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Digital Assets
 6 Months Ended
Jun. 30, 2024
Digital Assets [Abstract]  
DIGITAL ASSETS

NOTE 2 – DIGITAL ASSETS

 

The following table summarizes the digital currency transactions of Bitcoin for:

 

   June 30,
2024		   December 31,
2023		 
ASC 2023-08 fair value adjustment  $739,000   $
-
 
Digital assets beginning balance   2,097,000    6,746,000 
Revenue recognized from mined digital assets   13,005,000    21,052,000 
Revenue share from Sphere 3D   
-
    321,000 
Cost of digital assets sold for cash   (12,969,000)   (17,977,000)
Cost of digital assets transferred for noncash expenditures   (3,283,000)   (7,770,000)
Impairment loss on digital assets   
-
    (275,000)
Fair value gain on digital assets   1,385,000    
-
 
Digital assets ending balance  $974,000   $2,097,000 

 

For the six months ended June 30, 2024 and the year ended December 31, 2023, the Company used digital assets with a value of $3,283,000 and $7,770,000, respectively, for the payment of principal and interest for its notes payable.

 

The following table presents the Company’s Bitcoin holdings as of:

 

   June 30,
2024		   December 31,
2023		 
Number of Bitcoin held   15.77    67.18 
Carrying basis - per Bitcoin  $57,637   $31,213 
Fair value - per Bitcoin  $61,776   $42,214 
Carrying basis of Bitcoin  $908,000   $2,097,000 
Fair value of Bitcoin  $974,000   $2,836,000 

 

The carrying basis (or cost basis) represents the valuation of Bitcoin at the time the Company earns the Bitcoin through mining activities.

 

The carrying amount for 67.18 Bitcoin held as of the adoption of ASC 350-60, was determined on the “cost less impairment” basis.

 

The Company’s Bitcoin holdings are not subject to rehypothecation and do not serve as collateral for any existing loans or agreements. As of each of June 30, 2024 and December 31, 2023, the Company held no other crypto currency.

 

As of June 30, 2024 and December 31, 2023, the Company held 100% of its Bitcoin in cold storage and nil hot wallets, respectively.

  

Adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets

 

Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in the consolidated statement of operation each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. As a result of the Company’s early adoption of ASU 2023-08, the Company recorded a $739,000 increase in digital assets and a $739,000 decrease in accumulated deficit on the consolidated balance sheets as of January 1, 2024.