EXECUTIVE SUMMARY

Company name | The Third Bladetec Bitcoin Mine Ltd.

Website | envestors.envestry.com/deals/1623
Sector | Bitcoin/ Blockchain/ Cryptocurrency
Stage | Early-Stage
Year Started | 2018
Location | London
Funding Requirement | £3m - £10m
Pre-Money Valuation | Newco
Tax eligibility | EIS Not Applicable
Assigned Envestors Director | Agne Pakalniskyte [email protected] +44 (0)20 7240 0202

OVERVIEW WHAT IS BITCOIN MINING?

Since the introduction of Bitcoin in 2008, by a mysterious figure A Bitcoin mine is a computer that runs the Bitcoin processing
known as Satoshi Nakamoto, the popularity and value of Bitcoin algorithm (SHA-256). Mining, is the process through which
has climbed sharply. Although there are a limited number of Bitcoins are released to enter circulation and it involves solving
Bitcoins in circulation, they have four useful qualities: they are hard a computationally difficult task (known as the proof-of-work).The
to earn, decentralised from any government control, easy to transfer difficult task is a contest run every 10 minutes. Part of this work is to
and they are secured by the blockchain. Bitcoin has received a validate and verify Bitcoin transactions occurring within the contest
significant spark in interest over the past few months and is thought interval. The winner of the reward places the newly validated
to be the first cryptocurrency that has gained significance as an Bitcoin into the Blockchain. The Blockchain is the distributed ledger
appropriate medium for transactions. However, due to the volatile of all Bitcoin transactions ever made. Fraudulent transactions
nature of Bitcoin, investing in Bitcoin can be perceived as highly cannot enter the Blockchain, hence it is completely trusted by the
risky. Therefore, an alternative way to invest in Bitcoin is to invest in network. Bitcoin miners keep the Blockchain consistent, complete
its production – mining. and unalterable by repeatedly verifying and collecting newly
broadcast transactions into a block.
For this reason, the team at Bladetec Ltd aims to launch The Third
Bladetec Bitcoin Mine Ltd, (TBBM) in 2018 which will be fully
owned by the current round of shareholders. This mine will be
The Third Bladetec Bitcoin Mine Strategy
the company’s third iteration of mining for cryptocurrencies and The strategy of The Third Bladetec Bitcoin Mine Ltd launched through
the first where Bladetec is offering its services as a Bitcoin mining Bladetec, is to build a large-scale mine comprising of hundreds of
management company. individual, specialist mining computers which will compete to win
the reward for each ten-minute interval. The combined processing
WHAT ARE BITCOINS? power of this mine will be on the Peta-hash scale, which will make
Bitcoin, the first cryptocurrency, was introduced in 2008 and it a significant global mine. Proceeds from the mine will be securely
the first Bitcoin was created in 2009 by Satoshi Nakamoto, an stored in off-line wallets and safety-deposit boxes.
unknown person(s). Cryptocurrency is a virtual currency and unlike The aim of the mine is to mine as many Bitcoins as possible and in
fiat currencies such as Sterling, cryptocurrencies such as Bitcoin are order to do so ASIC processing miners will be purchased. These
not controlled by any government. machines will participate in a Bitcoin Mining Pool. A mining pool
Instead, Bitcoin is controlled by a monetary policy that is based on is a large number of mining machines that work together to win the
artificial scarcity, whereby only 21 million Bitcoins will be minted in reward. Proceeds of the rewards are split across miners based on
total. Bitcoins are created by miners. Every ten minutes a contest the amount of work they have contributed to the pool. In this way
is run to solve a complex computational algorithm and miners a predictable and daily pay-out of Bitcoins is assured.
compete in this contest to win. The winner receives the reward in
Bitcoins. The current reward is 12.5 Bitcoins. The reward is reduced
(cut in half) about every four years, through a process known as
halving. The next halving is anticipated to take place in June 2020,
when 6.25 BTC will be released every ten minutes. It is this scarcity
of supply that underpins the value of Bitcoin – the number of Bitcoins
and rate of production cannot be changed or influenced. To date,
approximately 80% of the released Bitcoin have been mined,
leaving approximately 4.1m BTC left to be mined. It is expected
that the very last Bitcoin will be minted in the year 2140.

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 EXECUTIVE SUMMARY

HOW WILL TBBM GENERATE REVENUE? MANAGEMENT TEAM

The Third Bladetec Bitcoin Mine Ltd’s mine will be competitive for John Kingdon (CEO and CTO), founder of Bladetec Ltd and
the first few years. At such a time as the technology improves, now Director of The Third Bladetec Bitcoin Mine Ltd. John has over
the mine’s competitiveness will decline. As the cost to produce thirty years of experience in Large scale computer design in various
Bitcoin outweighs the return, the Board of Directors will make sectors including government, military and financial services.
a recommendation to sell the Company’s assets; the mine’s
John Pitcher (Commercial Director), founder of Bladetec Ltd
computational resources and Bitcoins accumulated. The proceeds
and Director of The Third Bladetec Bitcoin Mine Ltd., will manage
from the sale will be in Pounds Sterling and the net proceeds will be
the promotion and sales of Bladetec’s Bitcoin mining operations to
distributed to shareholders
investors around the world. John has over 30 years of experience
in various areas of technology including computer security and
It is important to note that the rate of success in achieving these
company transformation.
fees and rewards is directly related to two factors: the amount of
processing globally and the increasing complexity of the problems Declan Kennedy (CFO), a Director of The Third Bladetec Bitcoin
which it calculates to solve. As the hash-rate increases, the difficulty Mine Ltd., is an accountant and is known as Ireland’s first ‘green’
increases, making it harder to succeed in winning Bitcoin. It is entrepreneur for creating the concept of a collective cooperative
possible that the company’s mine will have a reducing production ownership of assets for the benefit of shareholders with over
of rewards and fees as the number of miners increase, which has €500m AUM. Declan has recently developed two electricity
been included in the company’s financial projections. power stations with Biotricity.

COMPETITION OVERVIEW FINANCIAL SUMMARY

The mine will be of a large scale, with the most up to date technology The financial projections shown below are based on the value of
in comparison to its competitors. Therefore, The Third Bladetec Bitcoin increasing by 25%. The Company has prepared projections
Bitcoin Mine Ltd’s mine should be a significant mine. based on four different scenarios: each based on different future
values of Bitcoin. Please see the data room for further information.
Scenario 2 – Y/E 31st May 2018/19 2019/20
Income (£) Forecast   Forecast  
Bitcoin Capitalised Value 9,134,210 4,919,638
Proceeds of Bitcoin Sale 0 1,587,404
Total Income 9,134,210 6,507,042
Expenses    
Set Up Costs (850,000) 0
Overheads (3,658,227) (2,970,480)
Total Expenses (4,508,227) (2,970,480)
EBITDA 4,625,983 3,536,562
Depreciation (389,784) (311,827)
INVESTMENT OFFER EBITA 4,236,199 3,224,734
The company is raising £10m equity. The number of shares sold Taxation (434,583) (1,106,530)
(£1.00/share), at a minimum investment of £5,000 per investor,
Profit after Tax 3,801,616 2,118,205
will determine the value of the company. The funds raised will
be used to purchase the hardware and fund the electricity site
and admin costs. Unlike a traditional company there will be no Year 2: Projected IRR
overheads for marketing, sales and other functional costs. Projected
Scenarios IRR (annual) NAV
EXIT STRATEGY Value of Bitcoin Increases by 50% 45.0% £21,015,674
A proven exit strategy: after the two year time horizon, if the value Value of Bitcoin Increases by 25% 26.2% £15,919,821
of the Bitcoin has increased above the price anticipated, the Value of Bitcoin Remains the same 8.4% £11,739,795
Company will seek from its investors permission to continue mining
Bitcoin. If this permission is not received or the value of the Bitcoin Value of Bitcoin declines by 40% (11.5)% £7,825,923
has not increased, the Company's assets - to include Bitcoins mined,
miners and computing equipment - will be sold and the Company
liquidated. The net proceeds will be distributed to the shareholders
in Pounds Sterling.

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