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[bittymitty]

"This is a privately held, nonpublicly traded company. This company and the PMB's being offered are not regulated by any governmental entities including the SEC or any other agency or board"

This is not regulated by any government entities or the SEC as per the statement above.

Did lab_Rat get confirmation from the government and SEC about this?  Why is it unlikely to happen?  What info have we been given about this apart from the above statement? 

[mmmerlin]

"This is a privately held, nonpublicly traded company. This company and the PMB's being offered are not regulated by any governmental entities including the SEC or any other agency or board"

This is not regulated by any government entities or the SEC as per the statement above.

Did lab_Rat get confirmation from the government and SEC about this?  Why is it unlikely to happen?  What info have we been given about this apart from the above statement? 

It's unlikely to happen because there are many bigger fish in the sea for them to go after - that's why they're going for exchanges, it's an all in one move. The individual companies are too much hassle (for now).

Also, if it's not being traded on an exchange then it's just an agreement between people, and no longer a security, right?

Anyway, any legal guesswork is pointless, it is whatever the SEC says it is. They have the lawyers and the money, so they will decide. After all, you don't have to have actually broken any laws to be prosecuted as if you have. One would hope that unless you had that you wouldn't be convicted, but anyone can go after anyone essentially, so let's just cross our fingers, and know that it's even more in LR's interest than it is ours to make sure this doesn't get shut down!

No FUD!

[bittymitty]

What no FUD where is the fun in that   

all I can say is thank fud this is not labcoin

[bittymitty]

I just found a post from Lab_Rat on the BFL forum that might be of interest(not FUD)

https://forums.butterflylabs.com/bitcoin-business-directory/3712-lab-rat-data-processing-llc-labratmining-official-announcement-46.html

"I'm sorry to say but a good portion of this is inaccurate and incomplete. BFL is a small portion of the purchases made by LRM at this time, and it will not be a significant amount of time before hardware is received. It should be very soon that ~17-18 TH rolls in. That alone will put us at ~331 MH/s net being paid out to bondholders. Not to mention the other orders that should be rolling in 2-4 weeks following pushing past the 400MH/s mark and the 28nm orders later this year hopefully (and likely) pushing past 1 GH/s per bond.

The quantity of shares is correct though. I will sell shares at a rate as to not dilute the hashrate until 100k are sold. I will sell more in the future to expand, but there will be a good resting point at 100k. People will have to just understand that there are things that manufacturers have told me that I can't share and releasing the amount of hardware I have on order could compromise this. I promised a minimum of 100MH/s per bond and I'm shooting for at least 10 times that. What more do you want? "

1 GH per bond is music to my ears.

[bigasic]

I just found a post from Lab_Rat on the BFL forum that might be of interest(not FUD)

https://forums.butterflylabs.com/bitcoin-business-directory/3712-lab-rat-data-processing-llc-labratmining-official-announcement-46.html

"I'm sorry to say but a good portion of this is inaccurate and incomplete. BFL is a small portion of the purchases made by LRM at this time, and it will not be a significant amount of time before hardware is received. It should be very soon that ~17-18 TH rolls in. That alone will put us at ~331 MH/s net being paid out to bondholders. Not to mention the other orders that should be rolling in 2-4 weeks following pushing past the 400MH/s mark and the 28nm orders later this year hopefully (and likely) pushing past 1 GH/s per bond.

The quantity of shares is correct though. I will sell shares at a rate as to not dilute the hashrate until 100k are sold. I will sell more in the future to expand, but there will be a good resting point at 100k. People will have to just understand that there are things that manufacturers have told me that I can't share and releasing the amount of hardware I have on order could compromise this. I promised a minimum of 100MH/s per bond and I'm shooting for at least 10 times that. What more do you want? "

1 GH per bond is music to my ears.

Lets hope the difficulty is relatively low when we do reach 1 GH per bond. Then again, if we can just keep up with the difficulty now, Id be happy... I have a feeling there are just a couple people snatching up cheap bonds at the .12 rate or lower... If you dont absolutely need the money, keep the price atleast what you spent on the bond. (not you guys that spent .10 either, lol) but if the bond price didn't dip below .15 Id be happy.

On the other hand, ive been thinking about being one of the ones snatching up the cheap bonds, lol.... so, do as you please, hehe...

[BKM]

"This is a privately held, nonpublicly traded company. This company and the PMB's being offered are not regulated by any governmental entities including the SEC or any other agency or board"

This is not regulated by any government entities or the SEC as per the statement above.

Did lab_Rat get confirmation from the government and SEC about this?  Why is it unlikely to happen?  What info have we been given about this apart from the above statement? 

Zach specifically structured LRM and the number of bonds to be a limited offering of a PRIVATE COMPANY. LRM is not intended to be a publicly traded company. He did this in consultation with a legal advisor and was deliberate in the approach in order to avoid the issues that might arise from regulatory scrutiny.

[bigasic]

has anyone noticed RTM? I guess he pays 100Mhs per bond and his price is like .02 or .03, Im too tired to do the math. but could someone compare his stock with our stock? Im sure ours is much better, but it would be nice to see what the competition is doing..

[bittymitty]

"I reserve the option to repurchase bonds at 110% of the highest traded price over the last 15 days."

might be a scam...

[maqifrnswa]

"This is a privately held, nonpublicly traded company. This company and the PMB's being offered are not regulated by any governmental entities including the SEC or any other agency or board"

This is not regulated by any government entities or the SEC as per the statement above.

Did lab_Rat get confirmation from the government and SEC about this?  Why is it unlikely to happen?  What info have we been given about this apart from the above statement?  

Zach specifically structured LRM and the number of bonds to be a limited offering of a PRIVATE COMPANY. LRM is not intended to be a publicly traded company. He did this in consultation with a legal advisor and was deliberate in the approach in order to avoid the issues that might arise from regulatory scrutiny.

just because you put it in caps doesn't make it legal... Private companies are regulated by the SEC, too.

http://www.sec.gov/info/smallbus/qasbsec.htm#noreg

Non-public offering (private placement) exemption

Section 4(a)(2) of the Securities Act exempts from registration "transactions by an issuer not involving any public offering." To qualify for this exemption, which is sometimes referred to as the “private placement” exemption, the purchasers of the securities must:

  

• either have enough knowledge and experience in finance and business matters to be “sophisticated investors” (able to evaluate the risks and merits of the investment), or be able to bear the investment's economic risk;
• have access to the type of information normally provided in a prospectus for a registered securities offering; and
• agree not to resell or distribute the securities to the public.

In general, public advertising of the offering, and general solicitation of investors, is incompatible with the non-public offering exemption.

The precise limits of the non-public offering exemption are not defined by rule. As the number of purchasers increases and their relationship to the company and its management becomes more remote, it is more difficult to show that the offering qualifies for this exemption. If your company offers securities to even one person who does not meet the necessary conditions, the entire offering may be in violation of the Securities Act.

Rule 506 provides objective standards that your company can rely on to meet the requirements of the Section 4(a)(2) non-public offering exemption. Rule 506 is part of Regulation D, which is described more fully below.

LRM is arguing that having threads on BFL forums and bitcointalk is not public advertising since it is a closed community of sophisticated investors, that they have made the prospectus available for on bitfunder, and that by keeping it on bitfunder it limits shares to a community of bitcoin experts.

there are really in the grey area of all of these (I've sen plenty of people on bitcointalk with limited to no knowledge or experience in finance or business, the prospectus is missing important information such as what fees actually are, and bitfunder allows anyone in the public to sign up with a bitcoin account), but it would be a difficulty case for the SEC to go after for now, and there are much worse companies that they should be looking in to.

LRM's real saving grace may be that they claim to be selling hardware derivatives. Your security is (in the eys of the SEC) worthless; LRM promises you no rights to assets nor facevalue. It will only generate derivative income off of bitcoin mining and is only worth what someone else is willing to pay you for it.

[Bargraphics]

"I reserve the option to repurchase bonds at 110% of the highest traded price over the last 15 days."

might be a scam...

RTM Bonds -

The issuer can buy back the bond at any time at a price equal to 105% of the highest price the asset was traded on BitFunder over the prior 360 hours.

At current math,

a share at .0370 and a dividend at .00034064 (October 1st) will take 108+ weeks to pay off.


As for anyone worried about SEC intervention,

LRM will be the LEAST of everyone's worries if they decide to come full force like you guys are suggesting.
As has been said multiple times, he has retained a lawyer that has cleared him in good faith to operate his business like this. Maybe Zach can get a "legal opinion letter" from his lawyer (Maybe he already has one). Redact what needs redacted and post it here.

There's not much else he can do, this is the risk everyone takes in this uncharted territory, not Zach or Lab Rat Mining alone.

Edit: Realized bittymitty was talking about RTM not LRM (Sorry)

[Lab_Rat]

Does this mean that Bitfury will have to drop their price to compete with the 28nm gear coming online soon?

If they dont, im sure Zach will be able to use KnC as ammunition to bring their prices down..

I told Dave to give Tytus some friendly advice

[Lab_Rat]

It would be interesting to know what discount he could get for a bulk order from KNC and how that would compare to the Bitfury prices. 

Seeing as both the deliveries will be in November it will be the gh/BTC that will make difference.

I've contacted KnC

[Lab_Rat]

Well someone keeps selling and collecting all the bids down to about .12 which is well below IPO.  So someone is selling at a loss and I am guessing this is one or more of the hardware sellers trying to get out.   Not sure why you would buy at IPO then sell at a loss unless you really didn't believe in the future of the mine. 

Correct and I know who it is.  No biggie.  They'll be able to get some more coin for their bonds once I drop some major hashrate on the network.

[Lab_Rat]

"This is a privately held, nonpublicly traded company. This company and the PMB's being offered are not regulated by any governmental entities including the SEC or any other agency or board"

This is not regulated by any government entities or the SEC as per the statement above.

Did lab_Rat get confirmation from the government and SEC about this?  Why is it unlikely to happen?  What info have we been given about this apart from the above statement? 

It's unlikely to happen because there are many bigger fish in the sea for them to go after - that's why they're going for exchanges, it's an all in one move. The individual companies are too much hassle (for now).

Also, if it's not being traded on an exchange then it's just an agreement between people, and no longer a security, right?

Anyway, any legal guesswork is pointless, it is whatever the SEC says it is. They have the lawyers and the money, so they will decide. After all, you don't have to have actually broken any laws to be prosecuted as if you have. One would hope that unless you had that you wouldn't be convicted, but anyone can go after anyone essentially, so let's just cross our fingers, and know that it's even more in LR's interest than it is ours to make sure this doesn't get shut down!

No FUD!

My lawyer states that due to the currency being unregulated by the US the security doesn't have to be either.  The exchange on the other hand is a money transmitter and is regulated.  Bitfunder is hosted in AUS I believe though, so the US can't touch it.

[Lab_Rat]

"I reserve the option to repurchase bonds at 110% of the highest traded price over the last 15 days."

might be a scam...

It is a scam... Why I didn't include this clause... He's going to scoop some cash real quick and screw everyone out of their hashrate.

[Lab_Rat]

LRM's real saving grace may be that they claim to be selling hardware derivatives. Your security is (in the eys of the SEC) worthless; LRM promises you no rights to assets nor facevalue. It will only generate derivative income off of bitcoin mining and is only worth what someone else is willing to pay you for it.

My main reason of structuring like this.

[moribana]

has anyone noticed RTM? I guess he pays 100Mhs per bond and his price is like .02 or .03, Im too tired to do the math. but could someone compare his stock with our stock? Im sure ours is much better, but it would be nice to see what the competition is doing..

I did the math. If the difficulty increases like this for a couple of more months, RTM will make about 100% profit. The break even point is if the difficulty keeps increasing by less than 10% every 10-14 days. Usual stuff. Based on people not being able to sum a geometric series :-) Because I guess it is quite clear that this race is not going to slow down significantly in the next couple of months.

[stereotype]

has anyone noticed RTM? I guess he pays 100Mhs per bond and his price is like .02 or .03, Im too tired to do the math. but could someone compare his stock with our stock? Im sure ours is much better, but it would be nice to see what the competition is doing..

I did the math. If the difficulty will increase like this for a couple of more months RTM will make about 100% profit. The break even point is if the difficulty keeps increasing by less than 10% every 10-14 days. Usual stuff. Based on people not being able to sum a geometric series :-) Because I guess it is quite clear that this race is not going to slow down significantly in the next couple of months.

So using what div info that is currently being paid...

div-0.00034064 = 6.44% per week, if bought @ current 0.037.

Im surprised people are not more interested, but there seems to be no near support, to current ask.

[moribana]

has anyone noticed RTM? I guess he pays 100Mhs per bond and his price is like .02 or .03, Im too tired to do the math. but could someone compare his stock with our stock? Im sure ours is much better, but it would be nice to see what the competition is doing..

I did the math. If the difficulty will increase like this for a couple of more months RTM will make about 100% profit. The break even point is if the difficulty keeps increasing by less than 10% every 10-14 days. Usual stuff. Based on people not being able to sum a geometric series :-) Because I guess it is quite clear that this race is not going to slow down significantly in the next couple of months.

So using what div info that is currently being paid...0.0034064

div-0.00034064 = 6.44% per week, if bought @ current 0.037.

Im surprised people are not more interested, but there seems to be no near support, to current ask.

OK, then let's do the math. Current div is 0.00034064 i.e. 0.0034064 for a ten day period while difficulty is constant. If the difficulty increases by 20% every 10 days, the total paid out in dividends per share will be

   0.0034064*( 1 + 0.8 + 0.8^2 + 0.8^3 + ...) = 0.0034064/(1 - 0.8 ) = 0.017.

This is roughly how much this bond should be worth: 0.017 btc. You can recalculate with different numbers and find that it would be worth the current price if you expected the difficulty to increase less than 10% in every 10-14 day period. Very unlikely imho.

[fran2k]

I mostly agree, indeed using the TGB mining predictor, to obtain a few months ROI the current value of the GHs is around 20$ so I get an estimation of 0.0155 btc / bond at 130 $/btc.

has anyone noticed RTM? I guess he pays 100Mhs per bond and his price is like .02 or .03, Im too tired to do the math. but could someone compare his stock with our stock? Im sure ours is much better, but it would be nice to see what the competition is doing..

I did the math. If the difficulty will increase like this for a couple of more months RTM will make about 100% profit. The break even point is if the difficulty keeps increasing by less than 10% every 10-14 days. Usual stuff. Based on people not being able to sum a geometric series :-) Because I guess it is quite clear that this race is not going to slow down significantly in the next couple of months.

So using what div info that is currently being paid...0.0034064

div-0.00034064 = 6.44% per week, if bought @ current 0.037.

Im surprised people are not more interested, but there seems to be no near support, to current ask.

OK, then let's do the math. Current div is 0.00034064 i.e. 0.0034064 for a ten day period while difficulty is constant. If the difficulty increases by 20% every 10 days, the total paid out in dividends per share will be

   0.0034064*( 1 + 0.8 + 0.8^2 + 0.8^3 + ...) = 0.0034064/(1 - 0.8 ) = 0.017.

This is roughly how much this bond should be worth: 0.017 btc. You can recalculate with different numbers and find that it would be worth the current price if you expected the difficulty to increase less than 10% in every 10-14 day period. Very unlikely imho.