::nods::

I think the key points are that they:

(1) Clearly promised full BTC refunds in the even that they didn't delivery in several venue and forum, including explicit direct communication

(2) Could easily have arranged to make full BTC refunds possible (by holding the coins or hedging against their change in value with an agreement with someone who was holding the coins). They claimed their manufacturing was paid for by investors, so the view that they'd hold the coin was completely realistic (and may be true).

(3) Sold products under terms that would have really only been attractive when secured by the expectation of refund of BTC paid in the event of default. They sold machines for BTC that produce BTC and can't practically be used for anything else, only a fool or a madman would buy such a machine without the expectation that they'd get as much or more BTC back from it.

When I purchased my hashrate estimate was that if they delivered on time my baby-jet units would lose about 10 BTC each, but since they were offering up to 4x more hashrate via MPP that would be enough to let me upgrade my mining hardware to "significantly less than 1.0 W/GH" at basically breakeven, or— if they were so late to deliver that MPP could not protect it against hashrate increases, that I'd receive a full refund of the BTC paid. It was my understanding and belief that hardware itself would be pretty profitable relative to COGS but I was willing to give up most of that profit with HF's high prices in exchange for they and their investors taking the considerable risk of delays and failures to deliver.