American mining company Riot Blockchain has released its first quarter 2020 financial report. Description of an image of a company that relies heavily on equity and debt financing to finance its business.
The company reported recurring losses and negative cash flows from its operationsRiot anticipates sustained short-term losses.
But the mining team He hopes for the arrival of 2,000 next-generation mining machines that he believes will enable him to double his operational hash rate.
Riot improves performance year after year
As of March 31, 2020, Riot Blockchain stated that it had $ 14 million in cash. Crypto assets totaling $ 5.3 million, primarily Bitcoin (BTC), and working capital of $ 17 million.
In a press release, Riot emphasized its improved performance compared to the first quarter of 2019 with a mining margin of up to $ 955,000 with a loss of $ 65,000. Revenue increased 68% from $ 1.4 million to $ 2.4 million compared to the first quarter of 2019.
The company also emphasizes a sharp increase in corporate liquidity since the beginning of the year. with liquidity of up to USD 19.2 compared to USD 11.3 million as of December 31, 2019.
Yes, but this $ 221 million …?
However Riot’s accumulated deficit exceeded USD 221 millionThe company relied on equity and debt financing to fund most of its business.
In addition, the company “expects to continue to generate losses from operating business in the short term”whereas losses can be significant as legal, administrative and acquisition costs continue to rise. “The company is closely monitoring its balances, cash needs and expenses,” the report said.
Riot relies heavily on next generation Antminer
The company notes that its revenue and gross profit growth in the first quarter is mainly due to changes in cryptocurrency prices and recent use of next-generation cryptocurrency miners.
In December, Riot purchased 4,000 Bitmain ASIC Antminer S17 Pros for approximately $ 6.3 million. While all units were operational in late February, COVID-19 disruptions resulted in the company relocating a significant portion of its S17 to a Coinmint-operated plant in New York in April.
Riot recently bought 1,000 Antminer S19 and 1,040 S19 Pros Bitmainand expresses the expectation that the deployment will double the operational hash rate.
With debt in excess of $ 220 million, however, it remains to be seen whether the S19 can significantly improve the company’s performance, especially after halving this week’s block reward to just 6.25 BTC.