Quarterly report pursuant to Section 13 or 15(d)

Liquidity and Financial Condition

Liquidity and Financial Condition
6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Liquidity and Financial Condition

Note 2. Liquidity and Financial Condition:


The Company has experienced recurring losses and negative cash flows from operations.  At June 30, 2019, the Company had approximate balances of cash and cash equivalents of $16.1 million, digital currencies of $1.9 million, working capital of $14.6 million, total stockholders' equity of $26.1 million and an accumulated deficit of $212.0 million. To date, the Company has, in large part, relied on equity and debt financing to fund its operations.


The Company expects to continue to incur losses from operations for the near-term and these losses could be significant as the Company incurs costs and expenses associated with recent and potential future acquisitions, and development of the RiotX exchange platform, as well as public company, legal and administrative related expenses being incurred. As disclosed in Note 8, during the six months ended June 30, 2019, the Company issued a series of Senior Secured Convertible Promissory Notes (the “Notes”), to investors for an aggregate principal amount of $3,358,333 and an equal value of warrants for the purchase of shares of the Company’s common stock (the “Warrants”) in exchange for a total investment of $3,000,000. During the three months ended June 30, 2019, all of the Notes were converted into common stock and have been satisfied in full. The Company is closely monitoring its cash balances, cash needs and expense levels.


As disclosed in Note 9, during the six months ended June 30, 2019, the Company entered into a Sales Agreement with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) dated May 24, 2019 (the “Sales Agreement”), pursuant to which the Company may, from time to time, sell up to $100.0 million in shares of the Company’s common stock through H.C. Wainwright, acting as the Company’s sales agent and/or principal, in an at-the-market offering (“ATM Offering”). All sales of the shares in connection with the ATM Offering have been made pursuant to an effective shelf registration statement on Form S-3 filed with the U.S. Securities and Exchange Commission (“SEC”). The Company pays H.C. Wainwright a commission of approximately 3.0% of the aggregate gross proceeds the Company received from all sales of the Company's common stock under the Sales Agreement. The Company received net proceeds on sales under the Sales Agreement of approximately $18.9 million at a weighted average price of $3.26 (net of commissions) during the six months ended June 30, 2019.