of approximately $ 300,000.

January 2, 2022, the Board, as approved by its Compensation Committee, ratified grants of RSUs to the Company's executive officers
as part of a long-term incentive ("LTI") plan, with vesting terms set for when the Company's market capitalization
reaches and sustains a market capitalization for 30 consecutive days above four defined market capitalization thresholds of $ 100 million,
$ 150 million, $ 200 million and $ 400 million.

February 22, 2022, upon appointment of Manish Paranjape as Chief Technology Officer of the Company, Mr. Paranjape was also granted RSUs
as part of the LTI plan, with consistent vesting terms set for when the Company's market capitalization above the same four defined
market capitalization thresholds.

January 1, 2023 (the "LTI RSU Amendment Date"), upon recommendation of the Compensation Committee of the Board approved an
amendment to the LTI plan, whereby the market capitalization threshold targets were lowered to $ 50 million, $ 100 million, $ 150 million,
and $ 300 million.

 The
RSUs granted to each executive employee are as follows:

 Schedule of Restricted Stock Units

 Total

 Market
 Cap Vesting Thresholds

 Officer
 Name

 Title

 Grant
 Date

 RSUs
 Granted

 $
 50 million

 $
 100 million

 $
 150 million

 $
 300 million

 Charles Allen

 Chief Executive Officer

 1/2/2022

 694,444

 173,611

 173,611

 173,611

 173,611

 Michal Handerhan

 Chief Operations Officer

 1/2/2022

 444,444

 111,111

 111,111

 111,111

 111,111

 Michael Prevoznik

 Chief Financial Officer

 1/2/2022

 222,224

 55,556

 55,556

 55,556

 55,556

 Manish Paranjape

 Chief Technology Officer

 2/22/2022

 160,184

 40,046

 40,046

 40,046

 40,046

 1,521,296

 380,324

 380,324

 380,324

 380,324

 To
the extent any market capitalization targets set forth above for Mr. Prevoznik and Mr. Paranjape are achieved, the RSUs will also be
subject to the following five-year vesting schedule: 20 % of the LTI RSUs which have met a market capitalization criteria will vest on
the one-year anniversary of the grant date, and the remaining 80 % of the LTI RSUs which have met a market capitalization criteria will
vest annually on each subsequent calendar year-end date over the four years following the one year anniversary of the grant date.

 For
awards vesting upon the achievement of a service condition, compensation cost measured on the grant date will be recognized on a straight-line
basis over the vesting period. Stock-based compensation expense for the market-based restricted stock units with explicit service conditions
is recognized on a straight-line basis over the longer of the derived service period or the explicit service period, regardless of whether
the market condition is satisfied. However, in the event that the explicit service period is not met, previously recognized compensation
cost would be reversed. Market-based restricted stock units subject to market-based performance targets require achievement of the performance
target as well as a service condition in order for these RSUs to vest.

 F- 22

 BTCS
Inc.

 NOTES

 The
Company estimates the fair value of market-based RSUs as of the grant date and expected derived term using a Monte Carlo simulation that
incorporates pricing inputs covering the period from the grant date through the end of the derived service period.

 As
of the LTI RSU Amendment Date, the Company determined the pre-modification and post-modification estimated fair value of the LTI RSUs
accounting for the amended market cap criteria. The increase in fair value of the LTI RSUs attributable to the modification was valued
to be approximately $ 83,000 and added to the related unrecognized compensation expense in accordance with ASC 718 – Share-Based
Compensation, whereby any previously recognized compensation cost that has not vested as of the modification date should be adjusted
to reflect the new fair value of the equity awards on the date of the modification.

 The
following weighted-average assumptions were used to estimate the fair value of options granted during the years ended December 31, 2023
and 2022 for the Monte-Carlo simulation:

 Schedule of
Weighted-Average Assumptions Used to Estimate Fair Value

 Valuation
 Dates

 January
 1, 2023
 (Modification)

 January
 2, 2022
 (Original
 Issuance)

 Vesting Hurdle Price

 $
 3.81
 - $ 30.52

 $
 8.07
 - $ 36.99

 Term (years)

 4.00

 5.00

 Expected stock price volatility

 97.30
 %

 103.72
 %

 Risk-free rate of interest

 4.10
 %

 1.32
 %

Volatility: The Company uses historical volatility as it provides a reasonable estimate of the expected volatility. Historical volatility
is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the RSUs.

 Risk-Free
Interest Rate: The risk-free interest rate is based on the U.S. treasury zero-coupon yield curve in effect at the time of grant for
the expected term of the RSUs.

Term: The Company's expected term represents the weighted-average period that the Company's RSUs are expected to be outstanding.
The expected term is based on the stipulated 5 -year period from the grant date until the market-based criteria are achieved. If the market-based
criteria are not achieved within the five-year period from the grant date, the RSUs will not vest and shall expire.

 Vesting
Hurdle Price: The vesting hurdle prices are determined by taking the vesting Market Cap criteria divided by the shares outstanding
as of the valuation dates.

September 30, 2022, Mr. David Garrity resigned as a director of BTCS, Inc. The Board agreed to fully vest Mr. Garrity's remaining
unvested restricted stock units ( 7,962 shares) and pay Mr. Garrity approximately $ 5,600, which represents the remaining unpaid 2022 director
fees as of the date of resignation.

 On
October 1, 2022, the Company granted a total of 7,962 restricted stock units to Melanie Pump, a non-employee director of the Company,
which vested on December 31, 2023 with a total fair value of approximately $ 12,000.

 On
December 9, 2022, upon recommendation of the Compensation Committee, the Board of Directors approved the grant of 25,000 RSUs to Mr.
Prevoznik and Mr. Paranjape each, effective January 1, 2023, which vest annually over a five-year period with the first vesting date
being on the one-year anniversary of the execution date of the effective grant date, subject to continued employment on each applicable
vesting date. The fair value of the RSUs on the grant date was approximately $ 16,000, each.

 A
summary of the Company's restricted stock units granted under the 2021 Plan during the years ended December 31, 2023 and 2022 are
as follows:

 Summary of Restricted Stock

 Number
 of Restricted Stock Units

 Average Grant Date Fair Value

 Nonvested at December 31, 2022

 29,363

 $
 5.96

 Granted

 1,670,569

 3.28

 Vested

 ( 109,379
)

 2.29

 Nonvested at December 31, 2022

 1,590,553

 $
 3.34

 Granted

 50,000

 0.63

 Vested

 ( 34,180
)

 3.55

 Nonvested at December 31, 2023

 1,606,373

 $
 3.25

 F- 23

 BTCS
Inc.

 NOTES

 Stock-based

 Stock-based
compensation expenses are recorded as a part of selling, general and administrative expenses, compensation expenses and cost of revenues.
Stock-based compensation expenses for the years ended December 31, 2023 and 2022 were as follows:

 Schedule of Stock-based Compensation Expense

 2023

 2022

 For
 the Year Ended December 31,

 2023

 2022

 Employee bonus stock awards

 $
 675,061

 $
 1,152,525

 Employee stock option awards

 11,726

 97,142

 Employee restricted stock unit awards

 956,526

 1,575,475

 Non-employee restricted
 stock awards

 195,784

 225,207

 Stock-based
 compensation

 $
 1,839,097

 $
 3,050,349

 Stock
Purchase Warrants

 The
following is a summary of warrant activity for the years ended December 31, 2023 and 2022:

 Summary of Warrant Activity

 Number
 of Warrants

 Outstanding as of December 31,
 2021

 962,794

 Expiration of warrants

 ( 50,294
)

 Outstanding as of December 31, 2022

 912,500

 Expiration of warrants

 ( 200,000
)

 Outstanding as of December 31, 2023

 712,500

 F- 24

 BTCS
Inc.

 NOTES

 Note
7 – Executive Compensation

 Employment
Agreements

 Charles
W. Allen – Chief Executive Officer and Director

 On
June 22, 2017, we entered into an employment agreement with Charles Allen (the "Allen Employment Agreement"), whereby Mr.
Allen agreed to serve as our Chief Executive Officer and Chief Financial Officer for a period of two ( 2) years, subject to renewal, in
consideration for an annual salary of $ 245,000. Additionally, under the terms of the Allen Employment Agreement, Mr. Allen shall be eligible
for an annual bonus if we meet certain criteria, as established by the Board. Mr. Allen shall be entitled to participate in all benefits
plans we provide to our senior executives. We shall reimburse Mr. Allen for all reasonable expenses incurred in the course of his employment.
The Company shall pay the Executive $ 500 per month to cover telephone and internet expenses. If the Company does not provide office space
to the Executive the Company will pay the Executive an additional $ 500 per month to cover expenses in connection with their office space
needs.

 On
February 6, 2019 we amended the Allen Employment Agreement whereby the annual salary was increased to $ 345,000 per year effective January
1, 2019, subject to a 4.5 % annual increase each subsequent year to adjust for inflation. All other terms of the Allen Employment Agreement
remained unchanged including the Annual Increase. For the year ended December 31, 2023, Mr. Allen's annual base salary was $ 411,419.

 On
June 24, 2022, as a part of its cost-cutting measures, Charles Allen agreed to forfeit $ 25,000 of his annual base salary for 2022. The
forfeiture in 2022 does not alter or amend current employment agreements, or any calculations based on those agreements.

 Michal
Handerhan – Chief Operating Officer and Director

 On
June 22, 2017, we entered into an employment agreement with Michal Handerhan (the "Handerhan Employment Agreement"), whereby
Mr. Handerhan agreed to serve as our Chief Operating Officer and Secretary for a period of two ( 2) years, subject to renewal, in consideration
for an annual salary of $ 190,000. Additionally, under the terms of the Handerhan Employment Agreement, Mr. Handerhan shall be eligible
for an annual bonus if we meet certain criteria, as established by the Board. Mr. Handerhan shall be entitled to participate in all benefits
plans we provide to our senior executives. We shall reimburse Mr. Handerhan for all reasonable expenses incurred in the course of his
employment. The Company shall pay the Executive $ 500 per month to cover telephone and internet expenses. If the Company does not provide
office space to the Executive the Company will pay the Executive an additional $ 500 per month to cover expenses in connection with their
office space needs.

 On
February 6, 2019 we amended the Handerhan Employment Agreement whereby the annual salary was increased to $ 215,000 per year effective
on January 1, 2019, subject to a 4.5 % annual increase each subsequent year to adjust for inflation. All other terms of the Handerhan
Employment Agreement remained unchanged, including the Annual Increase.

 On
January 19, 2022, the Board approved a salary increase for Michael Handerhan to $ 275,000, effective January 1, 2022. For the year ended
December 31, 2023 Mr. Handerhan's annual base salary was $ 287,375.

 On
June 24, 2022, as a part of its cost-cutting measures, Michal Handerhan agreed to each forfeit $ 25,000 of his annual base salary for
2022. The forfeiture in 2022 does not alter or amend current employment agreements, or any calculations based on those agreements.

 F- 25

 Michael
Prevoznik – Chief Financial Officer

 On
December 1, 2021 we entered into an employment agreement with Michael Prevoznik (the "Prevoznik Employment Agreement"), whereby
Mr. Prevoznik agreed to serve as our Chief Financial Officer in consideration for an annual salary of $ 175,000. Additionally, under the
terms of the Prevoznik Employment Agreement, Mr. Prevoznik shall be eligible for an annual bonus if we meet certain criteria, as established
by the Board. Mr. Prevoznik shall be entitled to participate in all benefits plans we provide to our senior executives. We shall reimburse
Mr. Prevoznik for all reasonable expenses incurred in the course of his employment. The Company shall pay the Executive $ 500 per month
to cover telephone and internet expenses. If the Company does not provide office space to the Executive the Company will pay the Executive
an additional $ 500 per month to cover expenses in connection with their office space needs.

 On
June 1, 2022, the Board approved a salary increase for Michael Prevoznik to $ 225,000, effective June 1, 2022.

 On
December 9, 2022, upon recommendation of the Compensation Committee of the Board approved a 4.5 % inflationary increase in Mr. Prevoznik's
annual base salary, effective January 1, 2023.

 On
January 12, 2024, upon recommendation of the Compensation Committee of the Board approved a 4.5 % inflationary increase in Mr. Prevoznik's
annual base salary, effective January 1, 2024.

 For
the year ended December 31, 2023 Mr. Prevoznik's annual base salary was $ 235,125.

 Manish
Paranjape – Chief Technology Officer

 On
February 22, 2022 we entered into an employment agreement with Manish Paranjape (the "Paranjape Employment Agreement"), whereby
Mr. Paranjape agreed to serve as our Chief Technology Officer in consideration for an annual salary of $ 225,000. Additionally, under
the terms of the Paranjape Employment Agreement, Mr. Paranjape shall be eligible for an annual bonus if we meet certain criteria, as
established by the Board. Mr. Paranjape shall be entitled to participate in all benefits plans we provide to our senior executives. We
shall reimburse Mr. Paranjape for all reasonable expenses incurred in the course of his employment. The Company shall pay the Executive
$ 500 per month to cover telephone and internet expenses. If the Company does not provide office space to the Executive the Company will
pay the Executive an additional $ 500 per month to cover expenses in connection with their office space needs.

 On
December 9, 2022, upon recommendation of the Compensation Committee of the Board approved a 4.5 % inflationary increase in Mr. Paranjape's
annual base salary, effective January 1, 2023.

 On
January 12, 2024, upon recommendation of the Compensation Committee of the Board approved a 4.5 % inflationary increase in Mr. Paranjape's
annual base salary, effective January 1, 2024.

 For
the year ended December 31, 2023 Mr. Prevoznik's annual base salary was $ 235,125.

 F- 26

 BTCS
Inc.

 NOTES

 Termination/Severance
Provisions

 The
terms of the Allen Employment Agreement and Handerhan Employment Agreement (collectively the "Employment Agreements") provide
each of Messrs. Allen and Handerhan (the "Executives") certain, severance and change of control benefits if the Executive
resigns from the Company for good reason or the Company terminates him other than for cause. In such circumstances, the Executive would
be entitled to a lump sum payment equal to (i) the Executive's then-current base salary, and (ii) payment on a pro-rated basis
of any bonus or other payments earned in connection with any bonus plan to which the Executive was a participant. In addition, the severance
benefit for the Executives the employment agreements include the Company continuing to pay for medical and life insurance coverage for
up to one year following termination. If, within eighteen months following a change of control (as defined below), the Executive's
employment is terminated by the Company without cause or he resigns from the Company for good reason, the Executive will receive certain
severance compensation. In such circumstances, the cash benefit to the Executive will be a lump sum payment equal to two times (i) his
then-current base salary and (ii) his prior year cash bonus and incentive compensation. Upon the occurrence of a change of control, irrespective
of whether his employment with the Company terminates, each Executive's stock options and equity-based awards will immediately
vest.

 A
"change of control" for purposes of the Employment Agreements means any of the following: (i) the sale or partial sale of
the Company to an un-affiliated person or entity or group of un-affiliated persons or entities pursuant to which such party or parties
acquire shares of capital stock of the Company representing at least twenty five ( 25 %) of the fully diluted capital stock (including
warrants, convertible notes, and preferred stock on an as converted basis) of the Company; (ii) the sale of the Company to an un-affiliated
person or entity or group of such persons or entities pursuant to which such party or parties acquire all or substantially all of the
Company's assets determined on a consolidated basis, or (iii) Incumbent Directors (Mr. Allen and Mr. Handerhan) cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a
majority of the Board of the Company.

 Additionally,
pursuant to the terms of the Employment Agreements, we have entered into an indemnification agreement with each executive officer.

 Clawback
Policy

 On
November 17, 2023, our Board adopted a clawback policy in accordance with the rules of the Nasdaq
Stock Exchange, to recoup "excess" incentive compensation, if any, earned by current and former executive officers during
a three year look back period in the event of a financial restatement due to material noncompliance with any financial reporting requirement
under the securities laws (with no fault required).

 Bonuses

 2022
Bonuses

 On
January 2, 2022, Charles Allen, the Company's Chief Executive Officer, was awarded 173,611 fully-vested shares of Common Stock
and Michal Handerhan, the Company's Chief Operating Officer, was awarded 111,111 fully-vested shares of Common Stock granted under
the 2021 Equity Incentive Plan (the "Plan") as equity bonuses.

 On
May 12, 2022, the Compensation Committee of the Board of the Company approved a performance based Annual Cash Incentive Plan ("ACIP")
for the Company's executives for fiscal year 2022 whereby if an executive meets their performance milestones, the executive will
receive a bonus in amount up to 48 % to 107 % of the applicable executive's base salary.

 F- 27

 On
December 9, 2022, upon recommendation of the Compensation Committee, the Board approved an annual performance payout in the aggregate
amount of $ 278,498, to be paid in stock and cash in the closing price of the Company's common stock on January 1, 2023 as follows:

of Annual Performance Layout

 For the Year
 Ended

 31, 2022

 Charles Allen - CEO

 104,987

 Michal Handerhan - COO

 82,500

 Michael Prevoznik - CFO

 45,000

 Manish Paranjape - CTO

 46,011

 Total Performance Bonuses
 Earned

 278,498

 2023
Bonuses

 On
May 11, 2023, the Compensation Committee of the Board of the Company approved a performance based Annual Cash Incentive Plan ("ACIP")
for the Company's executives for fiscal year 2023 whereby if an executive meets their performance milestones, the executive will
receive a bonus in amount up to 64 % to 128 % of the applicable executive's base salary.

 On
December 29, 2023, upon recommendation of the Compensation Committee, the Board approved an annual performance payout in the aggregate
amount of $ 705,061, to be paid in stock and cash in the closing price of the Company's common stock on January 1, 2023 as follows:

 For the Year
 Ended

 Charles Allen
 - CEO

 354,849

 Michal Handerhan - COO

 151,164

 Michael Prevoznik - CFO

 101,399

 Manish
 Paranjape - CTO

 97,649

 Total Performance Bonuses
 Earned

 705,061

 F- 28

 BTCS
Inc.

 NOTES

 Note
8 – Accrued Expenses

 As
of December 31, 2023 and 2022, the Company had accrued expenses consisting of the following:

of Accrued Expenses

 31, 2022

 Accrued compensation

 $
 712,092

 $
 295,935

 Accounts payable and
 accrued expenses

 55,058

 76,727

 Accrued
 Expenses

 $
 767,150

 $
 372,662

 Accrued
compensation and related expenses include approximately $ 710,000 and $ 284,000 related to performance bonus accruals as of December 31,
2023 and 2022, respectively.

 Note
9 – Employee Benefit Plans

 The
Company maintains defined contribution benefit plans under Section 401(k) of the Internal Revenue Code covering substantially all qualified
employees of the Company (the "401(k) Plan"). Under the 401(k) Plan, the Company may make discretionary contributions of
up to 100 % of employee contributions. For the years ended December 31, 2023 and 2022, the Company made contributions to the 401(k) Plan
of $ 95,000 and $ 45,000, respectively.

 Note
10 – Liquidity

 The
Company follows " Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about
an Entity's Ability to Continue as a Going Concern ". 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.

 As
reflected in the financial statements, the Company has historically incurred a net loss and has an accumulated deficit of approximately
$ 138,677,000 at December 31, 2023, and net cash used in operating activities of approximately $ 3,562,000 for the reporting period then
ended. The Company is implementing its business plan and generating revenue; however, the Company's cash position and liquid crypto
assets are sufficient to support its daily operations over the next twelve months.

 The
Company has sustained recurring losses and negative cash flows from operations. Over the past year, the Company's growth has been
funded through the sale of common stock equity. As of December 31, 2023, the Company had approximately $ 1,458,000 of unrestricted cash.
However, historically the Company has experienced and may continue to experience negative operating margins and negative cash flows from
operations, as well as an ongoing requirement for additional capital investment. The Company expects that it will need to raise additional
capital to accomplish its business plan over the next several years. The Company expects to seek additional funding through
debt or equity financing. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

 F- 29

 BTCS
Inc.

 NOTES

 Note
11 - Income Taxes

 The
Company had no income tax expense due to operating loss incurred for the years ended December 31, 2023 and 2022.

 The
tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets
and liabilities at December 31, 2023 and 2022 are comprised of the following:

of Deferred Tax Assets and Liabilities

 2023

 2022

 As
 of December 31,

 2023

 2022

 Deferred tax assets:

 Federal net-operating
 loss carryforward

 $
 3,488,995

 $
 2,776,943

 State net-operating loss
 carryforward

 592,038

 360,818

 Other (non-qualified
 stock options)

 15,997

 225,794

 Total deferred tax assets

 4,097,030

 3,363,555

 Deferred tax liabilities:

 Unrealized gains on crypto assets

 715,899

 -

 Total deferred tax liabilities

 715,899

 -

 Valuation allowance

 ( 3,381,131
)

 ( 3,363,555
)

 Deferred tax assets,
 net

 $
 -

 $
 -

 At
December 31, 2023, the Company had net operating loss ("NOL") carry forwards for federal and state tax purposes of
approximately $ 25,753,000
which begins to expire
in 2034. The
20-year carryforward period has been replaced with an indefinite carryforward period for these NOLs generated in tax years beginning
after December 31, 2017 and future years.

 Accordingly,
the amount of Federal NOLs that were generated in the tax year December 31, 2014 in the amount of $ 1,290,156 will expire after December
31, 2034. The amount of NOLs that were generated in the tax year December 31, 2015 in the amount of $ 1,545,343 will expire after December
31, 2035. The amount of NOLs that were generated in the tax year December 31, 2016 in the amount of $ 794,762 will expire after December
31, 2036. The amount of NOLs that were generated in the tax year December 31, 2017 in the amount of $ 1,084,564 will expire after December
31, 2037. The NOLs generated in the tax years December 31, 2018 in the amounts of $ 11,899,437 and onwards will have an indefinite life
per current U.S. federal income tax legislation.

 Prior
to the February 5, 2014 merger, the Company had generated net operating losses, which the Company's preliminary analysis indicates
would be subject to significant limitations pursuant to Internal Revenue Code Section 382. The Company has not completed its IRC Section
382 Valuation, as required and the NOL's because of potential Change of Ownerships might be completely worthless.

 As of December 31, 2023, the Company had a deferred tax liability related
to the unrealized gains on its crypto assets amounting to $ 715,899. The final tax impact could significantly differ from current estimates
due to future market fluctuations and changes in tax laws.

 Therefore,
Management of the Company has recorded a Full Valuation Reserve, since it is more likely than not that no benefit will be realized for
the Deferred Tax Assets.

 In
assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of
the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal
of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. In case the deferred tax
assets will not be realized in future periods, the Company has provided a valuation allowance for the full amount of the deferred tax
assets at December 31, 2023 and 2022. The valuation allowance increased by approximately $ 18,000 as of December 31, 2023.

 The
expected tax expense (benefit) based on the U.S. federal statutory rate is reconciled with actual tax expense (benefit) as follows:

of Income Tax Rate

 2023

 2022

 For
 the years ended December 31,

 2023

 2022

 Statutory Federal Income Tax Rate

 ( 21.0
)%

 ( 21.0
)%

 State Taxes, Net of Federal Tax Benefit

 ( 6.48
)%

 ( 6.72
)%

 Federal tax rate change

 0.0
 %

 0.0
 %

 Other

 27.48
 %

 27.72
 %

 Change in Valuation
 Allowance

 ( 0.0
)%

 ( 0.0
)%

 Income Taxes Provision
 (Benefit)

 -
 %

 -
 %

 The
Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2023 and 2022.

 F- 30

 BTCS
Inc.

 NOTES

 Note
12 - Subsequent Events

 The
Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the
evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure
in the financial statements other than disclosed.

 On
December 29, 2023, upon recommendation of the Compensation Committee, the Board of BTCS Inc. approved the grant of 50,000 RSUs to each
of its executive officers (Mr. Allen, Mr. Handerhan, Mr. Prevoznik and Mr. Paranjape), effective January 1, 2024. The RSUs granted vest
annually over a 5-year period (10,000 per year) with the first vesting date of December 31, 2024 and each subsequent vesting on the one-year
anniversary of the first vesting date, subject to continued employment on each applicable vesting date.

 On
January 12, 2024, Messrs. Allen and Handerhan both informed the Compensation Committee, that for personal reasons, they each do not accept,
and forfeit, the 50,000 restricted stock units granted to them each by the Company effective January 1, 2024. Subsequently, effective
January 12, 2024, approved the grant of 50,000 additional RSUs to Mr. Prevoznik and Mr. Paranjape, each, which vest annually over a 5-year
period (10,000 per year) with the first vesting date of December 31, 2024 and each subsequent vesting on the one-year anniversary of
the first vesting date, subject to continued employment on each applicable vesting date.

 F- 31