Riot Blockchain, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Acquisitions (Tables)

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2021

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.

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	)