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

BTCS Inc. (OTCMKTS:BTCS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

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On December 7, 2017, BTCS Inc. (the “Company”) entered into an Amendment to Securities Agreement (the “Agreement”) with the holders of a majority (the “Majority Holders”) of the Company’s outstanding Convertible Preferred Stock Series C-1 (the “Series C-1”) amending the terms of the Company’s May 2017 Securities Purchase Agreement (the “May SPA”), the Company’s October 2017 Securities Purchase Agreement (the “October SPA”), the Certificate of Designations, Preferences, and Rights of the Series C-1 Convertible Preferred Stock (the “Series C-1 COD”), and the terms of the Series A Warrants, Additional Warrants, Bonus Warrants, and Series B Warrants (collectively the Series A Warrants, Additional Warrants, Bonus Warrants, and Series B Warrants are referred to as the “Warrants”) issued by the Company were each amended as disclosed below.

The terms and conditions of both the May SPA and the October SPA (collectively the “SPAs”) were modified to eliminate all investor protective terms and covenants of the SPAs. However, the representations and warranties made in the SPAs by the Company to the Majority Holders and the indemnification provisions of the SPAs were not modified.

The terms of the Series C-1 COD will be replaced in their entirety with an Amended Certificate of Designations (the “New Series C-1 COD”). The New Series C-1 COD contains a 4.99% beneficial ownership limitation and may, from time to time, convert into fully paid and non-assessable shares of common stock in an amount equal to two hundred (200) shares of common stock for each one (1) share of preferred surrendered. The New Series C-1 COD does not contain any investors protections and is materially similar to common stock.

The Company agreed to issue, on a pro-rata basis to the subscribers of the October SPA a total of 4,400,000 shares of common stock of the Company. The Company agreed to register the common stock issuable upon conversion of the Series C-1 under certain circumstances.

The Warrants will be amended and reissued to reflect the removal of certain investor favorable covenants from the Warrants and the elimination of the investor protective provisions. Additionally, the number of reserve shares of the Company’s common stock required to be reserved by the SPAs will be reduced to the number of shares of common stock issuable on the exercise of all of the Warrants and the Series C-1.

The foregoing does not purport to be a complete description of the terms of the Agreement and is qualified in its entirety by the full text of the Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.7 and is incorporated herein by reference. Readers should review this agreement for a complete understanding of the terms and conditions associated with the transaction.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On December 6, 2017, the Company filed a Certificate of Withdrawal with the Secretary of State of the State of Nevada. The Certificate of Withdrawal, which was effective upon filing, eliminated from the Articles of Incorporation of the Company all matters set forth in the Company’s Certificate of Designation with respect to the Company’s Series C Convertible Preferred Stock that had been previously filed with the Secretary of State of the State of Nevada on May 23, 2017. No shares of the Series C Convertible Preferred Stock were issued or outstanding at the time of the filing of the Certificate of Withdrawal, and none will be issued. A copy of the Certificate of Withdrawal is filed as Exhibit 3.3 to this report and is incorporated into this Item by reference.

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.

BTCS Inc. Exhibit
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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.

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