Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. As of June 30, 2022, the Company had two reportable segments in Continuing Operations: Cryptocurrency Mining and Data Center Hosting. The Company notes that previously there was an additional segment: Test and Measurement Instrumentation, however as discussed in Notes 1, 14, and 15, the Company sold MTI Instruments in April 2022, and therefore has classified as discontinued operations. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and cost of revenues of both reporting segments to assess the performance of the business of our reportable operating segments.

No operating segments have been aggregated to form the reportable segments. The Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.

The Cryptocurrency Mining segment generates revenue from the cryptocurrency the Company earns through its mining activities. The Data Center Hosting segment generates revenue from contracts for the provision/consumption of electricity and operation of the data center from the Company’s high performance computing facility in Calvert City, Kentucky.

For the three months ended June 30, 2022 and 2021, respectively, approximately 6% and 60% of the Company’s cryptocurrency mining revenue was generated from our operations in East Wenatchee, Washington, 41% and 40% from our operations in Calvert City, Kentucky and 53% and 0% from our operations in Murray, Kentucky. For the six months ended June 30, 2022 and 2021, respectively, approximately 6% and 71% of the Company’s cryptocurrency mining revenue was generated from our operations in East Wenatchee, Washington, 43% and 29% from our operations in Calvert City, Kentucky and 51% and 0% from our operations in Murray, Kentucky. 100% of the Company’s data center hosting revenue was generated from the facility in Calvert City, Kentucky from hosting with two customers for the three and six months ended June 30, 2022.

The Company evaluates performance based on profit or loss from operations before income taxes, accounting changes, items management does not deem relevant to segment performance, and interest income and expense. Inter-segment sales and expenses are not significant. Non-cash items of depreciation and amortization are included within both costs of sales and general and administrative expenses.

The following table details revenue and cost of revenues for the Company’s reportable segments for three and six months ended June 30, 2022 and 2021, and reconciles to net loss on the consolidated statements of operations :

(Dollars in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Reportable segment revenue:
Cryptocurrency mining revenue	$	7,497		$	1,657		$	15,309		$	2,652
Data hosting revenue		1,179			-			2,683			-
Total segment and consolidated revenue		8,676			1,657			17,992			2,652
Reportable segment cost of revenue:
Cost of cryptocurrency mining revenue, inclusive of depreciation		9,134			545			16,854			875
Cost of data hosting revenue		975			-			2,114			-
Total segment and consolidated cost of revenues		10,109			545			18,968			875
Reconciling items:
General and administrative expenses		7,249			2,503			14,504			3,799
Impairment on fixed assets		750			-			750			-
Interest expense		3,305			-			6,185			-
Loss on sale of fixed assets		1,618			-			1,618			-
Other income, net		-			(3	)		-			(8	)
Income tax (benefit) expense from continuing operations		(251	)		3			(797	)		3
Net loss from continuing operations		(14,104	)		(1,391	)		(23,236	)		(2,017	)
Income before income tax from discontinued operations (including gain on sale of MTI Instruments of $7,602 for the three and six months ended June 30, 2022)		7,477			217			7,702			177
Income tax benefit from discontinued operations		70			-			70			-
Net income from discontinued operations		7,547			217			7,772			177
Net loss	$	(6,557	)	$	(1,174	)	$	(15,464	)	$	(1,840	)
Capital expenditures		27,180			1,023			52,618			1,319
Depreciation and amortization		7,914			149			14,611			225