Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 6 — Discontinued Operations

In December 2021, the Company made the decision to divest certain mining equipment, graphic processing units and data center and its assets of TTM Digital reporting unit (“TTM Assets”) and commenced discussions with a third party to execute an asset sale. On March 24, 2022, the Company executed Heads of Terms agreement with a third party which includes certain binding and non-binding provisions. Pursuant to the Heads of Terms, the Company and the third party agreed to certain terms related to the Company’s sale of approximately 75% of its Ethereum mining assets and certain associated real property. The TTM Assets to be sold are those assets located in the facility in New York. The Company will continue to operate certain graphics processing units or associated assets at a co-located facility in North Carolina. See Note 18 – Subsequent Events for further discussion on the terms of the asset sale.

As a result of the decision to divest certain operating assets of the TTM Digital reporting unit, the Company has determined that subject assets met the definition of assets held for sale as defined by ASC 205-20 – Presentation of Financial Statements – Discontinued Operations. The Company determined the TTM Assets represented discontinued operations as it constituted a disposal of a significant component and a strategic shift that will have a material effect on the Company’s operations and financial results. As a result, the Company reclassified the balances and activities of the TTM Assets from their historical presentation to assets held for sale and assets and liabilities – discontinued operations on the consolidated balance sheets and to loss from discontinued operations on the consolidated statements of operations for the periods presented.

The carrying value of the TTM Digital asset disposal group was $6.07 million as of December 31, 2021. No adjustments were recorded to the carrying value of the assets held for sale as the estimated fair value less selling costs exceeded the carrying value. The following table details the assets and liabilities of the Company’s TTM Assets that were classified as assets held for sale and discontinued operations for the periods presented (in thousands):

	2021		2020
Current Assets
Related Party receivables	$	-	$	17
Mining equipment and facilities, net		5,571		-
Investment in Style Hunter		500		-
Total Current Assets	$	6,071	$	17
Noncurrent Assets
Mining equipment and facilities, net		-		1,272
Investment in Up North Hosting, LLC		-		644
Total Noncurrent Assets		-		1,916
Total Assets associated with discontinued operations	$	6,071	$	1,933
Liabilities associated with discontinued operations
Accounts payable	$	-	$	7
Accrued liabilities		-		117
Related party loan		-		75
Total Current Liabilities		-		199
Total Liabilities associated with discontinued operations	$	-	$	199

The following table presents the TTM Digital assets statement of operations line items classified as discontinued operations included within loss from discontinued operations for the years ended December 31, 2021, and 2020 (in thousands):

	2021			2020
Revenues
Mining income	$	8,150		$	1,868
Other revenue		29			-
Total Revenues		8,179			1,868
Operating costs and expenses
Mining cost		815			433
General and administrative		291			4
Depreciation		1,637			827
Total Operating Costs and Expenses		2,743			1,264
Gain from Discontinued Operations		5,436			604
Other Income (Expenses)
Gain (loss) on sale of fixed assets		(146	)		17
Fair value loss on previously held equity interest		(18	)		-
Other income (expenses), net		58			(29	)
Total Other Income		(106	)		12
Income before net loss of equity method investee		5,330			592
Share of net loss of equity method investee		(94	)		(39	)
Net income from discontinued operations	$	5,236		$	553

The following table summarizes the net cash flows from discontinued operations of TTM Digital for years ended December 31,2021 and 2020 (in thousands):

	For the Year Ended December 31,
	2021			2020
Net cash provided by operating activities – discontinued operations		1,369			595
Net cash used in investing activities – discontinued operations		(1,436	)		(582	)
Net cash provided by financing activities – discontinued operations		-			20