Property and Equipment
|3 Months Ended|
Mar. 31, 2021
|Property, Plant and Equipment [Abstract]|
|Property and Equipment||
Note 5. Property and Equipment
Property and equipment consisted of the following as of March 31, 2021 and December 31, 2020:
During the three months ended March 31, 2021, the Company received 6,703 miners related to its 2020 purchase contracts with Bitmain and, as of March 31, 2021, the Company had received and deployed a total of 13,746 new Antminer model S17-Pro or newer miners.
During the three months ended March 31, 2021, the Company paid approximately $56.4 million as deposits, primarily for miners, including $32.6 million paid to Bitmain as refundable deposits for the acquisition of 43,500 Antminer S19j (90 TH/s) miners for an aggregate purchase price of $145.7 million, which are scheduled to be delivered, on a monthly basis, between October 2021 and October 2022, with the remainder of the payments due in advance of deliveries. As of March 31, 2021, the Company reclassified $18.7 million to property and equipment in connection with the receipt of 6,703 miners at the Coinmint Facility.
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. These technologies have the potential to reduce the Company’s Bitcoin production costs, increase hashrate capacity and significantly extend the life of the Company’s Bitcoin mining ASICs. As of March 31, 2021, approximately $2.7 million in equipment costs for this project (that is not yet operational) is included in “Miners and mining equipment” in the table above.
Depreciation and amortization expense totaled approximately $2.8 million and $0.7 million (including $0.02 million and $0.03 million of patent amortization) for the three months ended March 31, 2021 and 2020, respectively. Depreciation is computed on the straight-line basis for the periods the assets are in service.
As of March 31, 2021, the Company had outstanding executed purchase agreements for the purchase of miners from Bitmain for a total of 25,400 miners (11,900 new S19-Pro model miners, 12,000 new S19j-Pro model miners, and 1,500 new model S19j miners), scheduled to be delivered through October 2021, and had paid a deposit of 20% of the total purchase price for the acquisition of 42,000 model S19j miners pursuant to a purchase agreement entered into by the Company and Bitmain, dated effective as of April 5, 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:
* 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.
** On March 31, 2021, the Company paid approximately $29 million as a deposit for the miners to be acquired under the purchase agreement, dated effective as of April 5, 2021, with Bitmain to acquire approximately 42,000 Antminer model S19j Miners, which are scheduled to be shipped in 12 batches of approximately 3,500 miners each, on a monthly basis, between November 2021 and October 2022. See Note 11.
The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef