Item 8.01 - Other Events.
Except as presented in this filing, the Company is not updating any other information in the Quarterly Reports.
Omitted Material Weakness:
The Company did not properly design and implement controls to ensure that certain inputs and assumptions utilized in the valuation of intangible assets identified in its accounting for business combinations were reasonable in the circumstances. Such deficiency also resulted in material adjustments required to the Company's provision for income taxes.
The Company's disclosures under Part I - Item 4. "Controls and Procedures" of
its Quarterly Report for the quarter ended
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (principal
executive officer) and our Chief Financial Officer (principal financial
officer), has evaluated the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) as of
1) The Company did not design and/or implement user access controls to ensure
appropriate segregation of duties that would adequately restrict user and privileged access to the financially relevant systems and data to the appropriate Company personnel.
2) The Company did not design and implement program change management controls
for certain financially relevant systems to ensure that IT program and data changes affecting the Company's (i) financial IT applications, (ii) digital currency cold storage wallets and mining equipment, and (iii) underlying accounting records, are identified, tested, authorized and implemented appropriately to validate that data produced by its relevant IT system(s) were complete and accurate. Automated process-level controls and manual controls that are dependent upon the information derived from such financially relevant systems were also determined to be ineffective as a result of such deficiency.
3) The Company did not properly design or implement controls to ensure that data
received from third parties is complete and accurate. Such data is relied on by the Company in determining amounts pertaining to revenue - mining and cryptocurrency assets held is complete and accurate. Automated process-level controls and manual controls that are dependent upon the information derived from such financially relevant systems were also determined to be ineffective as a result of such deficiency.
4) The Company did not properly design and implement controls to ensure that
certain inputs and assumptions utilized in the valuation of intangible assets identified in its accounting for business combinations were reasonable in the circumstances. Such deficiency also resulted in material adjustments required to the Company's provision for income taxes.
5) During testing of procedures during 2021, the Company's subsidiary, Whinstone,
did identify that there were material weaknesses over internal controls at Whinstone. The weaknesses noted that Whinstone did not properly document the design of its internal controls; did not design and implement procedures to ensure proper segregation of duties and all transactions are entered and disclosed timely and accurately in accordance with GAAP, which includes transactions with related parties.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document). 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 G. McGonegal Name :Jeffrey G. McGonegal Title: Chief Financial Officer
Date:
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