Management Implements Cost-Cutting Initiatives
Silver Spring, MD – (Globe Newswire – April 21, 2020) – BTCS Inc. (OTCQB: BTCS) (“BTCS” or the “Company”), a digital asset and blockchain technology focused company, today announced it strengthened its cash position in response to and to capitalize on economic dislocations as a result of COVID-19.
BTCS has strengthened its cash position by raising $500,000 in a convertible note financing and applying for a $42,000 loan through the CARES Act Paycheck Protection Program, which is forgivable subject to certain restrictions. The Company has also implemented cost reduction measures, including lowering its annual independent director fee from $75,000 to $18,750 for 2020 and to $15,000 for 2021 and thereafter. Additionally, BTCS management agreed to defer 35% of their salaries for the second quarter of 2020.
“The coronavirus pandemic has sent shockwaves through the global economy,” commented Charles Allen, CEO of BTCS. “While digital assets tumbled with the initial sell-off in equities in March, we believe this is an anomaly that could create opportunity for us to accumulate digital assets at attractive prices. With a strengthened cash position and lowered burn, we are in an ideal position to increase exposure to digital assets at depressed values.”
A core part of BTCS’ business plan is to establish positions in key digital assets. The Company believes Bitcoin, Ethereum, and certain other digital assets are a great store of value and can be an effective hedge against monetary debasement in the wake of multi-trillion-dollar economic bailouts. “In times of crisis, market participants often react emotionally, broadly disposing of assets. We believe this is what happened in recent weeks in the digital asset space,” continued Allen. “Moving forward, buoyed by strong fundamentals, including their fixed and limited supply, we strongly believe Bitcoin and Ethereum will benefit from a flight to higher quality amongst digital assets. Conversely, we believe smaller cryptocurrency projects and their associated digital assets will likely be negatively impacted by the economic downturn, specifically if those projects need additional funding.”
With no active mining operations, BTCS believes it’s in a stronger position to capitalize on the ongoing market dislocation compared to some of its public company peers.
Lastly, recent “shelter in place” orders have delayed development of the Company’s data analytics platform from its original timeline. As development progresses, the Company plans to provide additional updates.
BTCS is one of the first U.S. publicly traded companies focused on digital assets and blockchain technologies. BTCS plans to acquire additional digital assets to provide investors with indirect ownership of digital assets that are not securities, such as Bitcoin and Ether. We intend to acquire digital assets through open market purchases. We are not limiting our assets to a single type of digital asset and may purchase a variety of digital assets that appear to benefit our shareholders, subject to the limitations of the Investment Company Act of 1940. We are also internally developing a digital asset data analytics platform. The Company is also seeking to acquire controlling interests in businesses in the blockchain industry. For more information visit: www.btcs.com
Certain statements in this press release, constitute “forward-looking statements” within the meaning of the federal securities laws including statements regarding our belief regarding our ability to execute our business plan, our intention to acquire digital assets, our view on prices of digital assets, Ethereum and Bitcoin benefiting from investors seeking higher quality digital assets, acquiring controlling interests in businesses in the blockchain industry, expectations on timing of opening up and commercializing our digital asset data analytics platform, and applying and receiving benefits under the Paycheck Protection Program. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation failure to abide by the requirements of the Paycheck Protection Program, large liquidation of digital assets by investors who see cash as a less volatile asset during economic an downturn, as well as those risks set forth in the Company’s filings with the Securities and Exchange Commission. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.