BTCS

BTCS Inc (OTCMKTS:BTCS) A Blockchain Laggard

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BTCS Inc (OTCMKTS:BTCS) continues to struggle to keep pace with the rest of the cryptocurrency space. One can look at this situation as either a laggard bull case or a relative weakness signal of more underperformance to come. In any case, we know the capital needs of a company like this may take center stage at times such as this. That casts a positive light on the company’s announcement this week that it has closed on the remaining balance of its previously announced financing, which was co-led by Blockchain Global Ltd.

According to the release, the Company received a total of $1.1 million from the sale of its Series C -1 Convertible Preferred Stock and Warrants. On October 10, 2017, the Company closed on the initial $100,000 of a $1 million minimum financing which included $250,000 in bitcoin paid directly to BTCS and $750,000 in cash.

BTCS Inc (OTCMKTS:BTCS) describes itself as an early mover in the blockchain and digital currency ecosystems and the first “Pure Play” U.S. public company focused on blockchain technologies. BTCS goal is to enable users to engage in the digital currency ecosystem through one point of access – the Companys universal digital currency platform. As a firm believer in the blockchain technology, we offer various solutions including Bitcoin Shop – our ecommerce store which accepts a variety of digital currencies, BTCS Wallet – our secure storage solution and more. We deliver each solution by leveraging innovative technologies. We also leverage the services offered by our strategic partners. To date we have made investments in and partnered with 4 key digital currency companies including: GoCoin, Gem, Expresscoin, and Coin Outlet.

BTCS operates a beta eCommerceE marketplace. It hosts an online ecommerce marketplace where consumers could purchase merchandise using digital currencies, such as bitcoin, litecoin, and dogecoin. The company was formerly known as Bitcoin Shop, Inc. and changed its name to BTCS Inc. in July 2015. BTCS Inc. was founded in 2013 and is headquartered in Arlington, Virginia.

According to press materials, “BTCS is one of the first U.S. publicly traded companies focused on digital assets and blockchain technologies. Subject to additional financing, BTCS plans to create a portfolio of digital assets including bitcoin and other “protocol tokens” to provide investors a diversified pure-play exposure to the blockchain space. The blockchain is a decentralized public ledger and could fundamentally impact all industries on a global basis that rely on or utilize record keeping and require trust. BTCS is keenly focused on growth through acquisition and intends to acquire digital assets through open market purchases and participation in initial digital asset offerings (often referred to as initial coin offerings). Additionally, BTCS may acquire digital assets by resuming our transaction verification services business (often referred to as mining) through outsourced data centers, earning rewards in digital assets by securing their respective blockchains.”

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As noted above, the company just announced the closing of the remaining balance of its previously announced financing, which was co-led by Blockchain Global Ltd. According to the release, the Escrow Agent was permitted to release $100,000 to BTCS which allowed BTCS to pay its auditors, a valuation consultant, an accounting advisory firm and counsel so it could file its Form 10-Q for the six months ended June 30, 2017. The Form 10-Q was filed on October 24th after which the Escrow Agent paid BTCS the $650,000 held in escrow as well as an additional $100,000 paid by a new investor.

“We’ve now secured the necessary funds to settle all of our debt, excluding derivative liabilities, a key step in moving forward with our planned merger with BGL,” stated Charles Allen, CEO of BTCS. “With the filing of Form 10-Q and other key BTCS merger conditions now met from the C-1 financing, we’re well-positioned to execute on what we believe will be a transformational milestone for our companies.”

As we understand it, the planned merger is subject to negotiation and execution of a definitive merger agreement, BGL shareholder and board approvals and other customary closing conditions. Apparently, BTCS can provide no assurances or guarantees it will be able to consummate the planned merger.

Earning a current market cap value of $24.3M, BTCS has virtually no cash on the books, which is balanced by virtually no total current liabilities. BTCS is pulling in trailing 12-month revenues of $360K. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling precipitously. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $BTCS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $BTCS, either long or short, and we have not been compensated for this article.