[LABCOIN] IPO [BTCT.CO] - Details/FAQ and Discussion (ASIC dev/sales/mining)

[TheSwede75]

Q: We are considering asking Burnside for the option of "direct shares" that could be 'removed' from BTCT.CO and traded outside of the exchange. Is there interest for a independent owner registry of 'Labcoin 100' shares (1 Labcoin 100 share would be equal to 100 Labcoin shares as listed on BTCT.CO) for easier off-exchange trading of larger blocks of shares for larger share holders?

I don't have a problem with it but I do have a few points that may help in making the decision:

1) Internal transfers on BTCT.co (user to user) are free.  (so if you want to privately transfer a large chunk, no problem...)
2) As someone pointed out, asset lists are available at any time via API and are mailed out a couple times a day, so losing track in an exchange failure is not likely.
3) Keeping track internally has not been fun for Friedcat/ASICMINER.  In fact, it's been a bit of a nightmare for him trying to track all the direct shares.  (primarily because direct share transfers are a PITA.)

Cheers.

Burnside,
All very good points and I believe that answers a lot of questions. As I understand it is also easy enough for any major share holder (if they so wish) to introduce a security of their own on BTCT.CO or any other exchange with their own share-ownership as the asset, allowing the creation of pass through shares or larger share blocks for trading.

[Mabsark]

Can you elaborate on why you are going with the 65nm process?

With ActiveMining proceeding with a 28nm process, how do you plan to compete?

The short answer here is that we simply do not believe that investing heavily in the absolute "bleeding edge" of technology is wise or necessary to achieve competitive results or profitability.

Labcoin is not a project that is primarily focused on developing the absolutely most "high tech" ASIC possible, but rather to reach the market quickly with the best hash rate per invested dollar.

If you had to choose between ordering a high density mining chip from butterfly labs or a well designed multicore chip based on a technically older design with lower density from Bitfury, what would you choose right now? (Not to mention a year ago, when Butterfly Labs started their process).

With parallel development teams and established contacts with foundries and manufacturing plants in China, we simply see more profitability in developing and producing chips and mining equipment based on tried and available technologies, then risking investor funds and delays in targeting next generation tech.

I hope this at least somewhat answers your question.

28nm isn't next gen tech, it's current gen. Also, BFL use 65nm whereas BitFury use 55nm. The comparison you should be making is between KnC on 28nm and BitFury on 55nm which have similare efficiency.

As for the question of what you would choose, I'd say the one which provides the best value, regardless of process used or the efficiency of the ASIC. An inefficient ASIC priced low enough can offer far more value than a higher priced, highly efficient ASIC.

I'm looking forward to the IPO.

[burnside]

Asset admin lock has been removed.

The issuer lock is still in place.  The issuer can unlock it whenever they believe the prospectus is complete and they are ready to open voting by the site mods.

Cheers.

[TheSwede75]

Can you elaborate on why you are going with the 65nm process?

With ActiveMining proceeding with a 28nm process, how do you plan to compete?

The short answer here is that we simply do not believe that investing heavily in the absolute "bleeding edge" of technology is wise or necessary to achieve competitive results or profitability.

Labcoin is not a project that is primarily focused on developing the absolutely most "high tech" ASIC possible, but rather to reach the market quickly with the best hash rate per invested dollar.

If you had to choose between ordering a high density mining chip from butterfly labs or a well designed multicore chip based on a technically older design with lower density from Bitfury, what would you choose right now? (Not to mention a year ago, when Butterfly Labs started their process).

With parallel development teams and established contacts with foundries and manufacturing plants in China, we simply see more profitability in developing and producing chips and mining equipment based on tried and available technologies, then risking investor funds and delays in targeting next generation tech.

I hope this at least somewhat answers your question.

28nm isn't next gen tech, it's current gen. Also, BFL use 65nm whereas BitFury use 55nm. The comparison you should be making is between KnC on 28nm and BitFury on 55nm which have similare efficiency.

As for the question of what you would choose, I'd say the one which provides the best value, regardless of process used or the efficiency of the ASIC. An inefficient ASIC priced low enough can offer far more value than a higher priced, highly efficient ASIC.

I'm looking forward to the IPO.

You are of course absolutely correct. The comparison I was after was that Butterly Labs chose to develop an ASIC based on what when they started over 1 year ago was "next gen" at the time (I would argue that until KNC or any other ASIC provider shows an actual working unit/chip based on 28nm, it is still next generation), while Bitfury chose to develop using current generation technology (more or less) and has managed to reach market at almost the same time as Butterfly Labs, at a more attractive price point and with seemingly better availability of chips.

Between the two, its hard to not (as a customer or investor/share holder) want to say that The choice of developing a more effective chip based on available technology carries less risk, and plenty of opportunity for profitability without taking the risk involved in developing for "next gen".

[superduh]

where did sam go? he was the front and now he's disappeared?

[Blue777]

Question:
1. So how much percentage of profits is LabCoin planning to pay as a dividend?

"All shares are entitled to an equal percentage of dividends"
"Pay regular dividends amounting to a percentual share of ownership in the company on a bi-weekly basis."

There is no mention of the percentage of profits but only dividends.

2. To clarify, the shareholders have the ownership of LabCoin without voting right. Is that correct?

Thanks!

1. This will be clarified shortly but what we are working with is between 30-40% reinvestment fund at least in the short term and 60-70% directly towards dividend paid by-weekly or weekly.

2. We are defining this as well as we speak. We have gotten some requests for the possibility of selling "board seats" (ASICMINER style) where x amount of shares owned by a single share holder would equal a % of voting rights. It is a little complicated since we do not want to make decision making a long and complicated process, while still ensuring that share holders feel secure that we are developing in a direction that the majority is comfortable with.

60%-70% of profits will send to 10 million or 7 million shareholds?
Thanks

[TheSwede75]

where did sam go? he was the front and now he's disappeared?

Sam is very much still part of leading the project. I am assisting in communication, marketing and the IPO while Sam works on getting everything ready for first-run, production and component procurement for the first generation mining equipment.

[TheSwede75]

Question:
1. So how much percentage of profits is LabCoin planning to pay as a dividend?

"All shares are entitled to an equal percentage of dividends"
"Pay regular dividends amounting to a percentual share of ownership in the company on a bi-weekly basis."

There is no mention of the percentage of profits but only dividends.

2. To clarify, the shareholders have the ownership of LabCoin without voting right. Is that correct?

Thanks!

1. This will be clarified shortly but what we are working with is between 30-40% reinvestment fund at least in the short term and 60-70% directly towards dividend paid by-weekly or weekly.

2. We are defining this as well as we speak. We have gotten some requests for the possibility of selling "board seats" (ASICMINER style) where x amount of shares owned by a single share holder would equal a % of voting rights. It is a little complicated since we do not want to make decision making a long and complicated process, while still ensuring that share holders feel secure that we are developing in a direction that the majority is comfortable with.

60%-70% of profits will send to 10 million or 7 million shareholds?
Thanks

The profits are equally decided among all available shares. So 10.000.000 (ten million). It is also entirely possible that we will choose to pay a higher dividend then 70% based on whether or not reinvestment is a wise financial choice at the time. I can for example see a situation where mining and sales produce income faster then production and sales can be reinvested in. In which case dividends could go up significantly.

Important to remember is that the entire Labcoin team has a vested interest in the success of the company through their ownership and have every reason to maximize profitability and longevity of the company.

[zy02264]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

[forensick]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

depends on bylaws... in some way it can impossible to kick out somebody even with all 70% shares...

[zy02264]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

depends on bylaws... in some way it can impossible to kick out somebody even with all 70% shares...

Yeah for sure. I just worry about if this means the management doubt its profitability and just want to liquidate their shares ASAP. You know, if it gonna be huge, only want to keep 30% profits is a little bit strange.

[JMG]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

It's shares without voting power. The voting power is what controls the company. So the answer would be no.  

http://www.investopedia.com/terms/v/votingright.asp

The reason they owns 30% of the company is the matter of valuation of Labcoin management. They are valuing their time, efforts, and already invested money as $300,000 while rasing $1,000,000. I think it's an honest valuation, not like others who value themselves over millions of dollars.

[forensick]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

depends on bylaws... in some way it can impossible to kick out somebody even with all 70% shares...

Yeah for sure. I just worry about if this means the management doubt its profitability and just want to liquidate their shares ASAP. You know, if it gonna be huge, only want to keep 30% profits is a little bit strange.

well, with a good accountant, 30% profit could be some way more than 60%  

[TheSwede75]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

depends on bylaws... in some way it can impossible to kick out somebody even with all 70% shares...

Technically the shares in the IPO are non-voting shares and represent a percentage of profit and assets. The company itself is still managed by the founders and developers with community and share-owner input.

We also do not believe it would be in any shareholders best interest to attempt a "hostile takeover" since if an investor believe that they through a 3.000 BTC+ investment could better run a ASIC development and mining operation, an investor with access to over $250.000 in capital likely would just start their own company to do so instead.

[JMG]

So what happens if the management wants to sell some shares?

In my understanding, the structure of this IPO is Class A shares with voting power and Class B shares without voting power. If anyone wants to sell Class A shares, then the shares should have voting power, don't you think?

http://www.autoblog.com/2013/05/10/ford-family-keeps-special-voting-rights/

[TheSwede75]

Hey! Just read you revised business plan. Well done! I have one questions that hope you could answer:

Per your plan, you will sell 70% shares in IPO and you management will only keep 30%. Don't you worry about if someone buy 31% or more and kick you guys out? What make you think that you don't want to ensure an absolute control.

Thanks!

depends on bylaws... in some way it can impossible to kick out somebody even with all 70% shares...

Yeah for sure. I just worry about if this means the management doubt its profitability and just want to liquidate their shares ASAP. You know, if it gonna be huge, only want to keep 30% profits is a little bit strange.

I can assure you that everyone involved in Labcoin is 100% dedicated to what we believe is Labcoins very bright future. The reasoning behind the high percentage of ownership diversification is simply that we believe that quick access to funds for development and production is important.

We did discuss placing a smaller percentage in the IPO but in doing so we would increase initial valuation very sharply and to ensure success of the IPO we chose to price the project attractively and accept smaller ownership.

We are also of the opinion that since all ASIC development and hardware projects, no matter how well managed carry a fair risk to investors (such is the nature of Bitcoin mining, hardware development etc.).
And while many of the latest IPO's have been introduced at exceptionally high initial valuations, We would rather quickly fill a fairly priced offering and reward early investors then deal with a potentially drawn out introduction at a very high initial valuation.

I hope this answers your question.

[JMG]

I can assure you that everyone involved in Labcoin is 100% dedicated to what we believe is Labcoins very bright future. The reasoning behind the high percentage of ownership diversification is simply that we believe that quick access to funds for development and production is important.

We did discuss placing a smaller percentage in the IPO but in doing so we would increase initial valuation very sharply and to ensure success of the IPO we chose to price the project attractively and accept smaller ownership.

We are also of the opinion that since all ASIC development and hardware projects, no matter how well managed carry a fair risk to investors (such is the nature of Bitcoin mining, hardware development etc.).
And while many of the latest IPO's have been introduced at exceptionally high initial valuations, We would rather quickly fill a fairly priced offering and reward early investors then deal with a potentially drawn out introduction at a very high initial valuation.

I hope this answers your question.

That's a good answer. 

[TheSwede75]

So what happens if the management wants to sell some shares?

In my understanding, the structure of this IPO is Class A shares with voting power and Class B shares without voting power. If anyone wants to sell Class A shares, then the shares should have voting power, don't you think?

All 10.000.000 shares are of the same type and gives owners rights to dividends of 100% from the proceeds of Labcoin (don't confuse this with our 70% dividend estimate since the reinvestment fund is not money that leaves the project but are reinvested in development and production for future growth and profits). From a management perspective, Labcoin is controlled by iTec Pro LTD and no shares carry a set voting value.

Edit: As a possible instrument of direct influence from a share holder perspective we are considering two main options. A: a form of "board seat" share sales (ASICMINER does this and the board seat owners work as an advisory panel from what I understand) or B: a form of "trustee" system where we bring outside knowledge in through share holder votes on BTCT.CO and all share holders can approve or deny suggestions of new 'voting members' that would represent the share holders.

[HuLaN]

So what happens if the management wants to sell some shares?

In my understanding, the structure of this IPO is Class A shares with voting power and Class B shares without voting power. If anyone wants to sell Class A shares, then the shares should have voting power, don't you think?

All 10.000.000 shares are of the same type and gives owners rights to dividends of 100% from the proceeds of Labcoin (don't confuse this with our 70% dividend estimate since the reinvestment fund is not money that leaves the project but are reinvested in development and production for future growth and profits). From a management perspective, Labcoin is controlled by iTec Pro LTD and no shares carry a set voting value.

Exciting new IPO! One question though;
Both Asicminer and ActiveMining had in their IPO to first pay back the public investors in full before taking any cut of the profits themselves. Is this something Labcoin is considering also?

[blackswan]

Now that Burnside has removed the admin lock on this asset, do you have a timeline for when you think you'll remove the issuer lock so this security can be voted upon?