Argo Blockchain Plc current report, Q4 FY2022

Argo Blockchain plc — Form 6-K Summary

Business Context and Reporting Period

Argo Blockchain plc, a dual-listed cryptocurrency mining company (LSE: ARB; NASDAQ: ARBK), filed this Form 6-K for October 2022. The filing contains an October 31, 2022 strategy, company and operations update concerning previously announced financing actions.

Key Financial and Operating Metrics

  • Proposed financing: The company no longer expects a previously announced non-binding subscription with a strategic investor to proceed on its announced terms. The proposed raise was approximately £24 million ($27 million).
  • Asset sale: Argo sold 3,843 new-in-box Bitmain S19J Pro mining machines, representing approximately 384 PH/s of capacity, for approximately £4.8 million ($5.6 million) in cash proceeds.
  • Mining capacity: Total hashrate capacity remained approximately 2.5 EH/s after the sale.
  • Revenue, profit, margins and cash flow: The filing does not provide current-period revenue, profitability, margin, balance-sheet, debt, liquidity-balance or cash-flow figures.

Material Changes Versus the Prior Comparable Period

  • The proposed £24 million strategic-investor subscription is no longer expected to be completed under the previously announced terms.
  • Argo sold the final batch of its original Bitmain order scheduled for October installation, generating approximately £4.8 million in cash but leaving total hashrate capacity unchanged at approximately 2.5 EH/s.
  • Management stated that it is pursuing other financing opportunities and additional measures to maximize liquidity and preserve cash.

Guidance, Outlook, Risks and Unusual Items

  • Argo is seeking financing intended to provide working capital for at least the next twelve months from October 31, 2022.
  • Management warned that, if additional financing is not completed, the company would become cash-flow negative in the near term and could need to curtail or cease operations.
  • There is no assurance that definitive financing agreements will be signed or that proposed transactions will close.
  • The update includes forward-looking statements subject to cryptocurrency-market, operating, financing and execution risks. The company stated that it does not undertake to publicly update these statements except as required by applicable law or regulation.

Investor Verification Checklist

  • Verify whether replacement financing was secured, including its size, terms, dilution and closing status.
  • Verify Argo’s cash balance, liquidity runway, debt obligations and actual operating cash flow after October 31, 2022.
  • Assess whether the approximately £4.8 million machine sale affected mining output, fleet expansion plans or future capital expenditures.
  • Reconcile reported hashrate capacity of approximately 2.5 EH/s with installed, operational and energized capacity.
  • Review subsequent SEC and FCA filings for any restructuring, asset sales, going-concern disclosures or cessation or curtailment of operations.