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[fractal02]

The silence from Merlin, as a major bond holder, is deafening.

Looks like he will get a CTO with 'no baggage'

It's maybee part of the plan...

How a really good start for Coinseed to start with 190 TH/s almost Free...

[BKM]

CHANGE IN PAYOUT RATE STRUCTURE

Cryptocurrencies, which includes Bitcoin, are relatively new to the world economic communities and its governments. Worldwide there continues to be almost daily announcements from governments regarding crypto currencies. Lab Rat Data Processing, a Limited Liability Company in the state of New Jersey, continues to monitor those announcements and the ever-changing laws and economic environments and how those laws impact cryptocurrencies, including Bitcoin, and in particular Lab Rat Data Processing. Most important to Lab Rat Data Processing are the ever-changing laws and/or announcements from the United States and its governmental agencies and the state of New Jersey and its governmental agencies.

Based upon recent developments in US and local laws, Lab Rat Data Processing, and their legal representatives, have determined a potential current or future problem with its current rate structure, which was originally intended as a variable rate payout. Therefore, Lab Rat Data Processing is amending its variable rate payout with a set rate payout of 100 MH/s per contract. This rate payout shall be for all current contract-holders and all future contract-holders.  Contemporaneous with the change from a varying rate payout to a set rate payout Lab_Rat will triple the amount of contracts held by all contract holders as of the date of March 8, 2014.  Therefore, for all current contract holders on their current contracts, the effective rate will be permanently set at 300 MH/s per contract.  All future contracts purchased will be at the new rate of 100MH/s.

Lab Rat Data Processing will continue to monitor developments for cryptocurrencies and Bitcoin in particular, seeking to maintain its current status as a leader in the Bitcoin community and to maintain compliance with US and New Jersey laws.

More information to come.

Here is why what you wrote is false. And why you need a new lawyer.

Any supposed issue about "variable payouts" based on company performance is refuted by the fact that most companies ALREADY pay dividend based on their varying performance/growth. And each unit of ownership that receives dividends is based on a percentage of that unit per all units issued. That is exactly what each bond represents. Is paying dividends based on performance against federal or state laws? Clearly not.

Nobody that paid a percentage into this expected a "bond" to stop at 100MH. That was NEVER the expectation, and if you claim it was then you need to read the original posts about LRM. We aren't that stupid. And if your lawyer wrote it up differently, then you need to ask him how you can avoid being sued for documenting on your website and these forums how hashrates would not stop at 100MH.

The spirit of the matter(i.e the understood agreement) is this: The TRUE value of a bond was a fixed percentage of mining yields (not hashrate!), based on all issued bonds at any one time, and a fixed percentage is NOT VARIABLE. What ends up being mined may vary, but that is true if you fixed a bond at 100MH/bond instead of fixing it at ~1/50,000th of the 75% allotted for investors.

Cutting people off from their due percentage is a setup for a lawsuit, and I'm pretty sure a majority here are willing to go all the way with a lawsuit. Especially, after all the anger built up from all the scamming going on.

Your lawyer (who advised you from the beginning!) should have known exactly how this was going to work. And nobody signed a statement saying it was only going to be 100MH. If he's changing his story now,  then all I can say is that this smells like a crap story that needs investigation. And you might need to seek better legal counsel, because this guy is going to get you sued big time.

I hate to say it, but it seems like this is the first phases of allowing LRM to fail. And if so it would seem to have something to do with Coinseed and some new hardware opportunities.
percentage.

Well put ||bit. This is a very critical point. The rate of participation is fixed - earnings of the company are variable. Bonds are participatory at that fixed rate of 75%. As a result the bonds may come to be legally defined as being more akin to a share. LRM can call the bonds whatever it wants to - what matters is what the regulators and courts decide they actually are.

Clearly the overwhelming sentiment of the bond holders is that we are entitled to 75% of the LRM's assets on dissolution. If this remains a question in LRM's mind it may be necessary to get this into court for preemptive clarification. I'm not stating that this is the preferred option but it may be one that needs to be forced by a few of the larger stakeholders to preserve some proportion of their investment.

It is evident that the response in this forum indicates LRM's proposal is ENTIRELY unacceptable. There is still an opportunity to reconsider your proposed approach and engage the bondholders in constructive consultation on the best outcome. With this in mind Zach, kindly clarify what exactly is meant by "timely manner" in the statement "The specifics of these statutes will be presented in a timely manner." Time is of the essence and as a result timelines are best defined clearly rather than being left open ended.  

[elitenoob]

A few months only for the next answer of him...
Anyone knows the dox of the guy that runs labrat mining?

[mmmerlin]

The silence from Merlin, as a major bond holder, is deafening.

Looks like he will get a CTO with 'no baggage'

Long time no see everyone, just popping in to clear up a few things.

1) I have been emigrating and super busy with a bunch of things these last few months and haven't been reading this forum or even this thread. I was prompted to pop back in today and have caught up with the posts since "the announcement" but have not read anything else since around p. 110 of this thread. I intend to catch up, but it will take some time.

2) It took me a while to work out what the second sentence above meant, but I've got it now and I want to clear something up:

Whilst my real name is indeed Merlin, I am not the Merlin from Coinseed. We do indeed share an extremely unusual name, so I can see why people would assume this, but I am not him. I imagine this was conjectured at some point in the period I was away, so I just thought I should clarify that, whilst I am a major bondholder in LRM, I am not Merlin Kauffman.

Clearly a lot is going on at the moment, and I'm sure I will post about it here at some point, but just wanted to say that I am, as of today, reading this thread again, and clarify the fact that I am not the guy from Coinseed.

[BKM]

"The specifics of these statutes will be presented in a timely manner." Time is of the essence and as a result timelines are best defined clearly rather than being left open ended.  

Again I would like to apologize for this seeming like I'm randomly dropping this out of thin air.  I have had morality yanking on one arm and legality yanking on the other for the last 2-3 months.  This is not a new development, it is just becoming a finalized one though.

A few months only for the next answer of him. Anyone knows the dox of the guy behind labrat?

Yes, Zachary Dailey is well known and LRM is an incorporated LLC company in the USA - dox not an issue here

[cloverme]

A few months only for the next answer of him...
Anyone knows the dox of the guy that runs labrat mining?

So, here's a place to start. Coinseed hired the founder to lead development for them.

http://www.coindesk.com/coinseed-5m-investment-bitfury-mining/

Nothing like several million dollars to distract you from day to day operations.

[grnbrg]

I will add my voice to Epoch's to state that the only reasonable course in this process is to wind up the company rather than spending additional resources trying to fight your bondholders or somehow restructure the deal. All existing and inbound equipment needs to be sold and the proceeds distributed to the bondholders accordingly.

Lab_Rat's response on this has been that it will result in less value for the bond holders than ongoing operation with each original bond being worth 300 MH/s (including the 1->3 split).



grnbrg.

[elitenoob]

Lab_Rat's response on this has been that it will result in less value for the bond holders than ongoing operation with each original bond being worth 300 MH/s (including the 1->3 split).

grnbrg.

He did not answer the questions regarding bfl refund...i guess he will just order the additional promised hardware and everything that goes above 100/300 mh/s /share/contract goes into <xyz> pocket.

Now find out by yourself whom xyz stands for.

[fractal02]

I will add my voice to Epoch's to state that the only reasonable course in this process is to wind up the company rather than spending additional resources trying to fight your bondholders or somehow restructure the deal. All existing and inbound equipment needs to be sold and the proceeds distributed to the bondholders accordingly.

Lab_Rat's response on this has been that it will result in less value for the bond holders than ongoing operation with each original bond being worth 300 MH/s (including the 1->3 split).



grnbrg.

And why not 2 gh/s bond to reflect the futur hashrate ?
Why 300 mh/s when the issue is around the 100 mh/s bonds definition?

Something don't work here...

[||bit]

I will add my voice to Epoch's to state that the only reasonable course in this process is to wind up the company rather than spending additional resources trying to fight your bondholders or somehow restructure the deal. All existing and inbound equipment needs to be sold and the proceeds distributed to the bondholders accordingly.

Lab_Rat's response on this has been that it will result in less value for the bond holders than ongoing operation with each original bond being worth 300 MH/s (including the 1->3 split).



grnbrg.

Are you saying Labrat is going to cap investors return? We might need to know the name of Labrat's lawyer soon. No joke.

The timing of this news is VERY odd and suspect.

1.Zach said he knew about this for a couple months, BUT just a month ago he was talking about adding 156TH to LRM hashrate.
... That doesn't sound like a person that had legal concerns brewing. At least not a responsible person.
2. The legal issues stated are not cited, and are trivial at best - especially compared to how companies already pay dividends. Also, Zach admitted no certainty on the legal reference.
...Had Zach actually been contemplating this for two months, he should know the legal basis by heart and able to cite which specific new federal and state laws are an issue.
3. The proximity of the news to Zach's recent position as Coinseed CTO and the deals Coinseed leave reasons for one to be extremely suspect.
...Obvious question are: Was LRM becoming too much baggage for Coinseed? Was it a concern of Kauffman that LRM would grow under benefits of the umbrella of his own mining operation?

How things play out could cause things to turn very very ugly. If Zach is Coinseed, then it may turn out that Coinseed is a risky or toxic investment.

[Frankthechicken]

I definitely want to know details of the legal reasons behind this drastic and sudden (from our perspective) change.  The laws at issue and how they conflict with the original bond terms and why it is forcing the bonds to be fixed at 300 MH/s per bond.  If it is just a wording issue, I don't see why new terms can't be issued and accepted by signed message.

This is a huge explosive issue and I think LR needs to get a second opinion from another lawyer urgently.

[||bit]

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM?

Talk to me goose... or geese.

[mmmerlin]

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM?

Talk to me goose... or geese.

Maybe so, maybe not. Thus far there has been no explicit mention of what will happen to the hardware on order, so until we know how that will be dealt, with this is almost not even news, just a change of wording.

[daemonfox]

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM? So far, it seems that the only change is that LRM will have to issue out more bonds for every 100MH improvement in total hash rate. Again, that would still be a clumsy solution, imo.

Talk to me goose... or geese.

Truth is we just do not have enough facts for all the hype being spewed right now.

When Zach defines the issues legally, and then clarifies what the future hashrate to be added does for us... THEN we will have final pieces that allow for proper dissection of how fucked we all are.

[elitenoob]

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM? So far, it seems that the only change is that LRM will have to issue out more bonds for every 100MH improvement in total hash rate. Again, that would still be a clumsy solution, imo.

Talk to me goose... or geese.

Truth is we just do not have enough facts for all the hype being spewed right now.

When Zach defines the issues legally, and then clarifies what the future hashrate to be added does for us... THEN we will have final pieces that allow for proper dissection of how fucked we all are.

Or he is

[||bit]

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM?

Talk to me goose... or geese.

Maybe so, maybe not. Thus far there has been no explicit mention of what will happen to the hardware on order, so until we know how that will be dealt, with this is almost not even news, just a change of wording.

Looking more carefully, it seems that the "legal concerns" and their current "solution" mean that LRM would have to issue out more bonds for every 100MH of future improvement in total hash rate. Again, that would still be a very clumsy solution, imo. And Zach did mention in his update that LRM is " seeking to maintain its current status as a leader in the Bitcoin community". He can't take from investors expected growth and make that claim, that much is clear. Besides, that would be a case for a major lawsuit. Bitcoin has established itself to have value and has much more widespread attention now. So, a legal recourse would seem much easier to follow through with now as compared to last year. But I'll try to hold back until we get some much needed clarity on this, and hopefully very soon.

[||bit]

How about answering about what are you planning to do with the hardware and the hundreds of thousands of dollars invested in new hardware.

I've stated I'm working on the specifics of this.

Why isn't the answer to that question this easy:
"I'll be putting that hardware online and continue to pay out the proportionate percentage of mining that that hardware can generate for bond holders...even if it means issuing out even more bonds to allow for this."?

[Mindsync Miner]

I will add my voice to Epoch's to state that the only reasonable course in this process is to wind up the company rather than spending additional resources trying to fight your bondholders or somehow restructure the deal. All existing and inbound equipment needs to be sold and the proceeds distributed to the bondholders accordingly.

Lab_Rat's response on this has been that it will result in less value for the bond holders than ongoing operation with each original bond being worth 300 MH/s (including the 1->3 split).



grnbrg.

And why not 2 gh/s bond to reflect the futur hashrate ?
Why 300 mh/s when the issue is around the 100 mh/s bonds definition?

Something don't work here...

Absolutely right!

First of all if splitting now is appropriate can we look forward to future splits as new hardware comes in?  I would be OK with that because it just makes the growth more staggered.

If future splits aren't possible then for god's sake split us 10 to 20 ways x100MH to account for the hardware we already financed with our bond purchases.

I can only hope that the news improves from here.  Locked at 300MH is unacceptable.  That IS theft and we will fight for what's ours.

[||bit]

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM? So far, it seems that the only change is that LRM will have to issue out more bonds for every 100MH improvement in total hash rate. Again, that would still be a clumsy solution, imo.

Talk to me goose... or geese.

Truth is we just do not have enough facts for all the hype being spewed right now.

When Zach defines the issues legally, and then clarifies what the future hashrate to be added does for us... THEN we will have final pieces that allow for proper dissection of how fucked we all are.

I don't like the tone of how it sounds equivocal like when a boyfriend or girlfriend wants to break up. Instead, what I'd like to hear from Labrat is more confidence and that he's committed to going the distance with LRM... and with seeing a way through to solve this supposed "legal concern". There's really no clear reason what-so-ever that he can't solve this supposed problem.

Imagine if Microsoft said to shareholders. "Dear Investors, the dividends we are paying you is variable. Legal stuff - new state and federal laws we aren't too sure about - it's complicated. So, anyway, we have to cap your dividends to only a percentage of earnings generated from legacy software DOS and Windows 3.1.... Latest software resulting from company growth won't contribute to your dividends anymore, since that will cause your dividends to vary. Thanks for your money."

Sure, not an exact analogy. But the notion that a company would take investors money for a decaying return and decaying share value is ridiculous.

[countduckula]

Well, i could have gotten about 0.04 per share, now i can get 0.0005, 90% drop. Feel free to react as you want.