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Deposit, Property and Equipment and Intangible Assets
 9 Months Ended
Sep. 30, 2021
Property, Plant and Equipment [Abstract]  
DEPOSIT, PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

NOTE 3 – DEPOSIT, PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

 

On February 5, 2021, the Cosmos Infrastructure LLC (“Infrastructure”) entered into a Long-Term Purchase Contract with Canaan Convey Co Ltd (“Canaan”) for the purchase of 11,760 next generation Avalon A1246 ASIC Miners (Avalon). The purchase price per unit is $2,889 for a total purchase price of $33,974,640 (the “Canaan Transaction”). There will be a final adjustment to the purchase price in the last delivery due in March 2022 based on the actual tera hash delivered, based on the agreed price per tera hash under the terms of the contract.

 

The details of the Canaan Transaction were set out in our Quarterly Report on Form 10-Q filed on May 19, 2021. During the third quarter, the Company paid:

 

a)$1,799,280 during July 2021 for 1,176 miners

 

b)$1,693,440 during August 2021 for 1,176 miners

 

c)$1,587,600 during September 2021 for 1,176 miners

 

As a result of payments pursuant to the Canaan Transaction, Canaan delivered 2,944 Miners in the 3 months ended September 30, 2021. The Company recognized these delivered assets as Property and Equipment on the consolidated balance sheet when the transfer of risk and title occurs for each shipment (i.e., the Miners have been delivered by Canaan to the agreed-upon port of loading in China).

 

On August 9, 2021, Infrastructure entered into a second Long-Term Purchase Contract with Canaan for the purchase of 15,000 next generation Avalon A1246 ASIC Miners (Avalon). The purchase price per unit is $4,908 for a total purchase price of $73,620,000 (the “2ND Canaan Transaction”). There will be a final adjustment to the purchase price in the last delivery due in May 2022 based on the actual tera hash delivered, based on the agreed price per tera hash under the terms of the contract.

 

The details of the 2ND Canaan Transaction were set out in our Quarterly Report on Form 8-K filed August 9, 2021. During the third quarter the Company paid $14,724,000 as a deposit against the order.

 

As of September 30, 2021, approximately $34.63 million cash paid for Miners was recorded as a deposit on the balance sheet.

 

The Company’s depreciation and amortization expense for the three months ended September 30, 2021 and 2020 were $4.13m and $2.59m respectively. The Company’s depreciation and amortization expense for the nine months ended September 30, 2021 and 2020 were $7.98 million and $5.05 million respectively.