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Acquisitions

6 Months Ended

Jun. 30, 2025

Acquisitions

Note 3. Acquisitions

Rhodium Settlement and Acquisition of Assets

On April 28, 2025, the Company’s subsidiary, Whinstone US, Inc. (“Whinstone”) acquired certain assets owned by Rhodium Encore LLC (together with its affiliates, “Rhodium”) that were located at the Rockdale Facility, assumed Rhodium’s 125 MW of power capacity at the Rockdale Facility, terminated the legacy hosting agreements with Rhodium, and settled all existing litigation between the parties for total consideration of $185.0 million (the “Rhodium Settlement”). The total consideration consisted of approximately $129.9 million in cash, the return of Rhodium’s power security deposit of approximately $6.1 million, and 6,989,800 shares of Company common stock, valued at $49.0 million based on the preceding ten trading day volume-weighted average share price immediately prior to the date of execution. The terminated legacy hosting contracts with Rhodium had a remaining term through December 2030 (see Note 4. Revenue from Contracts with Customers for more information). The settled litigation and claims include all existing claims between the parties, and any and all claims, or future claims, arising under the hosting contracts.

The acquired set of assets did not meet the definition of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets acquired consisted primarily of bitcoin miners and related equipment, which are included in Property and equipment, net on the Condensed Consolidated Balance Sheets. The fair value of the tangible assets acquired was estimated to be $7.3 million and was determined using the cost approach, which utilizes replacement cost as an indicator of fair value. The key assumptions included replacement cost new, effective age, and remaining useful life, as well as physical deterioration factors. No identifiable intangible assets were acquired, no goodwill was recognized, and no liabilities were assumed in connection with the transaction.

In connection with the contract termination and the elimination of the Company’s future obligations under it, the Company relieved approximately $14.9 million of previously recognized deferred revenue (see Note 4. Revenue from Contracts with Customers).

The remaining portion of the transaction value is attributable to the combined impact of terminating the Company’s legacy hosting agreement and settling preexisting litigation with Rhodium, both of which stemmed from an ongoing contractual dispute. The legacy hosting agreement contained terms that were significantly unfavorable compared to prevailing market conditions for similar arrangements. As a result of the termination and settlement, the Company recognized a loss of $158.1 million, which is presented as Loss on contract settlement on the Condensed Consolidated Statements of Operations. This loss represents the residual amount after accounting for the total consideration transferred and the tangible assets acquired as part of the transaction.

E4A Solutions Acquisition

On December 16, 2024, the Company acquired 100% of the equity interests of E4A Solutions, a Texas-based electrical engineering solutions company, for total consideration of approximately $54.4 million, which was comprised of $51.8 million paid in cash from the Company’s existing cash and a contingent purchase price payable to the sellers with an estimated fair value at acquisition of $2.6 million. Under the contingent purchase price payable, the sellers are eligible to earn potential earn-out targets based on E4A Solutions’ adjusted EBITDA during the two years ending December 31, 2026, payable in cash or Riot common stock at the Company’s discretion. The potential earn-out is calculated as 2.65 times the amount the average adjusted EBITDA exceeds the prescribed earn-out threshold.

The E4A Solutions Acquisition builds on Riot’s vertically integrated strategy by adding engineering expertise to service its own existing and future electrical infrastructure and allows the Company to provide electrical solutions and services to support the rapidly growing market for electrical infrastructure.

The E4A Solutions Acquisition was accounted for as an acquisition of a business using the acquisition method of accounting, which requires recognition of assets acquired and liabilities assumed at their respective fair values on the date of acquisition. As of June 30, 2025, the Company has completed a preliminary allocation of the purchase consideration. Therefore, the allocation of the purchase price to assets acquired and liabilities assumed is based on provisional estimates and is subject to continuing management analysis, with assistance from third party valuation advisors. The Company expects to finalize the valuation of these assets and liabilities, and consideration transferred, as soon as practicable, but not later than one year from the acquisition date. Any changes to the preliminary estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill.

The following table presents the preliminary allocation of the purchase consideration:


Cash and cash equivalents		$	915
Accounts receivable			3,958
Prepaid expenses and other current assets			169
Contract assets			1,152
Property and equipment			136
Operating lease right-of-use asset			612
Finite-lived intangible assets:
Customer contracts			23,100
Trademark			1,100
Accounts payable			(1,446)
Deferred revenue, current portion			352
Accrued expenses			(254)
Operating lease liability, current portion			(323)
Operating lease liability, less current portion			(289)
Other long-term liabilities			(53)
Total identifiable assets and liabilities acquired			29,129
Goodwill			25,287
Total purchase consideration		$	54,416

The fair values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, other long-term assets, accounts payable, contract liabilities, accrued expenses, and other long-term liabilities were determined to be their carrying values due to the immaterial and/or short-term nature of the assets and liabilities.

The finite-lived intangible assets consist of a trademark and customer relationships. The fair value of the trademark was estimated using the relief-from-royalty rate method, which estimated future royalty charges attributable to the trademark. The fair value of the customer relationships was estimated using the income approach, which estimated future revenues and costs associated with the existing customer relationships. The estimated fair values of the trademark and customer relationships utilized a discount rate of 13.4%.

The right-of-use asset and operating lease liabilities consisted of an operating lease of office and commercial space in Houston, Texas. The lease has annual payments of approximately $0.4 million and a remaining lease term of approximately two years as of acquisition.

Goodwill was attributable to the assembled workforce of experienced personnel at E4A Solutions and synergies expected to be achieved from the combined operations of Riot and E4A Solutions. The goodwill recognized is expected to be deductible for tax purposes. We assigned the goodwill to our Engineering reportable segment.

The operating results of E4A Solutions have been included in the Company’s Condensed Consolidated Statements of Operations since the acquisition date. Through June 30, 2025, approximately $2.8 million of acquisition-related costs were expensed as incurred.

Block Mining Acquisition

On July 23, 2024, the Company acquired 100% of the equity interests of Block Mining, a vertically integrated Bitcoin mining company based in Kentucky, for total consideration of approximately $113.6 million. The purchase price consisted of $13.5 million in cash (adjusted for net working capital acquired and other items, excluding the payoff of debt of $5.0 million, which was accounted for as a transaction separate from the acquisition) from the Company’s existing cash, 7.2 million shares of Riot common stock valued at approximately $74.0 million, and a contingent purchase price payable to the sellers with an estimated fair value at acquisition of $26.1 million. Under the terms of the contingent purchase price payable, the sellers may earn up to an additional $32.5 million if certain milestones are reached by December 31, 2025.

The Block Mining Acquisition immediately enhanced the Company’s operational capabilities by increasing its total hash rate,

expanding Riot’s geographic footprint, and providing access to additional energy markets beyond the Electric Reliability Council of Texas (“ERCOT”). These markets include the Paducah Power Systems, Tennessee Valley Authority, and Big Rivers Electric Corporation, all located within the Midcontinent Independent System Operator (“MISO”) region. Block Mining consists of two operational sites, both in Kentucky, which consist of existing operational Bitcoin Mining capacity, with the potential to expand. In addition, Block Mining owns a greenfield development site adjacent to an existing substation, representing a strategic opportunity for scalable growth. Known for its capital-efficient development model and experienced management team, Block Mining strengthens Riot’s ability to execute on its vertically integrated strategy and enhances its long-term positioning in the Bitcoin mining sector.

The acquisition was accounted for as an acquisition of a business using the acquisition method of accounting, which requires recognition of assets acquired and liabilities assumed at their respective fair values on the date of acquisition. As of June 30, 2025, the Company completed a preliminary allocation of the purchase consideration. Therefore, the allocation of the purchase price to assets acquired and liabilities assumed is based on provisional estimates and is subject to continuing management analysis, with assistance from third-party valuation advisors. The Company finalized the valuation of these assets and liabilities, and consideration transferred, as of June 30, 2025. The finalization of the valuation did not result in any adjustments to any of the amounts presented below.

The following table presents the allocation of the purchase consideration:


Cash and cash equivalents		$	6,295
Accounts receivable			362
Prepaid expenses and other current assets			2,877
Property and equipment			20,165
Operating lease right-of-use asset			3,733
Accounts payable			(1,471)
Accrued expenses			(1,180)
Operating lease liability, current portion			(2,410)
Operating lease liability, less current portion			(1,323)
Long-term debt			(10,678)
Total identifiable assets and liabilities acquired			16,370
Goodwill			97,212
Total purchase consideration		$	113,582

The fair values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses were determined to be their carrying values due to the short-term nature of the assets and liabilities. The fair value of the acquired trade receivables was determined to be the net realizable amount of the closing date book value of $0.4 million.

The fair value of property and equipment was estimated by applying the cost approach, which uses the replacement cost as an indicator of fair value. The assumptions of the cost approach include replacement cost new and physical deterioration factors, including remaining life and effective age. The replacement cost new was based on a price per terahash consistent with prices the Company pays for new bitcoin miners and an effective age of three years, consistent with the Company’s current estimated useful life of bitcoin miners.

The right-of-use asset and operating lease liabilities consisted of an operating lease of a data center in Calvert City, Kentucky. The lease has annual payments of approximately $1.4 million and a remaining lease term of approximately 3.0 years as of the acquisition.

The assumed debt consisted of a $5.0 million secured loan and a $5.7 million note payable. The secured loan was paid off on the date of acquisition. The note payable carries a fixed rate of 8.81%, and matures in December 2035, with annual principal and accrued interest payments beginning on December 31, 2024. The fair value of the debt at acquisition of $5.7 million was determined to equal its carrying value due at acquisition as the interest rate is reasonably consistent with rates the Company would expect to incur for similar debt instruments.

Goodwill was attributable to the assembled workforce of experienced personnel at Block Mining and synergies expected to be achieved from the combined operations of Riot and Block Mining. The goodwill recognized is not expected to be deductible for tax purposes. We assigned the goodwill to our Bitcoin Mining reportable segment.

The operating results of Block Mining have been included in the Company’s Condensed Consolidated Statements of Operations since the acquisition date. Through June 30, 2025, approximately $2.9 million of acquisition-related costs were expensed as incurred.

Pro-forma financial information

The following unaudited pro forma financial information summarizes the combined results of operations for Riot, Block Mining, and E4A Solutions, as if the companies were combined as of January 1, 2023. The unaudited pro forma information does not reflect the effect of costs or synergies that may result from the acquisition and excludes acquisition-related costs of $5.7 million incurred for all periods through June 30, 2025. This unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of future operating results of the combined company. This information should not be used as a predictive measure of the Company’s future financial position, results of operations, or liquidity.


		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2024				2024
Revenue		$	85,859			$	182,041
Net income (loss)		$	(77,326)			$	138,149