Riot Blockchain (RIOT) Financial Report Summaries

Risks

• If we fail to grow our hash rate, we may be unable to compete, and our results of operations could suffer.
• We may be impacted by macroeconomic conditions due to global pandemics, epidemics or outbreaks of disease and the resulting global supply chain crisis.
• We expect the cost of acquiring new miners to continue to be affected by the ongoing global supply chain crisis.
• We may not be able to timely complete our future strategic growth initiatives or within our anticipated cost estimates, if at all.
• We may be unable to access sufficient additional capital for future strategic growth initiatives.
• Expansion of our Rockdale Facility and construction of our Corsicana Facility potentially exposes us to additional risks.
• Failure to successfully integrate acquired businesses could negatively impact our balance sheet and results of operations.
• We may experience increased compliance costs as a result of our strategic acquisitions.
• We have financed our strategic growth primarily by issuing new shares of our common stock in public offerings, which dilutes the ownership interests of our current stockholders, and which may adversely affect the market price of our securities.
• We have a history of operating losses, and we may report additional operating losses in the future.
• Our ability to achieve profitability is largely dependent on the price of Bitcoin, which has historically been volatile.
• Bitcoin is subject to halving, and our Bitcoin Mining operations may generate less revenue as a result.
• Transaction fees may decrease demand for Bitcoin and prevent expansion.
• Bitcoin faces significant scaling obstacles that can lead to high fees or slow transaction settlement times.
• To remain competitive in our industry, we seek to grow our hash rate to match the growing network hash rate and increasing network difficulty of the Bitcoin blockchain, and if we are unable to grow our hash rate at pace with the global network hash rate, our chance of earning Bitcoin from our Bitcoin Mining operations would decline.
• Because our miners are designed specifically to mine Bitcoin and may not be readily adaptable to other uses, a sustained decline in Bitcoin’s value could adversely affect our business and results of operations.
• Our reliance on third-party miners may subject our operations to increased risk of design flaws.
• Our use of third-party mining pools exposes us to certain risks.
• We may not be able to realize the benefits of forks.
• Cyber-attacks, data breaches or malware may disrupt our operations and trigger significant liability for us, which could harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business.
• Incorrect or fraudulent Bitcoin transactions may be irreversible and we could lose access to our Bitcoin.
• Our miners and mining infrastructure may not be adaptable to new technologies.
• The Rockdale Facility is subject to a long-term ground lease, and we may be unable to fully realize the anticipated benefits of its expansion if the lease is not renewed or is otherwise terminated.
• Our business could be harmed by prolonged power and internet outages, shortages, or capacity constraints.
• We are subject to risks associated with our need for significant electrical power.
• Our operations have been, and may continue to be, adversely affected by events outside of our control, such as natural disasters.
• Increased scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance (“ESG”) practices and the impacts of climate change may result in additional costs or risks.
• Changing environmental regulation and public energy policy may expose our business to new risks.
• The compliance costs of responding to new and changing regulations could adversely affect our operations at our Rockdale Facility and our future operations at our Corsicana Facility.
• Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects, or operations.
• Our interactions with a blockchain may expose us to specially designated nationals (“SDN”) or blocked persons and new legislation or regulation could adversely impact our business or the market for cryptocurrencies.
• Bitcoin and Bitcoin mining, as well as cryptocurrencies generally, may be made illegal in certain jurisdictions, including the ones we operate in, which could adversely affect our business prospects and operations.
• The trading price of shares of our common stock has been subject to volatility.
• We have a classified board of directors; therefore, only approximately one-third of the Board is up for election at each annual stockholders’ meeting, which could limit stockholders’ ability to influence directors’ decision making.
• Article X of our Bylaws, as amended, designates the courts of the State of Nevada as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and therefore may limit our stockholders’ ability to choose a forum for disputes with us or our directors, officers, employees, or agents.
• Nevada law contains provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts to replace or remove current management and reduce the market price of our stock.
• Because we do not currently intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
• We previously identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, any of which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.