Business Plan sent to interested investors (2011 - 09 - 20)

[MasterP]

*sighs*


i feel like my mom now. OnO


when she was a kid, she waited a whole year for one of those mail-order sega genesis.


now, i'm doing something similar. XD


DX

But you'll be able to play so much more than Sega Genesis. Its totally worth the wait, and if you are currently in line waiting, its better than being at the beginning of the new line forming or the end of that line depending how quick you get your preorder in.

True.


i'm just saying, i feel like my mom, caus' i'm waiting a year for the most awesome system of my generation. XD

 

[Link]

Understand your point totally. Please realize there are people who've ordered within the 1st week of Preordering, almost 3 years ago to the day. It sucks waiting for this thing, but it is totally worth it. I was lucky, arranged my schedule so I had the day off work, and was hitting F5 like it was my job on Craig's site and EDs IIRC. Once things went live I only ordered a Pandora to streamline the lagging bandwidth available, I skipped out on the accessories on a later order. First come, first served, first Open Pandora in the US. I waited exactly 600 days. A year ain't squat.

 

[EvilDragon]

Has anyone who's scrutinized this thought of something that ED might not have taken into account? There's gotta be SOME way to knock him down.

I'd feel safer in any investments if there was some information on contracts or a backout plan if another supplier starts dicking them around again. I'm sure they've got enough cases for now, but what happens when they need more and the company they were using, oops, destroyed the mould? Or if this new German company has as much trouble getting up to speed as CC seems to be having? Or the nub manufacturer goes out of business (again).


The only other concern would be if a cheaper Chinese knock off suddenly showed up. Cutting some features, making the board a lot simpler, using a different but binary compatible CPU (ie, existing PNDs could continue to run), a company could produce something close enough to the Pandora for much cheaper to steal some customers. This is only a concern for me until they can use up the existing OMAPs they've got and start looking at better parts, which according to the business plan I think should run out by end of 2012. So, can we survive another 18 months without a clone? Probably, but it's something to consider.

Well, if the German company is as crap as CC, it is way easier to get the money back from them


German law is pretty good in that case.


But from UK to US... that's complicated.


Also, one shouldn't expect that companies won't work. If you expect that, no company could ever produce anything unless they do everything alone, which is unlikely.


Of course, you ALWAYS have the risk that one company goes bust. That's why such investments have higher risks but can pay off pretty well.

 

[Timstertoo]

I haven't had (or requested) a copy yet. But I have a question before I start ploughing through the whole thing. Will all your other projects be part of the investment as well or am I only investing in the current Pandora?


Because in my perception if I put up my money in the bad times I should also be allowed to share in the joy in the good times.


So will the ICP be part of the company, or shares transferred from the ICP company into the German Pandora company as it's the same people using the same contacts and lessons learned in the same market and it appears to be the profitable part of your endeavors at this moment.


Also are there guarantees that other stuff done in future, like for instance a Pandora2, must be done in the company that's asking funds or is it possible for you to simply start a PandoraTWO gmbh. And will those guarantees also extend to any other form of portable gaming device by any other name?


I'm a bit worried that you put all the risk in one spot with outside money on a product that's rapidly nearing it's end of life. IE I don't think you'll be selling the current Pandora over 1,5 years in any significant numbers that would make it an interesting investment. And you keep your current profiting project and possible future ones outside of it. I think that an investment with a limited upside like "just" the current Pandora and a 100% downside (losing my complete investment) is probably not something I could choose to do. If you let people along for the complete ride I would certainly be interested as I think you guys are doing some cool stuff and the learning money you've paid, and will have your investors also paying for, will pay out in the form of profits in future projects.


Edit: Just to clarify. With the current Pandora I mean the one right now with exactly these specs.

 

[craigix]

iControlpad Ltd is a totally different company, registered separately and has different people involved in it. So it would not be involved in this.

 

[Timstertoo]

iControlpad Ltd is a totally different company, registered separately and has different people involved in it. So it would not be involved in this.

Thanks for your swift reply.


Can I make the assumption that this will also be the same with future projects and the current investment run is solely for the Pandora as it is now and investors might be excluded from a Pandora 2 or any other similar device you guys may design in the future?

 

[craigix]

I'd expect a Pandora2 to be linked directly to the current Pandora.

 

[EvilDragon]

As Craig mentioned, iCP is a different company.


However, OpenPandora GmbH includes my shop.


Therefore, any iCPs, Everdrives, etc. sold will also add to your profit share.


I'd love to do a Pandora 2 with the same people, and this is included in the plan as well.


I think it's a good idea to have seperate companies and we can help out each other.


We still help out each other. I think this is a really good setup.


Craig mainly concentrates on the iCP right now, which I also sell, and I will concentrate mostly on the Pandora.

 

[neko]

Might take especially long if you're not from Germany though.


The German contracts are finished next week, taxwise everything has been setup for my company. So theoretically, a German investor could sign up next week and send the money the day after.

I'm still a little unclear on the tax stuff, since you made a reference to a 25% dividend tax in Germany, but said the investors from other countries can "claim that money back".  Would I have to file something with the tax authorities in Germany, or is it sufficient that I give you an address in another country?


Also, international bank transfers often take longer than one day.

 

[Caine]

I'm still a little unclear on the tax stuff, since you made a reference to a 25% dividend tax in Germany, but said the investors from other countries can "claim that money back". Would I have to file something with the tax authorities in Germany, or is it sufficient that I give you an address in another country?


Also, international bank transfers often take longer than one day.

In so far I understand it correctly, ED will have to pay the German tax (25%+ solidarity tax) to the German tax office, and we will have to claim it back from them ourselves. Depending on the contracts between your country and Germany you can get those forms at either your own tax office or the German one, the latter being the more likely. E.g. in the Netherlands, I cannot go to my local tax office for claiming taxes from Germany. Your local tax office will need to provide a declaration of residence.


It also looks like you can request (in advance) that the taxes are lowered at the time of payment (at least according to the Dutch site), but the details and proper German forms (regardless of which approach is utilized) are currently unclear to me as well.

 

[EvilDragon]

Correct.


You will first get your profit, but 25 + 5.5% (Soli, that's a special tax here) from that will be kept here.


Then you'll fill out one form and send it to the German authorities (I can help you with that) and then you'll get it back.


After that, you have to include that profit into your normal tax report and pay the taxes for the profit in your country (15% if you're living in USA, varies from country to country)

 

[NESnero]

Notch eh, isnt he a millionaire now?


In any case, glad to hear you're progressing along, I got my pandora a few days ago, and its just the best!

 

[FatalErrorX]

cant wait for the pre order's to go up again ... good to see that the investors are biting in ^_^

 

[Shadowfox]

It was suggested by TI to use them, as they produce a similar product (like the BeagleBoard).


TI only had some prototypes produced there (AFAIK), and CC probably gives TI prototypes extra priority.


After we wrote what happened on the blog, one other company did contact us. They also wanted to work with CC, but the test run had a 100% failure rate...


They switched to a different company and things work fine now.


We've not been in contact with other customers.


Also, GC calls me up every now and then to ask the status, they contacted me on weekends if they have some news, whereas CC wasn't even able to answer us the question about the current status.


The communication is already WAY better.


I've seen some PCBs from their customers. One is a professional HDSDI video processor from a local company here, which has a similar part density on the PCB as the Pandora has and it's also 8layers, so pretty similar in terms of production.


The failure rate without extensive testing (they were in a hurry, as the previous production company in UK had problems producing the boards... yeah, that scenario reminds me of something) was 3%, so pretty good.

So, out of curiosity, what was the average failure rate % regarding the pandora production at CC? :lol:

 

[mcobit]

Around 20% iirc.

 

[Shadowfox]

Around 20% iirc.

Geez, I wonder what their track record is like since inception?

 

[Shadowfox]

Once the investment is setup and I can start everything, it should take about 3 months

Wow.


so i may not get mine until next year.


*sighs*


i feel like my mom now. OnO


when she was a kid, she waited a whole year for one of those mail-order sega genesis.


now, i'm doing something similar. XD


DX

Wow, was the Genesis completely sold-out during its initial release? *ponders how dated the components of the genesis were upon release* might have to do some wikipedia research.

 

[EvilDragon]

Around 20% iirc.

I think even 25 - 30%...


Now they're fixing all the remaining PCBs. But oh well, the failure rate often is stated BEFORE trying to fix the boards.

 

[neko]

Correct.


You will first get your profit, but 25 + 5.5% (Soli, that's a special tax here) from that will be kept here.


Then you'll fill out one form and send it to the German authorities (I can help you with that) and then you'll get it back.

Is the money returned to the investor or to OpenPandora GmbH, and how long does this take?  To minimize bank fees, it would be preferable not to receive two separate payments.

After that, you have to include that profit into your normal tax report and pay the taxes for the profit in your country (15% if you're living in USA, varies from country to country)

The rules in the USA are a little more complex than that.  To qualify for the 15% tax rate, the stock must have been held for at least 60 days.  While all investors will be in for more than 60 days, the investor can not sell the stock, or make an agreement to sell the stock, prior to the dividend.  Thus the exact wording of any repurchase agreement is relevant.

 

[EvilDragon]

Correct.


You will first get your profit, but 25 + 5.5% (Soli, that's a special tax here) from that will be kept here.


Then you'll fill out one form and send it to the German authorities (I can help you with that) and then you'll get it back.

Is the money returned to the investor or to OpenPandora GmbH, and how long does this take? To minimize bank fees, it would be preferable not to receive two separate payments.

It will be returned to the investor. I don't know how long this takes, but normally, tax returns happen within 1 - 2 months.


I will check if it's possible to minimize the bank fees.

After that, you have to include that profit into your normal tax report and pay the taxes for the profit in your country (15% if you're living in USA, varies from country to country)

The rules in the USA are a little more complex than that. To qualify for the 15% tax rate, the stock must have been held for at least 60 days. While all investors will be in for more than 60 days, the investor can not sell the stock, or make an agreement to sell the stock, prior to the dividend. Thus the exact wording of any repurchase agreement is relevant.

It's no stock. You cannot sell anything here.


Basically, you give me a loan and will get xx% of the profit share back. And after a set amount of time, you can reclaim your money.


This is the standard contract we're currently preparing.


If you do not agree with that and want some special deal, let me know what exactly would be of interest to you and we'll check it.


BTW: There is a site from our government about investing in german companies:


http://www.bundesfin...html?__nnn=true


Maybe you can find some information or help there as well.


EDIT: Just checked that site... they give minimal information in English, and once you want to take a look at the double tax agreement for the various countries (which is the important information for you), they only have the information in German...


Maybe US government has information about double tax agreements for investments into foreign countries somewhere?