You keep going around the issue while ignoring it.
No one is saying that $6M is a bad deal. Everyone is saying that there are too many reasons why $6M are not gonna happen.
1) You still have to define the cash injection in the company. How, when it would happen, etc.
2) How you will hold the $6M for us for two years, and who would be responsabile for it's possible loss/hacking, is still undefined.
3) How you will define $6M in BTC is also unclear. What happens if BTC spikes to 10k for 10 seconds? Will you say that you have fulfilled your terms?
4) No one assures us that you can't setup a recurring expense to one of your parent companies from the newco to move the money back to it, for example. Since that we have no control over the company, we have no control on how the money is spent. So you could pay 5 millions for a company copter for what I know.
5) Etc.
You can basically screw us all a second time and hide behind a chain of shell companies. I don't think to be alone not loving the idea.
Topic: HashFast announces specs for new ASIC: 400GH/s - page 75. (Read 880461 times)
Why don't we just ask questions here so everyone can read them? I have a lot of questions but so it is not confusing I will ask them one by one. I will be upfront and tell you that I think your offer is terrible and puts the creditors at more risk than they have now for recovery.
You have provided me details of your company's capitalization, yet you expect us all to invest in it. The deal means creditors could get zero. Just from hf's sworn testimony it looks like I will get minimum 50 to 75 percent back before the IP is even sold.
First question, please detail out how you feel lb is putting 10 million in cash in this business. If you plan to take over the business and it's assets and from that 10 million will be realized you really are not providing the money, the estate is. If you really plan to put real cash in this new business then why did you file with the court, the words Up to 8 million? That means you could put zero in after the two million (in claims not necessarily the amount you need to pay) is resolved. If you are sincere, please answer this first.
You have provided me details of your company's capitalization, yet you expect us all to invest in it. The deal means creditors could get zero. Just from hf's sworn testimony it looks like I will get minimum 50 to 75 percent back before the IP is even sold.
First question, please detail out how you feel lb is putting 10 million in cash in this business. If you plan to take over the business and it's assets and from that 10 million will be realized you really are not providing the money, the estate is. If you really plan to put real cash in this new business then why did you file with the court, the words Up to 8 million? That means you could put zero in after the two million (in claims not necessarily the amount you need to pay) is resolved. If you are sincere, please answer this first.
We still intend to host the telephone meeting because some things are just more quickly and effectively answered in an interactive setting. That said however, we are happy to answer your questions here as well as many of these questions seem to indicate large misunderstandings about what the 363 sale terms document says/means.
The current terms call for the formation of a new company (sometimes called “NewCo” in the documents). We are not taking over Hashfast, or its estate or anything else; we are forming an new company and it is buying some assets from Hashfast’s estate.
Once this new company (“NewCo”) is formed, Liquidbits/its investors will transfer $10 million to the new company in cash. This cash will then be used by NewCo to pay $2 million to the Hashfast estate for administrative/priority expenses and to satisfy executory contracts (who by law would be paid ahead of you or us anyway), and $8 million to pay to convert the chips and wafers into usable mining rigs and get them hosted (which is how the money to pay everyone back will be generated).
I think from your question you may have been thinking we were going to do something like give $10 million to the estate, then take over the estate and immediately get our money back. As you can see from the above explanation, this is simply not the case.
You also need to provide the math behind your claim that under liquidation we will only get 25 cents on the dollar since treat math does not add up to the sworn testimony that there are more than 8 million in inventory to be sold. Then you have the IP that can be sold. Those two alone get everyone over 80 cents on the dollar.
Why don't you list the inventory that you claim is only worth 25 cents?
The short answer is that is says $10 million in the documents, but you may not be looking in the right place. You will note that the filing or petition for the 363 sale was not made by Liquidbits but by the Hashfast estate (because they are the ones who must do that per court rules). Accordingly, their filing only address the components which will directly interact with them such and cash, stock, and Notes/IOU’s they will be given and inventory and IP license that they will give. As such it does not discuss the capitalization of NewCo because they are not directly part of it. However, if you continue all the way to the end, you will see in exhibit A the Terms Sheet from Liquidbits which covers all the components we will be involved (which gives a more complete picture. Under the heading of capitalization of the new company, it states quite clearly and specifically that we would provide $8 million to convert the boards which combined with the $2 million identified in the document under “consideration” (article 2) is the $10 million we have been referring to.
Regarding the inventory, the $8 million valuation in the testimony is a fantasy. You will note that the attorneys specifically noted that the individual was not an expert appraiser and that this was just his opinion. They could just as easily given “sworn testimony” that in their personal opinion the inventory was worth $25 million. The fact that this statement is sworn does not provide it any extra credibility, as it would be functionally impossible to prosecute someone for perjury, or hold them civilly liable for offering a personal opinion about the value of something.
I would not ask you to simply trust us however. Hashfast has been making limited sales of chips to keep the lights on and pay some bankruptcy expenses. It is our understanding that they are having difficulty selling these chips at $125 each. Given that there are 27,000 chips remaining for bulk liquidation or transfer to Liquidbits, a valuation of $8 million would equate to a price of just under $300 per chip. In a bulk liquidation scenario, it is highly probable that the unit cost of the chips would be even lower than the current $125, as people/companies buy in bulk to get a lower unit cost, not a higher one. Further the price which one might realistically expect to get for these chips is bounded by the competing chips/rigs in the marketplace. Specifically the BitMain AntMiner S3 is sold in rig form for $0.75 per ghash/s and a power consumption of .77 watts at the wall. When you factor in the cost of mounting HashFast chips, installing cooling units, and in some cases cutting the wafers into chips of about $400 per unit, what you find is that Hashfast’s estate would need to be selling the chips with a final cost of $100 to achieve a cost per ghash of $0.78 in order to compete with chips already in inventory and being sold. Even at this reduced price, they would still be a difficult sell as they have worse power consumption at 1.1 watt per ghash/s
So using a realistic price of $100 per chip, this equates to approximately $2.7 million in chip inventory. The intellectual property consists of little more than plans for a 16nm chip, which would take months and millions of dollars to produce, and then would be at best equivalent to what is already coming out now, and likely much lower performance than what would be available then. Consequently, it would be highly generous to assume a value of $2 million for the intellectual property. In addition, about $1 million (beyond the debts for Hashfast) is owed on this IP, so that the net value would, using a generous value equate to about $1 million.
This results in a total liquidation value of $3.7 million. From this there would need to be deducted the $2 million in priority/secured claims, which by law get paid before general unsecured creditors. This then leaves $1.7 million to be split among $12 million in claims. This would translate to a recovery of about 14% for each general unsecured creditor. If these chips wind up selling for $80 per chip, or if the IP sells for $1.5 million instead of $2million (both entirely likely situations), then the recovery for each general unsecured creditor drops to 10%. In the unlikely event that they are able to get $150 per chip, the recovery for general unsecured creditors would be approximately 25%. This is how we arrived at the estimated recovery rates listed earlier. We stand by these numbers, and think that anyone who thoroughly investigates this matter will arrive at the same conclusion.
Why don't we just ask questions here so everyone can read them? I have a lot of questions but so it is not confusing I will ask them one by one. I will be upfront and tell you that I think your offer is terrible and puts the creditors at more risk than they have now for recovery.
You have provided me details of your company's capitalization, yet you expect us all to invest in it. The deal means creditors could get zero. Just from hf's sworn testimony it looks like I will get minimum 50 to 75 percent back before the IP is even sold.
First question, please detail out how you feel lb is putting 10 million in cash in this business. If you plan to take over the business and it's assets and from that 10 million will be realized you really are not providing the money, the estate is. If you really plan to put real cash in this new business then why did you file with the court, the words Up to 8 million? That means you could put zero in after the two million (in claims not necessarily the amount you need to pay) is resolved. If you are sincere, please answer this first.
You have provided me details of your company's capitalization, yet you expect us all to invest in it. The deal means creditors could get zero. Just from hf's sworn testimony it looks like I will get minimum 50 to 75 percent back before the IP is even sold.
First question, please detail out how you feel lb is putting 10 million in cash in this business. If you plan to take over the business and it's assets and from that 10 million will be realized you really are not providing the money, the estate is. If you really plan to put real cash in this new business then why did you file with the court, the words Up to 8 million? That means you could put zero in after the two million (in claims not necessarily the amount you need to pay) is resolved. If you are sincere, please answer this first.
We still intend to host the telephone meeting because some things are just more quickly and effectively answered in an interactive setting. That said however, we are happy to answer your questions here as well as many of these questions seem to indicate large misunderstandings about what the 363 sale terms document says/means.
The current terms call for the formation of a new company (sometimes called “NewCo” in the documents). We are not taking over Hashfast, or its estate or anything else; we are forming an new company and it is buying some assets from Hashfast’s estate.
Once this new company (“NewCo”) is formed, Liquidbits/its investors will transfer $10 million to the new company in cash. This cash will then be used by NewCo to pay $2 million to the Hashfast estate for administrative/priority expenses and to satisfy executory contracts (who by law would be paid ahead of you or us anyway), and $8 million to pay to convert the chips and wafers into usable mining rigs and get them hosted (which is how the money to pay everyone back will be generated).
I think from your question you may have been thinking we were going to do something like give $10 million to the estate, then take over the estate and immediately get our money back. As you can see from the above explanation, this is simply not the case.
You also need to provide the math behind your claim that under liquidation we will only get 25 cents on the dollar since treat math does not add up to the sworn testimony that there are more than 8 million in inventory to be sold. Then you have the IP that can be sold. Those two alone get everyone over 80 cents on the dollar.
Why don't you list the inventory that you claim is only worth 25 cents?
The short answer is that is says $10 million in the documents, but you may not be looking in the right place. You will note that the filing or petition for the 363 sale was not made by Liquidbits but by the Hashfast estate (because they are the ones who must do that per court rules). Accordingly, their filing only address the components which will directly interact with them such and cash, stock, and Notes/IOU’s they will be given and inventory and IP license that they will give. As such it does not discuss the capitalization of NewCo because they are not directly part of it. However, if you continue all the way to the end, you will see in exhibit A the Terms Sheet from Liquidbits which covers all the components we will be involved (which gives a more complete picture. Under the heading of capitalization of the new company, it states quite clearly and specifically that we would provide $8 million to convert the boards which combined with the $2 million identified in the document under “consideration” (article 2) is the $10 million we have been referring to.
Regarding the inventory, the $8 million valuation in the testimony is a fantasy. You will note that the attorneys specifically noted that the individual was not an expert appraiser and that this was just his opinion. They could just as easily given “sworn testimony” that in their personal opinion the inventory was worth $25 million. The fact that this statement is sworn does not provide it any extra credibility, as it would be functionally impossible to prosecute someone for perjury, or hold them civilly liable for offering a personal opinion about the value of something.
I would not ask you to simply trust us however. Hashfast has been making limited sales of chips to keep the lights on and pay some bankruptcy expenses. It is our understanding that they are having difficulty selling these chips at $125 each. Given that there are 27,000 chips remaining for bulk liquidation or transfer to Liquidbits, a valuation of $8 million would equate to a price of just under $300 per chip. In a bulk liquidation scenario, it is highly probable that the unit cost of the chips would be even lower than the current $125, as people/companies buy in bulk to get a lower unit cost, not a higher one. Further the price which one might realistically expect to get for these chips is bounded by the competing chips/rigs in the marketplace. Specifically the BitMain AntMiner S3 is sold in rig form for $0.75 per ghash/s and a power consumption of .77 watts at the wall. When you factor in the cost of mounting HashFast chips, installing cooling units, and in some cases cutting the wafers into chips of about $400 per unit, what you find is that Hashfast’s estate would need to be selling the chips with a final cost of $100 to achieve a cost per ghash of $0.78 in order to compete with chips already in inventory and being sold. Even at this reduced price, they would still be a difficult sell as they have worse power consumption at 1.1 watt per ghash/s
So using a realistic price of $100 per chip, this equates to approximately $2.7 million in chip inventory. The intellectual property consists of little more than plans for a 16nm chip, which would take months and millions of dollars to produce, and then would be at best equivalent to what is already coming out now, and likely much lower performance than what would be available then. Consequently, it would be highly generous to assume a value of $2 million for the intellectual property. In addition, about $1 million (beyond the debts for Hashfast) is owed on this IP, so that the net value would, using a generous value equate to about $1 million.
This results in a total liquidation value of $3.7 million. From this there would need to be deducted the $2 million in priority/secured claims, which by law get paid before general unsecured creditors. This then leaves $1.7 million to be split among $12 million in claims. This would translate to a recovery of about 14% for each general unsecured creditor. If these chips wind up selling for $80 per chip, or if the IP sells for $1.5 million instead of $2million (both entirely likely situations), then the recovery for each general unsecured creditor drops to 10%. In the unlikely event that they are able to get $150 per chip, the recovery for general unsecured creditors would be approximately 25%. This is how we arrived at the estimated recovery rates listed earlier. We stand by these numbers, and think that anyone who thoroughly investigates this matter will arrive at the same conclusion.
27,000 chips * 500Gh per chip * .35 == $4,725,000 USD
27,000 chips * 700Gh per chip * .35 == $6,615,000 USD, that sounds much better. You also get several metric tons of board components (long lead time components) for free since that HF (wisely, for once) made a stock of it. If I had to guess it, you also already have the PCBs in hand, so you paid them $5 each and not $150 each in expedite fees. So basically your per board cost is around or less than $200. Without considering the new super secret board design that halves the costs another time.
@LB. Do you have or have you ever had a relationship with Butterfly Labs?
Yes, Yes. And again YES. A hell of a relationship I would say.
Btw, I keep being incredibly confused. But the number of puppets in this thread is at a record high lately (and Greg isn't replying anymore!); that brings me to the only possible conclusion.
Secondly have you had communication with HF other then regarding the status of your orders before this case? If you come out with a 14 or 16 NM chip I will personally litigate you pro Bono till 2095 billed to my estate and written off as a tax deduction. I don't like being screwed twice.
Have you been in contact with executives or another Bfl employee in the past 90 days?
Lastly if you are in an agreement with Bfl so the Monarch can ship with this product or use their assembly and data facilities this is not a big gamble as you want everybody to believe.
Edit: A former BFL employee has stated they have seen Hashfast and Liquidbits employees at the facility he worked at numerous times. I did not think much of Liquidbits other then another cloud mining firm at the time.
LB who is paying your legal fees?
Have you been in contact with executives or another Bfl employee in the past 90 days?
Lastly if you are in an agreement with Bfl so the Monarch can ship with this product or use their assembly and data facilities this is not a big gamble as you want everybody to believe.
Edit: A former BFL employee has stated they have seen Hashfast and Liquidbits employees at the facility he worked at numerous times. I did not think much of Liquidbits other then another cloud mining firm at the time.
LB who is paying your legal fees?
@LB. Do you have or have you ever had a relationship with Butterfly Labs?
Hell at this point I'll take whatever I can get back on my wasted babyjet+ satoshi's.
+1 let's just get back whatever we can now and put and end to this nightmare of a Hashfast scam saga!
I just want to get something back and put the whole thing behind me!! I must say it had been a very expensive life lesson, I will never jump so quickly into buying product again before carrying out proper Due Dilligence and seeing proof of others receiving theirs!
Do you often ask a series of stupid questions that are factually inaccurate, and have already been addressed in the thread?
I'm simply trying to understand where this $9mm figure came from and if there is a buyer offering it today.
From my calculations, I can buy in stock equipment from Bitmain at $1/Gh + power supply. This equipment can be air cooled and doesn't require any fancy water cooled solution to work.
I can buy AM chips at $0.35/Gh which would be equivalent to purchasing HF chips except for the fact that the boards for HF chips are more complicated than for Bitmain or AM chips. I'll be overly fair and say the HF chips are worth the same.
27,000 chips * 500Gh per chip * .35 == $4,725,000 USD
This price is only relevant if you actually have a buyer who has 20mW of data center space and enough capital to build boards, coolers, PDUs, PSUs, cabling, etc.
Seems to me that there aren't very many people who have all of these pieces ready to go. It takes months of work and planning to build even a 350Th/s mine.
So it seems you are valuing the IP at $4,275,000. Again, who is going to purchase the IP at this price? Do you have a buyer?
If that is a dumb question, I'll happily leave the thread.
You are an investor in Liquidbits, so you know very well that you are only addressing a portion of the assets that will be sold.
I am constrained by confidentiality agreements so I am unable to make it clear to people how stunningly disingenuous you are being.
HashFast part II: the ugliness continues...
Hell at this point I'll take whatever I can get back on my wasted babyjet+ satoshi's.
Do you often ask a series of stupid questions that are factually inaccurate, and have already been addressed in the thread?
I'm simply trying to understand where this $9mm figure came from and if there is a buyer offering it today.
From my calculations, I can buy in stock equipment from Bitmain at $1/Gh + power supply. This equipment can be air cooled and doesn't require any fancy water cooled solution to work.
I can buy AM chips at $0.35/Gh which would be equivalent to purchasing HF chips except for the fact that the boards for HF chips are more complicated than for Bitmain or AM chips. I'll be overly fair and say the HF chips are worth the same.
27,000 chips * 500Gh per chip * .35 == $4,725,000 USD
This price is only relevant if you actually have a buyer who has 20mW of data center space and enough capital to build boards, coolers, PDUs, PSUs, cabling, etc.
Seems to me that there aren't very many people who have all of these pieces ready to go. It takes months of work and planning to build even a 350Th/s mine.
So it seems you are valuing the IP at $4,275,000. Again, who is going to purchase the IP at this price? Do you have a buyer?
If that is a dumb question, I'll happily leave the thread.
Using your own math above liquidation is the best option.
You put 500gh per chip but it is 750 so your calculation should 6.4 million just from chips. Your numbers.
Plus 2 million for the IP. Then there are the recoveries from the shareholders still to be factored in. Without recoveries with your numbers liquidation gives us a far better deal. Around 80 cents on the dollar with upside being the recoveries.
You are an investor in Liquidbits, so you know very well that you are only addressing a portion of the assets that will be sold.
I am constrained by confidentiality agreements so I am unable to make it clear to people how stunningly disingenuous you are being.
I am constrained by confidentiality agreements so I am unable to make it clear to people how stunningly disingenuous you are being.
Spot on! BFL's spirit will never die!
Do you often ask a series of stupid questions that are factually inaccurate, and have already been addressed in the thread?
I'm simply trying to understand where this $9mm figure came from and if there is a buyer offering it today.
From my calculations, I can buy in stock equipment from Bitmain at $1/Gh + power supply. This equipment can be air cooled and doesn't require any fancy water cooled solution to work.
I can buy AM chips at $0.35/Gh which would be equivalent to purchasing HF chips except for the fact that the boards for HF chips are more complicated than for Bitmain or AM chips. I'll be overly fair and say the HF chips are worth the same.
27,000 chips * 500Gh per chip * .35 == $4,725,000 USD
This price is only relevant if you actually have a buyer who has 20mW of data center space and enough capital to build boards, coolers, PDUs, PSUs, cabling, etc.
Seems to me that there aren't very many people who have all of these pieces ready to go. It takes months of work and planning to build even a 350Th/s mine.
So it seems you are valuing the IP at $4,275,000. Again, who is going to purchase the IP at this price? Do you have a buyer?
If that is a dumb question, I'll happily leave the thread.
Who says it is advanteous to sell sell to one buyer instead of many? The IP also has value and there are recoveries. So by your own math, liquidation gives creditors 70 to 80 cents on the dollar up front vs. 0 to 100 in two years.
Liquidbits, if they actually were capitalized properly could simply offer 6 million to buy out all the other creditors Now and then they can do what they want. That is not that much if they actually had the money.
Do you often ask a series of stupid questions that are factually inaccurate, and have already been addressed in the thread?
I'm simply trying to understand where this $9mm figure came from and if there is a buyer offering it today.
From my calculations, I can buy in stock equipment from Bitmain at $1/Gh + power supply. This equipment can be air cooled and doesn't require any fancy water cooled solution to work.
I can buy AM chips at $0.35/Gh which would be equivalent to purchasing HF chips except for the fact that the boards for HF chips are more complicated than for Bitmain or AM chips. I'll be overly fair and say the HF chips are worth the same.
27,000 chips * 500Gh per chip * .35 == $4,725,000 USD
This price is only relevant if you actually have a buyer who has 20mW of data center space and enough capital to build boards, coolers, PDUs, PSUs, cabling, etc.
Seems to me that there aren't very many people who have all of these pieces ready to go. It takes months of work and planning to build even a 350Th/s mine.
So it seems you are valuing the IP at $4,275,000. Again, who is going to purchase the IP at this price? Do you have a buyer?
If that is a dumb question, I'll happily leave the thread.
You are an investor in Liquidbits, so you know very well that you are only addressing a portion of the assets that will be sold.
I am constrained by confidentiality agreements so I am unable to make it clear to people how stunningly disingenuous you are being.
Do you often ask a series of stupid questions that are factually inaccurate, and have already been addressed in the thread?
I'm simply trying to understand where this $9mm figure came from and if there is a buyer offering it today.
From my calculations, I can buy in stock equipment from Bitmain at $1/Gh + power supply. This equipment can be air cooled and doesn't require any fancy water cooled solution to work.
I can buy AM chips at $0.35/Gh which would be equivalent to purchasing HF chips except for the fact that the boards for HF chips are more complicated than for Bitmain or AM chips. I'll be overly fair and say the HF chips are worth the same.
27,000 chips * 500Gh per chip * .35 == $4,725,000 USD
This price is only relevant if you actually have a buyer who has 20mW of data center space and enough capital to build boards, coolers, PDUs, PSUs, cabling, etc.
Seems to me that there aren't very many people who have all of these pieces ready to go. It takes months of work and planning to build even a 350Th/s mine.
So it seems you are valuing the IP at $4,275,000. Again, who is going to purchase the IP at this price? Do you have a buyer?
If that is a dumb question, I'll happily leave the thread.
It really doesn't matter if they are investing $10M or $100M. The most the creditors every see is $6M, in 2 years. In exchange we give them $9M of inventory and IP rights.
Do you have a buyer at $9mm for the inventory and IP?
How did you come to believe that the inventory and IP is worth $9mm?
Isn't $6mm better than nothing?
Are you an investor in Liquidbits?
Do you often ask a series of stupid questions that are factually inaccurate, and have already been addressed in the thread?
It really doesn't matter if they are investing $10M or $100M. The most the creditors every see is $6M, in 2 years. In exchange we give them $9M of inventory and IP rights.
Do you have a buyer at $9mm for the inventory and IP? How did you come to believe that the inventory and IP is worth $9mm?
Isn't $6mm better than nothing?
There is sworn testimony that is the value. I do not see any better indication than that currently. Perhaps you could list it all and everyone could decide for themselves The value.
Yes, let's suppose that LB puts the $6M in an account for our benefit, two years goes by and the value is $20M (as per their simulations (haha)). Who guarantees us that they don't get hacked and they don't loose the private key? Meh...
And evaluating the chips without the details of the new board design that should halve the costs is more voodoo than what I'm used to. (And I got used to a lot of hashfast-related voodoo!)
And evaluating the chips without the details of the new board design that should halve the costs is more voodoo than what I'm used to. (And I got used to a lot of hashfast-related voodoo!)
And basically if the sale is approved the $6M would be holded into bitcoin and distributed at whatever value it is two years from now?
It's all "Jam tomorrow" (British saying) and nothing today, far too risky if you ask me, it is just like an Earn-out with far to many things that could go wrong and we would not have any control over what happens, at least now we have some say in what the out come will be! I vote liquidate or find another buyer that is willing to pay Now not in 2 years time! Etc.
And basically if the sale is approved the $6M would be holded into bitcoin and distributed at whatever value it is two years from now?
There are sell-side brokers that would research the most Likely buyers and facilitate exploratory acquisition meeting etc, providing the sellers are in agreement to go down this road with another adviser, if they have already tried to find a buyer themselves and have failed this sounds like it would be a good option to create a few competitive bids for the inventory of chips & IP etc. A good example of such a Broker is www.bcmscorp.com it would have to be a fast track campaign though!
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