Topic: [Havelock] HASH - Mining Equipment Sales, Contracts, and More - page 9. (Read 17394 times)

To the idiots who love trolling a company that is legit, epic fail to them. Learn about the business before you shills start posting fud around like idiots.

For the record:

If any current or potential investor would want any documents made available to them that are not NotLambChop or Gleb Gamrow (as well as their alternative accounts), I am fully willing to provide said documents. This includes (assuming there are no issues with the real estate agent), copies of the contract for the facilities we're in the process of purchasing.

I am not willing to provide these accounts (which have had accounts banned before on Bitcointalk) these documents, as I am certain they will not solve their inqueries into the company. If anyone wants to visit our offices, feel free to ask. I have met with about 5-6 members of LitecoinTalk/Bitcointalk/Reddit and other venues at our facilities, and am more than willing to show you our physical offices. Additionally, [email protected] routes into my business E-mail.

Additionally, I am planning on visiting the Cryptolina conference in Raleigh, NC. If you'd like to arrange a meeting, again, I will be more than willing to meet with you and discuss/provide any documents that are requested.

Yes. We do not need capital to remain viable as a business. All funds generated from the IPO will go into sustaining more capacity for the business and business model. The more we generate, the more profitable the model will be (certainly), but it does not change viability of the offering.

Please note that $450k was last year. We grossed about $400k in the first half of 2014 alone (again, P&L is forthcoming). We think that this justifies the valuation. Yes, its aggressive, but unlike every other company trying to promote itself on Havelock/ect, we have an actual track record of sales and deliveries.

Developing a chip IS crazy talk. We are not going to deal with that at any point in the near future - that is, maybe, a 3-4yr goal *if* we felt like we had enough contacts to charter our own chip. A more likely scenario would be working with the major chip fabricators to do a line of products, which is much less capital-intensive (e.g. what RockMiner has done - we already have good relationships with a few fabricators. But the cost to develop your own line of miners is about $300,000-500,000 if you want to do enough product volume to get a reasonable price on chips and components).

On organic growth - the problem that we have is a lack of capital. Lets say we have $50,000 in liquid capital that we can allocate to purchasing products. It takes us 2 weeks to acquire products from the factories (BitMain, RockMiner, ect), then another month to turn 100% of the inventory for a 20% return on the spent capital, or $10,000 in 6 weeks. Once you factor in overhead - lease, utilities, staff payments, ect, that $10,000 dwindles down sizably. This assumes you can turn 100% of the inventory in a month, which may or may not be true (we have some products like risers that have been sitting for months).

Compare that to the alternative scenario of having $500,000 in liquid capital available for product purchases. In this scenario, we spend the $500,000, get the products in two weeks, turn the products in 5 weeks (lets add an extra week in for safety's sake), and make the same 20% return. We have made about $100,000, but still have the same fixed costs of staffing, leasing, and other overhead.

So in one scenario, we see a net profit of $3,000 - $4,000 in 6 weeks. In the other, we see a net profit of $75,000 in 7 weeks. Which scenario do you think we want to pursue?

On profitability, our focus is on the following:

- Bitcoin ASICs (10-20% margin, very high volume)
- Litecoin ASICs (10-20% margin, lower volume)
- Custom-fabricated cables & components (50-300% margin, low volume, but very consistent)
- New R&D products (We'd like to work with a fabricator to create a turnkey PSU solution to reduce mining power solution costs considerably. Margins would be 30-50% and likely a sizable volume of sales, but we need about $50,000 USD to get this line started)
- Misc. accessories such as hubs/switches/cables (50-500% margin, highly variable volume).


Additionally, we do not need $1.4 million. Technically, we need nothing. We already have about $100,000 in inventory + liquid assets. But given everything I've done this year, I've run into dozens of times to where we could have made hundreds of thousands of dollars if we simply had more money in the bank. Even if we sell the first tranche, I will consider the IPO successful, as it should be enough to get a few of the contracts we have stewing in the works.

Here's some data from Amazon.com back in February to explain a sales scenario: (actually: Jan 20th through Feb 20th):

http://imgur.com/DMVR2Or

The highlight here is that we made $54,000 USD in a month. The vast majority of that was between Jan 25th and February 10th, so in about two weeks, we made money hand over fist. Additionally, we paid about $5 USD/ea for the risers, with most being resold between $10 and $25 (!)

The problem? We had no more money in which to purchase risers for some time, due to how Amazon holds funds on their system (they pay out every 2 weeks). By the time we got the ~$30,000 from the risers, the factories had closed in China, and they generally did not open back up until ate February for production runs. By this time, the GPU/Riser market was in its sunset, and most Chinese factories saw the demand and started doing direct sales, along with threatening every Amazon seller on the market.

If we had an extra $25,000 or $50,000, we could have likely profited close to $200,000 or so, because we were the only seller of risers as we had anticipated demand during CNY, and purchased what we could before the Chinese holidays.

I can give you more examples of this. Most recently being AntMiner U2, S1, and S3 sales. On the AntMiner U2, we purchased 1,000 USBs from the factory. We sold approximately 600 on Amazon, 300 to Micro Center, and 100 to Cryptobase in the UK. The problem? They sold out and do not make them any more. If we had more capital, we could have purchased, say, 2,500 devices and essentially cornered the market upon them selling out. On the S3, I have request for orders for 300+ devices that I cannot fill, because I do not have $150,000 in the bank to wire BitMain.

This is why we're seeking capital. We've been selling products for a year now, and we always sell out. But we're not big enough to be able to grow the company because we're at that strange point that there's just enough profits to pay staff and pay dividends, and cannot invest a significant amount of capital back into new products (although we are trying to do that as fast as possible).

Even if we get $250,000 during the IPO, that will help skyrocket our business. Additionally, we have deals with Micro Center that are more or less contingent on us getting more capital. Again, I know that $1.4m is asking a lot, but I truly believe by the end of the year, that $1.4 million will look like a pittance compared to our position within the US distributor/reseller marketplace.

Finally, if you're an hour away, I suggest taking a small road trip and visiting if you are interested in investing. I can show you what we have in stock, and show you our order fulfillment systems / Amazon/BAH accounts to give you a better understanding of how we're turning products, and why the capital will be so useful for us. I am not sure which direction you're in, but Circleville is pretty equi-distant from a lot of places in Ohio, and we're about 2 miles from S.R. 23.

well done, community, great research.
i love to hunt scammers and read their unicorn tales

i am sure that i will not spend any satoshi at this.

thanks

So you're asking for 1.4 million (2400 BTC * $600 per coin) for a company that had 450k in sales and grossed 75k in profit last year?

Have you lost your mind, son?

I hope you do well because I live about an hour from you and have a 25TH (and growing) mining operation, and it would be nice to have a bitcoin mining hardware supplier close by, but that valuation is absurd.

Also, I urge you to focus on the most profitable parts of your business and not try to expand in too many different directions at once.

Developing your own chip is crazy talk and a great way to go broke in a hurry. Multiple companies already have chips with similar specs (Bitmain, Spondoolies, Knc, Bitfury, and ASICMiner), so it's pretty clear that we're reaching current technological performance limits, so investing millions to try to re-invent the wheel is probably not the best idea.

Do you really need 1.4 million dollars of other peoples money to expand your business? Again, why can you just focus on the most profitable parts of your business and grow the business organically without putting a large amount of other peoples money at risk?

Given that you and Gleb are posting names/addresses of people that have nothing to do with myself, or the company, I have no choice but to delete your posts. If you want to post a scam accusation, feel free to. I am certain that, much like the thread Gleb has created, that many people view your malevolence as a negative, not a positive.

So what did John say when you called him?

I suggest calling John Rogers at 614-499-5257 to make sure he starts telling people who call that you did indeed win the 68,000 sq. ft warehouse located at 2150 N Court St. in Circleville, OH, formally known as Circleville Hardware, for at the moment such is not the case.

God forbid ben drop ships products or allows white label resell.

Group buys are a two-edged sword. I am not a fan of them, in that you put your credibility on the line against factories that may, or may not ship out in a timely manner. This can cause some issues. For example, we did a very large Red Fury USB buy last December. On one end, we did VERY well from it - we sold about $75,000 worth in about 5 days. However, we had a fair number of cancellations AND the factory decided to cut down how many we could order (initially wanted 2,000, but they only shipped 1,250 to us). Additionally, that is what led to our merchant processor locking our account, as they found out we sold Bitcoin hardware, which they deemed "High risk" (despite never disclosing this was an issue).

Re: Selling on Ebay - I could care less if anyone does it. It is the nature of the beast. This is why I (also) want to get enough capital to do away with group buys and simply control Amazon/EBay/eStore channels as strongly as possible.

If the IPO does extremely well, we should be able to stop doing group buys, and work more on the AntMiner S3 model of pre-pay group buys. This is where we commit capital to the order, and then notify people that we have X number of units in transit, and they will get them as soon as they land in the US. The AntMiner S3 group buy is the cleanest and most efficient we've ever done. Of course, a lot of that is thanks to our new logistical systems to track orders and efficiently route orders.

For anyone wondering what GB's we've participated in:

BPMC Nano Ice Fury USB Miners
Krakatau Mining Red Fury USB Miners
Gridseed ASIC 5-Chip Units
AntMiner S3 (Batch 3/5 - Ongoing)

Or at least those are the ones' off the top of my head. BPMC saw a 1 and 1/2 month delay. Red Furies were stuck in customs for ~10 days. Gridseeds went very well, but it took a few days to allocate proper shipping channels, as we did custom-fabricate ATX to 2.1mm DC cables for that GB, which slowed down delivery slightly. On the S3 Group Buy - they are supposed to land Monday/Tuesday, and I believe we can have 100% of the units dispatched within 2 days of them delivering to us. If we do that, it'd be a record for speed. Once we get the HQ, having loading docks would further ease turnaround for major mining buys. This is why we're wanting/needing a much larger facility... It gets much easier for USPS/FedEx/UPS/DHL if they can back a truck up to your shop and have you put the products into their LTL carrier than it is for us to drive a car/SUV/truck to their facility and pray we get someone that can pick up all the packages in a timely manner.

Benny,

could you share your experiences doing group buys?

Apparently if one of us participates in your group buys and then sells the hardware on Ebay it makes us your clone. Also, will you continue to offer group buys after the IPO or will that part of the business be changing?

1. I will put the dividend schedule up to vote after we IPO. We will calculate dividends on a quarterly basis, through Sept. 30th. We can either do a lump sum payment every 3 months, or do the calculation every 3 months, and pay out bi-monthly (twice a month, similar to how we've paid out since last October). The reason we're looking at 3 month calculations is due to net-30 payments from vendors. Dividends would vary wildly from month to month if we, say, had a $100,000 payment from a wholesaler (Micro Center), then next month we show a ~$50,000 loss because we've had to pay for hardware up front.

2. I will be contacting the LTCI passthrough holder to see how he feels about passthrough interactions with havelock, and transporting shares to Havelock.

3. There are 2 UK operations, actually. There was/is buyahash.co.uk - This was run by someone that was very interested in starting a franchise model in the UK for our products. Unfortunately, he and his partner decided to split. The other partner (and the webdev that we've used for buyahash.com) went on to form Cryptobase.co.uk. I believe this is where that strange, errant code comes from on our website. My thinking is he copied some of the store code, and that is an artifact.

Generally, we've sold them products at a small markup, and have generated a reasonable amount of capital from them. The owner of buyahash.co.uk owes us franchise fees, but has failed to pay them for months, and I have been unable to contact him in quite some time. We've lost no money on the deal, as they paid up front for all hardware. But we agreed to a 10% premium on all products sold, and they've failed to pay that (about $10,000 USD last I checked).

4. Its slightly high for utilities. We're at a small commercial location at the moment with 400a/208v service, and the cost for electric is about 11.1c/KWh. We can get it down at this location to about 7-8c/KWh, but that requires (as far as I know) about 50KW of usage, and we haven't quite hit that. We easily could if we wanted to do full deployment at this location, but since we're working hard on getting a new location, I'd prefer to delay any additional infrastructure payments until we have a more permanent facility. We currently lease the building we're at for $900/mo + $300 in utilities.

5. Postage & shipping supplies was about 5% of our revenues in 2013. I believe this will decrease as a percentage of profits going forward, as we're leveraging contracts with DHL (for international shipments) and working to broker more deals with FedEx for domestic/large sized packages. One area of our business that has great success is that we offer free shipping to customers. For Amazon users, this means prime-type speeds without the insane markups that Amazon charges to get products within the Prime service.

I haven't got numbers back from our accountant, but I would think that we should see a slight decrease in postage costs as a percentage of gross revenues. Hopefully, we can target about 2.5 - 3.0% going to shipping/logistics services in the near future. Again, this is mostly a volume issue, and we can broker cheaper deals as we continue to grow. We've already managed to get DHL to drop prices another 30% within H1, and I believe we can get it down even further.

To give you an idea on shipping costs (since I deal with it every day, and tend to be excited about cheaper costs):

<13oz of risers/cables in the US - $3.09 + packing materials
3lbs of ASICs (USBs or Grid/R-Boxes): $5.10 - $9.95
AntMiner S3: $11.09
1lb Economy Worldwide Shipment: $15.83
5lb Canadian 3-day shipment: $41.03
10lb Australian Shipment: $71.03

And so on. Free shipping costs us very little to do in the US. We're still working on how best to compute international prices, as we do charge for internationals ($10 for economy, $50 for DHL). Sometimes, we can lose a fair bit of money on internationals if its a mid-sized item going to Eastern Europe/Scandinavia, but other shipments can make up for it. I don't have the report handy, but I believe in 2013, we charged about $2,500 in shipping to offset the $20,000, and I believe that margin was higher in H1, further illustrating savings on shipping.

Whats the dividend schedule after all shares are distributed?
Litecoininvest.com BAH.C-PT is not run by you. Is the passthrough valid with share transfers to/from Havelock?
Recent new fans of your business found a UK operation hidden deep inside BuyAHash website. Whats the relationship with this UK store? How does their sales affect BAH profits?

Financial report 2013:
Utilities - Other was $11,500. Is this high or low for your area and operation?
Postage and Delivery was $20,000. Is this only getting more expensive as the business grows?

I want to know how acknowledging time of birth is pertient to running a business.

We've already answered more questions than any single issuer on any thread. We've had more personal information posted on this forum than Neobee/bitfunder/ect yet have had no investor complaints or concerns about our busines practices. Only outside individuals who are digging up dirt.

1. We're in negotiations for purchasing it. We've already won the auction and placed a down payment on the building. I will be approaching a few lenders next week about finishing financing on the building. If all goes well, we will have the deed to the building before we request a single BTC from Havelock. I would note that the reason we are seeking to buy it is because we can lease out a portion of the building (which will be far too large for mining/distribution) and fully offset any leasing expenses that we would face at the facility. The end goal is to have the company pay for no mortgage, no lease, and very few upgrades at the building - hopefully allowing for easier balance sheets that simply focus on mining revenue, hardware sales, and basic COGs/Overhead expenses.

2. It would help ensure that we can close the deal if any additional capital was/is needed for facility acquisition. As-is, the building is usable for retail/distribution, but not for larger scale mining. The facility is equipped with, at a minimum, 800a/208v service, but we need to continue investigation of the current capacity to see what maximum deployment is when we move in.

3. We will likely cut out the current HVAC equipment to be moved to the new facility. Furthermore, the facility is already equipped with a large number of air handlers/compressors. It was a former hardware sale company (think Lowes, but a mom & pop building). Regrettably, we could have purchased dozens of HVAC units at a fraction of retail when they liquidated the assets of the company. But there is still a reasonable amount of hardware available for utilization upon move-in.

4. We continued to pay out dividends regardless of where the facility was. Since our pivot involves a more retail-centric offering, we can put money into hardware resales, while ensuring that the HVAC/electric is done in a proper way. Once that is done, we'll leverage liquid capital from hardware sales to move into mining. Even then, I believe that we can broker a deal with companies like ZeusMiner that are willing to sell (or even give) you hardware if you're willing to split coin generation with them. This could be a scenario where the investor pays only for HVAC/electric installation, while we leverage said deal and merely pay for electricity - offsetting any hardware costs that the investor could occur while waiting (and losing) potential mining profits.

Whats the status of the 0.04c/kwh and 68k sq ft building?
How does a successful IPO affect the timetable or progress of this lease?
What happens to the old HVAC and electric equipment after you move the operation?
Last time you built a mining facility the construction seemed to take couple weeks too long cutting into profits. Will this time be better?

I did a deep research of your company and offering, i think that there is a small chance still to money grab trurnout.

I hope your company will be one of stars of havelock, paying dividens and have share price going up not down.

Maybe i will invest small part in this.

I just have their sig, not for small btc i get from them but becouse i support them, i made few deals with them and i know that they are honest and polite people.

I'll throw my hat in the ring for BAH. Benny has gone above & beyond for shareholders throughout this last year. He could have taken the funds and ran after LTC-Global kicked the bucket but he continued to make direct payments to shareholders.

Full disclosure: I own shares in BAH.