The operator of cryptocurrency marketplace BTCS.com – OTC traded Bitcoin Shop, Inc.- has sewed up financing worth US$498,000.
BTCS currently operates a legacy ecommerce website – www.bitcoinshop.us – and a public beta site of www.btcs.com where consumers can purchase thousands of products using digital currencies bitcoin, litecoin and dogecoin.
BTCS plans to use the funds to build a platform with the goal of enabling users to engage in the digital currency ecosystem through one point of access.
The company sold $433,000 of units consisting of common stock and warrants at a per unit price of $0.10. The units, inclusive of the warrants, convert into 15.155 million shares of common stock. The firm also sold non-convertible promissory notes to BTCS’ co-founders, Michal Handerhan and Tim Sidie, for aggregate proceeds of $65,000, which mature on December 31, 2015 and bear interest at an annual rate of 2 percent. Management and family of management accounted for 66 percent of the total funding. Additionally, the Company made a follow-on investment of $100,000 in its strategic partner Coin Outlet.
Charles Allen, CEO of BTCS, commented:
As we previously announced, on October 22, 2014 certain members of management voluntary agreed to have 12.75 million shares redeemed from them for an aggregate payment of $2,491. For investors that owned our stock prior to the redemption, the unit financing should result in minimal additional dilution, when net against the redemption. Management remains committed to building our business and taking the necessary actions to limit dilution to our public shareholders.
Through the strategic investment and partnership with Coin Outlet, BTCS plans to leverage Coin Outlet’s ATM network as an on-ramp to its planned universal digital currency ecosystem, which includes ATM/financial services. Overstock recently placed a Coin Outlet ATM in its headquarters to encourage digital currency use.
As the lead investor in Coin Outlet, we are pleased to see the installation of Coin Outlet’s ATM at Overstock’s headquarters. This is a great step to encourage the use of digital currencies among consumers who have yet to experience the easy exchange of US dollars to bitcoins.
Charles Allen additionally commented, “We believe the recent decline in the price of Bitcoin has created tremendous opportunities for us to further expand our business and seize opportunities created from the market downturn.”