Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

v3.20.2
Property and Equipment
9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 6. Property and Equipment

Property and equipment consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020

December 31, 2019

(Unaudited)

 

Miners

$

11,135

$

5,010

 

Leasehold improvements

-

38

 

Office and computer equipment

83

103

 

Total cost of property and equipment

11,218

5,151

 

Less accumulated depreciation

(2,650

)

(100

)

Property and equipment, net

$

8,568

$

5,051

 

During the three months ended September 30, 2020, the Company received 2,040 new next generation S19 and S19 Pro Miners from Bitmain at the Coinmint Facility and the related $4.5 million prepayment recorded as a deposit was reclassified as of September 30, 2020 to property and equipment.

Depreciation and amortization expense totaled approximately $1.3 million (including $0.1 million of patent amortization) for the three months ended September 30, 2020. Depreciation and amortization expense was nominal for the three months ended September 30, 2019. Depreciation and amortization expense totaled approximately $2.8 million (including $0.1 million of patent amortization) for the nine months ended September 30, 2020. Depreciation and amortization expense was nominal for the nine months ended September 30, 2019. Depreciation is computed on the straight-line basis for the periods the assets are in service.

As of September 30, 2020, the Company has executed purchase agreements for the purchase of Miners from Bitmain for a total of 16,600 new S19 Pro miners, to be delivered beginning in the fourth quarter of 2020. 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 (dollars in thousands):

Agreement Date

 

Contractual Obligation

 

Deposits Paid

 

Expected Shipping

June 1, 2020

$

2,293

$

2,293

Fourth Quarter 2020

August 12, 2020

17,549

7,085

First - Second Quarter 2021

August 25, 2020

11,187

3,356

First - Second Quarter 2021

September 30, 2020

6,124

-

Fourth Quarter 2020

Freight and other costs

-

69

Total

$

37,153

 

 

$

12,803

* 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.