ATTACHMENT Xx

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 1 of 34

communication group.txt

[6/10/2013 8:10:00 PM) Jeff (PR): [6/10/2013 8:10:03 PM] Jeff (PR): like this? [6/10/2013 8:10:03 PM] Josh Zerl an: [6/10/2013 8:10:39 PM] Anthony Fast: Yep, | was just doing that by adding Dave to the other one | set up last week [6/10/2013 8:10:44 PMY Anthony Fast: but this works

6/10/2013 8:23:11 PM] Jeff (PR) https://products. butterflyl abs. com/65nm-asic-bitcoin-mining-chip. htm [6/10/2013 8:23:32 PM] Jeff (PR): there is a minimum order of 100 chips. anything below that and you cannot proceed [6/10/2013 8:24:04 PM] Jeff (PR): when you add to cart, you get a subtotal which is the total cost of chips [6/10/2013 8:24:13 PMY Anthony Fast: There's Dave [6/10/2013 8:24:20 PM] Dave "The Knife" McClain: Fire and fall back! [6/10/2013 8:24:43 PM] Jeff (PR): there is a line: Payment Due on Shipping which is the amount due once chips are ready to ship [6/10/2013 8:24:55 PM] Jeff (PR): Customer pays 50% now + shipping [6/10/2013 8:25:11 PM] Jeff (PR): then they will be invoiced when the order is ready [6/10/2013 8:25:21 PM] Jeff (PR): once they pay the balance, the order is shipped [6/10/2013 8:25:34 PM] Jeff (PR): (Some of those details we are still working on, but we have time) [6/10/2013 8:25:38 PM] Anthony Fast: | didn't see it offhand, but can we include that sample chips will be available [6/10/2013 8:26:14 PM] Jeff (PR): you mean in the description? [6/10/2013 8:26:31 PM] Anthony Fast: Yeah, in the description [6/10/2013 8:27:01 PM] Anthony Fast: I'm not sure if that would go into consideration or terms of purchase [6/10/2013 8:27:56 PM] Anthony Fast: ya under the ToP saying that sample chips will be available upon request, although | don't know when that might be [6/10/2013 8:28:19 PM] Dave "The Knife" McClain: on another note

[6/10/2013 8:28:40 PM] Jeff (PR): do we send them samples?

[6/10/2013 8:28:48 PM] Dave "The Knife" McClain: look what came up on my Google Alerts for Butterfly Labs

[6/10/2013 8:28:51 PM] Dave "The Knife" McClain:

https://bitcointalk.org/index. php?topic=230325.0

[6/10/2013 8:28:58 PM] Anthony Fast: Sonny said we would today on the cal [6/10/2013 8:29:42 PM] Dave "The Knife" McClain: yeah he said a couple chi pes [6/10/2013 8:29:45 PM] Dave "The Knife" McClain: ertps

[6/10/2013 8:30:02 PM] Anthony Fast: Lulz at trolltal

pees 8:30:06 PM] Jeff (PR): this could get ugly. 100's of people asking for Samples

[6/10/2013 8:30:31 PM] Dave "The Knife" McClain: | think it's vt for paid orders [6/10/2013 8:30:37 PM] Anthony Fast: Is that after the deposit or before? [6/10/2013 8:30:41 PM] Anthony Fast: Yeah, echo Dvae

[6/10/2013 8:30:43 PM] Anthony Fast: Dave

[6/10/2013 8:30:59 PM] Dave "The Knife" McClain: after deposit

[6/10/2013 8:31:01 PM] Jeff (PR): yeah. that bitcointalk thread is a joke [6/10/2013 8:32:51 PM] Anthony Fast: So | think we can go with it if we mention Sample chips, although |'m sure people will want some sort idea when they would receive them

eee 8:34:09 PM] Anthony Fast: Wow, St. Clair already placed an order for

75

[6/10/2013 8:34:25 PM] Anthony Fast: and says "Done, now let's do something Substantial '

[6/10/2013 8:34:31 PM] Dave "The Knife" McClain: he was in the works

[6/10/2013 8:34:36 PM] Anthony Fast: Dude means busines. He's no Frank the Tank [6/10/2013 8:35:14 PM] Jeff (PR): someone did>

[6/10/2013 8:35:15 PM] Jeff (PR): ?

[6/10/2013 8:35:33 PM] Anthony Fast: | know he was, but he must have been refreshing that site from his boat off St Thomas

Page l

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 2 of 34

communication group.txt

[6/10/2013 8:36:00 PM] Anthony Fast: Yeah, Dave knows the situation with him, | just

started conversing with him on emails

[6/10/2013 8:36:17 PM] Anthony Fast: He's going to buy a lot from what Dave says [6/10/2013 8:36:25 PM] Jeff (PR): it's pending

[6/10/2013 8:36:32 PM] Jeff (PR): ah wire

[6/10/2013 8:36:34 PM] Jeff (PR): holy shit

[6/10/2013 8:37:21 PM) Jeff (PR): how did he find the page?

[6/10/2013 8:37:25 PM] Jeff (PR): did you send it?

[6/10/2013 8:38:46 PM] Anthony Fast: No, | actually just confirmed his email b/c he

was worried about the service in the ocean off St Thomas, but Josh had already osted address in the forums

6/10/2013 8:39:22 PM) Jeff (PR): ok

[6/10/2013 8:39:31 PM] Anthony Fast: He's on his game and has the money to burn [6/10/2013 8:40:55 PM] Anthony Fast: <files alt="sent file “st clair emai

order. png'">

<file size="88074" index="0">st clair email order. png</file></files>

[6/10/2013 8:41:36 PM) Anthony Fast: He's the guy who is an energy trader who wants

to build a mobile mining rig out of a shipping crate and go from one power station

to another around the country

[6/10/2013 8:41:45 PM] Jeff (PR): oh right

[6/10/2013 8:42:00 PM] Jeff (PR): what happened with the vietnamese guys? [6/10/2013 8:42:56 PM] Anthony Fast: lol, yeah, I'm going to let Dave explain what happened with Frank the Tank and the Vietnamese guys. Dude is on drugs or something

and Dave has a hilarious email exchange/story.

[6/10/2013 8:43:26 PM] Anthony Fast: Let's just say that is no more, however See 9:06:12 PM) Jeff (PR): anyone notices anything wrong with this, let me now asap

[6/11/2013 10:11:21 AM] Josh Zerlan: The lowered price for chips has generated a lot more enthu

6/11/2013 10: thony Fast: Hey guy |'mready to work with you on this upgrade annoucement whenever you get in today Josh [6/11/2013 10:28:58 AM] Jeff (PR): hmm [6/11/2013 10:29:05 AM] Jeff (PR): 1k chips out of current [6/11/2013 10:29:15 AM] Jeff (PR): why don't we just let them ask us for samples [6/11/2013 10:29:21 AM] Jeff (PR): not advertise it [6/11/2013 10:30:16 AM] Anthony Fast: Samples available upon request? ae ee 10:30:53 AM] Josh Zerlan: Sure, just let them ask, we don't even need to advertise [6/11/2013 10:31:50 AM] Anthony Fast: Well, | already have emails asking us about Samples from everyone who is interested aA far De 10:32:06 AM) Josh Zerlan: Just tell them we can send them 1 per 100 chips ordere [6/11/2013 10:32:16 AM] Josh Zerlan: = order confirmation

Page 2

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 3 of 34

communication group.txt

o = ~ wo wn Qa Qa o <= ao o (=) ow _ <= = oD wn =a —= sm o 20 = Pr) = = a) ro —a=— fo) f=) i qa <= vow c= ee Qa ww > 4 = ww own wo i ie) wn m ona = Of vw °o w ra > >w w o “wo =a Q ccd = o One oO —< oO oO we wn ww > = ww wo = x o— ww = “uw wn oO vdwo Dm ww CnmM <= w fo) oc ww Soca oc = SS oo ComoU__ «a of o> Eoc = <r ow oc coo o SH E&tDH ot ae wo oo Sa ok Es Se noocwce Cc « -- OG O GO ----ow oe ON SE SO ao er. Vsewrors wv a S>oeorc wvoa oc FE NN 0 N_—-~_N wv o Soc Db oy yy ow rn NnNO Hee WH > wooo ow~wond a ee eer eee wn 3 ——— —t<t<t<c <—=<t<t<t w = x

had a Jalapeno in

realized he still

t

hadn

AM]

Josh Zerlan:

had more time.

AODMOANDA GH oNWww CONN TODNGOG EN Stotin

hmm. to do?

box of fans?

ok what

—_— co = TO OAH HM MOH MM MH HM was mnanmM asses Ons esie a ads DOO O UDO OO OOD DOO MNS NS NS -— NS ONS ONS NS A GS MN NN ~_~_eo—_— oS SE ~ —-—_~__ et es te Ord Dedede

~~ OD

—~

Cc I I eR De

WWW WO DAM OWOWO DWH DBWOWOwo

a OO Oe

upgrade

wo wo a> x= <= = co 2 Oo w wn oO o = VU oOo ww Ul = Oo a > w a il 4 Oo wn nw a ua a wv o Qc ao o ov D= co oc Fo ont —n -— (=) 7a we aw Daw = = wo c— o = Q co => i o . -vO ao) vo —_ wo On coo i= wer oc ow so ro i = VU no wo o> o o I ow o-K w > we mt ww ao wn = == oo ow w i=) coo = o> ~oc = (= vo oOo Coe = Oo = wn ua wo Ww ~~ wv w= m co no <= vw o> w il qs wD -— wv fo) o oO. ON sas 0 oc oo oO Dm Ww wv o > wv QO wn cou w= x wow w wo ow fave) Oo -—<= ww wo 2 ou O= ~ ww on > Vv oO ll ow x= oO ee oo Om >>SlU —_— sew = vo <= co = < Io = oO. orc wo = SS w V mo vo oO Qu coo —AN = o cM | —— © = ao oF °o = —) ONAN os > a ee OL nn . ao co ——— -— oO =zovowwy om oMNN oo = SuUW —-~— Tr oO wo .~ Gov oo Soro >— nw > = Dew o a oO Or on -—— oo woccy, o SEF ~20 coc FO a>ooc ww CON Ss HP Oe —-éM<UUVULO vv we ONO ww coM~VY =a —— mane owc Me Vv a w< not wN -- wv a>) =: wn oD Hn—~—~ > —_— —_~—_ —_~ —_ —. O - wM= c._ coer Qo corr ew —_—_—_—, Kw wa w aa aaqaqaa coer" = OU —~— & —$— —Y~ >aoaaae co ow oO co _— eee wes wee O >oMdsu wee LO wee ee ye OY ees Tw vo oon MODAN BDiasy vy yu > ss 7. OO OH ooo oo o z= ——_—_. ao ome to tot =o Zo ==o == faa] —_-—_ —ws= a. aa> aaqaaqaoa2z2>222. > il wn oO aaqaaqaa a Oy ate AMM OAaAm~MOMM HS iM VDuUN® ANN MM tm OW De Be = +. Swe. -- OL... ee ee --NTAINNGS ove unwo UMmCO OMccccmoco.......-... MHeLO YD GMM BS wmiwmininem ss st st st -- OG -- Qys.. We) = oaooor- ADM ON BONNY NNNNN .. -. eee ee Sa. Oot OMS oa asia oS SS SS i I ac Nv w f— on om ~—m om —MAMNMAMNMAMNAMMNM O&O

COD GOUADON N VN V—NN we WD

oO OOOOOO Oe

NS MNS ONS ONIONS ONS ONS ONIONS

~~ SSS

SS

wn

Page 3

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 4 of 34

communi cation group. txt

[6/11/2013 1:14:06 PM] Jeff (PR): it's live on the products page

[6/11/2013 1:24:20 PM] Anthony Fast: awesome

[6/11/2013 1:24:46 PM] Anthony Fast: Should we announce that on our channels as wel now and include that in the email update about upgrades as well?

[6/11/2013 1:25:33 PM] Anthony Fast: Can we also replace the old one on the front page too? Where are the chips sales goin to be?

[6/11/2013 1:56:18 PM] Sonny: :

[6/11/2013 1:56:28 PM] Josh Zerlan: The legal reason we can use is the same as Paypal's or somethign similar

[erent ents 2:07:07 PM) Jeff (PR): we never send Viad a miner. Can we do that? 5 GH [6/11/2013 2:07:12 PM] Jeff (PR): or 7 GH

[6/11/2013 2:07:15 PM] Jeff (PR): whatever we can do

[6/11/2013 2:07:32 PM] Anthony Fast: that guy deserves it

[6/11/2013 2:17:17 PM] Jeff (PR): Engadgenet wants to do a video interview in KC with us on June 25th

[6/11/2013 2:20:21 PM] Anthony Fast: Wow, that's awesome

[6/11/2013 3:34:37 PM] Josh Zerlan: Order page for minirig still says April [6/11/2013 3:35:22 PM] Jeff (PR): refresh

[6/11/2013 3:35:30 PM] Josh Zerlan: You guys fixed it?

[6/11/2013 3:35:44 PM] Jeff (PR): yes. a bit ago

[6/11/2013 3:35:48 PM] Josh Zerlan: Ok coo

6/11/2013 4:22:22 PM] Josh Zerlan: Ok [6/12/2013 5:05:44 PM] Jeff (PR): Can someone catch me up on the arrangement that was made with forum guy who came to the office/ [6/12/2013 5:05:46 PM] Jeff (PR): ? [6/12/2013 5:06:28 PM] Dave "The Knife" McClain: Anthony is talking to Josh on the phone right now. Josh is out of the office. [6/12/2013 7:54:12 PM] Anthony Fast: <quote author="live: bfl anthony" authorname="Anthony Fast" conversation="#darl aj onocats/$467618e5559adc 44" gui d="xd6a4d8f e2542¢58997e486a803a2932928acbd585b5fdc2labea3208ee989948" timestamp="1371084278"><l egacyquote>[ 7:44:38 PM] Anthony Fast: </legacyquote>So were the contest winners LS units Supposed to ship first or something? | was not aware of this until now. Can anyone confirm?<legacyquote>

<<< </legacyquote></quote>

[6/12/2013 7:54:28 PM] Josh Zerlan: No, they are not ae to ship first. [6/12/2013 7:55:14 PM] Anthony Fast: Thanks, just got that comment on FB and that was the first | had heard of it, but | haven't been here that long and you guys know what's goin n with that

6/12/20 PM] J Zerlan: On another note, Daniel Mross wants to come and film the minirig. going online for his filmthat he's putting together. It looks pretty legit and he is one of our long time customers. | think | spoke with you about it Jeff, but in any event, what is the time frame we are looking at for turning up a Minirig for the first time with the long boards?

[6/12/2013 10:45:58 PM] Sonny: we should have one running tomorrow... although it will be with short boards. Friday we get a larger number of long boards in and we Page 4

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 5 of 34

communication group.

[6/17/2013 2:23:46 PM] Nasser Ghoseirl: it looks crreli Great froma distance [6/17/2013 2:24:10 PM] Nasser Ghoseiri

[6/17/2013 2:24:52 PM) Josh Zerlan: We. need someone that can do it... none of us knows how

[6/17/2013 2:25:00 PM] Nasser Ghoseiri: i know

[6/17/2013 2:25:19 PM] Nasser Ghoseiri: someone must be there to ignite the engine [6/17/2013 2:25:31 PM] Nasser Ghoseiri: | oth A) could pay us a visit [6/17/2013 2:25:51 PM] Nasser Ghoseiri: at this point, since we have the firmware,

chips and everything

[6/17/2013 2:25:54 PM] Nasser Ghoseiri: we need to run for our lives

[6/17/2013 2:25:59 PM] Nasser Ghoseiri: every day counts fromtoday..

ee 2:26:12 PM] Nasser Ghoseiri: they more people receive, the stronger we'| e in place

[6/17/2013 2:27:02 PM] Josh Zerlan: |'mcertainly not opposed to it

[6/17/2013 2:28:24 PM] Nasser Ghoseiri: @Dave: Are you aware of bit-fury? [6/17/2013 2:29:08 PM] Nasser Ghoseiri: basically @AIl: Are you aware of bit fury? [6/17/2013 2:30:01 PM] Dave "The Knife" McClain: yes | have heard of BitFury [6/17/2013 2:30:10 PM] Nasser Ghoseiri: very wel |

[6/17/2013 2:30:19 PM] Nasser Ghoseiri: it 1S possible that he may come out with

Some good chip

[6/17/2013 2:30:30 PM] Nasser Ghoseiri: to what extent that is true | don't know [6/17/2013 2:30:40 PM] Nasser Ghoseiri: but we need some plan with a lot of buzz [6/17/2013 2:30:49 PM] Nasser Ghoseiri: telling everyone that we'll be 28nm very

Soon

[6/17/2013 2:30:56 PM] Nasser Ghoseiri: so if came out with something superior [6/17/2013 2:31:06 PM] Nasser Ghoseiri: customers won't get excited

[6/17/2013 2:31:11 PM] Nasser Ghoseiri: how can that be planned?

hols) 2003) 23 3de 2s PM ett (PR) ce we have to walk this line carefully

[6/17/2013 2:32:19 PM] Jeff (PR): we have to maintain current sales.

[6/17/2013 2:32:36 PM] Nasser Ghoseiri: yes avoiding osborne effect

[6/17/2013 2:32:38 PM] Nasser Ghoseiri: 1!s et

[6/17/2013 2:32:56 PM] Jeff (PR): will there be an upgrade option ?

[6/17/2013 2:33:14 PM] Jeff (PR): also don't want to poke the trolls nest too much [6/17/2013 2:33:38 PM] Nasser Ghoseiri: hmmm

[6/17/2013 2:34:05 PM] Nasser Ghoseiri: we will need an upgrade program to make sure people have strong incentive to stay with us

ee 2:34:17 PM] Nasser Ghoseiri: even if temporarily, we have an inferior product

[6/17/2013 2:36:23 PM] Nasser Ghoseiri: or are there other ideas...

[6/17/2013 2:36:23 PM] Nasser Ghoseiri: ?

[6/17/2013 2:38:28 PM] Jeff (PR): how far are we from 28 ?

[6/17/2013 2:38:41 PM] Nasser Ghoseiri: @Sonny: Any info on that?

[6/17/2013 2:38:56 PM] Nasser Ghoseiri: | think we were supposed to go for it in like 3 weeks from now

[6/17/2013 2:39:22 PM] Jeff (PR): we still have to launch the voucher system for early adopters. this might be a good way to do it.

[6/17/2013 2:39:28 PM] Jeff (PR): offer this on new products

[6/17/2013 2:40:09 PM] Nasser Ghoseiri: with 28nm

[6/17/2013 2:40:18 PM] Nasser Ghoseiri: we will be sub 1W GH

eens 2:40:30 PM] Nasser Ghoseiri: that is, if we port actual design directly ere

[6/17/2013 2:51:51 PM] Josh Zerlan: We can't do another pre-order thing

[6/17/2013 2:52:01 PM] Josh Zerlan: At least not for this next round

[6/17/2013 2:52:05 PM] Jeff (PR): no

oy 20s 2S 2 OP MS eT TER aio away

[6/17/2013 2:52:25 PM] Josh Zerlan: End of July/early August tape out for 28nmis a projected date... however, given what we've seen so far with that, | would not eX ON ts

[6/17/2013 2:52:45 PM] Jeff (PR): where is tape out in process?

[6/17/2013 2:53:01 PM] Jeff (PR): is that pre or post fab ?

[6/17/2013 2:53:07 PM] Nasser Ghoseiri: pre fab

[6/17/2013 2:54:10 PM] Jeff (PR): the voucher program we are putting in for first 3 monthers might be a bust if we push ahem into a re-order and then |aunch new tech

Page 6

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 6 of 34

communication group.txt

[6/17/2013 2:54:40 PM] Nasser Ghoseiri: it's best not to give anything until we have

a chip this time | would say

[6/17/2013 2:54:59 PM] Nasser Ghoseiri: It reminds me of Wal Mart here, everytime

they give me vouchers for something

ee 2:55:11 PM] Nasser Ghoseiri: so many vouchers | lost track of what they

are for

[6/17/2013 2:55:24 PM] Jeff (PR): wal mart in france. mon dieu

[6/17/2013 2:55:31 PM] Nasser Ghoseiri: | meant carrefour

[6/17/2013 2:55:39 PM] Nasser Ghoseiri: but | thought you might not know what

meant

[6/17/2013 2:55:48 PM] Jeff (PR): same shit huh?

[6/17/2013 2:55:50 PM] Nasser Ghoseiri: yes

ee eee 2:56:04 PM] Nasser Ghoseiri: the issue | suspect is that if we announce nm

[6/17/2013 2:56:10 PM] Nasser Ghoseiri: osborne effect is very possible

[6/17/2013 2:56:24 PM] Nasser Ghoseiri: if we don't, and someone comes out with a

Superior chip

[6/17/2013 2:56:29 PM] Nasser Ghoseiri: it may affect our chip sales

[6/17/2013 2:56:37 PM] Nasser Ghoseiri: or give capital to competitors for a while

[6/17/2013 2:59:04 PM] Jeff (PR): although our record may help us with this

[6/17/2013 2:59:20 PM] Jeff (PR): if we announce people will think it will take a

year before we have it

[6/17/2013 2:59:32 PM] Jeff (PR): and keep buying current models

[6/17/2013 3:00:37 PM] Josh Zerlan: As long aS we provide a worthwhile upgrade

path/trade in program, people will still buy the current product. Unlike Osborne

if you wait, you lose out. It's better to mine now with 60 GH/s than to mine with

600 GHs in six months.

[6/17/2013 3:01:11 PM] Josh Zerlan: Our key ability is going to be to be able to

absorb the losses that an upgrade/trade in program generates

[6/17/2013 3:01:19 PM] Josh Zerlan: Something we are uniquely able to do compared to

everyone else.

[6/17/2013 3:01:26 PM] Nasser Ghoseiri: imagine

[6/17/2013 3:01:27 PM] Josh Zerlan: So everyone already invested in the BFL

ecosystem will continue with us

[6/17/2013 3:01:28 PM] Nasser Ghoseiri: next week

[6/17/2013 3:01:34 PM] Nasser Ghoseiri: BitFury

[6/17/2013 3:01:37 PM] Nasser Ghoseiri: says we're successfu

[6/17/2013 3:01:39 PM] Nasser Ghoseiri: and the chip works

[6/17/2013 3:01:43 PM] Nasser Ghoseiri: consumes |ike 1W/ GH

[6/17/2013 3:01:51 PM] Nasser Ghoseiri: They are not in mass, no PCB there

[6/17/2013 3:01:53 PM] Nasser Ghoseiri: but ap is confirmed

[6/17/2013 3:01:58 PM] Nasser Ghoseiri: what will happen?

[6/17/2013 3:02:17 PM] Josh Zerlan: eas will stil buy what they can NOW It’ al

about what you can buy right NOW, not what you can buy In 3 months

[6/17/2013 3:02:56 PM] Nasser Ghoseiri: yes it's one strong point

[6/17/2013 3:02:59 PM] Nasser Ghoseiri: and in 3 months

[6/17/2013 3:03:04 PM] Nasser Ghoseiri: we may have 28nm

[6/17/2013 3:03:09 PM] Nasser Ghoseiri: we may not for some reason

[6/17/2013 3:03:16 PM] Nasser Ghoseiri: if we do and it works, we stay lead

[6/17/2013 3:03:18 PM] Nasser Ghoseiri: if not...?

[6/17/2013 3:03:22 PM] Nasser Ghoseiri: what are your thoughts?

[6/17/2013 3:03:43 PM] Josh Zerlan: If we can guarantee an upgrade path right now

even if they announce and then we say we are working on 28nm, you'll be able to

upgrade... people will stick with us. Since they either have a BFL product now or

can buy one now and then ee later, not losing their investment

[6/17/2013 3:04:12 PM] Josh Zerlan: We need to make sure we have a 28nm product. If

we don't, we need to focus on something other than bitcoin mining

[6/17/2013 3:06:40 PM] Sonny: unless we stop the process, we're taping out at 28nm

this summer.

[6/17/2013 3:07:07 PM] Sonny: the current plan is to keep the same form factor & bga

compatibility

[6/17/2013 3:07:19 PM] Sonny: (that's the footprint they're working on)

[6/17/2013 3:08:57 PM] Sonny: If this bitfurry thing turns out to be real, we'l|

Page 7

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 7 of 34

communication group.txt [10/8/2013 7:33:03 PM] Nasser Ghoseiri: this is bad

10/8/2013 7:42:05 PM] Sonny: apparently the power consumption of our chip is even lower than what we've Dil Shed. The mock tapeout work with the foundry has found some additional power savings. We'll have updated simulation figures in the next day or two.

Soo 7:47:16 PM) Josh Zerlan: We shall not announce those until we demo a live chip

[10/8/2013 7:47:33 PM] Josh Zerlan: Should not rather

[10/8/2013 7:50:03 PM] Sonny: BitSafe update: It looks like we've got a handle on things again. Kirem has nearly completed his review of the firmware and believes he can complete that code. However, with Trezor nearing completion of it's development we've been able to study their firmware which is also open source. The idea at the moment is to merge the two firmwares and adopt the standards trezor has defined

Although this is a loss in eee: the standard... it would allow us to come to market fairly soon. We would effectively not be competing on features, but instead we'd be competing in having a much sexier form factor.

[10/8/2013 7:51:02 PM] Josh Zerlan: Our marketing reach would stomp them, too

Also, | talked to Luke about doing the Bitsafe stuff, he's interested, but if we've got a handle on it, never mind.

[10/8/2013 7:51:50 PM) Sonny: The revised form factor is similar to a oe watch

face. Ours will have a similarly large touch sensitive screen an no physical buttons. The ink- paper screen consumes much less power and will always display the last known balance even when it's off.

[10/8/2013 7:52:04 PM] Josh Zerlan: That's cool, | like htat

[10/8/2013 7:53:45 PM] Sonny: | agree... it's a tidy package... very competitive

aaa the Trezor, and with our marketing reach this could be a very hot product or us soon,

[10/8/2013 7:54:20 PM) Josh Zerlan: | have people asking about it all the time [10/8/2013 9:02:59 PM] Josh Zerlan: EMC is coming back a fully now. US1 is being a reverse proxy from Staminus. US2 is clear and will likely get DDoS'd and US3 1s at Hivelocity with the option to put it behind a DDoS. appliance when it gets

hit. There's a new eu.eclipsemc.com server that is up and operating in Germany

[10/8/2013 9:05:50 PM] Jody Drake: 469 shipped today

Se 9:25:40 PM] Jeff (PR): with numbers like that it's good we're converting

more to

[10/8/2013 9:26:34 PM] Jeff (PR): did anything happen on the windows server to speed

the database?

ao 9:26:43 PM] Jody Drake: Its more than | expected with our slow internet

today

[10/8/2013 9:27:37 PM] Sonny: josh, is there anyway to spend a lot of money to

resolve the bandwidth issue?

[10/8/2013 9:27:50 P Sonny: - or is it more than bandwidth?

[10/8/2013 9:29:31 P onny: We're also entering into the phase of the backlog

where orders per day Ox what they were the prior calendar weeks

[10/8/2013 9:29:40 P y Drake: We'll see if Jonathons work did any good tomorrow

[10/8/2013 9:30:00 P y Drake: 52 Mini Rigs in March

[10/8/2013 9:30:20 P y Drake: 21 in Feb

[10/8/2013 9:30:23 P ny: 52 times three or just 52?

[10/8/2013 9:30:31 P y Drake: X3

Page 55

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 8 of 34

communication group.txt

10/8/2013 9: 38:2 we've paid for the inventory but the shipping and handling is a lot [10/8/2013 9:39:04 PM] Jody Drake: What is our payroll now with all the overtime? [10/8/2013 9:39:21 PM] Sonny: we're close to a quarter million dollars a month [10/8/2013 9:40:14 PM] Jody Drake: 10 Mini Rigs [10/9/2013 12:44:53 AM] Josh Zerlan: | need to be able ot see what the actua problemis before | can say what can speed it up. | suspect it's a limitation of the software. [10/9/2013 4:03:53 PM] Dave "The Knife" McClain: | have had three good conversations today with Institutional Customers [10/9/2013 4:04:48 PM] Dave "The Knife" McClain: pera is uping his order to 108 and depending on some information | need to provide to himregarding the number of cards per box/rack maybe more for Dec. Deliver [10/9/2013 4:05:08 Pit} Dave "The Knife" McClain: the other two are new people [10/9/2013 4:06:29 PM] Dave "The Knife" McClain: the first is Lukas Bradley. Josh and | met himthis weekend in Atlanta. He is an entreprenuer that has a partner in Washington State that runs data centers. [10/9/2013 4:06:59 PM] Jeff (PR): :) [10/9/2013 4:07:04 PM] Jeff (PR): this is great stuff [10/9/2013 4:07:15 PM] Nasser Ghoseiri: who is the second one? [10/9/2013 4:07:27 PM] Dave "The Knife" McClain: one sec [10/9/2013 4:09:16 PM] Dave "The Knife" McClain: Ok the second is a gentlemen in NY that is loooking to buy 50 cards with hosting contracts. [10/9/2013 4:09:45 PM] Dave "The Knife" McClain: | did not offer a Dec. delivery at this point and he didn't ask for it. [10/9/2013 4:09:59 PM] Dave "The Knife" McClain: If we determine we have space, can go back to him. [10/9/2013 4:13:32 PM] Dave "The Knife" McClain: My only concern with this guy is his motives. He spoke a lot about ROI [10/9/2013 4:14:04 PM] Dave "The Knife" McClain: | cautioned hima lot about going down that road based on calculators now. [10/9/2013 4:14:42 PM] Jeff (PR): you didn't tell him RO! in a couple days, right? lt takes a week now. [10/9/2013 4:14:54 PM] Dave "The Knife" McClain: He also brought up an escrow agreement [10/9/2013 4:16:20 PM] Nasser Ghoseiri: did you make it clear that we only sel hardware, and can't guaranty ROI as it depends on infinite factors? [10/9/2013 4:16:37 PM] Dave "The Knife" McClain: exactly [10/9/2013 5:52:40 PM] Josh Zerlan: All EMC servers, except for the new EU server are protected from DDoS now. That's not to say a DDoS won't knock them offline, but it won't be Saar like before. It will just be automatically null routed ae it subsides, which means fail over should happen almost instantly when a DoS its. [10/9/2013 9:26:03 PM] Jody Drake: Shipped 494 today [10/10/2013 1:26:03 PM] Jeff (PR): any breakthroughs on making this go faster. It will take until end of 2013 at this pace [10/10/2013 2:51:55 PM] Jeff (PR): i forwarded an email from Dwolla [10/10/2013 2:52:32 PM] Jeff (PR): please take a moment to read it now [10/10/2013 2:52:44 PM] Jeff (PR): Dave, please start wid from Dwolla immedi atel y [10/10/2013 2:53:47 PM] Dave “The Knife" McClain: ok [10/10/2013 2:54:10 PM] Nasser Ghoseiri: | wonder what will become of dwolla [10/10/2013 2:56:21 PM] Nasser Ghoseiri: how will this impact us? [10/10/2013 2:56:56 PM] Jeff (PR): if we get ACH up quickly, not much [10/10/2013 2:57:04 PM] Jeff (PR): we did about $50k in last 2 months [10/10/2013 2:57:17 PM] Nasser Ghoseiri: how is the credit card setup going? [10/10/2013 2:57:29 PM] Nasser Ghoseiri: Something tells me ACH won't be much of a help to the masses [10/10/2013 2:57:38 PM] Jeff (PR): Dave had more info on that [10/10/2013 2:58:06 PM] Nasser Ghoseiri: @Dave: All the roads end to you, how is the

Page 56

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 9 of 34

communication group.txt

CC setup going?

[10/10/2013 3:00:30 PM] Jeff (PR): sonny. do you have a dwolla personal account? [10/10/2013 3:00:33 PM] Jeff (PR): anyone else?

[10/10/2013 3:00:35 PM] Jeff (PR): | do

[10/10/2013 3:00:42 PM] Jeff (PR): maybe we should do some transfering

[10/10/2013 3:01:05 PM] Dave "The Knife" McClain: They need our financials for the last 3 months. | am going call our contact and see if we can expedite it ee 3:01:42 PM] Jeff (PR): i have Dwolla reports and bitpay fromlast 3 months

10/10/2013 3:06:19 PM asser G elri: ho C there in total? [10/10/2013 3:06:23 PM] Jeff (PR): there is $37k in there now [10/10/2013 3:06:37 PM] Jeff (PR): after dave just initiated one ee 3:06:50 PM) Jeff (PR): but i think the 10k has to clear before we can do another [10/10/2013 3:07:06 PM) Jeff (PR): but if you transfer to a "customer" it's immedi ate [10/10/2013 3:07:58 PM] Nasser Ghoseiri: technically as they're closing their relationship with us, then we should be able to ask themfor a full wire? (It's like this in europe, no idea about there) [10/10/2013 3:08:13 PM] Jeff (PR): should be [10/10/2013 3:08:19 PM] Jeff (PR): but look at paypa [10/10/2013 3:09:11 PM] Jeff (PR): they may determine that we need to keep some there for refunds or something [10/10/2013 3:10:09 PM] Bruce Bourne: Hi Guys, I've been silent but watching this thread daily. I think if you look at the email from Dwolla you will see that unti Oct 28 we are able to SEND funds, so Jeff unless youthink they are oe to freeze us (like PayPal) we should be fine. | don;t like the idea of transferring to personal accounts. Propose we make daily transfers to BFL bank account until we empty this Dwolla account [10/10/2013 3:11:45 PM] Nasser Ghoseiri: Hi Bruce, maybe that's not a bad idea as well, but if we can make sure they can't decide what they can do with our funds, the that'll be what | would prefer. [10/10/2013 3:12:04 PM] Nasser Ghoseiri: Of course, we're talking only 37K$

10/10/2013 3:15:40 PM] Nasser Ghoseiri: ok, we can send it to BFL account then [10/10/2013 3:17:20 PM] Bruce Bourne: Thanks Nasser. Dave - you are going to need to indicate that the transfer to Jeff for accounting purposes is a loan, added to existing balance. Jeff - you will repay the loan by transferring the money to BFL bank account, okay?

[10/10/2013 3:17:36 PM] Jeff (PR): OK. No problem. | agree with that. | just don't want to get into a Paypa situation again.

[10/10/2013 3:17: 48 PA Jeff (PR): it was trasfered?

[10/10/2013 3:18:19 PM] Jeff (PR): transferred

[10/10/2013 3:18:29 PM] Jeff (PR): | was just talking about it.

[10/10/2013 3:18:31 PM] Bruce Bourne: | thought you said above Dave had initiated

Page 5/7

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 10 of 34

communication group.txt

[11/6/2013 11:06:48 AM] Sonny: yeah

[11/6/2013 11:07:22 AM] Jeff (PR): good for hash trade

[11/6/2013 11:07:23 AM] Sonny: also... ASICminer published their financials today Most people presume they're the big winners of the asic hardware game. They're not... not by a long shot.

[11/6/2013 11:07:45 AM] Nasser Ghoseiri: ?

[11/6/2013 11:08:18 AM] Sonny: And... AS|Cminer went conservative on their next

generation just like Avalon did. They're both coming to market now with 40 & 55nm

chips... Dead on arrival.

[11/6/2013 11:09:03 AM] Sonny: That leaves only us, hashfast & cointerra with top

tier technology. Cointerra may not even make it to market

[11/6/2013 11:09:13 AM] Sonny: HashFast is having big troubles

[11/6/2013 11:09:17 AM] Sonny: That leaves Butterfly.

[11/6/2013 11:09:27 AM] Sonny: (in an ideal scenario)

[11/6/2013 11:09:38 AM] Nasser Ghoseiri: HashFast problemis only their packaging [11/6/2013 11:09:58 AM] Josh Zerlan: Except, we don't even know if we've taped out Siena

(34/6) 2013 11:10:10 AM] Sonny: indeed

[11/6/2013 11:13:20 AM] Josh Zerlan: We need to consider Tee a revised timeline

at some point in the very near future. We will not be able to ship anything this ear at this point

(11/6/2013 11:13:47 AM] Jeff (PR): this is not good. again with this shit [11/6/2013 11:13:55 AM] Jeff (PR): unrea

[11/6/2013 11:14:15 AM] Josh Zerlan: Jeff, | told you we would never make the

i timeline we set out in the beginning, there was just no way it could appen.

[11/6/2013 11:14:49 AM] Nasser Ghoseiri: We still may be able to demonstrate before

j anuary

[11/6/2013 11:14:54 AM] Josh Zerlan: | thought we had planned on it?

[11/6/2013 11:15:02 AM] Josh Zerlan: Demonstrating is meaningless

[11/6/2013 11:15:06 AM] Josh Zerlan: For us

[11/6/2013 11:15:17 AM] Josh Zerlan: The only thing that matters is delivery. We

can demonstrate all we want and no one will care

[11/6/2013 11:16:29 AM] Nasser Ghoseiri: It's not as important as delivering, but it makes it clear to everyone that we will start shipping very soon

Pleo 20 le 63 6 AM Josh Zerlan: No it doesn't

[11/6/2013 11:16:39 AM] Nasser Ghoseiri: and makes sure they won't switch to anyone

else should someone come out

[11/6/2013 11:16:44 AM] Josh Zerlan: We demonstrated our 65nm chip and didn't ship

for 6 months

[11/6/2013 11:16:58 AM] Nasser Ghoseiri: we did ship, we didn't aye fast enough.. [11/6/2013 11:17:08 AM] Josh Zerlan: We have no faith or trust of the community. Nothing, nothing, nothing else matters cn delivery

[11/6/2013 11:17:49 AM] Nasser Ghoseiri: Delivery is the ultimate goal, and 1! don't

think it'll happen before a

[11/6/2013 11:18:08 AM] Josh Zerlan: Right, so we need to post a revised timeline. [11/6/2013 11:18:15 AM] Josh Zerlan: Lets be realistic about it this time, too. ae 11:18:31 AM] Nasser Ghoseiri: We need to wait for john before posting a

timeline

[11/6/2013 11:18:47 AM] Josh Zerlan: Then take whatever he says and add two months [11/6/2013 11:18:54 AM] Nasser Ghoseiri: and he has been more silent than bricks in my wall the last few days

[11/6/2013 11:19:09 AM) Jeff (PR): wait for John? The guy doesn't say anything

ever

[11/6/2013 11:19:28 AM] Nasser Ghoseiri: We need to know when the process starts [11/6/2013 11:19:29 AM] Josh Zerlan: Honestly, if we haven't even taped out at this point, | dont' see us shipping a product until! the very end of January at the

earliest, more like middle of February.

[11/6/2013 11:20:19 AM] Nasser Ghoseiri: If we receive the chip before ae [11/6/2013 11:20:30 AM] Nasser Ghoseiri: then chances are very high that we'll be

able to ship mid j anuar

[11/6/2013 11:20:37 AM] Nasser Ghoseiri: unless there is a problem with the chip [11/6/2013 11:20:46 AM] Nasser Ghoseiri: (which most likely will not be the case

Page 83

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 11 of 34

communication group.txt

anyway)

[11/6/2013 11:20:55 AM] Nasser Ghoseiri: but again, no word fromjohn yet [11/6/2013 11:21:24 AM] Jeff (PR): this guy is a pain. should have dumped him [11/6/2013 11:21:51 AM) Josh Zerlan: Even if we get the chip before January, with

the holiday in there, we won't get anything done on the part of vendors, etc... we

won't have a product to ship until the end of January.

[11/6/2013 11:22:41 AM] Jeff (PR): another oppotunity to seize the head spot and

we're gonna fuck it up with this guy

[11/6/2013 11:23:11 AM] Nasser Ghoseiri: Parts will be purchased in advance [11/6/2013 11:23:23 AM] Nasser Ghoseiri: there is uncertainty however

eos 11:23:25 AM] Josh Zerlan: But will they be the right parts? We don't now

[11/6/2013 11:23:30 AM] Nasser Ghoseiri: yes they will be

[11/6/2013 11:23:35 AM] Sonny: The only component of the timeline that has changed is the tapeout. There is no reason to extrapolate that out to every other step in

the process Once we get confirmation that the foundry countdown has started, we'l be able to rationally calculate demo & shipping dates. When we do, we'll push that

data out. Let's not get hysterical

ee 11:23:38 AM] Nasser Ghoseiri: I'll have the test board here in a few days rom AJ

[11/6/2013 11:24:29 AM] Josh Zerlan: Sonny, remember we have the holidays in there

That will destroy any sort of shipping/work getting done/contacting people ee 11:24:41 AM] Josh Zerlan: The timeline was predicated on not hitting the oliday

[11/6/2013 11:24:50 AM] Nasser Ghoseiri: Now that we know about the holiday [11/6/2013 11:24:53 AM] Nasser Ghoseiri: we must prepare for it

[11/6/2013 11:25:23 AM) Josh Zerlan: We have Christmas, New Years takes up basiclaly

all of the second half of December in terms of getting shit done

[11/6/2013 11:25:35 AM] Nasser Ghoseiri: We need to know which staff will be present

at the office

[11/6/2013 11:25:44 AM] Nasser Ghoseiri: we also need to arrange things in advance

to ensure things will be done in time

[11/6/2013 11:26:25 AM] Nasser Ghoseiri: @Marc: You need to arrange things on production and assembly side

ee 11:26:44 AM] Nasser Ghoseiri: now it's november, so it's a good time to plan stu

[11/6/2013 11:30:33 AM] Sonny: OK, | just got an email from John Cheng... Says he'll call me ina bit

eel 11:30:49 AM] Sonny: at the very least he hasn't run off with our money [11/6/2013 11:32:17 AM] Nasser Ghoseiri: Too early to say... where was he calling

from? Canary Islands?

[11/6/2013 11:47:48 AM] Sonny: Jeff, Josh & | are all going to have our numbers fed

to the call staff as soon as they get back fromlunch. We'll get to hear the pitch

and the accent quality.

[11/6/2013 11:49:13 AM] Sonny: Feedback is welcome for them to improve

[11/6/2013 11:49:20 AM) Jody Drake: Tell them you have a problem with your order and

see how they respond

[11/6/2013 11:49:51 AM] Nasser Ghoseiri: You mean they wont recognize your voice? [11/6/2013 11:50:38 AM] Nasser Ghoseiri: Jason is a good candidate

[11/6/2013 11:50:45 AM] Nasser Ghoseiri: especially with his british accent [11/6/2013 1:19:22 PM] Josh Zerlan: FFS is that our phone people calling me? If so, it's no wonder we have so many annoyed poeple. | want to beat the shit out of

whoever is running that phone system

[11/6/2013 1:19:40 PM] Sonny: what's FFS ?

[11/6/2013 1:19:42 PM] Josh Zerlan: 866-723-3108

[11/6/2013 1:19:46 PM] Josh Zerlan: For Fucks Sake

[11/6/2013 1:19:57 PM] Josh Zerlan: They have called no less than 25 times in the ast 30 minutes.

Pti/ 6/2013 1:21:56 PM] Sonny: Jeff, can you tell Odd to tune down their auto-redial? [11/6/2013 1:22:29 PM] Josh Zerlan: Here they are again

[11/6/2013 1:22:42 PM] Sonny: so answer the phone

[11/6/2013 1:22:45 PM] Josh Zerlan: And again

Page 84

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 12 of 34

communication group. 3°11:42:23 AM] Jeff (PR) this is all ee os assuming no more delays or anyone else 3 11:43:14 AM] Sonny: Best case would be a little faster, but not much rything yore as expected with reasonable norms in ti ming. : 44; AM] Nasser Ghoseiri: | believe in any post we make 44:45 AM] Nasser Ghoseiri: it's best not to put ourselves in a weak

ee Rot pS

a ee

ly concern is a defect in at won't happen, we'll be hance is not high, but st

e chip Nasser Ghoseiri:

AM] Nasser Ghoseiri: m AM] Nasser Ghoseiri: t

th ok | |

_—oe ey —_—so ny => uw rou se wo > =

it may Nasser Ghoseiri: so whatever post we make oe peers! Ghoseiri: it's best to somehow in a subtle way, or this M] Nasser Ghoseiri: any ideas how we can do that? M) Sonny: we have in our original terms of purchase... il development is complete and the unknowns along the way M] Sonny: From our order terms: “If you're uncomfortable lopment is complete and the product is shipped, do NOT

N

NIMD WNP NIN" Nr oot Ooo sw > =

t

BD Om OI oP

Mw rr DB Rem rRerR oO Fr Fr

WWD YD WD WOYtTteF WO WWM W LY

oer Sohee sii yee ve eet Josh Zerlan: We will not ship anything before February it's impossible.

Josh Zerlan: We need to start telling people they aren't cts until March or later. There is no way we are going to , we are going to take all sorts of shit and there's not a re done about it.

]

ee el ee eg ee ee ed ee

MNT SD MNP Ree coms MO WO Fw

om ee Ser rtoorow™uni

Reo Rr Oo oo COO te @&

a 0 S

COPD RRO TES I DW ESI OD I ee NO

MPmIPNRT RR Orr OOTmOOINIV CO AOA OT UFRD, DFT LHe ee

oe pee tie eee

ne

du

St OW BTS SD ~~

PRPs x: NRONO woow Saal ore

Sonny: Why not tell them next J une? Josh Zerlan: We also need ot offer refunds to those who want

oOo

] Sonny: it's just as arbitrary as March

] Josh Zerlan: Well, |'mall for June actually

] Josh Zerlan: Then if we deliver in March, we look good ] Josh Zerlan: Instead of giving them false promises for t even tape out until November.

] Sonny: Clearly when we laid out that timeline, we fully than November ]

;

]

]

]

oDOoOoOo TOOT

om ee ee ee oman

oo

--o-- ooo toon os OOOCOOCOs oon

ronicle tech etc knew we would not be taping out unti

PRO Rg PP PP tee

Sonny: You, me - ch Josh Zerlan: No,

Sonny: just like you know we won't ship before february. Josh Zerlan: | know we won't, yes, that's correct Sonny: Both are guesses based on the pain of the past...

~~ ~ o o Oo ~~ @ ~— ~wo oO Ss ~~ oO |! oOoOOO Oe =F BRO RO PRO HWW TR Rw UID Re OS UT SwWONI OD Sr O 4a "WODWMD oO 7 oD Ss es Ss a ee

ny: we have real data. h Zerlan: We have all the real data we need: John can't

Ro pep pet pe perm PS Pp pp

o7Ta

ny: fair point osh Zerlan: | said at the time we take what he tells us and

So eh Ss GS es Sp ie SS ae eee ce cee Nc a ee

WWWOA WWD WWW OD WWD WT WW WwW oO ca)

RRO RD PPP oo ra

ona

Le ee ee ee ee ee ee © oe ee ee ee ee ee oe ee =o => Ww wrt WP NPr3 oul

~~ oOo ~~ om ~~

PM] Josh Zerlan: That would have put us right around November. PM] Josh Zerlan: | realize marketing that might be problematic, we aren't taking more of a beating due to failed promises for

Orr

a i as ad ee Ce m™ Ww

ao Fee wo

] Josh Zerlan: Once or twice, ok, people can live with that...

way BFL is. We simply don't deliver when we say we will

] Josh Zerlan: So what do we want to a publicaly?

] Josh Zerlan: Here's my thought, something like this

] Josh Zerlan: Unfortunately, there has been a delay at the

y scheduled to get our first chips fromthe foundry around shes us out to the end of January at the very earliest

ip. As more information becomes availble, | will

013 Hoke 013 013 013

a a a a a a a a a aD ae ED EO) gg rn yo uF

CORR OC ROS RHO RRO RRO FRED PIPE RIO PIR Re Pet Pee 0 OO Oo

WNrYIMNMINYIO NO “NN DO MNMNNDM€£ VND MNMNMNONMNMTNDNMNNNN

a el oe QRS OT a 2 ee PP ee

s_~__ = BRO ROR

J t the 2nd of January, which for our first products to continue to update.

a

Page 97

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 13 of 34

communication group.txt

[11/12/2013 1:10:07 PM} Josh Zerlan: Alternately or additionally, |! could go into

technical details.

[11/12/2013 1:10:43 PM] Nasser Ghoseiri: Words

[11/12/2013 1:10:51 PM] Nasser Ghoseiri: "Unfortunately" is very negative

Ce ee 1:11:26 PM] Nasser Ghoseiri: We can announce that we've taped out on Friday

[11/12/2013 1:11:35 PM] Nasser Ghoseiri: and let everyone know how it goes [11/12/2013 1:11:55 PM] Josh Zerlan: No, | don't thin kwe should mention when we

taped out. We were suppose to tape out in September. Telling them we taped out last week is suicide

[11/12/2013 1:12:20 PM] Nasser Ghoseiri: Ok so we can say timeline from foundary was

given to us official

[11/12/2013 1:12:30 PM] Nasser Ghoseiri: and we'll have our hands on our silicon 2nd

J an

ee 1:12:35 PM] Jeff (PR): and cointerra has a PR out about taping out last

wee

ee 1:13:12 PM] Nasser Ghoseiri: What is the public expectation on our

shi pping?

oe 1:13:20 PM] Nasser Ghoseiri: When do most people believe that we'|

shi p?

[11/12/2013 1:15:06 PM] Nasser Ghoseiri: josh?

[11/12/2013 1:15:41 PM] Josh Zerlan: In two weeks from now or so

[11/12/2013 1:15:56 PM] Josh Zerlan: I've managed that expectation to move to the

end of December

[11/12/2013 1:16:08 PM] Nasser Ghoseiri: ok it's not a disaster

Pe 1:16:20 PM] Nasser Ghoseiri: people are also desensitized regarding our el ays

[11/12/2013 1:16:29 PM] Nasser Ghoseiri: difficulty won't skyrocket either [11/12/2013 1:16:32 PM] Josh Zerlan: Depends on your definition... it's not radiation in the ocean and your fish, but it's not exactly a good thing [11/12/2013 1:16:48 PM] Josh Zerlan: This was our chance to rebuild our rep and

that's gone now

[11/12/2013 1:17:11 PM] Nasser Ghoseiri: If we really ship in j anuary

[11/12/2013 1:17:16 PM] Josh Zerlan: We won't

[11/12/2013 1:17:19 PM] Nasser Ghoseiri: there will be no harm

[11/12/2013 1:17:22 PM) Josh Zerlan: | guarantee you we will not ship in January.

[11/12/2013 1:17:25 PM] Nasser Ghoseiri: that's up to us to make it happen

[11/12/2013 1:17:39 PM) Josh Zerlan: There is already harmin so far as we aren't

shipping when we promised at the end of the month

[11/12/2013 1:17:46 PM] Josh Zerlan: There is harm that we aren't shipping in

December.

[11/12/2013 1:17:53 PM] Josh Zerlan: We are 3 months late and we haven't even

started yet

PUL ie 20s) ease PM] Josh Zerlan: We can not tell people we are shipping in

January, we simply can't. IJt's not going to Pade and |f by some miracle we manage

to ship one or two units before January 31st, then all the better, we beat our

latest estimate.

[11/12/2013 1:19:01 PM] Nasser Ghoseiri: | know it's far from optimal situation

[11/12/2013 1:19:03 PM] Nasser Ghoseiri: but this is our hand

[11/12/2013 1:19:12 PM] Nasser Ghoseiri: we have to play the best we can with it

[11/12/2013 1:19:22 PM] Josh Zerlan: Indeed, so lets play it properly this time and

tell peole a realistic timeline.

[11/12/2013 1:19:23 PM] Nasser Ghoseiri: We have a lot of units that don't hash

[11/12/2013 1:19:28 PM] Nasser Ghoseiri: fast enough

ee 1:19:37 PM] Nasser Ghoseiri: maybe we can send one to each monarch

client

[11/12/2013 1:19:52 PM] Nasser Ghoseiri: as a gesture

[11/12/2013 1:19:56 PM] Nasser Ghoseiri: the hashing power isn't much

[11/12/2013 1:19:57 PM] Josh Zerlan: Nobody is going to want those at that point

they will cost more to run than they generate.

[11/12/2013 1:20:05 PM] Josh Zerlan: Take up too much space, too noisy

[11/12/2013 1:20:27 PM] Nasser Ghoseiri: has anyone complained about our timeline?

[11/12/2013 1:20:30 PM] Josh Zerlan: The only thing people will accept by way of

Page 98

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 14 of 34

communication group.txt ashing poy PM] Josh Zerlan: Yes, everyone complains about our timeline. PM] Josh Zerlan: | mean that quite literally, ae PM] Nasser Ghoseiri: ok these are the problems we have PM] N PM] oin

3

Ta NMYRMK TFN YY YY ODO

asser Ghoseiri: what is the solution? Josh Zerlan: There is no solution, beyond just telling g to get their miner until February at the earliest and

~_—_~_ o_o _ToovoTrcTcaesd

os

PM] Josh Zerlan: And offering refunds PM] Nasser Ghoseiri: as it is mentioned in the contract, we're refunds, as it's clearly stated that there are possibility of

~~oo ~~ ~~~ o

OD RRS OD I pe NN:

Qwww=< Wwww ww FRR OD PP n

ROO RRA DO RR reo ee Ss (ee ee

Re ee et Oe TO OO Re I ee Po MIN TMYINMYTWDO YNYINYIYINYH

ho

11 PM] Josh Zerlan: Yes | know we aren't required, but it's the

o-:--

Re R= OO OD Ot Pe ney De

Por

PM] Nasser Ghoseiri: at this point if we offer refund, people of that

Nasser Ghoseiri: if p Jeff (PR): we can't offer refunds

Nasser Ghoseiri: we'll consider that

Nasser Ghoseiri: otherwise, | see no reason

Jeff (PR): not unless PP releases a bunch of cash

Josh Zerlan: We can't promise people November and not ship offer refunds. We didn't take PP for Monarch Zerlan: We refund BTC Josh Zerlan: We can even refund it at the current rate for

o--

o-- NRO WO MYR OO UTUTWWH Fe

Q uo =

ue started building |

BRO RO RO RO POP TT PO tea Oo eee eee ie ee aQ PRIMI MIMI MRM SD MY YMNYIUOWO HO mo

=> 7 SS Ses es

oFts== == = eee Se ae eee oe

we ee ee ee ee ee

ROM mo H&L LS LH WWF WO wo rer

~~

PhO MR aur oO wn

wn POPS Pe Pe Pe PD Pepe PP pop pope poet yp

an: Why? We come out ahead.

t's just close the office

thought you meant sending them the equi val ent an: No, send them back the same USD value in BTC our policy has always been to send them the

BRO RO RY PY PYM TH MYM OD MY PNY NY PRY NY NY TY DP CoO TrDDODOOO DOD COCO COCOCO Oa a Ooo

Re D PREP Pe Pe Pm Pe PS Pe Pe PPP

BRO RO RY RY NYY AM MDM O11 UT WNrNro & fw DMI WUT 7S es. eo

Oo

Nasser Ghoseiri: jeff Nasser Ghoseiri: what legal actions can they take if we're

WW WW WW WWW ODO WW TC WW WOW WI OL D WWM WW

PIM D MYIMMNMHMNMMNMhP

NN ror NN am ue uu ou

PM] Nasser Ghoseiri: for maybe a month or so PM] Nasser Ghoseiri: ?

PM] Nasser Ghoseiri: However, this is our second generation, ter clarity on the process and we feel our timeline to begin

e end of the year is solid."

ul Josh Zerlan: Nasser, we were suppose to ship this month, we n

PM]

PM]

PM]

ina

BRO ROR Www aAanm TsaOUW

Oo err ww TT OIemug wor oOo ~—wOow

ii ee See =

ae Rs Sr re oy (eye al ec

oO = =

=o = OO SS 3 COW WW LW PRIPRIMYITC AT NINYIMN OD MYT DTN

RRR] PZ OP PR YP PO PP Pe ee TR TP PPP r rb

4a

s late. 1 month would be fine.

Nasser Ghoseiri: where is it stated november or december? Nasser Ghoseiri: | can't find the term.

Josh Zerlan: We changed it after Greg and company made the lly said (and people purchased on) the November/ December

WW Wet Wort Ree “mo CO CO

oDDDdDonoN on = DeOe ee

ee oe enka ee (eee it? eS

BNP PP PPP ra&

Nasser Ghoseiri: ok

Nasser Ghoseiri: how many units were ordered

Nasser Ghoseiri: before we changed the term

Josh Zerlan: Jeff can probably answer that

Nasser Ghoseiri: Jeff?

Jeff (PR): i'll have to dig.

Nasser Ghoseiri: ok

Sonny: We never EVER promised we would deliver in November at's established itself in the blogosphere, that doesn't make it e. Late november was the earliest possible in the range. That omising we'll deliver in November. Let's be clear about that ] Sonny: 'End of year' was the statement of record

] Sonny: Range = ( November / December range... expect end of

es oR Oe el 8 | ea

ee

MND SW NVNVYNNNNNNDONMNNO YO H~-MNNYIN DYN DY DO< GO PYRINID POTD PINIDY

TO MNWNYIDDWH WOWO—

Sofas fray ieee terse oie ened ee

OW0 DS TRS ESE BWW P-

CO COW FT UTNRYI CORI MOO U1CO ss a

em Dee ee

ooOonm aur

~~ eee eee ss 8 EES eS TO OT ee Ce:

WwW DMD WWW WY WY WY LI OI OM”

DOOMWMNN DDODODODOOCO

NWN Oo Pres ®

g M M 2/2013 2:13:18 PM] Jeff (PR): http://www. butterflylabs.com/ monarch Page 99

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 15 of 34

communi cation txt

(PR): more probably onny: all the mning by the GH customers are too. ave "The Knife" McClain: | do have a report from Paul that n down by date sold

(PR): monarch 300 page o oe // www. butterf

as f t

so RO ROR

= oO

n |

! have jan/feb y

abs.com/ monarch300 Kn McClain: | shared it with Jeff and Sonny

nife" although this is in magento

MPMIMNMYIMNMNNNM SMM YN

oo

x, ROT MRI RY MYM MP

mi 1-gh-cloud-hosted-bitcoin-hashing- power. htm owever, this is our second generation, so we have ss and we feel our timeline to launch towards the

ee oro =~ Oo DWO WWWWWWO Ww Ww —o VON OWOWOAAYAYDWHIUWH TUS WRI~1CKOWNIMN COCOW wr wo UV UU UDO UU

>To ST ~~ Oo ~~ See oer

ao=<c TO OWVWA OM Oo —-— HHS HHH

) ) e je ie ' 0 ) e

SO OO om

n=

- --WMWo-- TW WO EF SOW TT WI FON YI YIN TT NN

(PR): buts f (PR): Hosting contract equipment comes from our bulk o contracts will begin to be served in the January /

oO

PIOMYIMNYID YD YINYIO YIN DN HHI Oo ee are! ccrrcetce A

R): we're not that bad off

R): for most customers

From a technical point of view, we're ok. But as e

lel ee a a DUT" o Oa

DIT MYITMNMYIMNMNINIAD YINWLE DAMNYID YINRIMNYINIO NYP MY PIT PINYIO MYM D 9M NYRI WO PO

ys

R perspective.. we're going to get a black eye y: Potentially unrecoverable ys c

oo7sa OCe

~aD-

a a company who's significant value is brand and ost Josh Zenon We can avoid it in the future by not promising fect" timelines, because everything never goes perfect. Nasser Ghoseiri: | must clarify one thing Nasser Ghoseiri: we're operating on a pie order basis Nasser Ghoseiri: we sell products which are under

oe ee

RD RRO RRR DOT RII ee PP fa0)

SO DO Os OP I PP PTO OI IO Pa a ee PP pe a eis es ac eee eet ee,

2 ig 2s oe ae we >- UWUuUW --

] Nasser Ghoseiri: having no delay is nearly impossible

] Nasser Ghoseiri: not only in our particular industry

] Nasser Ghoseiri: look at microsoft, intel, amd

] Nasser Ghoseiri: so we must make it clear to everyone so n wee expectation

@

n

eel eel ell eee ell oe oe > Se Co oOOCOCO COCO O=<= &

Re ao

Josh Zerlan: I'm not arguing the technical side. | can of this all day long with my eyes closed. The PR side of g else entirely. It doens't matter what's technically right

~— o_O Oo as Do WOOD WW WY OUT WY OY WY TWD WLM LW WLW @ Le | TST Po LLL Se ee ee HD O11 UT

"on >a

r

oe ie

2 2 2 2 c 2: h 2: PM] Nasser Ghoseiri: well we must based our PR around this fact 23 PM] Nasser Ghoseiri: which is what you said "If everything goes

k h Zerlan: You can't base your PR around that fact h Zerlan: PR is perception, not facts ff (PR): you have to base it on worst case from now on et customers in this industry

‘58 PM] Josh Zerlan: The perception is we were to deliver in he latest December

:12 PM] Nasser Ghoseiri: Q@eff: The problemis identifying the worst

ace aie AS oo OoOZz OO wa

MPITWNRYID MYIMYIMNRYT NYMR TO OMNMD NPNMNMNMNMS DO RO ROT ROX NY DY TRY DN ROOT NYY TT DBD ON MY YYY D NY DY oa

—~o—~0o ~~~ OH ~~ DO SO OD eS OO ~~ O ~~ OO es

Ce etl eel el ek wtwod WWWO WLW

7B 2: ee do 2: a 22

RPOrSsS rrr

ao

2/2013 2:48:14 PM] Josh Zerlan: Jeff has it right... it's a rock and a hard Page 100

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 16 of 34

communication group.txt

| a

M]) Nasser Ghoseiri: | think it kinda can. Trolls will fill al L Fucked us again" etc

M] Nasser Ghoseiri: we have to act as it's normal

7 Nasser Ghoseiri: and predicted M M

FwWowowosd wom —_— rt MINN OD YO 2 2 os co O i al WWWO WwW

Nasser Ghoseiri: rather than “ooops, We think there is a

ORR eae a

a ae oe ee el ee ko) pan

03 PM) Jeff (PR): do we know how many customers are supposed to get

PM] Jeff (PR): besides Greg

PM] Sonny: nobody was guaranteed, it's not that sort of a ectations were we'd start shipping 'end of year'. Now the we'll start shipping in January.

PM] Jody Drake: Do customers know whether they were expecting was ae enough to say, "Yeah, you weren't in the first group. PM] Jetf (PR): is it possible we will get 1-2 units in Dec. ? P y i

Wwwow om

ro

ROD eRe RS PPP rR

MIMD PITT SO MPYIMRYIP

M] Sonny: impossible because we won't have any chips fromthe now. M] Nasser Ghoseiri: assuming they have no additional delay due

~ 5 ~~ 55 ~~ OD Ce SD ~~~ —~—<_= ~~ _~- o a -- oo

oo ome oo3 eceTU7F eos Oo POURS rr OrO-

om re WWW TWH WTHWTWTWWwows

0:43 PM] Dave "The Knife" McClain: | think it's important that once tten that | can have it before it's posted. So that | can send it to |

customers

oct

rrr o tS Perec

ae ri na 21:32 PM] Dave "The Knife" McClain: Much like how Greg had to find Fast was aa to be late via the forums. 5 h

Ro RK TROOP HY OH x<

PrP SOrFPOrOF Fr HW TONDO OSWO WOON WMMH TFOWOQDWH

4:09 PM] Bruce Bourne: Dave is right on that; we need to advise ustomers slightly in advance, and Bare: personally if we can reach andful by phone. As for messaging, |ook back at what we've said ming and to the extent we gave ranges or used "about" or e can use that to our advantage. Nasser is right - the more we can not inconsistent with expectations we will be better off 45 PM] Jeff (PR): can we post something from global or from john

7 PM] Jeff (PR): pass the buck a little

7 PM] Nasser Ghoseiri: We can say that our expectation of foundary ap earlier than their usual schedule was not met

0 PM) Nasser Ghoseiri: and they're processing it with their normal

= Os et 1 ONnNrN tN

=o

ore a

RRO Roto Soto Pep a oO WO >< ~s—_— 0 err rt —-— os

POF Oreos OH | ~~ or ~~ DO Or

Ww is 8: ? 8: M4 c

Mah

013 5:42:02 PM] Nasser Ghoseiri: so we expect to receive chips fromthem at

M] Nasser Ghoseiri: *our chip earlier than usua

M] Bruce Bourne: | wondered about something fromthem, Je n would be are we opening them up to getting attacked by the hat only distracting fromthem getting our work done? On the at would prevent them from causing us similar problems again in

"a -o

ff,

Om RR Dm BR es pet pp

om

Jody Drake: We shipped 890 today Sonny: :) Bruce Bourne: Wow, that's a pretty good day. Mostly

PM] Nasser Ghoseiri: ver PM] Nasser Ghoseiri: btw PM] Nasser Ghoseiri: he'

y good a

~~ 5S OS 8 OO

all the bad boards to test, before we

MPmWMYIMNMYINYIO VYIMNYINYIO QT

RCO RRO RRP WOWWMWON OWMOO OD OOWMOD OWOWol NH aS Teov wood Ow

ae Se ee

] Jody Drake: A lot of Jalapenos, but tomorrow we start with a Singles ] ]

ROM WOON O

Jody Drake: ana delivered this evening | Nasser Ghoseiri: what was delivered this evening? The test

PM] Jody Drake: the cases we were waiting on today PM] Nasser Ghoseiri: ah ok PM] Marc Goodpasture: We have been out since Friday PM] Marc Goodpasture: To build singles.

Page 109

TTT OT oO AO eee eee eee eee Ree eae eaeaeaeae.—

es a a RD SD aD ee ee OH TP eB

Ee eee ae ey ee ee eee a a Se eee eee ee i= om

om oro

BRO RO RO RO WOOWO wo

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 17 of 34

communication group.txt

[11/19/2013 9:03:40 PM] Nasser Ghoseiri: @Marc: Contact AJ regarding test boards When they arrive, you need to test themto see if the problem was solved. Don't mistake them for normal units for shipping

[11/19/2013 9:04:48 PM] Marc Goodpasture: Yes, | will have themtested. How about changing the bad component from China?

[11/19/2013 9:05:13 PM] Nasser Ghoseiri: if this resistor change fixes the issue [11/19/2013 9:05:27 PM] Nasser Ghoseiri: we can ignore the chinese issue (if it exists at all, and not just a theory)

[11/19/2013 9:05:36 PM] Nasser Ghoseiri: either was, we fixed 1 unit like this with the resistor replacement

[11/20/2013 10:31:45 AM] Dave "The Knife" McClain: We received the FedEx number to ship the machines to CapOne

[11/20/2013 10:32:27 AM] Dave "The Knife" McClain: The plan is to ship two pallets of 6 machines, shrink wrapped, strapped down, etc.

11/20/2013 2:59:37 PM] Sonny: had he paid in bitcoin for the 2nd half payment? [11/20/2013 3:06:33 PM) Dave "The Knife" McClain: | just talked to Jonathon about it and we went down through his tracking spread sheet. He has a number of orders waiting for the 2nd half payment. He went and searched to see if payment had been made and none had.

[11/20/2013 3:06:55 PM] Dave "The Knife" McClain: Josh if you have other information, please let me know so that we can act on ie

[11/20/2013 3:07:32 PM] Josh Zerlan: | just know a couple people have complained about it on the forums is all, | have no more information af an that

[11/20/2013 3:12:08 PM] Nasser Ghoseiri

Re: YES, you can get a REFUND from BFL

Today at 05:15:12 AM

Reply with quote #582

After 8 weeks of no response from BFL to Amex and my refusing shipments of 11 singles | am happy to say that the chargeback process is complete and | am finally rid of BFL after 8 long months. Good riddance

[11/20/2013 3:12:23 PMT Nasser Ghoseiri: Who has some info about this?

[11/20/2013 3:14:02 PM] Dave "The Knife" McClain: without an order number or name, it's hard to know.

[11/20/2013 3:14:28 PM] Nasser Ghoseiri: have we refunded 11 singles?

[11/20/2013 3:14:34 PM] Nasser Ghoseiri: that should be easy to track

[11/20/2013 3:14:46 PM] Nasser Ghoseiri: this was one today

[11/20/2013 3:14:57 PM] Nasser Ghoseiri: so if we haven't heard fromit, then we should be cee from AMEX soon?

[11/20/2013 3:17:30 PM] Sonny: This sounds like a chargeback scenario where it took a to convince his credit card company to give him money. and they

inally did.

[11/20/2013 3:18:11 PM] Sonny: So that will be a charge against our PayPal account and has likely already been given up by PayPal without our involvement

[11/20/2013 3:19:37 PM] Nasser Ghoseiri: i see

[11/20/2013 3:19:40 PM] Nasser Ghoseiri: we need to know who it is then

[11/20/2013 3:19:52 PM] Nasser Ghoseiri: otherwise we may ship himthe units ? [11/20/2013 3:22:55 PM] Nasser Ghoseiri: | must mention that many people cancel with us, to buy units from eba

[11/20/2013 3:23:02 PM] Nasser Ghoseiri: a mini-rig on ebay is like 11,000$ [11/20/2013 3:23:04 PM] Sonny: This is part of the tension we experienced with

Page 110

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 18 of 34

communication group.txt

[11/26/2013 11:03:32 AM] Josh Zerlan: Not at lw/GH for our stuff... even if he's 30% more effecient than that, we're on par

[11/26/2013 11:03:35 AM) Sonny: KNC was forced into it because their 28nmis a hard

copy and not competitive with everyone else's 28nm. This is a win for us [11/26/2013 11:03:59 AM] Josh Zerlan: But it is competitive, that's the point Effeciency doesn't matter at the moment

[11/26/2013 11:04:04 AM] Josh Zerlan: Maybe that will change as you say

[11/26/2013 11:04:13 AM] Josh Zerlan: Maybe bitcoin will be $1500

[11/26/2013 11:04:14 AM] Sonny: Josh, their 20nm won't be ready til summer [11/26/2013 11:04:26 AM] Sonny: Our 28nm will be ready much earlier than that [11/26/2013 11:04:28 AM] Sonny: We win.

[11/26/2013 11:04:42 AM] Sonny: 20nmis no competitive advantage

[11/26/2013 11:04:55 AM] Sonny: it's similar performance much later

ae 11:05:00 AM) Josh Zerlan: Well, if it's not released till summer, then

ok, great

[11/26/2013 11:05:09 AM] Josh Zerlan: Where'd you see that release date? [11/26/2013 11:05:33 AM] Sonny: In their press releases. Late spring / early

Summer .

[11/26/2013 11:06:04 AM] Jeff (PR): if we can get 16 out by then, it would be a win [11/26/2013 11:06:30 AM] Josh Zerlan: Early fall at best for l6nm

[11/26/2013 11:07:05 AM] Josh Zerlan: | just looked at thier press release. It's "End of Winter/Early Spring"

[11/26/2013 11:07:12 AM] Sonny: | get the pesimism, but it's impossible to have a productive discussion when you just assume the worst for us and the best for

everyone else,

[11/26/2013 11:07:13 AM] Josh Zerlan: So... March

UP PLT Se EN eT he Zerlan: We won't ship until mid February or early March... so that's kind of a problem

[11/26/2013 11:07:47 AM] Josh Zerlan: It's not pessimism, it's realism

[11/26/2013 11:08:00 AM} Josh Zerlan: We have to be real about what John can and

can't do and what the competition can and can't do

[11/26/2013 11:08:22 AM] Josh Zerlan: We can't continue to be overly optimistic

about our products and then get kicked in the nuts over and over. We need to assess

the reality of the situation.

[11/26/2013 11:09:20 AM] Sonny: OK, the reality is that 20nmis only 15% better than

ae Their announcement is no game changer of any kind. It's freakin' great news or us.

[11/26/2013 11:09:42 AM] Josh Zerlan: Not if they ship in March, it's a huge

advantage

[11/26/2013 11:10:00 AM] Sonny: | was expected themto take their war chest and make

a really big splash with 16nm or Intel 1l4nm. All they did was fix their 28nm performance problem

[11/26/2013 11:10:01 AM] Josh Zerlan: They have the Sedeesy | for shipping on time. oe obviously have the manufacturing capacity, adn they will have the better roduct

11/26/2013 11:10:20 AM] Sonny: OK, you win.

[11/26/2013 11:10:33 AM] Sonny: I'm gonna go get a job at McDonnal ds

[11/26/2013 11:11:22 AM] Josh Zerlan: That doesn't even make sense. What I'm Saying is that we stop trying to make the most effecient miner possible and consequently being the last to oe and start making stuff we can get out the door in a reasonable time fr

Pier 2 ele 16 AM] Sonny: That strategy has been the winning strategy all the

way through. No guestion about it. AsicMiner / Avalon / KNC.

[11/26/2013 11:13:54 AM] Sonny: We haven't invested in that strategy along the way, but we can't change that by wishing. The IP we have is not borne of that effort It's hand routed custom. We can't change that

[11/26/2013 11:14:35 AM] Sonny: Furthermore, now that we're at the end of the node

jumping game, it's that very efficiency which becomes a eevee advantage [11/26/2013 11:15:07 AM] Sonny: Queue the John sucks comments.

[11/26/2013 11:15:10 AM] Sonny: | get it.

[11/26/2013 11:15:19 AM] Josh Zerlan: We still haven't even taped out 28nm, though

We still have 16 and then by the time that's out, we're looking at 12 or 10. [11/26/2013 11:15:47 AM] Josh Zerlan: Effeciency won't matter for another couple

Page 118

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 19 of 34

communication group.txt

[12/13/2013 12:32:47 PM) Nasser Ghoseiri: | heard their next node will be Onm [12/13/2013 12:33:05 PM] Jody Drake: Nasser, is that a j oke?

[12/13/2013 12:33:08 PM] Jeff (PR): ha

[12/13/2013 12:33:19 PM] Sonny: So if they just open up their fab to everyone it's a whole new business model and lots of trouble. They're not geared up for it inspite of having taken a few steps in that direction

[12/13/2013 12:33:37 PM] Nasser Ghoseiri: fe it's a joke

[12/13/2013 12:33:59 PM] Jason Aspinall: | mao @0nm

[12/13/2013 2:07:48 PM] Marc eg tea OK. We are burning our first batch of the 3 chip jalapenos. About 20% are burning at l0gh/s up to 13gh/s. Do we want to offer the habanero at 10+ gh/s?

[12/13/2013 2:08:48 PM] Jeff (PR): these are small boards? still back ordered? [12/13/2013 2:09:30 PM] Marc Goodpasture: Yes but not many left

[12/13/2013 2:10:42 PM] Jeff (PR): how many will we have to sell?

[12/13/2013 2:11:05 PM] Marc Goodpasture: 400-600 | would guess

[12/13/2013 2:11:14 PM] Jeff (PR): by when?

[12/13/2013 2:11:48 PM] Marc Goodpasture: Starting now until the end of the month But mostly next week.

[12/13/2013 2:12:03 PM] Jeff (PR): we can start shipping them next week? [12/13/2013 2:12:23 PM] Marc Goodpasture: Yes. Even some today

[12/13/2013 2:12:38 PM] Jeff (PR): does it cost more than the 5 GH to make? [12/13/2013 2:12:39 PM] Marc Goodpasture: | have about 20

[12/13/2013 2:13:20 PM] Marc Goodpasture: $12 more for the 3rd chip. But they are the "C" chips we would have had a lot left over anyway

[12/13/2013 2:13:45 PM] Jeff (PR): so if we sold these 2x power for same price as 5 GH, it would be ok

[12/13/2013 2:14:04 PM] Jeff (PR): in terms of cost vs. retai

[12/13/2013 2:15:31 PM] Marc Goodpasture: Sure. | just thought it a market opportunity.

[12/13/2013 2:16:21 PM] Marc Goodpasture: While supplies last. Needs to be said. [12/13/2013 2:16:25 PM] Jeff (PR): per

[12/13/2013 2:16:46 PM] Jeff (PR): Tet me kick this around

[12/13/2013 2:17:05 PM] Jeff (PR): any more info on long boards?

[12/13/2013 2:17:41 PM] Marc Goodpasture: AJ said they started themtoday. That's all | have at the moment

[12/13/2013 2:17:46 PM] Jeff (PR): ok

[12/13/2013 2:18:02 PM] Jeff (PR): are we done selling 5 GH jalapenos now? [12/13/2013 2:18:07 PM] Jeff (PR): forever

[12/13/2013 2:18:19 PM] Jeff (PR): once backlog is gone will it all be 10GH ? [12/13/2013 2:20:39 PM] Marc Goodpasture: We should finish the 5's and 7's backlog on Tuesday with what is currently in He

[12/13/2013 2:21:43 PM] Marc Goodpasture: After that, We will still have about 2K more we can build and about 20% of those might be 10+gh/s.

[12/13/2013 2:22:11 PM] Marc Goodpasture: Just my guess. | need more time to tel ade 2:22:22 PM] Jeff (PR): so we will have more inventory of 5 GH we have to get rid of?

ee 2:23:11 PM] Marc Goodpasture: But mostly 7'st+. Not many 5's with the 3 chips.

[12/13/2013 2:24:03 PM] Je L (PR): ok

[12/13/2013 2:24:21 PM] Je (PR): if i start taking orders for these now, we can fulfill them quickly next ea

[12/13/2013 2:28:44 PM] Marc Goodpasture: Now | am getting a different story on how many there are. It might not be 20% Let me see on Monday's batch. | do have 20 or so that can ship now.

Page 132

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 20 of 34

communication .txt

12/14/2013 6:46:11 AM] Jody Drake: For Jalapenos, oards are not the only problem a consistently under delivered because they don't get enough cases fromthe anodizer [12/14/2013 10:09:06 AM] Jody Drake: Our numbers for Jalapenos before was an

a | have now completed an audit of actual orders In the shipping lobby to ship. We have 1683 ordered before Nov 25 to fulfill and 860 more between Nov 25 and Nov

29 when we stopped the Jal orders co delivered yesterday, so we won't get more Jalapenos until about noon on Monday. The most they ever ship us in a day is 480 and most of the time they can't make that (even though they say they can make 1,000 a day)

So | would not plan any announcement for Tuesday

We're givin' it all we can Cap'n but we ain't gonna make it in time.

ee 10:11:43 AM] Jeff (PR): does A&E have a contract that they are not ulfilling?

[12/14/2013 10:14:34 AM] Jason Aspinall: From what I've read so far in this

conversation, A&E need to change their anodisers...

[12/14/2013 10:14:37 AM] Marc Goodpasture: No. We had added to the number they need

to supply several times due to continuing sales

[12/14/2013 10:16:10 AM] Marc Goodpasture: They had 3 but one quit on them. Just

last week they came back on line. They are having to ship items to Ohio to be

annodized due to our volume and time constraints

Sas 10:17:43 AM) Jody Drake: We have 171 Singles on order now waiting for roduction

Po) 14/2013 10:19:28 AM] Marc Goodpasture: That't more than we had left before

Shipping yesterday so we got further behind

[12/14/2013 10:19:33 AM] Jody Drake: About 100 Little Singles

[12/14/2013 10:19:39 AM] Jody Drake: Yes more orders came in

[12/14/2013 10:20:34 AM] Marc Goodpasture: Hard to plan anything when you don't have

any visibility of new orders. All we see is a neverending backlog

[12/14/2013 10:21:15 AM] Jody Drake: No matter how may we ship., we still have that

many to ship.

[12/14/2013 10:21:35 AM] Jody Drake: Only Jalapenos and MiniRigs decrease in numbers

because we don't take new orders

[12/14/2013 10:22:00 AM] Jody Drake: 7 or 8 more shipping days until Christmas

[12/14/2013 10:24:32 AM] Jeff (PR): the orders and sales are all in the system I'l

see about sending an emailed report of daily sales of each itemto everyone

[12/14/2013 11:01:02 AM] Jason Aspinall: Obviously I'll be going over production

numbers in greater detail when |'m over in early Jan, but can | have the total

shipped figures for each of the products to date pl ease?

[12/14/2013 11:01:54 AM] Jason Aspinall: Certain design decisions were based on

anticipated sales, knowing quite how they panned out over the last six months wil

be certainly useful for future product design decisions

[12/14/2013 11:10:50 AM] Le Drake: We also need to produce and warehouse a number

of each units for RMA over the next year. We have RMAed about 1,000 units so far and

about 20-30 units go out everyday now for replacement

[12/14/2013 11:11:12 AM] Nasser Ghoseiri: @ody, what was the common failure?

[12/14/2013 11:11:27 AM] Jody Drake: |et me I ook

[12/14/2013 11:13:59 AM] Jody Drake: overheating, slow hashing, not recognized,

burnt board. Jonathon or Paul can give you a more comprehensive idea.

[12/14/2013 11:14:38 AM] Nasser Ghoseiri: | see

[12/14/2013 11:15:43 AM] Dave "The Knife" McClain: There are so many that the boxes

are just stacking up. No one has time to go through each box to determine if there

is an RMA issue or just user error

Page 133

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 21 of 34

communication group.txt

should be fairly easy

[12/22/2013 8:22:39 AM] Jody Drake: Did you read? We have the units but they are running 10-12 gh

[12/22/2013 8:24:10 AM] Marc Goodpasture: We have about 300 l0gh/s and 450 11-12gh/s [12/22/2013 8:24:31 AM] Be Drake: No more from A&E until after the New Year [12/22/2013 8:24:33 AM] Josh Zerlan: Yes, | read that.. I'm asking why is it proving impossible to get regular Jalapenos?

[12/22/2013 8:24:44 AM] Jody Drake: A&E is off

[12/22/2013 8:24:44 AM] Josh Zerlan: Why are we even making Habaneros if we still have Jalapenos to ship?

[12/22/2013 8:24:57 AM] Josh Zerlan: We have people, yeah?

[12/22/2013 8:25:08 AM] Jody Drake: Cases

[12/22/2013 8:26:43 AM] Marc Goodpasture: We had 500-600 jalapenos that didn't make

4.5gh. When | found out the Chicago had been mixing the "B" and "C" chips | asked

be t 0 a an extra "C" chip to each board so we wouldn't have any more hashing elow 5gh/s

[12/22/2013 8:29:33 AM] Marc Goodpasture: Previous to my trip to CA | was being told there were only "A" and "B" chips. When Chicago admitted they had just been mixing "B" and "C" together, | asked that they quit so we could get some consistency

Apparently they decided to make sure. Now we don't get much that isn't 10 or more [12/22/2013 9:42:28 AM] Jody Drake: | got 6 Tue for inventory

[12/22/2013 9:48:27 AM] Jeff (PR): So we don't list jabaneros for sale yet? [12/22/2013 9:48:49 AM] Jeff (PR): | have to take singles down and that will leave us with rack mount only.

[12/22/2013 9:51:58 AM] Marc Goodpasture: | would put jalapenos and habaneros on and state January deliver

[12/22/2013 9:53:10 AM] Jeff (PR): january 1 ?

[12/22/2013 9:53:47 AM] Marc Goodpasture: No date. Just January.

[12/22/2013 9:56:16 AM] Jeff (PR): we can't do that

[12/22/2013 9:57:35 AM] Marc Goodpasture: We have the habaneros now but won't have more jalapenos until January

[12/22/2013 9:57:59 A ary has 31 days

[12/22/2013 9:58:05 A 's quite a spread

g

AM] Sonny: So how many AM] Jody Drake: Arounf

3 AM] | 3 AM] J

Dou k friday alone?

280. ip Eric Pilnocks order of dy Drake: 4 Jal running at 12 is about a Single

dy Drake: So they will get substanstial value even if they

oo

Drake: not refund te ones who ask?

Page 143

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 22 of 34

communication group.txt

we refund 280 people? Write checks? ally, | would go to you to ask that question

here doubt about how to do it?

We are handicapped without PP

BitPay orders are no problem

's let Bruce chime in on this as the CFO before we

Sonny: | just wanted to raise the idea Jody Drake: Almost $77,000

9 AM] 2 AM]

McClain: BitPay is not that easy unless we change our exchange rate with them. Meaning, we convert 100 % of the BTC to USD on orders. We would need to have them hold some BTC or send some BIC to them to

al

complete the refunds.

[12/23/2013 6:26:20 AM] Sonny: Jody, is it safe to assume most of those purchases

were made with bitcoin?

[12/23/2013 6:26:36 AM] Jody Drake: No

Hea ae 6:26:47 AM] Dave "The Knife" McClain: No there are quite a few that used ACH.

eee 6:27:21 AM] Sonny: if you were to guess in percentage, what would that e]

[12/23/2013 6:31:44 ae Dave "The Knife" McClain: If were.a gambler, i would say

the largest would be ACH

Po 9:58:23 AM] Jeff (PR): and we need to check if those ACH were already

refunded.

[12/23/2013 eae AM] Jeff (PR): Vlad is putting in a new check. When ACH orders

are moved to Production, he will query the ACH systemto be sure the account is

still funded and not refunded

[12/23/2013 9:59:43 AM] Jody Drake: great

[12/23/2013 9:59:45 AM] Nasser Ghoseliri: what will be done with the units that are

not shipped?

[12/23/2013 9:59:57 AM] Nasser Ghoseiri: we'll ship them as ordered?

[12/23/2013 10:00:18 AM] Jody Drake: We will ship most of the orders today

[12/23/2013 10:00:23 AM] Nasser Ghoseiri: ok

[12/23/2013 10:33:32 AM] Jeff (PR): so the jabaneros are spoken for now

[12/23/2013 10:37:52 AM] Marc Goodpasture: All of the 10's DN We still have

lots of 11's and 12's Will let you know how many. And it's habanero with an “H"

[12/23/2013 10:38:57 AM] Nasser Ghoseiri: | guess our next generation of these

should be called "Habanna" to keep the rhyme going

[12/23/2013 10:39:11 AM] Nasser Ghoseiri: *Habana

[12/23/2013 10:40:36 AM] Jeff (PR): we have lls and 12s see lg on shelf right now?

[12/23/2013 10:40:47 Jeff (PR): can we ship them tomorrow?

[12/23/2013 11:17:59 Jody Drake: We have a limited number

[12/23/2013 11:18: 33 Jeff (PR): even ACH takes a couple of days to clear

[12/23/2013 11:18:39 Jeff (PR): we don't take wire

[12/23/2013 11:18:51 Jeff (PR): only bitcoin would have to ship before xmas

2/23 Sonny: we never promised to ship in time for christmas Ae Sonny: (just to answer your statement... | want to be clear [12/23/2013 11:50:05 AM] Jody Drake: Jeff just said "ship before Christmas."

Page 144

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 23 of 34

communication group.txt

[12/23/2013 11:50:34 AM] Sonny: But when we say ships immediately, and we don't get

it out for a month. that's something eg eae different

[12/23/2013 11:50:37 AM] Jeff (PR): we just don't tell them 2 shipping date and just

ship them soon

[12/23/2013 11:51:13 AM] Jody Drake: We were talking about Habeneros, not the

Jalapeno orders

[12/23/2013 11:54:11 AM] Jason Aspinall: The shopping cart on the website needs to

function much like Apple's

[12/23/2013 11:54:25 AM] Jason Aspinall: if we have stock on the shelves, then the

goods ship within 2 days

[12/23/2013 11:54:45 AM] Jason Aspinall: otherwise before order placement, the

website predicts a possible delivery slot

[12/23/2013 11:55:08 AM] Jason Aspinall: for instance, try and buy a Mac Pro right

now, their website states "ships february", and only that

[12/23/2013 11:55:59 AM] Jason Aspinall: though, this does mean becoming a bit more

Savvy with the production process taking into account variables such as A&E and AI tantly movin oal posts

12/23/2013 12:29:01 PM] Je y anero can we put in stock? [12/23/2013 12:48:06 PM] Jody Drake: We don't coe until we fulfill the backlog. It re ae on how many Jalapenos (5-7gh) Mark can recover before we have to use the Habaneros [12/23/2013 2:48:00 PM] Marc Goodpasture: We are shipping all of the 10's to finish out the backlog. We have 375 11's on the shelf, ready to ship. We will have another 375 11's and 12's when we get new cases in Jan.

[12/23/2013 2:48:52 PM] Jeff (PR): so we have 375 we can put on site?

[12/23/2013 2:49:22 PM] Marc Goodpasture: Yes. But not to ship before Christmas

[12/23/2013 2:49:26 PM] Jeff (PR): right

[12/23/2013 2:49:27 PM] Jeff (PR): no prob

[12/23/2013 2:49:43 PM] Jeff (PR): not saying anything about shipping

[12/23/2013 2:49:48 PM] Jeff (PR): just limited quantity

[12/23/2013 2:49:51 PM] Marc Goodpasture: We willl have a hard enough time just

Shipping what we have now

[12/23/2013 2:50:19 PM] Marc Goodpasture: Yes, limited quantity. Shut it down after

375 until Janjuary

[12/23/2013 6:16:21 PM] Jeff (PR): Let's make sure our BitSafe ad isn't this lame

http://techcrunch. com/ 2013/12/2 Ee Uy del ener meee

[12/23/2013 6:18:35 PM] Sonny: holy god... is that a Joke?

[12/23/2013 6:18:55 PM] Nasser Ghoseiri: it better be

[12/23/2013 6:24:29 PM] Dave "The Knife" McClain: Creeper McCreeperton

[12/23/2013 6:24:38 PM] Marc Goodpasture: Ok, it looks like we got the jalapeno al!

caught up. Jody will give us the exact numbers. It took all of the 10's to do it.

iar the 12's cases to ship more 10's and lower. We have about 300+ 11's on the

she

[12/23/2013 6:25:21 PM] Marc Goodpasture: We have about 200 singles still and

another 100 that haven't been put in cases (but are ready.)

[12/23/2013 6:25:48 PM] Marc Goodpasture: | don't have a count on the little singles

but we have a few

[12/23/2013 6:26:17 PM] Jeff (PR): are the singles assembled?

aes 6:26:40 PM] Jeff (PR): we were talking about putting all single boards

into racks

[12/23/2013 6:27:33 PM] Jeff (PR): if they are assembled and we can send them out

I'Il put themlive on the site again

[12/23/2013 6:28:14 PM] Marc Goodpasture: These were assembled last friday

Saturday and today we mostly worked on jalapenos

[12/23/2013 6:28:24 PM] Jeff (PR): so they are shippable?

[12/23/2013 6:28:42 PM] Jeff (PR): from my perspective i just need to know what

can sell on the website

[12/23/2013 6:29:17 PM] Marc Goodpasture: Make everything ..while supplies last. We Page 145

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 24 of 34

communication group.

in august... So yes, we need to come up with ee wel [3/4/2014 12:09:03 PM] Josh Zerlan: Just double up their hashrate? [3/4/2014 12:09:13 PM] Sonny: past six months - yes. [3/4/2014 12:09:28 PM] Sonny: | can't think of anything else we can do there [3/4/2014 12:09:38 PM] Josh Zerlan: Yeah, me either [3/4/2014 12:10:14 PM] Josh Zerlan: What is the last day that is eligible for refunds? | 4 12:11:01 PM] Jo u Zerlan: Also, wi we refund in the same method they

{4/201

aid in? PS) 4/2014 12:11:23 PM] Josh Zerlan: BTC in BTC (at whatever the current rate is, not the rate they paid) and Bank wire with bank wire? [3/4/2014 12:11:33 PM] Josh Zerlan: How do you mean, Jeff? [3/4/2014 12:11:33 PM] Jeff (PR): we will lose on BTC [3/4/2014 12:12:17 PM] Jeff (PR): | mean if people within 6 months cannot get refund, they will get am and we'll end up with the same a ae [3/4/2014 12:12:52 PM] Josh Zerlan: We are offering the 6 month refunds period.. |'m not sure | follow? [3/4/2014 12:13:10 PM] Jeff (PR): that doesn't stop people fromcalling an attorney [3/4/2014 12:13:24 PM] Josh Zerlan: If they get a full refund? What do they have to call an attorney for? [3/4/2014 12:14:03 PM] Josh Zerlan: Especially when it's pretty clear there are no refunds and we are doing this out of goodwill! [3/4/2014 12:14:17 PM] Josh Zerlan: And for a limited time [3/4/2014 12:14:23 PM] Jeff (PR): the guy that is just within 6 months will get an idea that he is due [3/4/2014 12:14:41 PM] Jeff (PR): and we are opening up the idea of refunds publicly [3/4/2014 12:15:13 PM] Josh Zerlan: | don't know that we have another choice really and | think it will generate a lot more goodwill than it will cause problems with the edge cases of those people that ordered on day 181 [3/4/2014 12:15:26 PM] Josh Zerlan Especially when they paid 1/2 the price [3/4/2014 12:18:03 PM] Sonny: I'm assuming we're in a position where we don't have a choice. Correct me if I'm wrong [3/4/2014 12:19:39 PM] Jeff (PR): who should byline the article BO is crafting? [3/4/2014 12:19:44 PM] Jeff (PR): Josh? [3/4/2014 12:20:16 PM] Sonny: | hadn't thought about it, but.. yes. [3/4/2014 12:21:18 PM] Josh Zerlan: Here is a draft: Peed ee a ere ee com/ post-staging/ 8062-monarch-update-draft.html #post778 Ce 21:29 PM] Josh Zerlan: My plane is boarding, |! will be back online as Soon as [3/4/2014 12: 21: 40 PM] Josh Zerlan: Leave notes either in that ofrum oor on here for changes additions etc... [3/4/2014 12:25:43 PM] Josh Zerlan: | am not done with it just need to pack up the computer [3/4/2014 12:25:44 PM) fds Aspinall: We need to utilise Google Docs more for these collaborative issues... Josh can easily formulate the forum post in a Doc, share to all and sundry for review, then copy/paste into a forum post [3/4/2014 12:26:27 PM] Jeff (PR): yes. i am never in the forum and can't see it unless i log in. Not sure mine is In lastpass [3/4/2014 12:27:20 PM] Jason Aspinall: Regarding refunds - people pay the ticket price of $999 not BIC/£/YEN/Drachma/Lira/etc... So whatever actual currency they used is irrelevant - they get $999 back at the prevailing rate, today [3/4/2014 12:28:12 PM] Jason Aspinall: (the $999 is just an ne - but the lingo on our site must stress this refund currency issue implicitly [3/4/2014 12:28:31 PM] Jason Aspinall: I'm sure I've mentioned this in the P [3/4/2014 12:28:38 PM) Jeff (PR): this is what we do. but in this case it's tter for them than us [3/4/2014 12:28:47 PM] Jeff (PR): the price has dropped [3/4/2014 12:29:10 PM] Jeff (PR): not sure where it was in Aug [3/4/2014 12:29:29 PM] Jason Aspinall: well, yes, that's an issue for us...but the point is, the customer cannot hold us liable to refund 100BTC that was used to make

Page 226

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 25 of 34

communication group.txt

up the $999 payment

[3/4/2014 12:29:44 PM] Jason Aspinall: (again, hypothetical figures)

[3/4/2014 12:29:49 PM] Jeff (PR): our policy has always been in USD

[3/4/2014 12:29:57 PM] Jeff (PR): no matter the method

[3/4/2014 12:30:01 PM] Jason Aspinall: sweet

[3/4/2014 12:33:46 PM] Jody Drake: You don't mean that only people that are more

than 6 months waiting get the extra hardware at the end. We need to give the extra

hardware to anyone who paid the original full price. It is this price point more

than the wait time that has ticked off the customers

[3/4/2014 12:34:20 PM] Jody Drake: especially the ones who paid full price just

before the plummet in price

[3/4/2014 12:34:29 PM] Nasser Ghoseiri: | have an idea

Ee 12:34:39 PM) Nasser Ghoseiri: how about increasing our prices on our

cards?

[3/4/2014 12:34:46 PM] Nasser Ghoseiri: We're delivering higher performance now

oo 12:34:55 PM) Nasser Ghoseiri: so for new orders, we increase the price for 0:

[3/4/2014 12:35:17 PM] Jeff (PR): if BTC goes to $1k that will work. But not now

[3/4/2014 12:35:19 PM] Sonny: the idea there Jody is that we give een the

special upgrade kit that gives them effectively double performance. They get the

high performance waterblock kit for free.

[3/4/2014 12:35:39 PM] Jeff (PR): this is everyone at the higher price, J Ody

[3/4/2014 12:35:39 PM] Nasser Ghoseiri: what is the market offering for 1TH?

3/4/2014 12:41:09 PM] Josh Zerlan: We can't get 1.2th out of a card can we? [3/4/2014 12:41:32 PM] Sonny: we can probably get 1.2 with two radiators [3/4/2014 12:41:47 PM] Josh Zerlan: We also need to create a new sku for the Super monarch or whatever we call it [3/4/2014 12:41:49 PM] Jody Drake: The people who ordered at $2100 are going to get the same increase in GH for half the money paid in Oct and Nov [3/4/2014 12:42:02 PM] Jeff (PR): a SKU for the overclock kit [3/4/2014 12:42:11 PM] Jeff (PR): you get the larger radiator [3/4/2014 12:43:03 PM] Jeff (PR): that makes it easy for us to assign a value to the upgrde and just add it to their cart [3/4/2014 12:43:58 PM] Jody Drake: You said there were so fewer orders in Oct and Nov it shouldn't be that much more to give them another unit if they paid $4600 [3/4/2014 12:46:19 PM] Josh Zerlan: We are going to need a new sku for the over clocked pau though. So we can ship the people a new product that is am upgrade not just a kit [3/4/2014 12:46:31 PM] Sonny: No, the people who ordered at half price *DON"T* get the upgrade kit for free. [3/4/2014 12:46:41 PM] Jeff (PR): Jody, the people who ordered at 2100 are not getting the increase. At least not the same thing [3/4/2014 12:47:10 PM] Jeff (PR): we reduced prices in late Nov. | said everything

Page 227

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 26 of 34

communication group.txt

before that point

[3/4/2014 12:47:41 PM] Josh Zerlan: What is the actual cutoff date?

[3/4/2014 12:48:13 PM] Jeff (PR): for which?

[3/4/2014 12:49:07 PM] Sonny: It's the date we dropped our prices... black friday The day after thanksgiving.

[3/4/2014 12:50:45 PM] Josh Zerlan: Ok good that makes it easy... | will just day anyone who paid the $4k price is elligible

[3/4/2014 12:51:00 PM] Josh Zerlan: That leaves dates out of it

ao 12:51:19 PM] Josh Zerlan: So there are no edge cases like Jeff was talking about

3/4/2014 12:55:01 PM] fee Drake: |S Dave available here? oe 12:56:27 PM] Josh Zerlan: We need a new monarch sku to upgrade people to thoug [3/4/2014 1:01:00 PM] Bruce Bourne: I've tried to read through this string, and it seems clear to me that either their is not complete understanding or there is not complete agreement as to what we are planning to do. Maybe a conference call would be a better mediumfor discussion. | have a meeting now and a conference call after that, but at 4pm! can be available, if someone can set up a call. [3/4/2014 1:02:21 PM] Jody Drake: The price dropped at the end of December. The people in December are the angriest [3/4/2014 1:11:26 PM] Nasser Ghoseiri: I'm available for the cal [3/4/2014 1:28:27 PM] Jeff (PR): http://techcrunch. com/ 2014/03/03/ mt-gox-source-code-|eaked-by-hackers-along-with-tea m-information-customer-data/?utm campai gn=f b&nci d=fb [3/4/2014 1:49:18 PM] Jason Aspinall: http://picosong.com/Y7di/ << staggering! [3/4/2014 2:01:03 PM] Sonny: Hopefully to save everyone from spending the time to investigate this last link... it's a recorded meeting in japanese between Mt Gox and thelr bank. [3/4/2014 2:27:23 PM] Josh Zerlan: | amin the Dallas airport now waiting on a new flight. | won't be in Austin until about 4:40 CST at the earliest. [3/4/2014 2:28:51 PM] | ody Drake: Will Dave be available then also? [3/4/2014 2:30:38 PM] Josh Zerlan: Yes most like [3/4/2014 4:41:39 PM) Josh Zerlan: | am available for call now [3/4/2014 4:41:46 PM] Josh Zerlan: Dave is at the hote [3/4/2014 5:06:03 PM] Nasser Ghoseiri: I'm available now [3/4/2014 7:01:17 PM] Josh Zerlan: | amtrying to write up the description of the Mining by the GH compensation. How are we going handle that portion of it? Double 7 pasta: but charge them for the hosting? If so, what formula do we use for that? [3/4/2014 8:17:38 PM] Sonny: well, for the six months offer, it's just straight double the gh. [3/4/2014 8:17:48 PM] Sonny: for inside the six months, we don't do anything [3/4/2014 8:18:12 PM] Jody Drake: | amtyping up our notes to email shortly [3/4/2014 8:20:56 PM] Bruce Bourne: |'mreading Josh's draft now [3/4/2014 8:25:08 PM] Bruce Bourne: Sonny - what we ended up with for Mining by the GH was 6 months get double the GH ordered OR a refund. We did not discuss whether we charge anything for the hosting, but | am assuming we do not, since they paid $10.83 per GH and we are going to give themtwice the GH. However, that begs the question about the hosting cost related to a hosted purchased card - in that case, | think we are providing another card or 50% off one (depending on wait time), but the hosting for the additional card will cost extra. Is that right?

Page 228

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 27 of 34

communication group.txt

[4/7/2014 10:40:08 AM] Jason Aspinall. <face pal m>

[4/7/2014 10:40:47 AM] Jason Aspinal

http://shakingthetree. files. wordpress. com/ 2011/03 oe [4/7/2014 2:03:14 PM] Nasser Ghoseiri: We had a 21$ sale today, a huge step forward

4/8/2014 5:07: Sonny: sure

[4/9/2014 10:57: Jason Aspinall: Anyone know if John Mutrux is around today, he doesn't appear to be answering any of his Skype messages, from yesterday? [4/9/2014 11:37:33 AM] Jody Drake: He is out on an errand. I'll get himto look at skype when he gets back Sen 11:38:06 AM] Jason Aspinall: S'okay Jody... I've managed to touch base wi t im [4/9/2014 11:39:03 AM] Jason Aspinall: | was talking to Justin about an un-related matter and asked if John was about, next thing, John's popping up on Skype - Justin must've contacted himvia cell phone or similar [4/9/2014 1:27:33 PM] Jeff (PR): Can somebody find jody for me? [4/9/2014 1:51:14 PM] Jeff (PR): Josh. Can you weigh in on this? [4/9/2014 1:51:14 PM] Jeff (PR): http://www. theverge. com/ 2014/ 4/ 8/5594266/ how- heart bl eed- broke-the-internet [4/9/2014 1:51:40 PM] Jeff (PR): how it relates to us [4/9/2014 1:53:30 PM] Jeff (PR): http://blog.lastpass.com/2014/04/lastpass-and-heartbl eed- bug. htm [4/9/2014 2:02:31 PM) Jeff (PR): update: Remus, our server admin updated OpenSSL this morning [4/9/2014 4:52:57 PM] Jeff (PR): we really need to look into this [4/9/2014 4:52:57 PM] Jeff (PR): http: //lifehacker.com/lastpass-now-tells-you-which-heartbleed-affected-passwo- 156152 Fr ee An en Oe Rene Nel facebook&utm source=lifehacker facebook &ut m. medium=socialflow [4/9/2014 4:54:50 PM] Jeff https://lastpass. com/heartbleed/?h= products. butterflylabs.com [4/9/2014 4:55:22 PM] Josh Zerlan: If you are using 2FA, you aren't affected - this on any site you use 2FA one. One more reason why you should be using 2FA anywhere and everywhere you can and why we need it on our sites [4/9/2014 4:55:55 PM] Jody Drake: Speak English. What is 2FA [4/9/2014 4:56:09 PM] Josh Zerlan: Also, the link you posted is showing the cloudflare cert. [4/9/2014 4:56:24 PM] Josh Zerlan: 2FA = Two Factor Authentication. Either Google Authenticator or Yubikey is an example Pee 4:56:52 PM] Jeff (PR): yes. we have a plugin for magento but it's only for admin side [4/9/2014 4:57:15 PM] Josh Zerlan: We need a user side solution. People have millions of dollars woth of stuff in their accounts nad we aren't securing it [4/9/2014 4:57:38 PM] Jeff (PR): do you know how to set it up? [4/9/2014 4:58:13 PM] Josh Zerlan: | don't know anything about Magento unfortunately. [4/9/2014 4:58:20 PM] Josh Zerlan: It's easy to implement though [4/9/2014 4:58:26 PM] Jeff (PR): and i don;t know how to check this without

Page 256

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 28 of 34

communication group.tx

<file size="72499" index="0" tid="3799558961" >Screen nee 2014-05-19 at

16.20.34. png</file></files>

[5/19/2014 10:21:19 AM] Jason Aspinall: *** Interesting recommended article for me on that page | just visited!

[5/19/2014 10:21:31 AM] Jeff (PR): ha

[5/19/2014 10:21:38 AM] Jason Aspinall: Quite!

[5/19/2014 10:21:39 AM] Jason Aspinall: lol

[5/19/2014 10:29:39 Jody Drake: When will Bruce and Jeff be on the Bridge again? [5/19/2014 10:30:04 Sonny: tomorrow

[5/19/2014 10:30:10 Jody Drake: thx

[5/19/2014 10:45:14 Jeff (PR): http: //bitcoinmagazine. com/

[5/19/2014 10:51:54 Sonny: :)

[5/19/2014 10:52:19 eff (PR): it will be in print also

9/19/2014 3:03:51 PM] Jody Drake: We need a product manual online for the Monarch Who is going to write it or discuss the product with Jonathon so he can write it? [5/20/2014 6:04:44 AM] Jason Aspinall: And, as if by magic, www. hardbit.cn doesn't exist anymore [5/20/2014 6:07:07 AM] Jason Aspinall: Guys... we have an issue to deal with: http://cointelegraph. com/news/111411/china releases hardbit hardware wallet [5/20/2014 6:07:26 AM] Jason Aspinall: Here's my screen-grab of the website, just incase it changes when you see it [5/20/2014 6:07:39 AM] Jason ee <files alt="Posted oe a <file size="1078827" index="0" tid="3891581043">Screen Shot 2014-05-20 at 12.07.27. png</file></files> [5/20/2014 6:08:14 AM] Nasser Ghoseiri: yes [5/20/2014 6:08:19 AM] Nasser Ghoseiri: we all knew this was coming anyway [5/20/2014 6:08:37 AM] Jason Aspinall: People alien off our product | ook? [5/20/2014 6:09:05 AM] Jason Aspinall: the hard- website doesn't load, Suggesting as | said the other day, to be fake [5/20/2014 6:52:16 AM] Sonny: it was the news site who did the sloppy imagery. Their article talks about the bitsafe and it's easier to use Ul... so | don't think this is theft on anyone's part. Just siiop) journalism.

[5/20/2014 7:07:00 AM] Sonny: Bitcoin hit 458 today

[5/20/2014 7:07:05 AM] Jason Aspinall: Fair comment. | think we could do with

firing off an email to coin telegraph, pointing out the error of their ways [5/20/2014 7:08:24 AM] Sonny: If this is a sign of the bottom having been defined at

440... the expected increase to follow would do us well as we begin shipping our Monarchs

[5/20/2014 7:08:39 AM) Jason Aspinall: Indeed

[5/20/2014 7:39:43 AM] Sonny: Another interesting observation fromthat article is

that when they mentioned butterfly labs, they didn't point out any of the popular

criticisms even though they published an article against butterfly labs yesterday Soe 7:40:13 AM] Sonny: Again - the bitsafe seems to be mostly imune to BFL ate.

[5/20/2014 7:49:20 AM] Jeff (PR): this site is troll city too

Page 300

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 29 of 34

communication group.txt

Trollit depresses the hell outta me

[5/21/2014 8:13:23 AM] Jason Aspinall:

http: //khon2.com/2014/05/20/ man-buys-kansas-home-using-bitcoin/ #songcoin

[5/21/2014 8:14:37 AM] Jason = Aspinal

http://www. reddit. com/r/Bitcoin/comments/26403v/butterfly. labs executive purchases 5 00000 home/

[5/21/2014 8:15:59 AM] Jason = Aspi nal

http://www.ihavebitcoins. coinjhaadli nes! bubrerhhy: |labs-executive-purchases-500000- hom e-bitcoin/ < Nice nose job there Josh ;)

[5/21/2014 8:17:45 AM] Jason = Aspi nal

http://www. cbs3springfield. com/story/25568078/bitcoin- used-to-buy-500000-olathe- home [5/21/2014 8:17:57 AM] Jason = Aspinal

http://www. reddit.com/r/B Peon) comment af 2eORUMbI Rest. used to buy 500000 kansas _ ho me |

[5/21/2014 8:24:42 AM] Jason Aspinall: Ok I'm done in... 7-8 pages sifted and that lot above is pretty much it

[5/21/2014 8:27:53 AM] Jason Aspinall: In slightly 'happier' news, at least the trolls appear Are be rightfully giving KnCMiner a good kicking:

http: //www.reddit.com/r/Bitcoln/comments/260in3/kncminercom puts butterfly labs _ bad_ reputation to/

[5/21/2014 8:29:13 AM] Nasser Ghoseiri: should we up-vote it? :)

[5/21/2014 8:29:20 AM] Jason Aspinall: | have (Y)

[5/21/2014 8:29:27 AM] Jason Aspinall: https://www.fairlay.com/event/category/bitcoin/butterfl yl abs/

Oe 8:41:37 AM] Jody Drake: No, we should not upvote the foolish lies on reddit.

[5/21/2014 8:42:46 AM] Jody Drake: Gives power to the posts

[5/21/2014 11:26:16 AM] Jeff (PR): did we get boards?

[5/21/2014 11:28:10 AM] Marc Goodpasture: We got boards. Bruce is waiting on Nasser to begin testing.

[5/21/2014 1:02:59 PM] Jeff (PR): ok

[5/21/2014 1:53:52 PM] Jeff (PR): Another day flying by. What's happening? [5/21/2014 1:56:10 PM] Sonny: testing away

[5/21/2014 2:15:13 PM) Jason Aspinall: The silence is deafening

[5/21/2014 2:15:38 PM] Dave "The Knife" McClain: still testing

[5/21/2014 2:56:31 PM] Sonny: Observation: There seems to be a in increasing trend of alt currency conversion into bitcoin. If you watch the daily percentage change of all the crypto currencies.. each time bitcoin goes up, the alt coins tend to not go up as much. When bitcoin goes down, the alt coints tend to go down more aS a percentage

[5/21/2014 4:15:08 PM] Marc Goodpasture: Bruce and | met with Brian from AL Huber on the power/cooling building improvements. We are "go."

[5/21/2014 4:16:13 PM] Marc Goodpasture: We need to clean everything out of the first burn room ASAP. The quicker it's gone the sooner we start. I'll take care of the racking but we have the game show equipment and the networking equipment that need to move.

[5/21/2014 4:16:30 PM] Marc Goodpasture: We can probably accomodate themin the middle room

[5/21/2014 4:16:57 PM] Jeff (PR): can we move on friday?

[5/21/2014 5:09:37 PM] Jeff (PR): is the board working?

[5/21/2014 5:10:01 PM] Marc Goodpasture: Just spoke with Jonathon. We are working on it.

[5/21 Marc Goodpasture: The move

Page 304

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 30 of 34

communication group.

5/ 3 Nasser Ghoseiri: [5/3 Josh Zerlan: Are air?

[5/31/2014 3:51:53 AM] Nasser Ghoseiri: [5/31/2014 3:51:59 AM] Nasser Ghoseiri: [5/31/2014 3:52:07 AM] Nasser Ghoseiri: cooling

[5/31/2014 3:52:10 AM] Nasser Ghoseiri: [5/31/2014 3:52:16 AM] Nasser Ghoseiri: [5/31/2014 3:52:23 AM] Nasser Ghoseiri:

[5/31/2014 3:40:28 AM] Nasser Ghoseiri: then the heat. kicks in

[5/31/2014 3:40:39 AM] Josh Zerlan: So. what happened in the initial design if we

can't even run the board at it's designed speed and less than it's designed ower?

[5/31/2014 3:40:40 AM] Nasser Ghoseir!: 520GH

[5/31/2014 3:41:08 AM] Nasser Ghoseiri: | don't get your eee

[5/31/2014 3:41:30 AM] Josh Zerlan: The board was designed to run at 600 GH @ 350w

lt seems that it can't even get close to that

[5/31/2014 3:41:54 AM] Nasser Ghoseiri: the internal planes consume too much heat

[5/31/2014 3:42:17 AM] Josh Zerlan: How did we not know that? | thought that is

what hte resistor test boards were for?

[5/31/2014 3:42:45 AM) Nasser Ghoseiri: that's a long story josh

[5/31/2014 3:43:07 AM] Josh Zerlan: Ok, but it's a question | get asked repeatedly

What do you wnat me to ansewr with?

[5/31/2014 3:43:32 AM] Nasser Ghoseiri: the resistor was to test the genera

functionality of the board

[5/31/2014 3:43:40 AM] Nasser Ghoseiri: those resistors easily melted

eae 3:43:51 AM] Nasser Ghoseiri: however, they allowed us to test the VRM at ike

[5/31/2014 3:43:54 AM] Nasser Ghoseiri: which the VRM was OK

[5/31/2014 3:44:11 AM] Nasser Ghoseiri: only a chip can pull 400Amps fromthe VRM

[5/31/2014 3:44:31 AM] Nasser Ghoseiri: these issues showed themselves at a higher

current

eee 3:44:46 AM] Josh Zerlan: man ,we are going ot take a lot of crap over

that.

[5/31/2014 3:45:07 AM] Nasser Ghoseiri: it doesn't change things now

[5/31/2014 3:45:08 AM] Nasser Ghoseiri: remember

[5/31/2014 3:45:12 AM] Nasser Ghoseiri: even ATI and AMD

[5/31/2014 3:45:18 AM] Nasser Ghoseiri: they haven't made a 600W GPU

[5/31/2014 3:45:31 AM] Josh Zerlan: Yes they have

[5/31/2014 3:45:33 AM] Nasser Ghoseiri: the issues we have are so subtle, not many

documents of it exist

[5/31/2014 3:45:41 AM] Josh Zerlan: The nVidia Tesla cards will pull 600w when

overclocked

[5/31/2014 3:45:47 AM] Nasser Ghoseiri: overclocked

[5/31/2014 3:45:52 AM] Nasser Ghoseiri: also, what's the core voltage there?

[5/31/2014 3:45:53 AM] Josh Zerlan: But they still work

[5/31/2014 3:45:58 AM] Josh Zerlan: Dunno off hand

[5/31/2014 3:46:07 AM] Nasser Ghoseiri: core voltage on those is usually 0.9V or 1V

[5/31/2014 3:46:13 AM] Nasser Ghoseiri: so it means max ee ke

[5/31/2014 3:46:15 AM] Josh Zerlan: I|'mjust repeating what the people on the forums

are going to say

[5/31/2014 3:46:23 AM] Josh Zerlan: I'm not making any comments on the situation

[5/31/2014 3:46:30 AM] Nasser Ghoseiri: here, it's 950Amp mi ni mum

[5/31/2014 3:46:33 AM] Nasser Ghoseiri: not overclocked

[5/31/2014 3:46:36 AM] Nasser Ghoseiri: you See..

[5/31/2014 3:46:43 AM] Nasser Ghoseiri: again, we can't convince themthis way

[5/31/2014 3:46:46 AM] Nasser Ghoseiri: they don't a care

[5/31/2014 3:47:11 AM] Josh Zerlan: You are right... we have to say something though

and they are not to take weak answers much longer if at all

I'll do the video today you cooling your test board with water or

water | the chips are Super coo it's the VRM and internal planes that need

and no way to cool them so they pass their heat either to the chips or to the MOSFETs and inductors

Page 330

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 31 of 34

communication group.txt

6/9/2014 11:00:44 PM] Bruce Bourne: We'll have something for you tomorrow - you can

ost tomorrow evening. 6/10/2014 12:45:36 PM] Josh Zerlan: So. ? [6/10/2014 12:46:16 PM] Jeff (PR): Can you come to office [6/10/2014 12:47:09 PM] Josh Zerlan: Yeah, | can for a bit. | am dealing with a rooted server at the moment, but I'm waiting on a response from support on migrating some stuff off that box so we can nuke it. I'mstill not feeling great either, but a hell of a lot better than the ae few days. [6/10/2014 12:47:13 PM] Josh Zerlan: | will be there shortly. [6/10/2014 12:47:35 PM] Jody Drake: hae jacket is here, Josh [6/11/2014 7:12:04 AM] Sonny: Monarch update - Wednesday morning [6/11/2014 7:13:15 AM] uae Nasser is in the final stretch of the job distribution code re-write. We'll be able to measure the performance boost it gives us today [6/11/2014 7:13:40 AM] Sonny: Kyong & Nasser tdentified something very important in the board layout [6/11/2014 7:16:53 AM] Sonny: It's a point of a, resistance immediately under the mosfets which don't have a thermal path out. Effectively, the wires are too thin there, so when we go above 500 GH, 1t starts to radiate heat aa up into the mosfets. The PCB has already been updated to resolve this and will be in the 1,000 boards we start into manufacture tomorrow. [6/11/2014 11:00:59 AM] Nasser Ghoseiri: Some Update [6/11/2014 11:01:29 AM] Nasser Ghoseiri: A test was run to measure the resistance that was suspected to be high and troublesom [6/11/2014 11:01:32 AM] Nasser Ghoseiri: *troubl esome [6/11/2014 11:01:36 AM] Nasser Ghoseiri: it turns out to be the case [6/11/2014 11:04:40 AM] Bruce Bourne: Do we have the solution for that? Is it easy and quick, or difficult and lengthy? [6/11/2014 11:04:51 AM] Nasser Ghoseiri: it's a PCB fix [6/11/2014 11:04:55 AM] Nasser Ghoseiri: the fix is already done [6/11/2014 11:05:02 AM] Nasser Ghoseiri: we'll be sending to AJ for manufacturing [6/11/2014 11:05:18 AM] Jeff (PR): the fix is done or the design of the fix is done? [6/11/2014 11:05:28 AM] Bruce Bourne: And how much do we gain fromthis? [6/11/2014 11:05:34 AM] Nasser Ghoseiri: the fix was applied to the PCB design [6/11/2014 11:05:37 AM] Nasser Ghoseiri: it will be sent to Al [6/11/2014 11:05:56 AM] Nasser Ghoseiri: @Bruce: we should gain some considerable heat reduction ae 11:06:04 AM) Nasser Ghoseiri: provided the internal planes are built as ordere [6/11/2014 11:06:12 AM] Jeff (PR): how much? [6/11/2014 11:06:17 AM] Jeff (PR): enough for 1 TH ?

Page 347

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 32 of 34

communication group.

each. One rack has been cloud mining since last iu aay they are coming by today to pick up the first one to take it to hosting here in KC, [7/8/2014 10:33:15 AM] Jeff (PR): cloud mining for who? [7/8/2014 10:33:40 AM] Marc Go oodpasture: The others, they will take as many as they o ue We are building 3 5 a day and need 18 to use up the first 700 "L" oards. [7/8/2014 10:34:30 AM] Jeff (PR): we need to oe customers on ASAP [7/8/2014 10:34:36 AM] Jeff (PR): so need to know about that Tae 10:35:09 AM] Marc Goodpasture: | will let all know what they take later today. [7/8/2014 10:35:35 AM] Jeff (PR): what about the cloud mining comment? [7/8/2014 10:35:51 AM] Jeff (PR): can you clarify? [7/8/2014 10:36:29 AM) Jurie Pieterse: @Marc, so there one rack ready with 23.4 TH to allocate immediately to customers for cloud mi ning? [7/8/2014 10:38:20 AM) Marc Goodpasture: 39 boards more like 13 to 14 TH [7/8/2014 10:38:37 AM] Jurie Pieterse: @Marc, you mean it's been burn testing since Thursday, moving to Greg today when we can allocate it in the cloud, once they complete setup? [7/8/2014 10:38:59 AM] Marc Goodpasture: It has been mining to our account [7/8/2014 10:39:15 AM] Jeff (PR): ugh fe 10:39:23 AM] Marc Goodpasture: It has been mining to the Cloud account, think. [7/8/2014 10:40:45 AM] Sonny: To clarify - it is *NOT* burning in to our burn in account eee 10:42:19 AM] Jurie Pieterse: Is it mining to a wallet? What wallet account then? [7/8/2014 10:42: AM] Jurie Pieterse: We're switching it off later today to transfer the rack to cloud mining facility? [7/8/2014 10:42:47 AM] Jeff (PR): can we switch it off now? [7/8/2014 10:44:24 AM] Marc Goodpasture: Yes, if you want es 10:45:48 AM] Marc Goodpasture: Yes, it will go to the cloud mining acility. [7/8/2014 10:50:48 AM] Bruce Bourne: Someone clarify for me where this mining has been pointed since Thursday. Jeff and Jody (and | guess Jurie too) need to know what has been completed each day so they can allocate to Cloud Mining customers. As for Cloud Mining facility - | amtalking to Greg in 10 minutes. He wants us to

take the local facility for 2 years, but it is more expensive than the St. Louis facility and we don't need it for that long. There is a possibility this stuff gets moved very soon, so | will update you on that as soon as | have info.

[7/8/2014 11:33:34 AM] Marc peepee <files alt="sent file "photo(57).JPG""> <file size="2615731" index="0">photo(57).] PG</file></files>

ee 11:33:49 AM] Marc Goodpasture: This is what the 39 monarch rack looks ike

[7/8/2014 3:17:50 PM] Jody Drake: Customer vi ewpoi nt

Page 376

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 33 of 34

communi cation txt

rie Pieterse: Send him a housewarmin dy Drake: He's in Texas. You can tak y Drake: or a Butterfly Bush

rie Pieterse: Ha ha ha!

Marc Goodpasture: For some reason now Netsolus has decided to Ss out of town. Now they want to maximize the number of units

huh?

where? pasture: They have decided to pickup tomorrow ich should be 5-6

g card from CS @

Ju

oq hima potted plant od

Ju

~~~ o =< ~~~ ~_—~_ ~~ ~~ RO RIND TF RORY PYM PY

R)

R)

od

wh odpasture: He said maybe Nebraska or someplace else. R): or someplace else?

R): do they not know?

R): hold on

R): wtf is up with this?

odpasture: | don't think he has decided, yet

ake: hope its not where they got covered with dirt

CO W1U1U1 Ot O11 Ot OT OO OW WH WO WO WOO CO CO CO NO eWWwN Ss UU DMWOMHANUIGDODO DW UF

4:53 PM] Jurie Pieterse: Sounds like we need a GPS tracker on our

$0 @Marc, not sure how they're packaged up but looking at the racks I'd how much damage equipment could be in for on a long j ourney.

5:56 PM] Bruce Bourne: Let me respond to this for a second it is

e

y

6

c—_— oS

aon oa

opposite of the discussion | had with Greg this morning, in which their overly expensive local facility.

~or—~—ons ~—s3 ~~~ SS Or

ml Bruce Bourne: They must be wrong. Or Greg was BS'ing me. it 1s. PM] Bruce Bourne: And | will let you know PM] Bruce Bourne: I've sent an email to greg, who is probably on a hat he told me this morning. marc, I've told him! want an answer nythgin goes out the door tomorrow. Jurie's point about aa in transit isely one of the reasons | agreed to pay extra to keep it in tow Others r speed of activation, customer satisfaction, troubleshooting, an 14 10:22:48 PM] Jurie Pieterse: Talk about not being ne Bit main

ven have a person attached to their press releases. No phone, no company r executives, and not even a PR agency contact. rnal.com/pr/ 2035504 ] Sonny: the largest bitcoin exchange (bitfinex) out of asia is tel y annomous ] Sonny: Some consider the strategy of not n let the quality of service speak for the

PROPRIO FH NYO MMNeD 3 ROM RO RORY MIMI MRE

ooo” a ofFPPoOoRO-r RA oe

1 n e 1 E t 1 in 1 1 a a

aw Sa CoD VN CODD OC DS COO—AWMO DOO —-CO COO OO OOF CO= M COC CCC os ato

re3 un uo eo 2S Oo o=Zzo=zco

giving people a credi bility of the

(25:15 PM) Sonny: It's a strange new world 46:34 AM] Josh Zerlan: Bitmain is shipping, they don't need contact

49:57 AM] Jason Aspinall: Anyone know if Jonathon is around today? emto get online with Hamachi to get into FishBowl. :50:47 AM) Jurie Pieterse: He is out of town, but apparently can provide t remotely at times when he is available. 52:02 AM] Jason Aspinall: Thanks Jurie... I've left a message on his wan a heads up if he's likely to read it today/tommorrow.. 52: ody Drake: Contact him by emai ou ody Drake: He's responding quicker by emai 53: ody Drake: jonathon@butterflylabs.com 53 as 135: as Sk uU as

—~o ~~ a ~~ @ oO H ~— :--

on Aspinall: Thanks Jody! on Aspinall: Given we have workers effectively all over the ype as a medium of communications, | think we should have delines' in place.. on Aspinall: Very often | see people “online” but lf that worker 1s away fromthe desk for a protracted

Page 377

o—_——_——_— ~~ o

we rely upon e Etiquette 8:59:51 AM] y unresponsiv

Cm mm © em ame dm Pm = a ac ca a ee Co HO TAY NYYHYHN HO HW NAYHD wHYNHAOWNAYDTHAYTOOWHADMN O AANA THO OwWYADO HYAYOD AAAYAYAYAYNHAYONAAYAYDSToO AAnraA4™

DTwoODADAOIOOMNOOWOTD OD OD ODD OcOT CO CO

ae Oonrowm or eS

Case 4:14-cv-00815-BCW Document 42-7 Filed 09/27/14 Page 34 of 34