Quarterly report pursuant to Section 13 or 15(d)

ADVANCES TO VENDORS AND DEPOSITS

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ADVANCES TO VENDORS AND DEPOSITS
6 Months Ended
Jun. 30, 2022
Advances To Vendors And Deposits  
ADVANCES TO VENDORS AND DEPOSITS

NOTE 4 – ADVANCES TO VENDORS AND DEPOSITS

 

The Company contracts with bitcoin mining server manufacturers in procuring equipment necessary for the operation of its bitcoin mining operations. A typical agreement calls for a certain percentage of the total order to be paid in advance at specific intervals, usually (1) within several days of execution of a specific contract (2) approximately six months before each shipment date and (3) approximately one month before each shipment date. We account for these payments as Advances to vendor on the balance sheet.

 

As of June 30, 2022 and December 31, 2021, such advances totalled approximately $800.2 million and $466.3 million, respectively. At June 30, 2022, the company had a payable of $46.6 million related to the accrual of an advance to a vendor that was subsequently approved for payment and paid in early July.

 

In addition, the Company contracts with other service providers for hosting of its equipment and operational support in data centers where the company’s equipment is deployed. These arrangements also call for advance payments to be made to vendors in conjunction with the contractual obligations associated with these services. We classify these payments as deposits on the balance sheet.