Bioptix starts over; focus is on cryptocurrency

Bioptix Inc., until recently a maker of diagnostic machinery for the biotech industry, is jumping on the digital-currencies bandwagon.

The Castle Rock-based company is changing its name to Riot Blockchain Inc. as it shifts its focus to buying up cryptocurrency and blockchain companies. Its first move under the new moniker is an investment in Coinsquare Ltd., a Canadian exchange for trading digital tokens.

The penny stock nearly doubled in value in the days leading up to the company’s announcement Wednesday. After Riot formally unveiled the change in direction, the shares extended their rally, gaining as much as 17 percent, to $9.50, the highest intraday level since January 2015.

Other companies have proven that a move into the cryptocurrency space is often rewarded by investors, at least initially, as the astronomical increase in the value of digital tokens like bitcoin has lured everyone from big banks to startups. Overstock.com Inc. shares rallied after the online retailer said it was starting a digital-coin exchange.

Shares of MGT Capital Investments Inc., the cybersecurity firm with ties to controversial anti-virus software developer John McAfee, soared after the company announced a move into bitcoin mining, though the stock has since pared its gains.

Formerly known as Venaxis Inc., and before that, AspenBio Pharma, the company had developed a blood test to detect a protein associated with inflammation of the appendix, but received a negative response from the FDA in 2014, the company said. It also owns intellectual property rights related to veterinary products.

In January, three Bioptix board members resigned, including former Colorado Lt. Gov. Gail Schoettler.

Bioptix bought out BiOptix Diagnostics Inc. in 2016, which wasn’t the best move, according to Chief Executive Officer Michael Beegh- ley, who said the company wasn’t in a big enough market and noted its significant cash burn.

“When I got on the board, they had made an acquisition that we decided as a board did not make sense, so we closed that down and then decided to change our focus,” he said in a phone interview. “We looked at the sector and said, ‘How can we participate in this, and how can our shareholders participate in this very exciting industry that’s like the beginning of the internet?”

The company is paying a few million dollars for about a 12 percent interest in Coinsquare, and has warrants to increase its stake to 20 percent, Beeghley said. Next, the CEO is looking to buy companies focused on bitcoin mining, blockchain and security software.

He plans to fund the deals with a combination of cash on hand and stock.

“We’ve had a lot of success taking companies where we have closed down operations and identifying new sectors to invest,” said Beeghley, who became CEO of Bioptix in April. “The most recent is Polarity — ticker symbol COOL — which we took public in March.”

Bioptix has already shuttered operations, and is selling its remaining patents and intellectual property to a private company in the diagnostics industry. It will receive an upfront payment as well as a royalty stream that will likely be as much as about $2.5 million, Beeghley said. Bioptix plans to change its ticker symbol to RIOT.