Annual report pursuant to Section 13 and 15(d)

Consolidated Statements of Cash Flows

Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities    
Net loss $ (60,212,528) $ (19,970,932)
Income (loss) from discontinued operations 96,132 (3,542,964)
Loss from continuing operations (60,308,660) (16,427,968)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities of continuing operations:    
Stock-based compensation 4,660,406 2,589,812
Depreciation and amortization 5,267,372 890,889
Deferred income tax benefit (699,000) (1,609,000)
Amortization of license fee revenue (96,698) (96,698)
Amortization of debt discount 4,750,000
Common stock issued for services 402,941 1,178,237
Loss on extinguishment of BMSS payable 265,500
Inducement expense on warrant exercises 173,867
Impairment of property and equipment 29,237,719 5,218,004
Impairment of digital currencies 3,501,250
Goodwill impairment charge 1,186,496
Acquired rights impairment charge 1,341,013
Realized gain on sale of digital currencies (26,443)
Loss on sale of property and equipment 3,639
Changes in assets and liabilities:    
Prepaid expenses and other current assets (839,722) (41,386)
Digital currencies - mining, net of mining pool operating fees (7,593,661) (200,164)
Accounts payable 3,419,286 90,022
Accrued expenses 1,299,369 (40,641)
Net cash used in operating activities of continuing operations (18,982,832) (3,521,387)
Net cash used in operating activities of discontinued operations (68,824) (918,663)
Net cash used in operating activities (19,051,656) (4,440,050)
Cash flows from investing activities - continuing operations:    
Proceeds from sale of digital currencies 9,237,225
Purchase of digital currencies (5,624,832)
Purchases of property and equipment (20,195,290)
Purchases of other investments (6,412,726) (3,200,000)
Proceeds from sale of short-term investments 7,506,761
Net cash acquired from purchase of subsidiaries 1,329,324
Security deposits (703,275)
Purchases of patent and trademark application costs (59,597) (61,094)
Investment in Logical Brokerage, net of cash acquired (516,917)
Purchase of developed technology by 1172767 B.C. Ltd. (586,769)
Net cash (used in) provided by investing activities of continuing operations (24,862,181) 5,574,991
Net cash provided by investing activities of discontinued operations 4,004
Net cash (used in ) provided by investing activities (24,862,181) 5,578,995
Cash flows from financing activities - continuing operations:    
Proceeds from issuance of convertible notes 4,750,000
Proceeds from issuance of common stock, net of $500,000 in offering expenses 38,451,052
Redemption of equity rights (392,007)
Special dividend payment (9,562,331)
Proceeds from notes payable 1,696,083
Payments on BMSS purchase agreement (300,000)
Repayment of notes payable and other obligations (135,574) (272,678)
Proceeds from exercise of warrants 350,000 1,860,000
Proceeds from exercise of stock options 78,522 149,136
Proceeds from sale of Riot shares held by 1172767 B.C. Ltd. 505,729
Proceeds from common shares sold by 1172767 B.C. Ltd., net 220,446
Refund of escrow dividend 72,056
Net cash provided by financing activities of continuing operations 2,487,262 34,983,172
Net (decrease) increase in cash and cash equivalents (41,426,575) 36,122,117
Cash and cash equivalents at beginning of year 41,651,965 5,529,848
Cash and cash equivalents at end of year 225,390 41,651,965
Supplemental disclosure of cash flow information:    
Cash paid for interest 6,585 5,605
Cash paid for taxes
Supplemental disclosure of noncash investing and financing activities:    
Value of shares issued for Prive asset acquisition 8,480,000
Value of preferred shares issued for Kairos asset acquisition 9,296,443
Value of common shares issued for Tess asset acquisition $ 636,750
Conversion of preferred stock to common stock 7,190,157 6,349,848
Deferred purchase price for BMSS $ 1,500,000
Preferred stock canceled 486,050
Deferred tax liability for Logical Brokerage 142,709
Acquisition of assets for installment obligations $ 268,640