Bitcoin Miner BTCS to Merge with Blockchain Global

Announcements, Blockchain, Investing, Mergers, News | August 22, 2017 By:

Publicly traded bitcoin miner BTCS Inc, formerly known as Bitcoin Shop, has signed a non-binding letter of intent (LOI) to merge with Australia’s Blockchain Global Limited (BCG).

BTCS is an early entrant in the digital asset market and one of the first U.S. publicly traded companies to be involved with 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 bitcoin and blockchain industries.

BCG operates four distinct business lines: an institutional exchange platform, transaction verification services (bitcoin mining), a blockchain startup accelerator, and a blockchain technology consultancy.

Under the terms, BCG shareholders will receive a combination of common stock, convertible preferred stock, and warrants equal to 75% of the fully-diluted equity securities of the BTCS post-closing. Under the LOI, BTCS’ two current executive officers will receive 12% of the fully-diluted equity in the form of common stock, preferred stock, or restricted stock units in a manner to be determined by BTCS.

Another key condition of the LOI is that the existing holders of BTCS securities which have anti-dilution protection, redemption features, and similar protections must be eliminated as determined solely by BCG. The LOI requires BTCS to establish an Equity Incentive Plan to acquire 20% of the fully-diluted equity, which will be administered by an independent compensation committee. The binding agreement will provide that BTCS shall have five directors, of which two shall be appointed by the company prior to closing and three appointed by BCG. Three of the directors shall be independent, with one appointed by BTCS and two by BCG, and two may be non-independent, one appointed by the BTCS and one by BCG. BTCS CEO Charles Allen shall be deemed an acceptable non-independent director.

“As early movers in a rapidly developing industry, we’ve assembled a talented team with the necessary expertise to excel,” said 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,” said 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.”