| Restatement of Previously Issued Financial Statements |
Note 2. Restatement of Previously Issued Financial Statements
The Company accounts for its Bitcoin held as an intangible asset and tested it for impairment on a daily basis based on quoted prices of Bitcoin, historically utilizing the daily closing price of Bitcoin. During the preparation of this Annual Report, the Company determined it has not been appropriately calculating its impairment of Bitcoin. The Company determined that its method of calculating impairment of its Bitcoin assets, on a daily basis using a spot price at a standard cutoff time, was not in compliance with the ASC 350-30-35-19 requirement to recognize impairment whenever carrying value exceeds fair value. Effectively, the Company determined that ASC 350-30-35-19 calls for the intraday low price of Bitcoin to be utilized in calculating impairment of the Company’s Bitcoin held as that metric is the most accurate indicator of whether it is more likely than not that the asset is impaired.
Updating of the Company’s historical calculations of Bitcoin impairment amounts resulted in correction of Impairment of Bitcoin and, in some cases, Realized gains on the sale of Bitcoin, with an offsetting correction of the book value of Bitcoin.
In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded that the error was material to the Consolidated Balance Sheet as of December 31, 2021 and Consolidated Statements of Operations, Equity, and Cash Flows for the years ended December 31, 2021 and 2020. Management restated the impacted financial statements as of December 31, 2021, and for the years ended December 31, 2021 and 2020, and related notes included herein to correct this error.
The following tables present the effects of correcting this error on the Company’s financial statements as of December 31, 2021, and for the years ended December 31, 2021 and 2020:
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As of December 31, 2021 |
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As previously |
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Consolidated Balance Sheet |
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reported |
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Adjustment |
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As restated |
Bitcoin |
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$ |
159,544 |
|
$ |
(8,951) |
|
$ |
150,593 |
Total current assets |
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573,539 |
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(8,951) |
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|
564,588 |
Total assets |
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1,530,939 |
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(8,951) |
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|
1,521,988 |
Accumulated deficit |
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|
(237,838) |
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|
(8,951) |
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|
(246,789) |
Total stockholders’ equity |
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1,357,320 |
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|
(8,951) |
|
|
1,348,369 |
Total liabilities and stockholders’ equity |
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$ |
1,530,939 |
|
$ |
(8,951) |
|
$ |
1,521,988 |
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For the year ended December 31, 2021 |
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As previously |
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Consolidated Statements of Operations |
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reported |
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Adjustment |
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As restated |
Impairment of Bitcoin |
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$ |
36,462 |
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$ |
7,511 |
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$ |
43,973 |
Total costs and expenses |
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235,602 |
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|
7,511 |
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243,113 |
Operating loss |
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(22,359) |
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(7,511) |
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(29,870) |
Net loss before taxes |
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(7,672) |
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(7,511) |
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(15,183) |
Net loss |
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(7,926) |
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(7,511) |
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(15,437) |
Net loss attributable to Riot Platforms, Inc. |
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$ |
(7,926) |
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$ |
(7,511) |
|
$ |
(15,437) |
Basis and diluted net loss per share |
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$ |
(0.08) |
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$ |
(0.09) |
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$ |
(0.17) |
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For the year ended December 31, 2020 |
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As previously |
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Consolidated Statements of Operations |
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reported |
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Adjustment |
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As restated |
Impairment of Bitcoin |
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$ |
989 |
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$ |
2,606 |
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$ |
3,595 |
Realized gain on sale/exchange of Bitcoin |
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(5,184) |
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(1,166) |
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(6,350) |
Total costs and expenses |
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26,214 |
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|
1,411 |
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|
27,625 |
Operating loss |
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(14,133) |
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(1,411) |
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(15,544) |
Net loss before taxes |
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(12,667) |
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(1,440) |
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(14,107) |
Net loss |
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(12,667) |
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(1,440) |
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(14,107) |
Net loss attributable to Riot Platforms, Inc. |
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$ |
(12,674) |
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$ |
(1,440) |
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$ |
(14,114) |
Basis and diluted net loss per share |
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$ |
(0.30) |
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$ |
(0.04) |
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$ |
(0.34) |
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For the year ended December 31, 2021 |
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Total Riot |
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Platforms, Inc. |
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Total |
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Accumulated |
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stockholders' |
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stockholders' |
Consolidated Statements of Stockholders' Equity |
|
deficit |
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equity |
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equity |
Net loss (as previously reported) |
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$ |
(7,926) |
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$ |
(7,926) |
|
$ |
(7,926) |
Net loss (adjustment) |
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|
(7,511) |
|
|
(7,511) |
|
|
(7,511) |
Net loss (as restated) |
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$ |
(15,437) |
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$ |
(15,437) |
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$ |
(15,437) |
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Balance as of December 31, 2021 (as previously reported) |
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$ |
(237,838) |
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$ |
1,357,320 |
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$ |
1,357,320 |
Balance as of December 31, 2021 (adjustment) |
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(8,951) |
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(8,951) |
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|
(8,951) |
Balance as of December 31, 2021 (as restated) |
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$ |
(246,789) |
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$ |
1,348,369 |
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$ |
1,348,369 |
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For the year ended December 31, 2020 |
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Total Riot |
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Platforms, Inc. |
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Total |
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Accumulated |
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stockholders' |
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stockholders' |
Consolidated Statements of Stockholders' Equity |
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deficit |
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equity |
|
equity |
Net loss (as previously reported) |
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$ |
(12,674) |
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$ |
(12,674) |
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$ |
(12,674) |
Net loss (adjustment) |
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(1,440) |
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|
(1,440) |
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|
(1,440) |
Net loss (as restated) |
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$ |
(14,114) |
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$ |
(14,114) |
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$ |
(14,114) |
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Balance as of December 31, 2020 (as previously reported) |
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$ |
(229,912) |
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$ |
277,071 |
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$ |
277,071 |
Balance as of December 31, 2020 (adjustment) |
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|
(1,440) |
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|
(1,440) |
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|
(1,440) |
Balance as of December 31, 2020 (as restated) |
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$ |
(231,352) |
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$ |
275,631 |
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$ |
275,631 |
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For the year ended December 31, 2021 |
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As previously |
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Consolidated Statements of Cash Flows |
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reported |
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Adjustment |
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As restated |
Net loss |
|
$ |
(7,926) |
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$ |
(7,511) |
|
$ |
(15,437) |
Impairment of Bitcoin |
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$ |
36,462 |
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$ |
7,511 |
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$ |
43,973 |
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For the year ended December 31, 2020 |
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As previously |
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Consolidated Statements of Cash Flows |
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reported |
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Adjustment |
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As restated |
Net loss |
|
$ |
(12,667) |
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$ |
(1,440) |
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$ |
(14,107) |
Impairment of Bitcoin |
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$ |
989 |
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$ |
2,606 |
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$ |
3,595 |
Realized gain on sale/exchange of Bitcoin |
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$ |
(5,184) |
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$ |
(1,166) |
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$ |
(6,350) |
The remainder of these notes to the consolidated financial statements have been updated, as applicable, to reflect the impacts of the revisions described above.
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