Riot Platforms (RIOT) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Our success depends on external factors affecting the Bitcoin industry
2. 02There is a finite supply of Bitcoin, and the number of new Bitcoin rewarded per block algorithmically decreases over time, which poses a risk to our business
3. 03We operate in a highly competitive market and if we fail to grow our hash rate, in a cost-effective manner, we may be unable to compete
4. 04We may be impacted by macroeconomic conditions due to global pandemics, epidemics or outbreaks of disease and the resulting global supply chain crisis
5. 05Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in crypto-related activities
6. 06We may be unable to access sufficient additional capital for future strategic growth initiatives
7. 07We face potential risks and challenges in evaluating and leveraging our remaining power capacity for AI/HPC uses
8. 08We may not be able to timely complete our future strategic growth initiatives or within our anticipated costs estimates, if at all
9. 09Global economic and geopolitical events, policies and conflicts may adversely affect our business, financial condition and results of operations
10. 10Failure to successfully integrate acquired businesses could negatively impact our balance sheet and results of operations
11. 11We may experience increased compliance costs as a result of our strategic acquisitions
12. 12We have a history of operating losses, and we may report additional operating losses in the future
13. 13The lack of regulation of digital asset exchanges which Bitcoin, and other cryptocurrencies, are traded on may expose us to the effects of negative publicity resulting from fraudulent actors in the cryptocurrency space and can adversely affect an investment in the Company
14. 14We depend on attracting and retaining officers, managers, and skilled professionals

Risks Related to the Price of Bitcoin

1. 15Our ability to achieve profitability is largely dependent on the price of Bitcoin, which has historically been volatile
2. 16Bitcoin market exposure to financially troubled cryptocurrency-related companies may impact our reputation, the price of Bitcoin and the profitability of our Bitcoin Mining operations
3. 17Bitcoin is subject to halving, and our Bitcoin Mining operations may generate less revenue as a result
4. 18Transaction fees may decrease demand for Bitcoin and prevent expansion
5. 19Bitcoin faces significant scaling obstacles that can lead to high fees or slow transaction settlement times

Risks Related to our Operations

1. 20Because our miners are designed specifically to mine Bitcoin and may not be readily adaptable to other uses, a sustained decline in Bitcoin’s value could adversely affect our business and results of operations
2. 21Our reliance on third-party miners may subject our operations to increased risk of design flaws
3. 22Our reliance primarily on immersion-cooling exposes us to additional risks
4. 23Our revenue generation is subject to risks applicable to our mining pool, including risks outside of our control
5. 24Our use of third-party mining pools exposes us to certain risks
6. 25We may not be able to realize the benefits of forks
7. 26We may be exposed to potential liability from claims relating to intellectual property rights
8. 27We are subject to counterparty risks, including in particular risks and uncertainties relating to our Custodians
9. 28digital assets is, and will remain, freely transferable without the payment of money or value and that NYDIG has no ownership interest in our account
10. 29Our limited rights of legal recourse and our lack of insurance protection over our Bitcoin expose us and our stockholders to the risk of loss of our Bitcoin for which there may be no adequate remedy
11. 30Cyber-attacks, data breaches or malware may disrupt our operations and trigger significant liability for us, which could harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business
12. 31If our third-party digital asset-focused custodian experiences a security breach or cyber-attack and unauthorized parties obtain access to our Bitcoin, we may lose some or all of our Bitcoin and our financial condition and results of operations could be materially adversely affected
13. 32Incorrect or fraudulent Bitcoin transactions may be irreversible and we could lose access to our Bitcoin
14. 33The Rockdale Facility is subject to a long-term ground lease, and we may be unable to fully realize the anticipated benefits of its expansion if the lease is not renewed or is otherwise terminated
15. 34Our business could be harmed by prolonged power and internet outages, shortages, or capacity constraints
16. 35We are subject to risks associated with our need for significant electrical power
17. 36Our operations have been, and may continue to be, adversely affected by events outside of our control, such as natural disasters
18. 37Increased scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance (“ESG”) practices and the impacts of climate change may result in additional costs or risks

Risks Related to Governmental Regulation and Enforcement

1. 38Changing environmental regulation and public energy policy may expose our business to new risks
2. 39The compliance costs of responding to new and changing regulations could adversely affect our operations at the Rockdale Facility and the Corsicana Facility
3. 40Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects, or operations
4. 41Our interactions with a blockchain may expose us to SDN or blocked persons and new legislation or regulation could adversely impact our business or the market for cryptocurrencies
5. 42Bitcoin and Bitcoin mining, as well as cryptocurrencies generally, may be made illegal in certain jurisdictions, including the ones we operate in, which could adversely affect our business prospects and operations

Risks Related to Ownership of Our Common Stock

1. 43The trading price of shares of our common stock has been subject to volatility
2. 44We have issued new shares of our common stock, which has a dilutive effect
3. 45We have a classified Board; therefore, only approximately one-third of the Board is up for election at each annual stockholders’ meeting, which could limit stockholders’ ability to influence directors’ decision making
4. 46Certain provisions of Nevada law described below may make us a less attractive candidate for acquisition, which may adversely impact the value of the shares of our capital stock held by our stockholders. We have not opted out of these provisions in our Bylaws, as permitted under the Nevada Revised Statutes
5. 47Because we do not currently intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them
6. 48If we are unable to maintain an effective system of internal control over financial reporting and disclosure controls, we may fail to produce timely and accurate financial statements