UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 8, 2020 (January 13, 2020)
Riot Blockchain, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 001-33675 | 84-1553387 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 202 6th Street, Suite 401, | ||
| Castle Rock, CO 80104 | ||
| (Address of principal executive offices) | ||
| (303) 794-2000 | ||
| (Registrant’s telephone number, including area code) |
(Former name, former address, and former fiscal year, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | RIOT | NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01 – Entry Into a Material Definitive Agreement.
Kairos Lease Amendment
Kairos Global Technologies, Inc. (“Kairos”), a wholly owned subsidiary of Riot Blockchain, Inc. (“Riot” or the “Company”), entered into that certain Lease Agreement by and between Kairos and 7725 Reno #1, L.L.C. (“7725 Reno”) dated February 27, 2018, as amended on March 26, 2018 and November 29, 2018 (the “Lease”). Effective as of January 8, 2020, Kairos entered into a third amendment to the lease (the “Third Lease Amendment”), extending the initial term of the Lease through May 15, 2020. All other provisions of the Lease remain the same as set forth in the second amendment to lease reported by the Company on Form 8-K filed with the Securities and Exchange Commission on December 6, 2019.
The foregoing descriptions of the Third Lease Amendment do not purport to be complete and are qualified in their entirety by reference to the complete text of such document, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by this reference.
8.01 – Other Events.
On January 8, 2020, the Company issued a Press Release announcing the delivery and deployment of the first order of Bitmain S17 Antminer cryptocurrency miners at its Oklahoma City, Oklahoma mining facility. Riot had previously announced its acquisition of the S17 Antminers from Bitmain on its Current Report on Form 8-K filed on December 4, 2019. A copy of the Press Release announcing the delivery and deployment of the S17 Antminers is attached hereto as Exhibit 99.1
About Riot Blockchain
Information reported in this Current Report on Form 8-K is limited to the scope of the information reportable under a Current Report on Form 8-K under the rules and regulations of the Commission. Please refer to the additional information concerning the Corporation referenced in the following notices and safe harbor provision for material risks and other uncertainties.
Investor Notice
An investment in the Corporation’s common stock involves a high degree of risk, and an investor should only purchase the Corporation’s securities if he or she can afford to suffer the loss of his or her entire investment. In determining whether to purchase the Corporation’s common stock, an investor should carefully consider all of the material risks described in this Current Report on Form 8-K below, together with the factors described under Item 1A under the heading “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on April 2, 2019, as amended on Form 10-K/A, filed with the SEC on April 23, 2019, as supplemented and updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, together with the financial or other information contained or incorporated by reference in such reports. In addition to the risks discussed below, other risks not presently known to us or that we currently believe to be immaterial may also adversely affect our business, financial condition and results of operations, perhaps materially. The risks discussed below also include forward-looking statements, and actual results and events may differ substantially from those discussed or highlighted in those forward-looking statements. See also the Section entitled “Forward-Looking Statements” herein.
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Safe Harbor
The information provided in this report may include forward -looking statements relating to future events or the future financial performance of the Corporation. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as “anticipates,” “plans,” “expects,” “intends,” “will,” “potential,” “hope” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon current expectations of the Corporation and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties. Detailed information regarding factors that may cause actual results to differ materially from the results expressed or implied by statements in report relating to the Corporation may be found in the Corporation’s periodic filings with the Commission, including the factors described in the sections entitled “Risk Factors”, copies of which may be obtained from the SEC’s website at www.sec.gov. The Corporation does not undertake any obligation to update forward-looking statements contained in this report.
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Item 9.01.
(d) Exhibits. |
Financial Statements and Exhibits.
The following exhibit is filed herewith: |
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Exhibit Number
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Description |
| 10.1 | Third Amendment to Lease, dated as of January 8, 2020, by and between Kairos Global Technologies, Inc. and 7725 Reno #1, L.L.C. |
| 99.1 | Press Release issued by Riot Blockchain, Inc. on January 8, 2020 (furnished pursuant to Item 8.01 of this Current Report on Form 8-K).* |
*The information contained in this Press Release is furnished but not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RIOT BLOCKCHAIN, INC. | ||
| By: | /s/ Jeffrey McGonegal | |
| Jeffrey McGonegal | ||
| Chief Executive Officer | ||
Date: January 13, 2020
Exhibit 10.1
THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE (“Amendment”) is entered into effective as of January 8, 2020, by and between 7725 RENO #1, L.L.C., an Oklahoma limited liability company (“Landlord”), and KAIROS GLOBAL TECHNOLOGY, INC., a Nevada corporation (“Tenant”).
A. Landlord and Tenant are parties to a Lease dated February 27, 2018, as amended by a First Amendment to Lease dated March 26, 2018 (“First Amendment”), and a Second Amendment to Lease (“Second Amendment”) dated November 29, 2018 (collectively, the “Lease”), pursuant to which Landlord has leased to Tenant certain premises and improvements (the “Premises”) in the building commonly known as OKC10 located at 7725 W. Reno Avenue, Oklahoma City, Oklahoma, as more particularly described and depicted in the Lease.
B. In the Second Amendment, Section 2.1 of the Lease was amended to extend the Initial Term of the Lease to August 15, 2019. Pursuant to Section 32 of the Lease, as amended by the Second Amendment, Tenant exercised its option to extend the Lease Term for two additional periods of three months each. The first Renewal Term commenced on August 16, 2019 and ended on November 15, 2019. The second Renewal Term commenced on November 16, 2019 and will end on February 15, 2020.
C. Landlord and Tenant desire to further extend the Lease Term as set forth in this Amendment. Terms not defined in this Amendment shall have the meanings given to them in the Lease.
NOW THEREFORE, for good and valuable consideration, the parties agree as follows:
1. Extension of Initial Term. Section 2.1 of the Lease is amended to extend the Lease Term to May 15, 2020 (the “Extended Term”), unless terminated earlier as provided in the Lease.
2. Rent. During the Extended Term, the monthly rent payable by Tenant under the Lease will continue to be comprised of two components: (a) Base Rent, and (b) an electricity usage charge based on Tenant’s metered usage of electricity each month and the rate charged by OG&E (Landlord’s electricity service provider) for such month (the “Electricity Usage Charge”), as further described below.
2.1 Base Rent. Notwithstanding anything to the contrary in the Lease or any prior amendment(s) thereto, during the Extended Term, Base Rent will continue to be due and payable in advance on the first day of each calendar month in the amount of $190,000 per month. The monthly Base Rent for any partial month at the beginning or end of the Term will be prorated based on the number of days in the partial month.
2.2 Electricity Usage Charge. Notwithstanding anything to the contrary in the Lease or any prior amendment(s) thereto, during the Extended Term, Tenant shall continue to pay the Electricity Usage Charge at the rates and as otherwise set forth in Section 2.2 of the Second Amendment – March, April, and May 2020 being calculated based upon the same rate specified for “Feb-20” in the table therein ($0.039).
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3. Renewal Options. Section 32 of the Lease, as previously amended, is hereby replaced and amended to reflect that Tenant will have no Renewal Options under the Lease to extend the Term past the date of expiration of the Extended Term (May 15, 2020), unless Landlord and Tenant mutually agree to execute an additional amendment providing for additional Renewal Options.
4. Tenant Not Deemed to be Holding Over. Notwithstanding similarity in terms used, during the Extended Term granted hereunder, Tenant shall not be deemed to be “Holding Over” as defined in Section 17.2 of the Lease, such provisions only becoming applicable if Tenant fails to vacate in accordance with the terms of the Lease (as amended) upon expiration or earlier termination of the Extended Term granted hereby, which Extended Term may be further amended and/or extended in a writing signed by Landlord and Tenant.
5. Ratification of Lease. Except as modified by this Amendment, the Lease is hereby ratified and shall remain in full force and effect in accordance with its terms.
6. Conflict; Inconsistency. In the case of conflict or inconsistency between the provisions of this Third Amendment and any provision(s) of the Lease, the Second Amendment, or the First Amendment, the terms of this Third Amendment shall control.
7. Guarantor’s Consent to Amendment and Ratification of Guaranty. Riot Blockchain, Inc. (“Guarantor”) consents to this Amendment to the Lease and confirms that its guaranty of payment as set forth in Section 33 of the Lease shall continue to be binding on Guarantor and its successor and assigns and shall inure to the benefit of Landlord and its successors and assigns.
8. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original and all of such counterparts together shall constitute one and the same Amendment.
[signatures follow]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day and year first set forth above.
| LANDLORD: |
7725 Reno # 1, LLC, an Oklahoma limited liability company |
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By: /s/Terryl Zerby Name: Terryl Zerby Title: Manager
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| TENANT: |
Kairos Global Technology, Inc., a Nevada corporation |
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By: /s/ Jeffrey McGonegal Name: Jeffrey McGonegal Title: Chief Executive Officer |
As to Section 5 of this Amendment:
| GUARANTOR: | Riot Blockchain, Inc., |
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By: /s/ Jeffrey McGonegal Name: Jeffrey McGonegal Title: Chief Executive Officer |
Exhibit 99.1
Riot Blockchain receives initial order of Bitmain S17 Pro Antminers and commences deployment at Oklahoma City Mining Facility
Company enters 2020 experiencing hashrate improvement as Riot upgrades mining facility.
CASTLE ROCK, CO. / PRNewswire / January 8, 2020 / Riot Blockchain, Inc. (NASDAQ: RIOT) ("Riot” or the “Company"), announces receipt of approximately 3,000 S17 Pro Antminers from BitmainTech PTE. LTD. (“Bitmain”), arriving at Riot’s Oklahoma City mining facility in late December 2019. The Riot team has commenced deploying the new S17 Pro generation miners. This initial purchase was previously announced on December 4, 2019. The deployment of the new miners is advancing rapidly, and Riot has secured additional temporary labor to accelerate the upgrade process.
Riot anticipates receipt of the second order of 1,000 S17 Pro Antminers from Bitmain during January 2020, as previously announced by the Company on December 12, 2019. Assuming a late January 2020 receipt of the second Bitmain order of 1,000 S17 Pro Antminers, as scheduled, the full upgrade of its Oklahoma City mining facility to the new S17 Pro generation of miners could be completed over approximately the next four weeks.
Riot estimates the aggregate operating hashrate at the Oklahoma City mining facility, assuming full utilization of the facility’s current total 12 megawatt (“MW”) available electric supply and full deployment of the total 4,000 next generation miners, to be approximately 248 petahash per second. This would represent an estimated 240% increase over Riot’s present average mining hashrate. Riot anticipates that total deployment of the 4,000 S17 Pro new miners will represent approximately 90% of the Oklahoma City’s mining facility’s total current capacity.
Riot Blockchain, one of the few Nasdaq listed public cryptocurrency mining companies in the United States, announced in December 2019 the purchase of 4,000 next generation Bitmain S17 Pro Antminers for approximately USD $6.35 million from Bitmain. Over the coming weeks Riot will be evaluating possible next steps for its approximate 7,500 S9 miners, a majority of which are being taken off-line to make room for the new generation miners. The Company plans to provide further updates as it progresses.
About Riot Blockchain
Riot Blockchain is focused on building, operating, and supporting blockchain technologies. Its primary operations consist of cryptocurrency mining, targeted development of a cryptocurrency exchange, and the identification and support of innovations within the sector. For more information, visit http://www.RiotBlockchain.com/.
Investor Notice
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 1A of our most recent Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission (the "SEC") on April 2, 2019, as amended by Amendment No. 1 on Form 10-K/A on April 23, 2019, as well as those risk factors disclosed in any periodic reports we file with the SEC. If any of these risks were to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline, and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us.
Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. See "Safe Harbor" below.
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Safe Harbor
The information provided in this press release may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as "anticipates," "plans," "expects," "intends," "will," "potential," "hope" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon current expectations of the Company and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties. Detailed information regarding factors that may cause actual results to differ materially from the results expressed or implied by statements in this press release relating to the Company may be found in the Company's periodic filings with the Securities and Exchange Commission, including the factors described in the sections entitled "Risk Factors," copies of which may be obtained from the SEC's website at www.sec.gov. The Company does not undertake any obligation to update forward-looking statements contained in this press release.
CONTACT:
Media Contact:
PR@RiotBlockchain.com
Investor Contact:
IR@RiotBlockchain.com
SOURCE: Riot Blockchain, Inc.