Fiat Daily posted on March 14, 2019 00:12:45
This seems more like a regular startup because its actual product is a hardware device that is supposed to improve privacy against trackers and ads (a glorified ad blocker device). Now I am unable to determine the technicalities of the device (if it is any good or not), but it seems that blockchain is pushed on this product based startup to acquire the funding investments. They claim that the byzantine fault tolerance algorithm is used for the security feature of the device to ensure the security of your internet traffice, I just fail to understand how that would work or if that is just some throwing around of buzzwords to impress noob investors. I am skeptical though and leaning to the latter. Also their use of tokens doesn't seem to have any valid value other than rewards loyalty points with tokens that can be used to purchase the device.
They claim in the whitepaper that they fully comply with SEC regulations, HOWEVER, US citizens are excluded from any token sale. That seems contradicting to me. From how the whole ICO is constructed it just seems to me that this in fact IS a security-type investment that they try hard to cover up by misleading investors by implying there will be returns on investment at the company's success, yet simultaneously stating that it is NOT an investment opportunity and that there are no rights whatsoever attached to the token.
There is a complicated 2 token structure of HNYD and HNY tokens. The HNY tokens are the actual tokens for the "eco system", the HNYD tokens are "convertible" tokens that can be exchanged for HNY tokens or that may become eligible for re-purchase after 18 months after token sale (sort of refund policy they say). Token sale price is $0.0375-0.05 and buy back price is $0.07, so this could also be interpreted as "guaranteed ROI" on investment.
The company sells the device at $100 in pre order* (while the actual sales price is supposed to be around $60 (against $32 prognosed manufacturing cost), according to other documentation) and simultaneously sells the HNY/HNYD tokens in the ICO. It is not clear to me why anyone would have any advantage to buy tokens if they don't see it as an investment with an expected ROI, which would make it a SEC non compliant securities offering. Minimal token purchase would be $1500, while each individual would normally need only 1 device.
(*: a competing hardware device by pi-hole sells for around the same price of $100 (calculated in USD from GBP) )
In their 4 yr financial forecast
they make a projection of selling 50,000 hardware units in the first year, growing to an annual sales of 500,000 units in 4 years, resulting in a profit of $90 million in the 4th year, to which the sold units contribute only 16% and the rest should come from additional revenues such as premium services, marketing and partnerships. Also, like so many other shady projects, a lot of the promised success is based on non existent partnerships and a lot of claimed negotiations, which means absolutely zero. The projections seem very ambitious for such a small startup, so investors should assume a very small probablility of achieving this (same as every other startup). Even more, it seems that these financial forecasts wouldn't have much influence on the performance of the token, because it is NOT a security token and the value of the token (according to described token economics) doesn't seem depending on the network's/company's success.
It should be noted that Honeypod was initially called honeybox, and incorporated in Kentucky by Bryant Marone (CEO)
. Apparently they rebranded to Honeypod and incorporated in Delaware
afterwards and the address checks out (with Harvard Business Services as registered agent on that address). Rebranding and corparate structure changes don't necessarily have to indicate red flags, but it is worth noting. On this issue, no straightforward red flag could faithfully be concluded.
There are also rumors about the company CFO Mark Rittmaier being marked as a fraud, but the link with that information appears to be about some people accusing him of cheating on his romantic relationships and not business oriented accusations, so these can't be included as evidence against the company in all honesty. Also these accusations can be the result of a smear campaign born out of vengeance by a jealous ex or something. Not conclusive evidence though for business ethics.
WIth no opinion about the product itself, which may very well be a good product, this project seems like a tech product startup seeking to raise money by misleading crypto investors that this project has anything to do with cryptocurrency and selling them tokens that have no inherent value or price appreciation expectation, for which there seems to be no apparent reason to buy this token. Although I cannot see clear evidence of this being a cookie cutter scam, I do advice people to approach this investment with the utmost caution and the lowest expectations, because I do not believe in the inherent value of the proposed token in relation to the company and product and in that sense my opinion is that the company is trying to sell make believe in order to take advantage of unsophisticated investors.
Very bad probabilities because in case of the company's success with their product and (not yet existing) partnerships, there would be little upside to the token value, but in the case of the company's failure, the downside to the token value will be equal to its failure rate, in other words: not much to gain when you win with this bet and much to lose when you lose the bet.