[HAVELOCK] SF1 - Announcement of Consultation Poll (Trading Halted)

[seedcoin]

SF1  - Announcement of Consultation Poll opened to SF1 unit holders

Temporary interruption of trading of 'SF1' units

The trading of 'SF1' units is temporarily halted under joint accord of Havelock Investments and Seedco Management Limited. The interruption is scheduled to last until October 8th, 12 noon time EST. During this period Seedco Management Limited would like to consult the SF1 unit holders regarding a potential unit buy back and/or unit conversion offer via a Consultation Poll which has been sent out to all SF1 unit holders.

Respondents may submit their answers to the consultation poll before the 8th of October, 2014 noon time EST.
 
Poll answers are for consultation only and will remain anonymous, only aggregate results will be published via Havelockinvestments.com.

Following the publication of the results of these polls SF1 units will resume trading on Havelockinvestments.com and Seedco Management Limited may proceed with a formal offer at a later date.

[zapeta]

For the record, their poll questions:

"Poll question number 1 : If Seedco Management Limited decided to make an offer to buy back the SF1 units at a unit price of BTC 0.00045 (or 3 times the latest unit price), and considering you were eligible to accept such an offer, would you accept this offer?

Poll question number 2 : If Seedco Management Limited decided to make an offer to convert SF1 units into shares of Seedco Holdings Limited, the company holding equity stakes into SF1 startups, and considering you were eligible to accept such an offer, would you accept this offer?”

Also note that their email says "Please note that only SF1 unit holders holding more than 2,000 SF1 units may be eligible, at the time of the offer, to choose to convert their SF1 units into Seedco Holdings Limited shares."

So, for clarification, it's either take the buyback at less than half the IPO price, or have your equity converted to shares of Seedco Holdings Limited, but this option is only available if you have 2000 SF1 shares or more.

Further, the section on buybacks/termination of operation in the IPO prospectus states:

In case of the acquisition or liquidation or any other major event affecting the shareholder structure of SFI, SFI shall reserve the right to close the listing following a public notice 30 days prior to closure, but
in certain circumstances (including but not limited to the death or disability of the director), notice may not be provided in this fashion. Closure may be effected via a buyback of all outstanding shares.
Pricing of the shares will be based on the 30-day weighted moving average of the unit prices on the exchange prior to closure.

So, was there an acquisition, liquidation, or other major event that would necessitate a buyback?  What is the nature of the event?  This is something that shareholders would want to know before making a decision regarding their vote on a buyback or conversion. 

Looking forward to some answers.

[seedcoin]

SF1 unit price has been lower than 50% of the unit price at the time of the offering (or under BTC0.0005) for the past four months and below BTC0.003 for the past 3 months, last price was BTC0.00015 so BTC0.00045 represents 3 times the latest price (this is also mentioned in the consultation poll announcement).

Not all SF1 unit holders have been holding SF1 units since the offering time, some transactions have been registered below BTC0.0001 per unit so for some unit holders getting BTC0.00045 per unit is a very good deal.

There are legal limitations to the number of shareholders and there is a cost for processing each shareholder's application, hence the minimum threshold to convert units into shares. However, trading will resume as of October 8th 12 noon time EST, anyone with an insufficient amount of units may buy more then.

If, following the results of the poll, we decided to make an offer, we will motivate it in more details then. It is just a consultation for now.

[zapeta]

SF1 unit price has been lower than 50% of the unit price at the time of the offering (or under BTC0.0005) for the past four months and below BTC0.003 for the past 3 months, last price was BTC0.00015 so BTC0.00045 represents 3 times the latest price (this is also mentioned in the consultation poll announcement).

Not all SF1 unit holders have been holding SF1 units since the offering time, some transactions have been registered below BTC0.0001 per unit so for some unit holders getting BTC0.00045 per unit is a very good deal.

There are legal limitations to the number of shareholders and there is a cost for processing each shareholder's application, hence the minimum threshold to convert units into shares. However, trading will resume as of October 8th 12 noon time EST, anyone with an insufficient amount of units may buy more then.

If, following the results of the poll, we decided to make an offer, we will motivate it in more details then. It is just a consultation for now.

The fact that your buyback offer is 3x the current price doesn't change the fact that it's less than 50% of the IPO price.  The reason why it's so low?  Lack of communication and lack of results, which is on you.  You don't get to pat yourself on the back for losing 55% of shareholder value.  The fact that some people bought at 0.0001 per unit and will make a pretty decent return isn't relevant to the people who you should care about, those who took a chance on the IPO.

Further, by your own contract, the only case that would warrant a buyback would be:  "In case of the acquisition or liquidation or any other major event affecting the shareholder structure of SFI, SFI shall reserve the right to close the listing following a public notice 30 days prior to closure, but in certain circumstances (including but not limited to the death or disability of the director), notice may not be provided in this fashion. Closure may be effected via a buyback of all outstanding shares. "

So, is there an acquisition, liquidation, or major event?  If so, what is it?  Those would be the only cases that could initiate a buyback.  Obviously any of these could affect the future value of SF1, which would help shareholders decide if they should accept the offer, if one is made.

[Germican]

I see this more as an out for those who do not want to continue with the fund. SF1 has been a very different model than most offerings and provided a service that isn't a short term dividend producing security. The price of the security is based on the market price and most people getting involved didn't realize this was a very long term security. The company has distributed most of their funds however one company fell through and no note to what is being done with that funding has been made public.

However look up the companies they funded talk to their owners and you will see that Seedcoin has been very active in providing the service they stated they would offer. From the moment the terms were agreed upon and fund distributed each share represented an unknown amount of equity. That equity hasn't changed( at least to public knowledge) but the market tanked. Why? Because bitcoin securities have such small markets that even one large sell off will tank it and hurt confidence in the market. If you look at how much volume has gone through SFI on Havelock. There hasn't been a ton over the months while bitcoin has gone through major changes. Some people didn't realize this would tie up their bitcoins for so long but a reasonable amount of research on the fund at the beginning would have shown that.

Now for the buy back price 0.00045 Yup its low as thats for more than 0.00075 bitcoins (0.0009 if you add in undistributed funds) that have been distributed your losing a lot however before today or even months ago you couldn't sell out any large quantity at that price. If you read their wording they state that if they made an offer to buy back for that price would you? They are not doing a forced buyback in the way they have phrased this. This is offering those who want their bitcoins out a reasonable offer based on the market. They get cheap shares of their fund and the seller gets instant access to bitcoins. Your only other option was to wait.

If they forced you to sell back then yes I would be very very pissed but right now I think it's just to allow those buyers who want out the ability to get out. They could literally do nothing and let the market go even lower or even just start buying shares at the lowest price points but instead they are looking at offering a deal to at a minimum help the market.

I think the issue is too many investors evaluated the security improperly and had very different expectations than what has happened. I think this is because a lot of bitcoin investors have very little knowledge or training in real investments. I invested in the ipo and slowly have been acquiring more as I personally still see this as a solid long term investment. The only thing I wish we could know is what level of equity is held by the fund in each company. Since we don't know that it leaves a big variable open.

But seriously hit up the companies they have funded on Twitter or email them to verify they are doing what was stated in the ipo which is funding and providing business assistance/consultation to build these into large global companies.

Edit: I'm holding and may consider the second option depending on the terms so long as the offer is reasonable compared to IPO and I don't have to convert all my shares as it's a fair means to diversify and I personally have confidence in the group running it.

[NotLambchop]

...

Whose alt are you?  All of your posts seem are defending Seedcoin.  Nothing else.

[Germican]

No alt I was a lurker til your post NotLambchop back in June about "why do you invest?". I think many people have a huge misunderstanding of the fund and what to expect so I try to clear that up as I don't hear many with the same perspective.

[NotLambchop]

Aha.  A disinterested educator.  Gotcha

[Germican]

Aha.  A disinterested educator.  Gotcha

Nope as I stated above I'm invested in them pretty well so I have an interest in it which is why i decide to actually take time and post.

[zapeta]

I see this more as an out for those who do not want to continue with the fund. SF1 has been a very different model than most offerings and provided a service that isn't a short term dividend producing security. The price of the security is based on the market price and most people getting involved didn't realize this was a very long term security. The company has distributed most of their funds however one company fell through and no note to what is being done with that funding has been made public.

However look up the companies they funded talk to their owners and you will see that Seedcoin has been very active in providing the service they stated they would offer. From the moment the terms were agreed upon and fund distributed each share represented an unknown amount of equity. That equity hasn't changed( at least to public knowledge) but the market tanked. Why? Because bitcoin securities have such small markets that even one large sell off will tank it and hurt confidence in the market. If you look at how much volume has gone through SFI on Havelock. There hasn't been a ton over the months while bitcoin has gone through major changes. Some people didn't realize this would tie up their bitcoins for so long but a reasonable amount of research on the fund at the beginning would have shown that.

Now for the buy back price 0.00045 Yup its low as thats for more than 0.00075 bitcoins (0.0009 if you add in undistributed funds) that have been distributed your losing a lot however before today or even months ago you couldn't sell out any large quantity at that price. If you read their wording they state that if they made an offer to buy back for that price would you? They are not doing a forced buyback in the way they have phrased this. This is offering those who want their bitcoins out a reasonable offer based on the market. They get cheap shares of their fund and the seller gets instant access to bitcoins. Your only other option was to wait.

If they forced you to sell back then yes I would be very very pissed but right now I think it's just to allow those buyers who want out the ability to get out. They could literally do nothing and let the market go even lower or even just start buying shares at the lowest price points but instead they are looking at offering a deal to at a minimum help the market.

I think the issue is too many investors evaluated the security improperly and had very different expectations than what has happened. I think this is because a lot of bitcoin investors have very little knowledge or training in real investments. I invested in the ipo and slowly have been acquiring more as I personally still see this as a solid long term investment. The only thing I wish we could know is what level of equity is held by the fund in each company. Since we don't know that it leaves a big variable open.

But seriously hit up the companies they have funded on Twitter or email them to verify they are doing what was stated in the ipo which is funding and providing business assistance/consultation to build these into large global companies.

Edit: I'm holding and may consider the second option depending on the terms so long as the offer is reasonable compared to IPO and I don't have to convert all my shares as it's a fair means to diversify and I personally have confidence in the group running it.

We don't know if this is a forced buyback or not - that was never stated.  If the offer is made, and participating in the buyback is voluntary, I don't see that as an issue.  I agree that a lot of people probably got in to the fund without any idea of how long it might take to pay back, and this would give those investors an out. 

[Germican]

The statment

"considering you were eligible to accept such an offer, would you accept this offer?"

Leads me to at least think that it's just going to be an offer you can choose to accept or not. That's at least my interpretation of the phrasing.

[seedcoin]

If the offer is made, and participating in the buyback is voluntary, I don't see that as an issue.  I agree that a lot of people probably got in to the fund without any idea of how long it might take to pay back, and this would give those investors an out. 

That seems quite a reasonable statement for someone who downgraded our Trust rating here by posting that:
"Seedcoin scammed users out of at least 1100 BTC. Offered 2 million shares at 0.001 BTC each (2000 BTC total) and then tried to buy them back for .00045 BTC each (900 BTC total), pocketing the rest."

I would be interested to read your explanation about where Seeedcoin has been 'pocketing' the rest since funds which have been raised have been paid out to the startups as planned and along a calendar of drawdowns agreed with both the entrepreneurs and Havelock. If we offered investors BTC0.00045 per unit we would be buying these with new funds raised from private investors and completely unrelated to the SF1 fund raising. That would not be a 'pocketing' but a fresh outlay of bitcoins.

[zapeta]

If the offer is made, and participating in the buyback is voluntary, I don't see that as an issue.  I agree that a lot of people probably got in to the fund without any idea of how long it might take to pay back, and this would give those investors an out. 

That seems quite a reasonable statement for someone who downgraded our Trust rating here by posting that:
"Seedcoin scammed users out of at least 1100 BTC. Offered 2 million shares at 0.001 BTC each (2000 BTC total) and then tried to buy them back for .00045 BTC each (900 BTC total), pocketing the rest."

I would be interested to read your explanation about where Seeedcoin has been 'pocketing' the rest since funds which have been raised have been paid out to the startups as planned and along a calendar of drawdowns agreed with both the entrepreneurs and Havelock. If we offered investors BTC0.00045 per unit we would be buying these with new funds raised from private investors and completely unrelated to the SF1 fund raising. That would not be a 'pocketing' but a fresh outlay of bitcoins.

My guess at your reason for offering the buyback was a reasonable assumption given the information we had about the motivation for the buyback offer (no reason given) and where the money would come from (no info before, but you've explained above). 

In any case, you haven't even confirmed or denied that the buyback would be voluntary if offered and not forced, and you've twice dodged my questions about the motivation for a buyback offer.  By your admission you've raised new funds from private investors.  Has someone come along and offered to buy out SF1?  What are the terms?  This would be something that would affect the decisions made by SF1 investors.

Even if this isn't a deliberate  scam or attempt to defraud your investors, your lack of answers makes me feel like Seedcoin is not acting in good faith.  Simply answering a couple questions, rather than attacking the people who may have invested, would go a long way to clearing that up.

[Germican]

If the offer is made, and participating in the buyback is voluntary, I don't see that as an issue.  I agree that a lot of people probably got in to the fund without any idea of how long it might take to pay back, and this would give those investors an out. 

That seems quite a reasonable statement for someone who downgraded our Trust rating here by posting that:
"Seedcoin scammed users out of at least 1100 BTC. Offered 2 million shares at 0.001 BTC each (2000 BTC total) and then tried to buy them back for .00045 BTC each (900 BTC total), pocketing the rest."

I would be interested to read your explanation about where Seeedcoin has been 'pocketing' the rest since funds which have been raised have been paid out to the startups as planned and along a calendar of drawdowns agreed with both the entrepreneurs and Havelock. If we offered investors BTC0.00045 per unit we would be buying these with new funds raised from private investors and completely unrelated to the SF1 fund raising. That would not be a 'pocketing' but a fresh outlay of bitcoins.

My guess at your reason for offering the buyback was a reasonable assumption given the information we had about the motivation for the buyback offer (no reason given) and where the money would come from (no info before, but you've explained above). 

In any case, you haven't even confirmed or denied that the buyback would be voluntary if offered and not forced, and you've twice dodged my questions about the motivation for a buyback offer.  By your admission you've raised new funds from private investors.  Has someone come along and offered to buy out SF1?  What are the terms?  This would be something that would affect the decisions made by SF1 investors.

Even if this isn't a deliberate  scam or attempt to defraud your investors, your lack of answers makes me feel like Seedcoin is not acting in good faith.  Simply answering a couple questions, rather than attacking the people who may have invested, would go a long way to clearing that up.

I also would like a straight answer as well. All the info implies that it's just and offer willing to be accepted our not. Even the second question is asking if you want to convert to holdings in SHL which is the holding company of all equity stakes. Per the prospectus your SF1 shares already are your stake in SHL however it seems a conversion to SHL more or less legitimizes your investment in paper compared to just being on a site like Havelock.

However the possibility still remains of allowing larger holders to convert to SHL holding then forcing a buyback and removing the listing from Havelock. I'd rather convert to SHL then be forced to buy back but would feel sorry for anyone below the limit to do so or is not eligible to do so.

[seedcoin]

Even if this isn't a deliberate  scam or attempt to defraud your investors, your lack of answers makes me feel like Seedcoin is not acting in good faith.  Simply answering a couple questions, rather than attacking the people who may have invested, would go a long way to clearing that up.

Thank you for removing the allegations of 'scamming' on the Trust grading system of this forum.

We are not 'attacking the people who may have invested', I think you would find it hard to point at my comments that attack any of the investors. I do not understand how a consultation about a buy back offer or conversion in shares can be labelled 'scam or attempt to defraud investors'. Trading has been temporarily halted and will resume next Wednesday, no offer has been made yet.

The reason for doing the consultation is to find out if investors would be interested to sell their units at a substantially higher price than SF1 has been trading for the last four months on Havelockinvestments or to convert these into shares of Seedco Holdings Limited. There are legal and economic constraints that prevent us from being able to offer all SF1 unit holders to convert into SHL shares, this is why a minimum number of units is mentioned to do so in the consultation. However, for those unit holders who may wish to reach this threshold they could increase their holdings once SF1 trading resumes, on October 8th, 2014 at 12 noon time EST.

Seedcoin and SF1 (or SHL) are two distinct entities therefore if there were a buy back, Seedcoin legal entity would be the acquiring entity financing this buy back and paying the legal costs to convert SF1 units into SHL shares. Seedcoin has raised funds privately for sustaining its operations and to continue to provide services to the incubated companies such as the SF1 startups, part of these funds could be allocated to a potential buy back.

There is one important element of SF1 to be considered in the discussions, the SF1 startups. This is our main motivation from the start. We have raised funds on Havelock because we thought of it as a cost efficient way to finance bitcoin startups at a time when venture capital was limited and a way to provide exposure in (and to) the bitcoin community to entrepreneurs trying to build their bitcoin companies. Today these startups are doing well, providing useful services to thousands of users around the world, and despite your assertions we have communicated this to the community at large. Most of the SF1 investors are aware of the success of these startups, they should be proud of it and yes we are grateful for their help in facilitating this. To put it mildly, the SF1 startups' achievements - and our support that can go back one year for some of these - are not reflected in the SF1 unit price. The bitcoin investment space has been hurt by frauds and bankruptcies like MtGox and several others. The distrust generated by these frauds may be among the reasons why some tend to use words like 'scams' rather quickly on these forums.  For honest, hard working entrepreneurs such as the startup founders we support, this can be quite frustrating.

We are assessing whether it is beneficial for the SF1 startups, and hence for the startup investors, to be available for trading on a market where numbers (volume, price, market cap) indicate a lack of interest in this type of investments. In one whole week of August there were 28 units of SF1 traded (or about BTC0.007 of trading), extremely low week but real nonetheless. You may think the status quo is fine but our main goal is to keep on helping SF1 startups growing and at this time I do not think a SF1 market cap of BTC300 - or less than 20% of the funds invested in these startups since the offering - is a good indicator of the value or potential of these companies. The SF1 startups are raising post seed funds through their own channels and through our contacts, a depressed SF1 unit price is not a positive element in that process.

Re. the voluntary aspect of a buy back offer, that would depend on the results of the consultation. If the vast majority of the SF1 unit holders were in favor of a buy back at the price mentioned in this consultation then leaving a small part of the units for trade on Havelock may not make much sense. The results will be discussed with Havelock and any offer would have to be approved by Havelock before being made. At this time nothing has been set yet, this is why a consultation has been opened. We are confident that unit holders will look both at their interests and at the wider picture, i.e. what is in the best interest of the startups and the unit holders in general.









 

[zapeta]

Thank you for removing the allegations of 'scamming' on the Trust grading system of this forum.

We are not 'attacking the people who may have invested', I think you would find it hard to point at my comments that attack any of the investors. I do not understand how a consultation about a buy back offer or conversion in shares can be labelled 'scam or attempt to defraud investors'.

You may not be scamming your investors in the traditional sense.  However, if I were forced to sell my shares back at 45% of what I paid for them, especially given the promising results that your startups have shown so far (which you mentioned), I'd feel scammed.  I wouldn't be surprised if others felt the same way.

In any case, thank you for finally providing some answers to the simple questions I asked several posts ago.

[Germican]

Thank you for the response and I agree with the decision just personally would not be happy with a buy back at that price as it has much more value to me. I did vote no on the buyback so I can only hope others do as well. But I have a feeling most would not be interested in selling back at that price as many can look at the companies and see that they are doing well. Plus the low price I think has a lot to do with the low volumes and the ability of one larger share holder to completely tank the market. After a huge drop it's unlikely that the price will recover to the same price prior to the dump because of the long term nature of the security compared to most others that try pushing securities that offer quick ROI and then end up failing. People tend to get wowed by the next big investment and constantly want to be jumping their bitcoins around.

I see that this will most likely continue if the offering stays on Havelock. However i don't see that as a horrible thing as those that do see value in the company can get shares for a fraction of the price. But having the market stay like that can produce A LOT of bad PR and people calling scam.

Looking forward to seeing the results though. I would like to convert to SHL but if I'm forced to sell back I really hope it is a much much higher price. Nothings worse than seeing and investment you think is doing well and want to hold for a while force you to take a huge loss because others don't value the security in the same terms.

[Germican]

Market is back open but any idea when to expect an update on the outcome of the poll?

[NotLambchop]

^OMG buy now and make munyz!!!11!

[NotLambchop]

@Germican

Lol, was this your vote of confidence?