Wednesday, June 29, 2022

BTCS Inc (OTCMKTS:BTCS) Signs LOI to Merge with Aussie Blockchain Play

BTCS Inc (OTCMKTS:BTCS) is one of the recent high-flyers in the cryptocurrency space. BTCS has been pulling back in recent trade after a sharp pop earlier this month. Shares continue to trade on a very thick tape as management continues to try to position BTCS for further expansion. To that end, the company came out to start this week with an announcement that it signed a non-binding Letter of Intent to merge with Blockchain Global Limited, an Australian blockchain company.
According to the release, “BCG operates four distinct business lines, an institutional exchange platform, transaction verification services (bitcoin mining), a blockchain start-up accelerator, and a blockchain technology consultancy. BCG generated AU$5.9 million (approximately US$4.4 million) revenue in FY16, a 300% increase over FY2015 revenue. BCG has approximately US$3.5 million in assets comprised of bitcoin and cash as of July 1, 2017, and is currently supporting its business through profit from operations. The reported revenues are audited in accordance with International Financial Reporting Standards and are financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles.”
BTCS Inc (OTCMKTS: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, we got word to start this week that crypto play BTCS has apparently signed a non-binding letter of intent to merge with Blockchain Global Limited, an Australian blockchain company. Now, it must be said that a “non-binding letter of intent” is basically nothing more than a public statement of “maybe”, so the market’s tepid response on Monday is certainly understandable.
In the release, it is noted that “the LOI is subject to a number of conditions including the approval of BCG’s shareholders and board and the approval of BTCS’s board, and the settlement of all of BTCS’ debt prior to closing.” There are also additional conditions, but these seem like the most obvious hurdles, particularly with no cash and a decent pile of debt on the balance sheet at present.
“As early movers in a rapidly developing industry, we’ve assembled a talented team with the necessary expertise to excel,” stated Sam Lee, CEO of BCG. “In addition to our work with innovative companies through the Melbourne Blockchain Center, we’ve also positioned ourselves to be a leading consultant in the space, servicing companies that recognize the importance of incorporating blockchain technology into their organizational strategies. By teaming up with BTCS, we’re deepening our pool of talent.”
“The blockchain space continues to suffer from a talent void,” commented Charles Allen, CEO of BTCS. “Together with BCG, and their track record of success, we’re positioning ourselves to fill this talent void, ultimately capitalizing on the immense opportunity in blockchain technologies and leveraging our early-mover advantage.”
At this time, carrying a capital value in the market of $20.8M, BTCS has virtually no cash on the books, which compares with 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. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $BTCS stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
Disclosure: We hold no position in $BTCS, either long or short, and we have not been compensated for this article.

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