Riot Blockchain: Yet Another Suspicious, Cash-Depleting Transaction

Summary

• Riot reported yet another dubious transaction via 8-K during a market "dead zone" - Friday after the close.
• Riot is paying a $4 million upfront consulting fee to a believed undisclosed related party entity.
• Just last week we had identified the entity, Ingenium International LLC, as being highly suspicious.
• Collectively, Riot's series of suspicious transactions are among the most brazen irregularities we have seen in a U.S. listed company.

Introduction

We genuinely thought we were done writing about Riot Blockchain (NASDAQ:RIOT) after our first article in early December. After all, what more needed to be said?

1. We had called the company out for making an arguably absurd "pivot" from a medical device company to a blockchain company.
2. We had identified that the company overpaid by about 6x for equipment purchased through a highly suspicious, newly-formed entity.
3. We had identified that a special dividend seemed to disproportionately enrich insiders.
4. We had identified that Barry Honig, an individual with a controversial past, seemingly had an influential behind-the-scenes stake in the company.

That should have been enough.

It also should have been enough when we wrote our second article on January 9th, entitled "Riot Blockchain: This Crypto Clown Car Continues Hurtling Toward The Abyss."

After all, what else could there be?

We had reinforced our earlier research by identifying numerous issues with:

• Believed related party transactions
• Multiple auditor switches
• The company's pattern of reporting seemingly negative news on Fridays after the market close.

Subsequent to that second article, the Wall Street Journal, the Denver Post, and CNBC corroborated and expounded on our research with exposes of their own. The stock plummeted, particularly after the CNBC piece.

Our second article even made a cameo appearance in one of Riot's growing list of class action lawsuits (1, 2, 3)

Our rather absurd headline is now forever cemented in the records of Florida's Southern District.

Great! Now we were done. Totally...

But then, despite all the scrutiny by us, by media outlets, by other independent bloggers and by numerous financial professionals (except for Dennis Gartman)... despite all of it, something remarkable happened.

On Friday, February 16^th, after the market close, the company reported yet another 8-K detailing what we believed to

Analyst’s Disclosure: I am/we are short RIOT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.