Bitcoin Group, slated as the second digital currency company to list on the ASX, is set to finally float after twice revising its listing date since it first lodged its prospectus with the corporate cop in June.
The bitcoin “miner” lodged a replacement prospectus on Friday, with a listing date set for November 11. The bookbuild for the offer started on Tuesday and will close on October 30.
The Australian Securities and Investment Commission lifted a second stop order on the IPO last Friday.
ASIC received the first prospectus on June 29 with a listing date of September 2, but the regulator put a stop order on the IPO on July 13. A second prospectus was written with a lodgement date of July 31 and a listing date of October 2. But ASIC issued a second stop order before it was officially lodged.
Chief executive Sam Lee said the revisions to the prospectus were so that the regulator could make sure investors would be fully informed.
“As the world’s first IPO in our industry, we are no doubt setting a precedent,” he said.
“ASIC’s role to protect Australian investors means they need to understand our unique business model. We appreciate the patience ASIC have taken to understand what we do, and thank their co-operation in helping ensure our prospectus accurately reflects the current and future opportunity of Bitcoin Group.”
The company first flagged it would list on the ASX in October 2014, when it said it wanted to list by November of that year.
Bitcoin Group plans to issue 100 million new shares to raise $20 million at 20¢ a share and a market capitalisation of $32.9 million based on 164,870,930 shares on completion of the offer.
The company earns money by solving complex mathematical equations to verify a bitcoin transaction on the digital currency’s “distributed” ledger, known as the blockchain. This is has no central location, but is held on every bitcoin user’s computer.
Bitcoin Group has powerful computers to do this “mining” work in seven sites across Australia, Iceland and China. Among the risks noted in the prospectus is the cost of electricity, so it places its machines in countries with low-cost power.
Ninety per cent of the funds raised, or $18 million, of the money will be spent on buying new computing power to mine bitcoins.
A maximum of $500,000 or 5 per cent of capital raised, whichever is less, from the raising will go to a bonus pool if the IPO is fully subscribed. This must be distributed within 60 days of the listing.
Directors will be repaid $230,000 in loans to the company. An individual can get a maximum of $150,000 from the pool. But even if the company manages to raise only $10 million, the bonus pool remains the same.
After the 2015-16 financial year the company will pay up to 20 per cent of net profits as bonuses if it reaches an NPAT goal of $10 million.
Revenue from bitcoins mined was $1.73 million as of the year to June 2015 and total profit was $10,000.
The latest prospectus removes forecasts of its revenue in its July 31 revised prospectus based on three different values for bitcoin compared to the Australian dollar of $250, $400 and $550. The earlier prospectus warns these are for illustration purposes only rather than being actual forecasts.
The projected revenue for 2015-16 under the three scenarios ranged from $21.3 million to $63.7 million. In the last month bitcoin has fallen from $370 to $348, but fell as low as $290 in that time.
In February, ASIC ordered the company to stop promoting its plan to list on Chinese social networking site WeChat before it lodged an official offer document.