Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 08, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | BTCS Inc. | |
Entity Central Index Key | 0001436229 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 13,257,625 | |
Trading Symbol | BTCS | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 77,086 | $ 52,117 |
Prepaid expense | 3,333 | 8,333 |
Total current assets | 80,419 | 60,450 |
Other assets: | ||
Property and equipment, net | 2,368 | 2,703 |
Total other assets | 2,368 | 2,703 |
Total Assets | 82,787 | 63,153 |
Liabilities and Stockholders' Deficit: | ||
Accounts payable and accrued expense | 168,909 | 119,146 |
Short term loan | 200,000 | 200,000 |
Total current liabilities | 368,909 | 319,146 |
Stockholders' deficit: | ||
Common stock, 975,000,000 shares authorized at $0.001 par value, 13,240,765 and 12,515,201 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 13,240 | 12,515 |
Additional paid in capital | 115,302,300 | 115,074,655 |
Accumulated deficit | (115,601,691) | (115,343,192) |
Total stockholders' deficit | (286,122) | (255,993) |
Total Liabilities and stockholders' deficit | 82,787 | 63,153 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock; 20,000,000 shares authorized at $0.001 par value: | ||
Series C-1 Convertible Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock; 20,000,000 shares authorized at $0.001 par value: | $ 29 | $ 29 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 975,000,000 | 975,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 13,240,765 | 12,515,201 |
Common stock, shares outstanding | 13,240,765 | 12,515,201 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, liquidation preference per share | $ 0.001 | $ 0.001 |
Series C-1 Convertible Preferred Stock [Member] | ||
Preferred stock, shares issued | 29,414 | 29,414 |
Preferred stock, shares outstanding | 29,414 | 29,414 |
Preferred stock, liquidation preference per share | $ 0.001 | $ 0.001 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating expenses: | ||
General and administrative | $ 251,964 | $ 255,663 |
Marketing | 535 | 1,485 |
Total operating expenses | 252,499 | 257,148 |
Other (expense) income: | ||
Interest expense | (6,000) | |
Realized gain on sale of digital currencies | 92,213 | |
Total other income | (6,000) | 92,213 |
Net loss | (258,499) | (164,935) |
Deemed dividend related to reduction of warrant strike price | (95,708) | |
Net loss attributable to common stockholders | $ (354,207) | $ (164,935) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.02) | $ (0.01) |
Weighted average number of common shares outstanding, basic and diluted | 13,033,038 | 12,273,975 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' (Deficit) Equity (Unaudited) - USD ($) | Series B Convertible Preferred Stock [Member] | Series C-1 Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 25 | $ 50 | $ 12,101 | $ 115,018,023 | $ (114,516,772) | $ 513,427 |
Balance, Shares at Dec. 31, 2017 | 25,877 | 50,004 | 12,101,462 | |||
Conversion of Series B Convertible Preferred Stock to common stock | $ (25) | $ 173 | (173) | (25) | ||
Conversion of Series B Convertible Preferred Stock to common stock, Shares | (25,877) | 172,513 | ||||
Net loss | (164,935) | (164,935) | ||||
Balance at Mar. 31, 2018 | $ 50 | $ 12,274 | 115,017,850 | (114,681,707) | 348,467 | |
Balance, Shares at Mar. 31, 2018 | 50,004 | 12,273,975 | ||||
Balance at Dec. 31, 2018 | $ 29 | $ 12,515 | 115,074,655 | (115,343,192) | (255,993) | |
Balance, Shares at Dec. 31, 2018 | 29,414 | 12,515,201 | ||||
Warrant exercise | $ 725 | 227,645 | 228,370 | |||
Warrant exercise, shares | 725,564 | |||||
Net loss | (258,499) | (258,499) | ||||
Balance at Mar. 31, 2019 | $ 29 | $ 13,240 | $ 115,302,300 | $ (115,601,691) | $ (286,122) | |
Balance, Shares at Mar. 31, 2019 | 29,414 | 13,240,765 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Cash flows used from operating activities: | ||
Net loss | $ (258,499) | $ (164,935) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expenses | 335 | 122 |
Realized gain on sale of digital currencies | (92,213) | |
Proceeds from sale of digital currencies | 172,439 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 5,000 | (6,108) |
Accounts payable and accrued expenses | 49,763 | (45,602) |
Net cash used in operating activities | (203,401) | (136,297) |
Net cash provided by financing activities: | ||
Proceeds from exercise of warrants | 228,370 | |
Net cash provided by financing activities | 228,370 | |
Net increase (decrease) in cash | 24,969 | (136,297) |
Cash, beginning of period | 52,117 | 303,334 |
Cash, end of period | 77,086 | 167,037 |
Supplemental disclosure of non-cash financing and investing activities: | ||
Conversion of Series B Convertible Preferred Stock to common stock | $ 5,175 |
Business Organization and Natur
Business Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2019 | |
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 ecommerce marketplace where consumers can purchase merchandise using Digital Assets, including bitcoin and is currently focused on blockchain and digital currency ecosystems. In January 2015, the Company began a rebranding campaign using its BTCS.COM domain (shorthand for Blockchain Technology Consumer Solutions) to better reflect its broadened strategy. The Company released its new website which included broader information on its strategy. 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 transaction verification services operation at our North Carolina facility due to capital constraints. Subject to additional financing, the Company plans to acquire additional Digital Assets to provide investors with indirect ownership of Digital Assets that are not securities, such as bitcoin and ether. The Company intends to acquire Digital Assets through open market purchases. Additionally, the Company may acquire Digital Assets by resuming its transaction verification services business through outsourced data centers and earning rewards in Digital Assets by securing their respective blockchains. We are not limiting our assets to a single type of Digital Asset and may purchase a variety of Digital Assets that appear to benefit our investors, subject to the certain limitations regarding Digital Securities. The Company is also seeking to acquire controlling interests in businesses in the blockchain industry. The Company has not participated in any initial coin offerings as it believes most of the offerings entail the offering of Digital Securities and require registration under the Securities Act and under state securities laws or can only be sold to accredited investors in the United States. Since about July 2017, initial coin offerings using Digital Securities have been (or should be) limited to accredited investors. Because we cannot qualify as an accredited investor, we do not intend to acquire coins in initial coin offerings or from purchasers in such offerings. Further, the Company does not intend to participate in registered or unregistered initial coin offerings. The Company will carefully review its purchases of Digital Securities to avoid violating the 1940 Act and seek to reduce potential liabilities under the federal securities laws. Digital asset blockchains are typically maintained by a network of participants which run servers which secure their blockchain. 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 April 5, 2019, the Company filed a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) with the Nevada Secretary of State to effect a one-for 30 reverse split of the Company’s class of common stock. The Amendment took effect on April 9, 2019. No fractional shares will be issued or distributed as a result of the Amendment. Numbers of shares of the Company’s preferred stock were not affected by the Reverse Stock Split; however, the conversion ratios have been adjusted to reflect the Reverse Stock Split. The financial statements have been retroactively restated to reflect the reverse stock split. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [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 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 are not necessarily indicative of results for a full year. The unaudited condensed financial statements and notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2018. |
Liquidity, Financial Condition
Liquidity, Financial Condition and Management's Plans | 3 Months Ended |
Mar. 31, 2019 | |
Liquidity Financial Condition And Managements Plans | |
Liquidity, Financial Condition and Management's Plans | Note 3 - Liquidity, Financial Condition and Management’s Plans The Company has commenced its planned operations but has limited operating activities to date. The Company has financed its operations since inception using proceeds received from capital contributions made by its officers and proceeds in financing transactions. Notwithstanding, the Company has limited revenues, limited capital resources and is subject to all of the risks and uncertainties that are typical of an early stage enterprise. Significant uncertainties include, among others, whether the Company will be able to raise the capital it needs to finance its longer-term operations and whether such operations, if launched, will enable the Company to sustain operations as a profitable enterprise. Our working capital needs are influenced by our level of operations, and generally decrease with higher levels of revenue. The Company used approximately $0.2 million of cash in its operating activities for the three months ended March 31, 2019. The Company incurred $0.2 million net loss for the three months ended March 31, 2019. The Company had cash of approximately $77,000 and a negative working capital of approximately $0.3 million at March 31, 2019. The Company expects to incur losses into the foreseeable future as it undertakes its efforts to execute its business plans. The Company will require significant additional capital to sustain its short-term operations and make the investments it needs to execute its longer-term business plan. The Company’s existing liquidity is not sufficient to fund its operations and anticipated capital expenditures for the foreseeable future. The Company is currently seeking to obtain additional debt or equity financing, however there are currently no commitments in place for further financing nor is there any assurance that such financing will be available to the Company on favorable terms, if at all. Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit, there is substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The financial statements have been prepared assuming the Company will continue as a going concern. The Company has not made adjustments to the accompanying financial statements to reflect the potential effects on the recoverability and classification of assets or liabilities should the Company be unable to continue as a going concern. The Company continues to incur ongoing administrative and other operating expenses, including public company expenses, in excess of revenues. While the Company continues to implement its business strategy, it intends to finance its activities by: ● managing current cash and cash equivalents on hand from the Company’s past debt and equity offerings by controlling costs, ● seeking additional financing through sales of additional securities |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 4 - Summary of Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2018 Annual Report. Use of Estimates The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US 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 long-lived assets, stock-based compensation, the valuation of derivative liabilities, and the valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates, including the carrying amount of the intangible assets, if any, 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. 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 and warrants. Diluted loss per share excludes the shares issuable upon the conversion of preferred stock 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 March 31, 2019 and 2018 because their effect was anti-dilutive: As of March 31, 2019 2018 Warrants to purchase common stock 1,229,700 2,068,821 Series C-1 Convertible Preferred stock 196,093 333,360 Total 1,425,793 2,402,181 Recent Accounting Pronouncements In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. The implementation of this rule did not have a material impact on the Company’s condensed financial position, results of operations, equity or cash flows. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Note Payable | Note 5 – Note Payable On December 18, 2018, the Company issued a $200,000 promissory note to one institutional investor (the “Promissory Note”). The Promissory Note is due on September 18, 2019 and bears interest at a rate of 12%. In the event of default the Promissory Note bears interest at a rate of 20%. During the three months ended March 31, 2019, the Company made no payment in connection with this Promissory Note and accrued interest expense of approximately $6,000. As of March 31, 2019, the principal balance of the Promissory Note was $0.2 million and accrued interest on the note payable amounted to approximately $7,000. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6 - Stockholders’ Equity During the three months ended March 31, 2019, the Company issued 725,564 shares of Common Stock for the cash exercise of Series A Warrants, Additional Warrants, and Bonus Warrants resulting in aggregate proceeds of $0.2 million to the Company. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 7 - Subsequent Events On April 18, 2019, the Company issued 16,803 shares of Common Stock in connection with the one-for 30 reverse split resulting from the rounding up of fractional shares of Common Stock to the whole shares of Common Stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US 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 long-lived assets, stock-based compensation, the valuation of derivative liabilities, and the valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates, including the carrying amount of the intangible assets, if any, 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. |
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 and warrants. Diluted loss per share excludes the shares issuable upon the conversion of preferred stock 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 March 31, 2019 and 2018 because their effect was anti-dilutive: As of March 31, 2019 2018 Warrants to purchase common stock 1,229,700 2,068,821 Series C-1 Convertible Preferred stock 196,093 333,360 Total 1,425,793 2,402,181 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. The implementation of this rule did not have a material impact on the Company’s condensed financial position, results of operations, equity or cash flows. 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) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and 2018 because their effect was anti-dilutive: As of March 31, 2019 2018 Warrants to purchase common stock 1,229,700 2,068,821 Series C-1 Convertible Preferred stock 196,093 333,360 Total 1,425,793 2,402,181 |
Liquidity, Financial Conditio_2
Liquidity, Financial Condition and Management's Plans (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liquidity Financial Condition And Managements Plans | ||||
Net cash used in operating activities | $ 203,401 | $ 136,297 | ||
Net loss | 258,499 | 164,935 | ||
Cash | 77,086 | $ 167,037 | $ 52,117 | $ 303,334 |
Working capital deficiency | $ 300,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Earnings Per Share Anti-diluted (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Excluded potentially dilutive securities | 1,425,793 | 2,402,181 |
Warrants to Purchase Common Stock [Member] | ||
Excluded potentially dilutive securities | 1,229,700 | 2,068,821 |
Series C-1 Convertible Preferred Stock [Member] | ||
Excluded potentially dilutive securities | 196,093 | 333,360 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | Dec. 18, 2018 | Mar. 31, 2019 |
Payments of notes payable | ||
Interest expense | 6,000 | |
Debt principal balance | 200,000 | |
Debt accrued interest | $ 7,000 | |
One Institutional Investor [Member] | ||
Proceeds from issuance of promissory notes | $ 200,000 | |
Debt maturity date | Sep. 18, 2019 | |
Debt interest rate | 12.00% | |
Debt default interest rate | 20.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - Series A Warrants [Member] | 3 Months Ended |
Mar. 31, 2019USD ($)shares | |
Number of warrants issued | shares | 725,564 |
Additional warrants proceeds | $ | $ 200,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Apr. 18, 2019shares |
Number of stock issued for reverse stock split | 16,803 |
Reverse stock split | one-for 30 reverse split |