I'll go ahead and alter the contract to include the adjusted bond price. I had thought of that, but was unsure how to best state that.
The contract now states:
The goal of the bond offering is to buy, build, and maintain a large amount of computer hardware, primarily focused on Scrypt-based currencies. We plan on mining the most profitable currencies with this bond offering, then converting said coinage to LTC for dividend payments.
We have selected 0.3 LTC per share as an optimal number, which translates to approximately $1.00 USD at this point in time. We estimate that $1.00 USD will produce approximately of 1 KH/s of power, once all other factors are considered (such as ancillary equipment, electricity, HVAC, lease costs, ect). Should the price of Litecoins vary significantly, we will adjust the sell price of the bond to equate to $1.00 USD.
As for the guaranteed payouts, I have no qualms with pegging it exactly at 0.5 KHs. My only issue with it was that my goal is to exceed that amount. But if others agree that it should be pegged at 0.5 KHs, then we can easily adjust the contract to state that.
Well there's nothing wrong with guaranteeing 0.5 KHS PPS equivalent minimum - then if you want to pay more do so but you aren't obliged to and don't need to produce detailed accounts justifying payments.
If you think through how you'd allocate EVERY payment partially to the bond you'll see why it's not a good route to go down. Plus if you try to account for the bond seperately (which you MUST do if payments are calculated for it based on performance) then it gets really m essy if you start doing things like putting a board that wasn't bought for the bond into a machine that otherwise WAS paid for by the bond - e.g. if the PS on that machine then fails is replacing it 100% a cost to the bond or some smaller percent?
Bonds shouldn't require detailed accounts - they should pay out a predetermined amount with no reference to actual performance needed to calculate it. It's one of the beauties of selling them - that you don't have to account for everything you to do other people. As it stands you can make decisions yourself - but then have to account for everything in detail to demonstrate that bond-raised capital was used only for the benefit of bondholders.
By making your offering into a more 'pure' bond you remove that need. I'd suggest starting it at a flat .5 KHS/bond then if things go well you could look at increasing it when you released a new batch - which would allow you to measure performance across your whole installation when working out profitability. And that gives you more flexibility - as you can move boards around as you see fit without having to remember which 'belong' to the bond.
Only issue then becomes close-down procedure. In a traditional bond, full face value would be returned (as is the case with my own non-mining LTC-ATF.B1 bond). To do that you have to price in depreciation when working out the dividend schedule for bonds - which I'm not convinced you've actually done. i.e. in a few years time when all the boards have failed, where is the hash-power coming from to keep servicing the bonds?
If you think of it as a loan - which eventually has to be repaid - then you're approaching the concept of bonds in the right manner. Bonds are debt - not equity (as is the case with shares).