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Evening All, 
 

I am a current investor (with clients) in Cosmos Capital, which plans to be the first ASX listed bitcoin mining operation (operations based in the US), which is expanding into Data centres (data hosting - leveraging cheap energy costs) and a Bitcoin Access Fund (Managed Investment scheme with ASIC approval looking to be Australia's first Bitcoin fund.
 

In my view, this is the first credible Australian based digital infrastructure play I have come across. 


Cosmos are conducting a fundraising round, which is at the lower of a 20% discount to IPO or a A$60m valuation. An IPO is targeted within 12 months. The business is already an established miner in the US (May 2020 Rev $630k with $230k gross margin). At a Bitcoin price of US$9500/BTC they are forecast to exit the calendar year 2021 with monthly revenue of A$2.6m/month. 

Whilst a key variable is the Bitcoin (BTC) price, you need to think about this as a leveraged digital asset infrastructure play (knowledge, appropriate sites and cheap energy as the other main ingredients). The operations have been seeded by private investment from a number of prominent Australian based fund managers and a number of domestic family offices. 

This round has been covered, however, I will have an allocation within reason as an existing supporter. I can send through the investor presentation to interested investors upon request.

I encourage you to visit their website and understand more, I think it will surprise you as will the presentation [Link- .Cosmos Capital Website ]

I am following on into this round personally. I am happy to talk through the opportunity, and/or arrange a call with qualified investors. 

 

Some key points below

 

  • Looking to exit full year 20021 with Rev os A$29,7m. Based on the forward analysis, this round priced on 2.0x revenue, and 6.4x EDITDA.

  • PWC confirm this round is ESIC Eligible (tax)

  • Propose protection for incoming investors in the form of a 20% discount to IPO or USD$40mil valuation, whichever is lower. If they do not achieve an IPO within 12 months Cosmos will provide investors with an additional 20% discount to the floor price = USD$32mil minimum.

  • Expectations of IPO within 12 months.

  • Their second site in Georgia has power costs of ~$0.035 / kwh represents a 44% reduction in our OPEX compared to their first site in Nebraska.

  • Revenue rapidly accelerating as sites deployed Oct 2019 Rev $109k vs May 2020 Rev of $630k.

  • Processing capacity rapidly expanding - Organic growth combined with the Georgia expansion allows Cosmos to hit 300 P/H (Petahash or the number of calculations made in mining bitcoin) of mining production by December 2020, 800PH by December 2021.

  • Highly leveraged to their fixed production costs, industrial-scale gives them a significant cost advantage. 

  • Operations/Company have tier one Audit and compliance (Dentons/ BDO/ PWC, Assets insured Lloyds of London/Vero and Chubb.

  • Data hosting diversifies revenue and is a significant secondary asset play, leveraging similar infrastructure needs that are employed in BTC mining. 

  • Bitcoin Access Fund (BAF) - is a registered Managed Investment Scheme (MIS), with ASIC approval (Cosmos will be the manager). Intends to list in 2020, solves several issues faced by investors in accessing and holding digital currency assets as part of a diversified portfolio in Australia.

  • Strong Board/Governance - Proposed Chair - Greg Martin (Iluka/AGL), Independent Director Michael Hughes (Sealink), Chris Bregenhoj Independent Director (ooH Media)

 

The round will close this Friday the 19th of June.

(Open to Wholesale/Sophisticated Investors only)

Best, 
Tom

Thomas Schoenmaker
Head of Wealth Management
Director

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