RChain cooperative lost an estimated $4.1M in 2018

Quick Take

  • RChain cooperative’s net loss for the fiscal year was approximately $4.1 million
  • Most of the platform’s expenses came from a license for an audio codec by Immersion Networks, which is still not fully paid for
  • It is now a realistic possibility that the RChain cooperative will be dissolved, and RSong will become a continuation of RChain

RChain cooperative, the blockchain platform that was hoping to rival Ethereum, released financials Monday including an income statement for 2018 and a balance sheet dated to February 2019. In 2018, the RChain cooperative generated income of $22.2 million from the sale of its token and cryptocurrencies. However, the income was outweighed by expenses of $26.3 million, leading to a total net loss for the fiscal year of approximately $4.1 million. Despite the loss and negative net assets, the company’s $RHOC token trades at a market cap of $5.2 million.

As uncovered by The Block in December, RChain Cooperative was “functionally bankrupt” after facing a major budgetary shortfall and alleged financial mishandling, stretching from incomplete balance sheets and the purchase of a million-dollar house. 

Per the income statement, the largest portion (64.5 percent) of the expenses came from “expenses related to strategic partners,” which was mostly related to a license for an audio codec by Immersion Networks. A little more than $5.3 million of that remains unpaid but it is “not due for quite some time,” according to RChain. 

According to the balance sheet dated as of February 20, the RChain cooperative had $2.9 million in total assets and $10.4 million in total liabilities. Thus, the value of business assets if all liabilities were paid off is negative $7.5 million. The company currently has $1.5 million of cash on hand.

RChain cooperative’s balance sheet

It’s now a realistic possibility that the RChain cooperative will be dissolved. If it is, the cooperative is seriously considering incorporating a separate entity called RSong, which would be “sort of a continuation of RChain” and would be assigned the license from Immersion Networks.

RSong is a dApp developed by RChain, which stores ‘immersive’ music on blockchain users can rent. Rudy Harper, a business development executive at RChain, believes that “RSong is viable to save the co-op from its financial challenge.”