Riot reported $2.8 million of revenue for the three months ending June 30 and a net loss of $24.4 million, according to a press release issued Wednesday. In the previous quarter, Riot brought in less than $1 million in revenue, according to its filing in May. Year-over-year comparisons are unhelpful since the company only entered the cryptocurrency business in October 2017.
Riot called the second quarter results a “milestone” in the press release.
Most of Riot’s revenue came from cryptocurrency mining, which is now fully setup, according to its latest quarterly filing. But the company has recorded a partial write-down in the value of the miners. Bitcoin’s price significantly declined in the first six months of the year. Based on that price decline “and the decline in projected cash flows over the life of the miners,” Riot said in its latest quarterly report, “the company determined that there were impairment charges.”
The company had $1.7 million of cash as of June 30, down from $5.3 million in cash at the end of the first quarter, and down from $41.7 million in December, according to the two most recent quarterly filings.
Riot has $4.9 million worth of cryptocurrency and sold $1.6 million worth of the digital currency. The cryptocurrency on hand increased slightly since last quarter.
Riot has no long term debt. The company owes $1.5 million in August for the purchase of cryptomining machines in February, according to its latest regulatory filing.
Over the last 6 months, Riot spent $20.1 million on purchasing property and equipment and used $9.6 million for operating activities.
“The Company expects to continue to incur losses from operations for the near-term and these losses could be significant…” the latest filing said. “The Company expects the need to raise additional capital to expand our operations and pursue our growth strategies…”
Riot expects to be able to meet its cash needs for at least one year, the filing said.
A CNBC investigation in February found a number of red flags in the company’s SEC filings that might make investors leery. The investigation revealed annual meetings that were postponed at the last minute, sales of stock by company insiders soon after the company’s name change, dilutive share issuances on favorable terms to large investors, confusing SEC filings and evidence that a major shareholder was selling shares while everyone else was buying.
O’Rourke accused CNBC of publishing “a negative one-sided piece.”
“We have made significant inroads in building a diversified portfolio of investments and to begin securing digital assets,” O’Rourke said in a letter to shareholders the day the CNBC investigation aired.