BTCS Inc. (OTCMKTS:ICRD) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 Entry Into A Material Definitive Agreement.
On December 6, 2016, BTCS, Inc. (the Company) issued a total of
$220,002 Convertible Promissory Notes (the December 2016 Notes)
to three accredited investors. The December 2016 Notes were
issued in connection with a loan of $200,002 and the cancellation
of two $10,000 promissory notes previously issued by the Company
to two of the investors. The December 2016 Notes are due on June
6, 2017 and bear interest at 8% per annum payable on the maturity
date. In connection with the investments, the Company agreed to
use its best efforts (no later than 90 days from the original
issuance date) to obtain shareholder approval to effectuate a
reverse stock split or increase its authorized capital (either, a
Charter Amendment) in order to permit the exercise and/or
conversion of all of the Companys outstanding securities into
common stock including securities owed to holders to
anti-dilution protection. Further, the December 2016 Notes
required the Company to designate a series of preferred stock
with super voting power and issue it to an executive officer of
the Company. In furtherance of that provision, the Company issued
100 shares of Series A Preferred Stock to Charles Allen, its
Chief Executive Officer and a director, which provides Mr. Allen
with a majority of the Companys outstanding voting power. See
Item 5.03 below. Until such time as the Company effects a Charter
Amendment, the December 2016 Notes are convertible into a
preferred stock which shall be designated and issued by the
Company and a Certificate of Designation designating the related
rights and preferences of the preferred stock shall be filed with
the Secretary of State of Nevada within 15 days of the
investment. After the Charter Amendment is effected, the December
2016 Notes will be convertible into common stock. The conversion
price of the December 2016 Notes is $0.002 per share.
The December 2016 Notes contain certain adjustment provisions
that apply in connection with any stock split, stock dividend,
stock combination, recapitalization or similar transactions. In
addition, subject to limited exceptions, the holder will not have
the right to convert any portion of the December 2016 Notes if
the holder, together with its affiliates, would beneficially own
in excess of 4.99% of the number of shares of the Companys common
stock outstanding immediately after giving effect to its
conversion. The holder may not convert into or otherwise
beneficially own in excess of 9.99% of the number of shares of
the Companys common stock outstanding immediately after giving
effect to its conversion.
The Company may only use the proceeds of the December 2016 Notes
for accrued and unpaid management compensation (subject to the
$50,000 salary limitation as set forth in the April 2015 amended
subscription agreement), unpaid out-of-pocket expenses of
employees, legal and accounting fees, and certain other fees and
liabilities. The Company may not use any of the proceeds towards
payments to its outstanding note holders or investors that
participated in the Companys past financings.
The issuance of the securities is exempt from the registration
requirements from the Securities Act of 1933, as amended, to
Section 4(a)(2) and Rule 506(b) of Regulation D thereof. The
Company has not engaged in general solicitation or advertising
with regard to the issuance and sale of the Common Stock and has
not offered securities to the public in connection with such
issuance and sale.
The foregoing description of the December 2016 Notes, do not
purport to be complete and are qualified in their entirety by
reference to the provisions of such agreements, the form of which
is filed as Exhibit 10.1 to this Current Report on Form 8-K.
ITEM 3.02 Unregistered Sales Of Equity
Securities.
See Items 1.01 and 5.03 which are incorporated by reference
herein.
ITEM 5.03 Amendments to Articles of or Bylaws; Change in
Fiscal Year.
On December 9, 2016, the Company filed with the Nevada Secretary
of State a Certificate of Designation of Series A Preferred Stock
(the Certificate of Designation). to the Certificate of
Designation, the Companys Board of Directors designated a new
series of the Companys preferred stock, the Series A Preferred
Stock, par value $0.001 per share. The Certificate of Designation
authorized the Company to issue up to 100 shares of Series A
Preferred Stock.
The Series A Preferred Stock is not convertible, does not have
any preferential dividend or liquidation rights. Holders of
Series A Preferred Stock shall only be entitled to vote on the
approval of the Charter Amendment and shall be entitled to a
voting power equal to one vote more than the total combined
voting power of the Companys common stock. The Company shall have
the obligation to redeem all of the Series A Preferred Stock for
a total of $100 upon the Companys filing with the Nevada
Secretary of State of Articles of Amendment to the Companys
Articles of Incorporation effectuating the Charter Amendment. On
December 9, 2016, the Company sold 100 shares of Series A
Preferred Stock to Charles Allen, its Chief Executive Officer and
a director, for $100.
The foregoing description of the Certificate of Designation and
Series A Preferred Stock does not purport to be complete and is
qualified in its entirety by Certificate of Designation, which is
filed as Exhibit 3.1 hereto and incorporated herein by reference.
ITEM 9.01 Financial Statements And Exhibits
(d) Exhibits. The following exhibits are filed
with this Report:
| Exhibit Number | Description | |
| 3.1 | Certificate of Designation | |
| 10.1 | Form of Convertible Promissory Note dated December 6, 2016 |
About BTCS Inc. (OTCMKTS:ICRD)
International Card Establishment, Inc. is a provider of diversified products and services to the electronic transaction processing industry. The Company’s operations take place through two wholly owned subsidiaries: International Card Establishment, Inc. (the same name as the parent company, but herein referred to as I.C.E.); and, Neos Merchant Solutions, Inc. I.C.E. establishes merchant accounts for businesses that enable those businesses to accept credit cards, debit cards, and other forms of electronic payments from their customers; supplies the necessary point-of-sale transaction systems; facilitates processing for the accounts. The I.C.E. subsidiary also markets a proprietary Smart Card-based system that enables merchants to offer customized gift and loyalty cards. All of the Company’s offerings generate recurring revenues in the form of transaction fees, service fees, or finance charges. BTCS Inc. (OTCMKTS:ICRD) Recent Trading Information
BTCS Inc. (OTCMKTS:ICRD) closed its last trading session 00.00000 at 0.00200 with 75,000 shares trading hands.