v3.24.3
FAIR VALUE MEASUREMENT
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENT FAIR VALUE MEASUREMENT
 
The Company measures certain financial and non-financial assets and liabilities at fair value on a recurring or non-recurring basis. The Company uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability.
The levels of the fair value hierarchy are:
 
 Level 1:Observable inputs such as quoted market prices in active markets for identical assets or liabilities
 Level 2:Observable market-based inputs or unobservable inputs that are corroborated by market data
 Level 3:Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions
 
The carrying amounts reported on the Condensed Consolidated Balance Sheets for cash and cash equivalents, restricted cash, other receivables, deposits, prepaid expenses and other current assets, property and equipment, advances to vendors, accounts payable, accrued expenses, and legal reserve payable approximate their estimated fair market value based on the short-term maturity of these instruments. Additionally, the carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s term loan, operating lease liabilities and other long-term liabilities approximate fair value as the related interest rates approximate rates currently available to the Company.

Financial assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to their fair value measurement. The Company measures the fair value of its marketable securities and investments by taking into consideration valuations obtained from third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs included reported trades of and broker-dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs.

Recurring measurement of fair value

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy for each of those assets and liabilities as of September 30, 2024 and December 31, 2023, respectively:

(in thousands)
Total carrying value at September 30, 2024
Quoted prices in active markets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
Assets:
Money market funds$105,130 $105,130 $— $— 
Digital assets1,710,221 1,710,221 — — 
Liabilities:
Derivative instrument (1)
24,246 — 24,246 — 
Contingent consideration liability (2)
3,485 — — 3,485 
 
(in thousands)
Total carrying value at December 31, 2023
Quoted prices in active markets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
Assets:
Money market funds$141,147 $141,147 $— $— 
U.S. Treasury Bills60,541 60,541 — — 
Digital assets639,660 639,660 — — 

(1) The fair value of the derivative instrument was estimated using a discounted cash flow approach that considers various assumptions including current market prices and electricity forward curves, which are considered Level 2 inputs. Increases (decreases) in market prices and electricity forward curves could result in significant increases (decreases) in the fair value of derivative instruments. Refer to Note 2 - Summary of Significant Accounting Policies - Derivatives, for further information.
(2) Represents the estimated amount of acquisition-related consideration expected to be paid in the future as of September 30, 2024 for the GC Center Equity Holdings, LLC acquired on January 12, 2024. Increases (decreases) in the probability of achieving the milestones could result in significant increases (decreases) in the fair value of the contingent consideration. Refer to Note 3 - Acquisitions, for further information.

The Company includes the above money market funds and U.S. treasury bills in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company’s U.S. treasury bills have original remaining maturities of three months or less when purchased.

Effective January 1, 2023, the Company early adopted ASU 2023-08, measuring digital assets at fair value on a recurring basis. There were no transfers among Levels 1, 2 or 3 during the nine months ended September 30, 2024.

Fair value of financial instruments not recognized at fair value

The following tables present information about the Company’s financial instruments that are not recognized at fair value on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, respectively, is as follows:

(in thousands)
Total carrying value at September 30, 2024
Quoted prices in active markets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
Liabilities:
Notes payable
$618,683 $561,291 $— $— 

(in thousands)
Total carrying value at December 31, 2023
Quoted prices in active markets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
Liabilities:
Notes payable
$325,654 $269,725 $— $— 
There were no transfers among Levels 1, 2 or 3 during the nine months ended September 30, 2024. As of September 30, 2024 and December 31, 2023 there were no other assets and liabilities measured at fair value on a non-recurring basis.