BTCS Inc. (OTCMKTS:BTCS) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On May 25, 2017 BTCS, Inc. (the Company) raised
$1 million in cash from four institutional investors in exchange
for the issuance of $1,111,111 of a new class of Series C
Convertible Preferred Stock (Series C) and three
types of warrants as described below. The 79,368 Series C shares
are initially convertible into 15,873,600 shares of common stock.
The Series C is convertible at $0.7 per share or approximately
$0.063 per share after giving effect to the additional $111,1111,
subject to reduction in the event of future sales of equity
securities and common stock equivalents (with customary
exemptions) at a lower price. The Company is subject to a number
of customary covenants and a restriction on the incurrence of
indebtedness for one year. Within 120 days, the Company has
agreed to file a registration statement covering the common stock
issuable upon exercise of the registrable securities described
below. The registration statement will cover 47,302,176 shares of
common underlying the Series A Warrants, Additional Warrants, and
Bonus Warrants, which warrants are described below:

15,873,600 Series A Warrants exercisable at $0.085 per share,
subject to adjustment, over a five-year period;

15,714,288 Additional Warrants exercisable at $0.085 per share,
subject to adjustment, over a period which is the earlier of (i)
one-year after the effective date of a registration statement
covering the warrant shares, or (ii) three years from the date of
issuance. The Additional Warrants are callable by the Company for
nominal consideration if the common stock trades above $0.17 per
share and the daily volume is more than $50,000 for at least 20
trading days;

15,714,288 Bonus Warrants exercisable at $0.17 per share, over a
three-year period. The Bonus Warrants are also callable for
nominal consideration but the threshold price is more than $0.30
per share.

The Series A Warrants and Additional Warrants have price
protection in the event of future lower priced issuances.

The following table details the Companys capitalization after
giving effect to the this financing.

The 133,231,343 warrants include: (i) 47,302,176 warrants issued
in connection with this financing, (ii) 493,950 warrants with a
strike price of $0.025 and an expiration date of January 21,
2020, and (iii) 85,435,786 warrants with a strike price of $0.032
and an expiration date of April 16, 2020.

The Company expects to use the proceeds for working capital
including payment of liabilities. Of the liabilities, the
Companys management will receive approximately $377,000
representing accrued and unpaid salaries for 2016 and 2017.
Provided; however, that the Companys management will be unable to
receive any payments towards accrued and unpaid salaries in
excess of $50,000 in total for 2017 for each of its two officers,
until such time as the Company has filed its Form 10-K for the
year ended December 31, 2016 (the 10K).
Additionally, the Company owes $187,330 to investors in the
Companys April 2017 financing to the amendment to the
subscription agreement and as a condition to the Series C
financing no payments can be made until the Company has filed its
10K.

The foregoing description of the Series C, warrants, and
Securities Purchase Agreement does not purport to be complete and
is qualified in its entirety by reference to the provisions of
such agreements, the forms of which are filed as Exhibit 10.1,
Exhibit 10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 10.6
respectively, to this Current Report on Form 8-K.

Item 3.02 Unregistered Sales of Equity
Securities.

See Item 1.01 which is incorporated by reference. The issuance of
the securities is exempt from the registration requirements from
the Securities Act of 1933 to Section 4(a)(2) and Rule 506(b) of
Regulation D thereof. The investors previously invested in
securities of the Company and the Company did not engage in
general solicitation or advertising with regard to the issuance
and sale of the securities and has not offered securities to the
public in connection with such issuance and sale. Each investor
represented that it is an accredited investor and purchased the
securities for investment and not with a view to distribution.

Item 5.03 Amendments To Articles Of Incorporation Or
Bylaws; Change In Fiscal Year

See Item 1.01 which is incorporated by reference. On May 23,
2017, the Company filed a Certificate of Designations,
Preferences and Rights of the Series C Convertible Preferred
Stock of BTCS, Inc. (the Certificate of
Designation) with the Nevada Secretary of State creating
the Series C. The Certificate of Designation authorized the
Company to issue 175,000 shares of Series C which are convertible
at a 1:200 ratio, subject to further adjustment in the event of
lower price issuances.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

*Certain schedules, appendices and exhibits to this agreement
have been omitted in accordance with Item 601(b)(2) of Regulation
S-K. A copy of any omitted schedule and/or exhibit will be
furnished supplementally to the Securities and Exchange
Commission staff upon request.

About BTCS Inc. (OTCMKTS:BTCS)

BTCS Inc., formerly Bitcoin Shop, Inc., is engaged in the business of hosting an online e-commerce marketplace where consumers can purchase merchandise using digital currencies, including bitcoin and with operations in the blockchain and digital currency ecosystems. The Company operates a beta e-commerce marketplace, which accepts a range of digital currencies, have designed a beta secure digital currency storage solution BTCS Wallet. The Company’s transaction verification services business (bitcoin mining) enables running application-specific integrated circuit (ASIC) servers. The ASIC servers solve a set of prescribed mathematical calculations in order to add a block to the blockchain and thereby confirm bitcoin transactions. The Company’s beta e-commerce marketplace offers approximately 250,000 curated products and utilizes its Intelligent Shopping Engine to find competitive prices on products from over 250 retailers.

BTCS Inc. (OTCMKTS:BTCS) Recent Trading Information

BTCS Inc. (OTCMKTS:BTCS) closed its last trading session 00.000 at 0.145 with shares trading hands.