Cosmos Health to issue $300M in senior secured convertible promissory notes.

Cosmos Health has entered into a securities purchase agreement with a U.S.-based institutional investor for up to $300 million in senior secured convertible promissory notes to support its Ethereum digital asset treasury reserve strategy. The company will accumulate ETH to enhance long-term shareholder value and custody and stake ETH assets through BitGo Trust Company. This initiative complements Cosmos Health's digital transformation and e-commerce efforts, with potential use cases in supply chain traceability and wellness incentive programs.

Cosmos Health Inc. (NASDAQ:COSM), a diversified, vertically integrated global healthcare group, has secured a significant financing facility of up to $300 million through senior secured convertible promissory notes to launch an Ethereum (ETH) digital asset treasury reserve strategy. The agreement, made with a U.S.-based institutional investor, requires the company to allocate at least 72.5% of net proceeds toward building its digital asset treasury reserve [1].

The initiative includes ETH custody and staking through BitGo Trust Company, with plans to explore blockchain applications in supply chain traceability and wellness programs. The remaining funds will support working capital needs, product development, R&D innovation, and the company's planned expansion into U.S. manufacturing [2].

Cosmos Health's CEO, Greg Siokas, stated that this financing marks a strategic milestone for the company, offering shareholders direct exposure to ETH, one of the most widely adopted digital assets in the world. He emphasized that the facility will provide access to growth capital to support various strategic initiatives, including accelerated product development, advanced R&D innovation, enhanced commercial initiatives, and the company's planned entry into U.S. manufacturing [1].

The company's entry into the digital asset space is part of a broader commitment to innovation. Siokas expressed confidence that the size and flexibility of this facility should position Cosmos Health to deliver long-term, sustainable value for its shareholders [1].

However, the structure of this deal warrants careful examination. These are senior secured convertible promissory notes, which means they'll rank above common shareholders in liquidation priority and will likely dilute existing shareholders upon conversion. The allocation requirement of 72.5% of proceeds for ETH purchase represents a substantial financial risk that seems disconnected from Cosmos Health's core business model [2].

Management's framing of this as providing "direct exposure to ETH" for shareholders raises questions. Typically, investors seeking cryptocurrency exposure would purchase it directly rather than through a healthcare company. The convertible structure also means the institutional investor providing this capital has downside protection that retail shareholders lack. This appears to be a fundamental business model shift rather than mere financial engineering [2].

References:
[1] https://www.globenewswire.com/news-release/2025/08/06/3128410/0/en/Cosmos-Health-Secures-up-to-300-Million-Financing-Facility-to-Launch-Ethereum-Treasury-Strategy.html
[2] https://www.stocktitan.net/news/COSM/cosmos-health-secures-up-to-300-million-financing-facility-to-launch-k0c4qal6f7px.html