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Property, Plant and Equipment | 9 Months Ended
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Sep. 30, 2023
Property, Plant and Equipment [Abstract] |
Property, Plant and Equipment | 4. Property, Plant and Equipment Property, plant and equipment consist of the following at: Schedule of Plant And Equipment
(Dollars in thousands) |  | September 30, 2023 |  |  | December 31, 2022 |
Land and land improvements |  | $ | 1,538 |  |  | $ | 540 |
Buildings and leasehold improvements |  |  | 25,161 |  |  |  | 6,410 |
Computers and related software |  |  | 11,136 |  |  |  | 7,248 |
Machinery and equipment |  |  | 8,875 |  |  |  | 3,310 |
Office furniture and fixtures |  |  | 23 |  |  |  | 22 |
Construction in progress |  |  | 2,073 |  |  |  | 26,175 |
Property, plant and equipment gross |  |  | 48,806 |  |  |  | 43,705 |
Less: Accumulated depreciation |  |  | (2,868 | ) |  |  | (1,496 | )
Property, plant and equipment |  | $ | 45,938 |  |  | $ | 42,209 |
Depreciation expense was approximately $1.2 million and $6.0 million for the three months ended September 30, 2023 and 2022, respectively. Depreciation expense was approximately $2.4 million and $15.9 million for the nine months ended September 30, 2023 and 2022, respectively. On February 23, 2023, NYDIG proceeded to foreclose on all of the collateral securing the MEFA, which resulted in a reportable disposition of all of the Company’s mining assets at the site and certain of the operating assets of Project Marie. The total net book value of the collateralized assets that were repossessed totaled approximately $3.4 million in which were written off the Company’s books in the first quarter of 2023, offsetting the outstanding accrued interest and penalty first, then the remaining outstanding loan. On September 5, 2023, NYDIG provided a letter finalizing the accounting for the repossessed collateralized assets totaling proceeds of approximately $3.4 million. This included legal and other expenses associated with the sale of the assets net a modest gain on the estimated net book value of the assets totaling approximately $251 thousand that was expensed as a loss on disposition of assets for the three months ended September 30, 2023. The Company noted a difference of approximately $500 thousand in the ending principle, interest and penalties balance as of August 3, 2023 valuation date indicated in the letter, which the Company is currently disputing. In January 2023, the Company sold M20 and M21 miners for a loss on sale of equipment of approximately $82 thousand in which we received proceeds of $213 thousand for our M20 and M21 miners which were previously reported as held for sale as of December 31, 2022, in which had a net book value of $295 thousand. There were additional proceeds of $36 thousand in March 2023, in which resulted in a gain of approximately $3 thousand of scrap and other equipment. This was offset with a gain on sale of approximately $48 thousand in relation to the sale of M30 miners in May and June of 2023, which the Company sold the miners for a higher value than the current net book value. The Company received proceeds of approximately $561 thousand in which the miners had a net book value of approximately $513 thousand. In addition, the Company sold Switchgear and M31 miners for cash proceeds of approximately $476 thousand in which no gain or loss was recognized as the switchgear and miners were sold at net book value. For the three months ended September 30, 2023, the Company incurred a loss on sale of fixed assets of approximately $373 thousand in relation to the sale of miners for Project Sophie and sale of the remaining Project Marie fixed assets including the Tesseracks (mobile, Bitcoin Mining Equipment). For Project Sophie, the Company incurred a loss on sale of approximately $30 thousand in which was due to the shift at the project site to data hosting services compared to proprietary mining beginning in the second quarter of fiscal 2023, the Company was looking to sell all the miners at the site as noted below within “Equipment held for sale”. The miners sold at the Sophie site were sold for proceeds of approximately $891 thousand in which had a net book value of approximately $921 thousand. For Project Marie, the Company sold the Tesseracks and remaining assets for a loss of approximately $92 thousand for the three months ended September 30, 2023 in which the Company received proceeds of $320 thousand in which included a note receivable of $240 thousand that is outstanding as of September 30, 2023. In addition, the Company incurred approximately a $251 thousand loss on sale of assets in relation to NYDIG collateral finalization in which the Company had to pay for expenses and legal fees in related to the disposition. The Company incurred a $1.0 million and $2.6 million loss for the three and nine months ended September 30, 2022 in connection with the disposal of miners and equipment with a net book value of approximately $3.3 million and $5.4 million for the three and nine months ended September 30, 2022 in which the Company received proceeds of $2.35 million and $2.8 million for the three and nine months ended September 30, 2022. During the nine months ended September 30, 2023, the Company had impairment charges of approximately $418 thousand in which related to impairment of approximately $165 thousand for power supply units (PSUs) at the Sophie location, $84 thousand for M31 miners based on sales of other recent M31 miners, in which the Company wrote down the net book value to sale price of the sold M32 miners, and $169 thousand due to revaluing the S19 miners to the current market conditions. During the three and nine months ended September 30, 2022, the Company concluded that there were impairment indicators on property, plant and equipment associated with the S-9 and L3 miners in storage. As a result, a quantitative impairment analysis was required as of September 30, 2022. As such, the Company reassessed its estimates and forecasts as of September 30, 2022, to determine the fair values of the S-9 and L3 miners held in storage. As a result of the analysis, as of September 30, 2022, the Company concluded the carrying amount of the property, plant and equipment associated with the S-9 and L3 miners exceeded its fair value, which resulted in impairment charges of $1.2 million and $2.0 million on the condensed unaudited consolidated statements of operations for the three and nine months ended September 30, 2022. In addition, the Company assessed the active miners in operations and determined there has been a decline in the market value of the active miners in the Company’s operations. As a result, a quantitative impairment analysis was required as of September 30, 2022. As such, the Company reassessed its estimates and forecasts as of September 30, 2022, to determine the undiscounted cash flows to determine whether the miners would be recoverable. It was determined based on the analysis, that the undiscounted cash flow with residual value was less than the net book value as of September 30, 2022, confirming the existence of a triggering event, and therefore required an impairment to be recognized. Based on the fair value of the active miners compared to the net book value, the Company determined that an impairment of approximately $26.8 million to be recognized for the three and nine months ended September 30, 2022. Equipment held for sale In April 2023, Project Sophie entered into a 25 MW hosting contract with a sustainability-focused Bitcoin miner, in which has shifted the Company’s business model at the Company’s modular data center at Project Sophie from proprietary mining to hosting Bitcoin miners for the customer. The Company is currently selling existing Bitcoin miners at the site and redeploying capital. The Company obtained Board of Director approval to sell all remaining miners at the Sophie location and as of September 30, 2023, approximately $248 thousand to be sold which the Company expects to sell within a year.

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- Definition The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 6 -SubTopic 360 -Topic 958 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480321/958-360-50-6 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d) -SubTopic 360 -Topic 958 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480321/958-360-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 7 -SubTopic 360 -Topic 958 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480321/958-360-50-7 + Details
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