BTCS Completes $1.45 Million Financing
On December 16th last year, BTCS Inc., a blockchain technology company who provide transaction verification services, completed a $1,450,000 financing led by Cavalry Fund I LP. Among the achievements that BTCS completed last year were: expanding the capacity of its North Carolina facility to 3mw; signing a definitive merger with Spondoolies; establishing an equipment finance facility with CSC Leasing Corporation and a bitcoin growth for the nine months ended September 2015 of almost 2500% compared with the 2014 full year.
Charles Allen, CEO of BTCS, stated: “The successful closing of this round of financing is an important milestone for BTCS. It enabled us to invest an additional $750,000 in Spondoolies-Tech Ltd. (“Spondoolies”), increasing our ownership from 6.6% to 9.6% ahead of our pending merger, and sets the stage for the rollout of their next-generation SP50 servers. With our third quarter revenues increasing 17% over our second quarter results and 1,872% for the nine months ended September 30, 2015 compared to the same period in 2014, this financing comes at an ideal time for us, strengthening our position as we move forward with our merger with Spondoolies and execute on our plans to ramp our transaction verification services business.”
Spondoolies CEO, Guy Corem commented: “The new capital we received from BTCS is expected to accelerate our SP50 server rollout. With an estimated 400% efficiency improvement over its predecessor, the SP35, getting the SP50 to market should provide us a strong competitive advantage in 2016.”
The financing generated $1,377,500 in net proceeds. New capital was raised via a note, convertible into shares of BTCS common stock at a conversion price of $0.30 per share. The note has a nine month maturity and included warrants to purchase 6.77 million shares of common stock at an exercise price of $0.375. Alongside this, BTCS advanced $325,000 to CSC Leasing Corporation to facilitate an international purchase of transaction verification servers through a sale-lease-back arrangement. BTCS hopes this will grow its transaction verification services business by over 100% in January, from 891 TH/s to around 1,800 TH/s. The advanced funds will be returned to BTCS after the receipt and installation of the equipment as a sale-lease-back arrangement.