Bitcoin Shop, Inc. (BTCS), a U.S.-based bitcoin transaction verification service, announced it has invested US$1.5M into Israeli digital currency server manufacturer Spondoolies-Tech, as the first step of their planned merger.
Announced in late-April, the merger of Bitcoin Shop, Inc. with Spondoolies-Tech is intended to create the world's first publicly traded bitcoin transaction verification equipment and mining equipment manufacturer, the two companies said in a joint release.
Commenting on the much-anticipated merger, Charles Allen, chairman and CEO at BTCS, said that the two companies, which are "clearly very complementary," should "produce immense revenue growth, while delivering value to customers, shareholders, and employees."
Allen will serve as the merged entity's chairman and CEO, and Guy Corem, Spondoolies-Tech's co-founder and CEO, will serve as a board member and executive officer.
Corem expressed gratitude for BTCS' support during his company's growth "transformative part," and said:
"We believe this new relationship will ensure our ability to continue development and production of innovative and high quality products, targeted mainly for internal use of the merged company but also to deliver the highest quality bitcoin mining equipment for our transaction verification services."
Through the investment agreement, BTCS acquired a 6.6% equity interest in Spondoolies-Tech and is granted certain exclusivity rights and pricing over current and future Spondoolies-Tech products.
Prior to the merger plan, BTCS had signed a partnership with Spondoolies-Tech to supply the former with mining equipment for its 83,000 square foot mining facility in North Carolina.
BTCS, a publicly traded company, currently operates four brands: Bitcoin Shop, an online store that accepts various digital currencies; BTCS Wallet, a multi-signature bitcoin storage solution currently in beta; BTCS Mining, a digital currency mining service; and BTCS ATMs, a network for bitcoin ATMs throughout the U.S.
Claiming to be looking to build the "universal digital currency ecosystem," the company, however, seems to have a particular interest in digital currency mining.
Following the partnership with Spondoolies-Tech to help establish BTCS' mining facility, Allen told Bitcoin Magazine:
"People are leaving the mining business because it is a sucker’s game. But the only way to make money in the next 1-2 years is with mining."