Quarterly report pursuant to Section 13 or 15(d)

Acquisitions (Tables)

v3.21.2
Acquisitions (Tables)
9 Months Ended
Sep. 30, 2021
Business Combinations [Abstract]  
Schedule of total consideration transferred

During the period ended September 30, 2021, the Company continued reviewing its valuations of the assets acquired and liabilities assumed in the May 26, 2021 acquisition of Whinstone based on new information obtained about facts and circumstances that existed as of the acquisition date. During the three months ended September 30, 2021, the Company recorded a preliminary measurement period adjustment of approximately $0.2 million to increase its acquisition date right of use asset, with the corresponding adjustment to goodwill.

18


Riot Blockchain, Inc. and Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited)

Any necessary adjustments will be finalized within one year from the date of acquisition (in thousands):

Cash and cash equivalents

$

10,400

Accounts receivable

1,072

Prepaid expenses and other current assets

2,176

Property and equipment

78,207

Intangible assets

90,291

Derivative asset

13,967

Right of use asset

6,464

Security deposits

1,775

Future power credits(1)

82,953

Accounts payable

(12,853

)

Accrued expenses

(504

)

Deferred revenues and customer deposits

(34,856

)

Operating lease liabilities

(8,184

)

Deferred tax liabilities

(37,761

)

Total identifiable assets and liabilities acquired

193,147

Goodwill(2)

267,237

Total purchase consideration

$

460,384

The $460.4 million total purchase price consideration consisted of $326.2 million fair value of Riot common shares issued, a $53.0 million cash payment (including $38.1 million of debt payoff and certain Seller transaction costs), an $83.0 million contingent purchase price payable to the Seller and other net items of $(1.7 million).

 

​​(1)

Future power credits of $83.0 million are associated with the contingent purchase price payable.

​​(2)

Goodwill represents the excess of total purchase consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed. Goodwill is attributable to the assembled workforce of experienced personnel at Whinstone and synergies expected to be achieved from the combined operations of Riot and Whinstone. None of the goodwill recognized is expected to be deductible for tax purposes. We assigned the goodwill to our data center hosting segment. See Note 16, “Segment Information”.

Schedule of Proforma Information for Acquisition

The following unaudited pro forma financial information summarizes the combined results of operations for Riot and Whinstone as if the companies were combined as of January 1, 2020. The unaudited pro forma information does not reflect the effect of costs or synergies that may result from the acquisition. The pro forma information excludes acquisition-related costs of $0.6 million and $18.9 million during the three and nine months ended September 30, 2021, respectively. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred on January 1, 2020, or of future results of the consolidated entities. This unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of future operating results of the combined company.

Three Months

Ended September 30,

Nine Months

Ended September 30,

2021

2020

2021

2020

Total revenue

$

64,807

$

5,847

$

132,693

$

11,828

Net income (loss)

$

(14,791

)

$

(8,229

)

$

107,360

$

(53,025

)