Q30001821534--12-31falsehttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate202308Memberhttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate202308Memberhttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate202308Memberhttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate202308Member0001821534美國通用會計準則:累積其他綜合收益成員2024-03-310001821534exod:比特幣成員會計準則更新202308成員2023-12-310001821534us-gaap: 信用集中風險成員公司C成員2023-01-012023-09-300001821534us-gaap:普通A類成員2021年激勵計劃成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員諮詢成員2024-01-012024-09-300001821534VG國家2023-01-012023-09-300001821534us-gaap:額外實收資本成員2022-12-310001821534exod:數字資產成員2024-01-012024-09-300001821534us-gaap: 信用集中風險成員exod:公司D成員2023-07-012023-09-3000018215342023-01-012023-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員us-gaap: 產品和服務其他成員2024-01-012024-09-300001821534us-gaap: 信用集中風險成員exod:公司B成員2023-07-012023-09-300001821534us-gaap:淨銷售收入成員exod:交易聚合成員us-gaap:產品集中風險成員2023-01-012023-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2023-12-310001821534us-gaap:普通A類成員exod:2021激勵計劃成員2023-12-310001821534exod:交易所聚合會員2024-01-012024-09-3000018215342024-01-012024-03-310001821534us-gaap:淨銷售收入成員exod:API供應商會員us-gaap:地理集中風險成員2024-07-012024-09-300001821534exod:域名會員2024-09-300001821534美國通用會計準則:累積其他綜合收益成員2023-12-310001821534us-gaap:普通A類成員srt : 先前報告的情況會員2023-07-012023-09-300001821534us-gaap:銷售成本成員2023-01-012023-09-3000018215342024-10-012024-09-300001821534us-gaap: 信用集中風險成員exod:公司B成員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員exod:交易匯聚成員us-gaap:產品集中風險成員2023-07-012023-09-300001821534exod:法幣入金成員2024-01-012024-09-300001821534us-gaap: 信用集中風險成員exod:A公司成員2023-01-012023-09-300001821534us-gaap:額外實收資本成員2023-03-310001821534us-gaap:普通A類成員srt : 重述調整成員2023-07-012023-09-300001821534exod:諮詢成員2024-07-012024-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2024-09-300001821534srt : 先前報告的情況會員us-gaap:普通B類成員2023-01-012023-09-300001821534美元指數和非美元指數會員2024-01-012024-09-300001821534美國通用會計準則:其他無形資產成員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員2023-07-012023-09-300001821534us-gaap:一般和管理費用成員2023-07-012023-09-300001821534us-gaap:淨銷售收入成員國家: 香港exod:API服務提供商成員us-gaap:地理集中風險成員2024-01-012024-09-300001821534us-gaap:傢俱和固定資產成員2023-12-310001821534us-gaap:普通股成員us-gaap:普通A類成員2023-07-012023-09-300001821534us-gaap:銷售成本成員2024-07-012024-09-3000018215342022-12-310001821534美國通用會計準則:累積其他綜合收益成員2023-01-012023-03-310001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:諮詢會員2024-07-012024-09-300001821534exod:二零二一激勵計劃會員2021-08-012021-08-3100018215342023-04-012023-06-3000018215342024-01-012024-09-300001821534美國通用會計準則:累積其他綜合收益成員2023-04-012023-06-300001821534會計準則更新202308成員exod:以太幣會員2023-12-310001821534exod:以太幣會員2024-01-012024-03-310001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:Fiat入賬會員2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2024-06-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員2024-07-012024-09-3000018215342023-09-300001821534美國通用會計準則:累積其他綜合收益成員2023-07-012023-09-300001821534us-gaap:淨銷售收入成員exod:API提供者成員us-gaap:地理集中風險成員2023-07-012023-09-300001821534國家: 香港2023-07-012023-09-3000018215342024-04-012024-06-300001821534美國通用會計準則:留存收益成員2023-07-012023-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2023-04-012023-06-300001821534美元指數:車輛成員2023-12-310001821534us-gaap: 信用集中風險成員exod:公司E成員2023-01-012023-09-300001821534exod:比特幣成員2024-04-012024-06-300001821534VG國家2023-07-012023-09-300001821534exod:域名成員2021-01-012021-03-310001821534exod:美國和非美國成員2023-07-012023-09-3000018215342024-03-3100018215342023-01-012023-12-310001821534us-gaap:淨銷售收入成員srt : 最低會員us-gaap:客戶集中風險成員2024-01-012024-09-300001821534us-gaap:一般和管理費用成員2024-07-012024-09-300001821534us-gaap: 帳面報告金額公允價值披露成員us-gaap:美國國債證券成員2024-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2024-06-300001821534美國通用會計準則:其他無形資產成員2024-03-310001821534us-gaap:額外實收資本成員2023-01-012023-03-310001821534國家: MH2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2024-09-300001821534us-gaap:淨銷售收入成員VG國家Exod: API提供者會員us-gaap:地理集中風險成員2023-07-012023-09-300001821534us-gaap:MoneyMarketFundsMember美國通用會計準則:公允價值輸入第一級會員2024-09-300001821534us-gaap: 產品和服務其他成員2023-07-012023-09-300001821534國家: 香港2024-07-012024-09-300001821534us-gaap:額外實收資本成員2023-12-310001821534國家:塞舌爾us-gaap:淨銷售收入成員exod:API提供者成員us-gaap:地理集中風險成員2023-01-012023-09-300001821534國家:密克羅尼西亞2023-01-012023-09-300001821534us-gaap: 限制性股票單位成員exod:2021年激勵計劃會員2024-01-012024-09-300001821534exod:比特幣會員2024-06-300001821534us-gaap:普通股成員us-gaap:普通A類成員2023-09-300001821534srt : 先前報告的情況會員2023-01-012023-09-300001821534us-gaap: 信用集中風險成員exod:A公司會員2023-07-012023-09-300001821534國家:MH2024-07-012024-09-300001821534us-gaap:普通B類成員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員國家:MHexod: API提供商會員us-gaap:地理集中風險成員2023-07-012023-09-300001821534美國通用會計準則:留存收益成員2023-04-012023-06-300001821534exod: 比特幣會員2024-09-300001821534srt : Maximum Member2024-09-300001821534us-gaap:關聯方成員srt : Maximum MemberExod:技術協議成員2023-01-012023-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2024-03-310001821534us-gaap:普通A類成員2023-01-012023-09-300001821534us-gaap:淨銷售收入成員exod:API提供者會員us-gaap:地理集中風險成員2023-01-012023-09-300001821534exod:數字資產會員2024-09-300001821534美國通用會計準則:累積其他綜合收益成員2023-03-310001821534us-gaap:普通股成員us-gaap:普通B類成員2023-03-310001821534us-gaap:淨銷售收入成員exod:API提供者會員exod:美元指數和非美元指數會員us-gaap:地理集中風險成員2024-07-012024-09-300001821534美國通用會計準則:其他無形資產成員2024-09-300001821534美國通用會計準則:累積其他綜合收益成員2022-12-310001821534us-gaap:美國國債證券成員2024-09-300001821534exod:比特幣會員2023-12-310001821534exod:股票期權和限制性股票單位會員2023-07-012023-09-300001821534us-gaap:淨銷售收入成員exod:美元指數和非美元指數會員exod:API提供者會員us-gaap:地理集中風險成員2023-07-012023-09-300001821534美國通用會計準則:留存收益成員2023-06-300001821534us-gaap:普通B類成員2023-12-310001821534us-gaap: 帳面報告金額公允價值披露成員2023-12-310001821534美國通用會計準則:累積其他綜合收益成員2024-04-012024-06-300001821534us-gaap:關聯方成員exod:技術協議成員2023-12-312023-12-310001821534us-gaap:關聯方成員srt : Maximum Memberexod:技術協議成員2023-07-012023-09-300001821534exod:2019激勵計劃成員2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2023-03-310001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:法幣入賬會員2023-07-012023-09-300001821534us-gaap:普通A類成員exod:2021年激勵計劃會員2022-01-012022-12-310001821534us-gaap: 帳面報告金額公允價值披露成員2024-09-300001821534美國通用會計準則:其他無形資產成員2024-06-300001821534srt:累積效應期採納調整成員美國通用會計準則:留存收益成員2023-12-310001821534股票期權和受限股單位成員2023-01-012023-09-3000018215342023-12-310001821534us-gaap:淨銷售收入成員國家:MHAPI提供者成員us-gaap:地理集中風險成員2024-01-012024-09-300001821534交易所聚合成員2023-01-012023-09-300001821534以太幣成員2023-12-310001821534us-gaap:普通股成員us-gaap:普通B類成員2024-01-012024-03-310001821534以太幣成員2024-06-300001821534srt : Maximum Member2024-07-012024-09-300001821534國家:MH2023-07-012023-09-300001821534srt : 重述調整成員us-gaap:普通B類成員2023-01-012023-09-300001821534美國通用會計準則:軟件開發成員2024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:法定貨幣入駐會員2024-07-012024-09-300001821534exod:其他數字資產會員美國通用會計準則:公允價值輸入第一級會員2024-09-300001821534us-gaap:額外實收資本成員2024-06-300001821534美國通用會計準則:留存收益成員2023-12-310001821534us-gaap:淨銷售收入成員exod:美國和非美國會員exod:API提供商成員us-gaap:地理集中風險成員2023-01-012023-09-300001821534us-gaap:額外實收資本成員2024-04-012024-06-300001821534us-gaap:普通B類成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:諮詢成員2023-01-012023-09-300001821534exod:2021年激勵計劃成員srt : Maximum Member2021-08-310001821534us-gaap:普通A類成員srt : 重述調整成員2023-01-012023-09-300001821534exod:比特幣成員2024-01-012024-03-310001821534exod:質押成員2023-07-012023-09-300001821534exod:股票期權和受限制股份單位成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員國家: 香港exod : API Providers Memberus-gaap:地理集中風險成員2023-07-012023-09-300001821534us-gaap: 限制性股票單位成員exod : Twothousand Twenty One Incentive Plan Member2024-09-300001821534us-gaap:淨銷售收入成員country:MHexod : API Providers Memberus-gaap:地理集中風險成員2024-07-012024-09-300001821534美國通用會計準則:累積其他綜合收益成員2024-06-300001821534us-gaap: 信用集中風險成員exod:公司C成員2024-07-012024-09-300001821534exod:二零二一激勵計劃成員2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2023-01-012023-03-310001821534us-gaap:銷售成本成員2024-01-012024-09-300001821534srt : 最低會員2023-12-310001821534exod:股票期權和限制股票單位會員2024-07-012024-09-300001821534exod:以太幣會員2024-09-300001821534us-gaap:淨銷售收入成員exod:API供應商會員exod:美國和非美國會員us-gaap:地理集中風險成員2024-01-012024-09-300001821534us-gaap: 帳面報告金額公允價值披露成員us-gaap:MoneyMarketFundsMember2023-12-310001821534exod:2019激勵計劃會員us-gaap:普通B類成員2024-09-300001821534us-gaap:淨銷售收入成員exod:交易彙總會員us-gaap:產品集中風險成員2024-07-012024-09-300001821534國家: 香港2023-01-012023-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:質押會員2023-07-012023-09-300001821534us-gaap: 帳面報告金額公允價值披露成員exod:比特幣會員2024-09-300001821534us-gaap:普通B類成員2023-07-012023-09-300001821534美國通用會計準則:公允價值輸入第一級會員us-gaap:美國國債證券成員2024-09-300001821534exod:交易所集成會員2023-07-012023-09-300001821534us-gaap:美國國債證券成員2023-12-310001821534us-gaap:普通股成員us-gaap:普通A類成員2022-12-310001821534srt : 先前報告的情況會員us-gaap:普通B類成員2023-07-012023-09-300001821534國家:塞舌爾2023-01-012023-09-3000018215342024-09-300001821534us-gaap:普通B類成員2023-01-012023-09-300001821534us-gaap:淨銷售收入成員srt : 最低會員us-gaap:客戶集中風險成員2023-01-012023-09-300001821534us-gaap:銷售成本成員2023-07-012023-09-300001821534美國通用會計準則:累積其他綜合收益成員2024-07-012024-09-300001821534exod: 諮詢會員2024-01-012024-09-300001821534國家:塞舌爾us-gaap:淨銷售收入成員exod: API供應商會員us-gaap:地理集中風險成員2023-07-012023-09-300001821534exod:域名註冊會員2023-12-310001821534us-gaap:一般和管理費用成員2023-01-012023-09-300001821534美國通用會計準則:留存收益成員2023-01-012023-03-310001821534美國通用會計準則:累積其他綜合收益成員2023-09-300001821534exod:2019年激勵計劃會員2019-09-012019-09-300001821534美國通用會計準則:留存收益成員2023-09-300001821534srt:累積效應期採納調整成員2023-12-3100018215342023-07-012023-09-300001821534exod:法幣入金會員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員srt : 最低會員us-gaap:客戶集中風險成員2023-07-012023-09-300001821534us-gaap:普通A類成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員2023-01-012023-09-300001821534us-gaap:關聯方成員Exod:技術協議成員2024-01-012024-09-300001821534us-gaap: 帳面報告金額公允價值披露成員exod:其他數字資產成員2024-09-300001821534us-gaap: 信用集中風險成員exod:公司A成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員us-gaap: 產品和服務其他成員2023-07-012023-09-300001821534us-gaap:淨銷售收入成員exod:API供應商成員us-gaap:地理集中風險成員2024-01-012024-09-300001821534美國通用會計準則:其他無形資產成員2024-04-012024-06-300001821534exod:比特幣成員2024-03-310001821534美國通用會計準則:軟件開發成員2023-12-310001821534exod:法幣入門成員2023-01-012023-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2023-12-310001821534國家:塞舌爾2023-07-012023-09-3000018215342024-10-310001821534us-gaap:普通A類成員srt : 先前報告的情況會員2023-01-012023-09-300001821534us-gaap:淨銷售收入成員country:MHexod : API Providers Memberus-gaap:地理集中風險成員2023-01-012023-09-300001821534exod : Staking Member2024-01-012024-09-300001821534us-gaap: 帳面報告金額公允價值披露成員us-gaap:美國國債證券成員2023-12-310001821534美國通用會計準則:留存收益成員2022-12-310001821534美國通用會計準則:累積其他綜合收益成員2024-01-012024-03-310001821534exod: 法定貨幣入職會員2023-07-012023-09-300001821534美國通用會計準則:留存收益成員2024-06-300001821534us-gaap: 信用集中風險成員exod: 公司C會員2024-01-012024-09-300001821534srt : 重述調整成員2023-01-012023-09-300001821534us-gaap:額外實收資本成員2023-04-012023-06-300001821534us-gaap: 產品和服務其他成員2024-01-012024-09-300001821534exod:2019年激勵計劃會員srt : Maximum Member2019-09-300001821534美國通用會計準則:留存收益成員2023-03-310001821534exod:以太幣會員2024-07-012024-09-300001821534美國通用會計準則:累積其他綜合收益成員2023-06-300001821534美國通用會計準則:留存收益成員2024-04-012024-06-300001821534us-gaap:普通A類成員2023-12-310001821534us-gaap: 產品和服務其他成員2023-01-012023-09-300001821534us-gaap:普通A類成員2024-09-3000018215342024-06-300001821534exod:其他非同質化代幣收入會員2024-01-012024-09-300001821534us-gaap: 信用集中風險成員exod:公司B會員2024-01-012024-09-300001821534exod:其他非同質化代幣收入會員2024-07-012024-09-300001821534us-gaap: 信用集中風險成員Exod: 公司D成員2023-01-012023-09-300001821534Exod: 交易聚合成員2024-07-012024-09-300001821534us-gaap: 帳面報告金額公允價值披露成員Exod: 安全代幣集團投資成員2023-12-310001821534srt:累積效應期採納調整成員美國通用會計準則:留存收益成員2024-09-300001821534us-gaap: 帳面報告金額公允價值披露成員exod : Ethereum Member2024-09-300001821534us-gaap:普通A類成員2023-07-012023-09-300001821534美國通用會計準則:留存收益成員2024-03-310001821534us-gaap: 帳面報告金額公允價值披露成員us-gaap:MoneyMarketFundsMember2024-09-300001821534us-gaap:額外實收資本成員2023-07-012023-09-300001821534us-gaap: 產品和服務其他成員2024-07-012024-09-300001821534us-gaap:額外實收資本成員2023-06-300001821534exod:美元指數會員和非美元指數會員2023-01-012023-09-300001821534us-gaap:額外實收資本成員2024-01-012024-03-3100018215342024-07-012024-09-300001821534美國通用會計準則:公允價值輸入第一級會員exod:比特幣會員2024-09-300001821534美國通用會計準則:公允價值輸入第一級會員us-gaap:美國國債證券成員2023-12-310001821534us-gaap:普通股成員us-gaap:普通A類成員2023-06-300001821534us-gaap:淨銷售收入成員srt : 最低會員us-gaap:客戶集中風險成員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員國家: 香港exod:API提供方成員us-gaap:地理集中風險成員2024-07-012024-09-300001821534國家:塞舌爾us-gaap:淨銷售收入成員exod:API服務提供者成員us-gaap:地理集中風險成員2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:質押成員2024-07-012024-09-300001821534us-gaap: 信用集中風險成員exod:D公司成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員國家: 香港exod:API提供者成員us-gaap:地理集中風險成員2023-01-012023-09-300001821534美元指數:車輛成員2024-09-300001821534exod:諮詢成員2023-01-012023-09-300001821534us-gaap:普通股成員us-gaap:普通A類成員2024-04-012024-06-300001821534us-gaap:普通A類成員exod:2021年激勵計劃會員2023-01-012023-12-310001821534us-gaap:普通股成員us-gaap:普通A類成員2024-07-012024-09-300001821534us-gaap:一般和管理費用成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員2024-01-012024-09-300001821534以太幣會員2024-03-310001821534us-gaap:普通股成員us-gaap:普通B類成員2023-01-012023-03-310001821534美國通用會計準則:留存收益成員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員Fiat入金會員2023-01-012023-09-300001821534us-gaap:傢俱和固定資產成員2024-09-300001821534美國通用會計準則:公允價值輸入第一級會員exod:以太幣成員2024-09-300001821534srt:累積效應期採納調整成員美國通用會計準則:留存收益成員2024-01-012024-03-310001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:質押成員2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2024-03-310001821534srt : 最低會員2024-09-300001821534國家:塞舌爾2024-07-012024-09-300001821534美國通用會計準則:其他無形資產成員2023-12-310001821534us-gaap: 限制性股票單位成員2024-01-012024-09-300001821534us-gaap: 信用集中風險成員exod:公司C成員2023-07-012023-09-300001821534us-gaap:普通B類成員2024-09-300001821534國家: 香港2024-01-012024-09-300001821534exod:抵押成員2023-01-012023-09-300001821534us-gaap: 帳面報告金額公允價值披露成員exod:安全令牌集團投資成員2024-09-300001821534us-gaap:計算機設備成員2023-12-310001821534us-gaap: 信用集中風險成員exod:A公司成員2024-07-012024-09-300001821534以太幣成員:以太幣會員2024-04-012024-06-300001821534us-gaap:普通股成員us-gaap:普通A類成員2024-01-012024-03-3100018215342023-06-300001821534srt : Maximum Member2023-12-310001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員us-gaap: 產品和服務其他成員2023-01-012023-09-3000018215342023-01-012023-03-310001821534us-gaap:額外實收資本成員2024-03-310001821534us-gaap:普通股成員us-gaap:普通B類成員2022-12-310001821534us-gaap:MoneyMarketFundsMember美國通用會計準則:公允價值輸入第一級會員2023-12-310001821534exod:權益證明會員2024-07-012024-09-300001821534us-gaap: 計算機軟件無形資產成員2024-01-012024-09-300001821534us-gaap:普通A類成員2024-07-012024-09-300001821534美國通用會計準則:留存收益成員2024-09-300001821534us-gaap: 信用集中風險成員exod:公司D成員2024-07-012024-09-300001821534國家:塞舌爾us-gaap:淨銷售收入成員exod:API提供者成員us-gaap:地理集中風險成員2024-07-012024-09-300001821534us-gaap:計算機設備成員2024-09-3000018215342023-03-310001821534美國通用會計準則:累積其他綜合收益成員2024-09-300001821534us-gaap: 計算機軟件無形資產成員2023-01-012023-09-300001821534exod:域名會員2024-04-012024-06-300001821534us-gaap: 信用集中風險成員exod:公司E會員2023-07-012023-09-300001821534us-gaap:淨銷售收入成員exod:交易聚合會員us-gaap:產品集中風險成員2024-01-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員us-gaap: 產品和服務其他成員2024-07-012024-09-300001821534exod:比特幣會員2024-07-012024-09-300001821534us-gaap:額外實收資本成員2024-09-300001821534exod:美國和非美國會員2024-07-012024-09-300001821534us-gaap:淨銷售收入成員us-gaap:產品集中風險成員exod:質押會員2023-01-012023-09-300001821534us-gaap:額外實收資本成員2023-09-300001821534美國通用會計準則:留存收益成員2024-01-012024-03-310001821534us-gaap:額外實收資本成員2024-07-012024-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2023-09-300001821534VG國家us-gaap:淨銷售收入成員exod:API提供者成員us-gaap:地理集中風險成員2023-01-012023-09-300001821534會計準則更新202308成員美國通用會計準則:其他無形資產成員2023-12-310001821534us-gaap: 信用集中風險成員exod:B公司成員2023-01-012023-09-300001821534美國通用會計準則:其他無形資產成員2024-01-012024-03-310001821534國家:塞舌爾2024-01-012024-09-300001821534us-gaap:普通股成員us-gaap:普通B類成員2023-06-300001821534srt:累積效應期採納調整成員美國通用會計準則:留存收益成員2024-01-012024-09-30xbrli:純形xbrli:股份exod:Unitiso4217:美元指數xbrli:股份iso4217:美元指數

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

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

For the quarterly period ended September 30, 2024

OR

 

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

 

Commission File Number: 000-56643

 

 

Exodus Movement, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-3548560

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

15418 Weir St. #333

Omaha, NE(1)

68137

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (833) 992-2566

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock,

par value $0.000001 per share.

 

EXOD

 

N/A

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

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

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

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

 

 

 

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

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

As of October 31, 2024, the registrant had 6,567,199 shares of Class A common stock, par value $0.000001 per share, outstanding.

 

 

 

 

 

 

 

 

 

(1) We are a remote-first company. Accordingly, we do not maintain a headquarters. For purposes of compliance with applicable requirements of the Securities Act of 1933, as amended, and Securities Exchange Act of 1934, as amended, communications may be directed to the listed address.


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements (Unaudited)

2

 

Condensed Consolidated Balance Sheets

2

 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

3

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity

4

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21

Item 4.

Controls and Procedures

22

 

 

 

PART II.

OTHER INFORMATION

23

 

 

 

Item 1.

Legal Proceedings

23

Item 1A.

Risk Factors

23

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

Item 3.

Defaults Upon Senior Securities

23

Item 4.

Mine Safety Disclosures

23

Item 5.

Other Information

23

Item 6.

Exhibits

24

Signatures

25

 

 

i


 

Cautionary Note on Forward-Looking Statements

This Report contains “forward-looking statements,” as that term is defined by the federal securities laws. All forward-looking statements are based upon our current expectations and various assumptions and apply only as of the date made. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs and projections will be achieved. Forward-looking statements are generally identified by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “forecast,” as well as variations of such words or similar expressions.

Forward-looking statements include statements concerning:

our business plans and strategy;
projected profitability, performance or cash flows;
future capital expenditures;
our growth strategy, including our ability to grow organically and through mergers and acquisitions (“M&A”);
anticipated financing needs;
business trends;
our capital allocation strategy;
liquidity and capital management; and
other information that is not historical information.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed or implied by our forward-looking statements, including those set forth in “Item 1. Business” and “Item 1A. Risk Factors” of Amendment No. 4 to our Registration Statement on Form 10 filed with the Securities and Exchange Commission (the “SEC”) on October 10, 2024 (the "Form 10"). All forward-looking statements are expressly qualified in their entirety by such cautionary statements. Readers are cautioned not to place undue reliance on such forward-looking statements. Except as required by law, we undertake no obligation to update or revise any forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

 

1


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Exodus Movement, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share and par value)

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

26,547

 

 

$

11,376

 

Restricted cash and cash equivalents

 

 

83

 

 

 

-

 

U.S. dollar coin ($0 and $500 USDC restricted as of September 30, 2024 and December 31, 2023 respectively)

 

 

5

 

 

 

517

 

Treasury bills

 

 

43,200

 

 

 

43,151

 

Accounts receivable

 

 

3,014

 

 

 

3,240

 

Prepaid expenses

 

 

3,232

 

 

 

1,440

 

Other current assets

 

 

771

 

 

 

5

 

Total current assets

 

 

76,852

 

 

 

59,729

 

OTHER ASSETS

 

 

 

 

 

 

Fixed assets, net

 

 

379

 

 

 

317

 

Digital assets

 

 

124,867

 

 

 

35,010

 

Software assets, net

 

 

7,315

 

 

 

8,051

 

Other long-term asset

 

 

40

 

 

 

-

 

Indefinite-lived assets

 

 

2,096

 

 

 

1,945

 

Other investments

 

 

100

 

 

 

100

 

Deferred tax assets

 

 

-

 

 

 

6,567

 

Total other assets

 

 

134,797

 

 

 

51,990

 

TOTAL ASSETS

 

$

211,649

 

 

$

111,719

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

1,600

 

 

$

1,061

 

Other current liabilities

 

 

7,841

 

 

 

6,485

 

Total current liabilities

 

 

9,441

 

 

 

7,546

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

Other long-term liabilities

 

 

447

 

 

 

412

 

Deferred tax liability

 

 

10,607

 

 

 

-

 

Total long-term liabilities

 

 

11,054

 

 

 

412

 

Total liabilities

 

 

20,495

 

 

 

7,958

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

$0.000001 par value, 5,000,000 shares authorized, no shares issued and outstanding

 

 

-

 

 

 

-

 

Class A Common Stock

 

 

 

 

 

 

$0.000001 par value, 300,000,000 shares authorized,

 

 

-

 

 

 

-

 

6,484,434 issued and outstanding as of September 30, 2024

 

 

-

 

 

 

-

 

4,320,005 issued and outstanding as of December 31, 2023

 

 

-

 

 

 

-

 

Class B Common Stock

 

 

 

 

 

 

$0.000001 par value, 27,500,000 shares authorized,

 

 

-

 

 

 

-

 

20,337,375 issued and outstanding as of September 30, 2024

 

 

-

 

 

 

-

 

21,760,855 issued and outstanding as of December 31, 2023

 

 

-

 

 

 

-

 

ADDITIONAL PAID IN CAPITAL

 

 

125,642

 

 

 

122,558

 

ACCUMULATED OTHER COMPREHENSIVE LOSS

 

 

(1,446

)

 

 

(1,477

)

RETAINED EARNINGS (ACCUMULATED DEFICIT)

 

 

66,958

 

 

 

(17,320

)

Total stockholders' equity

 

 

191,154

 

 

 

103,761

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

211,649

 

 

$

111,719

 

 

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

 

2


 

Exodus Movement, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended
September 30,
2024

 

 

Three Months Ended
September 30,
2023

 

 

Nine Months Ended
September 30,
2024

 

 

Nine Months Ended
September 30,
2023

 

OPERATING REVENUES

 

$

20,117

 

 

$

11,980

 

 

$

71,485

 

 

$

37,730

 

COST OF REVENUES

 

 

11,333

 

 

 

7,738

 

 

 

32,804

 

 

 

21,730

 

GROSS PROFIT

 

 

8,784

 

 

 

4,242

 

 

 

38,681

 

 

 

16,000

 

OPERATING EXPENSES (INCOME)

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

8,466

 

 

 

4,598

 

 

 

25,575

 

 

 

14,585

 

Loss (gain) on digital assets, net

 

 

370

 

 

 

357

 

 

 

(39,197

)

 

 

(285

)

Total operating expense (income)

 

 

8,836

 

 

 

4,955

 

 

 

(13,622

)

 

 

14,300

 

(Loss) income from operations

 

 

(52

)

 

 

(713

)

 

 

52,303

 

 

 

1,700

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Staking and other income

 

 

146

 

 

 

-

 

 

 

701

 

 

 

-

 

Unrealized (loss) gain on investments

 

 

(133

)

 

 

(171

)

 

 

(219

)

 

 

18

 

Loss on disposal of fixed assets

 

 

(36

)

 

 

-

 

 

 

(36

)

 

 

-

 

Interest income

 

 

1,026

 

 

 

811

 

 

 

2,668

 

 

 

1,715

 

Total other income

 

 

1,003

 

 

 

640

 

 

 

3,114

 

 

 

1,733

 

Income (loss) before income taxes

 

 

951

 

 

 

(73

)

 

 

55,417

 

 

 

3,433

 

INCOME TAX BENEFIT (EXPENSE)

 

 

(108

)

 

 

(178

)

 

 

(9,393

)

 

 

(1,042

)

NET INCOME (LOSS)

 

$

843

 

 

$

(251

)

 

$

46,024

 

 

$

2,391

 

OTHER COMPREHENSIVE (LOSS) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(637

)

 

 

121

 

 

 

31

 

 

 

(129

)

COMPREHENSIVE INCOME (LOSS)

 

$

206

 

 

$

(130

)

 

$

46,055

 

 

$

2,262

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share of common stock - Class A

 

$

0.03

 

 

$

(0.01

)

 

$

1.74

 

 

$

0.09

 

Basic net income (loss) per share of common stock - Class B

 

$

0.03

 

 

$

(0.01

)

 

$

1.74

 

 

$

0.09

 

Diluted net income (loss) per share of common stock - Class A

 

$

0.03

 

 

$

(0.01

)

 

$

1.44

 

 

$

0.08

 

Diluted net income (loss) per share of common stock - Class B

 

$

0.03

 

 

$

(0.01

)

 

$

1.44

 

 

$

0.08

 

Weighted average number of shares and share equivalents outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in basic
   computation - Class A

 

 

6,396

 

 

 

4,060

 

 

 

5,314

 

 

 

3,804

 

Weighted average number of shares used in basic
   computation - Class B

 

 

20,337

 

 

 

21,799

 

 

 

21,161

 

 

 

21,799

 

Weighted average number of shares used in diluted
    computation - Class A

 

 

9,840

 

 

 

4,060

 

 

 

8,733

 

 

 

7,291

 

Weighted average number of shares used in diluted
   computation - Class B

 

 

22,485

 

 

 

21,799

 

 

 

23,314

 

 

 

23,799

 

 

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

 

3


 

Exodus Movement, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Retained

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

Earnings

 

 

Total

 

 

 

Class A

 

 

Class B

 

 

Paid In

 

 

Comprehensive

 

 

(Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Shares

 

 

Capital

 

 

Loss

 

 

Deficit)

 

 

Equity

 

BALANCES as of January 1, 2023

 

 

3,544

 

 

 

21,798

 

 

$

116,644

 

 

$

(694

)

 

$

(30,106

)

 

$

85,844

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

2,326

 

 

 

-

 

 

 

-

 

 

 

2,326

 

Exercised options

 

 

-

 

 

 

1

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

1

 

Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes

 

160

 

 

 

-

 

 

 

(152

)

 

 

-

 

 

 

-

 

 

 

(152

)

Foreign currency translation adjustment

 

-

 

 

 

-

 

 

 

-

 

 

 

(50

)

 

 

-

 

 

 

(50

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

773

 

 

 

773

 

BALANCES as of March 31, 2023

 

 

3,704

 

 

 

21,799

 

 

$

118,819

 

 

$

(744

)

 

$

(29,333

)

 

$

88,742

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1,736

 

 

 

-

 

 

 

-

 

 

 

1,736

 

Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes

 

176

 

 

 

-

 

 

 

(172

)

 

 

-

 

 

 

-

 

 

 

(172

)

Foreign currency translation adjustment

 

-

 

 

 

-

 

 

 

-

 

 

 

(200

)

 

 

-

 

 

 

(200

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,869

 

 

 

1,869

 

BALANCES as of June 30, 2023

 

 

3,880

 

 

 

21,799

 

 

$

120,383

 

 

$

(944

)

 

$

(27,464

)

 

$

91,975

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1,333

 

 

 

-

 

 

 

-

 

 

 

1,333

 

Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes

 

206

 

 

 

-

 

 

 

(171

)

 

 

-

 

 

 

-

 

 

 

(171

)

Foreign currency translation adjustment

 

-

 

 

 

-

 

 

 

-

 

 

 

121

 

 

 

-

 

 

 

121

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

(251

)

 

 

(251

)

BALANCES as of September 30, 2023

 

 

4,086

 

 

 

21,799

 

 

$

121,545

 

 

$

(823

)

 

$

(27,715

)

 

$

93,007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCES as of January 1, 2024

 

 

4,320

 

 

 

21,760

 

 

$

122,558

 

 

$

(1,477

)

 

$

(17,320

)

 

$

103,761

 

Cumulative effect adjustment to the opening balance of retained earnings for ASU 2023-08 adoption, net of tax

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

38,254

 

 

 

38,254

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1,903

 

 

 

-

 

 

 

-

 

 

 

1,903

 

Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes

 

234

 

 

 

-

 

 

 

(334

)

 

 

-

 

 

 

-

 

 

 

(334

)

Conversion from Class B to Class A

 

 

240

 

 

 

(240

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

703

 

 

 

-

 

 

 

703

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

54,787

 

 

 

54,787

 

BALANCES as of March 31, 2024

 

 

4,794

 

 

 

21,520

 

 

$

124,127

 

 

$

(774

)

 

$

75,721

 

 

$

199,074

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

2,256

 

 

 

-

 

 

 

-

 

 

 

2,256

 

Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes

 

250

 

 

 

-

 

 

 

(883

)

 

 

-

 

 

 

-

 

 

 

(883

)

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35

)

 

 

-

 

 

 

(35

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,606

)

 

 

(9,606

)

BALANCES as of June 30, 2024

 

 

5,044

 

 

 

21,520

 

 

$

125,500

 

 

$

(809

)

 

$

66,115

 

 

$

190,806

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1,599

 

 

 

-

 

 

 

-

 

 

 

1,599

 

Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes

 

248

 

 

 

-

 

 

 

(1,457

)

 

 

-

 

 

 

-

 

 

 

(1,457

)

Exercised options, non-cash

 

 

-

 

 

 

9

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Conversion from Class B to Class A

 

 

1,192

 

 

 

(1,192

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(637

)

 

 

-

 

 

 

(637

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

843

 

 

 

843

 

BALANCES as of September 30, 2024

 

 

6,484

 

 

 

20,337

 

 

$

125,642

 

 

$

(1,446

)

 

$

66,958

 

 

$

191,154

 

 

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

 

4


 

Exodus Movement, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

 

Nine Months Ended
September 30,
2024

 

 

Nine Months Ended
September 30,
2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net income

$

46,024

 

 

$

2,391

 

Adjustments to reconcile net income to

 

 

 

 

 

Net cash (used in) provided by operating activities

 

 

 

 

 

Depreciation and amortization

 

3,862

 

 

 

3,353

 

Deferred tax expense

 

6,752

 

 

 

-

 

Gain on digital assets, net

 

(39,197

)

 

 

(285

)

Staking and other income

 

(701

)

 

 

-

 

Unrealized loss on investments

 

219

 

 

 

(18

)

Loss on disposal of assets

 

36

 

 

 

-

 

Stock based compensation

 

5,252

 

 

 

4,682

 

Accrued interest income

 

(1,824

)

 

 

(889

)

Other operating activities settled in digital assets and USDC (1)

 

(23,774

)

 

 

(9,614

)

Change in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(89

)

 

 

-

 

Prepaid expenses

 

(1,610

)

 

 

1,460

 

Other current assets

 

(765

)

 

 

16

 

Other long-term asset

 

(40

)

 

 

-

 

Accounts payable

 

549

 

 

 

708

 

Other current liabilities

 

(1,532

)

 

 

1,118

 

Other long-term liabilities

 

35

 

 

 

-

 

Net cash (used in) provided by operating activities

 

(6,803

)

 

 

2,922

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Purchases of domain names

 

(151

)

 

 

-

 

Purchases of fixed assets

 

(228

)

 

 

(25

)

Purchase of treasury bills

 

(73,262

)

 

 

(69,273

)

Redemption of treasury bills

 

74,819

 

 

 

58,795

 

Purchases of digital assets

 

(2,534

)

 

 

-

 

Disposal of digital assets held

 

26,097

 

 

 

-

 

Net cash provided by (used in) investing activities

 

24,741

 

 

 

(10,503

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Repurchase of shares to pay employee withholding taxes

 

(2,684

)

 

 

(515

)

Exercise of stock options

 

-

 

 

 

1

 

Net cash used in financing activities

 

(2,684

)

 

 

(514

)

Change in cash and cash equivalents, and restricted cash and cash equivalents

 

15,254

 

 

 

(8,095

)

Cash and cash equivalents, and restricted cash and cash equivalents

 

 

 

 

 

Beginning of period

 

11,376

 

 

 

20,494

 

End of period

 

26,630

 

 

 

12,399

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

Non-cash issuance of stock

$

10

 

 

$

20

 

Non-cash capitalized software costs settled in digital assets

 

 

 

 

 

   (including stock based compensation of $506 and $713 respectively)

$

(2,959

)

 

$

(3,930

)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

Cash paid for income taxes

$

(4,300

)

 

$

(918

)

 

 

 

 

 

 

 

(1) See Note 5, “Intangible Assets”.

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

 

5


 

Exodus Movement, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

1. Nature of Business

Exodus Movement, Inc. (“Exodus” or “the Company” or “we”) was incorporated in Delaware in July 2016. The Company operates in the FinTech subsector of the greater blockchain and digital asset industry. The Company has developed an un-hosted self-custodial digital asset wallet on the Exodus Platform and contracts with third parties to provide various services to users that utilize the Company’s wallet through the platform.

2. Summary of Significant Accounting Policies

The accompanying condensed consolidated financial statements of the Company are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) on the same basis as the audited consolidated financial statements and in management’s opinion, reflect all the adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair statement of the Company’s condensed consolidated financial statements for the periods presented. The unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the full year or any other period.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes included in the Form 10.

There were no changes to the significant accounting policies or recent accounting pronouncements that were disclosed in Note 2 Summary of Significant Accounting Policies to the audited consolidated financial statements included in the Form 10, other than the adoption of ASU 2023-08 Intangibles, Goodwill and Other - Crypto Assets ("ASU 2023-08"), as discussed below.

Correction of Previously Issued Financial Statements

Subsequent to the issuance of the Company’s interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023, the Company identified an error in the calculation of earnings per share due to the undistributed earnings not being appropriately allocated to each class of common shares and an error in the disclosure of operating activities settled in digital assets and USDC in Note 5. The effects of the correction on the prior periods are included below.

 

 

Three Months Ended
September 30, 2023

 

 

Nine Months Ended
September 30, 2023

 

 

Originally
Reported

 

 

Adjustment

 

 

As
Corrected

 

 

Originally
Reported

 

 

Adjustment

 

 

As
Corrected

 

Basic net income per share - Class A

$

(0.06

)

 

$

0.05

 

 

$

(0.01

)

 

$

0.63

 

 

$

(0.54

)

 

$

0.09

 

Basic net income per share - Class B

$

(0.01

)

 

$

-

 

 

$

(0.01

)

 

$

0.11

 

 

$

(0.02

)

 

$

0.09

 

Diluted net income per share - Class A

$

(0.06

)

 

$

0.05

 

 

$

(0.01

)

 

$

0.33

 

 

$

(0.25

)

 

$

0.08

 

Diluted net income per share - Class B

$

(0.01

)

 

$

-

 

 

$

(0.01

)

 

$

0.10

 

 

$

(0.02

)

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended
September 30, 2023

 

 

Originally
Reported

 

 

Adjustment

 

 

As
Corrected

 

Digital assets expense

$

26,371

 

 

$

(12,947

)

 

$

13,424

 

Conversion of digital assets and USDC to cash

$

-

 

 

$

12,947

 

 

$

12,947

 

 

 

6


 

Concentration of Revenue

Operating revenue from Application Programming Interface Providers (“API Providers”) exceeding 10% of total operating revenues for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

 

 

 

Three Months Ended
September 30, 2024

 

 

Three Months Ended
September 30, 2023

 

 

Nine Months Ended
September 30, 2024

 

 

Nine Months Ended
September 30, 2023

 

Company A

 

$

3,692

 

 

$

2,306

 

 

$

14,224

 

 

$

6,354

 

Company B

 

 

4,157

 

 

 

2,763

 

 

 

14,443

 

 

 

7,602

 

Company C

 

 

3,418

 

 

 

2,302

 

 

 

12,512

 

 

 

6,436

 

Company D

 

 

2,574

 

 

 

1,278

 

 

 

9,402

 

 

 

6,064

 

Company E (1)

 

 

-

 

 

 

1,442

 

 

 

-

 

 

 

5,619

 

(1) Company E did not have over 10% of revenue during the three and nine months ended September 30, 2024.

Digital Assets

As of September 30, 2024, the Company held $124.9 million of digital assets at fair value. The Company presents digital assets separately from other intangible assets, recorded as digital assets on the condensed consolidated balance sheets. The net activity from remeasurement of digital assets at fair value is reflected in the condensed consolidated statements of operations and comprehensive (loss) income within operating income (expense). Digital assets that are received as noncash consideration in our revenue arrangements and sold for cash within seven days are presented as cash flows from operating activities, while other digital asset activity held longer than seven days is reflected as cash flows from investing activities in the consolidated statements of cash flows. The Company uses a mix of non-custodial and custodial services at multiple locations that are geographically dispersed to store its digital assets. The Company has performed an analysis of the principal market. Refer to Note 5, Intangible Assets, and Note 11, Fair Value Measurements, for additional information. The Company has ownership of and control over its digital assets. The cost basis is calculated on a first-in first-out basis.

Fair Value Measurements

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:

Level 1 – Quoted prices for identical instruments in active markets.
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not observable.

Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, securities are priced using third-party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs that market participants presumably would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted. Subsequent to the adoption of ASU 2023-08, the fair value of each digital asset is based on quoted (unadjusted) prices in the principal market for each digital asset. Such prices are based on Level 1 inputs in accordance with ASC 820.

 

Recent Accounting Pronouncements

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This guidance only impacts footnote disclosures and will not impact our consolidated financial statements.

Improvements to Crypto Assets Disclosures

On December 13, 2023, the FASB issued ASU 2023-08 which provides an update to existing crypto asset guidance and requires an entity to measure certain crypto assets at fair value. In addition, this guidance requires additional disclosures related to crypto assets once it is adopted. As of January 1, 2024, the Company has adopted ASU 2023-08.

 

7


 

The Company has adopted the amendments prescribed in ASU 2023-08. As a result of adopting the amendments, the Company’s cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period, or as of January 1, 2024, amounted to $38.3 million, which consisted of a $48.7 million of fair value adjustments offset by a $10.4 million tax impact related to the fair value adjustments. The Company includes realized and unrealized gains and losses in net income on the consolidated financial statements which is presented separately from changes in the carrying amount of other intangible assets.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. This guidance only impacts footnote disclosures and will not impact our consolidated financial statements.

 

3. Revenue Recognition

The following table presents the Company’s operating revenues disaggregated by geography, based on the addresses of the Company’s API Providers (in thousands, except percentages):

 

 

 

Three Months Ended
September 30,

 

 

 

Nine Months Ended
September 30,

 

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

Republic of the Marshall Islands

 

$

5,993

 

 

 

29.8

 

%

 

$

3,579

 

 

 

30.0

 

%

 

$

21,914

 

 

 

30.7

 

%

 

$

12,500

 

 

 

33.1

 

%

British Virgin Islands(1)

 

 

-

 

 

 

-

 

 

 

 

2,233

 

 

 

18.6

 

 

 

 

-

 

 

 

-

 

 

 

 

8,069

 

 

 

21.4

 

 

Seychelles

 

 

3,692

 

 

 

18.4

 

 

 

 

2,306

 

 

 

19.2

 

 

 

 

14,224

 

 

 

19.9

 

 

 

 

6,372

 

 

 

16.9

 

 

Hong Kong

 

 

4,687

 

 

 

23.3

 

 

 

 

2,785

 

 

 

23.2

 

 

 

 

15,590

 

 

 

21.8

 

 

 

 

7,628

 

 

 

20.2

 

 

Other(2)

 

 

5,745

 

 

 

28.5

 

 

 

 

1,077

 

 

 

9.0

 

 

 

 

19,757

 

 

 

27.6

 

 

 

 

3,161

 

 

 

8.4

 

 

Operating revenues

 

$

20,117

 

 

 

100.0

 

%

 

$

11,980

 

 

 

100.0

 

%

 

$

71,485

 

 

 

100.0

 

%

 

$

37,730

 

 

 

100.0

 

%

 

(1) British Virgin Islands no longer exceeds 10% in 2024 and is now included in Other.

(2) No other individual country accounted for more than 10% of total revenue.

 

The following table presents the Company’s operating revenues disaggregated by products and services (in thousands, except percentages):

 

 

 

Three Months Ended
September 30,

 

 

 

Nine Months Ended
September 30,

 

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

Exchange aggregation

 

$

18,124

 

 

 

90.1

 

%

 

$

11,221

 

 

 

93.7

 

%

 

$

64,816

 

 

 

90.7

 

%

 

$

35,474

 

 

 

94.0

 

%

Fiat onboarding

 

 

852

 

 

 

4.2

 

 

 

 

572

 

 

 

4.8

 

 

 

 

2,816

 

 

 

3.9

 

 

 

 

1,660

 

 

 

4.4

 

 

Staking

 

 

488

 

 

 

2.4

 

 

 

 

168

 

 

 

1.4

 

 

 

 

1,655

 

 

 

2.3

 

 

 

 

527

 

 

 

1.4

 

 

Consulting

 

 

307

 

 

 

1.5

 

 

 

 

-

 

 

 

-

 

 

 

 

853

 

 

 

1.2

 

 

 

 

25

 

 

 

0.1

 

 

Other (1)

 

 

346

 

 

 

1.8

 

 

 

 

19

 

 

 

0.1

 

 

 

 

1,345

 

 

 

1.9

 

 

 

 

44

 

 

 

0.1

 

 

Operating revenues

 

$

20,117

 

 

 

100.0

 

%

 

$

11,980

 

 

 

100.0

 

%

 

$

71,485

 

 

 

100.0

 

%

 

$

37,730

 

 

 

100.0

 

%

 

(1) Other includes $0.3 million and $1.2 million related to non-fungible token revenue for the three and nine months ended September 30, 2024, respectively.

 

The following table presents the Company's contract balances as of September 30, 2024 and December 31, 2023 (in thousands):

 

Balance January 1, 2023

 

 

$

-

 

Contract liability

 

 

 

1,000

 

Performance obligation satisfied

 

 

 

(273

)

Balance December 31, 2023

 

 

 

727

 

Contract liability

 

 

 

100

 

Performance obligation satisfied

 

 

 

(664

)

Balance September 30, 2024

 

 

$

163

 

 

 

8


 

Revenue recognized during the nine months ended September 30, 2024 related to deferred revenue at the beginning of the period was $0.7 million. The remaining future performance obligations of $0.2 million will be satisfied before September 30, 2025.

 

4. Prepaid Expenses

The Company prepays certain expenses due to the nature of the service provided or to capture certain discounts. The table below shows a breakout of these prepaid expenses for the periods presented (in thousands):

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Prepaid cloud services

 

$

996

 

 

$

413

 

Prepaid software

 

 

865

 

 

 

281

 

Accounting, consulting, and legal services

 

 

604

 

 

 

688

 

Marketing

 

 

551

 

 

 

-

 

Partner fees

 

 

123

 

 

 

-

 

Prepaid insurance

 

 

93

 

 

 

58

 

Prepaid expenses

 

$

3,232

 

 

$

1,440

 

 

5. Intangible Assets

Indefinite-Lived Asset

Indefinite-lived assets consisted of the following (in thousands):

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Domain names

 

$

2,096

 

 

$

1,945

 

Indefinite-lived assets

 

$

2,096

 

 

$

1,945

 

The Company purchased the exodus.com domain name in the first quarter of 2021 for $1.9 million. In the second quarter of 2024, the Company purchased a domain name for $0.2 million. The Company considers these assets to be indefinite-lived, resulting in no recognition of amortization.

Digital Assets

The table below outlines the fair value of our digital assets based on publicly available rates as of the dates presented as well as the cost (in thousands, except units):

 

 

 

Units

 

 

Cost Basis

 

 

Fair Value

 

As of September 30, 2024

 

 

 

 

 

 

 

 

 

Bitcoin

 

 

1,800

 

 

$

53,194

 

 

$

114,030

 

Ethereum

 

 

2,617

 

 

 

4,849

 

 

 

6,813

 

Other

 

 

13,954,492

 

 

 

7,339

 

 

 

4,024

 

Digital assets

 

 

 

$

65,382

 

 

$

124,867

 

 

 

 

 

 

 

 

 

 

 

 

For the three and nine months ended September 30, 2024, the Company recognized realized gains from exchange of digital assets of $0.3 million and $6.5 million, respectively, and realized losses of $1.0 million and $1.4 million, respectively, which is included on the condensed consolidated statements of operations and comprehensive income (loss).

 

For the three and nine months ended September 30, 2024, the Company recognized unrealized gains from remeasurement of digital assets of $11.9 million and $76.2 million, respectively, and unrealized losses from remeasurement of digital assets of $11.5 million and $42.1 million, respectively, which is included on the condensed consolidated statements of operations and comprehensive income (loss). For the three and nine months ended September 30, 2024, there were no digital assets held with contractual sale restrictions.

 

9


 

The following table summarizes other operating activities settled in digital assets and USDC (in thousands):

 

 

 

 

Nine Months Ended
September 30,

 

 

 

 

2024

 

 

2023

 

Revenue

 

 

$

(70,864

)

 

$

(37,731

)

Expenses

 

 

 

16,744

 

 

 

13,424

 

Conversion to cash

 

 

 

27,112

 

 

 

12,947

 

Accounts receivable

 

 

 

315

 

 

 

298

 

Payroll liabilities

 

 

 

2,888

 

 

 

1,577

 

Currency translation

 

 

 

31

 

 

 

(129

)

Other operating activities settled in digital assets and USDC

 

 

$

(23,774

)

 

$

(9,614

)

 

The following table summarizes the digital asset activities as of September 30, 2024 and December 31, 2023 (in thousands, except units):

 

 

 

 

BTC

 

 

ETH

 

 

Other

 

 

 

 

Units

 

 

Value

 

 

Units

 

 

Value

 

 

Units

 

 

Value

 

Balance, December 31, 2023

 

 

 

1,787

 

 

 

32,262

 

 

 

2,538

 

 

$

2,022

 

 

 

4,625,187

 

 

$

726

 

Adoption of ASU 2023-08

 

 

 

-

 

 

 

43,162

 

 

 

-

 

 

 

3,764

 

 

 

-

 

 

 

1,750

 

Balance, January 1, 2024

 

 

 

1,787

 

 

 

75,424

 

 

 

2,538

 

 

 

5,786

 

 

 

4,625,187

 

 

 

2,476

 

Additions (1)

 

 

 

390

 

 

 

20,244

 

 

 

12

 

 

 

39

 

 

 

143,003

 

 

 

544

 

Disposals (2)

 

 

 

(385

)

 

 

(19,545

)

 

 

-

 

 

 

-

 

 

 

(106,050

)

 

 

(227

)

Gains (3)

 

 

 

-

 

 

 

51,832

 

 

 

-

 

 

 

3,460

 

 

 

-

 

 

 

1,825

 

Losses (3)

 

 

 

-

 

 

 

(309

)

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

(8

)

Balance, March 31, 2024

 

 

 

1,792

 

 

 

127,646

 

 

 

2,550

 

 

 

9,284

 

 

 

4,662,140

 

 

 

4,610

 

Additions (1)

 

 

 

241

 

 

 

15,813

 

 

 

30

 

 

 

101

 

 

 

132,460

 

 

 

614

 

Disposals (2)

 

 

 

(239

)

 

 

(15,844

)

 

 

-

 

 

 

-

 

 

 

(91,685

)

 

 

(197

)

Gains (3)

 

 

 

-

 

 

 

10,734

 

 

 

-

 

 

 

1,925

 

 

 

-

 

 

 

759

 

Losses (3)

 

 

 

-

 

 

 

(25,933

)

 

 

-

 

 

 

(2,453

)

 

 

-

 

 

 

(2,261

)

Balance, June 30, 2024

 

 

 

1,794

 

 

 

112,416

 

 

 

2,580

 

 

 

8,857

 

 

 

4,702,915

 

 

 

3,525

 

Additions (1)

 

 

 

214

 

 

 

13,297

 

 

 

37

 

 

 

99

 

 

 

11,433,136

 

 

 

472

 

Disposals (2)

 

 

 

(208

)

 

 

(13,021

)

 

 

-

 

 

 

-

 

 

 

(2,181,559

)

 

 

(89

)

Gains (3)

 

 

 

-

 

 

 

10,969

 

 

 

-

 

 

 

242

 

 

 

-

 

 

 

940

 

Losses (3)

 

 

 

-

 

 

 

(9,312

)

 

 

-

 

 

 

(2,385

)

 

 

-

 

 

 

(824

)

Currency translation adjustment

 

 

 

-

 

 

 

(319

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Balance, September 30, 2024

 

 

 

1,800

 

 

 

114,030

 

 

 

2,617

 

 

 

6,813

 

 

 

13,954,492

 

 

 

4,024

 

 

(1) Additions primarily relate to revenue generated from customers and staked assets.

(2) Disposals primarily relate to payment of liabilities pertaining to vendor invoices and payroll payments. Disposals of digital assets to cash are primarily used for operational purposes.

(3) The Company recognized cumulative realized gains from exchange of digital assets of $0.3 million and $ 6.5 million for the three and nine months ended September 30, 2024, respectively and cumulative realized losses of $1.0 million and $1.4 million for both three and nine months ended September 30, 2024 which is included on the condensed consolidated statements of operations and comprehensive income (loss).

6. Fixed Assets, Net

Fixed assets, net, consisted of the following (in thousands):

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Computer equipment

 

$

1,025

 

 

$

870

 

Vehicles

 

 

237

 

 

 

256

 

Furniture and fixtures

 

 

21

 

 

 

21

 

Fixed assets, gross

 

 

1,283

 

 

 

1,147

 

Less: accumulated depreciation

 

 

(904

)

 

 

(830

)

Fixed assets, net

 

$

379

 

 

$

317

 

 

 

10


 

 

Depreciation expense was less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively and $0.1 million and $0.3 million for the three and nine months ended September 30, 2023, respectively.

7. Software Assets, Net

Software assets, net, consisted of the following (in thousands):

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Internal use software

 

$

17,168

 

 

$

16,208

 

Less: accumulated amortization

 

 

(9,853

)

 

 

(8,157

)

Software assets, net

 

$

7,315

 

 

$

8,051

 

 

The following summarizes the future amortization expense as of September 30, 2024 (in thousands):

 

 

 

 

 

 

 

Three months ending December 31, 2024

 

 

 

$

1,236

 

2025

 

 

 

 

3,615

 

2026

 

 

 

 

1,827

 

2027

 

 

 

 

637

 

 

 

 

 

$

7,315

 

 

Amortization expense was $1.3 million and $3.7 million for the three and nine months ended September 30, 2024, respectively, and $1.1 million and $3.1 million for the three and nine months ended September 30, 2023, respectively.

8. Stockholders’ Equity

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible into one share of Class A common stock.

We have applied to list our Class A common stock on the NYSE American. Our listing is pending the SEC’s completion of its review of the Form 10.

In April 2024, our Class A Common Stock was listed for quotation on the OTCQX under the symbol “EXOD”. OTC Markets approval was received in April 2024.

In January 2024, our Class A Common Stock was listed for quotation on the OTCQB under the symbol “EXOD”. OTC Markets approval was received in January 2024 and in January the initial qualifying deposit was made and initial trades have occurred.

In December 2023, our Class A Common Stock ceased trading on tZERO Markets, LLC ("tZERO"), an alternative trading system that had the ability to support trades of our Class A Common Stock and transfers of our Common Stock Tokens. Our Class A Common Stock previously traded on tZERO under the symbol “EXOD”.

In October 2023, our Class A Common Stock ceased trading on Securitize Markets, an alternative trading system that had the ability to support trades of our Class A Common Stock and transfers of our Common Stock Tokens. Our Class A Common Stock previously traded on Securitize Markets under the symbol “EXOD”.

There is currently no public market for our Common Stock Tokens and we do not believe one will develop in the foreseeable future. Common Stock Tokens cannot be traded on the OTC market or any national securities exchange.

Stock-Based Compensation

Options and Equity Grants Issued

The 2019 Equity Incentive Plan adopted in September 2019 (the “2019 Plan”) permitted the Company to grant non-statutory stock options, incentive stock options, and other equity awards to Exodus team members, directors, and consultants. The exercise price for options issued under the 2019 Plan is determined by the board of directors, but will be (i) in the case of an incentive stock option granted to an employee or consultant who owns stock representing more than 10% of the voting power of all classes of stock of Exodus, no less than 110% of the fair market value per share on the date of grant; or (ii) granted to any other team member or consultant, no less than 100% of the fair market value per share on the date of grant. The contractual life for all options issued under the 2019 Plan is 10 years.

 

11


 

The 2019 Plan authorized grants to issue up to 3,000,000 options (prior to the 2021 Employee Equity Redemption Plan) that are convertible into shares of authorized but unissued Class B common stock. As of September 30, 2024, there were 2,145,604 shares of Class B common stock options outstanding.

In August 2021, the Company also adopted the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the Company to grant non-statutory stock options, incentive stock options and other equity awards, such as restricted stock awards, to Exodus team members, directors, and consultants. The exercise price for options issued under the 2021 Plan is determined by the board of directors, but will be (i) in the case of an incentive stock option granted to an employee who owns stock representing more than 10% of the voting power of all classes of stock of Exodus, no less than 110% of the fair market value per share on the date of grant; or (ii) granted to any other team member or consultant, no less than 100% of the fair market value per share on the date of grant. The contractual life for all options issued under the 2021 Plan is 10 years. The 2021 Plan initially authorized grants to issue up to 2,780,000 awards that are convertible into shares of authorized but unissued Class A common stock. Pursuant to the terms of the 2021 Plan, the Company may increase our share pool by 5% of our outstanding shares of capital stock each year. In 2023 and 2022, the total shares of our Class A common stock reserved for issuance increased by 1,875,000 shares for both periods and 132,936 shares in 2024 for a total of 6,662,936 shares of Class A common stock reserved under the 2021 Plan. As of September 30, 2024, there were 3,256,917 restricted stock units that are authorized and outstanding with a fair value of $49.2 million and 457 restricted stock units were vested but not yet issued.

Upon the approval of the 2021 Plan, the Company can no longer grant non-statutory stock options, incentive stock options, or other equity awards to Exodus team members, directors, or consultants under the 2019 Plan.

Terms of our share-based compensation are governed by the plan in which awards were issued.

The following table summarizes stock option activities for the nine months ended September 30, 2024 and 2023:

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average

 

 

 

 

 

 

Exercise Price

 

 

 

Options

 

 

Price

 

Outstanding as of January 1, 2023

 

 

2,190,979

 

 

$

2.40

 

Exercised

 

 

(300

)

 

 

2.55

 

Forfeited

 

 

(22,628

)

 

 

2.52

 

Outstanding as of September 30, 2023

 

 

2,168,051

 

 

$

2.40

 

Outstanding as of January 1, 2024

 

 

2,156,632

 

 

 

2.40

 

Exercised

 

 

(10,726

)

 

 

2.39

 

Forfeited

 

 

(302

)

 

 

2.39

 

Outstanding as of September 30, 2024

 

 

2,145,604

 

 

$

2.40

 

Vested and exercisable as of September 30, 2024

 

 

2,145,330

 

 

$

2.40

 

 

We recognized stock-based compensation related to options and restricted stock units of $1.6 million and $5.8 million for the three and nine months ended September 30, 2024, respectively, and $1.3 million and $5.4 million for the three and nine months ended September 30, 2023, respectively.

Stock-based compensation is recorded on the Company’s condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Cost of revenues

 

$

561

 

 

$

643

 

 

$

2,290

 

 

$

2,339

 

General and administrative

 

 

1,038

 

 

 

690

 

 

 

3,468

 

 

 

3,056

 

Stock-based compensation

 

$

1,599

 

 

$

1,333

 

 

$

5,758

 

 

$

5,395

 

 

As of September 30, 2024, total unrecognized stock-based compensation expense was $4.4 million.

9. Income Taxes

At the end of each interim period, the Company records income taxes by applying an estimated annualized effective tax rate to the current period income or loss before income taxes. The Company's annualized effective tax rate is based on pre-tax earnings, enacted U.S. statutory tax rates, non-deductible expenses, certain tax rate differences between U.S. and foreign jurisdictions, and specific events that are discretely recognized entirely within the interim period in which they occur. Exodus’ foreign subsidiaries Proper Trust AG files an income tax return in Switzerland and Osmium Europe B.V. will file in the Netherlands.

 

12


 

For the nine months ended September 30, 2024 and September 30, 2023, the Company recorded an income tax expense of $9.4 million and $1.0 million, on pre-tax income of approximately $55.4 million and $3.4 million, resulting in effective tax rates of 16.9% and 29.1%, respectively.

Our effective tax rate for the nine months ended September 30, 2024 was primarily impacted by the change in permanent differences, including the tax benefit from the foreign derived intangible income, and discrete items, including stock based compensation and tax effect of realized and unrealized digital asset gains and losses during the period. For purposes of recording the discrete tax expense related to digital assets, for the nine months ending September 30, 2024, realized gains or losses are recorded to the Company’s current taxes payable and unrealized gains and losses are recorded to the deferred tax liability based on current period activity. The effective tax rate for the nine months ended September 30, 2024 was primarily impacted by the change in permanent differences and discrete items, including the tax effect of digital asset gains and losses, specifically recognized in the period.

Changes in tax laws

We operate in various jurisdictions and are subject to changes in applicable tax laws, treaties or regulations in those jurisdictions. A material change in the tax laws, treaties or regulations, or their interpretation, of any jurisdiction with which we do business, or in which we have significant operations, could adversely affect us. For example, the new Pillar 2 approach, which came into effect in 2023 in certain jurisdictions, will establish a global minimum tax rate of 15%, such that multinational enterprises with an effective tax rate in a jurisdiction below this minimum rate will need to pay additional tax. While many aspects of the application of Pillar 2 remain to be clarified, including how the jurisdictions in which we operate, and those in which we and our subsidiaries are based, choose to implement the Organization for Economic Cooperation and Development’s approach in their tax treaties and domestic tax laws, we do not expect Pillar 2 to apply in 2024.

10. Commitments and Contingencies

Legal Proceedings

The Company is subject to a number of claims and proceedings that generally arise in the ordinary course of business, the outcome of which cannot be predicted with certainty. The Company does not believe that the liabilities from such ordinary course claims and proceedings will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. If the Company believes the losses are probable and can be reasonably estimated, reserves will be established. For matters where a reserve has not been established, the ultimate outcome or resolution cannot be predicted at this time or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and there can be no assurance as to the outcome of the individual litigated matters. It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company’s consolidated financial condition, results of operations or cash flows in any particular reporting period.

11. Fair Value Measurements

The Company’s financial assets are summarized below as of September 30, 2024 and December 31, 2023, with fair values shown according to the fair value hierarchy (in thousands):

 

 

 

Carrying
Value

 

 

Quoted
Prices
Level 1

 

 

Significant
Other
Observable
Inputs
Level 2

 

 

Significant
Unobservable
Inputs
Level 3

 

September 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

BTC

 

$

114,030

 

 

$

114,030

 

 

$

-

 

 

$

-

 

Treasury bills

 

 

45,768

 

 

 

45,768

 

 

 

-

 

 

 

-

 

Money market mutual funds

 

 

10,289

 

 

 

10,289

 

 

 

-

 

 

 

-

 

ETH

 

 

6,813

 

 

 

6,813

 

 

 

-

 

 

 

-

 

Other digital assets

 

 

4,024

 

 

 

4,024

 

 

 

-

 

 

 

-

 

Security token group investment

 

 

100

 

 

(A)

 

 

 

-

 

 

 

-

 

 

$

181,024

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Money market mutual funds

 

$

8,477

 

 

$

8,477

 

 

$

-

 

 

$

-

 

Treasury bills

 

 

45,463

 

 

 

45,463

 

 

 

-

 

 

 

-

 

Security token group investment

 

 

100

 

 

(A)

 

 

 

-

 

 

 

-

 

 

$

54,040

 

 

 

 

 

 

 

 

 

 

 

 

13


 

 

(A) This investment is recorded at cost.

The Company invests in held to maturity treasury bills. Discount rates ranged from 1.2% to 2.5% and 0.4% to 2.6% as of September 30, 2024 and December 31, 2023, respectively. The Company held treasury bills with a maturity of greater than three months in other current assets in the amount of $43.2 million for both periods as of September 30, 2024 and December 31, 2023, respectively. The Company held treasury bills with a maturity of less than three months in cash and cash equivalents in the amount of $2.6 million and $2.3 million as of September 30, 2024 and December 31, 2023, respectively.

Assets and Liabilities Not Measured and Recorded at Fair Value

The Company’s financial instruments, including USDC, are carried at cost, which approximates their fair value. If these financial instruments were recorded at fair value, they would be based on Level 1 inputs.

12. Earnings Per Share

The following table sets forth the computation of basic and diluted net income per share of common stock (in thousands, except per share amounts):

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Basic net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss), basic and diluted

 

 

$

843

 

 

$

(251

)

 

$

46,024

 

 

$

2,391

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares used in per share
   computation - Class A

 

 

 

6,396

 

 

 

4,060

 

 

 

5,314

 

 

 

3,804

 

Weighted-average number of shares used in per share
   computation - Class B

 

 

 

20,337

 

 

 

21,799

 

 

 

21,161

 

 

 

21,799

 

Basic net income (loss) per share - Class A

 

 

$

0.03

 

 

$

(0.01

)

 

$

1.74

 

 

$

0.09

 

Basic net income (loss) per share - Class B

 

 

$

0.03

 

 

$

(0.01

)

 

$

1.74

 

 

$

0.09

 

Diluted net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares used in diluted
   computation - Class A

 

 

 

9,840

 

 

 

4,060

 

 

 

8,733

 

 

 

7,291

 

Weighted-average number of shares used in diluted
   computation - Class B

 

 

 

22,485

 

 

 

21,799

 

 

 

23,314

 

 

 

23,799

 

Diluted net income (loss) per share - Class A

 

 

$

0.03

 

 

$

(0.01

)

 

$

1.44

 

 

$

0.08

 

Diluted net income (loss) per share - Class B

 

 

$

0.03

 

 

$

(0.01

)

 

$

1.44

 

 

$

0.08

 

 

13. Related Party Transactions

The company had no related party transactions for the nine months ended September 30, 2024. For the nine months ended September 30, 2023, related party transactions included:

Exodus signed an Application Development and Technology Agreement (the “Technology Agreement”) with tZERO Technologies, LLC (“tZERO”) in May of 2021. tZERO is a software technology company that provides its technology to tZERO Markets, LLC to enable it to provide licensed, efficient and automated securities brokerage services to its retail customers (the “tZERO Technology”). Pursuant to the Technology Agreement, Exodus integrated certain APIs of tZERO to create a tZERO application within the Exodus Platform that allows investors to open a securities brokerage account and submit orders to purchase and sell securities via the tZERO Technology.

 

$0.1 million of unrealized loss on investments was recorded on the condensed consolidated statements of operations and comprehensive income (loss) for both of the three and nine months ended September 30, 2023. This amount reflects the market adjustment of the shares held during the three and nine months ended September 30, 2023.
The Company’s relationship with tZERO ended on December 11, 2023.

 

14


 

14. Supplemental Disclosures of Cash Flow Information

The following is a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents (in thousands):

 

 

 

September 30,

 

 

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

26,547

 

 

$

12,399

 

Restricted cash and cash equivalents (1)

 

 

83

 

 

 

-

 

Total cash, cash equivalents, and restricted cash and cash equivalents

 

$

26,630

 

 

$

12,399

 

 

(1) Restriction represents future contractual milestone payments and will be removed by December 31, 2024.

 

15


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of Exodus’ financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this quarterly report. The following discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors,” “Forward Looking Statements,” and in other parts of this quarterly report and the Form 10.

Overview of Our Business

We are engaged in the business of creating and distributing self-custodial wallets for digital assets. Because a majority of our revenue is derived from services provided by API Providers to persons located outside the United States pursuant a transaction-based structure, our profitability is dependent on a number of factors including the pricing of digital assets, the volume of transactions and the quality of our third-party relationships.

Our revenues are primarily derived from digital asset related transactions and consist of fees from third party API agreements. Our expenses primarily consist of:

Cost of revenues (primarily including software development, user support and security and wallet operations);
Amortization expense relating to software development; and
General and administrative expenses (primarily including administrative, legal, financial operations, information technology services, marketing and advertising expenses).

Based on the services offered and transactions conducted by API Providers, the following table shows the digital assets that are most material to our business by revenue.

 

Digital Asset

API Provider Service(s)

Blockchain(s)

BTC

 

 

Store of value and payment cryptocurrency

Exchange Aggregation; Fiat Onboarding

Bitcoin

Tether USD

 

 

Stablecoin

Exchange Aggregation; Fiat Onboarding

Ethereum, Algorand, Avalanche, Binance Smart Chain, Arbitrum, Polygon, Optimism, Solana, Tron, Fantom, Polygon, Solana

Ether

 

 

Blockchain economy or blockchain platform

Exchange Aggregation; Fiat Onboarding; Staking

Ethereum

USD Coin

 

 

Stablecoin

Exchange Aggregation; Fiat Onboarding

Ethereum, Algorand, Avalanche, Binance Smart Chain, Arbitrum, Fantom, Polygon, Optimism, Solana, Tron

Other

 

 

All other digital assets

Exchange Aggregation; Fiat Onboarding; Staking

Multiple Blockchains

Known Trends and Uncertainties

Cloud based infrastructure expense - Cloud infrastructure expenses increased by $0.6 million and $2.5 million for the three and nine months ended September 30, 2024, respectively, compared to the corresponding prior year period. We anticipate increased cloud infrastructure expenses as the platform continues to grow due to increased database capacity and new users.

Investment in human capital - Costs related to investment in human capital (including recruiting costs, salary, incentive and compensation costs) increased $2.7 million and $7.3 million for the three and nine months ended September 30, 2024, respectively, compared to the corresponding prior year period. As the Exodus platform continues to expand, we anticipate the need to add more team members to accommodate the growth in our business, which is expected to materially increase both cost of revenues and general and administrative expenses as a result of the impact on the human capital costs described above. Human capital costs are also expected to increase due to the need to add additional team members to address compliance with the evolving regulatory environment.

Marketing expenses – Marketing-related costs increased $0.8 million and $1.3 million for the three and nine months ended September 30, 2024, respectively, compared to the corresponding prior year period. The increase in both periods was primarily due to increased spending on website advertisements targeted at the crypto space and on social platforms. To date, we have primarily focused on an

 

16


 

organic growth-based marketing strategy. We continue to evaluate our marketing strategy and in the future may decide to refocus the current organic growth strategy in growing our user base to a more competitive approach, which would be expected to further increase marketing-related expenses.

Monthly Active Users

To measure user activity, we rely on the number of monthly active users (“MAUs”) of our Exodus Platform. We define an MAU as any user with transaction history in any month. A user has “transaction history” if, in the last 30 calendar days, the user performed any activity within the application such as opening their application to check digital asset prices, reading news, or accessing the services of our API Providers. A user will not have “transaction history” if it merely opens our wallet application without further action. MAUs provide a measurement of attraction and retention levels and user engagement by allowing management to compare “churn users,” defined as users who have been inactive on the Exodus Platform for three consecutive months, against “renewing users,” defined as users who have been active on the Exodus Platform for two consecutive months, and “new users,” defined as users new to the platform that month. Within each cohort of churn users, renewing users, and new users, we then identify the funded users to assess users’ ability to engage with the Exodus Platform. The term “funded users” refers to users whose wallet currently holds digital assets of value as determined by blockchain and pricing provider data. MAUs consist of both funded wallets and unfunded wallets. Because Exodus does not have accounts, users do not close an account or otherwise leave the platform. Therefore, churn users may become new users in the next month or at any point in the future as they re-engage with the platform. A positive MAUs percentage indicates that new and renewing users exceed churned users in a given month and that interest in the Exodus Platform is increasing. Management views increasing interest in the Exodus Platform over time as a key indicator of increasing revenue, especially for MAUs outside of the United States as the likelihood of revenue generating transactions increases as user interest increases.

 

Monthly active users were 1.6 million and 1.1 million as of September 30, 2024 and 2023, respectively, reflecting an increase of 0.5 million, or 40%. We believe the increase in MAUs was primarily attributable to a positive movement in consumer-related sentiment related to the cryptocurrency markets, leading to higher prices and increased trading activity. Our strategic focus remains on expanding our active user base, improving app features, and expanding our business-to-business partnerships. We believe that over the long term, interest in digital assets and digital asset markets will increase. However, during any given period, we cannot be certain that our MAU growth efforts will be effective or that interest in digital assets will increase.

 

17


 

Results of Operations

Results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

 

 

Three Months Ended
September 30,
2024

 

 

Three Months Ended
September 30,
2023

 

 

$ Change

 

% Change

 

 

Nine Months Ended
September 30,
2024

 

 

Nine Months Ended
September 30,
2023

 

 

$ Change

 

% Change

 

OPERATING REVENUES

$

20,117

 

 

$

11,980

 

 

$

8,137

 

 

68

 

 

$

71,485

 

 

$

37,730

 

 

$

33,755

 

 

89

 

COST OF REVENUES

 

11,333

 

 

 

7,738

 

 

 

3,595

 

 

46

 

 

 

32,804

 

 

 

21,730

 

 

 

11,074

 

 

51

 

GROSS PROFIT

 

8,784

 

 

 

4,242

 

 

 

4,542

 

 

107

 

 

 

38,681

 

 

 

16,000

 

 

 

22,681

 

 

142

 

OPERATING EXPENSES (INCOME)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

8,466

 

 

 

4,598

 

 

 

3,868

 

 

84

 

 

 

25,575

 

 

 

14,585

 

 

 

10,990

 

 

75

 

Loss (gain) on digital assets, net

 

370

 

 

 

357

 

 

 

13

 

 

4

 

 

 

(39,197

)

 

 

(285

)

 

 

(38,912

)

 

13,653

 

Total operating expense (income)

 

8,836

 

 

 

4,955

 

 

 

3,881

 

 

78

 

 

 

(13,622

)

 

 

14,300

 

 

 

(27,922

)

 

(195

)

(Loss) Income from operations

 

(52

)

 

 

(713

)

 

 

661

 

 

(93

)

 

 

52,303

 

 

 

1,700

 

 

 

50,603

 

 

2,977

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staking and other income

 

146

 

 

 

-

 

 

 

146

 

n/m

 

 

 

701

 

 

 

-

 

 

 

701

 

n/m

 

Unrealized (loss) gain on investments

 

(133

)

 

 

(171

)

 

 

38

 

 

(22

)

 

 

(219

)

 

 

18

 

 

 

(237

)

 

(1,317

)

Loss on disposal of fixed assets

 

(36

)

 

 

-

 

 

 

(36

)

n/m

 

 

 

(36

)

 

 

-

 

 

 

(36

)

n/m

 

Interest income

 

1,026

 

 

 

811

 

 

 

215

 

 

27

 

 

 

2,668

 

 

 

1,715

 

 

 

953

 

 

56

 

Total other income

 

1,003

 

 

 

640

 

 

 

363

 

 

57

 

 

 

3,114

 

 

 

1,733

 

 

 

1,381

 

 

80

 

Income (loss) before income taxes

 

951

 

 

 

(73

)

 

 

1,024

 

 

(1,403

)

 

 

55,417

 

 

 

3,433

 

 

 

51,984

 

 

1,514

 

INCOME TAX BENEFIT (EXPENSE)

 

(108

)

 

 

(178

)

 

 

70

 

 

(39

)

 

 

(9,393

)

 

 

(1,042

)

 

 

(8,351

)

 

801

 

NET INCOME (LOSS)

$

843

 

 

$

(251

)

 

$

1,094

 

 

(436

)

 

$

46,024

 

 

$

2,391

 

 

$

43,633

 

 

1,825

 

OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

(637

)

 

 

121

 

 

 

(758

)

 

(626

)

 

 

31

 

 

 

(129

)

 

 

160

 

 

(124

)

COMPREHENSIVE INCOME (LOSS)

$

206

 

 

$

(130

)

 

$

336

 

 

(258

)

 

$

46,055

 

 

$

2,262

 

 

$

43,793

 

 

1,936

 

 

Total revenue increased $8.1 million, or 68%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily driven by exchange aggregation revenue, which increased $6.9 million, or 62%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. See Note 3 Revenue Recognition for further details. Additionally, non-exchange aggregation revenue increased $1.2 million, or 163%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. For the three months ending September 30, 2024, revenue growth across all sources was primarily driven by an increase in user growth (as discussed under “Monthly Active Users” above) and expansion through our business-to-business partner initiatives. For the three months ended September 30, 2024, four API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $13.8 million. For the three months ended September 30, 2023, five API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $10.1 million. See Note 2 - Summary of Significant Accounting Policies, Concentration of Revenue.


Total revenue increased $33.8 million, or 89%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily driven by exchange aggregation revenue, which increased $29.3 million, or 83%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Additionally, non-exchange aggregation revenue increased $4.4 million, or 196%, compared to the nine months ended September 30, 2023. For the nine months ending September 30, 2024, revenue growth across all sources was primarily driven by an increase in user growth (as discussed under “Monthly Active Users” above) and expansion through our business-to-business partner initiatives. For the nine months ended September 30, 2024, four API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $50.6 million. For the nine months ended September 30, 2023, five API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $32.1 million. See Note 2 - Summary of Significant Accounting Policies, Concentration of Revenue.

Cost of revenues increased $3.6 million, or 46%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily due to a $1.1 million increase in team member compensation and benefit expense as a

 

18


 

result of increased headcount, a $0.6 million increase in cloud infrastructure service costs due to increased database capacity needs as a result of the continued expansion of our platform and addition of new users, a $0.5 million increase in partner fee expense, a $0.2 million increase in subscription expenses, a $0.3 million increase in consulting expenses, a $0.5 million decrease in capitalized labor and a $0.2 million increase in software amortization expense.

Cost of revenues increased $11.1 million, or 51%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily due to a $3.7 million increase in team member compensation and benefit expense as a result of increased headcount, a $2.5 million increase in cloud infrastructure service costs due to increased database capacity needs as a result of the continued expansion of our platform and addition of new users, a $1.3 million increase in partner fee expense, a $0.6 million increase in subscription expenses, a $0.9 million increase in consulting expenses, a $0.6 million increase in software amortization expense and a $1.0 million decrease in capitalized labor.

General and administrative expenses increased $3.9 million, or 84%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily due to a $1.6 million increase in team member compensation and benefit expenses, a $1.5 million increase in legal and consulting expenses, a $0.8 million increase in meeting and travel expenses, a $0.7 million increase in marketing expenses, a $0.3 million increase in charitable donations and a $0.1 million increase in subscription expenses, partially offset by a $1.1 million decrease in foreign currency expense.

General and administrative expenses increased $11.0 million, or 75%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This increase was primarily due to a $3.5 million increase in team member compensation and benefit expenses, a $4.0 million increase in legal and consulting expenses, a $1.7 million increase in meeting and travel expenses, a $1.2 million increase in marketing expenses, a $0.3 million increase in subscription expenses, a $0.3 million increase in charitable donations and a $0.1 million increase in foreign currency expense.

During the three months ended September 30, 2024, the Company recognized net realized losses from exchange of digital assets of $0.7 million and net unrealized gains from remeasurement of digital assets of $0.4 million. Realized gains in 2023 were calculated using impaired balances compared to cost basis in 2024. For the three months ended September 30, 2023, the Company recorded a net impairment on digital assets of $0.4 million.

During the nine months ended September 30, 2024, the Company recognized net realized gains from exchange of digital assets of $5.1 million and net unrealized gains from remeasurement of digital assets of $34.1 million. For the nine months ended September 30, 2023, the Company recorded net gain on digital assets of $0.3 million.

Liquidity and Capital Resources

Overview

Our primary source of funds is from API fee revenues. Our primary use of funds is payment of our operating costs, which consist mostly of compensation and benefit expenses and security costs.

Source of Funds

The following table summarizes our cash flows for the periods indicated (in thousands):

 

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

Net cash (used in) provided by operating activities

 

$

(6,803

)

 

$

2,922

 

Net cash provided by (used in) investing activities

 

$

24,741

 

 

$

(10,503

)

Net cash used in financing activities

 

$

(2,684

)

 

$

(514

)

 

Net Cash (Used In) Provided By Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2024, was $6.8 million. The Company had net income of $46.0 million, $6.8 million deferred tax expense, $5.3 million in stock-based compensation and $3.9 million in depreciation and amortization, $0.2 unrealized loss on investments offset by $3.5 million in changes to working capital, $39.2 million net gain on digital assets due to market fluctuations and $23.8 million in other operating activities settled in digital assets and USDC which consisted of $70.9 million in revenue, reduced by $16.7 million in expenses, $2.9 million in expenses primarily related to accrued payroll and $27.1 million in conversions to cash.

Net cash provided by operating activities for the nine months ended September 30, 2023, was $2.9 million. The Company had net income of $2.4 million, $3.4 million in depreciation and amortization, $4.7 million in stock based compensation and $2.4 million in changes to working capital, partially offset by $9.6 million in other operating activities settled in digital assets and USDC (as discussed in Note 5 - Intangible Assets) and net gain on digital assets of $0.3 million.

 

19


 

Net Cash Provided By (Used In) Investing Activities

Net cash provided investing activities for the nine months ended September 30, 2024 was $24.7 million. This primarily consisted of $74.8 million of treasury bill redemption and $26.1 million provided by disposal of digital assets held, partially offset by $73.3 million invested in treasury bills, $2.5 million used in purchase of digital assets, $0.2 million used in the purchase of fixed assets and $0.2 million used in the purchase of a domain name.

Net cash used in investing activities for the nine months ended September 30, 2023 was $10.5 million. This primarily consisted of $69.3 million used in investment in treasury bills, partially offset by $58.8 million provided by redemption of treasury bills.

Net Cash Used In Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2024 was $2.7 million, which was used for the repurchase of shares of our common stock to pay employee withholding taxes as a part of our 2021 Plan.

Net cash used in financing activities for the nine months ended September 30, 2023 was $0.5 million, which was used for the repurchase of shares of our common stock to pay employee withholding taxes as part of the 2021 Plan.

Total Digital Assets and Liquid Assets

The following tables show the Company’s holdings of digital assets and cash and cash equivalents (including treasury bills with a maturity date of less than three months), USDC, and treasury bills with a maturity date of greater than three months.

 

The digital asset holdings as of September 30, 2024 and December 31, 2023 were (in thousands):

 

 

 

Units

 

 

Cost basis

 

 

Fair Value

 

As of September 30, 2024

 

 

 

 

 

 

 

 

 

Bitcoin

 

 

1,800

 

 

$

53,194

 

 

$

114,030

 

Ethereum

 

 

2,617

 

 

 

4,849

 

 

 

6,813

 

Other

 

 

13,954,492

 

 

 

7,339

 

 

 

4,024

 

Digital assets

 

 

 

$

65,382

 

 

$

124,867

 

 

 

Units

 

 

Carrying Value

 

 

Fair Value

 

As of December 31, 2023

 

 

 

 

 

 

 

 

 

Bitcoin

 

 

1,787

 

 

$

32,262

 

 

$

75,050

 

Ethereum

 

 

2,538

 

 

 

2,022

 

 

 

5,739

 

Other

 

 

4,625,187

 

 

 

726

 

 

 

2,443

 

Digital assets

 

 

 

$

35,010

 

 

$

83,232

 

 

The liquid asset holdings as of September 30, 2024 and December 31, 2023 were (in thousands):

 

 

 

 

 

Carrying Value

 

 

Quoted
Prices
Level 1

 

 

Significant
Other
Observable
Inputs
Level 2

 

 

Unobservable
Inputs
Level 3

 

As of September 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

$

26,547

 

 

$

26,547

 

 

$

-

 

 

$

-

 

USDC

 

 

 

 

5

 

 

 

5

 

 

 

-

 

 

 

-

 

Treasury bills

 

 

 

 

43,200

 

 

 

43,200

 

 

 

-

 

 

 

-

 

Total liquid assets

 

 

 

$

69,752

 

 

 

 

 

 

 

 

 

 

As of December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

$

11,376

 

 

$

11,376

 

 

$

-

 

 

$

-

 

USDC

 

 

 

 

517

 

 

 

517

 

 

 

-

 

 

 

-

 

Treasury bills

 

 

 

 

43,151

 

 

 

43,151

 

 

 

-

 

 

 

-

 

Total liquid assets

 

 

 

$

55,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to fund our operations through the next twelve months.

 

Critical Accounting Estimates

See “Critical Accounting Estimates” set forth under “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” in the Form 10. There have been no material changes from those disclosed in the Form 10.

 

20


 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market price risk of digital assets

A large portion of our operating revenue generated from API providers is received in Bitcoin. A decline in the market price of digital assets had (and could in the future, have) an adverse effect on the Company's operations, the value of our digital assets, and our future operations and cash flows.

The market price of Bitcoin is impacted by a variety of factors and is determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. The digital asset industry has previously been negatively impacted by market price volatility. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of Bitcoin. There can be no assurance that we will be able to exchange our digital assets for U.S. dollars on a timely basis, if at all, or for a fair price. If the value of our digital assets declines, or if we experience difficulties converting our digital assets to U.S. dollars, we may not have sufficient liquidity to satisfy our liabilities, expenses and costs as they become due, which may negatively affect our business operations and financial condition.

Interest rate risk

Our exposure to changes in interest rates primarily relates to interest earned on our cash and cash equivalents and U.S. Treasury Bills with maturities of approximately six months or less.

Our investment policy and strategy related to our cash, cash equivalents, and treasury bills is to preserve capital and meet liquidity requirements without increasing risk. Our cash and cash equivalents consist of money market funds denominated in U.S. dollars, cash deposits, and treasury bills acquired with less than three months to maturity. Treasury bills outside of cash and cash equivalents include amounts acquired with three months to twelve months to maturity. Therefore the fair value of our cash, cash equivalents, and treasury bills would not be significantly affected by either an increase or a decrease in interest rates. A hypothetical 100 basis points increase or decrease in average interest rates applied to our daily balances held as of September 30, 2024 and September 30, 2023, would have resulted in a $0.7 million and $0.6 million increase or decrease, respectively, in interest earned on cash, cash equivalents, and treasury bills. The Federal Reserve has increased the Federal Funds Rate over 500 basis points since March 31, 2021 to control current levels of inflation and as of September 30, 2024, the Federal Funds Rate was 4.83%. A decrease in interest rates is possible. A hypothetical 500 basis points increase or decrease in average interest rates applied to our daily balances held as of September 30, 2024 and September 30, 2023, which hypothetical basis point increase corresponds closely to the increase of the Federal Funds Rate since early 2021, would have resulted in a $3.5 million and $2.8 million increase or decrease, respectively, in interest earned on cash, cash equivalents, and treasury bills.

Foreign currency risk

Foreign currency transaction risk

Revenues, expenses, and financial results of our foreign subsidiaries are recorded in the functional currency of these subsidiaries. Our foreign currency exposure is primarily related to transactions denominated in Swiss Francs attributable to cash and cash equivalents, and other intercompany transactions where the transaction currency is different from a subsidiary’s functional currency. Changes in foreign exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our results of operations as expressed in U.S. dollars. We have experienced and will continue to experience fluctuations in our results of operations as a result of gains or losses on the settlement and the remeasurement of monetary assets and liabilities denominated in foreign currencies that are not the functional currency.

We recognized net foreign currency losses of $0.2 million and $0.1 million for the nine months ended September 30, 2024 and September 30, 2023, respectively, in general and administrative expense, net in the condensed consolidated statements of operations and comprehensive income (loss). If an adverse 10% foreign currency exchange rate change was applied to total monetary assets, liabilities, and commitments denominated in currencies other than the functional currencies at the balance sheet date, it would not have a material impact on our financial results.

We have not, but may in the future enter into derivatives or other financial instruments in an attempt to hedge our exposure to foreign currency exchange risk. It is difficult to predict the impact hedging activities would have on our results of operations. Additionally, the volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Our international operations increase our exposure to exchange rate fluctuations and, as a result, such fluctuations could have a material impact on our future results of operations and cash flows.

Foreign currency translation risk

Fluctuations in functional currencies from our net investment in international subsidiaries expose us to foreign currency translation risk, where changes in foreign currency exchange rates may adversely affect our results of operations upon translation into U.S. dollars. We recognized gains on translation adjustments, net of tax, of less than $0.1 million for the nine months ended September 30, 2024, compared to losses on translation adjustments, net of tax, of $0.1 million for the nine months ended September 30, 2023, in the condensed

 

21


 

consolidated statements of comprehensive income (loss). As of September 30, 2024 and 2023, a 10% increase or decrease on foreign currency exchange rates for translation purposes would not have a material impact on our financial results.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures which are designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such is accumulated and communicated to the Company’s management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of, and under the supervision of, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2024. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024 the Company’s disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting, as described below.

Material Weaknesses

During 2022, we identified errors in our previously reported financial information as of and for the year ended December 31, 2021. As a result of the errors that were identified, we identified a material weakness in the Company’s control environment whereby the Company did not design and maintain effective internal control over financial reporting with respect to the expertise and quantity of its resources. Specifically, we did not effectively execute a strategy to hire, train, and retain a sufficient quantity of personnel with an appropriate level of training, expertise, and experience in certain areas important to financial reporting. In addition, we also identified a material weakness whereby we did not design and implement effective control activities based on the criteria established in the Committee of Sponsoring Organizations framework. Specifically, the control activities did not adequately (i) address relevant risks, (ii) provide evidence of performance, (iii) provide appropriate segregation of duties, or (iv) operate at a level of precision to identify all potentially material errors.

Remediation Plan Update

We have initiated and intend to continue to implement measures designed to improve our internal control over financial reporting to remediate the material weaknesses, including the following:

We have hired what we believe to be a sufficient quantity of personnel who possess the necessary level of expertise, experience and training within our accounting function to allow for appropriate segregation of reporting duties. Specifically, we have strengthened our segregation of duties between the preparer and reviewer of controls related to financial accounting and completing reconciliations and have implemented processes strengthening segregation of duties between those with access to book journal entries and those responsible for reviewing journal entries booked.
We have formalized our internal control environment and activities and have engaged with a third-party consultant to provide professional services to assist management with Sarbanes Oxley (“SOX”) readiness and assistance to help perform a risk assessment, and scoping of key systems and business processes, including a risk assessment at the financial statement assertion level to ensure that the level of precision of relevant controls is adequate to address the identified risks. These remediation activities were substantially completed as of December 31, 2023.

We will continue to revise our risk assessment and scoping to rectify any deficiencies noted, enhance the design of controls and implement new controls if needed, expand education and training where necessary, update documentation, and add any necessary reviews by our management. We will continue to remediate the design of certain controls and test the design of the remediated controls.

We believe that the steps detailed above, are substantially implemented and once successfully tested, will remediate the identified material weaknesses. In addition, the Company has created an internal audit function that has completed a risk assessment and scoping analysis with respect to internal control over financial reporting for the year ending December 31, 2024. Management plans to continue to evaluate the risk assessment and scoping analysis each quarter to help monitor the Company’s internal control environment as well as to help effectively identify and address any deficiencies. The Company has also performed a fraud risk assessment to help identify and evaluate fraud risks that may impact business processes.

Changes in Internal Control over Financial Reporting

Except as described above with respect to our remediation plan, there have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

22


 

PART II—OTHER INFORMATION

The information required with respect to this item can be found in Note 10, “Commitments and Contingencies-Legal Proceedings” to our consolidated financial statements included in "Part I, Item 1" of this Report.

Item 1A. Risk Factors

There have been no material changes to the risk factors we previously disclosed in the Form 10.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended September 30, 2024, no director or Section 16 officer adopted, modified, or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements.

 

23


 

Item 6. Exhibits

 

Exhibit

Number

Description

31.1*

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH

 

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith.

** Furnished herewith.

 

24


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

EXODUS MOVEMENT, INC.

Date:November 12, 2024

By:

/s/ James Gernetzke

James Gernetzke

Chief Financial Officer

 

 

 

 

 

 

25