BitcoinDash (Darkcoin)MiningPayment

BTCS Injects $1.5M in Spondoolies Based on $21M Valuation, Ahead Possible Merger

btcs-spondoolies
OTC-traded Bitcoin Shop, Inc. (BTCS) announced yesterday that it invested $1.5m into Spondoolies-Tech Ltd, an Israeli transaction verification server manufacturer.

BTCS’ investment in Spondoolies comes on the heels of April news that BTCS and Spondoolies intend merge, and the investment is the first step in the merger, according to the two companies. The merged company will produce Bitcoin transaction verification equipment and deploy Bitcoin mining resources globally.

Under the investment agreement, BTCS purchased a 6.6 percent equity interest in Spondoolies, and received certain exclusivity rights and pricing for current and future Spondoolies’ products. They also gain a $1m breakup fee, in case the planned merger between BTCS and Spondoolies fails.

The investment in Spondoolies was based on a pre-money valuation of approximately $21.2m.

Headquartered in Kiryat Gat, Israel, Spondoolies-Tech is a major developer of Bitcoin transaction verification servers. Launched in August 2013, the company is backed by Israeli venture capital and has apparently shipped thousands of servers to customers around the world in the past year.

After completion of the merger, the two parties will equally share the dilution resulting from BTCS’ April 22, 2015 $2.3m financing. BTCS’ CEO Charles Allen will serve as the merged entity’s CEO and Chairman and Guy Corem, Spondoolies CEO and co-founder, will serve as a board member and executive officer. Spondoolies CFO Yuval Rozen will become BTCS’ CFO.

The merger is subject to a number of conditions, including satisfactory completion of diligence and execution of definitive agreements. According to the companies, there is “no assurance” that the conditions to closing will be satisfied or merger will be completed.

Charles Allen, who will lead the new company, said that the planned combination of the two companies represents a new force in the evolving blockchain industry.

This is a powerful merger as the technologies of the two companies are clearly very complementary and stand to produce immense revenue growth while delivering value to customers, shareholders, and employees.

Guy Corem noted:

We are excited to begin our partnership with BTCS and appreciate their support during a transformative part of our company’s growth. We believe this new relationship will ensure our ability to continue development and production of innovative and high quality products, targeted mainly for internal use of the merged company but also to deliver the highest quality bitcoin mining equipment for our transaction verification services.

Journalist, policy analyst, and evangelist of new, disruptive technologies including big data analytics, Internet of Things, and cryptocurrencies. Internet industry veteran with regional c-suite experience, and journalist credentials earned at internet.com, Internet World magazine, and Mecklermedia Corporation.
Free AllCoinsNews Email Updates
Get the latest cryptotoken market news and blockchain developments!
We respect your privacy.