Bitcoin Shop Inc (OTCMKTS:BTCS) announced management-lead financing worth $498,000 and follow-on investment in its strategic partner coin outlet. It sold common stocks and warrants worth $433,000 at a unit price of $0.10. The sold units translate into 15.155 million shares of common stock.
The sale details
Apart from common stocks and warrants, Bitcoin Shop sold non-convertible promissory notes to Tim Sidie and Michal Handerhan, the co-founders of company. The transaction generated aggregate proceeds of $65,000. The Notes, with an annual interest rate of 2%, will maturity on December 31, 2015. The management and family contributed 66% of the total funding. In addition, Bitcoin Shop made investment of $100,000 in coin outlet.
The management view
Charles Allen, the CEO of Bitcoin Shop Inc (OTCMKTS:BTCS), said that the company announced in October about voluntary sale of common stock. Some of the members of management agreed to sell 12.75 million shares for an aggregate value of $2,491. For investors who held company’s shares prior to redemption, sales would result in minimum dilution. The management intends to take all necessary steps to limit dilution for public shareholders.
The partnership motive
Bitcoin Shop Inc (OTCMKTS:BTCS) entered into a strategic partnership with Coin Outlet. With a follow-up investment, it intends to leverage ATM Network of Coin Outlet in order to expand its universal digital currency ecosystem. It will include ATM and other financial services. Overstock was one of the companies to get Coin Outlet ATM in its headquarters. The objective of partnership is to encourage use of digital currency across different parts of the world.
Downturn in market
Allen further said that the management strongly believes that there is nothing to worry about issues pertaining to Bitcoin. The recent decline in the price of virtual currency has created attractive opportunities for companies in the industry to expand their business, and the management will leave no stone unturned to use them in best possible way.