Charles Allen, CEO Of BTCS Explains About Divideds.

Charles Alles, CEO of BTCS. Last month, the internet was temporarily awash in stories about a publicly-traded crypto company’s plan to issue...

Charles Alles, CEO of BTCS.

Last month, the internet was temporarily awash in stories about a publicly-traded crypto company’s plan to issue a dividend in Bitcoin –— a “divided,” the company called it.

That company was Silver Spring’s BTCS Inc. (NASDAQ: BTCS), founded in 2013 and led by CEO Charles Allen — and now one of the first such corporate players to offer shareholders the option of receiving their dividend in either cash or Bitcoin. It was an attention-catching and controversial move for the surprisingly small firm. Since then, its stock price has risen 66%, from $3.03 per share to $5.03.

Criticism also ensued, however, and Allen was privy to it — on LinkedIn, and elsewhere. He saw some calling it a public relations stunt. “But there were all sorts of reasons it made sense to do,” he told the Washington Business Journal in an interview. The company has $45.7 million in digital assets as of early November, more than it has in liquid cash, which amounted to $1.4 million as of Nov. 4. Given the imbalance, Allen said he didn’t see a point in selling digital assets just to get the cash to issue the dividend.

“The thing it did accomplish is a lot of people have learned about our business model''—Allen.

Some experts have since warned that while the announcement seems designed to bring new, crypto-curious investors to BTCS, people interested in buying cryptocurrency can just do that separately. And that might be the wiser move unless buyers are interested in BTCS itself as a company, which up until now was little known.

Headquartered in Silver Spring, BTCS has three full-time employees and three independent board members, outsourcing most of its work to outside consultants. It used to have an office in Rosslyn and a mining facility in North Carolina, but now it operates virtually, with Allen himself based outside of Philadelphia.

The company has evolved its business since its start in 2013; back then, it was called Bitcoin Shop, and it was largely an e-commerce site where shoppers could buy products using various cryptocurrencies. It then abandoned that strategy and began mining Bitcoin in 2015. Eventually, that fell through as well, according to Allen, and the company began buying up Bitcoin and Ethereum, another form of cryptocurrency. And in 2021, it pivoted yet again to begin mining cryptocurrency, this time avoiding Bitcoin in favor of Ethereum, Avalanche and others.

In 2021, Allen said the company reached $1.2 million in total revenue, including $300,000 during the third quarter of 2021. Its net loss for that third quarter rose to $3.8 million, up from $1 million during the same period a year prior. That was partly due to a significant rise in compensation-related expenses, from $200,000 in the third quarter of 2020 to $4.7 million in that same period a year later as a slew of company stock options vested.

In March of last year, it raised $9.5 million in a registered direct offering. While BTCS’s market cap remains low – just over $50 million as of Friday – Allen said he’s focused on the future of the company. He hired Michael Prevoznik as a chief financial officer in November. “The core focus is growing the business, growing revenue, growing operations,” Allen said.