BTCS invests $1.5 million in Spondoolies
18 May 2015 | 1742 views | 0
Source: Bitcoin Shop
Bitcoin Shop, Inc. (OTCQB: BTCS) (“BTCS” or the “Company”), a blockchain technology company that engages in transaction verification services, announced today that it has invested $1.5m into Spondoolies-Tech Ltd (“Spondoolies”), a transaction verification server manufacturer.
BTCS’ investment in Spondoolies comes on the heels of the announcement of the intention for BTCS and Spondoolies to merge (April 28, 2015) and is serving as the first integral step of the planned merger. Together, the two companies will create the world’s first publicly traded company to produce Bitcoin transaction verification equipment and deploy Bitcoin mining resources.
Under the terms of the definitive investment agreements, BTCS purchased a 6.6 percent equity interest in Spondoolies, and received certain exclusivity rights and pricing for current and future Spondoolies’ products as well as a $1m breakup fee, in case the planned merger between BTCS and Spondoolies is not consummated. The investment in Spondoolies was based on a pre-money valuation of approximately $21.2m. Based in Kiryat Gat, Israel, Spondoolies-Tech is the premier developer of Bitcoin transaction verification servers. Launched in August 2013, Spondoolies is Israeli venture backed and has shipped thousands of servers to customers around the world in the past year.
The terms of the planned merger between BTCS and Spondoolies are a merger of equals. Upon closing, the parties will equally share the dilution resulting from BTCS’ April 22, 2015 $2.3m financing. Charles Allen will serve as the merged entity’s CEO and Chairman and Guy Corem, Spondoolies CEO and cofounder, will serve as a board member and executive officer. Additionally, Yuval Rozen will serve as BTCS’ CFO. The merger is subject to a number of conditions, including satisfactory completion of diligence and execution of definitive agreements. There can be no assurance that the conditions to closing will be satisfied or merger will be completed.
BTCS' Chairman and CEO 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.”
“We are excited to begin our partnership with BTCS and appreciate their support during a transformative part of our company's growth,” said Spondoolies CEO, Guy Corem. “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.”