Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40792 | |
Entity Registrant Name | BTCS Inc. | |
Entity Central Index Key | 0001436229 | |
Entity Tax Identification Number | 90-1096644 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 9466 Georgia Avenue #124 | |
Entity Address, City or Town | Silver Spring | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20910 | |
City Area Code | 202 | |
Local Phone Number | 430-6576 | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Trading Symbol | BTCS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,077,390 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 2,888,998 | $ 1,400,867 |
Digital assets/currencies | 36,561 | 3,117,360 |
Staked digital assets/currencies | 2,586,575 | 623,754 |
Prepaid expense | 207,078 | 324,551 |
Total current assets | 5,719,212 | 5,466,532 |
Other assets: | ||
Property and equipment, net | 12,330 | 9,783 |
Staked digital assets/currencies - long term | 5,600,122 | 8,625,678 |
Total other assets | 5,612,452 | 8,635,461 |
Total Assets | 11,331,664 | 14,101,993 |
Liabilities and Stockholders’ Equity: | ||
Accounts payable and accrued expense | 104,631 | 138,716 |
Accrued compensation | 212,571 | 7,334 |
Warrant liabilities | 712,500 | 1,852,500 |
Total current liabilities | 1,029,702 | 1,998,550 |
Stockholders’ equity: | ||
Common stock, 97,500,000 shares authorized at $0.001 par value, 13,053,712 and 10,528,212 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 13,055 | 10,529 |
Additional paid in capital | 160,374,041 | 147,682,384 |
Accumulated deficit | (150,085,134) | (135,589,470) |
Total stockholders’ equity | 10,301,962 | 12,103,443 |
Total Liabilities and Stockholders’ Equity | $ 11,331,664 | $ 14,101,993 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 97,500,000 | 97,500,000 |
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares issued | 13,053,712 | 10,528,212 |
Common stock, shares outstanding | 13,053,712 | 10,528,212 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Total revenues | $ 344,196 | $ 323,376 | $ 1,421,560 | $ 776,399 |
Cost of revenues | ||||
Validator expense | 82,203 | 71,690 | 313,972 | 145,935 |
Gross profit | 261,993 | 251,686 | 1,107,588 | 630,464 |
Operating expenses: | ||||
General and administrative | 432,956 | 282,558 | 1,595,296 | 1,149,506 |
Research and development | 126,857 | 273,909 | 448,579 | 602,178 |
Compensation and related expenses | 669,792 | 4,747,106 | 2,731,713 | 13,788,556 |
Marketing | 8,765 | 7,559 | 74,249 | 10,345 |
Impairment loss on digital assets/currencies | 145,247 | 208,647 | 12,347,472 | 3,777,785 |
Realized gains on digital asset/currency transactions | (20,126) | (489,682) | (3,054,418) | |
Total operating expenses | 1,363,491 | 5,519,779 | 16,707,627 | 16,273,952 |
Other income (expenses): | ||||
Interest expense | (58,521) | (172,603) | ||
Amortization on debt discount | (581,973) | (1,716,744) | ||
Change in fair value of warrant liabilities | 71,250 | 2,066,250 | 1,140,000 | 2,066,250 |
Distributions to warrant holders | (35,625) | |||
Total other income (expenses) | 71,250 | 1,425,756 | 1,104,375 | 176,903 |
Net loss | (1,030,248) | (3,842,337) | (14,495,664) | (15,466,585) |
Deemed dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock | (13,188) | (45,541) | ||
Deemed dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock | (5,020,883) | |||
Net loss attributable to common stockholders | $ (1,030,248) | $ (3,855,525) | $ (14,495,664) | $ (20,533,009) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.08) | $ (0.59) | $ (1.15) | $ (3.63) |
Weighted average number of common shares outstanding, basic and diluted | 12,952,645 | 6,518,645 | 12,616,805 | 5,660,966 |
Validator Revenue [Member] | ||||
Revenues | ||||
Total revenues | $ 344,196 | $ 323,376 | $ 1,421,560 | $ 776,399 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Series C-1 Convertible Preferred Stock [Member] Preferred Stock [Member] | Series C-2 Convertible Preferred Stock [Member] Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 29 | $ 4,201 | $ 120,578,944 | $ (119,539,887) | $ 1,043,287 | |
Beginning balance, shares at Dec. 31, 2020 | 29,414 | 4,201,035 | ||||
Issuance of common stock, net of offering cost / At-the-market offering | $ 41 | 219,705 | 219,746 | |||
Issuance of common stock, net of offering cost / At-the-market offering, shares | 41,290 | |||||
Stock-based compensation | $ 342 | 13,892,542 | 13,892,884 | |||
Stock-based compensation, shares | 342,796 | |||||
Net loss | (15,466,585) | (15,466,585) | ||||
Common stock issued including equity commitment fee, net | $ 322 | 3,013,683 | 3,014,005 | |||
Common stock issued including equity commitment fee, net, shares | 321,738 | |||||
Issuance of common stock and warrants for cash, net | $ 950 | 8,864,050 | 8,865,000 | |||
Issuance of common stock and warrants for cash, net, shares | 950,000 | |||||
Warrant liabilities value related to Issuance of common stock | (5,771,250) | (5,771,250) | ||||
Issuance of Series C-2 convertible preferred stock | $ 1,100,000 | 1,100,000 | ||||
Issuance of series C-2 convertible preferred stock, shares | 1,100,000 | |||||
Conversion of Series C-1 Convertible Preferred stock | $ (29) | $ 20 | 9 | |||
Conversion of Series C-1 Convertible Preferred stock, shares | (29,414) | 19,609 | ||||
Conversion of Series C-2 Convertible Preferred stock | $ (6,216,289) | $ 4,012 | 6,212,277 | |||
Conversion of Series C-2 Convertible Preferred stock, shares | (1,100,000) | 4,011,766 | ||||
Beneficial conversion features associated with convertible notes payable | 1,000,000 | 1,000,000 | ||||
Beneficial conversion feature of Series C-2 convertible preferred stock | (129,412) | 129,412 | ||||
Deemed dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock | 45,541 | (45,541) | ||||
Deemed dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock | 5,020,883 | (5,020,883) | ||||
Fractional shares adjusted for reverse split | $ 15 | (15) | ||||
Fractional shares adjusted for reverse split, shares | 14,477 | |||||
Warrant exercise | $ 200 | 399,800 | 400,000 | |||
Warrant exercise, shares | 200,000 | |||||
Stock-based compensation in connection with issuance of Series C-2 convertible preferred stock | 179,277 | 179,277 | ||||
Ending balance, value at Sep. 30, 2021 | $ 10,103 | 143,472,733 | (135,006,472) | 8,476,364 | ||
Ending balance, shares at Sep. 30, 2021 | 10,102,711 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 6,203,101 | $ 5,712 | 137,959,473 | (131,164,135) | 13,004,151 | |
Beginning balance, shares at Jun. 30, 2021 | 1,100,000 | 5,712,215 | ||||
Issuance of common stock, net of offering cost / At-the-market offering | $ 41 | 219,705 | 219,746 | |||
Issuance of common stock, net of offering cost / At-the-market offering, shares | 41,290 | |||||
Stock-based compensation | $ 290 | 4,665,892 | 4,666,182 | |||
Stock-based compensation, shares | 290,000 | |||||
Net loss | (3,842,337) | (3,842,337) | ||||
Common stock issued including equity commitment fee, net | $ 33 | 199,839 | 199,872 | |||
Common stock issued including equity commitment fee, net, shares | 32,963 | |||||
Warrant liabilities value related to Issuance of common stock | (5,771,250) | (5,771,250) | ||||
Conversion of Series C-2 Convertible Preferred stock | $ (6,216,289) | $ 4,012 | 6,212,277 | |||
Conversion of Series C-2 Convertible Preferred stock, shares | (1,100,000) | 4,011,766 | ||||
Deemed dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock | $ 13,188 | (13,188) | ||||
Fractional shares adjusted for reverse split | $ 15 | (15) | ||||
Fractional shares adjusted for reverse split, shares | 14,477 | |||||
Ending balance, value at Sep. 30, 2021 | $ 10,103 | 143,472,733 | (135,006,472) | 8,476,364 | ||
Ending balance, shares at Sep. 30, 2021 | 10,102,711 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 10,529 | 147,682,384 | (135,589,470) | 12,103,443 | ||
Beginning balance, shares at Dec. 31, 2021 | 10,528,212 | |||||
Issuance of common stock, net of offering cost / At-the-market offering | $ 2,149 | 11,092,983 | 11,095,132 | |||
Issuance of common stock, net of offering cost / At-the-market offering, shares | 2,148,658 | |||||
Stock-based compensation | $ 377 | 2,233,231 | 2,233,608 | |||
Stock-based compensation, shares | 376,842 | |||||
Dividend distributions | (634,557) | (634,557) | ||||
Net loss | (14,495,664) | (14,495,664) | ||||
Ending balance, value at Sep. 30, 2022 | $ 13,055 | 160,374,041 | (150,085,134) | 10,301,962 | ||
Ending balance, shares at Sep. 30, 2022 | 13,053,712 | |||||
Beginning balance, value at Jun. 30, 2022 | $ 12,705 | 159,432,894 | (149,054,886) | 10,390,713 | ||
Beginning balance, shares at Jun. 30, 2022 | 12,703,794 | |||||
Issuance of common stock, net of offering cost / At-the-market offering | $ 318 | 490,374 | 490,692 | |||
Issuance of common stock, net of offering cost / At-the-market offering, shares | 318,070 | |||||
Stock-based compensation | $ 32 | 450,773 | 450,805 | |||
Stock-based compensation, shares | 31,848 | |||||
Dividend distributions | ||||||
Net loss | (1,030,248) | (1,030,248) | ||||
Ending balance, value at Sep. 30, 2022 | $ 13,055 | $ 160,374,041 | $ (150,085,134) | $ 10,301,962 | ||
Ending balance, shares at Sep. 30, 2022 | 13,053,712 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net Cash flows used from operating activities: | ||
Net loss | $ (14,495,664) | $ (15,466,585) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 2,862 | 443 |
Amortization on debt discount | 1,716,744 | |
Stock-based compensation | 2,233,608 | 13,892,884 |
Stock-based compensation in connection with issuance of Series C-2 convertible preferred stock | 179,277 | |
Validator revenue | (1,421,560) | (776,399) |
Blockchain network fees (non-cash) | 1,321 | |
Change in fair value of warrant liabilities | (1,140,000) | (2,066,250) |
Purchase of non-productive digital assets/currencies | (5,761,550) | |
Sale of non-productive digital assets/currencies | 2,547,322 | 4,274,491 |
Realized gain on digital assets/currencies transactions | (489,682) | (3,054,418) |
Impairment loss on digital assets/currencies | 12,347,472 | 3,777,785 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 117,473 | (440,514) |
Accounts payable and accrued expenses | (37,842) | 168,546 |
Accrued compensation | 205,237 | (348,875) |
Net cash used in operating activities | (129,453) | (3,904,421) |
Net cash used in investing activities: | ||
Purchase of productive digital assets/currencies for validating | (9,274,055) | (9,462,279) |
Sale of productive digital assets/currencies | 432,716 | |
Purchase of property and equipment | (5,408) | (4,543) |
Net cash used in investing activities | (8,846,747) | (9,466,822) |
Net cash provided by financing activities: | ||
Dividend distributions | (630,801) | |
Proceeds from exercise of warrants | 400,000 | |
Proceeds from issuance of Series C-2 convertible preferred stock | 1,100,000 | |
Net proceeds from issuance of convertible notes | 1,000,000 | |
Net proceeds from issuance of common stock and warrants for cash | 8,865,000 | |
Net proceeds from issuance of common stock | 3,014,005 | |
Net proceeds from issuance common stock/ At-the-market offering | 11,095,132 | 219,746 |
Payment to convertible notes principle | (1,092,712) | |
Net cash provided by financing activities | 10,464,331 | 13,506,039 |
Net increase in cash | 1,488,131 | 134,796 |
Cash, beginning of period | 1,400,867 | 524,135 |
Cash, end of period | 2,888,998 | 658,931 |
Supplemental disclosure of non-cash financing and investing activities: | ||
Deemed dividends related to amortization of beneficial conversion feature of Series C-2 convertible preferred stock | 45,541 | |
Deemed dividends related to recognition of downround adjustment to conversion amount for Series C-2 convertible preferred stock | 5,020,883 | |
Conversion of Series C-1 Preferred Stock | 20 | |
Conversion of Series C-2 Preferred Stock | 6,216,289 | |
Beneficial conversion feature of Series C-2 convertible preferred stock | 129,412 | |
Beneficial conversion features associated with convertible notes payable | $ 1,000,000 |
Business Organization and Natur
Business Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization and Nature of Operations | Note 1 - Business Organization and Nature of Operations BTCS Inc. (formerly Bitcoin Shop, Inc.), a Nevada corporation (the “Company”) was incorporated in 2008. In February 2014, the Company entered the business of hosting an online e-commerce marketplace where consumers could purchase merchandise using Digital Assets, including Bitcoin. The Company is currently focused on blockchain and digital currency ecosystems. In late 2014 we shifted our focus towards our transaction verification service business, also known as Bitcoin mining, though in mid-2016 we ceased our mining operation at our North Carolina facility due to capital constraints. In January 2015, the Company began a rebranding campaign using its BTCS.com domain to better reflect its broadened strategy. The Company released a new website which included broader information on its strategy. The Company’s blockchain infrastructure operations focuses on securing next-generation blockchains and operating validator nodes on various proof of stake-based blockchain networks, earning rewards of additional Digital Assets by authenticating and validating transactions on the networks. The Company is in the late stages of developing a Digital Asset Platform that would enable users to aggregate their Digital Asset portfolio holdings from multiple exchanges and wallets into a single platform to view and analyze performance, risk metrics, and potential tax implications. The internally developed platform utilizes Digital Asset exchange APIs to read user data and does not allow for the trading of assets. We also are developing an integrated proprietary Staking-as-a-Service feature on the Digital Asset Platform that would enable users to participate in asset leveraging through securing blockchain protocols and to stake and delegating supported cryptocurrencies to BTCS operated validator nodes through a non-custodial platform. The market is rapidly evolving and there can be no assurances that we will be competitive with industry participants that have or may have greater resources than us. Amendment to Articles of Incorporation On August 12, 2021, the Company filed a Certificate of Change with the Nevada Secretary of State to affect a 1-for-10 reverse split of the Company’s class of Common Stock (the “Reverse Split”). The Certificate of Change became effective on August 13, 2021. No fractional shares were issued in connection with the Reverse Split and all such fractional interests were rounded up to the nearest whole number of shares of Common Stock. The Company now has 97,500,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 2 - Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Form 10-Q and the rules and regulations of the SEC. Accordingly, since they are interim statements, the accompanying unaudited condensed financial statements do not include all of the information and notes required by GAAP for annual financial statements, but in the opinion of the Company’s management, reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of results for the full year ended December 31, 2022. The unaudited condensed financial statements and notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 - Summary of Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2021 Annual Report. 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). Concentration of Cash The Company maintains cash balances at two financial institutions in checking accounts and money market accounts. The Company considers all highly liquid investments with original maturities of nine months or less when purchased to be cash and cash equivalents. As of September 30, 2022 and December 31, 2021, the Company had approximately $ 2.9 1.4 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 2.5 0.9 Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606 , Revenue from Contracts with Customers ● 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 Revenue 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. The Company has entered into network-based smart contracts by running its own Digital Asset validating nodes as well as by staking Digital Assets with staking pools on nodes run by third-party operators (either directly or through exchanges). Through these contracts, the Company provides cryptocurrency to stake on 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 a few weeks to months after it is canceled by the operator and requires that the cryptocurrency staked remain locked up during the duration of the smart contract. In exchange for staking the cryptocurrency and validating transactions on blockchain networks, the Company is entitled to all of the fixed cryptocurrency award for running the Company’s own node and is entitled to a fractional share of the fixed cryptocurrency award a third-party staking pool operator receives (less digital asset transaction fees payable to the pool operator or exchanges, 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 by a third-party staking pool is based on the proportion of cryptocurrency the Company staked to the staking pool node to the total cryptocurrency staked by all pool participants validating blockchain transactions. 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 transaction consideration the Company receives - the cryptocurrency awards - is a non-cash consideration, which the Company measures at fair value on the date received. The fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. The satisfaction of the performance obligation for transaction verification services 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 consists primarily of direct production costs related to the operations of validating transactions on the network, rent and utilities for locations housing server nodes to the extent applicable, hosting costs if cloud-based servers are utilized and fees (including stock-based fees) paid to 3rd parties to assist in software maintenance and operations of its nodes. Digital Assets Translations and Remeasurements The Company accounts for its Digital Assets as indefinite-lived intangible assets in accordance with ASC 350, Intangibles –Goodwill and Other Digital Assets held are included in the balance sheets as either current assets or other assets if they are staked and locked up for over one year. The Company’s Digital Assets are initially recorded at fair value upon receipt (or “carrying value”). The fair value of Digital Assets is determined using the average U.S. dollar spot price of the related Digital Asset. On a quarterly basis, Digital Assets are measured at carrying value, net of any impairment losses incurred since receipt. The Company will record impairment losses as the fair value falls below the carrying value of the Digital Assets at any time during the period, as determined using the lowest U.S. dollar spot price of the related Digital Asset subsequent to its acquisition. The Digital Assets can only be marked down when impaired and not marked up when their value increases. Such impairment in the value of Digital Assets are recorded as a component of costs and expenses in our statements of operations. The Company recorded impairment losses related to Digital Assets of approximately $ 12.3 3.8 Impairment losses cannot be recovered for any subsequent increase in fair value until the sale or disposal of the asset. Realized gain (loss) on sale of Digital Assets are included in other income (expense) in the statements of operations. The Company recorded realized gains (losses) on Digital Assets of approximately $ 490,000 3.1 The presentation of purchases and sales of Digital Assets on the Statement of Cash Flows is determined by the nature of the Digital Assets, which can be characterized as productive (i.e. purchased for purposes of staking) or non-productive. The purchase of non-productive Digital Assets and currencies are included as an operating activity, whereas the purchase of productive Digital Assets and currencies are included as investing activities in accordance with ASC 230-10-20 Investing activities. Internally Developed Software Internally developed software consists of the core technology of the Company’s Digital Asset Platform, which is being designed to allow users to track, monitor and analyze their aggregate cryptocurrency portfolio holdings by connecting their Digital Asset exchanges and digital wallets as well as providing a non-custodial delegation process to earn staking rewards on Digital 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, ASC 350, Intangibles-Goodwill and Other Property and Equipment Property and equipment consists of computer, equipment and office furniture and fixtures, all of which are recorded at cost. Depreciation and amortization is recorded using the straight-line method over the respective useful lives of the assets ranging from three five 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 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 (“ASC 815”). 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 sheet 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 compensation The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) 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. 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 On January 5, 2022, the board of directors of the Company 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 are considered a return of capital as the distributions are 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 Company will evaluate the appropriateness of potential future dividends as the Company continues to grow its operations. Dividend distributions amounted to $ 635,000 0 Advertising Expense Advertisement costs are expensed as incurred and included in marketing expenses. Advertising and marketing expenses amounted to approximately $ 74,000 10,000 Net Loss per Share Basic 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 convertible preferred stock, convertible notes, 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 September 30, 2022 and 2021 because their effect was anti-dilutive: Schedule of Earnings Per Share Anti-diluted 2022 2021 As of September 30, 2022 2021 Warrants to purchase common stock 945,837 962,823 Convertible notes - 285,429 Options 1,285,000 - Non-vested restricted stock awards units 1,612,350 - Total 3,843,187 1,248,252 Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU No. 2019-12 effective January 1, 2021, and the adoption did not have a material impact on its financial statements and related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity 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. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Note 4 - Fair Value of Financial Assets and Liabilities 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 Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The following table presents the Company’s assets and liabilities that are measured at fair value at September 30, 2022 and December 31, 2021: Schedule of Fair Value of Assets and Liabilities Valued on Recurring Basis Fair value measured at September 30, 2022 Total at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs 2022 (Level 1) (Level 2) (Level 3) Liabilities Warrant Liabilities $ 712,500 $ - $ - $ 712,500 Fair value measured at December 31, 2021 Total at December 31, Quoted prices in active markets Significant other Significant unobservable inputs 2021 (Level 1) (Level 2) (Level 3) Liabilities Warrant Liabilities $ 1,852,500 $ - $ - $ 1,852,500 Level 3 Valuation Techniques 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) 950,000 712,500 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, 2021, 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 sheet 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 at the date of issuance and, as of September 30, 2022 and December 31, 2021, is as follows: Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities September 30, 2022 December 31, 2021 Risk-free rate of interest 4.06 % 1.26 % Expected volatility 157.1 % 162.5 % Expected life (in years) 3.43 4.18 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. The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the nine months ended September 30, 2022 and 2021, 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 liabilities September 30, September 30, 2022 2021 Beginning balance $ 1,852,500 $ - Warrant liabilities classification - - Fair value adjustment of warrant liabilities (1,140,000 ) - Ending balance $ 712,500 $ - |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 5 - Stockholders’ Equity Common Stock Reverse Stock Split On August 25, 2021, the Company issued approximately 14,500 1-for-10 Reverse Split 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 3.0% During the nine months ended September 30, 2022, the Company sold a total of 2,148,658 11,454,000 5.33 11,095,000 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 has reserved 7,000,000 Options During the three months ended September 30, 2022, the Company granted 50,000 1.51 Summary of Weighted-average Assumptions Used to Estimate Fair Value For the nine months ended September 30, 2022 2021 Exercise price $ 1.51 $ 0.21 Term (years) 5.00 2.25 3.05 Expected stock price volatility 165.8 % 185.9 % Risk-free rate of interest 2.77 % 0.34 % Expected Volatility Risk-Free Interest Rate Expected Term For awards vesting upon the achievement of the market conditions which were met at the date of grant, compensation cost measured on the date of grant was immediately recognized. For awards vesting upon the achievement of the market conditions which were not met at the date of grant, compensation cost measured on the grant date will be recognized on a straight-line basis over the vesting period based on estimation using a Monte-Carlo simulation. A summary of option activity under the Company’s stock option plan for nine months ended September 30, 2022 is presented below: Summary of Option Activity Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life Outstanding as of December 31, 2021 1,235,000 $ 2.14 $ 1,488,000 4.3 Employee options granted 50,000 1.51 - 4.8 Outstanding as of September 30, 2022 1,285,000 $ 2.11 $ - 3.6 Options vested and exercisable as of September 30, 2022 1,229,750 $ 2.10 $ - 3.5 RSUs Effective January 2, 2022, the Board of Directors of the Company ratified the following arrangements approved by its Compensation Committee: The Board of Directors of the Company ratified grants of RSUs to each independent director. David Garrity, Carol Van Cleef and Charles Lee were each granted 31,848 The Company’s executive officers were granted RSUs as part of a long-term incentive plan (“LTI”), 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 $ 100 150 200 400 Effective 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. 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 $ 100 million $ 150 million $ 200 million $ 400 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% 80% 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. The following weighted-average assumptions were used to estimate the fair value of options granted during the nine months ended September 30, 2022 and 2021 for the Monte-Carlo simulation: Schedule of Weighted-Average Assumptions Used to Estimate Fair Value Nine Months Ended 2022 2021 Vesting Hurdle Price $ 19.39 - Term (years) 5.00 - Expected stock price volatility 103.7 % - Risk-free rate of interest 1.32 % - Expected Volatility Risk-Free Interest Rate Expected Term Vesting Hurdle Price: Effective September 30, 2022, Mr. David Garrity resigned as a director of BTCS, Inc. The Board of Directors of the Company agreed to fully vest Mr. Garrity’s remaining unvested restricted stock units ( 7,962 5,600 A summary of the Company’s restricted stock units granted under the 2021 Plan during the nine months ended September 30, 2022 are as follows: Summary of Restricted Stock Number of Restricted Stock Units Weighted Average Grant Day Fair Value Nonvested at December 31, 2021 29,363 $ 5.96 Granted 1,662,607 3.29 Vested (79,620 ) 3.14 Forfeited - - Nonvested at September 30, 2022 1,612,350 $ 3.35 Stock Based Compensation Stock-based compensation expense is recorded as a part of selling, general and administrative expenses, compensation expenses and cost of revenues. Stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021 was as follows: Schedule of Stock-based Compensation Expense 2022 2021 2022 2021 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Employee bonus stock awards $ - $ - $ 894,027 $ - Employee stock option awards 16,455 1,638,516 98,901 10,298,844 Employee restricted stock unit awards 434,349 3,027,665 1,182,053 3,029,040 Non-employee restricted stock awards 30,480 75,000 202,218 237,806 Series C-2 Allocation - - - 179,277 Stock-based compensation $ 481,284 $ 4,741,181 $ 2,377,199 $ 13,744,967 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 6 – Accrued Expenses Accrued expenses consist of the following: Schedule of Accrued Expenses September 30, 2022 December 31, 2021 Compensation and related expenses $ 212,571 $ 7,334 Accounts Payable 100,875 138,372 Other 3,757 343 Accrued Expenses $ 317,203 $ 146,050 Accrued compensation and related expenses include approximately $ 209,000 |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 7 - 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% 45,000 |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Note 8 – 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 As reflected in the financial statements, the Company has historically incurred a net loss and has an accumulated deficit at September 30, 2022, a net loss and net cash used in operating activities for the reporting period then ended. The Company is implementing its business plan and generating revenue; however, the Company’s cash position and liquid Digital Assets are sufficient to support its daily operations over the next twelve months. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 - 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. During the period from October 1, 2022 to November 8, 2022, the Company sold a total of 23,678 33,000 1.38 31,000 On October 1, 2022, the Board of Directors of BTCS Inc. appointed Melanie Pump as a new independent director of the Board. Ms. Pump was also appointed as the Chairperson of the Audit and Compensation Committees. As compensation for her service as a director and Chairperson of the Committees, Ms. Pump will receive: (i) annual cash compensation of $ 25,000 5,000 10,000 7,962 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). |
Reclassifications | 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). |
Concentration of Cash | Concentration of Cash The Company maintains cash balances at two financial institutions in checking accounts and money market accounts. The Company considers all highly liquid investments with original maturities of nine months or less when purchased to be cash and cash equivalents. As of September 30, 2022 and December 31, 2021, the Company had approximately $ 2.9 1.4 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 2.5 0.9 |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606 , Revenue from Contracts with Customers ● 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 Revenue 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. The Company has entered into network-based smart contracts by running its own Digital Asset validating nodes as well as by staking Digital Assets with staking pools on nodes run by third-party operators (either directly or through exchanges). Through these contracts, the Company provides cryptocurrency to stake on 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 a few weeks to months after it is canceled by the operator and requires that the cryptocurrency staked remain locked up during the duration of the smart contract. In exchange for staking the cryptocurrency and validating transactions on blockchain networks, the Company is entitled to all of the fixed cryptocurrency award for running the Company’s own node and is entitled to a fractional share of the fixed cryptocurrency award a third-party staking pool operator receives (less digital asset transaction fees payable to the pool operator or exchanges, 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 by a third-party staking pool is based on the proportion of cryptocurrency the Company staked to the staking pool node to the total cryptocurrency staked by all pool participants validating blockchain transactions. 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 transaction consideration the Company receives - the cryptocurrency awards - is a non-cash consideration, which the Company measures at fair value on the date received. The fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. The satisfaction of the performance obligation for transaction verification services 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 | Cost of revenue The Company’s cost of revenue consists primarily of direct production costs related to the operations of validating transactions on the network, rent and utilities for locations housing server nodes to the extent applicable, hosting costs if cloud-based servers are utilized and fees (including stock-based fees) paid to 3rd parties to assist in software maintenance and operations of its nodes. |
Digital Assets Translations and Remeasurements | Digital Assets Translations and Remeasurements The Company accounts for its Digital Assets as indefinite-lived intangible assets in accordance with ASC 350, Intangibles –Goodwill and Other Digital Assets held are included in the balance sheets as either current assets or other assets if they are staked and locked up for over one year. The Company’s Digital Assets are initially recorded at fair value upon receipt (or “carrying value”). The fair value of Digital Assets is determined using the average U.S. dollar spot price of the related Digital Asset. On a quarterly basis, Digital Assets are measured at carrying value, net of any impairment losses incurred since receipt. The Company will record impairment losses as the fair value falls below the carrying value of the Digital Assets at any time during the period, as determined using the lowest U.S. dollar spot price of the related Digital Asset subsequent to its acquisition. The Digital Assets can only be marked down when impaired and not marked up when their value increases. Such impairment in the value of Digital Assets are recorded as a component of costs and expenses in our statements of operations. The Company recorded impairment losses related to Digital Assets of approximately $ 12.3 3.8 Impairment losses cannot be recovered for any subsequent increase in fair value until the sale or disposal of the asset. Realized gain (loss) on sale of Digital Assets are included in other income (expense) in the statements of operations. The Company recorded realized gains (losses) on Digital Assets of approximately $ 490,000 3.1 The presentation of purchases and sales of Digital Assets on the Statement of Cash Flows is determined by the nature of the Digital Assets, which can be characterized as productive (i.e. purchased for purposes of staking) or non-productive. The purchase of non-productive Digital Assets and currencies are included as an operating activity, whereas the purchase of productive Digital Assets and currencies are included as investing activities in accordance with ASC 230-10-20 Investing activities. |
Internally Developed Software | Internally Developed Software Internally developed software consists of the core technology of the Company’s Digital Asset Platform, which is being designed to allow users to track, monitor and analyze their aggregate cryptocurrency portfolio holdings by connecting their Digital Asset exchanges and digital wallets as well as providing a non-custodial delegation process to earn staking rewards on Digital 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, ASC 350, Intangibles-Goodwill and Other |
Property and Equipment | Property and Equipment Property and equipment consists of computer, equipment and office furniture and fixtures, all of which are recorded at cost. Depreciation and amortization is recorded using the straight-line method over the respective useful lives of the assets ranging from three five |
Use of Estimates | 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 | 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 |
Accounting for Warrants | 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 (“ASC 815”). 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 sheet 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 compensation | Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) 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. 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 On January 5, 2022, the board of directors of the Company 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 are considered a return of capital as the distributions are 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 Company will evaluate the appropriateness of potential future dividends as the Company continues to grow its operations. Dividend distributions amounted to $ 635,000 0 |
Advertising Expense | Advertising Expense Advertisement costs are expensed as incurred and included in marketing expenses. Advertising and marketing expenses amounted to approximately $ 74,000 10,000 |
Net Loss per Share | Net Loss per Share Basic 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 convertible preferred stock, convertible notes, 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 September 30, 2022 and 2021 because their effect was anti-dilutive: Schedule of Earnings Per Share Anti-diluted 2022 2021 As of September 30, 2022 2021 Warrants to purchase common stock 945,837 962,823 Convertible notes - 285,429 Options 1,285,000 - Non-vested restricted stock awards units 1,612,350 - Total 3,843,187 1,248,252 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU No. 2019-12 effective January 1, 2021, and the adoption did not have a material impact on its financial statements and related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share Anti-diluted | The following financial instruments were not included in the diluted loss per share calculation as of September 30, 2022 and 2021 because their effect was anti-dilutive: Schedule of Earnings Per Share Anti-diluted 2022 2021 As of September 30, 2022 2021 Warrants to purchase common stock 945,837 962,823 Convertible notes - 285,429 Options 1,285,000 - Non-vested restricted stock awards units 1,612,350 - Total 3,843,187 1,248,252 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Fair Value of Assets and Liabilities Valued on Recurring Basis | The following table presents the Company’s assets and liabilities that are measured at fair value at September 30, 2022 and December 31, 2021: Schedule of Fair Value of Assets and Liabilities Valued on Recurring Basis Fair value measured at September 30, 2022 Total at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs 2022 (Level 1) (Level 2) (Level 3) Liabilities Warrant Liabilities $ 712,500 $ - $ - $ 712,500 Fair value measured at December 31, 2021 Total at December 31, Quoted prices in active markets Significant other Significant unobservable inputs 2021 (Level 1) (Level 2) (Level 3) Liabilities Warrant Liabilities $ 1,852,500 $ - $ - $ 1,852,500 |
Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities | 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 at the date of issuance and, as of September 30, 2022 and December 31, 2021, is as follows: Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities September 30, 2022 December 31, 2021 Risk-free rate of interest 4.06 % 1.26 % Expected volatility 157.1 % 162.5 % Expected life (in years) 3.43 4.18 Expected dividend yield - - |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Changes in Fair Value and Other Adjustments of Warrants | The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the nine months ended September 30, 2022 and 2021, 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 liabilities September 30, September 30, 2022 2021 Beginning balance $ 1,852,500 $ - Warrant liabilities classification - - Fair value adjustment of warrant liabilities (1,140,000 ) - Ending balance $ 712,500 $ - |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Weighted-Average Assumptions Used to Estimate Fair Value | The following weighted-average assumptions were used to estimate the fair value of options granted during the nine months ended September 30, 2022 and 2021 for the Monte-Carlo simulation: Schedule of Weighted-Average Assumptions Used to Estimate Fair Value Nine Months Ended 2022 2021 Vesting Hurdle Price $ 19.39 - Term (years) 5.00 - Expected stock price volatility 103.7 % - Risk-free rate of interest 1.32 % - |
Summary of Option Activity | A summary of option activity under the Company’s stock option plan for nine months ended September 30, 2022 is presented below: Summary of Option Activity Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life Outstanding as of December 31, 2021 1,235,000 $ 2.14 $ 1,488,000 4.3 Employee options granted 50,000 1.51 - 4.8 Outstanding as of September 30, 2022 1,285,000 $ 2.11 $ - 3.6 Options vested and exercisable as of September 30, 2022 1,229,750 $ 2.10 $ - 3.5 |
Schedule of Restricted Stock Units | 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 $ 100 million $ 150 million $ 200 million $ 400 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 |
Summary of Restricted Stock | A summary of the Company’s restricted stock units granted under the 2021 Plan during the nine months ended September 30, 2022 are as follows: Summary of Restricted Stock Number of Restricted Stock Units Weighted Average Grant Day Fair Value Nonvested at December 31, 2021 29,363 $ 5.96 Granted 1,662,607 3.29 Vested (79,620 ) 3.14 Forfeited - - Nonvested at September 30, 2022 1,612,350 $ 3.35 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense is recorded as a part of selling, general and administrative expenses, compensation expenses and cost of revenues. Stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021 was as follows: Schedule of Stock-based Compensation Expense 2022 2021 2022 2021 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Employee bonus stock awards $ - $ - $ 894,027 $ - Employee stock option awards 16,455 1,638,516 98,901 10,298,844 Employee restricted stock unit awards 434,349 3,027,665 1,182,053 3,029,040 Non-employee restricted stock awards 30,480 75,000 202,218 237,806 Series C-2 Allocation - - - 179,277 Stock-based compensation $ 481,284 $ 4,741,181 $ 2,377,199 $ 13,744,967 |
2021 Equity Incentive Plan [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Weighted-Average Assumptions Used to Estimate Fair Value | Summary of Weighted-average Assumptions Used to Estimate Fair Value For the nine months ended September 30, 2022 2021 Exercise price $ 1.51 $ 0.21 Term (years) 5.00 2.25 3.05 Expected stock price volatility 165.8 % 185.9 % Risk-free rate of interest 2.77 % 0.34 % |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: Schedule of Accrued Expenses September 30, 2022 December 31, 2021 Compensation and related expenses $ 212,571 $ 7,334 Accounts Payable 100,875 138,372 Other 3,757 343 Accrued Expenses $ 317,203 $ 146,050 |
Business Organization and Nat_2
Business Organization and Nature of Operations (Details Narrative) - shares | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Common stock shares authorized | 97,500,000 | 97,500,000 |
Schedule of Earnings Per Share
Schedule of Earnings Per Share Anti-diluted (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 3,843,187 | 1,248,252 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 945,837 | 962,823 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 285,429 | |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,285,000 | |
Non Vested Restricted Stock Awards Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,612,350 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Cash and cash equivalents | $ 2,888,998 | $ 1,400,867 | |
Cash, FDIC insured amount | 2,500,000 | $ 900,000 | |
Impairment losses | 12,300,000 | $ 3,800,000 | |
Realized investment gains losses | $ 490,000 | 3,100,000 | |
Income tax likelihood percentage description | 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 | ||
Payments of dividends | $ 635,000 | 0 | |
Advertising expenses | 74,000 | $ 10,000 | |
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cash, FDIC insured amount | $ 250,000 | ||
Property, plant and equipment, estimated useful lives | five | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | three |
Schedule of Fair Value of Asset
Schedule of Fair Value of Assets and Liabilities Valued on Recurring Basis (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liabilities | $ 712,500 | $ 1,852,500 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liabilities | $ 712,500 | $ 1,852,500 |
Summary of Valuation Methodolog
Summary of Valuation Methodology and Significant Unobservable Inputs Warrant Liabilities (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Risk-free rate of interest | 1.32% | ||
Expected volatility | 103.70% | ||
Expected life (in years) | 5 years | ||
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Risk-free rate of interest | 4.06% | 1.26% | |
Expected volatility | 157.10% | 162.50% | |
Expected life (in years) | 3 years 5 months 4 days | 4 years 2 months 4 days | |
Expected dividend yield |
Schedule of Changes in Fair Val
Schedule of Changes in Fair Value and Other Adjustments of Warrants (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liabilities, beginning balance | $ 1,852,500 | |||
Fair value adjustment of warrant liabilities | $ (71,250) | $ (2,066,250) | (1,140,000) | $ (2,066,250) |
Warrant liabilities, ending balance | 712,500 | 712,500 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liabilities, beginning balance | 1,852,500 | |||
Warrant liabilities classification | ||||
Fair value adjustment of warrant liabilities | (1,140,000) | |||
Warrant liabilities, ending balance | $ 712,500 | $ 712,500 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details Narrative) - shares | Aug. 25, 2021 | Mar. 02, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Shares of common stock | 14,500 | |
Securities Purchase Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Shares of common stock | 950,000 | |
Common stock warrants | 712,500 |
Summary of Weighted-average Ass
Summary of Weighted-average Assumptions Used to Estimate Fair Value (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price | $ 19.39 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 5 years | |
Expected stock price volatility | 103.70% | |
Risk-free rate of interest | 1.32% | |
2021 Equity Incentive Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price | $ 1.51 | $ 0.21 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 5 years | |
Expected stock price volatility | 165.80% | 185.90% |
Risk-free rate of interest | 2.77% | 0.34% |
2021 Equity Incentive Plan [Member] | Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 2 years 3 months | |
2021 Equity Incentive Plan [Member] | Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 3 years 18 days |
Summary of Option Activity (Det
Summary of Option Activity (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Equity [Abstract] | |
Number of shares outstanding, beginning balance | shares | 1,235,000 |
Weighted average exercise price, beginning balance | $ 2.14 |
Total Intrinsic value, beginning balance | $ | $ 1,488,000 |
Weighted average remaining contractual life (in years), beginning balance | 4 years 3 months 18 days |
Number of shares outstanding, Employee options granted | shares | 50,000 |
Weighted average exercise price, employee options granted | $ 1.51 |
Total intrinsic value, employee options granted | |
Weighted Average Remaining Contractual Life (in years), Employee options granted | 4 years 9 months 18 days |
Number of shares outstanding, ending balance | shares | 1,285,000 |
Weighted average exercise price, ending balance | $ 2.11 |
Total Intrinsic value, ending balance | $ | |
Weighted average remaining contractual life (in years), ending balance | 3 years 7 months 6 days |
Number of shares outstanding, options vested and exercisable | shares | 1,229,750 |
Weighted average exercise price, options vested and exercisable | $ 2.10 |
Total intrinsic value, options vested and exercisable | $ | |
Weighted average remaining contractual life (in years), options vested and exercisable | 3 years 6 months |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units (Details) | Feb. 22, 2022 shares |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 1,521,296 |
Market Cap Vesting Thresholds $100 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 380,324 |
Market Cap Vesting Thresholds $150 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 380,324 |
Market Cap Vesting Thresholds $200 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 380,324 |
Market Cap Vesting Thresholds $400 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 380,324 |
Chief Executive Officer [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Officer Name | Charles Allen |
Stock issued during period restricted stock award grant date | Jan. 02, 2022 |
Number of restricted stock units granted and vested, shares | 694,444 |
Chief Executive Officer [Member] | Market Cap Vesting Thresholds $100 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 173,611 |
Chief Executive Officer [Member] | Market Cap Vesting Thresholds $150 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 173,611 |
Chief Executive Officer [Member] | Market Cap Vesting Thresholds $200 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 173,611 |
Chief Executive Officer [Member] | Market Cap Vesting Thresholds $400 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 173,611 |
Chief Operating Officer [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Officer Name | Michal Handerhan |
Stock issued during period restricted stock award grant date | Jan. 02, 2022 |
Number of restricted stock units granted and vested, shares | 444,444 |
Chief Operating Officer [Member] | Market Cap Vesting Thresholds $100 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 111,111 |
Chief Operating Officer [Member] | Market Cap Vesting Thresholds $150 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 111,111 |
Chief Operating Officer [Member] | Market Cap Vesting Thresholds $200 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 111,111 |
Chief Operating Officer [Member] | Market Cap Vesting Thresholds $400 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 111,111 |
Chief Financial Officer [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Officer Name | Michael Prevoznik |
Stock issued during period restricted stock award grant date | Jan. 02, 2022 |
Number of restricted stock units granted and vested, shares | 222,224 |
Chief Financial Officer [Member] | Market Cap Vesting Thresholds $100 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 55,556 |
Chief Financial Officer [Member] | Market Cap Vesting Thresholds $150 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 55,556 |
Chief Financial Officer [Member] | Market Cap Vesting Thresholds $200 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 55,556 |
Chief Financial Officer [Member] | Market Cap Vesting Thresholds $400 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 55,556 |
Chief Technology Officer [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Officer Name | Manish Paranjape |
Stock issued during period restricted stock award grant date | Feb. 22, 2022 |
Number of restricted stock units granted and vested, shares | 160,184 |
Chief Technology Officer [Member] | Market Cap Vesting Thresholds $100 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 40,046 |
Chief Technology Officer [Member] | Market Cap Vesting Thresholds $150 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 40,046 |
Chief Technology Officer [Member] | Market Cap Vesting Thresholds $200 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 40,046 |
Chief Technology Officer [Member] | Market Cap Vesting Thresholds $400 Million [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of restricted stock units granted and vested, shares | 40,046 |
Schedule of Weighted-Average As
Schedule of Weighted-Average Assumptions Used to Estimate Fair Value (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||
Exercise price | $ 19.39 | |
Term (years) | 5 years | |
Expected stock price volatility | 103.70% | |
Risk-free rate of interest | 1.32% |
Summary of Restricted Stock (De
Summary of Restricted Stock (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Equity [Abstract] | |
Number of restricted stock units nonvested, beginning balance | shares | 29,363 |
Weighted average grant day fair value nonvested, beginning balance | $ / shares | $ 5.96 |
Number of restricted stock units, granted | shares | 1,662,607 |
Weighted average grant day fair value, granted | $ / shares | $ 3.29 |
Number of restricted stock units, vested | shares | (79,620) |
Weighted average grant day fair value, vested | $ / shares | $ 3.14 |
Number of restricted stock units, forfeited | shares | |
Weighted average grant day fair value, forfeited | $ / shares | |
Number of restricted stock units nonvested, ending balance | shares | 1,612,350 |
weighted average grant day fair value nonvested, ending balance | $ / shares | $ 3.35 |
Schedule of Stock-based Compens
Schedule of Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | $ 481,284 | $ 4,741,181 | $ 2,377,199 | $ 13,744,967 |
Employee Stock Option One [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | 894,027 | |||
Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | 16,455 | 1,638,516 | 98,901 | 10,298,844 |
Restricted Stock Units (RSUs) [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | 434,349 | 3,027,665 | 1,182,053 | 3,029,040 |
Non Employee Restricted Stock Awards [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | 30,480 | 75,000 | 202,218 | 237,806 |
Series C Two Allocation [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | $ 179,277 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 22, 2022 | Jan. 02, 2022 | Sep. 14, 2021 | Aug. 25, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 13, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Stock issued during period, shares, new issues | 14,500 | |||||||||
Reverse stock split | 1-for-10 Reverse Split | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 2.11 | $ 2.11 | $ 2.14 | |||||||
Number of stock options awarded | $ 450,805 | $ 4,666,182 | $ 2,233,608 | $ 13,892,884 | ||||||
Remaining unvested restricted stock units | 1,612,350 | 1,612,350 | 29,363 | |||||||
Remaining unvested restricted stock units aggregate intrinsic value, nonvested | $ 5,600 | $ 5,600 | ||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Remaining unvested restricted stock units | 7,962 | 7,962 | ||||||||
Restricted Stock Units (RSUs) One [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Market cap vesting thresholds, value | $ 100,000,000 | |||||||||
Restricted Stock Units (RSUs) Two [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Market cap vesting thresholds, value | 150,000,000 | |||||||||
Restricted Stock Units (RSUs) Three [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Market cap vesting thresholds, value | 200,000,000 | |||||||||
Restricted Stock Units (RSUs) Four [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Market cap vesting thresholds, value | $ 400,000,000 | |||||||||
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Number of stock options awarded | $ 31,848 | |||||||||
Chief Technology Officer [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 20% | |||||||||
Chief Technology Officer [Member] | Restricted Stock Units [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 80% | |||||||||
2021 Equity Incentive Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Common stock, capital shares reserved for future issuance | 7,000,000 | |||||||||
2021 Equity Incentive Plan [Member] | Non Executive Employees [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 50,000 | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1.51 | $ 1.51 | ||||||||
At-the-Market Offering Agreement [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Sale of stock, number of shares issued in transaction | 2,148,658 | |||||||||
Gross proceeds from issuance of common stock | $ 11,454,000 | |||||||||
Shares issued, price per share | $ 5.33 | $ 5.33 | ||||||||
Proceeds from issuance initial public offering, net | $ 11,095,000 | |||||||||
At-the-Market Offering Agreement [Member] | H.C. Wainwright and Co., LLC [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Sale of stock, consideration received on transaction | $ 98,767,500 | |||||||||
Percentage of gross proceeds of offerings | 3% |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Compensation and related expenses | $ 212,571 | $ 7,334 |
Accounts Payable | 100,875 | 138,372 |
Other | 3,757 | 343 |
Accrued Expenses | $ 317,203 | $ 146,050 |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) | Sep. 30, 2022 USD ($) |
Payables and Accruals [Abstract] | |
Accrued bonuses current and non current | $ 209,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Retirement Benefits [Abstract] | |
Percentage of defined comtribution plan employee | 100% |
Defined contribution plan employee | $ 45,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Oct. 01, 2022 | Nov. 08, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | ||||||
Gross proceeds from issuance of common stock | $ 3,014,005 | |||||
Share-Based Payment Arrangement, Noncash Expense | $ 2,233,608 | $ 13,892,884 | ||||
Remaining unvested restricted stock units | 1,612,350 | 29,363 | ||||
Restricted Stock Units (RSUs) [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Remaining unvested restricted stock units | 7,962 | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Share-Based Payment Arrangement, Noncash Expense | $ 10,000 | |||||
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Remaining unvested restricted stock units | 7,962 | |||||
Subsequent Event [Member] | Audit Commitees [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Share-Based Payment Arrangement, Noncash Expense | 25,000 | |||||
Subsequent Event [Member] | Compensation Commitees [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Share-Based Payment Arrangement, Noncash Expense | $ 5,000 | |||||
Subsequent Event [Member] | ATM Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares sold | 23,678 | |||||
Gross proceeds from issuance of common stock | $ 33,000 | |||||
Selling price | $ 1.38 | |||||
Net proceed from sales of equity | $ 31,000 |