Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Central Index Key | 0001167419 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 001-33675 | |
Entity Registrant Name | Riot Blockchain, Inc. | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 84-1553387 | |
Entity Address, Address Line One | 202 6th Street | |
Entity Address, Address Line Two | Suite 401 | |
Entity Address, City or Town | Castle Rock | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80104 | |
City Area Code | 303 | |
Local Phone Number | 794-2000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | RIOT | |
Name of Exchange on which Security is Registered | NASDAQ | |
Entity Common Stock, Shares Outstanding | 50,927,171 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 30,086 | $ 7,440 |
Prepaid expenses and other current assets | 1,516 | 1,349 |
Cryptocurrencies | 8,987 | 3,839 |
Total current assets | 40,589 | 12,628 |
Property and equipment, net | 8,568 | 5,051 |
Right of use assets | 367 | |
Deposits on equipment | 12,803 | 1,449 |
Long-term investments | 310 | 9,723 |
Security deposits | 703 | |
Patents, net | 361 | 459 |
Total assets | 62,631 | 30,380 |
Current liabilities | ||
Accounts payable | 780 | 717 |
Accrued expenses | 383 | 2,187 |
Operating lease liability, current portion | 368 | |
Deferred revenue, current portion | 97 | 97 |
Total current liabilities | 1,260 | 3,369 |
Deferred revenue, less current portion | 703 | 776 |
Total liabilities | 1,963 | 4,145 |
Commitments and contingencies - Note 10 | ||
Stockholders' equity | ||
Common stock, no par value; 170,000,000 shares authorized; 48,922,790 and 25,082,872 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 294,475 | 243,458 |
Accumulated deficit | (233,822) | (217,238) |
Total Riot Blockchain stockholders' equity | 60,675 | 26,242 |
Non-controlling interest | (7) | (7) |
Total stockholders' equity | 60,668 | 26,235 |
Total liabilities and stockholders' equity | 62,631 | 30,380 |
2% Series A Convertible Stock [Member] | ||
Stockholders' equity | ||
Preferred stock | ||
0% Series B Convertible Stock [Member] | ||
Stockholders' equity | ||
Preferred stock | $ 22 | $ 22 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, par value | ||
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, shares issued | 48,922,790 | 25,082,872 |
Common stock, shares outstanding | 48,922,790 | 25,082,872 |
2% Series A Convertible Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
0% Series B Convertible Stock [Member] | ||
Preferred stock, shares authorized | 1,750,001 | 1,750,001 |
Preferred stock, shares issued | 4,199 | 4,199 |
Preferred stock, shares outstanding | 4,199 | 4,199 |
Condensed Interim Consolidated
Condensed Interim Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total Revenue | $ 2,462 | $ 1,740 | $ 6,790 | $ 5,637 |
Costs and expenses: | ||||
Cost of revenues (exclusive of depreciation and amortization shown below) | 1,302 | 1,476 | 4,149 | 4,535 |
Selling, general and administrative | 2,000 | 1,762 | 7,964 | 7,140 |
Depreciation and amortization | 1,267 | 24 | 2,761 | 71 |
Impairment of long-term investment | 9,413 | |||
Impairment of cryptocurrencies | 372 | 989 | 372 | |
Total costs and expenses | 4,569 | 3,634 | 25,276 | 12,118 |
Operating loss | (2,107) | (1,894) | (18,486) | (6,481) |
Other income (expense): | ||||
Loss on issuance of convertible notes, common stock and warrants | (6,155) | |||
Change in fair value of warrant liability | (2,870) | |||
Change in fair value of convertible notes | (3,895) | |||
Reversal of registration rights penalty | 1,358 | |||
Gain on deconsolidation of Tess | 1,139 | |||
Gain (loss) on sale of equipment | (5) | 31 | ||
Interest income | 12 | 27 | ||
Interest expense | (4) | (119) | ||
Other income (expense) | (2) | 40 | (5) | 854 |
Realized gain on exchange of cryptocurrencies | 385 | 24 | 491 | 665 |
Total other income (expense) | 390 | 60 | 1,902 | (10,381) |
Net loss | (1,717) | (1,834) | (16,584) | (16,862) |
Net loss attributable to non-controlling interest | 221 | |||
Net loss attributable to Riot Blockchain | $ (1,717) | $ (1,834) | $ (16,584) | $ (16,641) |
Basic and diluted net loss per share: | $ (0.04) | $ (0.08) | $ (0.46) | $ (0.93) |
Basic and diluted weighted average number of shares outstanding | 44,773,870 | 23,371,856 | 36,017,927 | 17,971,541 |
Revenue, net - cryptocurrency mining [Member] | ||||
Revenue: | ||||
Total Revenue | $ 2,437 | $ 1,715 | $ 6,717 | $ 5,564 |
License fees [Member] | ||||
Revenue: | ||||
Total Revenue | $ 25 | $ 25 | $ 73 | $ 73 |
Condensed Interim Consolidate_2
Condensed Interim Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Accumulated Deficit [Member] | Total Riot Blockchain stockholder's equity [Member] | Noncontrolling Interest [Member] | Total |
BALANCE at Dec. 31, 2018 | $ 69 | $ 202,917 | $ (197,199) | $ 5,787 | $ (1,296) | $ 4,491 |
BALANCE, shares at Dec. 31, 2018 | 13,000 | 14,519,058 | ||||
Delivery of common stock underlying restricted stock units, net of tax withholding settlement, shares | 106,251 | |||||
Commons stock issued with convertible notes | $ 255 | 255 | 255 | |||
Commons stock issued with convertible notes, shares | 150,000 | |||||
Common stock issued in connection with conversion of notes payable | $ 10,226 | 10,226 | 10,226 | |||
Common stock issued in connection with conversion of notes payable, shares | 1,813,500 | |||||
Reclassification of warrant liability to equity | $ 5,439 | 5,439 | 5,439 | |||
Preferred stock converted to common stock | $ (47) | $ 47 | ||||
Preferred stock converted to common stock, shares | (8,801) | 8,801 | ||||
Issuance of common stock, net of offering costs/At-the-market offering | $ 22,659 | 22,659 | 22,659 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 7,608,785 | |||||
Net Loss attributable to non-controlling interest | (221) | (221) | ||||
Deconsolidation of Tess | 1,552 | 1,552 | ||||
Stock-based compensation | $ 431 | 431 | 431 | |||
Net loss | (16,641) | (16,641) | (16,641) | |||
BALANCE at Sep. 30, 2019 | $ 22 | $ 241,974 | (213,840) | 28,156 | 35 | 28,191 |
BALANCE, shares at Sep. 30, 2019 | 4,199 | 24,206,395 | ||||
BALANCE at Jun. 30, 2019 | $ 26 | $ 238,083 | (212,006) | 26,103 | 35 | 26,138 |
BALANCE, shares at Jun. 30, 2019 | 4,999 | 22,625,111 | ||||
Preferred stock converted to common stock | $ (4) | $ 4 | ||||
Preferred stock converted to common stock, shares | (800) | 800 | ||||
Issuance of common stock, net of offering costs/At-the-market offering | $ 3,806 | 3,806 | 3,806 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 1,580,484 | |||||
Net Loss attributable to non-controlling interest | ||||||
Stock-based compensation | $ 81 | 81 | 81 | |||
Net loss | (1,834) | (1,834) | (1,834) | |||
BALANCE at Sep. 30, 2019 | $ 22 | $ 241,974 | (213,840) | 28,156 | 35 | 28,191 |
BALANCE, shares at Sep. 30, 2019 | 4,199 | 24,206,395 | ||||
BALANCE at Dec. 31, 2019 | $ 22 | $ 243,458 | (217,238) | 26,242 | (7) | 26,235 |
BALANCE, shares at Dec. 31, 2019 | 4,199 | 25,082,872 | ||||
Issuance of common stock to settle executive compensation | $ 175 | 175 | 175 | |||
Issuance of common stock to settle executive compensation, shares | 122,377 | |||||
Delivery of common stock underlying restricted stock units to settle executive compensation, shares | 5,000 | |||||
Delivery of common stock underlying restricted stock units, net of tax withholding settlement | $ (352) | (352) | (352) | |||
Delivery of common stock underlying restricted stock units, net of tax withholding settlement, shares | 1,461,812 | |||||
Delivery of common stock underlying restricted stock units for consulting and advisory services, shares | 40,634 | |||||
Issuance of common stock, net of offering costs/At-the-market offering | $ 47,958 | 47,958 | 47,958 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 22,210,095 | |||||
Issuance of common stock related to exercise of warrant | $ 388 | 388 | 388 | |||
Issuance of common stock related to exercise of warrant, shares | 200,000 | |||||
Cancellation of Prive Escrow shares | (200,000) | |||||
Net Loss attributable to non-controlling interest | ||||||
Stock-based compensation | $ 2,848 | 2,848 | 2,848 | |||
Net loss | (16,584) | (16,584) | (16,584) | |||
BALANCE at Sep. 30, 2020 | $ 22 | $ 294,475 | (233,822) | 60,675 | (7) | 60,668 |
BALANCE, shares at Sep. 30, 2020 | 4,199 | 48,922,790 | ||||
BALANCE at Jun. 30, 2020 | $ 22 | $ 259,899 | (232,105) | 27,816 | (7) | 27,809 |
BALANCE, shares at Jun. 30, 2020 | 4,199 | 36,559,279 | ||||
Delivery of common stock underlying restricted stock units, net of tax withholding settlement | $ (130) | (130) | (130) | |||
Delivery of common stock underlying restricted stock units, net of tax withholding settlement, shares | 93,913 | |||||
Delivery of common stock underlying restricted stock units for consulting and advisory services, shares | 40,634 | |||||
Issuance of common stock, net of offering costs/At-the-market offering | $ 33,851 | 33,851 | 33,851 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 12,028,964 | |||||
Issuance of common stock related to exercise of warrant | $ 388 | 388 | 388 | |||
Issuance of common stock related to exercise of warrant, shares | 200,000 | |||||
Net Loss attributable to non-controlling interest | ||||||
Stock-based compensation | $ 467 | 467 | 467 | |||
Net loss | (1,717) | (1,717) | (1,717) | |||
BALANCE at Sep. 30, 2020 | $ 22 | $ 294,475 | $ (233,822) | $ 60,675 | $ (7) | $ 60,668 |
BALANCE, shares at Sep. 30, 2020 | 4,199 | 48,922,790 |
Condensed Interim Consolidate_3
Condensed Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (16,584) | $ (16,862) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 2,848 | 431 |
Depreciation and amortization | 2,761 | 70 |
Amortization of license fee revenue | (73) | (73) |
Amortization of right of use assets | 367 | 1,727 |
Impairment of long-term investment | 9,413 | |
Impairment of cryptocurrencies | 989 | 372 |
Loss on issuance of convertible notes, common stock and warrants | 6,155 | |
Change in fair value of convertible notes | 3,895 | |
Change in fair value of warrant liability | 2,870 | |
Gain on deconsolidation of Tess | (1,139) | |
Reversal of registration rights penalty | (1,358) | |
Gain on extinguishment of accounts payable, other liabilities and accrued expenses | (843) | |
Realized gain on exchange of cryptocurrencies | (491) | (665) |
Gain on sale of equipment | (31) | |
Accrued interest on Verady investment | (20) | |
Changes in assets and liabilities: | ||
Prepaid expenses and other current assets | 536 | (756) |
Cryptocurrencies - mining, net of mining pool operating fees | (6,623) | (5,453) |
Accounts payable | 63 | (1,798) |
Accrued expenses | (271) | 882 |
Lease liability | (368) | (1,725) |
Net cash used in operating activities | (8,822) | (12,932) |
Cash flows from investing activities | ||
Proceeds from sale of cryptocurrencies | 1,029 | 3,196 |
Proceeds from sale of equipment | 96 | |
Deposits on equipment | (11,354) | |
Purchases of property and equipment | (6,265) | (9) |
Patent costs incurred | (31) | (26) |
Net cash (used in) provided by investing activities | (16,525) | 3,161 |
Cash flows from financing activities | ||
Proceeds from issuance of convertible notes | 3,000 | |
Repayment of notes payable and other obligations | (950) | |
Proceeds from the issuance of common stock / At-the-market offering | 49,551 | 23,611 |
Offering costs for the issuance of common stock / At-the-market offering | (1,594) | (952) |
Proceeds from exercise of common stock warrants | 388 | |
Repurchase of common shares to pay employee withholding taxes | (352) | |
Net cash provided by financing activities | 47,993 | 24,709 |
Net increase in cash and cash equivalents | 22,646 | 14,938 |
Cash and cash equivalents at beginning of period | 7,440 | 225 |
Cash and cash equivalents at end of period | 30,086 | 15,163 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | ||
Cash paid for taxes | ||
Supplemental disclosure of noncash investing and financing activities: | ||
Issuance of common stock to settle previously accrued executive compensation | 175 | |
Cryptocurrencies received from sale of equipment | 52 | |
Conversion of notes payable to common stock | 10,226 | |
Reclassification of warrant liability to equity | 5,439 | |
Conversion of preferred stock to common stock | 47 | |
Common stock issued in connection with conversion of notes payable | 255 | |
Cryptocurrencies used to purchase miners | $ 99 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1. Organization Nature of operations: Riot Blockchain, Inc. operates a cryptocurrency mining operation, which utilizes specialized computers (also known as “Miners”) that generate cryptocurrency (primarily bitcoin) from the Blockchain. The Company was originally organized on July 24, 2000, as a Colorado corporation. Effective October 19, 2017, the Company's name was changed to Riot Blockchain, Inc., from Bioptix, Inc., and effective October 19, 2017, the Company changed its state of incorporation to Nevada from Colorado. Mining equipment: The Company’s current focus is on its cryptocurrency mining operation, and during the nine months ended September 30, 2020, it completed a full network upgrade of its Miners with the objective to increase the Company’s operational efficiency and performance. The Company’s Miners are being operated pursuant to a co-location mining services agreement with Coinmint, LLC (“Coinmint”) at Coinmint’s facility in New York (the “Coinmint Facility”). As previously disclosed the Company has recently entered into four additional purchase agreements with Bitmain for the acquisition of 16,600 model (110 TH/s) S19-Pro Antminers for an aggregate purchase price of $37.2 million, payable in installments. The Company expects delivery of the first 3,500 of these new miners to occur in the fourth quarter 2020, with the remaining 13,100 miners to be delivered in monthly installments starting during the first half of 2021. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Financial Condition | Note 2. Liquidity and Financial Condition At September 30, 2020, the Company had approximate balances of cash and cash equivalents of $ 30.1 60.7 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. The purchase commitment totals $37.2 million, with $12.8 million in deposits paid and the remaining $24.4 million due to be paid over the delivery schedule through the second quarter of 2021. 2019 ATM Offering As disclosed in Note 8, the Company entered into an At-The-Market Sales Agreement with H.C. Wainwright & Co., LLC (“H.C. Wainwright”), dated May 24, 2019 (the “Sales Agreement”), relating to the sale by the Company through its sales agent, H.C. Wainwright, of up to $100.0 million in shares of the Company’s common stock from time to time in an at-the-market offering (“2019 ATM Offering”). All sales of the Company’s common stock in the 2019 ATM Offering were made pursuant to the prospectus forming a part of the Company’s shelf registration statement on Form S-3, as amended (Registration No. 333-226111), which was declared effective as of May 8, 2019 (the “2019 Registration Statement”). The Company received proceeds on sales of 22,210,095 shares of common stock under the Sales Agreement of approximately $49.6 million (excluding commissions and expenses of $1.6 million), at a weighted average price of $2.23 per share, during the nine months ended September 30, 2020. According to the terms of the Sales Agreement, the Company paid H.C. Wainwright a commission of 3.0% of the aggregate gross proceeds the Company received from sales of its common stock in the 2019 ATM Offering. 2020 ATM Offering As of October 15, 2020, the Company and H.C. Wainwright entered into the first amendment to the Sales Agreement (the “First Amendment to the Sales Agreement”). Pursuant to the First Amendment to the Sales Agreement, the Company may sell, through H.C. Wainwright as its sales agent, up to $100.0 million in shares of the Company’s common stock from time to time in an at-the-market offering (the “2020 ATM Offering”). According to the First Amendment to the Sales Agreement, the Company shall pay H.C. Wainwright a commission of up to 3.0% of the aggregate gross proceeds the Company receives from all sales of its common stock in the 2020 ATM Offering. Sales of shares of the Company’s common stock in the 2020 ATM Offering will be made pursuant to the prospectus and prospectus supplement filed with and forming a part of the Company’s shelf registration statement on Form S-3 (Registration No. 333-249356), filed with the SEC on October 7, 2020 and declared effective as of October 15, 2020 (the “2020 Registration Statement”). Termination of 2019 ATM Offering Effective as of October 15, 2020, the Company and H.C. Wainwright terminated the 2019 ATM Offering and replaced it with the 2020 ATM Offering under the terms of the First Amendment to the Sales Agreement. As of its termination, the Company had cumulatively sold 30.6 million shares of its common stock, for an aggregate gross sales price of approximately $74 million pursuant to the 2019 ATM Offering. With the termination of the 2019 ATM Offering, no additional securities will be sold by the Company pursuant to the prospectus supplement relating to the 2019 Registration Statement. COVID-19 The COVID-19 global pandemic has been unprecedented and unpredictable and is likely to continue to result in significant national and global economic disruption, which may adversely affect our business. Based on the Company’s current assessment, however, the Company does not expect any material impact on its long-term strategic plans, its operations, or its liquidity due to the worldwide spread of the COVID-19 virus. However, the Company is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, and industry. The Company believes its current cash on hand is sufficient to meet its operating and capital requirements for at least the next twelve months from the date these financial statements are issued. |
Basis of presentation, summary
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements | Note 3. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements Basis of presentation and principles of consolidation The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. Amounts are in thousands except for share, per share and miner amounts. The results for the unaudited condensed interim consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2020 or for any future interim period. The unaudited condensed interim consolidated financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2020. The accompanying interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Significant Accounting Policies: For a detailed discussion about the Company’s significant accounting policies, see the Company’s December 31, 2019 consolidated financial statements included in its 2019 Annual Report. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's unaudited condensed interim consolidated financial statements include estimates associated with revenue recognition, asset valuations, the useful lives and recoverability of long-lived assets, impairment analysis of intangibles, stock-based compensation, assumptions used in estimating the fair value of convertible notes and warrants, and the valuation allowance associated with the Company’s deferred tax assets. Loss per share: Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes its unvested restricted shares and escrow shares from the net loss per share calculation. The escrow shares are excluded because of related contingencies and including them would result in anti-dilution. 11 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) Since the Company has net losses attributable to Riot Blockchain, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share at September 30, 2020 and 2019 because their inclusion would be anti-dilutive are as follows: September 30, 2020 2019 Warrants to purchase common stock 3,354,257 3,574,257 Options to purchase common stock 12,000 12,000 Escrow shares - 200,000 Unvested restricted stock awards 1,217,893 38,917 Convertible Series B preferred shares 4,199 4,199 Total 4,588,349 3,829,373 Recently issued and adopted accounting pronouncements: The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impact this ASU will have on its condensed consolidated financial statements and related disclosures. |
Acquisitions - Prive share escr
Acquisitions - Prive share escrow status | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions - Prive share escrow status | Note 4. Acquisitions - Prive share escrow status In February 2020, the conditions were not achieved by the date specified to provide for the release of 200,000 shares of the Company’s common stock, which shares were being held in escrow in connection with the Prive acquisition pursuant to the Escrow Deposit Agreement. After receiving notification on March 4, 2020 that the conditions set forth in the Escrow Deposit Agreement were not timely met, the Escrow Agent returned and canceled the 200,000 shares. |
Cryptocurrencies
Cryptocurrencies | 9 Months Ended |
Sep. 30, 2020 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Cryptocurrencies | Note 5. Cryptocurrencies The following table presents additional information about cryptocurrencies (in thousands): Beginning balance, January 1, 2020 $ 3,839 Revenue recognized from cryptocurrencies mined 6,717 Mining pool operating fees (94) Proceeds from sale of cryptocurrencies (1,029 ) Realized gain on sale/exchange of cryptocurrencies 491 Impairment of cryptocurrencies (989 ) Cryptocurrencies received from sale of equipment 52 Ending balance, September 30, 2020 $ 8,987 |
Property and Equipment
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. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
Investments | Note 7. Investments Coinsquare As of December 31, 2019, the Company’s cost investment in Coinsquare Ltd. (“Coinsquare”) totaled approximately $9.4 million representing approximately an 11.8% ownership on a fully diluted basis. The Company is a non-affiliated shareholder in Coinsquare, which represents a passive investment made by the Company. During June 2020, the Company became aware of allegations brought by the Ontario Securities Commission (the “OSC”) that Coinsquare and certain of its executives and directors engaged in systematic “wash trading” of cryptocurrencies on its Coinsquare market to manipulate the market’s trading volume during 2018 and 2019. Subsequently, on July 21, 2020, a hearing panel of the OSC entered an order (the “Order”) approving the settlement agreement between OSC, Coinsquare, and certain of its executives and directors (the “Settlement Agreement”), in which they admitted to breaches of Ontario securities laws and/or conduct contrary to the public interest including, market manipulation through reporting inflated trading volumes on its Coinsquare Market, misleading its clients and investors about these trading volumes, and taking reprisal against an internal whistleblower who brought this conduct to the attention of the named executives and directors. The Order requires certain oversight and governance procedures and to prohibit the named executives and directors from engaging in certain activities with respect to Coinsquare; additionally, the named executives and directors were required to resign from Coinsquare and Coinsquare and the named executives and directors were required to pay penalties and costs totaling approximately CAD 2.2 million. Accordingly, the Company determined there were indicators that would cause a 100% impairment of the Coinsquare investment and observed price changes, which was recorded as of June 30, 2020. The Company therefore recorded an impairment expense of $9.4 million for its investment in Coinsquare during the nine months ended September 30, 2020, as reflected in the accompanying unaudited condensed interim consolidated statements of operations. During the quarter ended September 30, 2020, the Company notified Coinsquare that based upon the OSC settlement related issues, it is evaluating all options to recover its investment in Coinsquare and the Company has engaged Canadian based litigation counsel to assist with this matter. 13 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) Verady The investment in Verady, Inc. (“Verady”) is valued at cost, less any impairment, plus or minus changes resulting from observable price changes. During the nine months ended September 30, 2020 the investment in Verady totaled approximately $0.2 million, and the Company determined there were no indicators that would cause an impairment. There were no price changes in orderly transactions for identical or similar investments in Verady. Tess As of September 30, 2020, and December 31, 2019, the fair value of the TessPay Inc. shares owned by the Company is approximately $0.1 million, calculated based upon the April 10, 2019 funding price. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8. Stockholders’ Equity At-the-Market Equity Offering: During the nine months ended September 30, 2020, the Company received proceeds under the Sales Agreement of approximately $49.6 million (excluding commissions and expenses of $1.6 million), at a weighted average price of $2.23 per share, from sales of 22,210,095 shares of its common stock sold pursuant to the 2019 ATM Offering. The Company paid H.C. Wainwright a commission of 3.0% of the aggregate gross proceeds the Company received from all sales of the Company's common stock under the Sales Agreement. As previously disclosed, effective as of October 15, 2020, the Company entered into the First Amendment to the Sales Agreement with H.C. Wainwright relating to the Company’s 2020 ATM Offering. Pursuant to the 2020 ATM Offering, the Company may sell, through H.C. Wainwright as its sales agent, up to $100.0 million in shares of the Company’s common stock from time to time on an at-the-market basis pursuant to the prospectus and prospectus supplement filed with and forming a part of the 2020 Registration Statement. According to the terms of the First Amendment to the Sales Agreement, the Company pays H.C. Wainwright a commission of up to 3.0% of the aggregate gross proceeds the Company receives from sales of shares of its common stock in the 2020 ATM Offering. As part of the First Amendment to the Sales Agreement, the Company and H.C. Wainwright agreed to terminate the 2019 ATM Offering and replace it with the 2020 ATM Offering. Accordingly, effective as of October 15, 2020, the 2019 ATM Offering was terminated and no additional sales may be made pursuant to the 2019 ATM Offering. Common Stock: During the nine months ended September 30, 2020, the 200,000 shares of common stock held in escrow under the Escrow Deposit Agreement were voided and cancelled. See Note 4. During the nine months ended September 30, 2020, 122,377 shares of common stock were issued to a Company executive under an employment agreement in settlement of $175,000 of previously accrued compensation under the Company’s 2019 Riot Blockchain, Inc. Equity Incentive Plan (the “Equity Plan”), and 5,000 shares of common stock were issued in settlement of fully vested restricted stock rights previously granted and previously expensed under the Company’s 2017 Equity Incentive Plan. During the nine months ended September 30, 2020, 1,638,467 shares of common stock were issued to members of the Company’s board of directors, officers and employees of the Company in settlement of an equal number of fully vested restricted stock units awarded to such individuals by the Company pursuant to grants made under the Company’s Equity Plan. The Company withheld 176,655 of these shares at a fair value of approximately $0.35 million, to cover the withholding taxes related to the settlement of these restricted stock units. During the nine months ended September 30, 2020, the Company issued 40,634 shares of its common stock to a consultant and advisors in settlement of fully vested restricted stock units granted under its Equity Plan. On August 20, 2020, the Company issued 200,000 shares of its common stock related to the exercise of 200,000 common stock warrants for cash of approximately $0.4 million or $1.94 per share. |
Stock Options, Warrants and Res
Stock Options, Warrants and Restricted Common Stock | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options, Warrants and Restricted Common Stock | Note 9. Stock Options, Warrants and Restricted Common Stock Stock based compensation: The Company’s stock-based compensation expenses recognized during the three and nine months ended September 30, 2020 and 2019, were attributable to selling, general and administrative expenses, which are included in the accompanying unaudited condensed interim consolidated statements of operations. The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2020 and 2019, granted under the Equity Plan, from the following categories (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Restricted stock awards under the Plan $ 467 $ 81 $ 2,848 $ 373 Stock option awards under the Plan - - - 58 Total stock-based compensation $ 467 $ 81 $ 2,848 $ 431 14 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) Restricted common stock awards: A summary of the Company’s unvested restricted common stock awards activity in the nine months ended September 30, 2020 is presented here: Number of Shares Weighted Average Grant-Date Fair Value Unvested at January 1, 2020 1,524,499 $ 1.37 Vested (1,850,965) $ 1.36 Granted 1,544,359 $ 1.27 Unvested at September 30, 2020 1,217,893 $ 1.27 On February 7, 2020, the Company issued 122,377 shares of common stock under a February 2019 employment agreement as disclosed above, and 5,000 vested restricted stock units to the Company’s Chief Executive Officer pursuant to the Equity Plan. On February 7, 2020, in relation to its amended and restated employment agreement with its Chief Executive Officer and Chief Financial Officer, the Company awarded 209,790 restricted common stock units, which vest in four equal quarterly installments, with each quarterly installment vesting as of the end of each quarter pursuant to the Equity Plan. On February 27, 2020, for 2020 services the Company awarded 1,212,192 restricted common stock units vesting over a one-year period to directors and certain employees of the Company issued pursuant to the Equity Plan. The total fair value of restricted stock rights granted during the nine months ended September 30, 2020 was approximately $2.0 million. The fair value of each restricted stock right was based upon the closing stock price on the grant date. The fair value of restricted stock rights is measured based on their fair value on the date of grant and amortized over the vesting period of twelve to twenty-four months. As of September 30, 2020, there was approximately $0.8 million of unrecognized compensation cost related to unvested restricted common stock awards, which is expected to be recognized over a remaining weighted-average vesting period of approximately 2.6 months. Stock incentive plan options: As of September 30, 2020, 12,000 stock options were outstanding under the Equity Plan, with a weighted average exercise price of $4.09, and a weighted average remaining contractual term of approximately 3.0 years. The stock options are 100% vested with zero intrinsic value. Other common stock purchase warrants: Following is a summary of outstanding warrants that were issued outside of the Equity Plan for the nine months ended September 30, 2020: Shares Underlying Options/Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2020 3,574,257 $ 19.48 2.9 $ - Exercised (200,000 ) $ 1.94 - Forfeited (20,000) $ 3.50 - Outstanding at September 30, 2020 3,554,257 $ 20.62 2.1 $ 1,298,189 Exercisable at September 30, 2020 3,554,257 $ 20.62 2.1 $ 1,298,189 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on September 30, 2020 and the exercise price, multiplied by the number of in-the-money warrants) that would have been received by the warrant holders, had all warrant holders exercised their warrants on September 30, 2020. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 10. Commitments and Contingencies Commitments: Coinmint Co-location Mining Services Agreement On April 8, 2020, the Company entered into an agreement with Coinmint, (the “Coinmint Agreement”), pursuant to which Coinmint agreed to provide up to approximately 9.5 MW of power and to perform all maintenance necessary to operate Riot’s miners at the Coinmint facility. In exchange, Coinmint is reimbursed for direct production expenses and receives a performance fee based on the net cryptocurrencies generated by Riot’s miners deployed at the Coinmint facility. The initial term of the Coinmint Agreement was six months with automatic renewals for subsequent three (3) month terms until and unless terminated as provided in the agreement. The Company determined the agreement with Coinmint does not meet the definition of a lease in accordance with Accounting Standards Codification (“ASC”) 842, Leases. Oklahoma Lease Agreement On January 8, 2020, Kairos entered into a third amendment to the OKC Lease to extend the lease term through May 15, 2020, with all other terms remaining substantially the same as the second amendment to the OKC Lease. On April 10, 2020, Kairos entered into a fourth amendment to the OKC Lease to extend the lease term through June 30, 2020, with all other terms remaining substantially unchanged. During the three months ended June 30, 2020, the Company relocated its miners to the Coinmint facility and vacated the OKC facility. As of June 30, 2020, the Company has a refundable lease deposit of approximately $0.7 million related to its OKC Lease which is included as prepaid expenses and other current assets on the accompanying condensed consolidated balance sheet. The OKC Lease terminated by its terms effective as of June 30, 2020, and the Company received a full refund of its deposit, less applicable electricity charges on July 2, 2020. Corporate Lease Agreement On April 9, 2018, the Company entered into a commercial lease agreement (the “Florida Lease”) with W-Crocker Fin Place Owner VII, LLC, a Delaware limited liability company, pursuant to which the Company leased approximately 1,700 rentable square feet of office and common area space in Fort Lauderdale, Florida. Pursuant to the terms of the Florida Lease, the initial term was for thirty-nine (39) months expiring on August 9, 2021, with one, five-year option to renew, and the initial base rent was $4,659 per month (or $2.75 per sq. ft. per month) which escalated at the rate of 3.0% per annum. Additionally, common operating expenses were prorated and charged monthly as additional rent. During May 2020, an agreement was reached to terminate the Florida Lease, and the Company expensed the termination payments for the Florida Lease. Operating Leases At September 30, 2020, the Company did not have any significant operating lease liabilities or right of use assets. The following summarizes quantitative information about the Company’s operating leases (dollars in thousands): Lease cost Nine Months Ended September 30, 2020 Operating lease cost $ 1,240 Variable lease cost 1,040 Operating lease expense 2,280 Short-term lease rent expense 9 Total rent expense $ 2,289 Other information Operating cash flows from operating leases $ 1,207 Right of use assets exchanged for new operating lease liabilities $ - Weighted-average remaining lease term – operating leases - Weighted-average discount rate – operating leases 0 % Rent expense including electric power costs, recorded on a straight-line basis, was approximately $0 million and $1.3 million for the three months ended September 30, 2020 and 2019, respectively. Rent expense including electric power costs, recorded on a straight-line basis, was approximately $2.3 million (up to lease termination as of June 30, 2020) and $4.2 million for the nine months ended September 30, 2020 and 2019, respectively. 16 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) Contingencies: The Company, and its subsidiaries, are subject at times to various claims, lawsuits and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including, consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in ordinary course of business are covered by the Company’s insurance program. The Company maintains property and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance, the Company may establish an accrual for such loss, retention or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying consolidated balance sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying consolidated statements of operations. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. On the basis of current information, the Company does not believe there is a reasonable possibility that, other than with regard to the Class Action described below, any material loss, if any, will result from any claims, lawsuits and proceedings to which the Company is subject to either individually, or in the aggregate. Shareholder Class Action Suit On February 17, 2018, Creighton Takata filed an action asserting putative class action claims on behalf of the Company's stockholders in the United District Court for the District of New Jersey, Takata v. Riot Blockchain Inc., et al. On April 18, 2018, Joseph J. Klapper, Jr., filed a complaint against Riot Blockchain, Inc., and certain of its officers and directors in the United District Court for the District of New Jersey ( Klapper v. Riot Blockchain Inc., et al. Takata Takata Klapper Lead Plaintiff filed a consolidated complaint on January 15, 2019. Defendants filed motions to dismiss on March 18, 2019. In lieu of opposing defendants’ motions to dismiss, Lead Plaintiff filed another amended complaint on May 9, 2019. Defendants filed multiple motions to dismiss the amended complaint starting on September 3, 2019. On April 30, 2020, the court granted the motions to dismiss, which resulted in the dismissal of all claims without prejudice. On June 1, 2020, Lead Plaintiff filed a motion for leave to file another amended complaint. The motion for leave to amend has been fully briefed and is pending before the court. If the court grants Lead Plaintiff leave to amend, defendants intend to continue to vigorously contest Lead Plaintiff’s amended allegations. Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. Shareholder Derivative Cases On April 5, 2018, Michael Jackson filed a shareholder derivative complaint on behalf of the Company in the Supreme Court of the State of New York, County of Nassau, against certain of the Company's officers and directors, as well as against an investor ( Jackson v. Riot Blockchain, Inc., et al. On May 22, 2018, two additional shareholder derivative complaints were filed on behalf of the Company in the Eighth Judicial District Court of the State of Nevada in and for the County of Clark ( Kish v. O'Rourke, et al. Gaft v. O'Rourke, et al. On September 24, 2018, the court entered an order consolidating the Gaft Kish In re Riot BlockChain, Inc. Shareholder Derivative Litigation 17 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) On October 9, 2018, another shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Eastern District of New York ( Rotkowitz v. O'Rourke, et al. On October 22, 2018, another shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Southern District of New York ( Finitz v. O'Rourke, et al. On December 13, 2018, another shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Northern District of New York ( Monts v. O'Rourke, et al. Defendants intend to vigorously contest plaintiffs’ allegations in the shareholder derivative actions and plaintiffs’ right to bring the action in the name of Riot Blockchain. But because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. Indemnification Demands On April 3, 2020, a complaint was filed against Riot Blockchain, Inc. (“Riot”) by Barry C. Honig and GRQ Consultants, Inc. (“GRQ”) in the United States District Court for the Southern District of New York, Honig v. Riot Blockchain, Inc. In addition to the suit filed by Mr. Honig and GRQ, other purported parties and beneficiaries of the SPA and RRA have also recently demanded indemnification from Riot related to the same litigation and SEC investigation. Riot believes that it does not owe an indemnification obligation to Mr. Honig, GRQ, or the other purported parties and beneficiaries of the SPA and RRA that have made an indemnification demand. Riot intends to vigorously contest Mr. Honig and GRQ claims, as well as the other demands for indemnification. Nevertheless, since this litigation and demands for indemnification are still in an early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. Kashwise Demand On February 18, 2020, the Company received a demand letter from Kashwise Global Funding, Inc. (“Kashwise”) for the payment of fees pursuant to an alleged arrangement between the Company and Kashwise in connection with the January 2019 private exempt offering of the Company’s securities to a group of accredited investors (the “Kashwise Demand”). The Company timely responded to the Kashwise Demand; however, on April 13, 2020, Kashwise Global Funding Solutions, Inc. filed suit against the Company in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the “Kashwise Suit”) alleging substantially similar claims as in the Kashwise Demand. The Company has removed the Kashwise Suit to Federal District Court in and for the Southern District of Florida where it remains pending with a scheduled trial date (if not delayed by the COVID-19) pandemic in June of 2021. The Company continues to vigorously dispute the allegations made in the Kashwise Suit and the parties are in the midst of the formal discovery period. However, because this litigation is still in an early stage, the Company cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. SEC Subpoena and Other Matters SEC Subpoena On April 9, 2018, the Company received a subpoena from the SEC, requesting documents and information. The Company fully cooperated with the SEC in that investigation. On January 29, 2020, the SEC notified the Company that it had concluded its investigation as to Riot, and based on the information the SEC had as of the date of the letter, it did not intend to recommend an enforcement action against Riot. Beneficial Ownership Pursuant to the rules of the SEC, the Company has consistently reported its beneficial ownership positions in its proxy and other filings where beneficial ownership disclosures are presented, for certain beneficial owners with respect to any person (including any “group” as that term is used in Section 13(d)(3) of the Securities and Exchange Act of 1934 (the “Exchange Act”) who is known to the Company to be the beneficial owner of more than 5% of the Company’s common stock. The Company has relied on each person who has reported to the SEC beneficial ownership of more than 5% of our common stock to provide complete and accurate information regarding their ownership, based on the reports filed by these persons. 18 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) On September 7, 2018, a complaint was filed by the SEC (Case 1:18-cv-08175) and as subsequently amended, (the “Complaint”) against, among others, a number of individuals and entities some of whom the Company has previously disclosed as its beneficial owners, as well as, Mr. John O’Rourke III, the Company’s former chairman of the board of directors and chief executive officer who resigned from the Company on September 8, 2018, as disclosed in the Current Periodic Report on Form 8-K filed September 10, 2018. Other persons named in the Complaint have previously reported that they were beneficial owners of the Company’s common stock, however, the Company has no basis to determine whether any such persons may have operated as a control group, collectively beneficially owning more than 5% of the Company’s common stock. On March 9, 2020, the U.S. District Court for the Southern District of New York entered final consent judgments against Mr. O’Rourke as well as other individuals and entities, some of whom were previously disclosed by the Company as beneficial owners. This settlement order followed a prior bifurcated settlement on July 10, 2019, with respect to other subjects of the SEC’s complaint. Without admitting or denying the SEC’s allegations, the defendants agreed to pay disgorgement, prejudgment interest and civil penalties. Registration Rights Penalty During December 2017, the Company closed on the sale of approximately $37 million of units comprised of 1,646,113 shares of its common stock and warrants to purchase up to 1,646,113 shares of its common stock (the “Units”) in a private exempt offering (the “December 2017 Private Placement”) to certain accredited investors (the “December 2017 Investors”), as previously disclosed by the Company on its Current Report on Form 8-K filed with the SEC on December 19, 2017. In connection with the December 2017 Private Placement, the Company entered into registration rights agreements (the “December 2017 Registration Rights Agreements”) with the December 2017 Investors, pursuant to which the Company agreed to take certain steps to register the shares underlying the Units. The Company accounted for the December 2017 Registration Rights Agreements in accordance with ASC 825-20, “Registration Payment Arrangements.” ASC 825-20 addresses an issuer’s accounting for registration payment arrangements and, in accordance with ASC 450-20 “Loss Contingencies,” the Company recorded approximately $1,358,000 for this contingent liability in 2018. On January 5, 2018, pursuant to December 2017 Registration Rights Agreements, the Company filed a registration statement on Form S-3 to register the shares underlying the Units. Subsequently, in April 2018, the Company received a subpoena from the SEC as part of an investigation, requesting documents and information. In July 2018, the SEC issued an Order Directing Examination and Designating Officers Pursuant to Section 8(e) of the Securities Act with respect to certain of the Company’s registration statements, including the registration statement on Form S-3 it filed pursuant to the December 2017 Registration Rights Agreements. On October 12, 2018, the Company filed for withdrawal of this registration statement on Form S-3, as well as other of its registration statements. On October 22, 2018, the Company was notified by SEC staff that the SEC had terminated the Section 8(e) examination with respect to the above-referenced registration statements. On January 29, 2020, the SEC notified the Company that it had concluded its investigation as to Riot, and based on the information the SEC had as of the date of the letter, it did not intend to recommend an enforcement action against Riot. Following the conclusion of the SEC’s activities as described above, the Company has evaluated its performance of its obligations under the December 2017 Registration Rights Agreements and has determined that it substantially complied with its requirements, and that its ultimate inability to cause the registration of the shares underlying the Units as required by the December 2017 Registration Rights Agreements was due to actions taken by the SEC. The Company has therefore determined to reverse the accrual pursuant to ASC 450-20 related to the December 2017 Registration Rights Agreements for its condensed consolidated financial statements as of June 30, 2020. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Events: Financing Subsequent to September 30, 2020, in connection with the Company’s Sales Agreement with H.C. Wainwright, the Company received gross proceeds of approximately $8.1 million from the sale of 2.0 million shares of common stock via the 2020 ATM Offering sold pursuant to the prospectus relating to the 2020 Registration Statement (Registration No. 333-249356). ATM Sales Agreement As disclosed under Note 2, Liquidity and Financial Resources, effective as of October 15, 2020, the Company and H.C. Wainwright entered into the First Amendment to the Sales Agreement, relating to the sale by the Company via its sales agent, H.C. Wainwright, of up to $100.0 million in shares of the Company’s common stock in the 2020 ATM Offering. Effective as of October 15, 2020, the Company and H.C. Wainwright terminated the 2019 ATM Offering and replaced it with the 2020 ATM Offering pursuant to the First Amendment to the Sales Agreement. Accordingly, as of October 15, 2020, no further sales of shares of the Company’s common stock may be made pursuant to the 2019 ATM Offering. Delivery of Miners Subsequent to September 30, 2020, the Company received and deployed at the Coinmint facility 1,003 next generation S19 Pro Miners purchased from Bitmain. Sale of Cryptocurrencies Subsequent to September 30, 2020, the Company sold 100 bitcoins generating total cash proceeds of approximately $1.55 million. |
Basis of presentation, summar_2
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. Amounts are in thousands except for share, per share and miner amounts. The results for the unaudited condensed interim consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2020 or for any future interim period. The unaudited condensed interim consolidated financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2020. The accompanying interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Significant Accounting Policies: For a detailed discussion about the Company’s significant accounting policies, see the Company’s December 31, 2019 consolidated financial statements included in its 2019 Annual Report. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's unaudited condensed interim consolidated financial statements include estimates associated with revenue recognition, asset valuations, the useful lives and recoverability of long-lived assets, impairment analysis of intangibles, stock-based compensation, assumptions used in estimating the fair value of convertible notes and warrants, and the valuation allowance associated with the Company’s deferred tax assets. |
Loss per share | Loss per share: Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes its unvested restricted shares and escrow shares from the net loss per share calculation. The escrow shares are excluded because of related contingencies and including them would result in anti-dilution. 11 Index Riot Blockchain, Inc. and Subsidiaries Notes to Condensed Interim Consolidated Financial Statements (Unaudited) Since the Company has net losses attributable to Riot Blockchain, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share at September 30, 2020 and 2019 because their inclusion would be anti-dilutive are as follows: September 30, 2020 2019 Warrants to purchase common stock 3,354,257 3,574,257 Options to purchase common stock 12,000 12,000 Escrow shares - 200,000 Unvested restricted stock awards 1,217,893 38,917 Convertible Series B preferred shares 4,199 4,199 Total 4,588,349 3,829,373 |
Recently issued and adopted accounting pronouncements | Recently issued and adopted accounting pronouncements: The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impact this ASU will have on its condensed consolidated financial statements and related disclosures. |
Basis of presentation, summar_3
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities | Since the Company has net losses attributable to Riot Blockchain, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share at September 30, 2020 and 2019 because their inclusion would be anti-dilutive are as follows: September 30, 2020 2019 Warrants to purchase common stock 3,354,257 3,574,257 Options to purchase common stock 12,000 12,000 Escrow shares - 200,000 Unvested restricted stock awards 1,217,893 38,917 Convertible Series B preferred shares 4,199 4,199 Total 4,588,349 3,829,373 |
Cryptocurrencies (Tables)
Cryptocurrencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Summary of Additional Information About Cryptocurrencies | The following table presents additional information about cryptocurrencies (in thousands): Beginning balance, January 1, 2020 $ 3,839 Revenue recognized from cryptocurrencies mined 6,717 Mining pool operating fees (94) Proceeds from sale of cryptocurrencies (1,029 ) Realized gain on sale/exchange of cryptocurrencies 491 Impairment of cryptocurrencies (989 ) Cryptocurrencies received from sale of equipment 52 Ending balance, September 30, 2020 $ 8,987 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of 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 |
Schedule of Purchase Agreement Commitments, Deposits Paid and Expected Delivery Timing | 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. |
Stock Options, Warrants and R_2
Stock Options, Warrants and Restricted Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation | The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2020 and 2019, granted under the Equity Plan, from the following categories (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Restricted stock awards under the Plan $ 467 $ 81 $ 2,848 $ 373 Stock option awards under the Plan - - - 58 Total stock-based compensation $ 467 $ 81 $ 2,848 $ 431 |
Summary of Restricted Plan Activity | A summary of the Company’s unvested restricted common stock awards activity in the nine months ended September 30, 2020 is presented here: Number of Shares Weighted Average Grant-Date Fair Value Unvested at January 1, 2020 1,524,499 $ 1.37 Vested (1,850,965) $ 1.36 Granted 1,544,359 $ 1.27 Unvested at September 30, 2020 1,217,893 $ 1.27 |
Schedule of Changes in Outstanding Warrants | Following is a summary of outstanding warrants that were issued outside of the Equity Plan for the nine months ended September 30, 2020: Shares Underlying Options/Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2020 3,574,257 $ 19.48 2.9 $ - Exercised (200,000 ) $ 1.94 - Forfeited (20,000) $ 3.50 - Outstanding at September 30, 2020 3,554,257 $ 20.62 2.1 $ 1,298,189 Exercisable at September 30, 2020 3,554,257 $ 20.62 2.1 $ 1,298,189 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Leases | The following summarizes quantitative information about the Company’s operating leases (dollars in thousands): Lease cost Nine Months Ended September 30, 2020 Operating lease cost $ 1,240 Variable lease cost 1,040 Operating lease expense 2,280 Short-term lease rent expense 9 Total rent expense $ 2,289 Other information Operating cash flows from operating leases $ 1,207 Right of use assets exchanged for new operating lease liabilities $ - Weighted-average remaining lease term – operating leases - Weighted-average discount rate – operating leases 0 % |
Organization (Details)
Organization (Details) - Bitmain [Member] $ in Millions | Sep. 30, 2020USD ($) |
Business Acquisition [Line Items] | |
Number of computers acquired | 16,600 |
Value of computers acquired | $ 37.2 |
Expected Delivery in Fourth Quarter of 2020 [Member] | |
Business Acquisition [Line Items] | |
Number of computers acquired | 3,500 |
Expected Delivery in First half of 2021 [Member] | |
Business Acquisition [Line Items] | |
Number of computers acquired | 13,100 |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2020 | Aug. 20, 2020 | May 24, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Purchase Commitment | $ 37,153 | ||||||||
Deposits paid | 12,803 | ||||||||
Cash and cash equivalents | 30,086 | $ 15,163 | $ 7,440 | $ 225 | |||||
Cryptocurrencies | 9,000 | ||||||||
Working capital | 39,300 | ||||||||
Stockholders' equity | 60,668 | 28,191 | $ 27,809 | 26,235 | $ 26,138 | $ 4,491 | |||
Accumulated deficit | 233,822 | $ 217,238 | |||||||
Proceeds from the sale of stock | 49,551 | $ 23,611 | |||||||
H.C. Wainwright [Member] | Termination of 2019 ATM Offering [Member] | Subsequent Event [Member] | |||||||||
Gross proceeds | $ 74,000 | ||||||||
Number of shares sold | 30,600,000 | ||||||||
Common Stock [Member] | |||||||||
Stock issued during period | 200,000 | ||||||||
Common Stock [Member] | H.C. Wainwright [Member] | Subsequent Event [Member] | |||||||||
Maximum amount of sales shares | $ 100,000 | ||||||||
Percentage of commission | 3.00% | ||||||||
Common Stock [Member] | H.C. Wainwright [Member] | 2019 ATM Offering [Member] | |||||||||
Maximum amount of sales shares | $ 100,000 | ||||||||
Proceeds from the sale of stock | $ 49,600 | ||||||||
Percentage of commission | 3.00% | ||||||||
Commsion paid | $ 1,600 | ||||||||
Weighted average price | $ 2.23 | ||||||||
Stock issued during period | 22,210,095 | ||||||||
Common Stock [Member] | H.C. Wainwright [Member] | 2020 ATM Offering [Member] | Subsequent Event [Member] | |||||||||
Maximum amount of sales shares | $ 100,000 | ||||||||
Percentage of commission | 3.00% | ||||||||
Miners received from Bitmain [Member] | |||||||||
Purchase Commitment | $ 37,200 | ||||||||
Deposits paid | 12,800 | ||||||||
Remaining amount due in second quarter of 2021 | $ 24,400 |
Basis of presentation, summar_4
Basis of presentation, summary of significant accounting policies (Schedule of Antidilutive Securities) (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 4,588,349 | 3,829,373 |
Warrants to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 3,354,257 | 3,574,257 |
Option to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 12,000 | 12,000 |
Escrow shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 200,000 | |
Unvested restricted stock awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 1,217,893 | 38,917 |
Convertible Series B Preferred Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 4,199 | 4,199 |
Acquisitions - Prive share es_2
Acquisitions - Prive share escrow status (Narrative) (Details) - Prive Technologies, Inc. [Member] - shares | 1 Months Ended | 9 Months Ended |
Feb. 28, 2020 | Sep. 30, 2020 | |
Business Acquisition [Line Items] | ||
Number of Stock held in escrow | 200,000 | |
Number of commons shares held in escrow voided and cancelled | 200,000 |
Cryptocurrencies (Summary of Ad
Cryptocurrencies (Summary of Additional Information About Cryptocurrencies) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Beginning balance, January 1,2020 | $ 3,839 | |
Revenue recognized from cryptocurrencies mined | 6,717 | |
Mining pool operating fees | (94) | |
Proceeds from sale of cryptocurrencies | (1,029) | |
Realized gain on sale/exchange of cryptocurrencies | 491 | |
Impairment of cryptocurrencies | (989) | |
Cryptocurrencies received from sale of equipment | 52 | |
Ending balance, September 30, 2020 | $ 8,987 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Miners received from Bitmain [Member] | |
Property, Plant and Equipment [Line Items] | |
Number of computers acquired | 2,040 |
Value of computers acquired | $ 4.5 |
Bitmain [Member] | |
Property, Plant and Equipment [Line Items] | |
Number of computers acquired | 16,600 |
Value of computers acquired | $ 37.2 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | $ 11,218 | $ 11,218 | $ 5,151 |
Less accumulated depreciation | (2,650) | (2,650) | (100) |
Property and equipment, net | 8,568 | 8,568 | 5,051 |
Depreciation expense | 1,300 | 2,800 | |
Miners [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | 11,135 | 11,135 | 5,010 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | 38 | ||
Office and computer equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | 83 | 83 | $ 103 |
Patents [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 10 | $ 100 |
Property and Equipment (Sched_2
Property and Equipment (Schedule of Purchase Agreement Commitments, Deposits Paid and Expected Delivery Timing) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Property, Plant and Equipment [Line Items] | |
Purchase Commitment | $ 37,153 |
Deposits paid | $ 12,803 |
Agreement Date One [Member] | |
Property, Plant and Equipment [Line Items] | |
Agreement Date | June 1, 2020 |
Purchase Commitment | $ 2,293 |
Deposits paid | $ 2,293 |
Expected Shipping | Fourth Quarter 2020 |
Agreement Date Two [Member] | |
Property, Plant and Equipment [Line Items] | |
Agreement Date | August 12, 2020 |
Purchase Commitment | $ 17,549 |
Deposits paid | $ 7,085 |
Expected Shipping | First - Second Quarter 2021 |
Agreement Date Three [Member] | |
Property, Plant and Equipment [Line Items] | |
Agreement Date | August 25, 2020 |
Purchase Commitment | $ 11,187 |
Deposits paid | $ 3,356 |
Expected Shipping | First - Second Quarter 2021 |
Agreement Date Four [Member] | |
Property, Plant and Equipment [Line Items] | |
Agreement Date | September 30, 2020 |
Purchase Commitment | $ 6,124 |
Deposits paid | |
Expected Shipping | Fourth Quarter 2020 |
Freight and other costs [Member] | |
Property, Plant and Equipment [Line Items] | |
Purchase Commitment | |
Deposits paid | $ 69 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020CAD ($) | Dec. 31, 2019USD ($) | |
Tess Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Amount of Investment | $ 0.1 | $ 0.1 | $ 0.1 | |
Coinsquare [Member] | ||||
Business Acquisition [Line Items] | ||||
Amount of Investment | $ 9.4 | $ 9.4 | $ 9.4 | |
Ownership interest percentage | 11.80% | 11.80% | ||
Penalties and costs related to investment | $ 2.2 | |||
Percentage of impairment of investments | 100.00% | 100.00% | ||
Impairment expense | $ 9.4 | $ 9.4 | ||
Verady, LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Amount of Investment | $ 0.2 | $ 0.2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2020 | Aug. 20, 2020 | May 24, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Class of Stock [Line Items] | |||||
Proceeds from the sale of stock | $ 49,551 | $ 23,611 | |||
Restricted Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Proceeds from the sale of stock | $ 350 | ||||
Vested restricted stock units | 1,850,965 | ||||
Restricted Stock [Member] | 2017 Equity Incentive Plan [Member] | |||||
Class of Stock [Line Items] | |||||
Vested restricted stock units | 5,000 | ||||
Prive Technologies, Inc. [Member] | |||||
Class of Stock [Line Items] | |||||
Number of commons shares held in escrow voided and cancelled | 200,000 | ||||
Members of our board of directors and an employee of Company [Member] | Restricted Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock | 1,638,467 | ||||
Number of shares held to cover withholding taxes related to the settlement of restricted stock units | 176,655 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock | 200,000 | ||||
Issuance of common stock, value | $ 400 | ||||
Issuance of common stock, price per share | $ 1.94 | ||||
Issuance of common stock shares exercised | 200,000 | ||||
Shares of restricted common stock issued | 122,377 | ||||
Common Stock [Member] | Employees [Member] | |||||
Class of Stock [Line Items] | |||||
Value of previously accrued compensation to executive, settled through issuance of common stock | $ 175 | ||||
Common Stock [Member] | Consultant and advisors [Member] | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock | 40,634 | ||||
Common Stock [Member] | H.C. Wainwright [Member] | Subsequent Event [Member] | |||||
Class of Stock [Line Items] | |||||
Maximum amount of sales shares | $ 100,000 | ||||
Percentage of commission | 3.00% | ||||
2019 ATM Offering [Member] | Common Stock [Member] | H.C. Wainwright [Member] | |||||
Class of Stock [Line Items] | |||||
Maximum amount of sales shares | $ 100,000 | ||||
Proceeds from the sale of stock | $ 49,600 | ||||
Percentage of commission | 3.00% | ||||
Weighted average price | $ 2.23 | ||||
Issuance of common stock | 22,210,095 | ||||
Commsion paid | $ 1,600 |
Stock Options, Warrants and R_3
Stock Options, Warrants and Restricted Common Stock (Narrative) (Details) $ / shares in Units, $ in Millions | Feb. 07, 2020Installmentsshares | Feb. 27, 2020shares | Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ | $ 0.8 | |||
Unrecognized compensation cost, period for recognition | 2 years 7 months 6 days | |||
Chief Executive Officer and Interim Chief Financial Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of restricted common stock issued | 209,790 | |||
Directors and Certain Emoployees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Shares of restricted common stock issued | 1,212,192 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested restricted stock units | 1,850,965 | |||
Fair value of restricted stock granted | $ | $ 2 | |||
Options outstanding | 1,217,893 | 1,524,499 | ||
Restricted Stock [Member] | Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of restricted common stock issued | 5,000 | |||
Restricted Stock [Member] | Chief Executive Officer and Interim Chief Financial Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Installments | Installments | 4 | |||
Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options outstanding | 12,000 | |||
Weighted average exercise price | $ / shares | $ 4.09 | |||
Weighted average remaining contractual term | 3 years | |||
Intrinsic value | $ | $ 0 | |||
Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of restricted common stock issued | 122,377 | |||
Common Stock [Member] | February 2019 employment agreement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of restricted common stock issued | 122,377 |
Stock Options, Warrants and R_4
Stock Options, Warrants and Restricted Common Stock (Schedule of Stock-based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 467 | $ 81 | $ 2,848 | $ 431 |
Restricted stock awards under Plan [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 467 | 81 | 2,848 | 373 |
Stock option awards under Plan [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 58 |
Stock Options, Warrants and R_5
Stock Options, Warrants and Restricted Common Stock (Schedule of Restricted Stock Activity) (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Number of Shares | |
Unvested at January 1, 2020 | shares | 1,524,499 |
Vested | shares | (1,850,965) |
Granted | shares | 1,544,359 |
Unvested at September 30, 2020 | shares | 1,217,893 |
Weighted Average Grant-Date Fair value | |
Unvested at January 1, 2020 | $ / shares | $ 1.37 |
Vested | $ / shares | 1.36 |
Granted | $ / shares | 1.27 |
Unvested at September 30, 2020 | $ / shares | $ 1.27 |
Stock Options, Warrants and R_6
Stock Options, Warrants and Restricted Common Stock (Schedule of Award Activity) (Details) - Other common stock purchase options [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shares Underlying Options/Warrants | ||
Outstanding, beginning | 3,574,257 | |
Exercised | (200,000) | |
Forfeited | (20,000) | |
Outstanding, ending | 3,554,257 | 3,574,257 |
Exercisable | 3,554,257 | |
Weighted Average Exercise Price | ||
Outstanding, beginning | $ 19.48 | |
Exercised | 1.94 | |
Forfeited | 3.50 | |
Outstanding, ending | 20.62 | $ 19.48 |
Exercisable | $ 20.62 | |
Weighted Average Remaining Contractual Term (Years) | ||
Outstanding | 2 years 1 month 6 days | 2 years 10 months 24 days |
Exercisable | 2 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 1,298,189 | |
Exercisable | $ 1,298,189 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) | Apr. 09, 2018USD ($)ft² | Dec. 31, 2017USD ($)shares | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) |
Operating Leased Assets [Line Items] | ||||||||
Contingent liability | $ 1,358,000 | |||||||
Kairos Global Technology, Inc [Member] | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Rent expense | $ 0 | $ 1,300,000 | $ 2,300,000 | $ 4,200,000 | ||||
Office Space - Fort Lauderdale, Florida [Member] | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Area of lease | ft² | 1,700 | |||||||
Lease expire date | Aug. 9, 2021 | |||||||
Lease term | 39 months | |||||||
Lease renewal term | 5 years | |||||||
Base rent per month | $ 4,659 | |||||||
Base rent per month per square foot | $ 2.75 | |||||||
Escalate rate | 3.00% | |||||||
OKC Lease [Member] | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Lease deposit | $ 700,000 | |||||||
December 2017 Private Placement [Member] | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Proceeds from sale of common stock | $ 37,000,000 | |||||||
Issuance of common stock | shares | 1,646,113 | |||||||
Warrants to purchase common stock | shares | 1,646,113 |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Operating Leases) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Lease cost | |
Operating lease cost | $ 1,240 |
Variable lease cost | 1,040 |
Operating lease expense | 2,280 |
Short-term lease rent expense | 9 |
Total rent expense | 2,289 |
Other information | |
Operating cash flows from operating leases | 1,207 |
Right of use assets exchanged for new operating lease liabilities | |
Weighted-average remaining lease term - operating leases | 0 years |
Weighted-average discount rate - operating leases | 0.00% |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands, shares in Millions | 1 Months Ended | |
Nov. 09, 2020USD ($)shares | Sep. 30, 2020 | |
Miners received from Bitmain [Member] | ||
Subsequent Event [Line Items] | ||
Number of computers acquired | 2,040 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Number of computers acquired | 1,003 | |
Number of bitcoin sold | 100 | |
Proceeds from sale of bitcoin | $ 1,550 | |
Subsequent Event [Member] | Sales Agreement with H.C. Wainwright [Member] | ||
Subsequent Event [Line Items] | ||
Gross proceeds | $ 8,100 | |
Number of shares sold | shares | 2 | |
Subsequent Event [Member] | Amendment in 2020 ATM Offering with H.C. Wainwright [Member] | ||
Subsequent Event [Line Items] | ||
Gross proceeds | $ 100,000 |