Topic: [Havelock][KCIM] Korb Investments – Establishing my Investment Firm, part 1 - page 6. (Read 30912 times)

Korbman,

Will your buy back schedule for the fund start after you receive the Jupiter unit or only after you receive all you outstanding equipment?

Thanks

Sure!

Butterfly Labs:
4 x Single SC 60GH/s - #16100 [January 8th]
4 x Single SC 60GH/s - #16252 [January 10th]

KnCMiner
1 x Jupiter 400GH/s - #855 [June 4th]

ETA of the BFL equipment is always unknown and unpredictable, but at this point I'd say within the next 2 months. It really depends on how they ramp up and start delivering the Singles.
ETA on the Jupiter is still either September or October. More on this coming within the next few weeks as KnC releases new info, updates their queues, and gets their chips.

Korbman,

Would you please kindly summarize what equipment the fund currently owns / ordered (ETA of equipment).

Thanks.

Ha, very true. I suppose I haven't posted an update in a while, other than updating the first page and my website!

Chip Credits:
My account has been credited with 176 BFL chip credits; 128 belong to the Fund, and the other 48 are mine from my personal purchases. My initial thought was to sell them, but that's been put on hold. Instead, they'll probably be used for something bigger

KnC:
Ah, yes, good 'ol KnCMiner! They seem to have really taken off after partnering with ORSoC, and their Open Day QA session really helped gather momentum behind their initiative. As it stands right now, a single Jupiter has been purchased, pay-dated June 4th, 2013 and order #855 (though that's subject to change as the old unpaid orders get cleared out). Hopefully we get some more good news over the coming week or two on queues, shipping dates, and a status on manufacturing. If KnC can pull this off, they'll be the new standard for high quality mining equipment, leaving both BFL and Avalon in the dust.

As it stands right now, the Fund owns 880GH/s worth of equipment. That alone should sustain us, but if it's on shaky ground (financially speaking) I'll add my processing power to the mix as well.

Feels lonely in this thread just felt like checking up after a month and wondering how it's going with BFL chip credits and KNC

Makes sense I see ASIC doing auctions now and then so I was thinking it was better to have something running and hedge your bets but I do hope that BFL ships for you guys, they were at the convention was watching their product  in one of the livestream videos so I do hope they do deliver soon
http://www.ustream.tv/channel/flippro?utm_campaign=t.co&utm_source=12122863&utm_medium=social
Thanks for the quick reply

I've definitely considered that in the past, but during the timeframe when I was making purchases there wasn't a whole lot of information to go on with all of the vendors. BFL was "shipping soon" (as they always are), Avalon Batch #1 was closed and due to ship in a few weeks, and ASICMiner wasn't in the picture yet. To that end, for the quantity I was ordering, BFL products had the added benefits of A) space, since the miners are smaller than Avalons, and B) better power consumption.

Based on what I knew at the time, it was a better business decision to allocate the majority of funds to Butterfly Labs products.

Maybe do the same thing Lightbox did not an investor but watch it on havelock and try buying some Avalons from ASIC instead and assume BFL will not ship for ages if at all

Essentially, except the BFL equipment prices have nothing to do with it. Equipment was bought ages ago, it's just all about receiving it now.

The Notes are structured based on when equipment is received from BFL. Initially it seemed they were getting ready to ship, so extending the period by 3 months didn't seem like a big deal...but as we saw, that's not the case. The end result: If we continue on the current schedule (without the update) we're going to hit a BIIIGGG wall called "no viable revenue" and fail to make timely payments (or payments at all), unlike what I have been doing for 6 months now. This update and the latest Amendment draws attention to this fact to see if we can get it resolved sooner rather than later.

In other words, "we don't have equipment and our NAV has fallen because of the BTCUSD rise and BFL prices their units in USD, so you have to accept our update or you get a fraction of your investment back".

Hello All!

It has been quite a while since my last [major] update to everyone, so I figured it may be good to get this going again…though admittedly there is another reason for this update, but we’ll get to that shortly.

The past 3 months have been quite a ride for Bitcoin, but for two pertinent reasons:

•   Butterfly Labs has yet again delayed (surprise there, I know) even though they should be shipping soon, and in the meantime Avalon has proven to be a worthy ASIC contender as they finish up shipping their first batch (with more batches on the horizon).
•   On top of that, we’ve seen a monstrous rise (and fall so far) in the value of Bitcoin to fiat.

What this is all alluding to is another contractual amendment, and unfortunately this is one that I am forced to make without exception. The reasoning for this change stems from the changes that have taken place over the past 3 months.

As we all know by now, Butterfly Labs hasn’t ever stuck to their deadlines. In January (when I ordered the hardware) I figured this would probably be the case, hence the first Contractual Amendment extending the buyback timeframe by 3 months. As we’ve all seen, 3 months has come and gone...and even though Butterfly Labs has made progress, we still don’t have anything to show for it.

How This Relates: The update to the contract will not simply extend the period again, but will create more of an indefinite timeframe instead; one that is contingent on when the equipment is received. In hindsight, this is how the contracts should have been created to start, but I suppose I had more faith in Butterfly Labs than was warranted. The contractual overview at the end of this update will go into more detail.

The second part to all this is the vast Bitcoin valuation increase. It has increased so much that it is impossible for me to continue converting my personal [real-life] savings into Bitcoin to cover interest on a monthly basis. HOWEVER – I had enough funds stocked up prior to the increase to cover us for another several months, and a number of other personal investments have turned out quite well. Naturally if the price corrects to a much lower value, I will buy up as many as I can to help extend this timeframe (something I’ve already started to do).

How This Relates: The minimum interest rate has been decreased from 1% to 0.5%. Though I do not foresee a need to actually implement the change (everything is still the same 1% per month), it does give me more flexibility should any unforeseen financial events take place in the Bitcoin community or in my personal life.


Similar to before, an Investor is required to agree to the Contract before it is fully implemented. The same process will occur, with a survey being released shortly to gather information from investors. The link to all this will go out through the KCIM updates section on Havelock. It is absolutely imperative that all Investors reply, otherwise your presumed response is “Agree” (just like before).

Should ALL Investors choose NOT to accept the terms of the contract, the result will be company insolvency as I will not be able to make the currently agreed payment schedule. If this were to occur, all ASIC equipment orders purchased with company funds will be refunded from Butterfly Labs, Inc for their USD amount and then converted into Bitcoin at whatever the market rate is at the time, as well as accounting for any exchange fees during the process. From there, all Bitcoins under the KCIM ticker (company reserves, personal investments, and equipment refunds) will be distributed based on the number of Notes held per Investor out of all outstanding Notes.
For example, if there were 1000 Notes outstanding and you owned 100 of them, then you would be entitled to 10% of all remaining funds. If there were only 200 Bitcoins after a full liquidation, you would receive 20.0 BTC (your 10% share).

If you CHOOSE not accept this contract update (but the majority of others do accept the change) then YOUR Notes will be purchased back as if the entire company went insolvent in NEARLY the same scenario above. Meaning if you choose not to accept the contract you will be paid based on your percentage of ownership in the equipment.

The difference here is that the payment to you would not only be out of the company reserves and my personal funds, but you’d also receive a PART of what would be received had I gone the route of a full refund from Butterfly Labs.

In other words, if you owned 100 Notes out of the 1000 outstanding, you would still be entitled to 10% of company funds on hand. If 900 Bitcoins (out of the 1000) were used to buy equipment, then your contribution is 90 Bitcoins (10% of the total equipment cost). Assuming 200 Bitcoins remain after a partial liquidation, you would receive 10% of the total reserves MINUS your difference on the contribution…200 * 10% = 20.0 BTC – ([100-90] * 10%) = 19.0 BTC

Use this equation to help determine how much you would receive:
[# of shares you own / 907] = X
[# of shares you own – [# of shares you own * (750.4684 / 907)]] = Y
200X – XY = Your Return. Round to 3 decimal places.

In this case, the 200 may vary as it comes from what I have on hand during buybacks.
   
The reason for this is because we’re essentially liquidating your contribution to the equipment, while keeping everyone else’s investment intact, even if it means selling off part of the total equipment purchases (as opposed to all of it).

In the end, this isn’t something I want to do. Ideally, we’re going to keep chugging along, fighting through Butterfly Labs’ nonsense along the way.

Here is the current link to the contract:
https://docs.google.com/file/d/0BxnW49twNMNbX01vV0ZmSVN0N0k/edit?usp=sharing
As always, I strongly urge all Investors to read it.

Here’s a breakdown by Section for an easier read:
Section #:
1.   States that this is the second amendment to the original contract and overrules the first amendment. I briefly describe the purpose and reason for the change, noting Third Party influences (delays) and current financial infeasibility.
2.   Here is where I describe the changes I propose, which focuses on the second and third sections of the original contract, but changes are also made to the fourth and sixth sections (which should have been changed before to make sense with the later Amendments).
     a.   Interest at 1% has been extended indefinitely, essentially meaning I will keep paying it until we receive our equipment or I choose to buy back the Notes early. Interest is at 2% starting 2 months after receiving the equipment. Interest is increased to 4% 10 months from the receive date. Interest is increased one last time to 6% for the final months, concluding 14 months after receiving the equipment.
     b.   The minimum Interest rate has been lowered from 1% to 0.5% to grant the Borrower flexibility during extreme financial pressure or other unforeseen events.
     c.   Principal payments no longer begin in June 2013. Instead, they have been pushed back indefinitely, being 100% contingent on when the equipment is received. Two months after receiving the equipment, the previous schedule resumes, where they start at the normal 1.10BTC per month for 7 months. After which starts the purchase at 1.15BTC per Note lasting for 3 months, and the next two months after that marks the final purchase of 1.20BTC per Note.
     d.   The fourth section has been updated, specifically to reflect the change in the Principal payment schedule.
     e.   The sixth section has been updated to reflect the change in End date.
3.   The Amendment is valid as of May 1st, 2013, which marks greater than seven [7] days after I give notice (as per the original contract).
4.   In the event of a conflict between the original document and the Amendment, the Amendment governs.
5.   The other unchanged parts of the original contract are still valid.
6.   The original document and the included Amendment now constitute the Final Agreement.
7.   This Amendment may be modified after agreeing with both parties.
8.   In the event of illegality, unenforceability, invalidity, etc, the remainder of the contract and its Amendments are still valid.
9.   Electronic communication (or other forms of communication) is valid statements of agreement, recognized in the same effect as a signature.
10.   You confirm you have the power to agree and bind to the contracts outlined.
11.   [Self Explanatory]

As always, feel free to express any comments / questions / suggestions you may have. There will always be something I’ve overlooked, and I’m more than happy to hear other ideas put on the table. Thank you to those that stick with it, as you'll understand this is just a rough patch in an otherwise successful venture. We've made it this far, and I don't see why we can't make it all the way.

Cheers,
-Andrew

Happy March everyone!
I figured it was about time I gave everyone a company update.

As everyone should know by now, 8 Single SCs were purchased with company funds in January (order numbers 16100 and 16252). Since then, I’ve had more than enough funds to purchase 3 (maybe 4 if this rally keeps up) more Singles, but at this time I would rather wait until the orders we already have are filled.

That said, there’s really no point in continually selling Notes when it’s really just going to sit in the account for me to pay interest on (which is great for investors, but not so great for me).
On March 8th, 2013, Lightbox (James, the Havelock manager) has agreed to pull any remaining Notes off the open market for KCIM.

All this means is that no new shares can be purchased, and instead people will have to buy/sell shares from each other instead. This also has the benefit of stabilizing my finances a bit since I’ll know the exact amounts I’ll be paying for dividends (and eventually buybacks) each month. So, if you wish to purchase from the fund itself (and not from another investor) this will be your last week to do so.

Speaking of buybacks, I currently (still) have them slated to start on June 1st, 2013. Even given the continued Butterfly Labs delays, I am unsure if pushing this timeline back (again) is warranted. Assuming BFL manages to start shipping this month, I will more than likely receive my personal equipment (2 Singles ordered back in August and November, respectively) before June. This has the benefit of adding a bit of funding before the January orders come in, which will help.

If anything, my first option here is to modify the current Buyback Rate (the percentage I purchase back each month). To maintain solvency without any mining revenue, I can lower the rate to 5-10% instead of 20-25%. This means I would purchase back fewer of the outstanding Notes, leaving more in investor hands. As you may surmise, this is better for you and worse for me since I’ll be paying out more interest to more people.
Regardless, I think this option is better than drafting up another contractual amendment for everyone to look at and agree to.

Other than that, I’m sure everyone has notice that they’re received their February interest payment. The March payment is scheduled, so everyone should be receiving a notification about it soon. The latest company documents can be found under the Company Docs and Links section, and this includes the Korb and Co. Investments Financials up through February.


As always, if anyone has any comments, questions, or concerns please feel free to get in touch with me through this thread, email, or PM.

Cheers,
-Andrew

Hmm, it does appear that I'm down. Thanks for point that out, I'll check up on it and see what's up.

EDIT: It's the whole webs.com network that's down, so no worries. When they're back up, I'll be back up.

EDIT #2: Back up and working as normal.

Is KorbInvestments.com site down?  Maybe it is a President's Day server issue.

I am interested in reading some docs before my next buy in.

I noticed I didn't get my normal email from Havelock notifying that Dividends have been paid. Anyone receive the email? Just making sure it's not just me before I get in touch with James.

Anyway, don't fret if you haven't received the email! Dividends have been paid. I just checked the Fund Manager side of things and everything is looking good, so it seems that the emailing aspect just hasn't happened yet.

EDIT: There was an issue with the mailer on the server, which has now been resolved. Investors, you should be receiving notifications from Havelock again.

Thanks for the update, I think I may grab a few additional shares.

Just released a company update, including info on the recent purchases.

Two most important updates, however, are:
1) Updated my previous network analysis using January statistics (previous revision was in October). I'm predicting an initial rate of around 270TH/s now (up from 217TH/s). A link to the update can be found on the first page under the Company Updates section.
2) I've submitted a preliminary outline of my company financials, a link to which can be found on the first page under the Company Documentation section. It would be best to download the Excel file as it's formatted better that way. Naturally I don't expect it to be perfect, but I am looking for input or corrections as time goes on. I've included an updated payment schedule under the Analysis tab on the sheet, which outlines the coming 14 months in detail.

Cheers,
-Andrew

Given the recent USD/BTC rally, I've made the last purchase of four SCs a bit earlier. Saved about 14 BTC in the process

I'll post another update for investors with the receipt later today.

Cheers,
-Andrew

Not just a Single .. Four to start

I'll update the fund with the receipt later today. Either Friday or early next week I'll make my next purchase of 4 as well.

seems you ordered a single? https://bitcointalksearch.org/topic/m.1441767