Update: exchange offer for physical hashing power or ASIC securities

Dear Investors,

With the latest difficulty increase of more than 11%, the earnings per week came down to 0.98% of IPO price. Including the compound earnings of ~22% since the IPO, the time frame to recover the investment got fairly long. If ASICs show up by the end of this year or early 2013, we might even end up with not being able to earn back at all.

This would be the first time that I fail to recover my investment in mining rig, and it makes me really sad that it happened with investors' money. Contractually wise I am not obligated to guarantee a ROI at all - I basically passed a portion of my risk from acquiring mining rig to you, hoping for a quick recovery and a long term profitability. We took a joined risk, and it did not turned out as expected. Please note that my personal involvement in this venture is more than 75%, i.e. I collected less than 10k$ through the IPO, but paid 40k$+ for the mining rig that operates ZETA-MINING. So, while I could refer to the contract, let the bond price deplete continuously, and remain perfectly compliant to the contract, I feel a moral commitment to not let those down that are supporting me.

Last week I already stated that I will pay at least the break-even price denominated in fiat (which for this week is 0.108BTC) for outstanding shares. I plan to keep this offer as long as possible, at the same time I admit that currently I have not enough liquidity to buy back all outstanding shares at once. I considered a variety of different options I could offer to investors and ended up with the following two that address the core criticism towards mining bonds in general and the main mid-term risk existing mining ventures have in common:

1) Bond holders are offered a trade option for physical hashing power. Each share qualifies for the break-even ratio of 1MH/s. Example: after dividend payments for week 34.2012, the break-even price of the bonds issued is 0.23BTC, which is 78% of the IPO price. Therefore, each outstanding share can be traded for 780kH/s of physical hashing power. A CM1 Quad-FPGA currently delivers 840MH/s, which during this week allows you to trade 1077 shares for one CM1 board. Bond holder is paying shipping and taxes. This offer will be always valid, the exchange ratio will be updated each week in the related spreadsheet.

2) At any time before October 2012, each ZETA-MINING share can be exchanged for 1.5 ASICMINER shares. If you believe that ASICs will kill GPU and FPGA-mining and have some confidence in friedcat's venture, this is your chance to participate. If the plan succeeds, each ASICMINER share will represent 30MH/s, allowing you to upgrade 1MH/s physical FPGA-based hashing power to 45MH/s assumed ASIC-based hashing power. I am in no way promoting ASICMINER or claiming the venture will be successful at all. The bond holder willing to swap needs to do so based on his own risk analyses and is fully responsible for the outcome.

If you are interested in one of these options, please contact me via PM. As said above, contractually I am not obligated to offer such an exchange program. I do it solely as a goodwill to thank you for the support I received so far. This implies that I reserve the right to cancel the offer on extreme and / or unforeseen developments.

Thanks for your continuous support and have a nice week,
Zefir