EXECUTIVE SUMMARY
Company name | The Third Bladetec Bitcoin Mine Ltd.
Website
Sector
Stage
Year Started
Location
Funding Requirement
Pre-Money Valuation
Tax eligibility
Assigned Envestors Director | Agne Pakalniskyte agne.pakalniskyte@envestors.co.uk +44 (0)20 7240 0202
OVERVIEW
Since the introduction of Bitcoin in 2008, by a mysterious figure
known as Satoshi Nakamoto, the popularity and value of Bitcoin
has climbed sharply. Although there are a limited number of
Bitcoins in circulation, they have four useful qualities: they are hard
to earn, decentralised from any government control, easy to transfer
and they are secured by the blockchain. Bitcoin has received a
significant spark in interest over the past few months and is thought
to be the first cryptocurrency that has gained significance as an
appropriate medium for transactions. However, due to the volatile
nature of Bitcoin, investing in Bitcoin can be perceived as highly
risky. Therefore, an alternative way to invest in Bitcoin is to invest in
its production – mining.
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 company’s third iteration of mining for cryptocurrencies and
the first where Bladetec is offering its services as a Bitcoin mining
management company.
WHAT ARE BITCOINS?
Bitcoin, the first cryptocurrency, was introduced in 2008 and
the first Bitcoin was created in 2009 by Satoshi Nakamoto, an
unknown person(s). Cryptocurrency is a virtual currency and unlike
fiat currencies such as Sterling, cryptocurrencies such as Bitcoin are
not controlled by any government.
Instead, Bitcoin is controlled by a monetary policy that is based on
artificial scarcity, whereby only 21 million Bitcoins will be minted in
total. Bitcoins are created by miners. Every ten minutes a contest
is run to solve a complex computational algorithm and miners
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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| envestors.envestry.com/deals/1623
| Bitcoin/ Blockchain/ Cryptocurrency
| Early-Stage
| 2018
| London
| £3m - £10m
| Newco
| EIS Not Applicable
WHAT IS BITCOIN MINING?
A Bitcoin mine is a computer that runs the Bitcoin processing
algorithm (SHA-256). Mining, is the process through which
Bitcoins are released to enter circulation and it involves solving
a computationally difficult task (known as the proof-of-work).The
difficult task is a contest run every 10 minutes. Part of this work is to
validate and verify Bitcoin transactions occurring within the contest
interval. The winner of the reward places the newly validated
Bitcoin into the Blockchain. The Blockchain is the distributed ledger
of all Bitcoin transactions ever made. Fraudulent transactions
cannot enter the Blockchain, hence it is completely trusted by the
network. Bitcoin miners keep the Blockchain consistent, complete
and unalterable by repeatedly verifying and collecting newly
broadcast transactions into a block.
The Third Bladetec Bitcoin Mine Strategy
The strategy of The Third Bladetec Bitcoin Mine Ltd launched through
Bladetec, is to build a large-scale mine comprising of hundreds of
individual, specialist mining computers which will compete to win
the reward for each ten-minute interval. The combined processing
power of this mine will be on the Peta-hash scale, which will make
it a significant global mine. Proceeds from the mine will be securely
stored in off-line wallets and safety-deposit boxes.
The aim of the mine is to mine as many Bitcoins as possible and in
order to do so ASIC processing miners will be purchased. These
machines will participate in a Bitcoin Mining Pool. A mining pool
is a large number of mining machines that work together to win the
reward. Proceeds of the rewards are split across miners based on
the amount of work they have contributed to the pool. In this way
a predictable and daily pay-out of Bitcoins is assured.
 EXECUTIVE SUMMARY

HOW WILL TBBM GENERATE REVENUE? MANAGEMENT TEAM

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