Correspondence 0001558370-24-014151 from Riot Platforms, Inc. (RIOT)
Riot Platforms, Inc.
Date: Nov. 1, 2024 · CIK: 0001167419 · Accession: 0001558370-24-014151
AI Filing Summary & Sentiment
File numbers found in text: 001-33675
Letter
Riot Platforms, Inc.
3855 Ambrosia St., Ste. 301
Castle Rock, CO 80109
+1 (303) 794-2000
www.RiotPlatforms.com
FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC. PURSUANT TO (“SEC RULE 83”)
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN POTIONS OF THIS LETTER. THIS LETTER OMITS CONFIDENTIAL INFORMATION (THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE OMITTED PORTIONS) INCLUDED IN THE UNREDACTED VERSION OF THE LETTER DELIVERED TO THE DIVISION OF CORPORATION FINANCE.
November 1, 2024
Via EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance Office of Crypto Assets
100 F Street, N.E.
Washington, D.C. 20549-3720
Attention:Lulu Cheng; David Lin; Michelle Miller; and Mark Brunhofer
Re:Riot Platforms, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2023
Filed February 23, 2024
Form 10-Q for the Period Ending June, 30, 2024
Form 8-K filed July 31, 2024
File No. 001-33675
Ladies and Gentlemen:
On behalf of Riot Platforms, Inc. (the “Company”), we submit this letter in response to comments from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”) received on October 3, 2024, relating to the Company’s Form 10-Q (the “Form 10-Q”) filed with the SEC on July 31, 2024, Form 10-K (the “Form 10-K”) filed with the SEC on February 23, 2024, and Form 8-K (the “Form 8-K”) filed with the SEC on July 31, 2024.
For your convenience, the Staff’s comments have been repeated below in their entirety in bold, with the Company’s response to a particular comment set out immediately thereunder. The headings and numbered paragraphs in this letter correspond to the headings and numbered paragraphs in the comment letter received from the Staff on October 3, 2024. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the relevant Form 10-Q, Form 10-K, and Form 8-K, as applicable.
***FOIA CONFIDENTIAL TREATMENT REQUESTED
BY RIOT PLATFORMS, INC.***
Securities and Exchange Commission
November 1, 2024
Page 2
Pursuant to 17 C.F.R. § 200.83, the Company requests confidential treatment for portions of its response to the Staff’s comment. Specifically, the Company requests that portions of its response that have been redacted from the version of this letter filed via the Commission’s EDGAR system and marked by the symbol “[***]” be maintained in confidence, not be made part of any public record and not be disclosed to any person, including in response to any request under the Freedom of Information Act, 5 U.S.C. § 552 (“FOIA”), as such responses contain confidential information. An unredacted version of this letter is being provided to the Commission under separate cover, along with the request for confidential treatment under SEC Rule 83.
Form 10-Q for the period ending June 30, 2024
General
1. We note your proposed disclosure in Appendix “B” to your Form 10-K that your custodian holds your Bitcoin in segregated trust accounts solely for Riot’s benefit and that your “Bitcoin held in such trust accounts are therefore not at risk of such custodian’s creditors or subject to inclusion in the bankruptcy estate of such custodian, if such custodian were ever to petition for bankruptcy protection or otherwise be declared insolvent.” Please balance your disclosure in future filings by providing a risk factor that:
● Addresses any potential uncertainties under applicable insolvency laws with respect to the holding of crypto assets in custodial accounts; and
● Discloses any consequent risk that your custodially-held Bitcoin could be considered the property of your custodian’s estate in the event of a bankruptcy of your custodian, and addresses the material impact and risks to shareholders related thereto.
Company Response: We respectfully acknowledge the Staff’s comment and confirm that we will revise our disclosure, commencing with the Quarterly Report on Form 10-Q for the period ended September 30, 2024 (the “2024 Q3 Form 10-Q”), by providing a risk factor regarding the risks related to potential uncertainties under insolvency laws with respect to the holding of our Bitcoin assets in custodial accounts, and we intend to include such disclosure in future filings. In addition, the risk factor disclosure will address the risk that our custodially-held Bitcoin could be considered property of our custodian’s estate in the event of bankruptcy of our custodian and the material impact and risks to shareholders related thereto.
Condensed Consolidated Statements of Operations, page 2
2. It is apparent from your disclosure added on page 29 in response to prior comment 8 that your cost of revenue for Bitcoin Mining does not include depreciation. Please represent to us that in future filings you will revise your statements of operations to provide the parenthetical disclosure called for in SAB 11B. To the extent depreciation and amortization are not included in any of your costs of revenues lines (i.e., Bitcoin Mining, Engineering and Other), ensure your disclosure covers all relevant captions.
Company Response: We respectfully acknowledge the Staff’s comment and confirm that we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to provide parenthetical disclosure as called for in
***FOIA CONFIDENTIAL TREATMENT REQUESTED
BY RIOT PLATFORMS, INC.***
Securities and Exchange Commission
November 1, 2024
Page 3
SAB 11B, and we intend to include such disclosure in future filings.
Notes to the financial statements, page 6
3. Please revise future Form 10-Q filings to provide activity in notes to the financial statements for the current quarter in addition to the year-to-date information you currently present in the financial statements.
Company Response: We respectfully acknowledge the Staff’s comment and confirm that we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to provide current quarter activity in notes to the financial statements in addition to year-to-date information where applicable, and we intend to include such disclosure in future filings. For example, we will add disclosure of activity for the current three-month period in addition to the previously reported year-to-date disclosures in Note 5. Bitcoin, where we will add disclosure of revenue recognized from Bitcoin mined and the change in fair value of Bitcoin, and in Note 9. Power Supply Agreements, where we will add disclosure for the change in fair value of derivative assets.
Note 2. Significant Accounting Policies and Recent Accounting Pronouncements
Revenue recognition, page 7
4. We note your response to prior comment 17 and your revised disclosures. Please address the following:
● You disclose that your mining pool participation agreements are freely terminable, at any time by you or by the pool operator, without penalty to either party and separately that for accounting purposes, each agreement has a duration of less than 24 hours and is therefore continually renewed. Confirm for us that your agreements are continually renewed as a result of either party being able to terminate the agreement at any time without penalty and therefore result in a duration that is less than 24 hours. If this is true, revise your policy disclosure in future filings to properly state the causal relationship (i.e., contracts are less than 24 hours in duration as a result of them being continuously renewed and not vice versa) and link the continuously renewal determination to the termination rights in your agreements.
● In the first paragraph on page 8 you disclose that you measure the noncash Bitcoin consideration received at agreement inception and indicate that this measurement is based on the quoted price in your Principal Market at the beginning of the “contract period” at the single Bitcoin level. As contracts continuously renew and therefore there are multiple contracts incepted (and multiple contract periods) during each “measurement period” identified in the antepenultimate paragraph on page 7, tell us whether you mean you value Bitcoin consideration from the pool operator at the beginning of the measurement period. If so, revise your disclosure in future filings to indicate the specific time you measure Bitcoin and state that this specific time is on the date of contract inception. In this regard, see ASC 606-10-32-21 which clarifies that the measurement of noncash consideration is made on the date that the criteria in ASC 606-10-25-1 are met. If not, tell us the time you use to value Bitcoin consideration and clarify whether this time is on the date of contract inception for all
***FOIA CONFIDENTIAL TREATMENT REQUESTED
BY RIOT PLATFORMS, INC.***
Securities and Exchange Commission
November 1, 2024
Page 4
the contracts during the measurement period.
● In the penultimate paragraph on page 7 and the first paragraph on page 8 you refer to “contract period” when it appears you may be referring to the measurement period as there appear to be multiple contract periods throughout the day based on continuous renewal. Confirm for us whether this is true. If so, revise your disclosure in future filings to clarify. If not, tell us the contract periods to which you are referring.
Company Response: We respectfully acknowledge the Staff’s comment and respond as follows:
Bullet # 1:
We confirm that our mining pool participation agreement is freely terminable, at any time, by the Company or by the pool operator, without penalty to either party. We further confirm that for accounting purposes, the agreement has a duration of less than 24 hours as a result of the agreement being continually renewed at the beginning of each measurement period. The continual renewal of the agreement does not represent a material right requiring separate performance obligations as the FPPS formula remains the same upon each renewal. We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to clarify this, and we intend to include such disclosure in future filings.
Bullet #2:
We confirm that we value Bitcoin consideration from the pool operator at the beginning of the measurement period, which we consider to be 0:00:00 UTC on the date of contract inception. We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to clarify this, and we intend to include such disclosure in future filings.
Bullet #3:
We confirm that we were referring to the measurement period and, to clarify, we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to remove the word “contract” and insert the word “measurement,” and we intend to include such disclosure in future filings.
Note. 9 Power Purchase Agreement, page 14
5. We note your response to prior comment 18 and your revised disclosures on pages 14 and 15. Please enhance future filings by revising disclosure to:
● Clarify, if true, that power usage is not a variable input in fair value determination of the Power Purchase Agreement (PPA) derivative fair value as under the terms of the PPA, the price and quantity of power are fixed, despite the existence of multiple blocks with separate power amounts and terms. If not true, tell us why not.
● Clarify, if true, that the discounted cash flow estimation considers the PPA fixed-price of each block for a total of 345 MW as well as the disclosed quoted commodity exchange spot and forward prices as adjusted for basis spreads for load zone-to-hub differentials through the
***FOIA CONFIDENTIAL TREATMENT REQUESTED
BY RIOT PLATFORMS, INC.***
Securities and Exchange Commission
November 1, 2024
Page 5
term of the PPA. If not true, tell us why not.
● Enhance your rollforward of the change in fair value of the derivative asset to disaggregate the change in fair value between gains and losses and/or settlements for the periods presented. Refer to ASC 820-10-50-2(c) and (d). In this regard, as you either purchase power or elect to sell it back in exchange for credits against future power cost, it would appear that settlements occur each period. In your response, tell us how settlements are calculated for purposes of the requested disclosure.
● Provide additional quantitative input disclosure as we note that the only quantitative input you provide (i.e., the discount rate used to calculate the fair value of the derivative asset) did not change from the 23.6% rate at December 31, 2023 and it otherwise is not clear from your financial statement disclosures what caused the changes in value in 2024. In your response tell us your consideration of disclosing estimates and or ranges of quoted commodity exchange spot and forward prices, adjusted for basis spreads for load zone-to-hub differentials through the term of the PPA, that presumably you would utilize in validating the derivative fair value determined by your third-party valuation specialist. Refer to ASC 820-10-35-54 and ASC 820-10-50-2(bbb)(2).
Company Response: We respectfully acknowledge the Staff’s comment and respond as follows:
Bullet #1:
We confirm that power usage is not a variable input in fair value determination of the Power Purchase Agreement (“PPA”) derivative fair value and we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q to clarify this, and we intend to include such disclosure in future filings.
Bullet #2:
We confirm that the discounted cash flow estimation considers the PPA fixed-price of each block for a total of 345 MW as well as the disclosed quoted commodity exchange spot and forward prices as adjusted for basis spreads for load zone-to-hub differentials through the term of the PPA and we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to state this, and we intend to include such disclosure in future filings.
Bullet #3:
We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to enhance our rollforward of the change in fair value of the derivative asset to disaggregate the change in fair value between changes due to changes in the forward price curve and changes due to the passage of time and settlements for the periods presented, and we intend to include such disclosure in future filings. For the purposes of this disclosure, the change in fair value due to the passage of time is calculated first by using the forward price curve as of the current period end date to compute an estimated fair value of the derivative. Then, as of the same current period end date, the price curve used as of the prior period end date is used to compute an estimated fair value of the derivative as of the current period end date. The difference between those two estimates equals the change in value due to the passage of time, with the remainder of the change in the fair value of the derivative
***FOIA CONFIDENTIAL TREATMENT REQUESTED
BY RIOT PLATFORMS, INC.***
Securities and Exchange Commission
November 1, 2024
Page 6
being attributable to settlements.
Bullet #4:
We respectfully acknowledge the discount rate of 23.6% was used for the derivative asset valuation as of June 30, 2024 and a discount rate of 23.1% was used as of December 31, 2023. However, the increase in discount rate was not a significant driver of the change in fair value of the derivative asset, and therefore not deemed material for disclosure. The primary driver of the change in fair value of the derivative asset was attributable to changes in the forward price curve for electricity. We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to include a table of unobservable inputs, including forward power price ranges and averages during the respective reporting periods, and we intend to include such disclosure in future filings.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 27
6. We note your response to prior comment 12. Considering the material impact of your power strategy on operating results, per
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CORRESP 1 filename1.htm Riot Platforms, Inc. 3855 Ambrosia St., Ste. 301 Castle Rock, CO 80109 +1 (303) 794-2000 www.RiotPlatforms.com FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC. PURSUANT TO (“SEC RULE 83”) CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN POTIONS OF THIS LETTER. THIS LETTER OMITS CONFIDENTIAL INFORMATION (THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE OMITTED PORTIONS) INCLUDED IN THE UNREDACTED VERSION OF THE LETTER DELIVERED TO THE DIVISION OF CORPORATION FINANCE. November 1, 2024 Via EDGAR United States Securities and Exchange Commission Division of Corporation Finance Office of Crypto Assets 100 F Street, N.E. Washington, D.C. 20549-3720 Attention:Lulu Cheng; David Lin; Michelle Miller; and Mark Brunhofer Re:Riot Platforms, Inc. Form 10-K for the Fiscal Year Ended December 31, 2023 Filed February 23, 2024 Form 10-Q for the Period Ending June, 30, 2024 Form 8-K filed July 31, 2024 File No. 001-33675 Ladies and Gentlemen: On behalf of Riot Platforms, Inc. (the “Company”), we submit this letter in response to comments from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”) received on October 3, 2024, relating to the Company’s Form 10-Q (the “Form 10-Q”) filed with the SEC on July 31, 2024, Form 10-K (the “Form 10-K”) filed with the SEC on February 23, 2024, and Form 8-K (the “Form 8-K”) filed with the SEC on July 31, 2024. For your convenience, the Staff’s comments have been repeated below in their entirety in bold, with the Company’s response to a particular comment set out immediately thereunder. The headings and numbered paragraphs in this letter correspond to the headings and numbered paragraphs in the comment letter received from the Staff on October 3, 2024. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the relevant Form 10-Q, Form 10-K, and Form 8-K, as applicable. ***FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC.*** Securities and Exchange Commission November 1, 2024 Page 2 Pursuant to 17 C.F.R. § 200.83, the Company requests confidential treatment for portions of its response to the Staff’s comment. Specifically, the Company requests that portions of its response that have been redacted from the version of this letter filed via the Commission’s EDGAR system and marked by the symbol “[***]” be maintained in confidence, not be made part of any public record and not be disclosed to any person, including in response to any request under the Freedom of Information Act, 5 U.S.C. § 552 (“FOIA”), as such responses contain confidential information. An unredacted version of this letter is being provided to the Commission under separate cover, along with the request for confidential treatment under SEC Rule 83. Form 10-Q for the period ending June 30, 2024 General 1. We note your proposed disclosure in Appendix “B” to your Form 10-K that your custodian holds your Bitcoin in segregated trust accounts solely for Riot’s benefit and that your “Bitcoin held in such trust accounts are therefore not at risk of such custodian’s creditors or subject to inclusion in the bankruptcy estate of such custodian, if such custodian were ever to petition for bankruptcy protection or otherwise be declared insolvent.” Please balance your disclosure in future filings by providing a risk factor that: ● Addresses any potential uncertainties under applicable insolvency laws with respect to the holding of crypto assets in custodial accounts; and ● Discloses any consequent risk that your custodially-held Bitcoin could be considered the property of your custodian’s estate in the event of a bankruptcy of your custodian, and addresses the material impact and risks to shareholders related thereto. Company Response: We respectfully acknowledge the Staff’s comment and confirm that we will revise our disclosure, commencing with the Quarterly Report on Form 10-Q for the period ended September 30, 2024 (the “2024 Q3 Form 10-Q”), by providing a risk factor regarding the risks related to potential uncertainties under insolvency laws with respect to the holding of our Bitcoin assets in custodial accounts, and we intend to include such disclosure in future filings. In addition, the risk factor disclosure will address the risk that our custodially-held Bitcoin could be considered property of our custodian’s estate in the event of bankruptcy of our custodian and the material impact and risks to shareholders related thereto. Condensed Consolidated Statements of Operations, page 2 2. It is apparent from your disclosure added on page 29 in response to prior comment 8 that your cost of revenue for Bitcoin Mining does not include depreciation. Please represent to us that in future filings you will revise your statements of operations to provide the parenthetical disclosure called for in SAB 11B. To the extent depreciation and amortization are not included in any of your costs of revenues lines (i.e., Bitcoin Mining, Engineering and Other), ensure your disclosure covers all relevant captions. Company Response: We respectfully acknowledge the Staff’s comment and confirm that we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to provide parenthetical disclosure as called for in ***FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC.*** Securities and Exchange Commission November 1, 2024 Page 3 SAB 11B, and we intend to include such disclosure in future filings. Notes to the financial statements, page 6 3. Please revise future Form 10-Q filings to provide activity in notes to the financial statements for the current quarter in addition to the year-to-date information you currently present in the financial statements. Company Response: We respectfully acknowledge the Staff’s comment and confirm that we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to provide current quarter activity in notes to the financial statements in addition to year-to-date information where applicable, and we intend to include such disclosure in future filings. For example, we will add disclosure of activity for the current three-month period in addition to the previously reported year-to-date disclosures in Note 5. Bitcoin, where we will add disclosure of revenue recognized from Bitcoin mined and the change in fair value of Bitcoin, and in Note 9. Power Supply Agreements, where we will add disclosure for the change in fair value of derivative assets. Note 2. Significant Accounting Policies and Recent Accounting Pronouncements Revenue recognition, page 7 4. We note your response to prior comment 17 and your revised disclosures. Please address the following: ● You disclose that your mining pool participation agreements are freely terminable, at any time by you or by the pool operator, without penalty to either party and separately that for accounting purposes, each agreement has a duration of less than 24 hours and is therefore continually renewed. Confirm for us that your agreements are continually renewed as a result of either party being able to terminate the agreement at any time without penalty and therefore result in a duration that is less than 24 hours. If this is true, revise your policy disclosure in future filings to properly state the causal relationship (i.e., contracts are less than 24 hours in duration as a result of them being continuously renewed and not vice versa) and link the continuously renewal determination to the termination rights in your agreements. ● In the first paragraph on page 8 you disclose that you measure the noncash Bitcoin consideration received at agreement inception and indicate that this measurement is based on the quoted price in your Principal Market at the beginning of the “contract period” at the single Bitcoin level. As contracts continuously renew and therefore there are multiple contracts incepted (and multiple contract periods) during each “measurement period” identified in the antepenultimate paragraph on page 7, tell us whether you mean you value Bitcoin consideration from the pool operator at the beginning of the measurement period. If so, revise your disclosure in future filings to indicate the specific time you measure Bitcoin and state that this specific time is on the date of contract inception. In this regard, see ASC 606-10-32-21 which clarifies that the measurement of noncash consideration is made on the date that the criteria in ASC 606-10-25-1 are met. If not, tell us the time you use to value Bitcoin consideration and clarify whether this time is on the date of contract inception for all ***FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC.*** Securities and Exchange Commission November 1, 2024 Page 4 the contracts during the measurement period. ● In the penultimate paragraph on page 7 and the first paragraph on page 8 you refer to “contract period” when it appears you may be referring to the measurement period as there appear to be multiple contract periods throughout the day based on continuous renewal. Confirm for us whether this is true. If so, revise your disclosure in future filings to clarify. If not, tell us the contract periods to which you are referring. Company Response: We respectfully acknowledge the Staff’s comment and respond as follows: Bullet # 1: We confirm that our mining pool participation agreement is freely terminable, at any time, by the Company or by the pool operator, without penalty to either party. We further confirm that for accounting purposes, the agreement has a duration of less than 24 hours as a result of the agreement being continually renewed at the beginning of each measurement period. The continual renewal of the agreement does not represent a material right requiring separate performance obligations as the FPPS formula remains the same upon each renewal. We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to clarify this, and we intend to include such disclosure in future filings. Bullet #2: We confirm that we value Bitcoin consideration from the pool operator at the beginning of the measurement period, which we consider to be 0:00:00 UTC on the date of contract inception. We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to clarify this, and we intend to include such disclosure in future filings. Bullet #3: We confirm that we were referring to the measurement period and, to clarify, we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to remove the word “contract” and insert the word “measurement,” and we intend to include such disclosure in future filings. Note. 9 Power Purchase Agreement, page 14 5. We note your response to prior comment 18 and your revised disclosures on pages 14 and 15. Please enhance future filings by revising disclosure to: ● Clarify, if true, that power usage is not a variable input in fair value determination of the Power Purchase Agreement (PPA) derivative fair value as under the terms of the PPA, the price and quantity of power are fixed, despite the existence of multiple blocks with separate power amounts and terms. If not true, tell us why not. ● Clarify, if true, that the discounted cash flow estimation considers the PPA fixed-price of each block for a total of 345 MW as well as the disclosed quoted commodity exchange spot and forward prices as adjusted for basis spreads for load zone-to-hub differentials through the ***FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC.*** Securities and Exchange Commission November 1, 2024 Page 5 term of the PPA. If not true, tell us why not. ● Enhance your rollforward of the change in fair value of the derivative asset to disaggregate the change in fair value between gains and losses and/or settlements for the periods presented. Refer to ASC 820-10-50-2(c) and (d). In this regard, as you either purchase power or elect to sell it back in exchange for credits against future power cost, it would appear that settlements occur each period. In your response, tell us how settlements are calculated for purposes of the requested disclosure. ● Provide additional quantitative input disclosure as we note that the only quantitative input you provide (i.e., the discount rate used to calculate the fair value of the derivative asset) did not change from the 23.6% rate at December 31, 2023 and it otherwise is not clear from your financial statement disclosures what caused the changes in value in 2024. In your response tell us your consideration of disclosing estimates and or ranges of quoted commodity exchange spot and forward prices, adjusted for basis spreads for load zone-to-hub differentials through the term of the PPA, that presumably you would utilize in validating the derivative fair value determined by your third-party valuation specialist. Refer to ASC 820-10-35-54 and ASC 820-10-50-2(bbb)(2). Company Response: We respectfully acknowledge the Staff’s comment and respond as follows: Bullet #1: We confirm that power usage is not a variable input in fair value determination of the Power Purchase Agreement (“PPA”) derivative fair value and we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q to clarify this, and we intend to include such disclosure in future filings. Bullet #2: We confirm that the discounted cash flow estimation considers the PPA fixed-price of each block for a total of 345 MW as well as the disclosed quoted commodity exchange spot and forward prices as adjusted for basis spreads for load zone-to-hub differentials through the term of the PPA and we will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to state this, and we intend to include such disclosure in future filings. Bullet #3: We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to enhance our rollforward of the change in fair value of the derivative asset to disaggregate the change in fair value between changes due to changes in the forward price curve and changes due to the passage of time and settlements for the periods presented, and we intend to include such disclosure in future filings. For the purposes of this disclosure, the change in fair value due to the passage of time is calculated first by using the forward price curve as of the current period end date to compute an estimated fair value of the derivative. Then, as of the same current period end date, the price curve used as of the prior period end date is used to compute an estimated fair value of the derivative as of the current period end date. The difference between those two estimates equals the change in value due to the passage of time, with the remainder of the change in the fair value of the derivative ***FOIA CONFIDENTIAL TREATMENT REQUESTED BY RIOT PLATFORMS, INC.*** Securities and Exchange Commission November 1, 2024 Page 6 being attributable to settlements. Bullet #4: We respectfully acknowledge the discount rate of 23.6% was used for the derivative asset valuation as of June 30, 2024 and a discount rate of 23.1% was used as of December 31, 2023. However, the increase in discount rate was not a significant driver of the change in fair value of the derivative asset, and therefore not deemed material for disclosure. The primary driver of the change in fair value of the derivative asset was attributable to changes in the forward price curve for electricity. We will revise our disclosure, commencing with the 2024 Q3 Form 10-Q, to include a table of unobservable inputs, including forward power price ranges and averages during the respective reporting periods, and we intend to include such disclosure in future filings. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 27 6. We note your response to prior comment 12. Considering the material impact of your power strategy on operating results, per