Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 24, 2020 | Jun. 28, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Riot Blockchain, Inc. | ||
Entity Central Index Key | 0001167419 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding | 31,034,308 | ||
Entity Public Float | $ 70.9 | ||
Entity Incorporation State Code | NV | ||
Entity File Number | 001-33675 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 7,440 | $ 225 |
Prepaid expenses and other current assets | 1,349 | 1,379 |
Cryptocurrencies | 3,839 | 707 |
Total current assets | 12,628 | 2,311 |
Property and equipment, net | 5,051 | 26 |
Right of use assets | 367 | |
Intangible rights acquired | 700 | |
Deposits on equipment | 1,449 | |
Long-term investments | 9,723 | 9,413 |
Security deposits | 703 | 703 |
Patents, net | 459 | 507 |
Convertible note and accrued interest | 200 | |
Total assets | 30,380 | 13,860 |
Current liabilities | ||
Accounts payable | 717 | 3,829 |
Accrued expenses | 2,187 | 1,532 |
Deferred purchase price - BMSS | 1,200 | |
Operating lease liability | 368 | |
Deferred revenue, current portion | 97 | 97 |
Total current liabilities | 3,369 | 6,658 |
Notes payable | 1,696 | |
Deferred revenue, less current portion | 776 | 872 |
Deferred income tax liability | 143 | |
Total liabilities | 4,145 | 9,369 |
Commitments and contingencies - Note 15 | ||
Stockholders' equity | ||
Common stock, no par value; 170,000,000 shares authorized; 25,082,872 and 14,519,058 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 243,458 | 202,917 |
Accumulated deficit | (217,238) | (197,199) |
Total Riot Blockchain stockholders' equity | 26,242 | 5,787 |
Non-controlling interest | (7) | (1,296) |
Total stockholders' equity | 26,235 | 4,491 |
Total liabilities and stockholders' equity | 30,380 | 13,860 |
2% Convertible Preferred Stock Series A [Member] | ||
Stockholders' equity | ||
Preferred stock | ||
0% Convertible Preferred Stock Series B [Member] | ||
Stockholders' equity | ||
Preferred stock | $ 22 | $ 69 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, par value | ||
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, shares issued | 25,082,872 | 14,519,058 |
Common stock, shares outstanding | 25,082,872 | 14,519,058 |
2% Convertible Preferred Stock Series A [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
0% Convertible Preferred Stock Series B [Member] | ||
Preferred stock, shares authorized | 1,750,001 | 1,750,001 |
Preferred stock, shares issued | 4,199 | 13,000 |
Preferred stock, shares outstanding | 4,199 | 13,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | ||
Total Revenue | $ 6,837 | $ 7,845 |
Costs and expenses: | ||
Cost of revenues (exclusive of depreciation and amortization shown below) | 6,097 | 5,820 |
Selling, general and administrative | 9,159 | 20,858 |
Depreciation and amortization | 119 | 5,267 |
Impairment of property and equipment | 29,238 | |
Impairment of goodwill | 1,186 | |
Impairment of intangible rights acquired | 700 | 1,341 |
Impairment of cryptocurrencies | 844 | 3,501 |
Total costs and expenses | 16,919 | 67,211 |
Operating loss from continuing operations | (10,082) | (59,366) |
Other income (expense): | ||
Loss on issuance of convertible notes, common stock and warrants | (6,155) | |
Change in fair value of warrant liability | (2,869) | |
Change in fair value of convertible notes | (3,896) | |
Gain on deconsolidation of Tess | 1,139 | |
Non-compliance penalty for SEC registration requirement | (1,350) | |
Interest expense | (122) | (123) |
Gain on extinguishment of accounts payable, other liabilities and accrued interest | 854 | |
Investment income | 37 | 70 |
Loss on extinguishment of BMSS payable | (265) | |
Realized gain on sale of cryptocurrencies | 665 | 26 |
Other expense | (17) | |
Total other expense | (10,364) | (1,642) |
Loss from continuing operations before income taxes | (20,446) | (61,008) |
Deferred income tax benefit | 143 | 699 |
Loss from continuing operations | (20,303) | (60,309) |
Discontinued operations | ||
Income from operations | 96 | |
Income from discontinued operations | 96 | |
Net loss | (20,303) | (60,213) |
Net loss attributable to non-controlling interest | 264 | 2,205 |
Net loss attributable to Riot Blockchain | $ (20,039) | $ (58,008) |
Basic and diluted net loss per share: | ||
Continuing operations attributable to Riot Blockchain | $ (1.02) | $ (4.34) |
Discontinued operations attributable to Riot Blockchain | 0.01 | |
Net loss per share | $ (1.02) | $ (4.33) |
Basic and diluted weighted average number of shares outstanding | 19,597,977 | 13,403,846 |
Revenue - cryptocurrency mining [Member] | ||
Revenue: | ||
Total Revenue | $ 6,741 | $ 7,749 |
License fees [Member] | ||
Revenue: | ||
Total Revenue | $ 96 | $ 96 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Accumulated Deficit [Member] | Total riot blockchain stockholder's equity [Member] | Noncontrolling Interest [Member] | Total |
BALANCE at Dec. 31, 2017 | $ 7,745 | $ 180,387 | $ (139,263) | $ 48,869 | $ 758 | $ 49,627 |
BALANCE, shares at Dec. 31, 2017 | 1,458,001 | 11,622,112 | ||||
Common stock issued for asset purchase - Prive | $ 8,480 | 8,480 | 8,480 | |||
Common stock issued for asset purchase - Prive, shares | 800,000 | |||||
Common stock escrow shares issued for asset purchase - Prive | ||||||
Common stock escrow shares issued for asset purchase - Prive, shares | 200,000 | |||||
Discount on convertible debt arising from values of: | ||||||
Exercise of warrants | $ 350 | 350 | 350 | |||
Exercise of warrants, shares | 100,000 | |||||
Preferred stock converted to Common stock | $ (7,190) | $ 7,190 | ||||
Preferred stock converted to Common stock, shares | (1,353,505) | 1,353,505 | ||||
Preferred stock canceled | $ (486) | $ 486 | ||||
Preferred stock canceled, shares | (91,496) | |||||
Exercise of stock options | $ 79 | 79 | 79 | |||
Exercise of stock options, shares | 19,533 | |||||
Stock-based compensation | $ 4,660 | 4,660 | 4,660 | |||
Stock-based compensation, shares | ||||||
Common stock issued for services | $ 403 | 403 | 403 | |||
Common stock issued for services, Shares | 43,277 | |||||
Refund of escrow dividend | 72 | 72 | 72 | |||
Sale of Riot shares held by 1172767 B.C. Ltd. | 506 | 506 | 506 | |||
Stock issued for the extinguishment of the BMSS payable | $ 265 | 265 | 265 | |||
Stock issued for the extinguishment of the BMSS payable, Shares | 50,000 | |||||
Cashless exercise of stock purchase warrants | ||||||
Cashless exercise of stock purchase warrants, shares | 3,215 | |||||
Delivery of common stock underlying restricted stock units | ||||||
Delivery of common stock underlying restricted stock units, Shares | 327,416 | |||||
Non-controlling interest - Logical Brokerage | 41 | 41 | ||||
Net loss attributable to non-controlling interest | (2,205) | (2,205) | ||||
Sale of common shares by 1172767 B.C. Ltd. | 111 | 111 | 110 | 221 | ||
Net loss | (58,008) | (58,008) | (58,008) | |||
BALANCE at Dec. 31, 2018 | $ 69 | $ 202,917 | (197,199) | 5,787 | (1,296) | 4,491 |
BALANCE, shares at Dec. 31, 2018 | 13,000 | 14,519,058 | ||||
Discount on convertible debt arising from values of: | ||||||
Delivery of common stock underlying restricted stock units | ||||||
Delivery of common stock underlying restricted stock units, shares | 239,751 | |||||
Common stock issued with convertible notes | $ 255 | 255 | 255 | |||
Common stock issued with convertible notes, shares | 150,000 | |||||
Common stock issued in connection with conversion of notes payable | $ 10,226 | 10,226 | 10,226 | |||
Common stock issued in connection with conversion of notes payable, shares | 1,813,500 | |||||
Reclassification of warrant liability to equity | $ 5,439 | 5,439 | 5,439 | |||
Reclassification of warrant liability to equity, shares | ||||||
Preferred stock converted to Common stock | $ (47) | $ 47 | ||||
Preferred stock converted to Common stock, shares | (8,801) | 8,801 | ||||
Stock-based compensation | $ 745 | 745 | 745 | |||
Issuance of common stock, net of offering costs/At-the-market offering | $ 23,829 | 23,829 | 23,829 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 8,351,762 | |||||
Net loss attributable to non-controlling interest | (264) | (264) | ||||
Deconsolidation of Tess | 1,553 | 1,553 | ||||
Net loss | (20,039) | (20,039) | (20,039) | |||
BALANCE at Dec. 31, 2019 | $ 22 | $ 243,458 | $ (217,238) | $ 26,242 | $ (7) | $ 26,235 |
BALANCE, shares at Dec. 31, 2019 | 4,199 | 25,082,872 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (20,303) | $ (60,213) |
Income from discontinued operations | 96 | |
Loss from continuing operations | (20,303) | (60,309) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities of continuing operations: | ||
Stock-based compensation | 745 | 4,660 |
Depreciation and amortization | 119 | 5,267 |
Deferred income tax benefit | (143) | (699) |
Amortization of license fee revenue | (96) | (96) |
Non-cash lease expense | 2,297 | |
Common stock issued for services | 403 | |
Common stock issued for the extinguishment of the BMSS payable | 265 | |
Loss on issuance of convertible notes, common stock and warrants | 6,155 | |
Change in fair value of convertible notes | 3,896 | |
Change in fair value of warrant liability | 2,869 | |
Gain on deconsolidation of Tess | (1,139) | |
Gain on extiguishment of accounts payable, other liabilities and accrued interest | (854) | |
Impairment of property and equipment | 29,238 | |
Impairment of cryptocurrencies | 844 | 3,501 |
Goodwill impairment charge | 1,186 | |
Impairment of intangible rights acquired | 700 | 1,341 |
Realized gain on sale of cryptocurrencies | (665) | (26) |
Accrued interest on Verady investment | (20) | |
Changes in assets and liabilities: | ||
Prepaid expenses and other current assets | (101) | (839) |
Cryptocurrencies - mining, net of mining pool operating fees | (6,606) | (7,593) |
Deposits on equipment | (1,449) | |
Accounts payable | (1,886) | 3,419 |
Accrued expenses | 1,069 | 1,230 |
Lease liability | (2,296) | |
Net cash used in operating activities | (16,864) | (19,052) |
Cash flows from investing activities - continuing operations: | ||
Proceeds from sale of cryptocurrencies | 3,196 | 9,237 |
Purchase of cryptocurrencies | (5,625) | |
Purchases of equipment | (4,958) | (20,195) |
Purchases of other investments | (6,413) | |
Security deposits | (703) | |
Patent costs incurred | (38) | (59) |
Investment in Logical Brokerage, net of cash acquired | (517) | |
Purchase of developed technology by Tess Pay, Inc. | (587) | |
Net cash used in investing activities | (1,800) | (24,862) |
Cash flows from financing activities - continuing operations: | ||
Proceeds from issuance of convertible notes | 3,000 | |
Proceeds from notes payable | 1,696 | |
Payments on BMSS purchase agreement | (300) | |
Repayment of notes payable and other obligations | (950) | (136) |
Proceeds from the issuance of common stock / At-the-market offering | 24,825 | |
Offering costs for the issuance of common stock / At-the-market offering | (996) | |
Proceeds from exercise of warrants | 350 | |
Proceeds from exercise of stock options | 79 | |
Proceeds from sale of Riot shares held by Tess Pay, Inc. | 506 | |
Proceeds form the sale of common shares sold by Tess Pay, Inc. | 220 | |
Refund of escrow dividend | 72 | |
Net cash provided by financing activities | 25,879 | 2,487 |
Net increase (decrease) in cash and cash equivalents | 7,215 | (41,427) |
Cash and cash equivalents at beginning of period | 225 | 41,652 |
Cash and cash equivalents at end of period | 7,440 | 225 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 7 | |
Cash paid for taxes | ||
Supplemental disclosure of noncash investing and financing activities: | ||
Conversion of notes payable to common stock | 10,226 | |
Reclassification of warrant liability to equity | 5,439 | |
Value of shares issued for Prive asset acquisition | 8,480 | |
Conversion of preferred stock to common stock | 47 | 7,190 |
Deferred purchase price for BMSS | 1,500 | |
Preferred stock canceled | 486 | |
Deferred tax liability for Logical Brokerage | 143 | |
Cryptocurrencies used to purchase miners | $ 99 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1. Organization Riot Blockchain, Inc. (the “Company” or “Riot Blockchain”) was originally organized on July 24, 2000, as a Colorado corporation. Effective October 19, 2017, the Company's name was changed to Riot Blockchain, Inc., from Bioptix, Inc. Effective October 19, 2017, the Company changed its state of incorporation to Nevada from Colorado. The Company operates a cryptocurrency mining operation, which utilizes specialized computers (also known as “miners”) that generate cryptocurrency (primarily bitcoin) from the Blockchain. The Company acquired approximately 8,000 miners through its acquisition of Kairos Global Technology, Inc., (“Kairos”) in November 2017, and from Prive Technologies, Inc. (“Prive”) Blockchain Mining Supply & Services Ltd. (“BMSS”) in February 2018. During December 2019, the Company purchased 4,000 next generation Bitmain S17 Pro Antminers for approximately $6.3 million from BitmainTech PTE. LTD. (“Bitmain”). In December 2019, 3,000 miners were received at the Company’s Oklahoma City facility, and the remaining 1,000 miners were received in early 2020. During February 2020, all of the new generation miners were installed and operational. As part of this upgrade, due to power and infrastructure considerations, virtually all of the previously acquired miners were taken offline and their future use is being evaluated. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Financial Condition | Note 2. Liquidity and Financial Condition The Company has experienced recurring losses and negative cash flows from operations. At December 31, 2019, the Company had approximate balances of cash and cash equivalents of $7.4 million, working capital of $9.3 million, total stockholders' equity of $26.2 million and an accumulated deficit of $217.2 million. To date, the Company has, in large part, relied on equity financings to fund its operations. The Company expects to continue to incur losses from operations for the near-term and these losses could be significant as the Company incurs costs and expenses associated with recent and potential future acquisitions, as well as public company, legal and administrative related expenses being incurred. As disclosed in Note 10, during January 2019, the Company issued a series of Senior Secured Convertible Promissory Notes (the “Notes”), to investors for an aggregate principal amount of approximately $3.4 million and an equal value of warrants for the purchase of shares of the Company’s common stock (the “Warrants”) in exchange for a total investment of $3.0 million. During the year ended December 31, 2019, all of the Notes were converted into common stock and have been satisfied in full. The Company is closely monitoring its cash balances, cash needs and expense levels. As disclosed in Note 11, the Company entered into a Sales Agreement with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) dated May 24, 2019 (the “Sales Agreement”), pursuant to which the Company may, from time to time, sell up to $100.0 million in shares of the Company’s common stock through H.C. Wainwright, acting as the Company’s sales agent and/or principal, in an at-the-market offering (“ATM Offering”). All sales of the shares in connection with the ATM Offering have been made pursuant to an effective shelf registration statement on Form S-3 filed with the U.S. Securities and Exchange Commission (“SEC”). The Company pays H.C. Wainwright a commission of approximately 3.0% of the aggregate gross proceeds the Company received from all sales of the Company's common stock under the Sales Agreement. The Company received net proceeds on sales under the Sales Agreement of approximately $23.8 million at a weighted average sales price of $2.97 during the year ended December 31, 2019. Subsequent to December 31, 2019, in connection with the Sales Agreement, the Company received gross proceeds of approximately $9.5 million from the sale of 5,995,559 shares of common stock. The Company believes its current cash on hand is sufficient to meet its operating and capital requirements for at least the next twelve months from the date these financial statements are issued. |
Basis of Presentation, Summary
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | Note 3. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements Principles of consolidation The accompanying consolidated financial statements of the Company include the accounts of the Company and its wholly or majority owned and controlled subsidiaries. Consolidated subsidiaries results are included from the date the subsidiary was formed or acquired. Intercompany investments, balances and transactions have been eliminated in consolidation. Non–controlling interests represents the minority equity investment in the Company's subsidiaries, plus the minority investors' share of the net operating results and other components of equity relating to the non–controlling interest. The Company's consolidated operating subsidiaries and (percentage owned at December 31, 2019) consisted of; Kairos Global Technology, Inc., (100%) and Logical Brokerage Corp. (92.5%). Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's financial statements include estimates associated with revenue recognition, asset valuations, the useful lives and recoverability of long-lived assets, impairment analysis of intangibles and goodwill, stock-based compensation, and the valuation allowance associated with the Company’s deferred tax assets. Long-term investments As described in Note 6 to these consolidated financial statements, effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 concerning recognition and measurement of financial assets and financial liabilities. In adopting this new guidance, the Company has made an accounting policy election to adopt an adjusted cost method measurement alternative for investments in equity securities without readily determinable fair values. For equity investments that are accounted for using the measurement alternative, the Company initially records equity investments at cost but is required to adjust the carrying value of such equity investments through earnings when there is an observable transaction involving the same or a similar investment with the same issuer or upon an impairment. As of December 31, 2019, the Company’s long-term investments consist of its investments in Coinsquare Ltd., (“Coinsquare”), TessPay Inc. (formerly 1172767 B.C. Ltd) (“Tess”) and Verady, LLC (“Verady”). Cash, cash equivalents and short-term investments The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company's cash account balances exceed the balances as covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. As of December 31, 2019 and 2018, the Company had no cash equivalents or short-term investments. Fair value of financial instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company's market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. As of December 31, 2019 there were no financial assets or liabilities measured at fair value. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, and accounts payable, approximate fair value due to the short-term nature of these instruments. During the year ended December 31, 2019, the Company issued convertible notes and warrants in connection with the notes. The notes and warrants were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other expense on the consolidated statements of operations and disclosed in the consolidated financial statements. Cryptocurrencies Cryptocurrencies, (including bitcoin, bitcoin cash and litecoin) are included in current assets in the accompanying consolidated balance sheets. Cryptocurrencies purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition policy disclosed below. Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Purchases of cryptocurrencies by the Company are included within investing activities in the accompanying consolidated statements of cash flows, while cryptocurrencies awarded to the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of cryptocurrencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the consolidated statements of operations. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting. Deferred revenue The Company recognized upfront license fees from Ceva Santé Animale S.A. (“Licensee”) related to its exclusive license agreement (“License Agreement”), which have been recorded as deferred revenue and are being amortized over the term of the License Agreement. Amortization of the license fees totaling approximately $1.6 million began in July 2012. As of December 31, 2019, and 2018, each, deferred revenue of approximately $0.1 million has been classified as a current liability and $0.8 million and $0.9 million, respectively, has been classified as a long-term liability. The current liability represents the next twelve months' portion of the license fees revenue. For each of the years ended December 31, 2019 and 2018, approximately $0.1 million, was recorded as the license fee revenue. Property and equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally two years for cryptocurrency mining equipment and three years for computer related assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. Patents and other intangible assets The Company accounts for intangible assets under ASC 350-30. Patents costs consisting of filing and legal fees incurred are initially recorded at cost. Patents are amortized over the legal life of the patent or their estimated useful lives, using the straight-line method. Certain patents are in the legal application process and therefore are not currently being amortized. Impairment of long-lived assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on its reviews, management determined that its cryptocurrency mining equipment and related improvements were impaired by a total of $29.2 million based upon an assessment as of December 31, 2018, including consideration of the decline in bitcoin values which occurred commencing in late December 2017 and continued through December 31, 2018. Intangible assets acquired in the Tess business combination consist primarily of in-process research and development (“IPR&D”) assets. The value attributable to IPR&D projects at the time of acquisition is capitalized as an indefinite-lived intangible asset and tested for impairment until the project is completed or abandoned. Upon completion of the project, the indefinite-lived intangible asset will be accounted for as a finite-lived intangible asset and amortized on a straight-line basis over its estimated useful life. If the project is abandoned, the indefinite-lived intangible asset will be charged to expense. During the year ended December 31, 2018, management determined that its intangible assets related to the Tess Investment were impaired and recorded an impairment charge of $1.3 million. The Company made the decision, effective as of December 31, 2019 not to pursue its RiotX / Logical Brokerage cryptocurrency exchange development plan, and as of December 31, 2019 recorded an impairment of intangible assets acquired of approximately $0.7 million. Deferred tax liability Due to certain acquisitions, temporary differences between the book fair value and the tax basis of the indefinite life intangible assets and depreciable property and equipment were recorded. The Company recognized a $0.1 million deferred tax liability related to its Logical Brokerage acquisition during the year ended December 31, 2018. Subsequently, due to the Company’s decision not to pursue its Logical Brokerage business and the impairment and depreciation of the Kairos property and equipment, the Company recorded a $0.1 million and $0.7 million income tax benefit during the years ended December 31, 2019 and 2018, respectively, from the reduction of its existing deferred tax liability related to its acquisitions. The following is a rollforward of the Company’s deferred tax liability from January 1, 2018 to December 31, 2019: December 31, 2019 December 31, 2018 Beginning Balance $ 143 $ 699 Deferred tax liability recorded on the Logical Brokerage acquisition — 143 Impairment and depreciation on the Kairos acquisition — (699 ) Abandonment of Logical Brokerage (143 ) — Ending Balance $ — $ 143 Sequencing On January 28, 2019, the Company adopted a sequencing policy under Accounting Standards Codification (“ASC”) 815-40-35 Derivatives and Hedging Notes payable fair value option As described further in Note 10 - Notes and Other Obligations, As of December 31, 2019, all of the Notes were converted into 1,813,500 shares of the Company’s common stock valued at their estimated fair value at the time of conversion totaling approximately $10.2 million. Warrant liability The Company issued Warrants to purchase 1,908,144 shares of its common stock in connection with the Notes issued to the Investors in January 2019, and recorded these outstanding Warrants as a liability at fair value utilizing a Monte Carlo simulation model. This liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company's consolidated statements of operations. As of June 25, 2019, the Company’s Notes had been converted in their entirety and the warrant liability was revalued and reclassified to equity, because the Warrants are no longer subject to the Company’s sequencing policy as described above. Leases Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements under ASC Topic 840. Revenue recognition Cryptocurrency mining: The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Cost of revenue The Company's cost of revenue consists primarily of direct production costs related to mining operations, including mining pool fees, rent and utilities, but excluding depreciation and amortization, which are separately stated in the Company’s consolidated statements of operations. Business combinations The Company applies the provisions of ASC 805 in the accounting for acquisitions. ASC 805 requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately apply preliminary value to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include; future expected cash flows from product sales; customer contracts and acquired technologies; expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Income taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. ASC Topic 740, Income Taxes, (“ASC 740”), also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. Stock-based compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. These options generally vest on the grant date or over a one- year period. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Effective January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by Accounting Standards Update (“ASU”) 2016-09. Ultimately, the actual expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures. Loss per share Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes its unvested restricted shares and escrow shares from the net loss per share calculation. The escrow shares are excluded because of related contingencies and including them would result in anti-dilution. Since the Company has only incurred losses, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at December 31, 2019 and 2018 because their inclusion would be anti-dilutive are as follows: December 31, 2019 2018 Warrants to purchase common stock 3,574,257 1,671,113 Options to purchase common stock 12,000 62,000 Escrow shares 200,000 200,000 Unvested restricted stock awards 1,524,499 95,939 Convertible Series B preferred shares 4,199 13,000 Total 5,314,955 2,042,052 Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer. We currently operate in one segment surrounding our cryptocurrency mining operation. Subsequent events The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued. See Note 17. Recently issued and adopted accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements properly reflect the change. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases Leases In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. The Company adopted on January 1, 2020 and its adoption did not have any impact on the Company’s consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4. Acquisitions Asset Purchase Agreement with Prive Technologies LLC On February 21, 2018, the Company and Kairos, completed an asset purchase under an agreement (the “Prive Purchase Agreement”) with Prive on behalf of certain persons and entities who owned certain cryptocurrency mining machines and related operating equipment (the “Prive Equipment”). Pursuant to the Prive Purchase Agreement, the aggregate consideration for the Prive Equipment consisted of (i) $11.0 million and (ii) 1,000,000 shares of the Company’s common stock (the “Prive Shares”). Upon closing of the transaction, and pursuant to the terms of the Prive Purchase Agreement, Kairos became the owner of the Prive Equipment used for the mining of cryptocurrency, including, but not limited to, 3,800 Bitmain AntMiner S9s. On February 21, 2018, the Prive Equipment was recorded for a purchase price of approximately $19.5 million, consisting mainly of cash of $11.0 million and 800,000 shares of the Company’s common stock valued at $10.60 per share (excluding 200,000 shares of common stock currently held in escrow). The purchase price for the miners was recorded as follow (in thousands): Cash consideration $ 11,000 Fair value of common stock 8,480 Other expenses 2 Total $ 19,482 The 200,000 shares held in escrow (the “Escrow Shares”) were deposited into an escrow account with Corporate Stock Transfer, Inc., as escrow agent (the “Escrow Agent”), pursuant to an escrow agreement (the “Escrow Agreement”). Certificates representing the Escrow Shares were deposited and recorded with the Escrow Agent to be held in escrow and not be transferred, pledged or hypothecated except as provided in the Escrow Agreement. No value was assigned to the Escrow Shares at the time of the acquisition as they are contingent consideration. The Escrow Shares will be released to the Sellers upon the Company generating Net Cash Flow (as defined in the Prive Purchase Agreement) of at least $10.0 million from the equipment. If the Escrow Shares are not released to the Sellers on or before the two-year anniversary (February 2020) of the Prive Purchase Agreement, the Escrow Shares shall be returned to the Company for cancellation. As of December 31, 2019 and 2018, no escrow shares have been released based upon not achieving required net cash flow (See Note 17) . Under the guidance of ASC 360, Impairment or Disposal of Long-lived Assets, a long-lived asset or asset group (including intangibles) will be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Asset Purchase Agreement with Blockchain Mining Supply & Services Ltd. On February 21, 2018, the Company completed an asset purchase under an agreement (the “BMSS Purchase Agreement”) with BMSS which owned 3,000 AntMiner S9 bitcoin mining machines (the “BMSS Equipment”). Pursuant to the BMSS Purchase Agreement, the Company purchased the BMSS Equipment for aggregate consideration of $8.5 million. On February 21, 2018, the BMSS Equipment was recorded for purchase price of $8.5 million paid or payable in cash. $7.0 million of the purchase price was paid at closing and $1.5 million was payable within six-months, as further defined in the BMSS Purchase Agreement. On August 21, 2018, the Company and BMSS entered into a waiver letter, amending the BMSS Purchase Agreement (the “Waiver”) whereby the Company and BMSS agreed to waive any and all past due amounts payable by the Company to BMSS pursuant to Section 2(b)(ii) of the BMSS Purchase Agreement. Pursuant to the Waiver, the Company agreed to pay to BMSS the remaining $1.5 million in monthly installments plus accrued and unpaid interest calculated at a rate equal to 10% per year. In addition to the foregoing, the Company agreed to issue to BMSS 50,000 shares of the Company’s restricted common stock in connection with the Waiver within seven days of the execution of the Waiver. In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering. During the year ended December 31, 2018, a total of $0.3 million in payments were made against the $1.5 million deferred price and the Company recorded a loss of approximately $0.3 million related to the computed value of the modification of the BMSS deferred purchase price which was recorded as a loss on extinguishment of debt in connection with the Waiver. All required payments under the amended BMSS agreements have not been timely made and the Company and BMSS are currently discussing plans to resolve. Under the guidance of ASC 360, Impairment or Disposal of Long-lived Assets, a long-lived asset or asset group (including intangibles) will be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Based upon the significant decline in the price of bitcoin during the year ended December 31, 2018 and the decline in projected cash flows over the life of the miners, the Company performed an undiscounted cash flow test to determine if the miners were impaired. The undiscounted cash flows were less than the carrying amount of the BMSS Equipment and therefore, the carrying amount of the assets were compared to the fair value of the miners, and the Company determined that there were impairment charges to be recorded on the miners purchased from BMSS. Impairment charges for the year ended December 31, 2018 totaled approximately $6.7 million. Acquisition of Logical Brokerage Corp. On March 26, 2018, the Company entered into and closed a stock purchase agreement (the “Logical Brokerage Purchase Agreement”) between the Company and Mark Bradley Fisher (the “Logical Brokerage Seller”). Pursuant to the Logical Brokerage Purchase Agreement, the Company purchased from the Logical Brokerage Seller 9.25 shares of Logical Brokerage, representing 92.5% of the outstanding capital stock of Logical Brokerage, for a cash purchase price of $0.6 million. Logical Brokerage, a futures introducing broker headquartered in Miami, Florida is registered with the CFTC and is a member of the NFA. The Company considered the provisions of FASB ASU 2017-01, Business Combinations (Topic 805), and has determined that the Logical Brokerage Purchase Agreement should be accounted for as an acquisition of assets since the majority of the fair value of the assets acquired was concentrated in a single identifiable asset (CFTC License), and the acquired assets did not have outputs or employees. The asset recorded at the purchase price of $0.6 million, net of cash received with the asset acquisition of $0.1 million, plus any transaction costs. The CFTC license is included as intangible rights acquired, within the non-current asset section of the Company’s consolidated balance sheets. As a result of an asset acquisition through the acquisition of ownership, temporary differences may arise due to differences between the tax bases of assets acquired and liabilities assumed (determined by tax law) and the values of those assets and liabilities recognized for financial statement purposes (determined based on the provisions of ASC 805). ASC 740 requires an entity to recognize deferred tax assets and liabilities for those temporary differences and acquired operating loss or other tax credit carryforwards that arise as a result of the purchase of an asset. However, deferred taxes are not recognized for differences related to nondeductible goodwill, leveraged leases, and certain other differences for which there are specific exceptions. The deferred tax liability represents the difference between the book basis and the tax basis of Riot Blockchain’s intangible assets, calculated using a 25.6% effective tax rate. On March 26, 2018, the CFTC license was recorded as follows (in thousands): Cash, net of cash acquired $ 500 Deferred tax liability 143 Non-controlling interest 40 Legal costs 17 Intangible rights acquired $ 700 In connection with the closing of the Logical Brokerage Purchase Agreement, on March 26, 2018, the Company entered into a stockholders’ agreement (the “Stockholders Agreement”) with Logical Brokerage and Mark Bradley Fisher. The Stockholders Agreement provides, among other things, that, subject to certain exceptions, the Logical Brokerage Seller may not transfer any of his remaining shares of Logical Brokerage without the written consent of the Company. The Stockholders Agreement also provides that, subject to certain exceptions, in the event the Company proposes to transfer 35% or more of Logical Brokerage’s total issued and outstanding capital stock, the Logical Brokerage Seller will be entitled to certain “tag-along” rights. The Company made the decision, effective as of December 31, 2019 not to pursue its RiotX / Logical Brokerage business development plan. Under the guidance of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, the Company determined that the discontinuation of RiotX / Logical Brokerage did not represent a strategic shift that would have a major effect on the Company’s operations and financial results. The Company accounted for the discontinuation as an impairment of an intangible asset acquired, and as of December 31, 2019, recorded an impairment expense of approximately $0.7 million and recorded an income tax benefit of approximately $0.1 million, which are reflected on the accompanying consolidated statements of operations. Kairos Global Technology, Inc. Acquisition On November 3, 2017, the Company closed on a business combination share exchange agreement (the “Agreement”) with Kairos Global Technology, Inc., a Nevada corporation. Under the Agreement, the shareholders of Kairos agreed to exchange all outstanding shares of Kairos' common stock to the Company and the Company agreed to issue an aggregate of One Million Seven Hundred Fifty Thousand and One (1,750,001) newly-designated shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”) which are convertible into an aggregate of One Million Seven Hundred Fifty Thousand and One (1,750,001) shares of the Company's common stock, no par value per share (the transaction, the “Kairos Transaction”) to such shareholders. See Note 10 for further information about the Series B Preferred Stock. The 1,750,001 Series B Preferred Shares were valued at approximately $5.31 per share based upon the then value of the Company's common shares, discounted based upon restrictions associated with the preferred shares, for a total value of approximately $9.3 million. The shareholders of Kairos also will receive a royalty to be paid from cash flow generated from operations, as defined in the Agreement, which shall entitle such shareholders to receive 40% of the gross profits generated on a monthly basis until they have received a total of $1.0 million, at which point the royalty is extinguished. For financial reporting purposes the royalty liability will be recorded as the contingency is resolved and obligation determined. To date no royalty amounts have been achieved. Kairos owned certain computer equipment and other assets used for the mining of cryptocurrency, specifically miners consisting of 700 AntMiner S9s and 500 AntMiner L3s, all manufactured by Bitmain. The acquisition of Kairos was accounted for as a business combination in accordance with the provisions of ASC 805. We have completed an allocation of the purchase consideration. The following is the allocation of the purchase consideration (in thousands): Cash $ 1,131 Equipment 10,333 Accounts payable and accrued expenses (46 ) Deferred income tax liability (2,122 ) Purchase price $ 9,296 Based upon the significant decline in the price of bitcoin during the year ended December 31, 2018 and the decline in projected cash flows over the life of the miners, the Company performed an undiscounted cash flow test to determine if the miners were impaired. The undiscounted cash flows were less than the carrying amount of the miners and therefore, the carrying amount of the assets were compared to the fair value of the miners, and the Company determined that there were impairment charges to be recorded on the miners purchased from Kairos. Impairment charges for the years ended December 31, 2019 and 2018, totaled approximately nil and $3.0 million, respectively. |
Cryptocurrencies
Cryptocurrencies | 12 Months Ended |
Dec. 31, 2019 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Cryptocurrencies | Note 5. Cryptocurrencies The following table presents additional information about cryptocurrencies (in thousands): December 31, 2019 December 31, 2018 Beginning balance $ 707 $ 200 Revenue recognized from cryptocurrencies mined 6,741 7,749 Mining pool operating fees (135 ) (155 ) Purchase of cryptocurrencies — 5,625 Purchase of miner equipment with cryptocurrencies (99 ) — Sale / trade of cryptocurrencies (3,196 ) (9,237 ) Realized gain on sale of cryptocurrencies 665 26 Impairment of cryptocurrencies (844 ) (3,501 ) Ending balance $ 3,839 $ 707 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6. Fair Value Measurements On January 28, 2019 the Company issued the notes and warrants which were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other expense on the consolidated statements of operations and disclosed in the unaudited condensed interim consolidated financial statements. As of June 27, 2019, in accordance with their original terms, all of the Notes were converted into a total of 1,813,500 shares of the Company’s common stock by their holders. See Note 10. A summary of weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s Notes and Warrants at the issuance date of January 28, 2019 and during the conversion of the Notes as of June 27, 2019, are as follows: Senior Secured Promissory Notes January 28, 2019 As of June 27, 2019 Dividend yield 0% 0% Expected price volatility 119.5% 122.2%-127.1% Risk free interest rate 2.60% 2.07%-2.44% Expected term 1 year - Warrants January 28, 2019 As of June 27, 2019 Dividend yield 0% 0% Expected price volatility 111.6% 119.9%-120.5% Risk free interest rate 2.58% 2.23%-2.58% Expected term 5 years 4 years, 10 months There were no assets or liabilities measured at fair value during the year ended December 31, 2018. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2019 (in thousands): Convertible Notes Warrant Liability Issuance of senior secured convertible notes $ 6,330 $ — Issuance of warrants in connection with convertible notes — 2,570 Balance at January 28, 2019 6,330 2,570 Change in fair value 3,896 2,869 Conversion of convertible notes to common stock (10,226 ) — Reclassification of warrant liability to equity — (5,439 ) Balance at December 31, 2019 $ — $ — |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 7. Property and Equipment Property and equipment consisted of the following as of December 31, 2019 and 2018 (in thousands): December 31, 2019 December 31, 2018 Miners $ 5,010 $ — Leasehold improvements 38 — Office and computer equipment 103 93 Total cost of property and equipment 5,151 93 Less accumulated depreciation (100 ) (67 ) Property and equipment, net $ 5,051 $ 26 There were no impairment charges related to miners for the year ended December 31, 2019. The breakdown of the impairment charges recorded for the year ended December 31, 2018 are as follows (in thousands): December 31, 2018 Prive miners $ 17,691 BMSS miners 6,702 Kairos miners 3,026 Leasehold improvements 1,819 Total impairment charge $ 29,238 During December 2019, the Company purchased 4,000 next generation Bitmain S17 Pro Antminers for approximately $6.3 million from Bitmain. In December 2019, 3,000 miners had been received at the Company’s Oklahoma City facility but not yet placed in service. The remaining 1,000 miners were received at its Oklahoma City facility during February 2020 and the related $1.4 million prepayment is recorded as a deposit on the accompanying consolidated balance sheet. Depreciation and amortization expense totaled approximately $0.1 million (including $0.09 million of patent amortization) and $5.2 million, for the years ended December 31, 2019 and 2018, respectively. Depreciation is computed on the straight-line basis for the periods the assets are in service. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Investments | Note 8. Investments Coinsquare In September 2017, the Company acquired a minority interest for $3.0 million in Coinsquare, which operates a digital crypto currency exchange platform in Canada. During February 2018, the Company invested an additional $6.4 million to acquire additional common stock of Coinsquare. These additional investments resulted in a current ownership in Coinsquare by the Company of approximately 11.7% ownership in Coinsquare on a fully diluted basis. The Company has evaluated the guidance in ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, and elected to account for the investment using the measurement alternative as the equity securities are without a readily determinable fair value and do not give the Company significant influence over Coinsquare. The measurement alternative at cost, less any impairment, plus or minus changes resulting from observable price changes. As of December 31, 2019 and 2018, the Company considered the cost of the investment to not exceed the fair value of the investment and did not observe price changes. Tess In 2017, the Company acquired approximately 52% of Tess which is developing blockchain solutions for telecommunications companies. Under the terms of the Purchase Agreement (the “Purchase Agreement”) the Company invested cash of approximately $0.3 million in Tess and issued 75,000 shares of restricted Common Stock to Tess in exchange for 2,708,333 shares of common stock of Tess. The 75,000 shares of Common Stock were valued at the $8.49 market price as of October 20, 2017 for a total of approximately $0.6 million. Accordingly, Tess became a majority-owned subsidiary of the Company. As part of the transaction, the Company and Tess entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement to register the resale of 25,000 shares (of 75,000 shares) of Common Stock issued to Tess. The 2017 acquisition of Tess was accounted for as a business combination in accordance with the provisions of ASC 805. The allocation of purchase consideration includes $0.7 million as in-process research and development (IPR&D) related to the TessPay project. As of December 31, 2018, the Company had $0.6 million of intangibles related to Tess’s internal technology platform. In January 2018, following the execution of a non-binding letter of intent as of December 11, 2017, the parties executed a definitive agreement providing that Tess agreed to merge with Cresval Capital Corp. (“Cresval”) (TSX-V: CRV). Assuming closing conditions are met, upon closing of the anticipated merger, Tess would be publicly traded on the TSX Venture Exchange (the “TSXV”). During the year ended December 31, 2018, Tess received approximately $0.5 million from the sale of shares of Riot Blockchain common stock held by Tess, which has been recorded as a credit to the consolidated Common Stock of the Company. Additionally, Tess issued approximately 189,000 of its common shares in exchange for cash proceeds of approximately $220,000 thereby reducing the investment percentage held by the Company from 52.01% to 50.2% as of December 31, 2018. Due to the termination of the Cresval Agreement on February 15, 2019, the Company recorded an impairment loss of $2.1 million consisting of $0.7 million of in process research and development costs, $0.6 million related to capitalized costs of Tess’s internal technology platform and $0.8 million of goodwill during the year ended December 31, 2018. On April 10, 2019, Tess closed on a funding agreement under which approximately 23.8 million shares of Tess were issued for CAD $1.2 million. As a result of this and subsequent funding’s, the Company’s ownership in Tess was reduced to approximately 8.8%. Subsequently Tess was no longer being consolidated in the Company’s consolidated financial statements. As of December 31, 2019, the Company evaluated its remaining interest in Tess under the guidance of ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, and determined it should remeasure its retained interest at fair value upon deconsolidation to establish a new cost basis. As of December 31, 2019, the fair value of the Tess shares owned by the Company is approximately $0.1 million, calculated based upon the April 10, 2019 funding price as follows (in thousands except for share and per share amounts): April 10, 2019 Tess shares held by Riot Blockchain, Inc. 2,708,333 Per share fair value $ 0.03 Fair value of Tess shares held by Riot Blockchain, Inc. $ 90 The Company accounts for deconsolidation of subsidiaries in which it loses controlling interest in the financial interest of the subsidiary in accordance with Accounting Standards Codification (“ASC”) 810-10-40 – “Consolidation”. The deconsolidation of Tess resulted in a gain of approximately $1.1 million calculated as follows (in thousands) on the date of deconsolidation: Current assets $ 130 Less: Accounts payable 761 Accrued expenses 275 Convertible notes 1,696 Net liabilities (2,602 ) Non-controlling interest share 1,553 Sub-total (1,048 ) Less: fair value of shares owned by Riot Blockchain 90 Gain on deconsolidation of Tess $ (1,139 ) Verady During November 2017, the Company made a $0.2 million investment in a convertible note as part of a series of notes issued by Verady, LLC (“Verady”). The notes are unsecured, subordinated to other approved liabilities, mature December 31, 2022, bear interest at 6%, unless previously repaid or converted and contain other conditions and restrictions, all as defined under the subscription documents. The Verady convertible note was previously recorded at fair value (which approximates cost). The conversion rate of the convertible note is defined based upon the possible occurrence of certain defined events which may or may not occur. The Company has no other relationship or rights associated with Verady. Founded in 2016, Verady is privately held and recently launched VeraNet, a decentralized network of financial reporting and accounting tools targeted to the needs of the cryptocurrency community. During the year ended December 31, 2019, Verady completed a financing that under the terms of the Company’s original investment, resulted in the automatic conversion of the Company’s convertible note plus accrued interest totaling approximately $0.2 million, into equity of Verady. The automatic conversion resulted in a current ownership in Verady by the Company of approximately 3.2% on a fully diluted basis. The Company has evaluated the guidance in ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, and elected to account for the investment using the measurement alternative as the equity securities are without a readily determinable fair value and do not give the Company significant influence over Verady. The investment is valued at cost, less any impairment, plus or minus changes resulting from observable price changes. During the year ended December 31, 2019, there were no price changes in orderly transactions for identical or similar investments in Verady. |
Long-Term Assets
Long-Term Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Long-Term Assets | Note 9. Long-Term Assets Intangible rights acquired As of December 31, 2019, intangible rights acquired totaled zero. As of December 31, 2018, intangible rights acquired totaled $0.7 million, which were associated with the Company’s Logical Brokerage acquisition in March 2018. The Company made the decision, effective as of December 31, 2019 not to pursue its RiotX / Logical Brokerage business development plan. See Note 4. Deposits on equipment During December 2019, the Company purchased 1,000 next generation Bitmain S17 Pro Antminers from Bitmain for approximately $1.4 million. As of December 31, 2019, the Company has not yet received the miners and recorded the $1.4 million as a deposit on the accompanying consolidated balance sheet. Patents The Company’s intangible assets with finite lives consist of its patents pertaining to its legacy animal health business, which have been out-licensed. For all periods presented, all of the Company’s identifiable intangible assets were subject to amortization. The carrying amounts related to acquired intangible assets as of December 31, 2019 and 2018 were as follows (in thousands): December 31, 2019 December 31, 2018 Patents $ 1,157 $ 1,119 Accumulated amortization (698 ) (612 ) Patents, net 459 507 Convertible note investment — 200 Accrued interest convertible note — — Convertible note — 200 Total $ 459 $ 707 The following table represents the total estimated amortization of intangible assets for the five succeeding years and thereafter (in thousands): For the year ended December 31, Estimated amortization expense 2020 $ 86 2021 86 2022 86 2023 86 2024 and thereafter 115 Total $ 459 The Company capitalizes legal costs and filing fees associated with obtaining patents on its new discoveries. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life using the straight-line method. Amortization expense totaled $86,000 and $62,000 for the years ended December 31, 2019 and 2018, respectively. The Company tests intangible assets with finite lives upon significant changes in the Company’s business environment. The testing resulted in no patent impairment charges during the years ended December 31, 2019 and 2018. |
Notes, warrants and other oblig
Notes, warrants and other obligations | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes, Warrants and Other Obligations | Note 10. Notes, Warrants and Other Obligations Senior Secured Convertible Promissory Notes and Warrants On January 28, 2019, in connection with a private financing (the “Private Financing”), the Company issued the Notes, to investors (collectively, the “Investors” and each an “Investor”) for an aggregate principal amount of approximately $3.4 million along with Warrants for the purchase of and equal value of shares of the Company’s common stock in exchange for $3.0 million of private financing. The Notes were convertible into shares of the Company’s common stock at any time after the issuance date, provided that at no time would the Company be required to issue shares in excess of the aggregate number of shares of its commons stock outstanding. The Notes were set to mature twelve months from date of issuance and accrue interest at a rate of 8% per annum, with twelve months of interest guaranteed. The Notes were subject to prepayment penalties, default conditions and other terms and conditions, as further defined in the Financing Agreements (the “Financing Agreements”) as disclosed in the Company’s current report on Form 8-K filed with the SEC on February 1, 2019. As additional consideration for the investment, the Company issued a total of 150,000 restricted common shares to the Investors. The Notes were convertible into shares of the common stock of the Company at a price equal to the lower of $2.00 or 80% of the lowest volume-weighted adjusted price of shares of the Company’s common stock in the twenty trading days prior to the conversion date, subject to adjustments in certain cases as defined in the Financing Agreements. Provided, however, that according to the Notes, the cumulative shares of the Company’s common stock issuable upon conversion of the Notes cannot exceed 19.99% of the total number of the Company’s outstanding common stock as of January 28, 2019. Pursuant to the Financing Agreements between the Company and the Investors, the Company granted the Investors a security interest in its assets to secure repayment of the Notes. Further to the Financing Agreements, the Company also reserved a number of shares of its common stock equal to 300% of the total number of shares issuable upon full conversion of the Notes. Due to the complexity and number of embedded features within the Notes and as permitted under applicable accounting guidance, the Company elected to account for the Notes and all the embedded features under the fair value option, which records the Notes at fair value rather than at historical cost, with changes in fair value recorded in the condensed interim consolidated statements of operations. Direct costs and fees incurred to issue the Notes were recognized in earnings as incurred and were not deferred. On the initial measurement date of January 28, 2019, the fair value of the Notes was estimated at approximately $6.3 million. Upfront costs and fees related to items for which the fair value option was elected were approximately $0.4 million and were recorded as a component of other expenses for the year ended December 31, 2019. In connection with the Notes, the Company entered into registration rights agreement with the Investors. The Company filed a registration statement with the SEC covering the equity rights and any other shares issuable in connection with the Notes on March 14, 2019 and the registration statement was declared effective on April 29, 2019. During the year ended December 31, 2019, holders of the Notes issued on January 28, 2019, converted 100% of the Notes into 1,813,500 shares of the Company’s common stock. The aggregate fair value of the Notes converted during the year ended December 31, 2019 was $10.2 million, an increase in fair value of $3.9 million, which is reflected on the consolidated statements of operations for the year ended December 31, 2019, as change in fair value of convertible note. Accordingly, having satisfied the Notes in full, the Company’s obligations under the Notes have been cancelled. In connection with this Private Financing, the Company also issued Warrants to the Investors to acquire up to an aggregate of 1,908,144 shares of the Company’s common stock at an exercise price of $1.94 per share. The Warrants are exercisable by the Investors beginning on July 29, 2019, through the fifth year anniversary of the effective date of the Private Financing; provided, however, each Investor’s beneficial ownership of the Company’s common stock may not exceed 4.99% of the total outstanding shares of the Company’s common stock without first providing sixty days’ notice to the Company, and, in any event, the ownership, including beneficial ownership, of shares of the Company’s common stock by each of the Investors, shall not exceed 9.99% of the total outstanding shares of our common stock. Tess Convertible Note As of March 28, 2018, Tess, a subsidiary of the Company, entered into a note purchase agreement with a private investor under which a convertible promissory note was issued by Tess in the principal amount USD $1.7 million (CAD $2.2 million) (the “Tess Convertible Note”). The Tess Convertible Note bears interest at 5%, is unsecured and due in 2021. During the year ended December 31, 2019, the Company’s ownership in Tess was reduced to 8.8% and as a result, Tess is no longer consolidated in the Company’s consolidated financial statements. BMSS and Other Liabilities Settlements On February 21, 2018, the Company completed an asset purchase under an agreement (the “BMSS Purchase Agreement”) with BMSS, to purchase the 3,000 AntMiner S9 bitcoin mining machines owned by BMSS Equipment (the “BMSS Equipment”). Pursuant to the BMSS Purchase Agreement, the Company purchased the BMSS Equipment for aggregate consideration of $8.5 million. As of June 27, 2019, in connection with the BMSS agreement, the Company owed approximately $1.3 million of principal and interest and the Company and BMSS agreed to a one-time settlement payment totaling $1.0 million. The remaining $0.4 million was recorded as a gain on extinguishment of notes and interest, and included in other income in the accompanying consolidated statement of operations for the year ended December 31, 2019. During the year ended December 31, 2019, the Company reached agreements with certain creditors to settle the amounts of outstanding liabilities at a discount. The computed value of the modifications as compared to the liability balances were recorded as other income from the gains on extinguishment of debt. The liabilities settled excluding BMSS, during the period totaled approximately $2.1 million in exchange for cash payments of $1.6 million, resulting in a gain of approximately $0.5 million recognized during the year ended December 31, 2019. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11. Stockholders' Equity Preferred Stock Series B – Preferred Stock On November 3, 2017, the Company designated 1,750,001 shares of preferred stock as “0% Series B Convertible Preferred Stock” in connection with the filing of the Certificate of Designation with the Secretary of State of the State of Nevada. The shares of Series B Preferred Stock are convertible into shares of common stock based on a conversion calculation equal to the stated value of the Series B Preferred Stock, plus all accrued and unpaid dividends, if any, on such Series B Preferred Stock, as of such date of determination, divided by the conversion price. The stated value of each share of Series B Preferred Stock is $6.80 and the initial conversion price is $6.80 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. The holders of Series B Preferred Stock are entitled to receive dividends if and when declared by the Company's board of directors. The Series B Preferred Stock will participate on an “as converted” basis, with all dividends declared on the Company's common stock. Such dividends will be paid by the Company out of funds legally available therefor, payable, subject to the conditions and other terms hereof, in cash on the stated value of such Series B Preferred Stock. The Company is prohibited from effecting a conversion of the Series B Preferred Stock to the extent that, as a result of such conversion, the holder would beneficially own more than 4.99% percent of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Series B Preferred Stock, which beneficial ownership limitation may be increased by the holder up to, but not exceeding, 9.99% percent. Each holder is entitled to vote on all matters submitted to stockholders of the Company, and will have the number of votes equal to the number of shares of common stock issuable upon conversion of such holder's Series B Preferred Stock. The Series B Preferred Stock contains a blocker pursuant to which, if the Company has not obtained the approval of its shareholders in accordance with NASDAQ Listing Rule 5635(d), then the Company may not issue upon conversion of the Series B Preferred Stock a number of shares of common stock, which, when aggregated with any other shares of common stock underlying the Series B Preferred Stock issued pursuant to the Agreement would exceed 19.99% of the shares of common stock issued and outstanding as of the date of the Agreement, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the date of the Agreement. On December 21, 2017, the Company amended the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of 0% Series B Convertible Preferred Stock (the “Amendment”) in order to remove the voting rights of the Series B Preferred Stock. During the year ended December 31, 2018, holders of 1,353,505 Series B Preferred Shares elected to convert those shares to 1,353,505 shares of the Company’s common stock under their original terms. On November 30, 2018, the Company canceled 91,496 shares of its Series B Preferred Stock with a value at issuance of $5.31 per share, or approximately $0.5 million. As of December 31, 2018, 13,000 shares of Series B Preferred Stock were outstanding. During the year ended December 31, 2019, 8,801 shares of the Company’s Series B preferred stock were converted into 8,801 shares of the Company’s common stock. As of December 31, 2019, 4,199 shares of Series B Preferred Stock were outstanding. 2019 Transactions Common Stock As additional consideration for the January 2019 Private Financing, the Company issued a total of 150,000 restricted common shares to three investors at an average fair value of $1.70 per share. See Note 10. At-the-Market Equity Offering The Company entered into a Sales Agreement with H.C. Wainwright dated May 24, 2019, pursuant to which the Company may, from time to time, sell up to $100 million in shares of the Company’s common stock through H. C. Wainwright, as the Company’s sales agent and/or principal, in the ATM Offering. All sales of the shares have been made pursuant to an effective shelf registration statement on Form S-3 filed with the SEC. The Company pays H.C. Wainwright a commission of approximately 3.0% of the aggregate gross proceeds the Company received from all sales of the Company's common stock under the Sales Agreement. The Company received net proceeds on sales of 8,351,762 shares of common stock under the Sales Agreement of approximately $23.8 million at a weighted average sales price of $2.97 during the year ended December 31, 2019. Restricted Common Stock During the year ended December 31, 2019, 239,751 shares of common stock were issued, related to past fully vested restricted stock rights previously granted under the Company’s 2017 Equity Incentive Plan. During the year ended December 31, 2019, under the Company’s 2019 Equity Incentive Plan, 1,493,832 restricted stock rights were awarded to advisory board members and employees of the Company, and under the Company’s 2017 Equity Incentive Plan, 48,500 restricted stock rights were awarded to a consultant and advisory board members. The restricted stock rights have a grant date fair value of approximately $2.2 million or $1.41 per share, and vest over a period of three months to two years. 2018 Transactions Common Stock On January 4, 2018, the Company issued 19,533 shares of common stock upon the exercise of an employee stock-option. On January 25, 2018, the Company issued 2,754 shares of common stock at fair value for consulting services at $7.26 per share. On February 14, 2018, the Company issued 100,000 shares of common stock for the exercise of 100,000 warrants issued in March 2017. The Company received $350,000 from the exercise of the warrants. On April 20, 2018, the Company issued 18,000 shares of the Company’s common stock for consulting services at an average fair value of $14.33 per share. During August 2018, the Company issued 50,000 shares of the Company’s common stock at an average fair value of $5.31 per share, as consideration for the Waiver under the BMSS Purchase Agreement. See Note 4. On December 18, 2018, the Company issued 22,523 shares of common stock at a fair value of $5.55 per share, related to a settlement fee for consulting services. During the year ended December 31, 2018, holders of 1,353,505 Series B preferred shares elected to convert those shares to 1,353,505 shares of the Company’s common stock under its original terms. During the year ended December 31, 2018, warrants to purchase 13,009 shares of common stock were exercised on a cashless basis for 3,215 shares of common stock. Common Stock issued in Asset Acquisition On February 21, 2018, the Company issued 1,000,000 shares of common stock at fair value in connection with the Prive asset purchase agreement, with 200,000 of these shares deposited into an escrow account with Corporate Stock Transfer, Inc. Restricted Common Stock During the year ended December 31, 2018, 327,416 shares of common stock related to fully vested shares of restricted common stock were delivered for services performed. |
Stock Options, Warrants and Res
Stock Options, Warrants and Restricted Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options, Warrants and Restricted Common Stock | Note 12. Stock Options, Warrants and Restricted Common Stock During the year ended December 31, 2019, the Company’s shareholders approved its 2019 Equity Incentive Plan (the “2019 Plan”), which reserves a total of 3,600,000 shares of the Company’s common stock plus the remaining shares reserved under the Company’s 2017 Equity Incentive Plan. On December 5, 2019 the Company registered 3,930,603 shares of common stock under the 2019 Plan. The Company currently provides stock-based compensation to employees, directors and consultants, under the Company's 2019 Plan, as approved by the Company's shareholders and non-qualified options and warrants issued outside of the Plan. Stock-based Compensation The Company’s stock-based compensation expenses recognized during the years ended December 31, 2019 and 2018, were attributable to selling, general and administrative expenses, which are included in the accompanying consolidated statements of operations. The Company recognized total stock-based compensation expense during the years ended December 31, 2019 and 2018, from the following categories (in thousands): Years Ended December 31, 2019 2018 Restricted stock awards under the Plan $ 687 $ 3,972 Stock option awards under the Plan 58 688 Total stock-based compensation $ 745 $ 4,660 Restricted common stock awards A summary of the Company's restricted stock activity in the years ended December 31, 2019 and 2018 is as follows: Number of Shares Weighted Average Grant-Date Unvested at January 1, 2018 496,152 $ 5.97 Granted 431,000 $ 10.46 Vested (530,065 ) $ 7.61 Forfeited (301,148 ) $ 7.68 Unvested at December 31, 2018 95,939 $ 12.49 Vested (58,772 ) $ 7.66 Granted 1,542,332 $ 1.41 Forfeited (55,000 ) $ 14.95 Unvested at December 31, 2019 1,524,499 $ 1.37 The value of restricted common stock grants are measured based on their fair market value on the date of grant and amortized over their respective vesting periods. As of December 31, 2019, there was approximately $1.8 million of unrecognized compensation cost related to unvested restricted common stock rights, which is expected to be recognized over a remaining weighted-average vesting period of approximately three months. Stock Incentive Plan Options The Company estimates the fair value of the share-based option awards on the date of grant using the Black-Scholes option-pricing model (the “Black-Scholes model”). Using the Black-Scholes model, the value of the award that is ultimately expected to vest is recognized over the requisite service period in the statement of operations. The Company attributes compensation to expense using the straight-line single option method for all options granted. The Company's determination of the estimated fair value of share-based payment awards on the date of grant under the Plan is affected by the following variables and assumptions: • The grant date exercise price – the closing market price of the Company's common stock on the date of the grant; • Expected option term – based on historical experience with existing option holders estimated at 3-5 years; • Estimated dividend rates – based on historical and anticipated dividends over the life of the option; • Legal term of the option – grants have legal lives of 10 years; • Risk-free interest rates – with maturities that approximate the expected life of the options granted; • Calculated stock price volatility – calculated over the expected life of the options granted, which is calculated based on the daily closing price of the Company's common stock over the period commencing in mid-2017 when the Company changed its strategic focus; and • Option exercise behaviors – based on actual and projected employee stock option exercises and forfeitures. • The Company accounts for forfeitures as they occur. The Company currently provides stock-based compensation to employees, directors and consultants under the Plan. There were no stock options issued during the year ended December 31, 2019. The Company utilized assumptions in the estimation of fair value of stock-based compensation for the year ended December 31, 2018, as follows: December 31, 2018 Dividend yield 0% Expected price volatility 152% - 159% Risk free interest rate 2.49% - 2.96% Expected term 5 years A summary of stock option activity under the Plan for options to employees, officers, directors and consultants, for the years ended December 31, 2019 and 2018, is presented below: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2018 119,533 $ 9.02 Granted 62,000 $ 15.71 Exercised (19,533 ) $ 4.02 Forfeited (100,000 ) $ 10.00 Outstanding at December 31, 2018 62,000 $ 15.71 9.2 Granted — $ — Exercised — $ — Forfeited (50,000 ) $ 18.50 Outstanding at December 31, 2019 12,000 $ 4.09 3.7 $ — Exercisable at December 31, 2019 12,000 $ 4.09 3.7 $ — The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on December 31, 2019 and 2018, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders, had all option holders been able to, and in fact had, exercised their options on December 31, 2019 and 2018, respectively. As of December 31, 2018, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $58,000, which was fully amortized in the first quarter of 2019. Other common stock purchase warrants As of December 31, 2019, the Company had outstanding 3,574,257 warrants issued in connection with offerings. The following is a summary of the change in outstanding warrants during the years ended December 31, 2019 and 2018: Shares Underlying Options/Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2018 1,944,895 $ 35.06 2.7 $ 6,135,000 Issued — $ — — Exercised (113,009 ) $ 3.50 — Forfeited (160,773 ) $ 10.88 — Outstanding at December 31, 2018 1,671,113 $ 39.47 2.0 $ — Issued 1,908,144 $ 1.94 5.2 Forfeited (5,000 ) $ 7.90 — Outstanding at December 31, 2019 3,574,257 $ 19.48 2.9 $ — Exercisable at December 31, 2019 3,574,257 $ 19.48 2.9 $ — The Company issued Warrants to purchase 1,908,144 shares of its common stock with an exercise price of $1.94, in connection with the Notes issued on January 28, 2019. During the year ended December 31, 2018, 13,009 of the warrants issued in the May 2013 private offering were exercised on a cashless basis for the issuance of 3,215 shares of common stock, 100,000 warrants issued in March 2018, were exercised for cash proceeds of approximately $0.4 million and 160,773 warrants were forfeited. The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on December 31, 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders, had all option holders been able to, and in fact had, exercised their options on December 31, 2019. |
Animal Health License Agreement
Animal Health License Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Animal Health License Agreements [Abstract] | |
Animal Health License Agreements | Note 13. Animal Health License Agreements Ceva License Agreement In July 2012, the Company entered into an exclusive license agreement (the “License Agreement”) with Ceva Santé Animale S.A. (“Licensee”), under which the Company granted the Licensee an exclusive royalty-bearing license, until December 31, 2028, to the Company's intellectual property and other assets, including both (a) the Company’s patent rights and know-how, relating to recombinant single chain reproductive hormone technology for use in non-human mammals (the “Company's Animal Health Assets”) and (b) the technology licensed to the Company by Washington University in St. Louis (“WU”). The License Agreement contains termination provisions as defined in the License Agreement. Under the License Agreement, the Licensee obtained a worldwide exclusive license to develop, seek regulatory approval for and offer to sell, market, distribute, import and export luteinizing hormone ('LH') and/or follicle-stimulating hormone (“FSH”) products for bovine (cattle), equine and swine in the field of the assistance and facilitation of reproduction in bovine, equine and swine animals. The Company also granted the Licensee an option and right of first refusal to develop additional animal health products outside of the licensed field of use or any diagnostic pregnancy detection tests for non-human mammals. Under the License Agreement as of December 31, 2019, the Company would be entitled to receive future payments if Ceva achieves certain regulatory approvals as outlined in the License Agreement, summarized as follows: ● Payments, totaling up to a potential of $0.9 million in the aggregate, based on the satisfactory conclusion of conditions as defined in the License Agreement; ● Potential for payments of up to an additional $2 million for development and receipt of regulatory approval for additional licensed products; and ● Royalties, at low double-digit rates, based on sales of licensed products. The upfront license fees received from the License Agreement have been recorded as deferred revenue and are amortized over the term of the License Agreement. License fees revenue totaling a net of approximately $1.6 million commenced being amortized in July 2012. As of December 31, 2019, deferred revenue of $0.1 million has been classified as a current liability and $0.8 million has been classified as a long-term liability. The current liability represents the next twelve months' portion of the license fees revenue. For each of the years ended December 31, 2019 and 2018, approximately $0.1 million, was recorded as the amortized license fee revenue. Washington University License Agreement During 2004 WU and Riot Blockchain entered into an exclusive license agreement which grants Riot Blockchain exclusive license and right to sublicense WU's technology (as defined under the WU License Agreement) for veterinary products worldwide, except where prohibited. The term of the WU License Agreement continues until the expiration of the last of WU's patents (as defined in the WU License Agreement). Riot Blockchain has agreed to pay minimum annual royalties, creditable against future royalties and royalties payable to WU for covered product sales by Riot Blockchain carrying a mid-single digit royalty rate and for sublicense fees received by Riot Blockchain carrying a low double-digit royalty rate. No royalty payments were made during the years ended December 31, 2019 and 2018. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 14. Income taxes The components of the loss from continuing operations before income taxes for the years ended December 31, 2019 and 2018 are as follows (in thousands): For the years ended December 31, 2019 2018 Domestic $ (20,446 ) $ (56,453 ) Foreign — (4,555 ) Loss from Continuing Operations before Income Taxes $ (20,446 ) $ (61,008 ) The components of income tax benefit are as follows (in thousands): As of December 31, 2019 2018 Current: US Federal $ — $ — US State — — Foreign — — Total current benefit $ — $ — Deferred: US Federal $ 117 $ 495 US State 26 112 Foreign — 92 Total deferred benefit 143 699 Total benefit for income taxes $ 143 $ 699 The tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities at December 31, 2019 and 2018 are comprised of the following (in thousands): As of December 31, 2019 2018 Deferred income tax assets: Net operating loss carryforwards $ 43,436 $ 30,745 Research and development credit carryforwards 989 989 Stock option expense 1,095 1,384 Impairment of mining related assets and other (146 ) 8,779 Total deferred tax assets 45,374 41,897 Valuation allowance (45,374 ) (41,897 ) Net deferred tax assets — — Deferred income tax liabilities: Indefinite life intangible assets — (143 ) Net deferred tax liabilities $ — $ (143 ) The Company has approximately $168.8 million of federal and state tax Net Operating Losses (“NOL”s) that may be available to offset future taxable income, if any. The federal net operating loss carryforwards of $100.3 million, if not utilized, will expire in 2037. The federal and state net operating loss carryforwards of $20.1 million and $19.1 million generated in 2019 and 2018, respectively are subject to an 80% limitation on taxable income, do not expire and will carry forward indefinitely. Furthermore, as a result of changes in the ownership of our common stock and changes in our business operations, our ability to use our federal NOLs may be limited under Internal Revenue Code Section 382 and 383. State NOLs are subject to similar limitations in many cases. As a result, our substantial NOLs may not have any value to us. The statute of limitations for assessment by the IRS and state tax authorities is open for tax years ending December 31, 2016 through 2019, although carryforward attributes that were generated prior to tax year 2016 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in a future period. Currently, no federal or state income tax returns are under examination by the respective taxing authorities. The foreign tax returns for the years ended December 31, 2017 through 2019 are open for examination. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. In case the deferred tax assets will not be realized in future periods, the Company has provided a valuation allowance for the full amount of the deferred tax assets at December 31, 2019 and 2018. The valuation allowance increased by approximately $3.5 million during the year ended December 31, 2019. The expected tax expense (benefit) based on the U.S. federal statutory rate is reconciled with actual tax expense (benefit) as follows (in thousands): For the years ended December 31, 2019 2018 Statutory federal income tax expense (benefit) $ (4,293 ) $ (12,791 ) State taxes, net of federal tax expense (benefit) (664 ) (2,887 ) Stock compensation 1,142 174 Other 195 – Change in valuation allowance 3,477 14,805 Income taxes benefit $ (143 ) $ (699 ) The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2019 and 2018. The Company’s policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. The Company did not accrue either interest or penalties for the years ended December 31, 2019 and 2018. The Company is subject to U.S. federal income tax and primarily Oklahoma and Colorado state income tax. The Company has not been under tax examination in any jurisdiction for the years ended December 31, 2019 and 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 15. Commitments and Contingencies Commitments: Oklahoma Lease Agreement On February 27, 2018, Kairos entered into a lease agreement (the “OKC Lease”) with 7725 Reno #1, LLC (“7725 Reno”), pursuant to which Kairos leases approximately 107,600 square foot warehouse located in Oklahoma City, Oklahoma. Pursuant to the terms of the OKC Lease, the initial term of one year terminates on February 15, 2019, unless terminated earlier pursuant to the terms of the OKC Lease. Kairos has the right to operate from the premises on a 24 hour/seven day a week basis. Base rent for the premises during the initial term of the OKC Lease was equal to $55.95/kW per month for a total of 4 Megawatts (MW) of available electrical power, or $223,800 per month. On March 26, 2018, Kairos entered into a first amendment to the above OKC Lease, whereby 7725 Reno agreed to increase the electrical power available for Kairos’s use from 6MW to 12MW, and the base rent under the lease was increased to approximately $664,760 per month, effective as of the date when such additional power is available. Effective November 29, 2018, Kairos entered into the second amendment to the OKC Lease which provided the following: • extended the initial term of the lease through August 19, 2019; • monthly base rent of $235,000 for December 2018, $230,000 for January and $190,000 per month thereafter for the duration of the OKC Lease, including any renewals thereof; • changes the monthly electricity usage charges; and • granting Kairos the option to renew the OKC Lease for up to two, three-month periods after expiration of the initial term of the second amendment to the OKC Lease. On May 15, 2019, Kairos renewed the OKC Lease for the first renewal term of three months, extending the OKC Lease through November 15, 2019. On August 15, 2019, Kairos renewed the OKC Lease for the second renewal term of three months, extending the lease through February 15, 2020. On January 8, 2020, Kairos entered into a third amendment to the OKC Lease to extend the lease term through May 15, 2020, with all other terms remaining substantially the same as the second amendment to the OKC Lease. Corporate Lease Agreement On April 9, 2018, the Company entered into a commercial lease agreement (the “Florida Lease”) with W-Crocker Fin Place Owner VII, LLC, a Delaware limited liability company, pursuant to which the Company leases approximately 1,700 rentable square feet of office and common area space in Fort Lauderdale, Florida. Pursuant to the terms of the Florida Lease, the initial term is for thirty-nine (39) months expiring on August 9, 2021, with one, five-year option to renew. The initial base rent is $4,658.50 per month (or $2.75 per sq. ft.) for the first year and shall escalate at the rate of 3.0% per annum thereafter. Additionally, common operating expenses are prorated and charged monthly as additional rent. Operating Leases At December 31, 2019, the Company had operating lease liabilities of approximately $0.4 million and right of use assets of approximately $0.4 million, which are included in the consolidated balance sheet. The following summarizes quantitative information about the Company’s operating leases (dollars in thousands): Lease cost Year Ended December 31, 2019 Operating lease cost $ 2,378 Variable lease cost 3,200 Operating lease expense 5,578 Short-term lease rent expense 17 Total rent expense $ 5,595 Other information Operating cash flows from operating leases $ 2,377 Right of use assets exchanged for new operating lease liabilities $ 2,664 Weighted-average remaining lease term – operating leases 0.5 years Weighted-average discount rate – operating leases 10.00 % Maturities of the Company’s operating lease liabilities, are as follows (in thousands): For the year ended December 31, 2020 $ 344 For the year ended December 31, 2021 35 Total $ 379 Less present value discount (11 ) Operating lease liabilities $ 368 Rent expense, recorded on a straight-line basis, was approximately $5.6 million and $5.5 million for the years ended December 31, 2019 and 2018, respectively. Ingenium International LLC Consulting Agreement On February 21, 2018, the Company entered into a Consulting Agreement with Ingenium International LLC (the “Consultant”) to provide consulting services related to the Company’s business for a twelve-month period. Pursuant to the Consulting Agreement, Consultant’s services are defined as follows: complete the installation and deployment of 8,000+ ASIC cryptocurrency miners, which included the Prive Equipment and the BMSS Equipment; assist in managing and monitoring the operation of the 8,000+ cryptocurrency miners on an ongoing basis; promptly responding to and troubleshooting any issues as they arise in the management and monitoring of the operations; continuing the buildout of up to 40 Megawatts of energy capacity, with the ultimate goal to secure the power and build the location for up to 80 Megawatts of energy capacity; and to make strategic introductions to other cryptocurrency business opportunities and contacts in the sector. In connection with the Consulting Agreement the Company made a lump sum payment of $4.0 million to the Consultant. The Company recorded the $4.0 million as a prepaid expense on February 21, 2018 and was amortizing the total cost over the one-year life of the agreement. However, the Company determined that as of December 31, 2018, the Consultants had provided substantially all the agreed upon services under the Consulting Agreement and therefore, recorded any remaining prepaid balance to selling, general and administrative expense on the accompanying statement of operations. The controlling principals of Ingenium International LLC. are shareholders in the Company by virtue of the previous acquisitions of Kairos and Prive. Synapse Financial Technologies, Inc. Agreement On October 23, 2018, the Company, through its wholly-owned subsidiary, Logical Brokerage entered into an agreement (the “SynapseFi Agreement”) with Synapse Financial Technologies, Inc. (“SynapseFi”) to secure Synapse’s services. SynapseFi is an industry leader in the provision of Application Program Interfaces (“API”) to the financial services industry. The SynapseFi Agreement was terminated by mutual agreement of the parties, in September 2019. For the years ended December 31, 2019 and 2018, there were no material expenses incurred related to the SynapseFi Agreement. Contingencies The Company, and its subsidiaries, are subject at times to various claims, lawsuits and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including, consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in ordinary course of business are covered by the Company’s insurance program. The Company maintains property, and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance, the Company may establish an accrual for such loss, retention or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying consolidated balance sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying consolidated statements of operations. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. On the basis of current information, the Company does not believe there is a reasonable possibility that, other than with regard to the Class Action described below, any material loss, if any, will result from any claims, lawsuits and proceedings to which the Company is subject to either individually, or in the aggregate. On February 17, 2018, Creighton Takata filed an action asserting putative class action claims on behalf of the Company's stockholders in the United District Court for the District of New Jersey, Takata v. Riot Blockchain Inc., et al. Two additional, nearly identical complaints were subsequently filed by Richard Roys and Bruce Greenawalt in the United District States Court for the Southern District of Florida ( Roys v. Riot Blockchain Inc., et al. Greenawalt v. Riot Blockchain Inc., et al. On April 18, 2018, Joseph J. Klapper, Jr., filed a complaint against Riot Blockchain, Inc., and certain of its officers and directors in the United District Court for the District of New Jersey ( Klapper v. Riot Blockchain Inc., et al. Lead Plaintiff filed a consolidated complaint on January 15, 2019. Defendants filed motions to dismiss on March 18, 2019. In lieu of opposing defendants’ motions to dismiss, Lead Plaintiff filed another amended complaint on May 9, 2019. Defendants filed multiple motions to dismiss the amended complaint starting on September 3, 2019. Briefing on the motions to dismiss has been completed. Subject to the outcome of the pending motions, defendants intend to continue to vigorously contest Lead Plaintiff’s allegations. Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. Shareholder Derivative Cases On April 5, 2018, Michael Jackson filed a shareholder derivative complaint on behalf of the Company in the Supreme Court of the State of New York, County of Nassau, against certain of the Company's officers and directors, as well as against an investor ( Jackson v. Riot Blockchain, Inc., et al. On May 22, 2018, two additional shareholder derivative complaints were filed on behalf of the Company in the Eighth Judicial District Court of the State of Nevada in and for the County of Clark ( Kish v. O'Rourke, et al. Gaft v. O'Rourke, et al. On September 24, 2018, the court entered an order consolidating the Gaft Kish In re Riot BlockChain, Inc. Shareholder Derivative Litigation On October 9, 2018, another shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Eastern District of New York ( Rotkowitz v. O'Rourke, et al. On October 22, 2018, a fifth shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Southern District of New York ( Finitz v. O'Rourke, et al. Defendants intend to vigorously contest plaintiffs’ allegations in the shareholder derivative actions and plaintiffs’ right to bring the action in the name of Riot Blockchain. But because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. SEC Subpoena and Other Matters On April 9, 2018, the Company received a subpoena from the SEC, requesting documents and information. The Company fully cooperated with the SEC in that investigation. On January 29, 2020, the SEC notified the Company that it had concluded its investigation as to Riot and based on the information the SEC has as of the date of the letter, it does not intend to recommend an enforcement action against Riot. Beneficial Ownership Pursuant to the rules of the SEC, the Company has consistently reported its beneficial ownership positions in its proxy and other filings where beneficial ownership disclosures are presented, for certain beneficial owners with respect to any person (including any “group” as that term is used in Section 13(d)(3) of the Securities and Exchange Act of 1934 (the “Exchange Act”) who is known to the Company to be the beneficial owner of more than 5% of the Company’s common stock. The Company has relied on each person who has reported to the SEC beneficial ownership of more than 5% of our common stock to provide complete and accurate information regarding their ownership, based on the reports filed by these persons. On September 7, 2018, a complaint was filed by the SEC (Case 1:18-cv-08175) and as subsequently amended, (the “Complaint”) against, among others, a number of individuals and entities some of whom the Company has previously disclosed as its beneficial owners, as well as, Mr. John O’Rourke III, the Company’s former chairman of the board of directors and chief executive officer who resigned from the Company on September 8, 2018, as disclosed in the Current Periodic Report on Form 8-K filed September 10, 2018. Other persons named in the Complaint have previously reported that they were beneficial owners of the Company’s common stock, however, the Company has no basis to determine whether any such persons may have operated as a control group, collectively beneficially owning more than 5% of the Company’s common stock. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 16. Related Party Transactions Tess Tess related parties include: Powercases Inc., and 2227470 Ontario Inc., (companies that are wholly-owned by Jeffrey Mason, President and Chief Executive Officer of Tess), 1038088 Ontario Limited (a company that is wholly-owned by Fraser Mason, Chairman and Chief Financial Officer of Tess), and JLM Strategic Marketing (a proprietorship owned by Jennifer Mason, Manager Corporate Communications of Tess). The following table provides the total amount of transactions that have been entered into with Tess related parties and outstanding balances with Tess related parties as of and for the periods identified (in thousands): Year Ended Services to Tess provided by (1): December 31, 2019 December 31, 2018 Powercases Inc. $ 213 $ 655 JLM Strategic Marketing $ — $ 228 1038088 Ontario Limited $ 45 $ 187 Payable to: December 31, 2019 December 31, 2018 Powercases Inc. $ — $ 37 JLM Strategic Marketing $ — $ 9 1038088 Ontario Limited $ — $ 52 (1) - 2019 amounts provided by related parties are up to the date of de-consolidation. During the 2019 period ended (up to the point of de-consolidation) and the year ended December 31, 2018, included in Tess's recorded services from related parties was approximately $0.3 million and $0.7 million, respectively for Tess's key management personnel salaries. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17. Subsequent Events Financing Subsequent to December 31, 2019, in connection with the Company’s Sales Agreement with H.C. Wainwright, the Company received gross proceeds of approximately $9.5 million from the sale of 5,995,559 shares of common stock. Common Stock On February 7, 2020, the Company issued 122,377 restricted stock units, and 5,000 vested restricted stock units to an officer of the Company. On February 27, 2020, for 2020 services the Company awarded 1,212,192 restricted shares of common stock vesting over a one-year period to Directors and certain employees of the Company. Prive share escrow status As of February 2020, the conditions for the release of the 200,000 shares of Riot’s stock held in escrow in connection with the Prive acquisition were not achieved by the date specified in the Prive Purchase Agreement. The Escrow Agent has been notified that the conditions set forth in the Prive Purchase Agreement were not met and the 200,000 shares of Riot’s stock that have been held in escrow by the Escrow Agent are to be returned to the Company. See Note 4, Acquisitions, for additional discussion regarding the Prive acquisition. Corporate Matters On February 7, 2020, the Company amended and restated its employment agreement (the “Agreement”) with its Chief Executive Officer and Interim Chief Financial Officer (the “Executive”). Under the terms of the Agreement, the Executive will receive a prorated annual salary of $0.3 million and 209,790 restricted common stock units, which vest in four equal quarterly installments, with each quarterly installment vesting as of the end of each quarter. The termination date of the Agreement is February 7, 2021. |
Basis of Presentation, Summar_2
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements of the Company include the accounts of the Company and its wholly or majority owned and controlled subsidiaries. Consolidated subsidiaries results are included from the date the subsidiary was formed or acquired. Intercompany investments, balances and transactions have been eliminated in consolidation. Non–controlling interests represents the minority equity investment in the Company's subsidiaries, plus the minority investors' share of the net operating results and other components of equity relating to the non–controlling interest. The Company's consolidated operating subsidiaries and (percentage owned at December 31, 2019) consisted of; Kairos Global Technology, Inc., (100%) and Logical Brokerage Corp. (92.5%). |
Use of estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's financial statements include estimates associated with revenue recognition, asset valuations, the useful lives and recoverability of long-lived assets, impairment analysis of intangibles and goodwill, stock-based compensation, and the valuation allowance associated with the Company’s deferred tax assets. |
Long-term investments | Long-term investments As described in Note 6 to these consolidated financial statements, effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 concerning recognition and measurement of financial assets and financial liabilities. In adopting this new guidance, the Company has made an accounting policy election to adopt an adjusted cost method measurement alternative for investments in equity securities without readily determinable fair values. For equity investments that are accounted for using the measurement alternative, the Company initially records equity investments at cost but is required to adjust the carrying value of such equity investments through earnings when there is an observable transaction involving the same or a similar investment with the same issuer or upon an impairment. As of December 31, 2019, the Company’s long-term investments consist of its investments in Coinsquare Ltd., (“Coinsquare”), TessPay Inc. (formerly 1172767 B.C. Ltd) (“Tess”) and Verady, LLC (“Verady”). |
Cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company's cash account balances exceed the balances as covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. As of December 31, 2019 and 2018, the Company had no cash equivalents or short-term investments. |
Fair value of financial instruments | Fair value of financial instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company's market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. As of December 31, 2019 there were no financial assets or liabilities measured at fair value. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, and accounts payable, approximate fair value due to the short-term nature of these instruments. During the year ended December 31, 2019, the Company issued convertible notes and warrants in connection with the notes. The notes and warrants were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other expense on the consolidated statements of operations and disclosed in the consolidated financial statements. |
Cryptocurrencies | Cryptocurrencies Cryptocurrencies, (including bitcoin, bitcoin cash and litecoin) are included in current assets in the accompanying consolidated balance sheets. Cryptocurrencies purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition policy disclosed below. Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Purchases of cryptocurrencies by the Company are included within investing activities in the accompanying consolidated statements of cash flows, while cryptocurrencies awarded to the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of cryptocurrencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the consolidated statements of operations. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting. |
Deferred Revenue | Deferred revenue The Company recognized upfront license fees from Ceva Santé Animale S.A. (“Licensee”) related to its exclusive license agreement (“License Agreement”), which have been recorded as deferred revenue and are being amortized over the term of the License Agreement. Amortization of the license fees totaling approximately $1.6 million began in July 2012. As of December 31, 2019, and 2018, each, deferred revenue of approximately $0.1 million has been classified as a current liability and $0.8 million and $0.9 million, respectively, has been classified as a long-term liability. The current liability represents the next twelve months' portion of the license fees revenue. For each of the years ended December 31, 2019 and 2018, approximately $0.1 million, was recorded as the license fee revenue. |
Property and equipment | Property and equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally two years for cryptocurrency mining equipment and three years for computer related assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. |
Patents and other intangible assets | Patents and other intangible assets The Company accounts for intangible assets under ASC 350-30. Patents costs consisting of filing and legal fees incurred are initially recorded at cost. Patents are amortized over the legal life of the patent or their estimated useful lives, using the straight-line method. Certain patents are in the legal application process and therefore are not currently being amortized. |
Impairment of long-lived assets | Impairment of long-lived assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on its reviews, management determined that its cryptocurrency mining equipment and related improvements were impaired by a total of $29.2 million based upon an assessment as of December 31, 2018, including consideration of the decline in bitcoin values which occurred commencing in late December 2017 and continued through December 31, 2018. Intangible assets acquired in the Tess business combination consist primarily of in-process research and development (“IPR&D”) assets. The value attributable to IPR&D projects at the time of acquisition is capitalized as an indefinite-lived intangible asset and tested for impairment until the project is completed or abandoned. Upon completion of the project, the indefinite-lived intangible asset will be accounted for as a finite-lived intangible asset and amortized on a straight-line basis over its estimated useful life. If the project is abandoned, the indefinite-lived intangible asset will be charged to expense. During the year ended December 31, 2018, management determined that its intangible assets related to the Tess Investment were impaired and recorded an impairment charge of $1.3 million. The Company made the decision, effective as of December 31, 2019 not to pursue its RiotX / Logical Brokerage cryptocurrency exchange development plan, and as of December 31, 2019 recorded an impairment of intangible assets acquired of approximately $0.7 million. |
Deferred tax liability | Deferred tax liability Due to certain acquisitions, temporary differences between the book fair value and the tax basis of the indefinite life intangible assets and depreciable property and equipment were recorded. The Company recognized a $0.1 million deferred tax liability related to its Logical Brokerage acquisition during the year ended December 31, 2018. Subsequently, due to the Company’s decision not to pursue its Logical Brokerage business and the impairment and depreciation of the Kairos property and equipment, the Company recorded a $0.1 million and $0.7 million income tax benefit during the years ended December 31, 2019 and 2018, respectively, from the reduction of its existing deferred tax liability related to its acquisitions. The following is a rollforward of the Company’s deferred tax liability from January 1, 2018 to December 31, 2019: December 31, 2019 December 31, 2018 Beginning Balance $ 143 $ 699 Deferred tax liability recorded on the Logical Brokerage acquisition — 143 Impairment and depreciation on the Kairos acquisition — (699 ) Abandonment of Logical Brokerage (143 ) — Ending Balance $ — $ 143 |
Sequencing | Sequencing On January 28, 2019, the Company adopted a sequencing policy under Accounting Standards Codification (“ASC”) 815-40-35 Derivatives and Hedging |
Notes payable fair value option | Notes payable fair value option As described further in Note 10 - Notes and Other Obligations, As of December 31, 2019, all of the Notes were converted into 1,813,500 shares of the Company’s common stock valued at their estimated fair value at the time of conversion totaling approximately $10.2 million. |
Warrant liability | Warrant liability The Company issued Warrants to purchase 1,908,144 shares of its common stock in connection with the Notes issued to the Investors in January 2019, and recorded these outstanding Warrants as a liability at fair value utilizing a Monte Carlo simulation model. This liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company's consolidated statements of operations. As of June 25, 2019, the Company’s Notes had been converted in their entirety and the warrant liability was revalued and reclassified to equity, because the Warrants are no longer subject to the Company’s sequencing policy as described above. |
Leases | Leases Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements under ASC Topic 840. |
Revenue recognition | Revenue recognition Cryptocurrency mining: The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. |
Cost of revenue | Cost of revenue The Company's cost of revenue consists primarily of direct production costs related to mining operations, including mining pool fees, rent and utilities, but excluding depreciation and amortization, which are separately stated in the Company’s consolidated statements of operations. |
Business Combinations | Business combinations The Company applies the provisions of ASC 805 in the accounting for acquisitions. ASC 805 requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately apply preliminary value to assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include; future expected cash flows from product sales; customer contracts and acquired technologies; expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. |
Income taxes | Income taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. ASC Topic 740, Income Taxes, (“ASC 740”), also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. |
Stock-based compensation | Stock-based compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. These options generally vest on the grant date or over a one- year period. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Effective January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by Accounting Standards Update (“ASU”) 2016-09. Ultimately, the actual expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures. |
Loss per share | Loss per share Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes its unvested restricted shares and escrow shares from the net loss per share calculation. The escrow shares are excluded because of related contingencies and including them would result in anti-dilution. Since the Company has only incurred losses, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at December 31, 2019 and 2018 because their inclusion would be anti-dilutive are as follows: December 31, 2019 2018 Warrants to purchase common stock 3,574,257 1,671,113 Options to purchase common stock 12,000 62,000 Escrow shares 200,000 200,000 Unvested restricted stock awards 1,524,499 95,939 Convertible Series B preferred shares 4,199 13,000 Total 5,314,955 2,042,052 |
Segment Reporting | Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer. We currently operate in one segment surrounding our cryptocurrency mining operation. |
Subsequent events | Subsequent events The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued. See Note 17. |
Recently issued and adopted accounting pronouncements | Recently issued and adopted accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements properly reflect the change. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases Leases In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. The Company adopted on January 1, 2020 and its adoption did not have any impact on the Company’s consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Basis of Presentation, Summar_3
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Changes in Deferred Tax Liability | The following is a rollforward of the Company’s deferred tax liability from January 1, 2018 to December 31, 2019: December 31, 2019 December 31, 2018 Beginning Balance $ 143 $ 699 Deferred tax liability recorded on the Logical Brokerage acquisition — 143 Impairment and depreciation on the Kairos acquisition — (699 ) Abandonment of Logical Brokerage (143 ) — Ending Balance $ — $ 143 |
Schedule of Antidilutive Securities | Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at December 31, 2019 and 2018 because their inclusion would be anti-dilutive are as follows: December 31, 2019 2018 Warrants to purchase common stock 3,574,257 1,671,113 Options to purchase common stock 12,000 62,000 Escrow shares 200,000 200,000 Unvested restricted stock awards 1,524,499 95,939 Convertible Series B preferred shares 4,199 13,000 Total 5,314,955 2,042,052 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prive Technologies, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Assets and Liabilities Acquired | The purchase price for the miners was recorded as follow (in thousands): Cash consideration $ 11,000 Fair value of common stock 8,480 Other expenses 2 Total $ 19,482 |
Logical Brokerage Corp [Member] | |
Business Acquisition [Line Items] | |
Schedule of Assets and Liabilities Acquired | On March 26, 2018, the CFTC license was recorded as follows (in thousands): Cash, net of cash acquired $ 500 Deferred tax liability 143 Non-controlling interest 40 Legal costs 17 Intangible rights acquired $ 700 |
Kairos Global Technology, Inc [Member] | |
Business Acquisition [Line Items] | |
Schedule of Assets and Liabilities Acquired | The following is the allocation of the purchase consideration (in thousands): Cash $ 1,131 Equipment 10,333 Accounts payable and accrued expenses (46 ) Deferred income tax liability (2,122 ) Purchase price $ 9,296 |
Cryptocurrencies (Tables)
Cryptocurrencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Summary of Additional Information About Cryptocurrencies | The following table presents additional information about cryptocurrencies (in thousands): December 31, 2019 December 31, 2018 Beginning balance $ 707 $ 200 Revenue recognized from cryptocurrencies mined 6,741 7,749 Mining pool operating fees (135 ) (155 ) Purchase of cryptocurrencies — 5,625 Purchase of miner equipment with cryptocurrencies (99 ) — Sale / trade of cryptocurrencies (3,196 ) (9,237 ) Realized gain on sale of cryptocurrencies 665 26 Impairment of cryptocurrencies (844 ) (3,501 ) Ending balance $ 3,839 $ 707 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Weighted Average Unobservable Inputs | A summary of weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s Notes and Warrants at the issuance date of January 28, 2019 and during the conversion of the Notes as of June 27, 2019, are as follows: Senior Secured Promissory Notes January 28, 2019 As of June 27, 2019 Dividend yield 0% 0% Expected price volatility 119.5% 122.2%-127.1% Risk free interest rate 2.60% 2.07%-2.44% Expected term 1 year - Warrants January 28, 2019 As of June 27, 2019 Dividend yield 0% 0% Expected price volatility 111.6% 119.9%-120.5% Risk free interest rate 2.58% 2.23%-2.58% Expected term 5 years 4 years, 10 months |
Schedule of Changes in Level 3 Liabilities Measured at Fair Value | The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2019 (in thousands): Convertible Notes Warrant Liability Issuance of senior secured convertible notes $ 6,330 $ — Issuance of warrants in connection with convertible notes — 2,570 Balance at January 28, 2019 6,330 2,570 Change in fair value 3,896 2,869 Conversion of convertible notes to common stock (10,226 ) — Reclassification of warrant liability to equity — (5,439 ) Balance at December 31, 2019 $ — $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31, 2019 and 2018 (in thousands): December 31, 2019 December 31, 2018 Miners $ 5,010 $ — Leasehold improvements 38 — Office and computer equipment 103 93 Total cost of property and equipment 5,151 93 Less accumulated depreciation (100 ) (67 ) Property and equipment, net $ 5,051 $ 26 |
Schedule of Impairment Charges | The breakdown of the impairment charges recorded for the year ended December 31, 2018 are as follows (in thousands): December 31, 2018 Prive miners $ 17,691 BMSS miners 6,702 Kairos miners 3,026 Leasehold improvements 1,819 Total impairment charge $ 29,238 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Fair Value Shares | April 10, 2019 Tess shares held by Riot Blockchain, Inc. 2,708,333 Per share fair value $ 0.03 Fair value of Tess shares held by Riot Blockchain, Inc. $ 90 |
Schedule of Calculation of Gain on Deconsolidation of Tess | The deconsolidation of Tess resulted in a gain of approximately $1.1 million calculated as follows (in thousands) on the date of deconsolidation: Current assets $ 130 Less: Accounts payable 761 Accrued expenses 275 Convertible notes 1,696 Net liabilities (2,602 ) Non-controlling interest share 1,553 Sub-total (1,048 ) Less: fair value of shares owned by Riot Blockchain 90 Gain on deconsolidation of Tess $ (1,139 ) |
Long-Term Assets (Tables)
Long-Term Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amounts Related to Acquired Intangible Assets | The carrying amounts related to acquired intangible assets as of December 31, 2019 and 2018 were as follows (in thousands): December 31, 2019 December 31, 2018 Patents $ 1,157 $ 1,119 Accumulated amortization (698 ) (612 ) Patents, net 459 507 Convertible note investment — 200 Accrued interest convertible note — — Convertible note — 200 Total $ 459 $ 707 |
Schedule of Total Estimated Amortization of Intangible Assets | The following table represents the total estimated amortization of intangible assets for the five succeeding years and thereafter (in thousands): For the year ended December 31, Estimated amortization expense 2020 $ 86 2021 86 2022 86 2023 86 2024 and thereafter 115 Total $ 459 |
Stock Options, Warrants and R_2
Stock Options, Warrants and Restricted Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Recognized Stock-based Compensation | The Company recognized total stock-based compensation expense during the years ended December 31, 2019 and 2018, from the following categories (in thousands): Years Ended December 31, 2019 2018 Restricted stock awards under the Plan $ 687 $ 3,972 Stock option awards under the Plan 58 688 Total stock-based compensation $ 745 $ 4,660 |
Summary of Restricted Stock Activity | A summary of the Company's restricted stock activity in the years ended December 31, 2019 and 2018 is as follows: Number of Shares Weighted Average Grant-Date Unvested at January 1, 2018 496,152 $ 5.97 Granted 431,000 $ 10.46 Vested (530,065 ) $ 7.61 Forfeited (301,148 ) $ 7.68 Unvested at December 31, 2018 95,939 $ 12.49 Vested (58,772 ) $ 7.66 Granted 1,542,332 $ 1.41 Forfeited (55,000 ) $ 14.95 Unvested at December 31, 2019 1,524,499 $ 1.37 |
Schedule of Fair Value Assumptions Used to Estimate Stock-based Compensation | The Company currently provides stock-based compensation to employees, directors and consultants under the Plan. There were no stock options issued during the year ended December 31, 2019. The Company utilized assumptions in the estimation of fair value of stock-based compensation for the year ended December 31, 2018, as follows: December 31, 2018 Dividend yield 0% Expected price volatility 152% - 159% Risk free interest rate 2.49% - 2.96% Expected term 5 years |
Summary of Stock Incentive Plan Activity | A summary of stock option activity under the Plan for options to employees, officers, directors and consultants, for the years ended December 31, 2019 and 2018, is presented below: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2018 119,533 $ 9.02 Granted 62,000 $ 15.71 Exercised (19,533 ) $ 4.02 Forfeited (100,000 ) $ 10.00 Outstanding at December 31, 2018 62,000 $ 15.71 9.2 Granted — $ — Exercised — $ — Forfeited (50,000 ) $ 18.50 Outstanding at December 31, 2019 12,000 $ 4.09 3.7 $ — Exercisable at December 31, 2019 12,000 $ 4.09 3.7 $ — |
Schedule of Changes in Outstanding Warrants | The following is a summary of the change in outstanding warrants during the years ended December 31, 2019 and 2018: Shares Underlying Options/Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2018 1,944,895 $ 35.06 2.7 $ 6,135,000 Issued — $ — — Exercised (113,009 ) $ 3.50 — Forfeited (160,773 ) $ 10.88 — Outstanding at December 31, 2018 1,671,113 $ 39.47 2.0 $ — Issued 1,908,144 $ 1.94 5.2 Forfeited (5,000 ) $ 7.90 — Outstanding at December 31, 2019 3,574,257 $ 19.48 2.9 $ — Exercisable at December 31, 2019 3,574,257 $ 19.48 2.9 $ — |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Loss From Continuing Operations by Domestic and Foreign Jurisdictions | The components of the loss from continuing operations before income taxes for the years ended December 31, 2019 and 2018 are as follows (in thousands): For the years ended December 31, 2019 2018 Domestic $ (20,446 ) $ (56,453 ) Foreign — (4,555 ) Loss from Continuing Operations before Income Taxes $ (20,446 ) $ (61,008 ) |
Schedule of Components of Income Tax Benefit | The components of income tax benefit are as follows (in thousands): As of December 31, 2019 2018 Current: US Federal $ — $ — US State — — Foreign — — Total current benefit $ — $ — Deferred: US Federal $ 117 $ 495 US State 26 112 Foreign — 92 Total deferred benefit 143 699 Total benefit for income taxes $ 143 $ 699 |
Schedule of Deferred Tax Assets and (Liabilities) | The tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities at December 31, 2019 and 2018 are comprised of the following (in thousands): As of December 31, 2019 2018 Deferred income tax assets: Net operating loss carryforwards $ 43,436 $ 30,745 Research and development credit carryforwards 989 989 Stock option expense 1,095 1,384 Impairment of mining related assets and other (146 ) 8,779 Total deferred tax assets 45,374 41,897 Valuation allowance (45,374 ) (41,897 ) Net deferred tax assets — — Deferred income tax liabilities: Indefinite life intangible assets — (143 ) Net deferred tax liabilities $ — $ (143 ) |
Schedule of Federal Statutory Rate Reconcilition Tax Expense (Benefit) | The expected tax expense (benefit) based on the U.S. federal statutory rate is reconciled with actual tax expense (benefit) as follows (in thousands): For the years ended December 31, 2019 2018 Statutory federal income tax expense (benefit) $ (4,293 ) $ (12,791 ) State taxes, net of federal tax expense (benefit) (664 ) (2,887 ) Stock compensation 1,142 174 Other 195 – Change in valuation allowance 3,477 14,805 Income taxes benefit $ (143 ) $ (699 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Leases | The following summarizes quantitative information about the Company’s operating leases (dollars in thousands): Lease cost Year Ended December 31, 2019 Operating lease cost $ 2,378 Variable lease cost 3,200 Operating lease expense 5,578 Short-term lease rent expense 17 Total rent expense $ 5,595 Other information Operating cash flows from operating leases $ 2,377 Right of use assets exchanged for new operating lease liabilities $ 2,664 Weighted-average remaining lease term – operating leases 0.5 years Weighted-average discount rate – operating leases 10.00 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of the Company’s operating lease liabilities, are as follows (in thousands): For the year ended December 31, 2020 $ 344 For the year ended December 31, 2021 35 Total $ 379 Less present value discount (11 ) Operating lease liabilities $ 368 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Tess Related Party Transactions | The following table provides the total amount of transactions that have been entered into with Tess related parties and outstanding balances with Tess related parties as of and for the periods identified (in thousands): Year Ended Services to Tess provided by (1): December 31, 2019 December 31, 2018 Powercases Inc. $ 213 $ 655 JLM Strategic Marketing $ — $ 228 1038088 Ontario Limited $ 45 $ 187 Payable to: December 31, 2019 December 31, 2018 Powercases Inc. $ — $ 37 JLM Strategic Marketing $ — $ 9 1038088 Ontario Limited $ — $ 52 (1) - 2019 amounts provided by related parties are up to the date of de-consolidation. |
Organization (Details)
Organization (Details) $ in Thousands | Dec. 31, 2019USD ($) | Nov. 03, 2017USD ($) |
Kairos Global Technology, Inc [Member] | ||
Number of computers acquired | 8,000 | |
Value of computers acquired | $ 10,333 | |
Percentage of interest acquired | 100.00% | |
BitmainTech PTE. LTD [Member] | ||
Number of computers acquired | 4,000 | |
Value of computers acquired | $ 6,300 | |
BitmainTech PTE. LTD [Member] | Miners received at Company's Oklahoma City facility [Member] | ||
Number of computers acquired | 3,000 | |
BitmainTech PTE. LTD [Member] | Received in early 2020 [Member] | ||
Number of computers acquired | 1,000 |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details) - USD ($) | Feb. 14, 2018 | May 24, 2019 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2019 | Jan. 28, 2019 | Dec. 31, 2017 |
Cash and cash equivalents | $ 7,440,000 | $ 225,000 | $ 41,652,000 | |||||
Working capital | 9,300,000 | |||||||
Stockholders' equity | 26,235,000 | 4,491,000 | $ 49,627,000 | |||||
Accumulated deficit | 217,238,000 | 197,199,000 | ||||||
Total investment | $ 3,000,000 | |||||||
Proceeds from the sale of stock | $ 24,825,000 | |||||||
Weighted average price | $ 2.97 | |||||||
H.C. Wainwright [Member] | ||||||||
Proceeds from the sale of stock | $ 9,500,000 | |||||||
Stock issued during period | 5,995,559 | |||||||
Common Stock [Member] | ||||||||
Stock issued during period | 100,000 | 100,000 | 3,215 | |||||
Common Stock [Member] | H.C. Wainwright [Member] | ||||||||
Maximum amount of sales shares | $ 100,000,000 | |||||||
Percentage of commission | 3.00% | |||||||
Proceeds from the sale of stock | $ 100,000,000 | $ 23,800,000 | ||||||
Stock issued during period | 8,351,762 | |||||||
Investors [Member] | Senior Secured Convertible Promissory Notes [Member] | ||||||||
Debt instrument face amount | $ 3,400,000 | $ 3,400,000 |
Basis of Presentation, Summar_4
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jun. 27, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2019 | Jan. 28, 2019 | Mar. 26, 2018 | Dec. 31, 2017 | |
Deferred tax liability | $ 143,000 | $ 699,000 | ||||||
Income taxes benefit | 143,000 | 699,000 | ||||||
Impairment charge | 29,238,000 | |||||||
Impairment of intangible assets | 700,000 | 1,341,000 | ||||||
Amortization of license fees and milestone revenue | 100,000 | |||||||
Deferred revenue, less current portion | 776,000 | 872,000 | ||||||
Revenue | 6,837,000 | 7,845,000 | ||||||
Conversion of notes into shares | 1,813,500 | |||||||
Fair value of notes | $ 10,226,000 | |||||||
Forfeiture rate | 0.00% | |||||||
Right of use assets and lease liabilities | $ 1,500,000 | |||||||
Impairment of intangible rights acquired | $ 700,000 | 1,341,000 | ||||||
Senior Secured Convertible Promissory Notes [Member] | ||||||||
Conversion of notes into shares | 1,813,500 | |||||||
Fair value of notes | $ 3,900,000 | $ 10,200,000 | ||||||
Investors [Member] | Senior Secured Convertible Promissory Notes [Member] | ||||||||
Debt instrument face amount | $ 3,400,000 | $ 3,400,000 | ||||||
Warrant issued | 1,908,144 | 1,908,144 | ||||||
License fees [Member] | ||||||||
Revenue | $ 96,000 | 96,000 | ||||||
Cryptocurrency machine [Member] | ||||||||
Estimated useful life | 2 years | |||||||
Computer related assets [Member] | ||||||||
Estimated useful life | 3 years | |||||||
Kairos Global Technology, Inc [Member] | ||||||||
Ownership percentage | 100.00% | |||||||
Income taxes benefit | $ 100,000 | 700,000 | ||||||
Impairment charge | 3,000,000 | |||||||
Logical Brokerage Corp [Member] | ||||||||
Ownership percentage | 92.50% | 92.50% | ||||||
Deferred tax liability | $ 100,000 | |||||||
Income taxes benefit | $ 100,000 | |||||||
Impairment of intangible assets | 700,000 | |||||||
Impairment of intangible rights acquired | $ 700,000 |
Basis of Presentation, Summar_5
Basis of Presentation, Summary of Significant Accounting Policies (Schedule of Changes in Deferred Tax Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Beginning Balance | $ 143 | $ 699 |
Deferred tax liability recorded on the Logical Brokerage acquisition | 143 | |
Impairment and depreciation on the Kairos acquisition | (699) | |
Impairment of Logical Brokerage | (143) | |
Ending Balance | $ 143 |
Basis of Presentation, Summar_6
Basis of Presentation, Summary of Significant Accounting Policies (Schedule of Antidilutive Securities) (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 5,314,955 | 2,042,052 |
Warrants to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 3,574,257 | 1,671,113 |
Option to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 12,000 | 62,000 |
Escrow shares of common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 200,000 | 200,000 |
Unvested restricted stock awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 1,524,499 | 95,939 |
Convertible Preferred Stock Series B [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 4,199 | 13,000 |
Acquisition (Narrative) (Detail
Acquisition (Narrative) (Details) - USD ($) | Feb. 14, 2018 | Nov. 03, 2017 | Aug. 31, 2018 | Aug. 21, 2018 | Mar. 31, 2018 | Mar. 26, 2018 | Feb. 21, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||||
Aggregate cash consideration | $ 517,000 | ||||||||
Impairment charge | 29,238,000 | ||||||||
Payments on BMSS purchase agreement | 300,000 | ||||||||
Income taxes benefit | 143,000 | 699,000 | |||||||
Impairment of intangible rights acquired | $ 700,000 | $ 1,341,000 | |||||||
Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Stock issued during period | 100,000 | 100,000 | 3,215 | ||||||
Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Stock issued during period | 8,351,762 | ||||||||
Kairos Global Technology, Inc [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of voting interests acquired | 100.00% | ||||||||
Royalty percentage | 40.00% | ||||||||
Royalty amount | $ 1,000,000 | ||||||||
Impairment charge | $ 3,000,000 | ||||||||
Income taxes benefit | $ 100,000 | 700,000 | |||||||
Kairos Global Technology, Inc [Member] | Series B Convertible Preferred Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Common stock, par value | $ 5.31 | ||||||||
Value of equity consideration issued for acquisition | $ 9,300,000 | ||||||||
Stock issued for purchase of assets | 1,750,001 | ||||||||
Kairos Global Technology, Inc [Member] | Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of shares of common stock issuable upon conversion | 1,750,001 | ||||||||
Prive Technologies, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Equity consideration issued for acquisition, number of shares | 1,000,000 | ||||||||
Aggregate cash consideration | $ 11,000,000 | ||||||||
Business acquisition share price | $ 10.60 | ||||||||
Common stock shares held in escrow | 200,000 | ||||||||
Common stock escrow value | $ 10,000,000 | ||||||||
Net purchase price | $ 19,500,000 | ||||||||
Impairment charge | 17,700,000 | ||||||||
Prive Technologies, Inc. [Member] | Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Stock issued during period | 1,000,000 | ||||||||
Prive Technologies, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Equity consideration issued for acquisition, number of shares | 800,000 | ||||||||
Aggregate cash consideration | $ 11,000,000 | ||||||||
BMSS [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Aggregate cash consideration | 8,500,000 | ||||||||
Impairment charge | 6,700,000 | ||||||||
Purchase price on closing | 7,000,000 | ||||||||
Remainder of purchase price | $ 1,500,000 | $ 1,500,000 | |||||||
Accrued and unpaid interest rate | 10.00% | ||||||||
Payments to acquire entity | $ 150,000 | ||||||||
Loss on modification of entity | $ 300,000 | ||||||||
BMSS [Member] | Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Stock issued during period | 50,000 | 50,000 | |||||||
Logical Brokerage Corp [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of voting interests acquired | 92.50% | 92.50% | |||||||
Common stock, par value | $ 9.25 | ||||||||
Aggregate cash consideration | $ 600,000 | ||||||||
Net purchase price | 100,000 | ||||||||
Purchase of consideration | $ 600,000 | ||||||||
Effective tax rate | 25.60% | ||||||||
Income taxes benefit | $ 100,000 | ||||||||
Impairment of intangible rights acquired | $ 700,000 |
Acquisitions (Schedule of Purch
Acquisitions (Schedule of Purchase Price for the Miners) (Details) - Prive Technologies, Inc. [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Cash consideration | $ 11,000 |
Fair value of common stock | 8,480 |
Other expenses | 2 |
Total | $ 19,482 |
Acquisitions (Schedule of CFTC
Acquisitions (Schedule of CFTC License) (Details) - Logical Brokerage Corp [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Cash, net of cash acquired | $ 500 |
Deferred tax liability | 143 |
Non-controlling interest | 40 |
Legal costs | 17 |
Intangible rights acquired | $ 700 |
Acquisition (Schedule of Assets
Acquisition (Schedule of Assets and Liabilities Acquired) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 03, 2017 |
Business Acquisition [Line Items] | |||
Deferred income tax liability | $ (143) | ||
Kairos Global Technology, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 1,131 | ||
Equipment | 10,333 | ||
Accounts payable and accrued expenses | (46) | ||
Deferred income tax liability | (2,122) | ||
Purchase price | $ 9,296 |
Cryptocurrencies (Summary of Ad
Cryptocurrencies (Summary of Additional Information About Cryptocurrencies) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Cryptocurrencies, beginning balance | $ 707 | $ 200 |
Revenue recognized from cryptocurrencies mined | 6,741 | 7,749 |
Mining pool operating fees | (135) | (155) |
Purchase of cryptocurrencies | 5,625 | |
Purchase of minor equipment with cryptocurrencies | 99 | |
Sale / trade of cryptocurrencies | (3,196) | (9,237) |
Realized gain on sale of cryptocurrencies | 665 | 26 |
Impairment of cryptocurrencies | (844) | (3,501) |
Cryptocurrencies, ending balance | $ 3,839 | $ 707 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) | 1 Months Ended |
Jun. 27, 2019shares | |
Fair Value Disclosures [Abstract] | |
Conversion of notes into shares | 1,813,500 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Weighted Average Unobservable Inputs) (Details) - Fair Value, Inputs, Level 3 [Member] | 1 Months Ended | |
Jun. 27, 2019 | Jan. 28, 2019 | |
Dividend yield [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 0% | 0% |
Expected Price volatility [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 119.9%-120.5% | 111.6% |
Risk free interest rate [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 2.23%-2.58% | 2.58% |
Expected term [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 4 years, 10 months | 5 years |
Senior Secured Convertible Promissory Notes [Member] | Dividend yield [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 0% | 0% |
Senior Secured Convertible Promissory Notes [Member] | Expected Price volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 122.2%-127.1% | 119.5% |
Senior Secured Convertible Promissory Notes [Member] | Risk free interest rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 2.07%-2.44% | 2.60% |
Senior Secured Convertible Promissory Notes [Member] | Expected term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 1 year |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Changes in Level 3 Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Issuance of senior secured convertible notes | $ 3,000 | ||
Conversion of convertible notes to common stock | (10,226) | ||
Reclassification of warrant liability to equity | 5,439 | ||
Convertible Notes [Member] | Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Issuance of senior secured convertible notes | 6,330 | ||
Issuance of warrants in connection with convertible notes | |||
Balance Beginning | $ 6,330 | ||
Change in fair value | 3,896 | ||
Conversion of convertible notes to common stock | (10,226) | ||
Reclassification of warrant liability to equity | |||
Balance Ending | |||
Warrant [Member] | Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Issuance of senior secured convertible notes | |||
Issuance of warrants in connection with convertible notes | 2,570 | ||
Balance Beginning | 2,570 | ||
Change in fair value | 2,869 | ||
Conversion of convertible notes to common stock | |||
Reclassification of warrant liability to equity | (5,439) | ||
Balance Ending |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Feb. 29, 2020USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | $ 5,151 | $ 93 | |
Less accumulated depreciation | (100) | (67) | |
Property and equipment, net | 5,051 | 26 | |
Depreciation expense | 100 | 5,200 | |
Patents [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 90 | ||
Bitmain [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Number of computers acquired | 4,000 | ||
Value of computers acquired | $ 6,300 | ||
Bitmain [Member] | Miners received at Company's Oklahoma City facility [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Number of computers acquired | 3,000 | ||
Bitmain [Member] | Miners received at Company's Oklahoma City facility [Member] | Subsequent Event [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Number of computers acquired | 1,000 | ||
Value of computers acquired | $ 1,400 | ||
Miners [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | $ 5,010 | ||
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | 38 | ||
Office and computer equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost of property and equipment | $ 103 | $ 93 |
Property and Equipment (Sched_2
Property and Equipment (Schedule of Impairment Charges) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Impairment charge | $ 29,238 | |
Prive Miners [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment charge | 17,691 | |
BMSS Miners [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment charge | 6,702 | |
Kairos Miners [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment charge | 3,026 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment charge | $ 1,819 |
Investment (Narrative) (Details
Investment (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2019 | Feb. 14, 2018 | Mar. 31, 2018 | Oct. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2018 |
Business Acquisition [Line Items] | |||||||||
Shares issued, value | $ 23,829 | ||||||||
Impairment of intangible assets | 700 | $ 1,341 | |||||||
Coinsquare [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Minority interest | $ 3,000 | ||||||||
Amount of Investment | $ 6,400 | ||||||||
Percentage owned | 11.70% | ||||||||
Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Shares issued | 100,000 | 100,000 | 3,215 | ||||||
Tess Inc [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Amount of Investment | $ 300 | ||||||||
Ownership percentage | 8.80% | 52.00% | |||||||
Shares issued, value | $ 100 | $ 500 | |||||||
Research and development expense | $ 700 | ||||||||
Intangibles | $ 600 | ||||||||
Impairment of intangible assets | 2,100 | ||||||||
Tess Inc [Member] | Capitalized cost [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Impairment of intangible assets | 600 | ||||||||
Tess Inc [Member] | Goodwill [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Impairment of intangible assets | 800 | ||||||||
Tess Inc [Member] | Research and Development Expense [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Impairment of intangible assets | $ 700 | ||||||||
Tess Inc [Member] | Minimum [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership percentage | 52.01% | ||||||||
Tess Inc [Member] | Maximum [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership percentage | 50.20% | ||||||||
Tess Inc [Member] | Common Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Shares issued | 23,800,000 | 75,000 | 189,000 | 75,000 | |||||
Shares issued, value | $ 6,000 | $ 220 | |||||||
Shares issued price per share | $ 8.49 | ||||||||
Resale of shares | 25,000 | ||||||||
Shares exchanged | 2,708,333 | ||||||||
Tess Inc [Member] | Common Stock [Member] | Canada, Dollars [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Shares issued, value | $ 1,200 |
Investment (Verady) (Details)
Investment (Verady) (Details) - Convertible Note [Member] - Verady, LLC [Member] - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Nov. 30, 2017 | Dec. 31, 2019 | |
Investment in Convertible note | $ 0.2 | |
Investment Maturity date | Dec. 31, 2022 | |
Investment Interest rate | 6.00% | |
Automatic conversion of Company's convertible note plus accrued interest | $ 0.2 | |
Percentage owned | 3.20% |
Investments (Schedule of Fair v
Investments (Schedule of Fair value shares) (Details) - Tess Inc [Member] $ / shares in Units, $ in Thousands | Apr. 10, 2019USD ($)$ / sharesshares |
Tess shares held by Riot Blockchain, Inc. | shares | 2,708,333 |
Per share fair value | $ / shares | $ 0.03 |
Fair value of Tess shares held by Riot Blockchain, Inc. | $ | $ 90 |
Investment (Schedule of Calcula
Investment (Schedule of Calculation of Gain on Deconsolidation of Tess) (Details) - USD ($) $ in Thousands | Apr. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | $ 12,628 | $ 2,311 | |
Less: | |||
Net liabilities | (4,145) | (9,369) | |
Gain on deconsolidation of Tess | $ 1,139 | ||
Tess Inc [Member] | |||
Current assets | $ 130 | ||
Less: | |||
Accounts payable | 761 | ||
Accrued expenses | 275 | ||
Convertiable notes | 1,696 | ||
Net liabilities | (2,602) | ||
Non-controlling interest share | 1,553 | ||
Sub-total | (1,048) | ||
Less: Fair value of shares owned by Riot Blockchain | 90 | ||
Gain on deconsolidation of Tess | $ (1,139) |
Long-Term Assets (Schedule of C
Long-Term Assets (Schedule of Carrying Amounts Related to Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Long-term Assets Schedule Of Carrying Amounts Related To Acquired Intangible Assets | ||
Patents at beginning, net | $ 507 | $ 510 |
Additions | 38 | 59 |
Less: amortization expense | 86 | 62 |
Patents at ending, net | $ 459 | $ 507 |
Long-Term Assets (Schedule of T
Long-Term Assets (Schedule of Total Estimated Amortization of Intangible Assets) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Future amortization | |||
2020 | $ 86 | ||
2021 | 86 | ||
2022 | 86 | ||
2023 | 86 | ||
2024 and thereafter | 115 | ||
Total | 459 | $ 507 | $ 510 |
Amortization expense of intangible assets | 86 | 62 | |
Intangible assets acquired in business acquisition | $ 0 | ||
Logical Brokerage Corp [Member] | |||
Future amortization | |||
Intangible assets acquired in business acquisition | $ 700 | ||
Bitmain S17 Pro Antminers from Bitmain [Member] | |||
Future amortization | |||
Number of computers acquired | 1,000 | ||
Value of computers acquired | $ 1,400 | ||
Deposits | $ 1,400 |
Notes, Warrants and Other Obl_2
Notes, Warrants and Other Obligations (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jun. 27, 2019USD ($)shares | Jan. 31, 2019USD ($)shares | Aug. 23, 2018USD ($) | Feb. 21, 2018USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Jan. 28, 2019USD ($)$ / sharesshares | Mar. 28, 2018USD ($) | Mar. 28, 2018CAD ($) | |
Debt Instrument [Line Items] | ||||||||||
Conversion of notes into shares | shares | 1,813,500 | |||||||||
Fair value of conversion of shares | $ 10,226,000 | |||||||||
Gain on extinguishment of debt | 854,000 | |||||||||
Restricted Stock [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stock issued during period | shares | 150,000 | |||||||||
Senior Secured Convertible Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 8.00% | |||||||||
Fair value of notes | $ 6,300,000 | |||||||||
Upfront costs and fees | $ 400,000 | |||||||||
Conversion of notes into shares | shares | 1,813,500 | |||||||||
Fair value of conversion of shares | $ 3,900,000 | $ 10,200,000 | ||||||||
Senior Secured Convertible Promissory Notes [Member] | Restricted Stock [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stock issued during period | shares | 150,000 | |||||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price | $ / shares | $ 2 | |||||||||
Percentage of lowest volume-weighted adjusted price of shares | 80.00% | |||||||||
Exercise price | $ / shares | $ 1.94 | |||||||||
Debt instrument face amount | $ 3,400,000 | $ 3,400,000 | ||||||||
Percentage amount of shares issuable upon full conversion of Notes | 300.00% | |||||||||
Warrant issued | shares | 1,908,144 | 1,908,144 | ||||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of number of shares issuable | 19.99% | |||||||||
Percentage of beneficial ownership of shares | 9.99% | |||||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of beneficial ownership of shares | 4.99% | |||||||||
Senior Secured Convertible Promissory Notes [Member] | Private Financing [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 3,000,000 | |||||||||
Tess Inc [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Ownership percentage | 8.80% | |||||||||
Tess Inc [Member] | Convertible Note [Member] | Private Placement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 1,700,000 | |||||||||
Tess Inc [Member] | Convertible Note [Member] | Canada, Dollars [Member] | Private Placement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 2,200,000 | |||||||||
Tess Inc [Member] | Promissory Note [Member] | Private Placement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable | $ 1,696,000 | |||||||||
Cash released | $ 921,000 | |||||||||
Interest rate | 5.00% | |||||||||
BMSS Purchase Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 1,300,000 | |||||||||
Purchase cost | $ 8,500,000 | |||||||||
Gain on extinguishment of debt | 400,000 | |||||||||
One time settlement amount | $ 1,000,000 | |||||||||
Settlement with certain creditors [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gain on extinguishment of debt | $ 500,000 | |||||||||
Value of liabilities settled with certain creditors | 2,100,000 | |||||||||
Cash payment made to settle liabilities with certain creditors | $ 1,600,000 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | Dec. 18, 2018 | Apr. 20, 2018 | Feb. 14, 2018 | Jan. 25, 2018 | Jan. 04, 2018 | May 24, 2019 | Jan. 31, 2019 | Aug. 31, 2018 | Aug. 21, 2018 | Mar. 31, 2018 | Feb. 21, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 03, 2017 |
Class of Stock [Line Items] | ||||||||||||||
Proceeds from issuance of common stock | $ 24,825,000 | |||||||||||||
Fair value of restricted stock | ||||||||||||||
Proceeds from warrant exercise | $ 350,000 | |||||||||||||
H.C. Wainwright [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Proceeds from issuance of common stock | $ 9,500,000 | |||||||||||||
Stock issued during period | 5,995,559 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 8,351,762 | |||||||||||||
Fair value of restricted stock | ||||||||||||||
Warrant [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Exercise price | $ 1.94 | |||||||||||||
Warrants to purchase common stock | 13,009 | |||||||||||||
Number of shares of common stock issuable upon conversion | 100,000 | |||||||||||||
Proceeds from warrant exercise | $ 400,000 | |||||||||||||
Restricted common stock [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 150,000 | |||||||||||||
Share price | $ 1.70 | |||||||||||||
Restricted common stock [Member] | Directors and Officers [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 327,416 | |||||||||||||
Kairos Global Technology, Inc [Member] | Common Stock [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion price | $ 6.80 | |||||||||||||
Preferred stock stated value per share | $ 6.80 | |||||||||||||
Number of shares of common stock issuable upon conversion | 1,750,001 | |||||||||||||
Prive Technologies, Inc. [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock shares held in escrow | 200,000 | |||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares terminated | 91,496 | |||||||||||||
Stock issued during period | 500,000 | |||||||||||||
Share price | $ 5.31 | |||||||||||||
Preferred stock, shares outstanding | 4,199 | 13,000 | ||||||||||||
Preferred stock outstanding | 4,199 | 13,000 | ||||||||||||
Conversion of stock shares converted into common stock | 8,801 | 1,353,505 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 100,000 | 100,000 | 3,215 | |||||||||||
Proceeds from warrant exercise | $ 350,000 | |||||||||||||
Common Stock [Member] | H.C. Wainwright [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Proceeds from issuance of common stock | $ 100,000,000 | $ 23,800,000 | ||||||||||||
Stock issued during period | 8,351,762 | |||||||||||||
Amount of Sales Agreement | $ 23,800,000 | |||||||||||||
Percentage of commission of aggregate proceeds | 3.00% | |||||||||||||
Share price | $ 2.97 | |||||||||||||
Common Stock [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 239,751 | |||||||||||||
Common Stock [Member] | Consultant and advisory board members [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 48,500 | |||||||||||||
Fair value of restricted stock | $ 2,200,000 | |||||||||||||
Share price | $ 1.41 | |||||||||||||
Common Stock [Member] | Advisory board members and employees [Member] | 2019 Equity Incentive Plan [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 1,493,832 | |||||||||||||
Common Stock [Member] | Consulting Services [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 22,523 | 18,000 | 2,754 | |||||||||||
Share price | $ 5.55 | $ 14.33 | $ 7.26 | |||||||||||
Common Stock [Member] | Stock Options [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 19,533 | |||||||||||||
Common Stock [Member] | BMSS [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 50,000 | 50,000 | ||||||||||||
Share price | $ 5.31 | |||||||||||||
Common Stock [Member] | Prive Technologies, Inc. [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period | 1,000,000 | |||||||||||||
Common Stock [Member] | Corporate Stock Transfer, Inc [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock shares held in escrow | 200,000 |
Stock Options, Warrants and R_3
Stock Options, Warrants and Restricted Common Stock (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 05, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 1,800,000 | ||
Unrecognized compensation cost, period for recognition | 3 months | ||
Total stock-based compensation | $ 745,000 | $ 4,660,000 | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 3 years | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 5 years | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
2019 Equity Incentive Plan [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares reserved under the Plan | 3,600,000 | ||
Number of shares registered under the Plan | 3,930,603 | ||
Stock Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 58,000 |
Stock Options, Warrants and R_4
Stock Options, Warrants and Restricted Common Stock (Other Common Stock Purchase Warrants) (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 14, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Proceeds from warrants exercised | $ 350 | ||||
Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Proceeds from warrants exercised | $ 350 | ||||
Stock issued during period | 100,000 | 100,000 | 3,215 | ||
Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options forfeited | 160,773 | ||||
Proceeds from warrants exercised | $ 400 | ||||
Warrants to purchase common stock | 1,908,144 | ||||
Exercise price | $ 1.94 | ||||
Number of warrants exercised | 13,009 | ||||
Nonqualified [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Awards outstanding | 3,574,257 | 1,671,113 | 1,944,895 |
Stock Options, Warrants and R_5
Stock Options, Warrants and Restricted Common Stock (Schedule of Stock-based Compensation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 745 | $ 4,660 |
Restricted stock awards under Plan [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 687 | 3,972 |
Stock option awards under Plan [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 58 | $ 688 |
Stock Options, Warrants and R_6
Stock Options, Warrants and Restricted Common Stock (Schedule of Restricted Stock Activity) (Details) - Restricted common stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Beginning balance | 95,939 | 496,152 |
Granted | 1,542,332 | 431,000 |
Vested | (58,772) | (530,065) |
Forfeited | (55,000) | (301,148) |
Ending balance | 1,524,499 | 95,939 |
Weighted Average Grant Date Fair value | ||
Beginning balance | $ 12.49 | $ 5.97 |
Granted | 1.41 | 10.46 |
Vested | 7.66 | 7.61 |
Forfeited | 14.95 | 7.68 |
Ending balance | $ 1.37 | $ 12.49 |
Stock Options, Warrants and R_7
Stock Options, Warrants and Restricted Common Stock (Schedule of Fair Value Assumptions) (Details) - Stock Incentive Plan [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Expected price volatility, minimum | 152.00% |
Expected price volatility, maximum | 159.00% |
Risk free interest rate, minimum | 2.49% |
Risk free interest rate, maximum | 2.96% |
Expected term | 5 years |
Stock Options, Warrants and R_8
Stock Options, Warrants and Restricted Common Stock (Schedule of Award Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Incentive Plan [Member] | |||
Shares Underlying Options/Warrants | |||
Outstanding, beginning | 62,000 | 119,533 | |
Granted | 62,000 | ||
Exercised | (19,533) | ||
Forfeited | (50,000) | (100,000) | |
Outstanding, ending | 12,000 | 62,000 | 119,533 |
Exercisable | 12,000 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning | $ 15.71 | $ 9.02 | |
Granted | 15.71 | ||
Exercised | 4.02 | ||
Forfeited | 18.50 | 10 | |
Outstanding, ending | 4.09 | $ 15.71 | $ 9.02 |
Exercisable | $ 4.09 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding | 3 years 8 months 12 days | 9 years 2 months 12 days | |
Exercisable | 3 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Outstanding | |||
Exercisable | |||
Nonqualified [Member] | |||
Shares Underlying Options/Warrants | |||
Outstanding, beginning | 1,671,113 | 1,944,895 | |
Granted | 1,908,144 | ||
Exercised | (113,009) | ||
Forfeited | (5,000) | (160,773) | |
Outstanding, ending | 3,574,257 | 1,671,113 | 1,944,895 |
Exercisable | 3,574,257 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning | $ 39.47 | $ 35.06 | |
Granted | 1.94 | ||
Exercised | 3.50 | ||
Forfeited | 7.90 | 10.88 | |
Outstanding, ending | 19.48 | $ 39.47 | $ 35.06 |
Exercisable | $ 19.48 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding | 2 years 10 months 25 days | 2 years | 2 years 8 months 12 days |
Issued | 5 years 2 months 12 days | ||
Exercisable | 2 years 10 months 25 days | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 6,135,000 | ||
Exercisable |
Animal Health License Agreeme_2
Animal Health License Agreements (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2012 | Dec. 31, 2019 | Dec. 31, 2018 | |
Animal Health License Agreements [Abstract] | |||
Aggregate milestone payments, maximum | $ 900,000 | ||
Additional milestone payments, maximum | 2,000,000 | ||
Deferred revenue | 97,000 | $ 97,000 | |
Deferred revenue, noncurrent | 776,000 | 872,000 | |
Recognition of license fee revenue | $ 1,600,000 | $ 96,000 | $ 96,000 |
Income taxes (Narrative) (Detai
Income taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | $ 168.8 | |
Portion of federal and state net operating loss carryforwards subject to an 80% limitation on taxable income, that do not expire and will carry forward indefinitely | 20.1 | $ 19.1 |
Increase (decrease) in deferred tax asset valuation allowance | 3.5 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | $ 100.3 | |
Maximum [Member] | Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards, expiration date | Dec. 31, 2037 |
Income taxes (Schedule of Compo
Income taxes (Schedule of Components of Loss From Continuing Operations by Domestic and Foreign Jurisdictions) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (20,446) | $ (56,453) |
Foreign | (4,555) | |
Loss from continuing operations before income taxes | $ (20,446) | $ (61,008) |
Income taxes (Schedule of Com_2
Income taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||
US Federal | ||
US State | ||
Foreign | ||
Total current benefit | ||
Deferred: | ||
US Federal | 117 | 495 |
US State | 26 | 112 |
Foreign | 92 | |
Total deferred benefit | 143 | 699 |
Total benefit for income taxes | $ 143 | $ 699 |
Income taxes (Schedule of Defer
Income taxes (Schedule of Deferred Tax Assets and (Liabilities)) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred income tax assets: | |||
Net operating loss carryforwards | $ 43,436 | $ 30,745 | |
Research and development credit carryforwards | 989 | 989 | |
Stock option expense | 1,095 | 1,384 | |
Impairment of mining related assets and other | (146) | 8,779 | |
Total deferred tax assets | 45,374 | 41,897 | |
Valuation allowance | (45,374) | (41,897) | |
Net deferred tax assets | |||
Deferred income tax liabilities: | |||
Indefinite life intangible assets | (143) | ||
Net deferred tax liabilities | $ (143) | $ (699) |
Income taxes (Reconciliation of
Income taxes (Reconciliation of Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax expense (benefit) | $ (4,293) | $ (12,791) |
State taxes, net of federal tax expense (benefit) | (664) | (2,887) |
Stock compensation | 1,142 | 174 |
Other | 195 | |
Change in valuation allowance | 3,477 | 14,805 |
Income taxes benefit | $ (143) | $ (699) |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) | Apr. 09, 2018USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 26, 2018USD ($) | Feb. 27, 2018USD ($)ft² |
Operating Leased Assets [Line Items] | |||||
Operating lease liabilities | $ 368,000 | ||||
Right of use assets | 400,000 | ||||
Lump sum payment made to consultant for services relating to the Company's business | 4,000,000 | ||||
Prepaid expenses | 4,000,000 | ||||
Office Space - Fort Lauderdale, Florida [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Area of lease | ft² | 1,700 | ||||
Lease expire date | Aug. 9, 2021 | ||||
Lease term | 39 months | ||||
Lease renewal term | 5 years | ||||
Base rent per month | $ 4,659 | ||||
Base rent per month per square foot | $ 2.75 | ||||
Escalate rate | 3.00% | ||||
Kairos Global Technology, Inc [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Area of lease | ft² | 107,600 | ||||
Base rent per month | 235,000 | $ 664,760 | $ 223,800 | ||
Monthly base rent owed for January 2019 | 230,000 | ||||
Monthly base rent owed for all remaining periods thereafter for the duration of the lease, including any renewals | 190,000 | ||||
Rent expense | $ 5,600,000 | $ 5,500,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Operating Leases) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease cost | |
Operating lease cost | $ 2,378 |
Variable lease cost | 3,200 |
Operating lease expense | 5,578 |
Short-term lease rent expense | 17 |
Total rent expense | 5,595 |
Other information | |
Operating cash flows from operating leases | 2,377 |
Right of use assets exchanged for new operating lease liabilities | $ 2,664 |
Weighted-average remaining lease term - operating leases | 6 months |
Weighted-average discount rate - operating leases | 10.00% |
Commitments and Contingencies_4
Commitments and Contingencies (Schedule of Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
For the year ended December 31, 2020 | $ 344 |
For the year ended December 31, 2021 | 35 |
Total | 379 |
Less present value discount | (11) |
Operating lease liabilities | $ 368 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Tess [Member] | ||
Related Party Transaction [Line Items] | ||
Key management personnel salaries | $ 300,000 | $ 700,000 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Tess Related Party Transactions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Powercases Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Services to Tess | [1] | $ 213 | $ 655 |
Payable to | 37 | ||
JLM Strategic Marketing [Member] | |||
Related Party Transaction [Line Items] | |||
Services to Tess | [1] | 228 | |
Payable to | 9 | ||
1038088 Ontario Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Services to Tess | [1] | 45 | 187 |
Payable to | $ 52 | ||
[1] | - 2019 amounts provided by related parties are up to the date of de-consolidation. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Feb. 07, 2020 | Feb. 28, 2020 | Feb. 27, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Proceeds from the sale of stock | $ 24,825 | ||||
Subsequent Event [Member] | Prive Technologies, Inc. [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of Stock held in escrow | 200,000 | ||||
Subsequent Event [Member] | Officer [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares of restricted common stock issued | 122,377 | ||||
Vested restricted stock units | 5,000 | ||||
Subsequent Event [Member] | Chief Executive Officer and Chief Financial Officer [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares of restricted common stock issued | 209,790 | ||||
Annual salary | $ 300 | ||||
Subsequent Event [Member] | Directors and certain employees [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares of restricted common stock issued | 1,212,192 | ||||
Vesting period of restricted common stock issued | 1 year | ||||
H.C. Wainwright [Member] | |||||
Subsequent Event [Line Items] | |||||
Proceeds from the sale of stock | $ 9,500 | ||||
Stock issued during period | 5,995,559 |