Annual report pursuant to Section 13 and 15(d)

Property and Equipment

v3.21.1
Property and Equipment
12 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 7. Property and Equipment

Property and equipment consisted of the following as of December 31, 2020 and 2019:

December 31, 2020

December 31, 2019

Miners

$

14,406

 

$

5,010

Leasehold improvements

-

 

38

Office and computer equipment

83

 

103

Total cost of property and equipment

14,489

 

5,151

Less accumulated depreciation

(4,346

)

(100

)

Property and equipment, net

$

10,143

 

$

5,051

There were no impairment charges related to miners for the years ended December 31, 2020 and 2019.

During the year ended December 31, 2019, the Company purchased 4,000 Bitmain S17-Pro Antminers for approximately $6.3 million from Bitmain. In December 2019, 3,000 miners had been received at the Company’s Oklahoma City facility but not yet placed in service. The remaining 1,000 miners were received at its Oklahoma City facility during February 2020 and the related $1.4 million prepayment is recorded as a deposit on the accompanying December 31, 2019 consolidated balance sheet. During the year ended December 31, 2020, the 4,000 S17-Pro Antminers were relocated to the Coinmint facility.

During the year ended December 31, 2020, the Company purchased 33,646 Bitmain S19-Pro Antminers and as of December 31, 2020 the Company had received 3,043 of the S19-Pro Antminers.

F-18


Index

Riot Blockchain, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(in thousands, except for share and per share amounts)

 

As of December 31, 2020, the Company had outstanding executed purchase agreements primarily for the purchase of miners from Bitmain for a total of 30,603 new S19-Pro miners, to be delivered in 2021 through October 2021. A summary of the purchase agreement commitments, deposits paid and expected delivery timing (remaining balances are payable in advance of shipping) is summarized as follows:

Agreement Date *

Purchase Commitment

Deposits Paid

Expected Shipping

August 12, 2020

$

17,428

$

13,071

First Quarter 2021

August 25, 2020

$

11,110

$

5,773

First - Second Quarter 2021

September 30, 2020

$

6,094

$

6,124

First Quarter 2021

December 18, 2020 (1 of 2)

$

26,308

$

2,631

Third - Fourth Quarter 2021

December 18, 2020 (2 of 2)

$

8,577

$

4,289

Second - Third Quarter 2021

Other contracts and costs

$

2,804

$

1,205

Total

$

72,321

$

33,093

* Pursuant to the Company’s agreements with Bitmain, the Company is responsible for all shipping charges incurred in connection with the delivery of the miners.

In December 2020, the Company entered into a pilot project with a dual focus of evaluating next-generation immersion technology to increase mining productivity, in addition to evaluating software to reduce energy costs. The immersion modules provide significant potential benefits, and the software is designed to help miners reduce their cost of power by being opportunistic in the local energy market. When combined, both technologies have the potential to reduce the Company’s bitcoin production costs, increase hashrates and significantly extend the life of the Company’s bitcoin mining ASICs. As of December 31, 2020, the Company has made contract deposits totaling approximately $1.2 million related to the pilot project, which amounts are included in the above table.

Depreciation and amortization expense totaled approximately $4.5 million (including $0.2 million of patent amortization) and $0.1 million, for the years ended December 31, 2020 and 2019, respectively. Depreciation is computed on the straight-line basis for the periods the assets are in service.