The Company uses the equity method of accounting to account for its 49% equity interest in its partially owned mining operations Alborz LLC, Bear LLC and Chief, LLC (the “Data Center LLCs”). The Company recognized a total of approximately $2.4 million and $0.2 million of equity in the net losses of its equity investees in the condensed consolidated statements of operations during the three months ended March 31, 2023 and 2022, respectively. Cryptocurrency mining operations for the Data Center LLCs consisted only of minimal activity at the Alborz Facility for the three months ended March 31, 2022.

During the year ended December 31, 2022, the Company contributed miners and mining equipment to the Alborz, Bear and Chief Facilities. The majority of these contributed miners had a fair value that was lower than the cost paid by the Company to obtain them, and the Company recognized losses at the time of the contributions, resulting in basis differences related to the Company’s investments in Alborz LLC, Bear LLC and Chief LLC, all of which recorded the contributions of equipment from the Company at the historical cost paid by the Company to obtain the equipment. As Alborz LLC, Bear LLC and Chief LLC depreciate the historical cost of these miners on their respective financial statements over the expected depreciation period of five years, the Company accretes these basis differences over the same period and records the accretion amount for each reporting period within equity in losses of equity investees on its statements of operations until these miners are fully depreciated and the corresponding basis differences are fully accreted. As of March 31, 2023, the Company had remaining basis differences totaling approximately $29.7 million that have not yet been accreted. Accretion recorded by the Company during the three months ended March 31, 2023 is shown in the table below and was recorded within equity in the net losses of equity investees on the statement of operations.

Activity in the Company’s investments in equity investees during the three months ended March 31, 2023 consisted of the following (in thousands):


Balance as of January 1, 2023	$	37,478
Cost of miners and mining equipment contributed		1,925
Accretion of basis differences related to miner contributions		1,670
Capital distributions		(3,807	)
Bitcoin received from equity investees		(317	)
Equity in net losses of equity investees		(2,420	)
Balance as of March 31, 2023	$	34,529