Confirming that there’s a sucker born every minute, Bitcoin mining outfit BTCS, Inc. has raised $1.4 million in a post-IPO equity round led by Cavalry Fund LP.

The funding comes after news via way of a Securities and Exchange Commission (SEC) filing in November that detailed that the company was in serious financial strife and was literally running out of money.

As we reported at the time:

Proving that you can apparently never burn money quickly enough, the company … reported a net loss of $3.8 million in the previous quarter, and $8.4 million year-to-date to September 30, up from a $2.5 million quarterly loss for the same quarter in 2014 on a $6.6m year-to-date net loss.

It wasn’t just the figures that indicated it was in trouble, but the company itself, who noted in the report that “Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit, there is substantial doubt about the Company’s ability to continue as a going concern.”

BTCS was originally founded as a Blockchain focused e-commerce fintech provider before shifting its business model to Bitcoin mining in late 2014 at a time where the price of Bitcoin started to fall and existing, bigger, Bitcoin miners started going out of business.

According to a report from Finance Magnates the company has also entered into a merger agreement with Israel-based Bitcoin mining hardware provider Spondoolies-Tech; $750,000 from the new investment is said going toward additional investment in Spondoolies, raising BTCS’s stake to 9.6%.

Insanity

BTCS did note in November that it was trying to raise capital to continue trading and to their credit they have done so, but it’s still pure insanity to throw $1.4 million at a company that has a beyond abysmal record when it comes to running a business, one where they are burning money while failing to actually bring in needed revenue to replace it.

While the company’s November financials did note that it made $67,000 profit after costs on its Bitcoin mining operations for the year-to-date to September, that won’t necessarily now scale with the additional funding; while the price of Bitcoin has improved this year increasing the potential financial returns from the process, at the same time the cost of Bitcoin mining itself is also rapidly increasing with the difficulty of mining having increased by 41.9 percent over the last 30 days according to data from Kaiko meaning that more computing power is required to mine for the same amount of Bitcoins.

Shares in BTCS, which is listed on the Other The Counter (OTC) board dropped 1.87 percent to 10 cents a share on the news, and is down from 12 cents it was trading at in November.

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