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PROPERTY AND EQUIPMENT, NET
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET

11. PROPERTY AND EQUIPMENT, NET

 

At September 30, 2024 and December 31, 2023, property and equipment consisted of:

          
   September 30, 2024   December 31, 2023 
Building, land and improvements  $92,850,000   $100,184,000 
Crypto assets mining equipment   12,162,000    50,640,000 
Crane rental equipment   34,500,000    34,469,000 
Computer, software and related equipment   11,276,000    10,533,000 
Aircraft   15,983,000    15,983,000 
Other property and equipment   11,503,000    11,066,000 
    178,274,000    222,875,000 
Accumulated depreciation and amortization   (17,400,000)   (27,209,000)
Property and equipment, net  $160,874,000   $195,666,000 

 

Summary of depreciation expense:

                
   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
Depreciation expense  $7,533,000   $9,894,000   $19,174,000   $21,823,000 

 

Impairment of Property and Equipment

 

During the three months ended September 30, 2024, due to increases in the Bitcoin mining difficulty level, which compounded the continued impact of the Bitcoin halving event, we concluded that indicated that an impairment triggering event had occurred. Testing performed indicated the estimated fair value of the Company’s miners to be less than their net carrying value as of September 30, 2024, and an impairment charge of $10.5 million was recognized, decreasing the net carrying value of the Company’s crypto assets mining equipment to their estimated fair value. The Company valued the miners using an income approach utilizing a discounted cash flow and a discount rate of 20%. The Company estimated the cash flow from the miners over a two-year period assuming a utilization rate of 98%, a mining difficulty level of 101.6 trillion, a Bitcoin price of $76,000 and a power cost of $0.055 per kilowatt-hour. The estimated fair value of the Company’s miners is classified in Level 3 of the fair value hierarchy with no observable inputs using a discounted cash flow methodology.

In addition, the Company has recorded $1.2 million and $9.2 million in impairment charges related to real estate assets of AGREE during the three and nine months ended September 30, 2024, respectively.