Bitcoin Forum

Previous Thread: https://bitcointalk.org/index.php?topic=112232.0


Ladies and Gentlemen, recently I’ve been seeing that many funds are closing down and liquidating, while others switch to Litecoin mining. With the lack of a prominent exchange and concerns of legality, there’s been a stifling of Funds within our community. It’s a shame to see this all happening just as we began to experience the interesting businesses and creativity that resulted because of a well known Securities Exchange.

I, however, am not normally deterred by such circumstances. I’ve been determined to see my idea through. Instead of letting it fall by the wayside, I’ve reinvigorated my company, changing the corporate structure, writing formal documents for use within my Fund, and updating my old website.

As a result of my persistence, I’m proud to announce my new partnership with Havelock Investments [HavelockInvestments.com (http://havelockinvestments.com)] for hosting the renovated, more formal, Korb and Co. Investments Mining Fund [KCIM] (https://www.havelockinvestments.com/fund.php?symbol=KCIM)!

Most of the posts below this one will be similar to what we saw on my old thread, except now we have formal documents, a website, and greater detail!

NOTE: I figured I should make this clear in the introductory post…this is not an “invest for a perpetual GH/s amount” fund…this is not an “I pay a billion percent per week or month from my Ponzi” fund. This Fund is a “Put money in now, wait 6 months, receive more money back plus monthly interest”. In other words, a short term investment (mostly under 1 year).


!!IMPORTANT!!
After discussing my options with Lightbox (Site Manager of Havelock Investments) and a few of the members on this forum, I have decided to take some advice and limit my Fund a bit. Due to current market conditions and the unease amongst the investing community, I have cut my current market cap from 50,000 to 10,000 Notes, which will allow for the purchase of 2 Mini Rigs. If market conditions improve and the Fund does well over the next two months, I will increase the market cap with another offering.

I have updated all contracts and financials accordingly. Financially, instead of buying back 30% of Notes per month when the time comes, it is actually more feasible to purchase 25% at a time. This means a greater return for investors as they won’t have as many of their Notes purchased back at a time, thus more interest on outstanding principal.

As of 12:00pm (noon) today (October 26th, 2012), my Fund will officially be live! The initial offering has been established for November 1st, 2012 at 9am. This offering will continue until 4pm on December 31st, 2012 or until all Notes are purchased. During this time, all Notes can be purchased for 1.0 BTC each. Interest will begin to be paid to holders on the last day of November.

The sooner investments are made, the sooner I can submit my orders for the mining equipment!

Contracts:

Here’s where we get serious.

The previous contract I had created…though more substantial than most other funds…wasn’t cutting it from my point of view. As a result, I spent about a month drafting, revising, and fine tuning new documents that will help to cover all bases.

The contracts and informational documents I’ve created have one ultimate goal: To Ensure I’m Held to High Standards

To that end, I will link each document in this post and then give an explanation of what the document entails in normal “conversational” speak, compared to the formal language I used when writing up each one. Under each contract area I will denote ‘Section Numbers’ that will correlate to the section in the document. It would probably make the most sense if you read (or reference) the docs so the answers I provide make sense :P

NOTE: Each of these documents can be found on my website under the “Investors Area” as well. I reserve the right to modify/update them until the day before the public offering of the Fund.



Letter of Intent (https://docs.google.com/open?id=0BxnW49twNMNbYnhCX0VWMFdiYWc)
Revision 4.0 – Last updated October 25th, 2012
Though the Letter of Intent may resemble a contract, it’s actually a legally non-binding document that sort of acts as a prelude to my General Agreement. In this case, it’s to give a brief overview of my obligations and what I expect of Investors as well.

Section #:
1.   The proposed transaction lays out details of what is expected from both parties. Essentially saying that after purchasing into the fund I will provide all documentation and manage everything to the best of my ability under any circumstances.
2.   Each transaction (“share”) is valued at 1.00BTC and held in the fund.
3.   The idea here is to invest with the fund before the end of December 2012 (so I can have a solid understanding of how many Notes are left, publicly held, etc). [NOTE: I may extend this date out by a month depending on the general market sentiment].
4.   Essentially states that if you agree to the proposed transaction, then I know you’ve done your due diligence.
5.   States that you will notify me when ready to proceed…but this isn’t necessary since it’s all based on a Fund.
6.   The document is non-binding, but references to the Final Agreement, which is in the Secured Promissory Note agreement.
7.   If you want to know anything about the Fund or my Company, ask and I’ll fill you in.
8.   No matter what happens, we each cover our own expenses.
9.   Again, not legally binding and you can withdrawal at anytime (essentially just not investing in the Fund).



General Agreement (https://docs.google.com/open?id=0BxnW49twNMNbS3BmblhwbGw3Y0E)
Revision 4.0 – Last updated October 25th, 2012
This is the contract leading up to the Note. The premise here is reaffirming what was stated in the Letter of Intent, but instead as a legally binding document.

Section #:
1.   Describes my Obligations to investors, including transparency, Fund and Company management, and promise fulfillment.
2.   Describes what I am expecting of Investors. Obviously, investing in the Fund is a key part here (otherwise none of these docs would apply to you). IF you are looking to purchase 1,000 or more Notes, I ask for your identifiable information (name, address, phone, etc). The ONLY PURPOSE for this is to make sure my top investors are taken care of first. I want to make sure that I know who you are just as you know who I am, and in case anything goes wrong I know who to get in touch with as quickly as possible.
3.   States that I [Andrew Korb] will represent my company in all dealings.
4.   If an event happens that is outside of either party’s control, neither is liable. Notify the other party of the impact as a result of the event and make a reasonable effort to maintain obligations.
5.   Since I live in Vermont, I will abide by the laws of my State.
6.   No changes to the agreement will be made unless otherwise agreed upon.
7.   Rights/obligations within the agreement can’t be transferred between people unless agreed upon.
8.   The Bitcoin address you use when investing counts as a signature, agreeing to the documents I’ve laid out.
9.   If something happens that makes part of the contract illegal or invalid, the rest of the agreement will continue as long as feasibly possible.
10.   If you want to talk, there’s a ton of different ways to do so.
11.   Nothing can be cancelled unless we both agree on it.
12.   States that this document is agreed upon and you weren’t forced into it.
13.   [Self-explanatory]
14.   Once you invest, the agreement becomes effective.
15.   We’ll both try our best to be awesome.



Secured Promissory Note (https://docs.google.com/open?id=0BxnW49twNMNbSDB5VkltQnpOYUE)
Revision 4.0 – Last updated October 25th, 2012
As the Core of the Fund, this contract is the most important because it assigns legally binding obligations to ME and only ME. Each “share” of the Fund is in effect a ‘Note’, granted by this contract.

Section #:
1.   I promise to pay back the original principal plus interest to the Bitcoin Address that you provide me or otherwise update during the lifetime of the Note.
2.   Prior to March 1st, 2013, monthly coupon rates are 1% and distributed on the last day each month. From March through September, the rate increases to 2%. From October through November, it goes up to 4%. Finally in December it goes up to 6%. Interest isn’t distributed on principal already paid. If for some reason I am not able to maintain stable payments (Force Majeure, “Acts of God”, or otherwise), I reserve the right to modify the interest rate to reflect the current circumstances (higher or lower, but will never go below the minimum) as a last resort to maintain financial stability and payments to investors.
3.   I will start paying the principal back after February 28th, 2013 on the first day of each month, starting at 1.10BTC from March through September. October through November warrants a 1.15BTC Note buyback. December through the beginning of January increases the buyback to 1.20BTC per Note, and all Notes will be bought back by then. If for some reason I am not able to maintain stable payments (Force Majeure, “Acts of God”, or otherwise), I reserve the right to modify the principal rate to reflect the current circumstances (higher or lower, but will never go below the minimum) as a last resort to maintain financial stability and payments to investors.
4.   First interest payment is the end of November, and the first principal payment is the first of March 2013.
5.   Should I have excess funds, I reserve the right to buyback any outstanding Notes before maturity (March 2013) at a rate 1.005x the Par Value [1.00 BTC].
6.   Everything will be paid back and finalized by or before the last day of January 2014.
7.   Details of how the Secured Promissory Note is “Secured” are detailed in the Security Agreement.
8.   In the event of default the Investors are notified….
9.   …and everything is liquidated to pay them back.
10.   In short – I mess up, I can get sued.
11.   [Self-explanatory]
12.   This agreement applies to any successors should something happen to either Party.
13.   If you want to talk, there’s a ton of different ways to do so.
14.   I’m abiding by the laws of my State.
15.   This Note is the Final Agreement, superseding all others.
16.   Just because the Investor doesn’t do anything, doesn’t mean they gave up their right.
17.   I’ll cover any costs associated with Investors getting their payment.
18.   If something happens that makes part of the contract illegal or invalid, the rest of the agreement will continue as long as feasibly possible.
19.   [Self-explanatory]
20.   [Not a Section] – By investing in the Fund, your Bitcoin Address represents your signature, stating your agreement to the terms herein.



Security Agreement (https://docs.google.com/open?id=0BxnW49twNMNbbXc5MlRVRHpnRFk)
Revision 3.0 – Last updated October 25th, 2012
This is sub-agreement to the Secured Promissory Note, detailing how the assets purchased with Investor funds will be “Secured”.

Section #:
1.   Investors have a secured interest in all assets (inventory, equipment, etc) purchased as a result of the Note. I value the 2 Mini Rigs at the Fund value of 10,000 BTC, which I am obligated to secure.
2.   The collateral will be kept at a datacenter (TechVault) near me unless otherwise not feasible (financially, logistically, or as a result of outside influence). I will not do anything with the assets unless agreed upon. I will maintain all assets to the best of my ability.
3.   Should the Company go into default, the assets will be liquidated to cover Investor expenses.



Amendment to the Secured Promissory Note (https://docs.google.com/open?id=0BxnW49twNMNbSVhHamJkZ1VtZmM)
Revision 2.0 - Last updated December 30th, 2012
This is an amendment to the Secured Promissory Note, detailing the payment schedule changes and extensions as a result of ASIC manufacturer delays.

Section #:
1.   States that this is the first amendment to the original contract. 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.
...a.   Interest at 1% has been extended by three [3] months, going from November 2012 to the end of May 2013. Interest is at 2% from June 2013 to the end of December 2013. Interest is increased to 4% from January 2014 through March 2014. Interest is increased one last time to 6% for the final months of April and May (though everything should be purchased back in April).
...b.   Principal payments no longer begin in March 2013. Instead, they have been pushed back to June 2013, where they start at the normal 1.10BTC per Note until the end of December 2013. January 2014 starts the purchase at 1.15BTC per Note, and April 2014 marks the final purchase of 1.20BTC per Note.
...c.   An error in the third section has been corrected to note that the Principal rate (previously said “Interest”, which voided that part of the section) will never go below the minimum, which is 1.005x the Par Value (1.0BTC).
3.   The Amendment is valid as of January 7th, 2013, which marks 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]



Second Amendment to the Secured Promissory Note (https://docs.google.com/file/d/0BxnW49twNMNbX01vV0ZmSVN0N0k/edit?usp=sharing)
Revision 2.0 - Last updated April 15th, 2013
This is the second amendment to the Secured Promissory Note, further detailing the payment schedule changes and extensions as a result of ASIC manufacturer delays.

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]

Wow dude you are making such a ponzi!!! What a scammer you are... I will warn every person I know of not to invest in you.. I heard from other people you are planning to make this into a scamming project, and now I want to warn them..

Realistically, the hash rate will start off around 150TH/s and increase to 300TH/s over 12 months.

Fund Overview:
I'm looking to make a purchase of 5 BFL SC "Mini-Rigs" (highest end @ 1.5TH/s apiece). At the current price of $30,247USD each ($29,899 + $348 shipping), purchasing 5 rigs amounts to $151,235USD, which is a substantial goal to meet under some of the best financial circumstances.

To reach my equipment requirements, I am looking to issue 50,000 Notes, priced at 1BTC apiece with a buyback period starting at in March 2013 (Four [4] months after rigs are released to market, Two [2] after assumed arrival time) and extending to December 31st, 2013 (based on funds available).


Ticker Symbol: KCIM
Fund Location: Havelock Investments [HavelockInvestments.com (http://havelockinvestments.com)]
Company: Korb and Co. Investments, LLC
Notes to be sold: 50,000
Price (ea.): 1.0 BTC
Monetary Goal to Raise: $375,000 [Any extra funds beyond equipment needs are used for Early Buybacks]

That estimate is screwed right of the top, first wave is going to be 150th/s at least if not more second wave will hit couple of months later with I will go a conservative 50% increase in units or 225th/s for total of 375th/s. You have time taking on average two months a pop for each wave arriving so that you can look forward to five more before the end of next year, putting us probably over the 1000th/s range in the year.

That would mean about a 21x increase in difficulty over the course of 12 months, bringing the network rate to 450TH/s+. That seems a bit more likely to me. Thoughts?

Oooohhhh, looks like I made someone a bit upset by trashing their Banyan ponzi scheme  ;)

And this part boy that is some interesting math you want to buy $175k of equipment but the goal raising is $375k and actual 50k of BTC is worth ~$600k on the market, you must have went to the gigavps school of math only you increased your take here well they do say improve on the takings teaching..

Totally unrealistic even if it takes four months for the next wave to hit and each one after that the same at 150th/s as the first then you have 600th/s online at year end. I'm thinking the next and each wave to follow will get better at the process and speedier as well so 1ph/s is totally doable next years end. BTW your math still don't add up.

Interesting mathematics. Do you have any proof of work or network analysis to show where you got your data? I'm curious to see what methods you are using to draw your conclusion.

That would be deduced by direct observation of events as they have unfolded. BFL if shipping by end of year will be just about six months into this the other efforts just started a couple of months ago and look on track to ship within the next month or two. From this One can safely assume that a turn around time of four months is possible. Now four months into next year is April 150th/s hits the market on to the next in August 150th/s more then December a merry christmas extra 150th/s for a total of 600th/s to ring in the new year.

Unfortunately this is all speculation as you've only provided your opinion instead of data.  :-\

Not to worry though, I'll be rewriting my initial analysis to incorporate recent data releases and observations. This way, I'll be able to show a more update-to-date trend to back my financials. If you'd like to read my August analysis, it can be found here (https://docs.google.com/document/d/1L8hKZinune9Cc7tWY9Pmx8J17BOxor7QNQAV03xROOc/edit).

Korbman is anywhere but "dreamland". I can't speak to his profit estimates, but he's clearly done his homework, and lays it out for the benefit of all. We need more people like him involved with Bitcoin, and fewer that spout off "take another hit" at the slightest differing opinion.

His money, investments, and use of the aforementioned should be of no concern to you anyway.

And your concern about my concern is of no concern to you, go sock puppet elsewhere. I have seen enough of these damn scams around here this one the mining bond ponzi in disguise not having the forever payment feature. They all amount to the same thing people being separated from their BTC by these grand visionaries whose plans don't even include what is obvious for anyone to see.

Korbman is anywhere but "dreamland". I can't speak to his profit estimates, but he's clearly done his homework, and lays it out for the benefit of all. We need more people like him involved with Bitcoin, and fewer that spout off "take another hit" at the slightest differing opinion.

His money, investments, and use of the aforementioned should be of no concern to you anyway.

I have cut my current market cap from 50,000 to 10,000 Notes, which will allow for the purchase of 2 Mini Rigs.

10,000BTC @$10=$100,000
2x minirig $29,899=$59,798

Left over $40,202/cost of rigs*100=67.23% markup.

This is called a Liquidity (Financial) Cushion (http://www.investopedia.com/terms/l/liquiditycushion.asp#axzz2AVttjKyD).

Uh huh sure it is. Your plan here somehow produces two thirds as much money as is required to pay for two machines. The operating costs on these things even if you rent $800 a month space to place them in paying $200 on electricity giving you $1000 outlay this gives you a 40 month "cushion". Anyone who believes that load of BS can PM me I have bridge in Brooklyn for sale going so cheap I'm virtually giving it away.

Forgive me if this question is answered somewhere else in the thread.  I couldn't see it.

Can you explain in more detail how you will decide which buyback period any particular note will be bought back in?

I notice you made reference briefly to 'the largest noteholders' lasting the longest.  Does this mean the more notes you buy the longer you will have to wait for the larger return?  What if I want out in the first buyback period? or the last?  As a noteholder, will I have a choice?, or are you choosing randomly?

If I understand you correctly,  starting in March, you will be buying back 25% of everyone notes, rounding up, every month until December. The rounding up part will 'shake-out' so to speak, those noteholders with a really low volume.  According to my calculations, I will need to purchase a minimum of 27 notes to make it to the Dec buyback.

Here's a chart illustrating the buyback month along with the number of notes required to make it to that buyback month.

Month	Notes Req,d	Monthly Return
March	1	2%
April	2	2%
May	3	2%
June	4	2%
July	6	2%
Aug	8	2%
Sept	11	4%
Oct	15	4%
Nov	20	4%
Dec	27	6%

My first 10 notes, I will only ever make 2%/month over 6 months plus buyback of 1.10/note.
My next 16 notes, I will only ever make 4%/month over 3 months plus buyback of 1.15/note.
My 27th and remaining notes, I will make 6%/month over 1 month plus buyback of 1.20/note.

That about right?

If I understand you correctly,  starting in March, you will be buying back 25% of everyone notes, rounding up, every month until December. The rounding up part will 'shake-out' so to speak, those noteholders with a really low volume.  According to my calculations, I will need to purchase a minimum of 27 notes to make it to the Dec buyback.

Here's a chart illustrating the buyback month along with the number of notes required to make it to that buyback month.

Month	Notes Req,d	Monthly Return
March	1	2%
April	2	2%
May	3	2%
June	4	2%
July	6	2%
Aug	8	2%
Sept	11	4%
Oct	15	4%
Nov	20	4%
Dec	27	6%

My first 10 notes, I will only ever make 2%/month over 6 months plus buyback of 1.10/note.
My next 16 notes, I will only ever make 4%/month over 3 months plus buyback of 1.15/note.
My 27th and remaining notes, I will make 6%/month over 1 month plus buyback of 1.20/note.

That about right?

Something that I didn't see mentioned but may have missed...is there any risk due to BTC/USD price changes?  I'm assuming that BTC will have to be sold to purchase the rigs, so there is probably some risk there.  Will dividends then be paid using the BTC mined once the rigs are online?  I just want to make sure that there won't be a situation where you need to purchase BTC to make the interest payments or buybacks but can't because BTC prices have shot up to some crazy number like $50/BTC.  I think that sort of situation impacted some earlier mining companies when they planned on getting $2/BTC forever and then BTC jumped to $5/BTC.

Thanks!

So, based on the 27 units example above, estimated profit would be 5.7BTC? not counting possible bonuses/fluctuations?

[....]

An investment professional who can't do accounting-math. Just what we need more of around here, congratulations.

Everyone makes mistakes from time to time. I don't expect you to be perfect either. The important part is that I not only acknowledged the error, but corrected it as well ;)

And for the record, I never made mention of myself as a professional..that would imply I do this for a living. I'm a well-versed amateur with a strong sense for business operations and a heavy background in tech  :D

Compared to most of "investment" schemes we've seen this year, Korbman's has been thought through and presented in detail. The problem was noticed (by Aahzman) and is being addressed. He is responsive to constructive criticism.  I don't know him personally and haven't done business with him, but I like what I see, and I'd say this is exactly what we do need more around here.

Realistically, the hash rate will start off around 250TH/s and increase to 400TH/s over 12 months.

Really I have already pointed out just how wrong this part of the proposal is but he somehow seems to have ignored that. To expect that the first wave of production of these devices is only going to be followed by half that capacity increase in one years time is just so far off the mark it is unbelievable that he continues to persist in using it for any calculations.

My estimates show 300-400 TH/s as the equilibrium after ASIC migration. This will be pushed up or down, depending on the exchange rate, which has historically been the main factor driving difficulty up or down. Mid- and long-term future exchange rates are absolutely unknown.

So only the first batch plus little extra produced essentially. Nobody is going to run a second, third, ..... batch of these things through the production line ever again. Boy I would love to have some of what you guys are smoking.

Running more batches costs money, and something or someone will need to absorb this cost. There are only so many sheep, and only so many coins. Therefore, yes, I expect an equilibrium in (exchange rate per difficulty), assuming no major technological breakthroughs or costly moves to smaller ASIC nodes. Regardless, we should take this discussion to the mining speculation.

[...]

@Niko -- I've usually found it best to just ignore SAC. He's just here to troll my thread  :D

It actually works out in my favor as well since he keeps bumping my thread to the top of the Securities section ;)

Glad to see you've implemented dividends. I look forward to the success of this fund and any other bitcoin related funds. I've invested a decent amount into your fund so I'm hoping for good things.

You'll need more like myself since I own almost half of the shares outstanding.

And for more of a global update to everyone:
Congratulations everyone!  :)
We're currently sold over 580 Notes, with a little over 9400 Notes outstanding.

Just a minor niggle - ignored it first time, as thought it was just a typo.

Outstanding shares/notes/bonds are the ones that have been sold, not the unsold ones.  You have 580 notes outstanding and 9400 Notes issued but not sold.

Oh no!! You seem to be exactly right. I created an excel sheet to calculate it out and I came up with the same answer, which has me a bit concerned given my previous statements. When I originally did my quick calculations, I did it on straight addition...meaning if you have 1 Note and you keep that 1 Note the entire time, then you'll have X% ROI because month #1 + 2 + 3 = whatever %% total.
The reality is that I needed to take a weighted average to get a proper ROI based on the current buyback program, which is [currently] a flat 25% from everyone at a time. If the program was more of a 'round robin' approach, then my original statement would still be somewhat valid.

Thank you for pointing out this huge flaw Aahzman. I will update my original projects and the update section accordingly, noting the differences.

[...] I tend to brute-force it in a spreadsheet, no fancy formulae or functions. just line-by-line simple calcs and adds, to help me understand it. 

You are making some progress, 744 shares and counting! The whole GLBSE mess has certainly turned off many potential investors.

Got the dividends. I planned to reinvest them, however, when I try to buy the IPO, I get an error that the fund symbol is invalid.

The survey seems open to anyone, not just investors. Vendors might see this as an opportunity to manipulate your decision.

Hey guys, I'm evaluating investing in KCIM. After failing to do this by reading parts of this thread for 15 minutes I decided to just ask some stupid question that might help me understand before I haively dive into this:

• why are shares offered for BTC 0.92?

Thanks korbman, niko and deprived for your answers. Especially the google sheet helped clear things up, confirmed some of my assumptions and made me buy a couple of notes.

I still have questions, please excuse if these are naive or stupid... I'm lacking experience in this area.

Other than that, you can't just choose to sell your Notes back to me on a whim at 1.005.

At this point I'd say no, only because there are over 9000 [no pun intended] Notes on the open market being sold at the

The absolutely worst-case scenario for an investor would be continual scheduling readjustments as a result of ASIC [...]

I'm assuming your promise to try to make whole all investors in these bad cases means that on the other hand, should things work out much better than expected, investors will not be payed more either? So there's no chance to make more than planned by good will of fortuna?

If this is the case, then this is about as "non-gambly" as it gets (assuming trust in you and your promises), right? A conservative investment, so to speak?

allright. I think I understood things fairly well now. This was easier than reading all the documents (which I still might do). Now I can evaluate how much I want to put in on top of the bit I already did.

Thanks for your time (for now).

Glad to hear Molecular, and I see you've taken a decent number of shares off the open market ;)

seems you ordered a single? https://bitcointalk.org/index.php?topic=89685.msg1441767#msg1441767

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.

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".

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

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.

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

Korbman,

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

Thanks.

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

Can you be more specific about how you intend to make your investors whole. For example, are you going to pay back the longest bond holders first are you going to buy back shares on the exchange from individuals willing to sell at a loss. Also, how long do you anticipate it will take you to pay us all back?

Thanks Korbman, so if I've been with the fund since Feburary 2013, all of my shares will be bought back before any shares bought in March?

the top 10 people (out of quite a few) own 80%+ of the Notes...so obviously my focus will be on them regardless of how long they've been invested.

I own 11% of the notes and I've had them since 2/13, can I assume I'm one of your top 10?

Buybacks happen from the Management interface I work in, so there won’t be anything listed on the Exchange for people to sell at a loss to.

I've noticed some activity on Havelock, purchases of shares at an extreme discount; .2 -.3 per share. The only person I can imagine this would make sense for is you. That's what I meant by asking if you were going to be buying back shares on the exchange from individuals willing to take a loss. Could you comment please?

I feel lucky that I've managed to sell a number of my units when I did at the prices I did (about 25% of my holdings). Even then, I'm still sure that I probably am your largest note holder (if not, close to it). Having said that, I do wish to see a fair and equitable way to see revenues distributed, but I did probably take the biggest risk of most by investing most of my BTC in your fund day 1 as well as investing some of my own money in the BFL debacle (at least I'll see miners come in the next week probably).

I am guessing that based on what I'm reading, I would be hard pressed to see a break even based on my remaining notes?

What is your sense on the ability of Cointerra to be able to deliver in January?

How does this affect your buy back time frame?

As it stands right now, here's what's running:
2 x BFL Singles (Personal) -- 117GH/s -- @ BTC Guild ***
3 x BFL Singles -- 175GH/s (roughly) -- @ BitMinter
1 x KnC Jupiter -- 535GH/s (roughly) -- @ BitMinter
Total: 827GH/s

your total resources are 827GH/s?

Hey Korbman,

Any updates? Seems you've had an uptick in deposits to your mining income wallet since the 19th. Is that just the one BFL single?

Uut of curiosity, why did you decide to do repurchasing the way you are doing it rather than repurchasing at discount from the open exchange orders?  Wouldn't everyone benefit most by clearing the maximum number of outstanding shares possible?  Why take N shares off the market when you can take 3N or 4N shares off the market providing increase value to everyone? 

I'm not complaining.  I'm just curious what the thinking is.

I've been trying to strike a balance between keeping to my word and being practical, though it's certainly easier said than done. I'm more than happy to look into another method if someone has an idea, just let me know.  :)

Thanks.  I was just curious.   Perhaps there should be some threshold whereby you prefer repurchasing shares from the exchange at a discount?  I'd rather see each 1 BTC go towards buying back 3 or 4 shares than 1 share.  That increases everyone's expectations in the long run.  But, that may simply not be possible due to commitments you've already made.

It's a good question, and one I often rethink since there are quite a few ways that repurchasing can happen.

As everyone knows, the original set of contracts had to be voided in order to completely overhaul the way the repurchasing occurred (otherwise insolvency would have ensued)...but I truly wanted to keep to some semblance to what I had originally thought out. Add in the fact that most people purchased during the 2012 IPO at BTC1.0 and it made sense to try and stay above that. That's where the notion to buyback at the "minimum" of BTC1.005 per Note came into play.

But is BTC1.005 a good number to work with? I'm not entirely sure. It certainly has its benefits for those who are seeing some of their Notes bought back every 2 weeks. If I switch to a repayment of BTC0.5, I'll then be able to buy back twice the amount during that same period...but I'd wager that investors wouldn't be happy with that decision since the majority bought in at BTC1.0, even if it meant more people saw the benefits.

I've been trying to strike a balance between keeping to my word and being practical, though it's certainly easier said than done. I'm more than happy to look into another method if someone has an idea, just let me know.  :)

Does that help?

If he starts using his limited incoming BTC to buy from the market at 0.001 etc. prices, what incentive does he have to fulfill his original commitment to repurchase the shares at 1.005? In that case he's going to feel a temptation to stop or delay the buyback so that people will get frustrated and list their shares on the market at a steep loss. (I'm not implying that Korbman would do this, just that the temptation would be there, and that it's a situation that no issuer should be put in.) I strongly believe that in order to avoid potential conflicts of interest, Korbman should not be buying shares on the open market at this time.

Swapping debt for equity would align our interests. Take your bonds off the market, use an equitable formula to re-assign shares based on amount invested (I assume between you and Havelock this should be possible, and I don't mean 1 note = 1 btc), and start paying out profits weekly or monthly. I know it sounds a bit chapter 11, but think of it more as a sovereign debt restructuring (ie Argentina 2002). We become partners for as long as we can keep mining. What do think?

All the rest of you, read the previous posts. This has all come up before.

Sorry.  I didn't see it really discussed much prior.  I'm not an original investor, and my stake is very small.  I still don't understand how anyone could support using 1 BTC to buy out 1 share when it could buy out 3 shares, unless they were blinded by greed under the expectation that they will collect 1 BTC at the expense of all the other investors.

But, as I said, I have little skin in this game.  I was just trying to understand the thought process.  Fortunately the Havelock market while weak, still exists, and I can exit my position at any point with relatively little loss.  That's something many of you guys can't say, so I really can't criticize too much. 

Thanks for the endorsement supermono.

Actually the terms of the original contract were not what is currently stated on the overview at Havelock. Originally:

Each Note will have a Coupon Rate of 1% per month until June 2013, during which the rate will increase to 2%, until January 2014 when it goes to 4%. In April 2014, the Rate will increase one last time to 6% to pay back the final Note holders.

The starting buyback price will be 1.10BTC for the first 6 months (June - December 2013), 1.15BTC for 3 months (January 2014 - March 2014), and 1.20BTC for the last month of April. This would mean a 17 month holding (November 1st, 2012 to April 30th, 2014). The largest Note Holders will receive the most return on investment as their holdings will last the longest.

So the terms were quite appealing and the intention was always to reward the longest note holders. Clearly, everything changed.

Also, even though Havelock does not have a mechanism for shareholder voting, Korbman has made changes to the contract that he has presented to the shareholders on this forum for a vote, so something similar could occur again.

Finally, trading continues currently on what amounts to a secondary market that really only benefits new players. Again, someone bought 4 shares at .001 and sold them at .04, or .09 (minimum), possibly higher; either way, not a bad return. But none of the long term, original investors are participating in trading at this level, it wouldn't make sense. So we just hold onto our shares in hopes of hitting the lottery every two weeks.

There is no reason trading can't re-open after restructuring, allowing individuals to exit or buy in but I really think an equity swap is the fairest thing at this point.

Didn't even know about XBOND. Glad I got out of that rascal.

Certainly, we're in unchartered waters.

If you start buying on the market you are rewarding those who came in late, at a discount who are trying to flip their shares. If whoever bought 4 at .001 sold today at .34 to an uniformed investor - god bless. But if it was you, that sucks for rest of us.

I don't see why you think you deserve special treatment over the person who got a share for .001.  A share is a share.  It doesn't suddenly become worth less because it was traded.  I wasn't under the impression that this is a pyramid scheme where people at the top get all the rewards where people at the bottom are left with nothing.

Are these bonds numbered and prioritized?  How do you know where you sit in the queue?  If you have a high priority share and trade it, does it move to the back of the line?   What's the point of even allowing shares to transfer hands if they suddenly become worth nothing?

Are these bonds numbered and prioritized?  How do you know where you sit in the queue?  If you have a high priority share and trade it, does it move to the back of the line?   

I don't understand this well either. This is one reason why I like acorcos' idea to convert the asset into a revenue share, and pay dividends from the mining revenue equally distributed over all outstanding shares, for as long as the mining remains profitable, and then liquidate and pay a final dividend when the mining is no longer profitable. That way, all the shares would be treated equally, and everyone would get part of their investment back

I don't see why you think you deserve special treatment over the person who got a share for .001.  A share is a share.  It doesn't suddenly become worth less because it was traded.  I wasn't under the impression that this is a pyramid scheme where people at the top get all the rewards where people at the bottom are left with nothing.

XBOND was a well-run bond, and it was bought back at 105% of its face value per its contract. So people who were holding it when it was bought back came out of it fine, as long as they had not paid over 105% of face value when they bought it.

In any case, you've got me thinking. There many be an option here we're not seeing, or at the very least I should be able to find some middle ground. Thanks!

Are these bonds numbered and prioritized?  How do you know where you sit in the queue?  If you have a high priority share and trade it, does it move to the back of the line?   What's the point of even allowing shares to transfer hands if they suddenly become worth nothing?

I don't know what to say Norman except that I'm not sure you understand what constitutes a contractual bond issue. If this wasn't the wild west of bitcoin investing, Korbman would have long ago had to settle his obligations, in court, as a debt default.

The Notes are not numbered, prioritized, and holders aren’t in a queue, since this wasn’t something I was able to set up back in 2012. I’ve put more of a priority on repurchases for the longest holders (November / December 2012 for the most part…they’re the ones who literally got us started), but this was my own decision.

Hi Korbman,

Could you clarify how the 869 shares have turned into 86900 units.

Is there a 100 to 1 split?

This will be going out through the Havelock 'Fund Reports' system soon, but I wanted to post it here first. Let me know what you think.

Also, I've got a bit of a surprise for everyone. A few people mentioned to me that they'd like to see a monthly update in a similar fashion to Havelock's HMF.
With that, I present the first rendition of the KCIM Newsletter: https://drive.google.com/file/d/0BxnW49twNMNbWDNSbXptUWVydUU/edit?usp=sharing

The goal of the newsletter is to give an update as to where the fund stands, how operations went for the previous month, and a forecast for what's to come.

This will be going out through the Havelock 'Fund Reports' system soon, but I wanted to post it here first. Let me know what you think.

Hey Korbman,

Any updates on the TerraMiner IV? I saw this on the Cointerra website:

http://cointerra.com/update-production-news-janfeb-batch-customer-offer/

Hey Korbman,

Thanks for the newsletter.

What are your thoughts on the second batch Neptune from KcNMiner? Not sure what's available in the "kitty" for additional equipment purchases, and then there's the energy cost, etc. Just wondering.

I've got quite an update for this evening.

1) A coworker of mine has been interested in Bitcoin ever since I introduced them to it last September. Since I needed to move the old BFL Singles out of our datacenter, he offered to purchase them from us for BTC1.7, to which I've agreed. Given how the network is beginning to ramp up with the new hardware being shipped, I figured this was a fair price, and my coworker didn't mind. Payment will be added directly to our 'hardware reinvestment' address.

2) Our January CoinTerra order has arrived! I spent quite a bit of time today rearranging our portion of the rack to accommodate the size. Here's the unboxing album (http://imgur.com/a/4W2ik).
For those of you wondering, you can change the power stepping on the rig from 1 (the minimum power usage) to 9 (the maximum). At the minimum, the rig uses a bit over 1000W and runs at 800-850GH/s. I've been slowly stepping up the power to make sure I don't cause any unneeded disturbances / fluctuations. As of right now, I've set the stepping to '5', and we're running stable at 1.1-1.2TH/s.

You can see us on the BitMinter Live Stats page (https://bitminter.com/livestats/big) for once, though I'm positive our tenure there will be short. :D

Our combined rate is currently 1.8-1.9TH/s.

Disappointing that the TerraMiner IV is flawed. They should certainly be willing to compensate us for that, they were offering 15% discount coupons to customers who got the less-than-advertised early releases.

Perhaps you suggest they throw in a GSX I card with the next TerraMiner IV delivery since the 400 GH the card supplies is even less than the short fall on your current IV.

We qualify for the 15% discount, but it comes down to whether or not we'll want to use it since that means purchasing more gear from CoinTerra. Based on what I've experienced so far, placing another purchase doesn't seem likely (unless they get their act together).

As for their new GSX card, the problem is I have no idea how the card would be set up (aside from building a PC solely for mining), where it would be set up, or any additional costs associated with running it. Not to mention it won't be shipping for another 5 months (making it nearly obsolete by that time).

What I would appreciate, however, is a TerraMiner II if they A) start selling them again and B) can figure out how to get it into a 2U space ...at half the price and speed, it should come with half the problems :D

Are we still at 1EYUhR7cJSacH9URg85H2DqzCDtujKWiEg for mining income? Haven't seen any deposits in a few days.

Indeed, seems we're in a stretch of bad luck :: https://bitminter.com/livestats/big

1 day, 10.5 hours since the last block.

(As for BFL refunds that is a losing battle, I hope they do deliver before the units become worthless due to difficulty increases)
https://bitcointalk.org/index.php?topic=99497.msg3026517#msg3026517

To make matters worse, since January we’ve been swarmed with new chip development companies. So many, in fact, that most people receiving equipment now are beginning to doubt their return on investment. We've not only got Butterfly Labs (Sort of) , Avalon, and ASICMiner, but also BitFury, KnCMiner, HashFast (Delay), BitMine (Scam), Cointerra, IceDrill, Labcoin (Scam), and a number of others. As the number of companies grows, so does the hashrate, or at least the guesstimates of where we’ll be in the next 6 months (https://bitcointalk.org/index.php?topic=278384.0).

That aside any interesting news or updates since last month.

Anything new with CoinTerra delivery?

Hello Everyone!

Trading will be temporarily halted tomorrow (May 23rd) at 12:00PM EDT prior to some new updates I'll be releasing. We'll be going over where we are so far this year, what's to come (potentially), and go over some voting.

The freeze will last seven days, and trading will resume on May 30th, 12:00PM EDT. There won't be any effect on mining or dividends during this time.

I'm not (and have not been) a KCIM shareholder/investor, but I'd like to commend you on how you're handling this.

The trade-stop, the detailed explanation of the current environment, and the solicitation of comments from the shareholders all speak to your professionalism.

I'm not (and have not been) a KCIM shareholder/investor, but I'd like to commend you on how you're handling this.

The trade-stop, the detailed explanation of the current environment, and the solicitation of comments from the shareholders all speak to your professionalism.

PM sent. For the record, I am the largest single shareholder in this fund that I'm aware of. Not happy with the situation, but I well understand that too many factors were involved that didn't go our way, going back to BFL delays, the sudden spike in the value of BTC after hardware purchases, and rampant network growth.

Unfortunate turn of events indeed. I do have two concerns about the fund operation and it's ending.

1. More curiosity than concern but did you only mine BTC during fund operations? I noticed several mining funds or ventures that did not end well citing the difficulty of BTC being a major factor but being someone who mines as well I know that just pointing your miner at a BTC pool won't be enough to make good profit. There are some alt coins that beat out BTC when mined and sold on exchanges.

Also, did you (with prior notification and approval, of course) ever consider setting aside some of the mined proceeds to trade with? Obviously this would take some time and might even require an extra employee with trading experience but if I only relied on mined proceeds I would have never paid my miners off in a reasonable amount of time. I'm just curious since most mining concerns as described sound like they only mine BTC alone and dump it into USD as soon as they get it. If it is decided to continue operations perhaps this is something to consider.

2. In terms of the Dissolution Clause via Havelock. In the Dissolution Clause it states "all mining equipment will be auctioned to the highest bidder(s). Proceeds from the sale, in conjunction with any remaining funds, will be distributed to all investors as a Final Dividend." If it comes to that for future reference how will all that be handled?

•   Postpone dividends and put a heavier focus on reinvestment in new hardware.

•   Stick it out and wait for the Bitcoin price to increase.

•   Are your ambitions as big as PETA’s?

•   Sell all hardware and use the proceeds to purchase new, more efficient devices.

•   What will happen to my shares if liquidation should occur?

•   What do you estimate the final dividend to be?

Since trading is closed, my liquidation value guess is going to be somewhere around .00018

Maaayyyybeeeee...
http://bbsimg.ngfiles.com/1/23991000/ngbbs4fc686c4485c2.jpg


Sorry, I promise I have a sense of humor sometimes.  :D

0.00018 is close, but too low since you don't know how much is left in the KCIM reserves.  ;)

Hello everyone!

All equipment has been sold and so far the new owners are happy with their purchases, which is something I strive for. All cash purchases are visible from our public 'reinvestment' address. Some of you may have noticed that our outstanding shares have decreased as well. This is the result of some holders trading their shares for equipment.


Last I just quickly tallied, the dividend comes in at ~0.00025 per share (or thereabout). I converted our stockpiled Namecoins, which helped to give us a tiny boost as well. I'll have the final number tomorrow (after accounting for transfer fees...which obviously aren't much) when I combine all funds into the my Havelock manager's account for payout.

With the final dividend going out tomorrow morning, the plan at this point is to completely cease operations by the 30th (delisting that day, or shortly after depending on Havelock). I'll post my closing statements on the 29th.