Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2022 | May 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 001-39187 | |
Entity Registrant Name | CleanSpark, Inc. | |
Entity Central Index Key | 0000827876 | |
Entity Tax Identification Number | 87-0449945 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 2370 Corporate Circle | |
Entity Address, Address Line Two | Suite 160 | |
Entity Address, City or Town | Henderson | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89074 | |
City Area Code | 702 | |
Local Phone Number | 989-7692 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CLSK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,290,065 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Cash and cash equivalents | ||
Cash and cash equivalents, including restricted cash | $ 1,912,947 | $ 18,040,327 |
Accounts receivable, net | 6,836,253 | 2,619,957 |
Inventory | 1,259,423 | 2,672,744 |
Prepaid expense and other current assets | 10,316,242 | 5,129,047 |
Digital currency | 17,045,640 | 23,603,210 |
Derivative investment asset | 3,794,359 | 4,905,656 |
Investment in equity security | 250,000 | 260,772 |
Investment in debt security, AFS, at fair value | 541,200 | 494,608 |
Total current assets | 41,956,064 | 57,726,321 |
Property and equipment, net | 276,330,089 | 137,674,739 |
Operating lease right of use asset | 1,353,557 | 1,488,240 |
Intangible assets, net | 10,262,761 | 12,699,177 |
Deposits on mining equipment | 69,902,321 | 87,959,910 |
Other long-term asset | 5,943,314 | 875,536 |
Goodwill | 19,049,198 | 19,049,198 |
Total assets | 424,797,304 | 317,473,121 |
Current liabilities | ||
Accounts payable and accrued liabilities | 21,385,732 | 7,975,263 |
Contract liabilities | 188,929 | 296,964 |
Operating lease liability | 321,600 | 256,195 |
Finance lease liability | 345,817 | 413,798 |
Acquisition liability | 0 | 300,000 |
Contingent Consideration | 0 | 820,802 |
Dividends payable | 335,439 | |
Total current liabilities | 22,577,517 | 10,063,022 |
Long-term liabilities | ||
Operating lease liability, net of current portion | 1,043,931 | 1,235,325 |
Finance lease liability, net of current portion | 257,952 | 458,308 |
Total liabilities | 23,879,400 | 11,756,655 |
Stockholders' equity | ||
Common stock; $0.001 par value; 100,000,000 shares authorized; 41,293,951 and 37,395,945 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively | 41,291 | 37,394 |
Preferred stock; $0.001 par value; 10,000,000 shares authorized; Series A shares; 2,000,000 authorized; 1,750,000 and 1,750,000 issued and outstanding as of March 31, 2022 and September 30, 2021, respectively | 1,750 | 1,750 |
Additional paid-in capital | 525,246,200 | 444,074,832 |
Accumulated other comprehensive income (loss) | 41,200 | (5,392) |
Accumulated deficit | (124,412,537) | (138,392,118) |
Total stockholders' equity | 400,917,904 | 305,716,466 |
Total liabilities and stockholders' equity | $ 424,797,304 | $ 317,473,121 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Sep. 30, 2021 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 41,290,587 | 37,395,945 |
Common stock, shares outstanding | 41,290,587 | 37,395,945 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 1,750,000 | 1,750,000 |
Preferred Stock, Shares Outstanding | 1,750,000 | 1,750,000 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 1,750,000 | 1,750,000 |
Preferred Stock, Shares Outstanding | 1,750,000 | 1,750,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues, net | ||||
Digital currency mining revenue, net | $ 36,965,739 | $ 6,715,792 | $ 73,940,317 | $ 7,449,202 |
Energy hardware, software and services revenue | 4,585,971 | 1,313,530 | 8,556,181 | 2,827,233 |
Other services revenue | 86,282 | 90,366 | 383,463 | 100,824 |
Total revenues, net | 41,637,992 | 8,119,688 | 82,879,961 | 10,377,258 |
Costs and expenses | ||||
Cost of revenues (exclusive of depreciation and amortization shown below) | 12,127,120 | 1,537,683 | 20,925,046 | 2,879,197 |
Professional fees | 900,976 | 2,456,554 | 4,218,795 | 4,169,277 |
Payroll expenses | 10,542,025 | 3,262,097 | 19,425,072 | 6,576,298 |
General and administrative expenses | 3,182,946 | 1,243,154 | 5,071,046 | 2,193,293 |
(Gain) on disposal of assets | (920,861) | 0 | (642,691) | |
Other impairment expense (related to Digital Currency) | 811,345 | 0 | 7,033,691 | 0 |
Depreciation and amortization | 11,661,633 | 2,117,172 | 19,359,201 | 3,226,263 |
Total costs and expenses | 38,305,184 | 10,616,660 | 75,390,160 | 19,044,328 |
Income (loss) from operations | 3,332,808 | (2,496,972) | 7,489,801 | (8,667,070) |
Other income/(expense) | ||||
Other Income | 308,038 | 541,576 | 308,038 | 541,576 |
Change in fair value of contingent consideration | 290,249 | 0 | 345,791 | 0 |
Realized gain (loss) on sale of digital currency | (2,733,882) | 585,709 | 7,260,909 | 635,627 |
Realized gain on sale of equity security | 0 | 0 | 665 | 0 |
Unrealized gain (loss) on equity security | 0 | 343,000 | (1,847) | 269,500 |
Unrealized gain (loss) on derivative security | (1,410,146) | 8,400,629 | (1,111,297) | 7,380,135 |
Interest income | 51,782 | 54,479 | 85,253 | 102,463 |
Interest expense | (9,584) | (28,381) | (62,293) | (29,721) |
Total other income (expense) | (3,503,543) | 9,897,012 | 6,825,219 | 8,899,580 |
Income (loss) before income tax (expense) or benefit | (170,735) | 7,400,040 | 14,315,020 | 232,510 |
Income tax (expense) or benefit | 0 | 0 | 0 | 0 |
Net income (loss) | (170,735) | 7,400,040 | 14,315,020 | 232,510 |
Preferred stock dividends | 20,828 | 177,505 | 335,439 | 177,505 |
Net income (loss) attributable to common shareholders | (191,563) | 7,222,535 | 13,979,581 | 55,005 |
Other comprehensive income | 28,479 | 0 | 46,592 | 0 |
Total comprehensive income (loss) attributable to common shareholders | $ (163,084) | $ 7,222,535 | $ 14,026,173 | $ 55,005 |
Income (loss) per common share - basic | $ 0 | $ 0.28 | $ 0.34 | $ 0 |
Weighted average common shares outstanding- basic | 41,336,342 | 25,925,259 | 40,802,319 | 24,025,557 |
Income (loss) per common share - diluted | $ 0 | $ 0.22 | $ 0.34 | $ 0 |
Weighted- average common shares outstanding - diluted | 41,336,342 | 32,697,863 | 40,861,052 | 30,798,161 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Beginning balance, value at Sep. 30, 2020 | $ 16,426,365 | $ 1,750 | $ 17,391 | $ 132,809,830 | $ 0 | $ (116,402,606) |
Beginning Balance, Shares Outstanding at Sep. 30, 2020 | 1,750,000 | 17,390,979 | ||||
Stock Issued During Period, Shares, Issued for Services | 501,437 | |||||
shares issued for service | 3,011,634 | $ 501 | 3,011,133 | |||
Exercise of options and warrants, shares | 115,385 | |||||
Exercise of options and warrants | 192,656 | $ 116 | 192,540 | |||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 1,618,285 | |||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 21,183,351 | $ 1,618 | $ 21,181,733 | |||
Stock Issued During Period, Shares, Other | 1,339,009 | 1,339,009 | ||||
Shares issued under underwritten offering, net of offering costs | 4,444,445 | |||||
Shares issued under underwritten offering, net of offering costs value | $ 37,049,605 | $ 4,445 | $ 37,045,160 | |||
Net income (loss) | (7,167,530) | (7,167,530) | ||||
Ending balance, value at Dec. 31, 2020 | 72,035,090 | $ 1,750 | $ 24,071 | 195,579,405 | 0 | (123,570,136) |
Ending Balance, Shares Outstanding at Dec. 31, 2020 | 1,750,000 | 24,070,531 | ||||
Beginning balance, value at Sep. 30, 2020 | 16,426,365 | $ 1,750 | $ 17,391 | 132,809,830 | 0 | (116,402,606) |
Beginning Balance, Shares Outstanding at Sep. 30, 2020 | 1,750,000 | 17,390,979 | ||||
Net income (loss) | 232,510 | |||||
Other comprehensive income | 0 | |||||
Ending balance, value at Mar. 31, 2021 | 283,720,459 | $ 1,750 | $ 33,874 | 400,032,436 | 0 | (116,347,601) |
Ending Balance, Shares Outstanding at Mar. 31, 2021 | 1,750,000 | 33,874,151 | ||||
Beginning balance, value at Sep. 30, 2020 | 16,426,365 | $ 1,750 | $ 17,391 | 132,809,830 | 0 | (116,402,606) |
Beginning Balance, Shares Outstanding at Sep. 30, 2020 | 1,750,000 | 17,390,979 | ||||
Ending balance, value at Sep. 30, 2021 | 305,716,466 | $ 1,750 | $ 37,394 | 444,074,832 | (5,392) | (138,392,118) |
Ending Balance, Shares Outstanding at Sep. 30, 2021 | 1,750,000 | 37,395,945 | ||||
Beginning balance, value at Dec. 31, 2020 | 72,035,090 | $ 1,750 | $ 24,071 | 195,579,405 | 0 | (123,570,136) |
Beginning Balance, Shares Outstanding at Dec. 31, 2020 | 1,750,000 | 24,070,531 | ||||
Stock Issued During Period, Shares, Issued for Services | 19,429 | |||||
shares issued for service | 71,497 | $ 19 | 71,478 | |||
Exercise of options and warrants, shares | 223,650 | |||||
Exercise of options and warrants | 3,153,903 | $ 223 | 3,153,680 | |||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 477,703 | |||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 13,246,704 | $ 478 | $ 13,246,226 | |||
Stock Issued During Period, Shares, Other | 777,517 | 777,517 | ||||
Shares issued under underwritten offering, net of offering costs | 9,090,910 | |||||
Shares issued under underwritten offering, net of offering costs value | $ 187,213,213 | $ 9,091 | $ 187,204,122 | |||
Stock Repurchased During Period, Shares | (8,072) | |||||
Shares returned in relation to business acquisition | $ (8) | 8 | ||||
Preferred dividends | (177,505) | (177,505) | ||||
Net income (loss) | 7,400,040 | 7,400,040 | ||||
Other comprehensive income | 0 | |||||
Ending balance, value at Mar. 31, 2021 | 283,720,459 | $ 1,750 | $ 33,874 | 400,032,436 | 0 | (116,347,601) |
Ending Balance, Shares Outstanding at Mar. 31, 2021 | 1,750,000 | 33,874,151 | ||||
Beginning balance, value at Sep. 30, 2021 | 305,716,466 | $ 1,750 | $ 37,394 | 444,074,832 | (5,392) | (138,392,118) |
Beginning Balance, Shares Outstanding at Sep. 30, 2021 | 1,750,000 | 37,395,945 | ||||
Shares issued under equity offering, value net of offering costs | $ 4,021 | 67,984,972 | ||||
Options and restricted stock units issued for services | 5,749,107 | 5,749,107 | ||||
Exercise of options and warrants, shares | 52,061 | |||||
Exercise of options and warrants | $ 281,616 | $ 52 | 281,564 | |||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 150,011 | 8,404 | ||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 8 | 150,003 | ||||
Shares issued under equity offering, shares | 67,988,993 | 4,017,652 | ||||
Preferred dividends | $ (314,611) | 314,611 | ||||
Net income (loss) | $ 14,485,755 | 14,485,755 | ||||
Other comprehensive income | 18,113 | 18,113 | ||||
Ending balance, value at Dec. 31, 2021 | 394,075,450 | $ 1,750 | $ 41,475 | 518,240,478 | 12,721 | (124,220,974) |
Ending Balance, Shares Outstanding at Dec. 31, 2021 | 1,750,000 | 41,474,062 | ||||
Beginning balance, value at Sep. 30, 2021 | 305,716,466 | $ 1,750 | $ 37,394 | 444,074,832 | (5,392) | (138,392,118) |
Beginning Balance, Shares Outstanding at Sep. 30, 2021 | 1,750,000 | 37,395,945 | ||||
Net income (loss) | 14,315,020 | |||||
Other comprehensive income | 46,592 | |||||
Ending balance, value at Mar. 31, 2022 | $ 400,917,904 | $ 1,750 | $ 41,291 | 525,246,200 | 41,200 | (124,412,537) |
Ending Balance, Shares Outstanding at Mar. 31, 2022 | 400,917,904 | 1,750,000 | 41,290,587 | |||
Beginning balance, value at Dec. 31, 2021 | $ 394,075,450 | $ 1,750 | $ 41,475 | 518,240,478 | 12,721 | (124,220,974) |
Beginning Balance, Shares Outstanding at Dec. 31, 2021 | 1,750,000 | 41,474,062 | ||||
Options and restricted stock units issued for services | 6,553,984 | $ 2 | 6,553,982 | |||
Options and restricted stock units issued for services, Shares | 1,874 | |||||
Shares returned for settlement of contingent consideration and holdbacks related to business acquisition, Shares | (232,518) | |||||
Shares returned for settlement of contingent consideration and holdbacks related to business acquisition | $ (233) | 233 | ||||
Exercise of options and warrants, shares | 47,169 | |||||
Exercise of options and warrants | 451,554 | $ 47 | 451,507 | |||
Preferred dividends | (20,828) | 20,828 | ||||
Net income (loss) | (170,735) | (170,735) | ||||
Other comprehensive income | 28,479 | 28,479 | ||||
Ending balance, value at Mar. 31, 2022 | $ 400,917,904 | $ 1,750 | $ 41,291 | $ 525,246,200 | $ 41,200 | $ (124,412,537) |
Ending Balance, Shares Outstanding at Mar. 31, 2022 | 400,917,904 | 1,750,000 | 41,290,587 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($) | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ 14,315,020 | $ 232,510 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Unrealized (gain) loss on equity security | 1,847 | (269,500) |
Realized gain on sale of equity security | (665) | 0 |
Impairment of digital currency | 7,033,691 | 0 |
Realized gain on sale of digital currency | (7,260,909) | (635,627) |
Digital currency issued for services | 294,992 | 0 |
Unrealized (gain) loss on derivative asset | 1,111,297 | (7,380,135) |
Change in fair value of contingent consideration | (345,791) | 0 |
Non-cash lease expenses | 134,683 | 166,460 |
Stock Based Compensation | 12,303,091 | 5,199,658 |
Depreciation and amortization | 19,359,201 | 3,226,263 |
Provision for bad debts | 231,932 | |
PPP loan forgiveness | (531,169) | |
Gain on write-off and disposal of assets | (642,691) | 0 |
Income from in-kind receipts of miners | (308,038) | |
Changes in operating assets and liabilities | ||
Mining of digital currency | (73,940,317) | (7,449,202) |
Decrease in operating lease right of use liabilities | (125,989) | (268,861) |
Decrease (increase) in contract assets, net | 4,103 | |
Increase (decrease) in contract liabilities, net | (108,035) | 487,779 |
Increase (decrease) in accounts payable and accrued liabilities | 10,083,770 | (2,890,270) |
(Increase) in prepaid expenses and other current assets | (12,985,662) | (1,130,741) |
(Increase) decrease in accounts receivable | (3,963,323) | 114,285 |
(Increase) decrease in Inventory | 1,495,321 | (793,945) |
Net cash used in operating activities | (33,548,507) | (11,686,460) |
Cash Flows from investing | ||
Payments on miner deposits | (105,077,053) | (45,488,258) |
Purchase of fixed assets | (28,914,917) | (9,058,011) |
Settlement of holdbacks related to contingent consideration | (625,000) | |
Investment in infrastructure development | (2,830,560) | |
Proceeds from sale of digital currencies | 80,430,113 | 2,422,282 |
Proceeds from sale of miners | 3,497,654 | 0 |
Proceeds from sale of equity securities | 9,590 | 0 |
Acquisition of Solar Watt Solutions, net of cash received | (1,000,337) | |
Acquisition of ATL Data Center, net of cash received | 45,783 | |
Net cash used in investing activities | (50,679,613) | (55,909,101) |
Cash Flows from Financing Activities | ||
Payments on promissory notes | (5,865,476) | |
Payments on finance leases | (368,450) | |
Proceeds from exercise of options and warrants | 480,197 | 3,346,559 |
Proceeds from equity offerings, net | 67,988,993 | 224,262,818 |
Net cash provided by financing activities | 68,100,740 | 221,743,901 |
Net increase (decrease) in cash and cash equivalents and restricted cash | (16,127,380) | 154,148,340 |
Cash and cash equivalents and restricted cash, beginning of period | 18,040,327 | 3,126,202 |
Cash and cash equivalents and restricted cash, end of period | 1,912,947 | 157,274,542 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 62,293 | 31,846 |
Non-cash investing and financing transactions | ||
Shares and options issued for business acquisition | 34,430,055 | |
Cashless exercise of options and warrants | 74 | |
Receivables from exercise of options | 252,973 | |
Shares issued for settlement of seller agreements related to acquisition | 150,011 | |
Shares returned as part of settlement of seller agreements related to acquisition | 233 | |
Preferred share dividends accrued | 335,439 | 177,505 |
Unrealized gain on investment in available-for-sale debt security | $ 46,592 |
1. ORGANIZATION AND LINE OF BUS
1. ORGANIZATION AND LINE OF BUSINESS | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND LINE OF BUSINESS | 1. ORGANIZATION AND LINE OF BUSINESS Organization The Company – CleanSpark, Inc. (“CleanSpark,” “we,” “our,” or the "Company") was incorporated in the state of Nevada on October 15, 1987 as SmartData Corporation. In October 2016, the Company changed its name to CleanSpark, Inc. CleanSpark, Inc. is a bitcoin mining and energy technology company. The Company sustainably mines bitcoin and provides advanced energy technology solutions to commercial and residential customers to solve modern energy challenges. The Company, through itself and its wholly owned subsidiaries, has operated in the digital currency mining sector since December 2020, and in the alternative energy sector since March 2014. Lines of Business Digital Currency Mining Segment Through our wholly owned subsidiaries, ATL Data Centers LLC (“ATL”) and CleanBlok, Inc. (“CleanBlok”), the Company mines bitcoin. The Company entered the bitcoin mining industry through our acquisition of ATL in December 2020. It acquired a second data center in August 2021 and has had a co-location agreement with New York-based Coinmint, LLC in place since July 2021. Bitcoin mining has now become the Company’s principal revenue generating business activity. We currently intend to acquire additional facilities, equipment and infrastructure capacity to continue to expand our bitcoin mining operations. Through our subsidiaries CSRE Properties Norcross, LLC, CSRE Property Management Company, LLC and CSRE Properties, LLC, we maintain real property holdings for ATL Data Centers LLC and CleanBlok Inc. Energy Segment The Company provides energy solutions through our wholly owned subsidiaries CleanSpark, LLC, CleanSpark Critical Power Systems, Inc., GridFabric, LLC, and Solar Watt Solutions, Inc. These solutions consist of engineering, design and software solutions, custom hardware solutions, Open Automated Demand response (“OpenADR”), solar, energy storage for microgrid and distributed energy systems to military, commercial and residential customers in Southern California and throughout the world. The Company’s solutions are supported by a proprietary suite of software solutions that include microgrid energy modeling, energy market communications and energy management solutions. Other business activities Through ATL, we also provide traditional data center services, such as providing customers with rack space, power and equipment, and offer several cloud-based service solutions including virtual services, virtual storage, and data backup services. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent annual report on Form 10-K for the year ended September 30, 2021, filed with the SEC on December 14, 2021 (“Form 10-K”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented in this quarterly report on Form 10-Q have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. The accompanying unaudited consolidated financial statements include the accounts of CleanSpark, Inc., and its wholly owned operating subsidiaries, CleanSpark, LLC, CleanSpark II, LLC, CleanSpark Critical Power Systems Inc., p2kLabs, Inc, GridFabric, LLC, ATL Data Centers LLC, CleanBlok, Inc., CSRE Properties, LLC, Solar Watt Solutions, Inc, CSRE Properties Norcross, LLC and CSRE Property Management Company, LLC. All intercompany transactions have been eliminated upon consolidation of these entities. Liquidity As shown in the accompanying unaudited consolidated financial statements, the Company generated a net income (loss) of ($ 170,735 ) and $ 14,315,020 respectively during the three months and six months ended March 31, 2022. While the Company has experienced negative cash flows from investing and operating activities due to its continued investments in capital expenditures in support of its bitcoin mining operations, it has generated positive cash flows from financing activities. The Company has sufficient working capital to support its ongoing operations for the next twelve months. In addition, the Company has access to equity financing through its At-the-Market offering facility and debt financing through the lending arrangement the Company entered into in April 2022 (see Note 15). As of March 31, 2022, the Company had working capital of $ 19,378,547 . Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include estimates used to review the Company’s goodwill and digital currency impairment, intangible assets acquired, impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, revenue recognition from digital currency mining, valuation of derivative assets and liabilities, available-for-sale investments, allowances for uncollectible accounts, valuation of digital currencies, valuation of contingent consideration, warranty, and the valuations of share based awards. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions including, but not limited to, the ultimate impact that the ongoing COVID-19 pandemic may have on the Company’s operations. Revenue Recognition We recognize revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board's (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five steps be followed in evaluating revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Our accounting policy on revenue recognition by type of revenue is provided below. Revenues from digital currency mining The Company has entered into contracts with digital asset mining pool operators to provide computing power to the mining pools. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives ( less net digital asset transaction fees to the mining pool operator), for successfully adding a block to the blockchain, plus a fractional share of the transaction fees attached to that blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The transaction consideration the Company receives is noncash consideration, in the form of digital currency, which the Company measures at fair value on the date received which is not materially different than the fair value at contract inception or time the Company has earned the award from the mining pools. Fair value of the digital currency award received is determined using the spot price of the related digital currency on the date earned. There is currently no definitive guidance under GAAP or alternative accounting framework for the accounting for digital currencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Engineering & Construction Contracts and Service Contracts The Company recognizes engineering and construction contract revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. Engineering and construction contracts are generally accounted for as a single unit of account (a single performance obligation) and are not segmented between types of services. The Company recognizes revenue based primarily on contract cost incurred to date compared to total estimated contract cost (an input method). The input method is the most faithful depiction of the Company’s performance because it directly measures the value of the services transferred to the customer. Customer-furnished materials, labor and equipment and, in certain cases, subcontractor materials, labor and equipment, are included in revenue and cost of revenue when management believes that the Company is acting as a principal rather than as an agent (i.e., the Company integrates the materials, labor and equipment into the deliverables promised to the customer). Customer-furnished materials are only included in revenue and cost when the contract includes construction activity and the Company has visibility into the amount the customer is paying for the materials or there is a reasonable basis for estimating the amount. The Company recognizes revenue, but not profit, on certain uninstalled materials that are not specifically produced, fabricated, or constructed for a project. Revenue on these uninstalled materials is recognized when the cost is incurred (when control is transferred). Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the client. Project mobilization costs are generally charged to project costs as incurred when they are an integrated part of the performance obligation being transferred to the client. Customer payments on engineering and construction contracts are typically due within 30 to 45 days of billing, depending on the contract. The Company recognizes energy (solar panel and battery) installation contract revenue for residential customers at a point in time upon completion of the installation. The revenues associated with energy installations for commercial customers are recognized over a period of time as noted in the engineering and construction contract revenue disclosure above. For service contracts (including maintenance contracts) in which the Company has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, revenue is recognized when services are performed and contractually billable. Service contracts that include multiple performance obligations are segmented between types of services. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using an estimate of the stand-alone selling price of each distinct service in the contract. Revenue recognized on service contracts that have not been billed to clients is classified as a current asset under contract assets on the Consolidated Balance Sheets. Amounts billed to clients in excess of revenue recognized on service contracts to date are classified as a current liability under contract liabilities. Customer payments on service contracts are typically due within 30 days of billing, depending on the contract. Revenues from Sale of Equipment Performance Obligations Satisfied at a point in time. We recognize revenue on agreements for equipment we sell on a standardized basis to the market at a point in time. We recognize revenue at the point in time that the customer obtains control of the good, which is generally upon shipment or when the customer has physical possession of the product depending on contract terms. We use proof of delivery for certain large equipment with more complex logistics, whereas the delivery of other equipment is estimated based on historical averages of in-transit periods (i.e., time between shipment and delivery). Generally, shipping costs are included in the price of equipment unless the customer requests a non-standard shipment. In situations where an alternative shipment arrangement has been made, the Company recognizes the shipping revenue upon customer receipt of the shipment. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. We generally do not provide for anticipated losses on point in time transactions prior to transferring control of the equipment to the customer. Our billing terms for these point in time equipment contracts vary and generally coincide with shipment to the customer; however, within certain businesses, we receive progress payments from customers for large equipment purchases, which is generally to reserve production slots with our manufacturing partners, which are recorded as contract liabilities. Due to the customized nature of the equipment, the Company does not allow for customer returns. Service Performance obligations satisfied over time. We enter into long-term product service agreements with our customers primarily within our microgrid segment. These agreements require us to provide preventative maintenance, and standby support services that include certain levels of assurance regarding system performance throughout the contract periods, and these contracts will generally range from 1 to 10 years. We account for items that are integral to the maintenance of the equipment as part of our service-related performance obligation, unless the customer has a substantive right to make a separate purchasing decision (e.g., equipment upgrade). Contract modifications that extend or revise contract terms are not uncommon and generally result in our recognizing the impact of the revised terms prospectively over the remaining life of the modified contract (i.e., effectively like a new contract). Revenues are recognized for these arrangements on a straight-line basis consistent with the nature, timing and extent of our services, which primarily relate to routine maintenance and as needed product repairs. Our billing terms for these contracts vary, but we generally invoice periodically as services are provided. Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables (typically for cost reimbursable contracts) and contract work in progress (typically for fixed-price contracts). There were no contracts assets as of March 31, 2022 and September 30, 2021. Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed under the terms of the contract. There are no advances that are payments on account of contract assets that have been deducted from contract assets as of March 31, 2022 and September 30, 2021. Contract liabilities represent deferred revenues as of March 31, 2022. The Company recorded $ 188,929 and $ 296,964 in contract liabilities as of March 31, 2022 and September 30, 2021, respectively. Revenues from software The Company derives its software revenue from both subscription fees from customers for access to its energy software offerings and software license sales and support services. Revenues from software licenses are generally recognized upfront when the software is made available to the customer and revenues from the related support is generally recognized ratably over the contract term. The Company’s policy is to exclude sales and other indirect taxes when measuring the transaction price of its subscription agreements. The Company’s subscription agreements generally have monthly or annual contractual terms. Revenue is recognized ratably over the related contractual term beginning on the date that the platform is made available to a customer. Access to the platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Revenues from design, software development and other technology-based consulting services For service contracts performed under Master Services Agreements (“MSA”) and accompanying Statement(s) of Work (“SOW”), revenue is recognized based on the performance obligation(s) outlined in the SOW which is typically hours worked or specific deliverable milestones. In the case of a milestone-based SOW, the Company recognizes revenues as each deliverable is signed off by the customer. Revenues from data center services The Company provides data services such as providing its customers with rack space, power and equipment, and cloud services such as virtual services, virtual storage, and data backup services, generally based on monthly services provided at a defined price included in the contracts. The performance obligations are the services provided to a customer for the month based on the contract. The transaction price is the price agreed with the customer for the monthly services provided and the revenues are recognized monthly based on the services rendered for the month. Variable Consideration The nature of the Company’s contracts gives rise to several types of variable consideration, including claims and unpriced change orders; awards and incentive fees; and liquidated damages and penalties. The Company recognizes revenue for variable consideration when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company estimates the amount of revenue to be recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regard to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the Company’s performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. If the requirements for recognizing revenue for claims or unapproved change orders are met, revenue is recorded only when the costs associated with the claims or unapproved change orders have been incurred. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for claims accounting have been satisfied. The Company generally provides limited warranties for work performed under its engineering and construction contracts. The warranty periods typically extend for a limited duration following substantial completion of the Company’s work on a project. Historically, warranty claims have not resulted in material costs incurred. Practical Expedients If the Company has a right to consideration from a customer in an amount that corresponds directly with the value of the Company’s performance completed to date (a service contract in which the Company bills a fixed amount for each hour of service provided), the Company recognizes revenue in the amount to which it has a right to invoice for services performed. The Company does not adjust the contract price for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a service to a customer and when the customer pays for that service will be one year or less. The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are collected by the Company from its customers (use taxes, value added taxes, some excise taxes). Cost of Revenues The Company includes the following in cost of revenues: energy costs, materials costs, manufacturing and logistics costs, freight costs, inventory write-downs, hosting services costs. The recognition of cost of revenue for our energy segment is dependent upon the revenue stream that it pertains to, refer below: 1. Products and related services delivered at a point in time. Cost of revenue from these products and related services is recognized when the Company transfers control of the product to the customer, which is generally upon shipment. 2. Products and related services delivered over time. Cost of revenue from these products and related services is recognized over the related service period. Cash and cash equivalents Cash and cash equivalents include cash and amounts due from banks and restricted cash. The Company’s restricted cash represents amounts held in trust for certain construction projects. The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statements of cash flows. March 31, September 30, Cash and cash equivalents, excluding restricted cash $ 1,695,718 $ 14,571,198 Restricted cash - construction escrow account 217,229 3,469,129 Cash and cash equivalents, including restricted cash $ 1,912,947 $ 18,040,327 Accounts receivable Accounts receivable is comprised of uncollateralized customer obligations due under normal trade terms. They are initially recorded at the invoiced amount upon the sale of goods or services to customers, and do not bear interest. The Company performs ongoing credit evaluation of its customers and management closely monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The carrying amount of accounts receivable is reviewed periodically for collectability. If management determines that collection is unlikely, an allowance that reflects management’s best estimate of the amounts that will not be collected is recorded. Accounts receivable, net consists of the following: March 31, September 30, Accounts Receivable, gross $ 6,796,293 $ 2,891,784 Other receivables 733,468 421,681 Provision for doubtful allowances ( 693,508 ) ( 693,508 ) Total Accounts Receivable, net $ 6,836,253 $ 2,619,957 Inventory Inventory is stated at the lower of cost or net realizable value with cost being measured on a first-in, first-out basis. For solar panel and battery installations, the Company transfers component parts from inventories to cost of goods sold once installation is complete. The Company periodically reviews inventories for unusable and obsolete items based on assumptions about future demand and market conditions. Based on this evaluation, provisions are made to write inventories down to their net realizable value. There were no write-downs of inventory as of March 31, 2022 and September 30, 2021, respectively. The composition of inventory as of March 31, 2022 and September 30, 2021 are as follows: March 31, September 30, Batteries and solar panels $ 595,432 $ 1,819,398 Supplies and other 663,992 853,346 Total inventory $ 1,259,423 $ 2,672,744 Prepaid expense and other current assets The Company records a prepaid expense for costs paid but not yet incurred. Those expected to be incurred within one year are recognized and shown as a short-term pre-paid expense. Any costs expected to be incurred outside of one year would be considered other long-term assets. Other current assets are assets that consist of deposits and interest receivable. Deposits and interest we expect to receive within one year are shown as short-term. Those we expect to receive outside of one year are shown as other long-term assets. Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. The cash balance, in excess of the FDIC limits was $ 1,098,786 and $ 17,790,327 as of March 31, 2022 and September 30, 2021, respectively. The accounts offered by custodians of the Company’s bitcoin are not insured by the FDIC. The fair market value of bitcoin held in accounts not covered by FDIC limits was $ 17,045,640 and $ 23,603,210 as of March 31, 2022 and September 30, 2021, respectively. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. The Company has certain customers and vendors who individually represented 10 % or more of the Company’s revenue or capital expenditures. Please refer to Note 13 - Major Customers and Vendors. Stock-based compensation The Company follows the guidelines in FASB Codification Topic ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. For equity awards granted by the Company that are contingent upon market-based conditions, the Company fair values these awards using the Monte Carlo simulation model. For discussion of accounting for restricted stock units (RSUs), please refer Note 11 – Stock-Based Compensation. Earnings (loss) per share The Company reports earnings (loss) per share in accordance with FASB ASC 260-10 “Earnings Per Share,” which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. As of March 31, 2022, 489,282 units of common stock equivalents that consist of options, warrants and restricted stock units were excluded from the calculation of the diluted (loss) per share calculation for the three months ended March 31, 2022 as their effect is anti-dilutive. For the Three Months For the Six Months 2022 2021 2022 2021 Numerator Consolidated net income (loss) attributable to common shareholders $ ( 191,563 ) $ 7,222,535 $ 13,979,581 $ 55,005 Denominator Weighted- average common shares outstanding, 41,336,342 25,925,259 40,802,319 24,025,557 Dilutive impact of stock options and other share-based awards — 6,772,604 58,733 6,772,604 Weighted- average common shares outstanding, 41,336,342 32,697,863 40,861,052 30,798,161 Net income (loss) per common share attributable Basic $ ( 0.00 ) $ 0.28 $ 0.34 $ 0.00 Diluted $ ( 0.00 ) $ 0.22 $ 0.34 $ 0.00 Property and equipment Property and equipment are stated at cost less accumulated depreciation. Construction in progress is the construction or development of assets that have not yet been placed in service for its intended use. Depreciation for machinery and equipment, mining equipment, buildings, furniture and fixtures and leasehold improvements commences once they are ready for its intended use. Leasehold improvements are depreciated on a straight-line basis over the shorter of their estimated useful lives or the terms of the related leases. Land is not depreciated. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Useful life (years) Building 30 Land Improvements 15 Machinery and equipment 1 - 10 Office Equipment 3 - 7 Mining equipment 3 - 15 Miners 3 - 5 Infrastructure asset Shorter of estimated lease term or 15 years Leasehold improvements Shorter of estimated lease term or 5 years Furniture and fixtures 1 - 5 In accordance with the FASB ASC 360-10, "Property, Plant and Equipment” the carrying value of property and equipment, and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the three and six months ended March 31, 2022 and March 31, 2021 the Company did no t record an impairment expense. Digital Currency Digital currencies are included in current assets in the consolidated balance sheets. Digital currencies are recorded at cost less impairment. They are classified as indefinite-lived intangible assets in accordance with ASC 350, Intangibles — Goodwill and Other, and are accounted for in connection with the Company’s revenue recognition policy detailed above and in Note 2 – Summary of Significant Accounting Policies. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. Quantitative impairment is measured using the quoted price of the digital currency at the time its fair value is being measured in accordance with ASC 820, Fair Value Measurement. Quoted prices are obtained from the principal market. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted as per ASC 350, Intangibles – Goodwill and Other. Digital currencies earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of digital currencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the consolidated statements of operations and comprehensive income (loss). The Company accounts for its gains or losses in accordance with the first in first out (“FIFO”) method of accounting. The following table presents the activities of the digital currencies for the six months ended March 31, 2022: Amount Balance as on September 30, 2021 $ 23,603,210 Addition of digital currencies 73,940,317 Sale of digital currencies ( 80,430,113 ) Digital currencies issued for services ( 294,992 ) Realized gain on sale of digital currencies 7,260,909 Impairment loss ( 7,033,691 ) Balance as on March 31, 2022 $ 17,045,640 Fair Value Measurement of financial instruments, derivative asset and contingent consideration Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable. Level 1 Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily-available pricing sources for comparable instruments. Level 3 Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. The carrying value of cash, accounts payable and accrued expenses, and debt approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments. Th |
3. ACQUISITIONS
3. ACQUISITIONS | 6 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | 3. ACQUISITIONS SOLAR WATT SOLUTIONS, INC. On February 23, 2021, the Company entered into an Agreement and Plan of Merger (the “SWS Merger Agreement”) with Solar Watt Solutions, Inc. (“SWS”) and its owners (the “Sellers”). The Company accounted for the acquisition of SWS as an acquisition of a business under ASC 805 – Business Combination. At the closing on February 24, 2021, SWS became a wholly owned subsidiary of the Company. In exchange, the Company issued (i) 477,703 shares of restricted common stock with a deemed value of $ 15,640,000 calculated based on the five-day average closing price of the Company's common stock for the trading days including and immediately preceding the closing date of $ 32.74 per share to the Sellers, of which (a) 167,685 shares with a deemed value of $ 5,490,000 would be fully earned on closing, and (b) an additional 310,018 shares with a deemed fair value of $ 10,150,000 were issued to an escrow agent and only earned by Sellers, subject to holdback pending Sellers’ satisfaction of certain future milestones with all such shares subject to a lock up of no less than 180 days and a leak out of no more than 10% of average daily trading value of the prior 30 days for a period of 36 months following the closing, and (ii) up to $3,850,000 in cash to the Sellers, minus the Sellers’ debt, minus the difference between the Actual Amount and Expected Amount consisting of: (a) $1,350,000 (no changes post acquisition date) in cash payable on a pro rata basis to Sellers at closing, less payment of $500,000 (no changes post acquisition date) to settle Sellers’ debt at closing, which includes (x) $200,000 (no changes post acquisition date) in cash held back by the Company to satisfy potential damages from indemnification claims and any amounts owed pursuant to post-closing adjustments, (y) an additional $100,000 (no changes post acquisition date) in cash held back by the Company to satisfy any amounts owed pursuant to post-closing adjustments, and (b) up to $2,500,000 (fair valued at $155,000 at acquisition date) in cash held back by the Company and only payable pro rata to Sellers upon meeting certain future milestones and subject to satisfaction of any amounts owing from SWS to the Company resulting from damages required to be indemnified under the SWS Merger Agreement. The Company determined the fair value of the consideration given to the sellers of SWS in connection with the transaction in accordance with ASC 820 was as follows: Consideration: Fair Value Cash $ 1,350,000 Contingent consideration 155,000 310,018 shares of common stock as contingent equity $ 533,002 167,685 shares of common stock 4,649,905 Total Consideration $ 6,687,907 Preliminary Adjustments Final Customer List $ 5,122,733 $ ( 4,932,733 ) $ 190,000 Goodwill 1,642,409 5,178,126 6,820,535 Other Assets and Liabilities assumed, ( 77,235 ) ( 245,393 ) ( 322,628 ) Total $ 6,687,907 $ — $ 6,687,907 The goodwill recorded as result of the acquisition represents the strategic benefits of growing the Company’s service portfolio and the expected revenue growth from increased market penetration. Acquired goodwill is not deductible for income tax purposes. The total purchase price was allocated to identifiable assets deemed acquired, and liabilities assumed, based on their estimated fair values. The amortization period for customer list is estimated to be 1.5 years. The Company estimated the fair value of the identified customer list using a discounted cash flow model. These fair value measurements were based on significant inputs not observable in the market and thus represent a Level 3 measurement. Key assumptions include the level and timing of expected incremental future cash flows over its remaining useful life, and discount rates the Company believe to be consistent with the inherent risks associated with customer list, which is 14 %. The Company believes the level and timing of expected future cash flows appropriately reflects market participant assumptions. On January 31, 2022, the Company entered into a Merger Satisfaction and Release Agreement (the "Merger Satisfaction Agreement") with the Sellers of SWS. In consideration of fully satisfying the terms under the SWS Merger Agreement, the Company paid the Sellers $ 625,000 and released from escrow 77,500 shares of the Company's common stock. Additionally, the Sellers agreed to release back to the Company 232,518 shares of the Company's common stock held in escrow. Upon delivery of such consideration, the parties agreed that the shares and cash holdbacks contained in the original merger agreement were fully satisfied. ATL DATA CENTERS, LLC On December 9, 2020, the Company entered into an Agreement and Plan of Merger (the “ATL Merger”) with ATL Data Centers LLC (“ATL”) and its members. The Company accounted for the acquisition of ATL as an acquisition of a business under ASC 805 – Business Combination. At the closing, ATL became a wholly owned subsidiary of the Company. In exchange, the Company issued 1,618,285 shares of restricted common stock to the selling members of ATL, of which: (i) 642,309 shares were fully earned on closing, and (ii) an additional 975,976 shares were issued and held in escrow, subject to holdback pending satisfaction of certain indemnification claims and future milestones, with all such shares subject to a lock up of no less than 180 days and a leak out of no more than 10% of the average daily trading value of the prior 30 days. Of the 975,976 shares held in escrow, 515,724 shares were released to the selling members of ATL and 68,194 shares were returned to the Company and canceled due to satisfy nonsatisfaction of certain indemnification matters during the year ended September 30, 2021. The remaining 392,058 shares held in escrow consist of 72,989 shares subject to holdback pending satisfaction of further indemnification matters and 319,069 shares subject to satisfaction of future milestones. In connection with the return of the 68,194 shares held in escrow that were cancelled to satisfy certain indemnification matters, total consideration and the related goodwill, decreased by $ 892,659 during the year ended September 30, 2021. The consideration remitted in connection with the ATL Merger is subject to adjustment based on post-closing adjustments to closing cash, indebtedness, and transaction expenses of ATL within 90 days of closing. The Company also assumed approximately $ 6,900,000 in debts of ATL at closing. As part of the transaction costs, the Company issued 41,708 shares of common stock for an aggregate value of $ 545,916 to the broker which were expensed upon issuance of the shares. Purchase Price Allocation Preliminary Adjustments Final Strategic Contract $ 7,457,970 $ 2,342,000 $ 9,799,970 Goodwill 14,205,245 ( 1,264,167 ) 12,941,078 Other Assets and Liabilities assumed, ( 479,864 ) ( 1,077,833 ) ( 1,557,697 ) Total $ 21,183,351 $ — $ 21,183,351 The Company made measurement period adjustments, primarily to strategic contract and goodwill, to better reflect the facts and circumstances that existed at the acquisition date. The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s service portfolio and the expected revenue growth from increased market penetration. Acquired goodwill is not deductible for income tax purposes. The total purchase price was allocated to identifiable assets deemed acquired, and liabilities assumed, based on their estimated fair values. The strategic contract relates to supply of a critical input to our digital currency mining business. The other assets and liabilities assumed include $ 5,670,000 of digital currency mining equipment and approximately $ 5,475,000 of notes payable related to this equipment, which was settled by the Company in December 2020. In connection with the acquisition, the Company had acquired an operating lease related to a rental building, which had a purchase option associated with the lease agreement. The Company exercised the purchase option to buy the property in May 2021 and, as a result, terminated the lease. The amortization period for strategic contracts is estimated to be 5 years . The Company estimated the fair value of the identified strategic contract using a discounted cash flow model. These fair value measurements were based on significant inputs not observable in the market and thus represent a Level 3 measurement. Key assumptions include the level and timing of expected future cash flows, conditions and demands over its remaining useful life, and discount rates the Company believe to be consistent with the inherent risks associated with strategic contract, which is 6.4 %. The Company believes the level and timing of expected future cash flows appropriately reflects market participant assumptions. Pro forma of Consolidated Financial Statements (Unaudited) T he following is the unaudited pro forma information assuming the acquisition of ATL and SWS occurred on October 1, 2020: For the three months ended For the six months ended March 31, 2021 March 31, 2021 Net sales $ 8,907,200 $ 12,967,229 Net income (loss) $ 7,208,568 $ ( 551,184 ) Net income / (loss) per common share – basic $ 0.27 $ ( 0.02 ) Weighted average common shares outstanding – basic 26,402,962 26,121,545 Net income / (loss) per common share – diluted $ 0.22 $ ( 0.02 ) Weighted average common shares outstanding – diluted 33,175,566 26,121,545 The unaudited pro forma consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that would have actually resulted had the acquisition occurred on the first day of the earliest period presented, or of future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. All transactions that would be considered inter-company transactions for pro forma purposes have been eliminated. |
4. INVESTMENTS
4. INVESTMENTS | 6 Months Ended |
Mar. 31, 2022 | |
Schedule of Investments [Abstract] | |
INVESTMENTS | 4. INVESTMENTS As of March 31, 2022 and September 30, 2021, the Company had total investments of $ 4,585,559 and $ 5,661,036 , respectively that comprise of the following: International Land Alliance, Inc. On November 5, 2019, the Company entered into a binding Memorandum of Understanding (the “MOU”) with International Land Alliance, Inc. (“ILAL”), a Wyoming corporation, to lay a foundational framework where the Company expects to deploy its energy solutions across the portfolio of ILAL, including its energy projects, and its customers. In connection with the MOU, and to support the power and energy needs of ILALs development and construction of certain projects, the Company entered into a Securities Purchase Agreement (“SPA”), dated as of November 6, 2019, with ILAL. Pursuant to the terms of the SPA with ILAL, the Company purchased 1,000 shares of Series B Preferred Stock of ILAL (the “Preferred Stock”) for an aggregate purchase price of $ 500,000 (the “Stock Transaction”), less certain expenses and fees. The Series B Preferred Stock accrue cumulative in-kind accruals at a rate of 12% per annum and were redeemable on August 6, 2020. The Preferred Stock can be converted into common stock at a variable rate (refer the discussion on embedded derivative assets below). This variable conversion ratio will increase by 10% with the occurrence of certain events. Since the investments were not redeemed on August 6, 2020, they are now redeemable at the Company`s option in cash or into common stock, based on the conversion ratio. The Preferred Stock is recorded as an AFS debt security and is reported at its estimated fair value as of March 31, 2022. Any change in the fair values of AFS debt securities are reported net of income tax as an element of Other Comprehensive income. The Company accrued interest on our available-for-sale debt securities totaling $ 484,000 and $ 399,863 , as of March 31, 2022 and September 30, 2021, respectively, presented as prepaid expense and other current assets on the Consolidated Balance Sheets. The fair value of investment in Debt Securities is $ 541,200 and $ 494,608 as of March 31, 2022 and September 30, 2021, respectively. The Company has included gain on change in fair value of preferred stock amounting to $ 28,479 and $ 46,592 respectively for the three month and six month periods ended March 31, 2022, and $ 0 and $ 0 respectively for the three month and six month periods ended March 31, 2021, as part of other comprehensive income in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has deemed this variable conversion feature of ILAL preferred stock as an embedded derivative instrument in accordance with ASC Topic No. 815. This topic requires the Company to account for the conversion feature on its balance sheet at fair value and account for changes in fair value as a derivative gain or loss. Unrealized gain or loss on fair valuation of this embedded feature is recognized as an income in Consolidated statements of Operations and Comprehensive Income (Loss). Total fair value of investment in derivative assets as of March 31, 2022 and September 30, 2021, respectively was $ 3,794,359 and $ 4,905,656 . The Company fair values the debt security as a straight debt instrument based on liquidation value and accrued interest to date. The fair value of the derivative asset is based on the difference in the fair value of the debt security determined as a straight debt instrument and the fair value of the debt security if converted as of the reporting date. The Company recorded an unrealized loss on derivative assets for $ 1,410,146 and $ 1,111,297 respectively for the three and six month periods ended March 31, 2022, compared to an unrealized gain on derivative assets for $ 8,400,629 and $ 7,380,135 for the three and six month periods ended March 31, 2021. The following table sets forth a reconciliation of carrying value of all investments as of March 31, 2022 and September 30, 2021: ILAL ILAL ILAL Law Balance as of September 30, 2021 $ 494,608 $ 4,905,656 $ 10,772 $ 250,000 Shares sold during the year — — ( 9,590 ) — Realized gain on fair value recognized in other income/expense — — 665 — Unrealized loss recognized in other income/expense — ( 1,111,297 ) ( 1,847 ) — Unrealized gain on fair value recognized in other comprehensive income 46,592 — — — Balance as of March 31, 2022 $ 541,200 $ 3,794,359 $ — $ 250,000 |
5. INTANGIBLE ASSETS
5. INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets consist of the following as of March 31, 2022 and September 30, 2021: March 31, 2022 Intangible assets Accumulated amortization Total Patents $ 74,113 $ 34,552 $ 39,561 Websites 23,115 8,915 14,200 Customer list and non-compete agreement 6,892,024 5,981,767 910,257 Design assets 123,000 123,000 - Trademarks 5,928 2,480 3,448 Engineering trade secrets 4,370,269 3,282,677 1,087,592 Software 870,000 344,375 525,625 Strategic Contract 9,799,970 2,568,129 7,231,841 mPulse software 741,846 291,609 450,237 Total $ 22,900,265 $ 12,637,504 $ 10,262,761 September 30, 2021 Intangible assets Accumulated amortization Total Patents $ 74,112 $ 28,329 $ 45,783 Websites 8,115 8,115 — Customer list and non-compete agreement 6,892,024 4,940,456 1,951,568 Design assets 123,000 123,000 — Trademarks 5,928 2,236 3,692 Engineering trade secrets 4,370,269 2,943,173 1,427,096 Software 870,000 325,519 544,481 Strategic Contract 9,799,970 1,577,098 8,222,872 mPulse software 741,846 238,161 503,685 Total $ 22,885,264 $ 10,186,087 $ 12,699,177 Amortization expense for the three and six months ended March 31, 2022 was $ 1,225,873 and $ 2,451,417 , respectively. Amortization expense for the three and six months ended March 31, 2021 was $ 1,403,483 and $ 2,309,974 , respectively. The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows: Year March 31, 2022 $ 2,063,365 2023 2,908,616 2024 2,827,374 2025 2,000,726 2026 439,811 Thereafter 22,869 $ 10,262,761 |
6. PROPERTY AND EQUIPMENT
6. PROPERTY AND EQUIPMENT | 6 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 6. PROPERTY AND EQUIPMENT Property and equipment consist of the following: March 31, September 30, Mining equipment $ 11,782,820 $ 2,823,218 Miners 256,063,805 120,330,769 Land Improvements 1,529,937 — Office Equipment 167,329 126,584 Land and building 12,624,608 11,048,299 Machinery and equipment 331,172 323,682 Leasehold improvements 158,110 69,056 Furniture and fixtures 82,601 30,934 Infrastructure 12,439,515 81,868 Construction in progress 4,172,407 10,498,311 Less: accumulated depreciation ( 23,022,215 ) ( 7,657,982 ) Property and equipment, net $ 276,330,089 $ 137,674,739 Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 10,435,760 and $ 706,417 , respectively. Depreciation expense for the six months ended March 31, 2022 and 2021 was $ 16,907,784 and $ 930,324 , respectively. For the three months ended March 31, 2022, $ 3,978,676 of property and equipment was sold for a gain of $ 920,861 . For the six months ended March 31, 2022, $ 4,390,160 of property and equipment was disposed of for a gain of $ 642,691 , which included $ 411,484 of property and equipment that was written-off resulting in a loss of $ 278,170 . There were no disposals during the three and six months ended March 31, 2021. The Company placed-in service property and equipment of $ 160,345,487 during the six months ended March 31, 2022. This increase in fixed assets primarily consisted of miners amounting to $ 135,733,036 , which also includes miners received in-kind under miner purchase agreements valued at approximately $ 308,038 , mining equipment of $ 8,959,602 , and infrastructure of $ 12,357,647 . Construction in progress: The Company is expanding its facilities in Georgia. As of March 31, 2022, the Company has outstanding deposits totaling $ 69,902,321 . These deposits are in prepayments paid to premier suppliers and manufacturers to purchase mining ASICs and equipment. The prepayments will be applied to the purchase price when the vendor ships the miners. |
7. LEASES
7. LEASES | 6 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | 7. LEASES On October 1, 2019, the Company adopted the amendments to ASC 842, Leases, which requires lessees to recognize lease assets and liabilities arising from operating leases on the balance sheet. The Company adopted the new lease guidance using the modified retrospective approach and elected the transition option issued under ASU 2018-11, Leases (Topic 842) Targeted Improvements, allowing entities to continue to apply the legacy guidance in ASC 840, Leases, to prior periods, including disclosure requirements. The Company’s operating leases are office spaces and finance leases which are primarily related to equipment used at its data center. The Company's lease costs recognized during the three and six months ended March 31, 2022 and 2021 in the Consolidated Statements of Operations and Comprehensive Income (Loss) consist of the following: For the three months ended For the six months ended March 31, March 31, March 31, March 31, Operating lease cost (1) $ 83,237 $ 152,848 $ 166,475 $ 189,006 Finance lease cost: Amortization of right-of-use assets $ 94,815 $ 90,981 $ 189,630 $ 112,729 Interest on lease obligations $ 10,125 $ 14,645 $ 21,512 $ 18,223 (1) Included in general and administrative expenses Other lease information is as follows: For the six months ended March 31, March 31, Cash paid for amounts included in Operating cash flows from operating $ 157,780 $ 158,874 Financing cash flows from finance leases $ 206,063 $ 124,644 March 31, September 30, 2021 Weighted-average remaining lease term - 4.54 years 5 years Weighted-average remaining lease term - 1.78 years 3.2 years Weighted-average discount rate - operating 4.50 % 4.50 % Weighted-average discount rate - finance 5.50 % 5.50 % The following is a schedule of the Company's lease liabilities by contractual maturity as of March 31, 2022: Fiscal Year Operating Finance 2022 $ 159,125 $ 198,047 2023 324,949 295,541 2024 333,234 131,164 2025 341,767 11,092 2026 299,039 - Thereafter 37,301 - Gross lease liabilities 1,495,415 635,844 Less: imputed interest ( 129,884 ) ( 32,075 ) Present value of lease liabilities $ 1,365,531 $ 603,769 Less: Current portion of lease liabilities ( 321,600 ) ( 345,817 ) Total lease liabilities, net of current portion $ 1,043,931 $ 257,952 |
8. RELATED PARTY TRANSACTIONS
8. RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8 . RELATED PARTY TRANSACTIONS Zachary K. Bradford - Chief Executive Officer and Director During the three and six months ended March 31, 2022, the Company paid Blue Chip Accounting, LLC (“Blue Chip”) $ 0 and $ 47,075 , respectively, for accounting, tax, administrative services and reimbursement for office supplies. During the three and six months ended March 31, 2021, the Company paid Blue Chip Accounting, LLC (“Blue Chip”) $ 50,675 and $ 80,675 , respectively, for accounting, tax, administrative services and reimbursement for office supplies. Blue Chip is 50 % beneficially owned by Mr. Bradford. None of the services were associated with work performed by Mr. Bradford. The services consisted of preparing and filing tax returns, bookkeeping, accounting and administrative support assistance. The Company also sub-leases office space from Blue Chip. During the three and six months ended March 31, 2022, $ 0 and $ 4,575 , respectively, was paid to Blue Chip for rent. During the three and six months ended March 31, 2021, $ 4,575 and $ 9,150 , respectively, was paid to Blue Chip for rent. The sublease and engagement for accounting services was terminated on December 31, 2021 . |
9. STOCKHOLDERS' EQUITY
9. STOCKHOLDERS' EQUITY | 6 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY Overview The Company’s authorized capital stock consists of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock, par value $ 0.001 per share. As of March 31, 2022, there were 41,290,587 shares of common stock issued and outstanding and 1,750,000 shares of preferred stock issued and outstanding. As of September 30, 2021, there were 37,395,945 shares of common stock issued and outstanding and 1,750,000 shares of preferred stock issued and outstanding. Common Stock issuances during the six months ended March 31, 2022 The Company issued 99,230 common shares in relation to exercise of options. The Company issued 1,874 common shares valued at $ 30,032 as compensation for Director services. The Company issued 8,404 common shares valued at $ 150,011 for settlement of contingent consideration related to business acquisition. The Company issued 4,017,652 common shares in relation to equity raises through its At-the-Market offering facility, net of offering costs, for net proceeds of $ 67,988,993 . Common stock returned during the six months ended March 31, 2022 The Company had 232,518 shares of common stock returned back to the Company as part of the settlement of contingent consideration and holdbacks related to business acquisition. |
10. STOCK WARRANTS
10. STOCK WARRANTS | 6 Months Ended |
Mar. 31, 2022 | |
Stock Warrants | |
STOCK WARRANTS | 10. STOCK WARRANTS The following is a summary of stock warrant activity during the six months ended March 31, 2022: Number of Weighted Balance, September 30, 2021 615,704 $ 30.72 Warrants granted — — Warrants expired ( 183,334 ) 40.91 Warrants canceled — — Warrants exercised — — Balance, March 31, 2022 432,370 26.39 As of March 31, 2022, there are warrants exercisable to purchase 432,370 shares of common stock in the Company and there are no warrants that are unvested. As of March 31, 2022, the outstanding warrants have a weighted average remaining term of 1.62 years and an intrinsic value of $ 467,940 . During the three and six months ended March 31, 2022, there were no exercise of warrants. |
11. STOCK-BASED COMPENSATION
11. STOCK-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan (the “Plan”), which was established by the Board of Directors of the Company on June 19, 2017. On October 7, 2020, the Company executed a first amendment to the Plan to increase its share pool from 300,000 to 1,500,000 shares of common stock. Effective September 15, 2021, following approval by our stockholders, the Plan was amended to (i) increase the number of shares of common stock authorized for issuance under the Plan by an additional 2,000,000 shares, resulting in an aggregate of 3,500,000 shares of common stock authorized for issuance under the Plan, and (ii) revise Section 19 of the Plan to more closely align with the provisions of Section 422 of the Internal Revenue Code of 1986, as amended, and Section 17.2 of the Plan. As of March 31, 2022, there were 370,821 shares available for issuance under the Plan. The Plan allows the Company to grant incentive stock options, non-qualified stock options, stock appreciation rights, common stock, units of common stock, restricted stock, performance shares and performance units. Other than incentive stock options that are granted to participants who owns more than 10 % of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a “Ten Percent Stockholder”), stock options are exercisable for up to ten years, at an option price per share not less than the fair market value on the date the option is granted. The incentive stock options are limited to persons who are regular full-time employees of the Company or Ten Percent Stockholders at the date of the grant of the option. Non-qualified stock options and the other types of awards issuable under the Plan may be granted to any person, including, but not limited to, employees, independent agents, consultants and attorneys, who the Company’s Compensation Committee believes have contributed, or will contribute, to the success of the Company. The option vesting schedule for options granted is determined by the Compensation Committee at the time of the grant. The Plan provides for accelerated vesting of unvested options if there is a change in control, as defined in the Plan. The Company granted 64,000 non-qualified options pursuant to the Plan during the six months ended March 31, 2022. The Company recognized $ 6,553,984 and $ 12,303,091 respectively for the three and six months ended March 31, 2022 in stock-based compensation under the Plan. The Company recognized $ 231,361 and $ 1,163,401 respectively for the three and six months ended March 31, 2021 in stock-based compensation under the Plan. STOCK OPTIONS The following is a summary of stock option activity during the six months ended March 31, 2022: Number of Weighted Average Balance, September 30, 2021 1,547,029 18.35 Options granted 197,250 15.29 Options expired - - Options canceled/forfeited ( 157,885 ) 18.59 Options exercised ( 99,230 ) 7.39 Balance, March 31, 2022 1,487,164 18.69 As of March 31, 2022, there are options exercisable to purchase 632,753 shares of common stock in the Company and 854,508 unvested options outstanding that cannot be exercised until vesting conditions are met. As of March 31, 2022, the outstanding options have a weighted average remaining term of 1.61 years and an intrinsic value of $ 1,303,773 . During the six months ended March 31, 2022, a total of 99,230 shares of the Company’s common stock were issued in connection with the exercise of common stock options at exercise prices ranging from $ 4.65 to $ 15.10 , for a total consideration of $ 733,170 . For the six months ended March 31, 2022, the Company also granted 197,250 options with a total fair value of $ 2,958,367 to purchase shares of common stock to employees. The Black-Scholes model utilized the following inputs to value the options granted during the six months ended March 31, 2022: Fair value assumptions Options: March 31, Risk free interest rate 0.10 % - 2.55 % Expected term (years) 1.50 - 6.02 Expected volatility 140 % - 533 % Expected dividends 0 % As of March 31, 2022, the Company expects to recognize $ 13,096,168 of stock-based compensation for the non-vested outstanding options over a weighted-average period of 2.05 years. RESTRICTED STOCK UNITS The Company grants RSUs that contain (a) service conditions, (b) performance conditions, or (c) market performance conditions. RSUs containing service conditions vest monthly or annually. RSUs containing performance conditions generally vest over 1 year , and the number of shares earned depends on the achievement of predetermined Company metrics. When the criteria for vesting is met, the Company recognizes the expense equal to the total fair value of the common stock price on the grant date. All of the RSUs issued prior to September 30, 2021 were either vested or forfeited and cancelled. The following table summarizes the performance-based restricted stock units at the maximum award amounts based upon the respective performance share agreements. Actual shares that will vest depend on the attainment of the performance-based criteria. Number of Weighted Aggregate Outstanding at September 30, 2021 10,995 $ 11.59 $ 84,839 Granted 1,106,250 14.68 13,684,313 Vested ( 77,885 ) 20.15 1,569,280 Forfeited ( 40,759 ) 20.48 458,729 Outstanding at March 31, 2022 998,601 $ 14.15 $ 12,352,694 During the six months ended March 31, 2022, the Company granted 1,106,250 RSUs, which comprised of 90,000 that are service period based, 146,250 that are performance condition based, and 870,000 that are market condition based awards. The market condition based RSUs consist of 60,000 units that are perpetual in nature, and therefore, are given a derived service period of 5 years. The remaining 810,000 RSUs have a stated service period of 1 year. The fair value of the market based RSUs are determined using the Monte Carlo simulation and is in the following range: $ 11.03 - $ 17.89 per unit. The risk free rate, volatility, expected term, and cost of equity of these market based RSUs are as follows: 0.14 - 1.26 %, 111.37 - 172.18 %, 1 - 5 years, and 20.00 - 21.00 %. As of March 31, 2022, the Company had $ 7,755,679 in unrecognized compensation costs related to RSU awards that it expects to recognize over a weighted average period of 0.75 years. |
12. COMMITMENTS AND CONTINGENCI
12. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Purchase of bitcoin mining equipment The Company has cancellable purchase commitments totaling approximately $ 87,300,000 related to purchase of miners and approximately $ 10,600,000 related to purchase of mining operations related equipment and construction projects as of March 31, 2022, and the Company has paid approximately $ 73,700,000 towards these commitments as of the end of this period. As of March 31, 2022, the remaining commitment for future payments was approximately $ 24,200,000 . Future hosting agreements On March 29, 2022, the Company entered into a Hosting Agreement (the "Lancium Agreement") with Lancium LLC (“Lancium”). Pursuant to the Lancium Agreement, Lancium has agreed to host, power and provide maintenance and other related services to the Company’s cryptocurrency mining equipment to be placed at Lancium facilities. Pursuant to the Agreement, Lancium will provide 200 megawatts in support of Company’s mining equipment. In addition, for a period of two and a half years following the operations commencement date under the Agreement, the Company will have an option to increase the power capacity supplied to the Company up to 500 MW or 40% of the aggregate capacity of all facilities owned and operated by Lancium, whichever is lesser. As consideration for the Services, the Company shall pay Lancium a power charge fee based on kilowatt hours consumed by the Company’s equipment and a hosting fee based on power consumed, subject to service level adjustments and credits, if any. The Agreement further provides that through December 31, 2023, Lancium, subject to certain limited exceptions, will not enter into any all-in fixed price agreements with other customers with the same or less power draw as the Company that contains more favorable terms for the fixed all-in price than those in the Lancium Agreement, unless the Company is provided with the same lower fixed price under the Lancium Agreement. The Agreement has an initial term of five years from the operations commencement date (unless terminated earlier in accordance with the terms of the Agreement), after which it will renew automatically for two-year periods unless either party provides notice of non-renewal at least ninety days prior to the expiration of the term or renewal term, as applicable. As of March 31, 2022, the Company did no t have any contractual future payment obligations under the terms of the Agreement. Contractual future payments The following table sets forth certain information concerning our obligations to make contractual future payments towards our agreements as of March 31, 2022: 2022 2023 2024 2025 2026 Thereafter Total Recorded contractual obligations: Operating lease obligations $ 159,125 $ 324,949 $ 333,234 $ 341,767 $ 299,039 $ 37,301 $ 1,495,415 Finance Lease obligations 198,047 295,541 131,164 11,092 - - 635,844 Mining equipment 20,396,770 - - - - - 20,396,770 Mining operations related equipment 3,774,435 - - - - - 3,774,435 Total $ 24,528,377 $ 620,490 $ 464,398 $ 352,859 $ 299,039 $ 37,301 $ 26,302,464 Contingent consideration GridFabric On August 31, 2020, the Company acquired GridFabric, LLC. Pursuant to the terms of the purchase agreement, additional shares of the Company’s common stock valued at up to $ 750,000 were issuable if GridFabric achieves certain revenue and product release milestones. On September 30, 2021, the contingent consideration was re-measured to $ 500,000 . On November 23, 2021, the Company settled all contingent consideration due to GridFabric resulting in a payment of 8,404 shares of common stock valued at $ 150,000 . Solar Watt Solutions On February 24, 2021, the Company acquired Solar Watt Solutions, Inc. Pursuant to the terms of the purchase agreement, additional cash consideration of up to $ 2,500,000 (fair valued at $ 155,000 at acquisition date) in cash held back by the Company and only payable pro rata to Sellers upon meeting certain future milestones and subject to satisfaction of any amounts owing from SWS to the Company resulting from damages required to be indemnified under the SWS Merger Agreement. The contingent cash consideration was re-measured to $ 615,249 at December 31, 2021. On January 31, 2022, the Company settled all contingent consideration due to the SWS sellers, resulting in a payment of $ 625,000 , 77,500 shares of common stock released out of escrow to the SWS sellers, and SWS sellers releasing 232,518 shares of common stock back the Company. Legal contingencies From time to time we may be subject to litigation arising in the ordinary course of business. The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these existing matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has identified certain claims as a result of which a loss may be incurred, but in the aggregate the loss is expected to be insignificant. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates. For other claims regarding proceedings that are in an initial phase, the Company is unable to estimate the range of possible loss, if any, but at this time believes that any loss related to such claims will not be material. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. We maintain liability insurance to reduce such risk exposure to the Company. Despite the measures taken, such policies may not cover future litigation, or the damages claimed may exceed our coverage which could result in contingent liabilities. Bishins v. CleanSpark, Inc. et al. On January 20, 2021, Scott Bishins (“Bishins”), individually, and on behalf of all others similarly situated (together, the “Class”), filed a class action complaint (the “Class Complaint”) in the United States District Court for the Southern District of New York against the Company, its Chief Executive Officer, Zachary Bradford (“Bradford”), and its Chief Financial Officer, Lori Love (“Love”) (such action, the “Class Action”). The Class Complaint alleged that, between December 31, 2020 and January 14, 2021, the Company, Bradford, and Love “failed to disclose to investors: (1) that the Company had overstated its customer and contract figures; (2) that several of the Company’s recent acquisitions involved undisclosed related party transactions; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.” The Class Complaint sought: (a) certification of the Class, (b) an award of compensatory damages to the Class, and (c) an award of reasonable costs and expenses incurred by the Class in the litigation. On December 2, 2021, the Court appointed Darshan Hasthantra as lead Plaintiff (together, with Bishins, the “Plaintiffs”), and Glancy, Prongay and Murray LLP as class counsel. Hasthantra filed an Amended Complaint on February 28, 2022 (the “Amended Class Complaint”). In the Amended Class Complaint, Love is no longer a defendant and S. Matthew Schultz (“Schultz”) has been added as a defendant (the Company, Bradford and Schultz, collectively, the “Defendants”). The Amended Class Complaint alleges that, between December 10, 2020 and August 16, 2021 (the “Class Period”), Defendants made material misstatements and omissions regarding the Company’s acquisition of ATL Data Centers, Inc. (“ATL”) and its anticipated expansion of bitcoin mining operations. In particular, Plaintiffs allege that Defendants: (1) were misleading in their various public announcements related to the timeline for expanding ATL’s mining capacity; and (2) failed to disclose other material conditions purportedly related to the Company’s acquisition of ATL, including that an ATL predecessor had filed for bankruptcy about six months prior to the acquisition, that another bitcoin miner had declined to acquire ATL, and that a related party had performed an audit of ATL for the Company. The Amended Class Complaint seeks: (a) certification of the Class, (b) an award of compensatory damages to the Class, and (c) an award of reasonable costs and expenses incurred by the Class in the litigation. To date, no class has been certified in the Class Action. The Company filed its Motion to Dismiss on April 28, 2022. The Motion to Dismiss seeks dismissal of all claims asserted in the Amended Class Complaint with prejudice and without leave to amend on the grounds that Plaintiffs fail to state a claim upon which relief can be granted under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. Plaintiffs’ opposition is due on June 27, 2022, and Defendants’ reply in further support of their Motion to Dismiss is due on August 11, 2022. Although the ultimate outcome of the Class Action cannot be determined with certainty, the Company stands behind all of its prior statements and disclosures and believes that the claims raised in the Amended Class Complaint and the Class Complaint are entirely without merit. The Company intends to both defend itself vigorously against these claims and to vigorously prosecute any counterclaims. Notwithstanding Plaintiffs’ allegations’ lack of merit, however, the Class Action may distract the Company and cost the Company’s management time, effort and expense to defend against the claims made in the Amended Class Complaint. Notwithstanding the Company’s belief that the Company and its management have complied with all of their obligations under applicable securities regulations, no assurance can be given as to the outcome of the Class Action, and in the event the Company does not prevail in such action, the Company, its business, financial condition and results of operations could be materially and adversely affected. Ciceri, derivatively on behalf of CleanSpark, Inc., v. Bradford, Love, Schultz, Beynon, McNeill, and Wood (consolidated with Perna, derivatively on behalf of CleanSpark, Inc., v. Bradford, Love, Schultz, Beynon, McNeill, and Wood) On May 26, 2021, Andrea Ciceri (“Ciceri”), derivatively on behalf of CleanSpark, Inc., filed a verified shareholder derivative action (the “Ciceri Derivative Action”) in the United States District Court in the District of Nevada against Chief Executive Officer, Zachary Bradford (“Bradford”), Chief Financial Officer, Lori Love (“Love”) and Directors Matthew Schultz, Roger Beynon, Larry McNeill and Tom Wood (Bradford, Love and Directors collectively referred to as “Ciceri Derivative Defendants.”) On June 22, 2021, Mark Perna (“Perna”) (Ciceri, Perna, and Ciceri Derivative Defendants collectively referred to as the “Parties”) filed a verified shareholder derivative action (the “Perna Derivative Action”) in the same Court against the same Ciceri Derivative Defendants, making substantially similar allegations. On June 29, 2021, the Court consolidated the Ciceri Derivative Action with the Perna Derivative Action in accordance with a stipulation among the parties (the consolidated case referred to as the “Derivative Action”). The Derivative Action alleges that Ciceri Derivative Defendants: (1) made materially false and misleading public statements about the Company’s business and prospects; (2) did not maintain adequate internal controls; and (3) did not disclose several related party transactions benefitting insiders, questionable uses of corporate assets, and excessive compensation. The claims asserted against all Ciceri Derivative Defendants include breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. A claim for contribution under Sections 10(b) and 21D of the Securities and Exchange Act is asserted against only Bradford and Love. The Derivative Action seeks declaratory relief, monetary damages, and imposition of adequate corporate governance and internal controls. Plaintiffs were given the opportunity to submit an Amended Complaint by November 25, 2021, but elected not to. In January 2022, the Parties agreed to stay the entirety of the case pending the outcome of the Motion to Dismiss in the Class Action. Any of the Parties may also terminate the stay on 20 days’ notice. Although the ultimate outcome of the Derivative Action cannot be determined with certainty, the Company stands behind all of its prior statements and disclosures, and believes that the claims raised in that case are entirely without merit. The Company intends to both defend itself vigorously against these claims and to vigorously prosecute any counterclaims. Notwithstanding the Derivative Action’s lack of merit, however, it may distract the Company and cost the Company’s management time, effort and expense to defend against the claims. Notwithstanding the Company’s belief that the Company and its management have complied with all of their obligations under applicable securities regulations, no assurance can be given as to the outcome of the Derivative Action, and in the event the Company does not prevail in such action, the Company, its business, financial condition and results of operations could be materially and adversely affected. Solar Watt Solutions, Inc., v. Pathion, Inc. On January 6, 2022 , Solar Watt Solutions, Inc., (“SWS”) filed suit in the Superior Court of the State of California in the County of Santa Clara against Pathion, Inc., (“Pathion”) for breach of contract, conversion, unjust enrichment and negligent misrepresentation. Prior to its acquisition by the Company, SWS paid Pathion $ 418,606 for solar batteries and related equipment for delivery in August 2019, later amended to November 2019. Pathion never delivered any of the items purchased by SWS. Pathion’s breach resulted in SWS being unable to complete a separate contract and cost the end-user client over $ 15,000 per month in electricity costs. SWS is seeking an award of compensatory damages totaling over $ 500,000 . Pathion filed an answer on or around February 16, 2022, generally denying the claims asserted by SWS. A case management conference is scheduled for May 31, 2022, and discovery has commenced. |
13. MAJOR CUSTOMERS AND VENDORS
13. MAJOR CUSTOMERS AND VENDORS | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
MAJOR CUSTOMERS AND VENDORS | 13. MAJOR CUSTOMERS AND VENDORS Digital Currency Mining Segment For the three months ended March 31, 2022 and 2021, the digital currency mining business had the following customers that represented more than 10 % of revenue. For these purposes customers are defined as the Company’s mining pool operators. Three Months Ended March 31, 2022 March 31, 2021 Mining Pool Operator A 99.99 % — Mining Pool Operator B 0.01 % 100.00 % For the six months ended March 31, 2022 and 2021, the digital currency mining business had the following customers that represented more than 10 % of revenue. For these purposes customers are defined as the Company’s mining pool operators. Six Months Ended March 31, 2022 March 31, 2021 Mining Pool Operator A 99.95 % — Mining Pool Operator B 0.05 % 100.00 % For the three months ended March 31, 2022 and 2021, the Company had the following significant suppliers of mining equipment. Three Months Ended March 31, 2022 March 31, 2021 Vendor A 90.85 % — Vendor B — 57.94 % Vendor C — 23.69 % Vendor D — 18.37 % For the six months ended March 31, 2022 and 2021, the Company had the following significant suppliers of mining equipment. Six Months Ended March 31, 2022 March 31, 2021 Vendor A 71.70 % — Vendor B 24.03 % — Vendor C — 46.77 % Vendor D — 27.49 % Vendor E — 14.91 % Energy Segment For the three months ended March 31, 2022 and 2021, the energy business had the following customers that represented more than 10 % of revenue. Three Months Ended March 31, 2022 March 31, 2021 Customer A 37.39 % 39.06 % Customer B — 12.47 % Customer C — 10.17 % For the six months ended March 31, 2022 and 2021, the energy business had the following customers that represented more than 10 % of revenue. Six Months Ended March 31, 2022 March 31, 2021 Customer A 30.01 % 56.00 % Customer B — 12.25 % For the three months ended March 31, 2022 and 2021, the Company had the following suppliers that represented more than 10 % of direct material costs. Three Months Ended March 31, 2022 March 31, 2021 Vendor A 20.23 % 22.24 % Vendor B 17.82 % — Vendor C 12.06 % — Vendor D — 23.90 % For the six months ended March 31, 2022 and 2021, the Company had the following suppliers that represented more than 10 % of direct material costs. Six Months Ended March 31, 2022 March 31, 2021 Vendor A 38.87 % — Vendor B 11.76 % — Vendor C — 15.62 % Vendor D — 14.54 % Vendor E — 12.91 % |
14. SEGMENT REPORTING
14. SEGMENT REPORTING | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 14. SEGMENT REPORTING We disclose segment information that is consistent with the way in which management operates and views the business. Our operating structure contains two reportable segments: Digital Currency and Energy. The Company measures the results of its segments using, among other measures, each segment's sales and operating income, which includes certain corporate overhead allocations. Digital Currency: This segment consists of operations related to Bitcoin mining. The Company provides computing power through ATL Data Centers LLC and CleanBlok Inc. to the mining pools. This segment also includes operation related to maintenance of real property holdings for company purposes through CSRE properties Norcross LLC and CSRE properties LLC. This segment revenue represents fractional share of the fixed cryptocurrency award received from the mining pool operator in exchange of computing power. Energy: This segment provides services, equipment, and software to the energy industry. This segment includes revenue from providing engineering and construction services, selling equipment such as residential battery, residential solar, commercial solar and non-customized equipment and providing access to its energy software offerings and software license sales and support services. Other Revenue and Eliminations: This includes revenue from providing design, software development, and other technology-based consulting services through p2k Labs and data center services through ATL Data Center. Corporate items and eliminations consist of corporate overhead and other items not allocated to any of the Company's segments as in the table below. Intersegment transactions, which were at market price, are included in the “Other revenue and eliminations” and “Corporate items and eliminations” in the table below. Three Months Ended March 31, 2022 March 31, 2021 Revenue Energy $ 4,585,971 $ 1,313,530 Digital Currency Mining 36,965,739 6,715,792 Total segment revenues 41,551,710 8,029,322 Other revenue and eliminations 86,282 90,366 Consolidated Revenues 41,637,992 8,119,688 Profit Energy 945,534 292,023 Digital Currency Mining 28,476,493 6,251,287 Total segment profit 29,422,027 6,543,310 Corporate items and eliminations (including ( 29,592,762 ) 856,730 Net income/(loss) $ ( 170,735 ) $ 7,400,040 Six Months Ended March 31, 2022 March 31, 2021 Revenue Energy $ 8,556,181 $ 2,827,233 Digital Currency Mining 73,940,317 7,449,202 Total segment revenues 82,496,498 10,276,435 Other revenue and eliminations 383,463 100,824 Consolidated Revenues 82,879,961 10,377,259 Profit Energy 1,931,774 389,853 Digital Currency Mining 59,809,483 7,107,416 Total segment profit 61,741,257 7,497,269 Corporate items and eliminations (including ( 47,426,237 ) ( 7,264,759 ) Net income $ 14,315,020 $ 232,510 For details on major customers of Digital currency and Energy segment, see Note 13. A summary of segment assets is as follows: March 31, 2022 September 30, 2021 Digital Currency Mining $ 375,183,757 $ 270,995,942 Energy 25,267,292 17,507,314 Other and Corporate assets 24,346,255 28,969,865 Total $ 424,797,304 $ 317,473,121 The Company operates its business only in the United States. Total additions in long-lived assets for the three months and six months ended March 31, 2022 and 2021: Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Digital Currency Energy Corporate Digital Currency Energy Corporate Property and Equipment 97,273,057 13,939 78,393 9,001,813 70,688 1,945 Intangibles - - 15,000 - 190,000 - Total 97,273,057 13,939 93,393 9,001,813 260,688 1,945 Six Months Ended Six Months Ended March 31, 2022 March 31, 2021 Digital Currency Energy Corporate Digital Currency Energy Corporate Property and Equipment 168,566,562 29,993 148,202 10,259,396 83,554 8,160 Intangibles - - 15,000 - 190,000 - Total 168,566,562 29,993 163,202 10,259,396 273,554 8,160 |
15. SUBSEQUENT EVENTS
15. SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS On April 22, 2022, the Company entered into a Master Equipment Financing Agreement with Trinity Capital Inc., as the Lender (the “Financing Agreement”). The Financing Agreement provides for up to $ 35 million of borrowings to finance the Company’s acquisition of blockchain computing equipment. The Company received a loan of $ 20 million at closing, with the remaining $ 15 million fundable upon the Company's request, if requested no later than December 31, 2022, subject to certain customary conditions. The loan draws have a term of 36 months from issuance with a monthly rate factor of at least 0.032198 payable monthly on the total cost of the equipment purchased with such borrowing. The Financing Agreement contains standard financial reporting requirements and certain other affirmative obligations, failure of which to comply with could result in an event of default under the Financing Agreement. In such an event, the Lender could exercise certain remedies including, but not limited to, declaring that all amounts outstanding under the Financing Agreement, together with accrued interest, be declared immediately due and payable. The Company received funding of $ 20 million at close, which included closing costs of $ 701,624 and security deposit of $ 643,960 . |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent annual report on Form 10-K for the year ended September 30, 2021, filed with the SEC on December 14, 2021 (“Form 10-K”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented in this quarterly report on Form 10-Q have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. The accompanying unaudited consolidated financial statements include the accounts of CleanSpark, Inc., and its wholly owned operating subsidiaries, CleanSpark, LLC, CleanSpark II, LLC, CleanSpark Critical Power Systems Inc., p2kLabs, Inc, GridFabric, LLC, ATL Data Centers LLC, CleanBlok, Inc., CSRE Properties, LLC, Solar Watt Solutions, Inc, CSRE Properties Norcross, LLC and CSRE Property Management Company, LLC. All intercompany transactions have been eliminated upon consolidation of these entities. |
Liquidity | Liquidity As shown in the accompanying unaudited consolidated financial statements, the Company generated a net income (loss) of ($ 170,735 ) and $ 14,315,020 respectively during the three months and six months ended March 31, 2022. While the Company has experienced negative cash flows from investing and operating activities due to its continued investments in capital expenditures in support of its bitcoin mining operations, it has generated positive cash flows from financing activities. The Company has sufficient working capital to support its ongoing operations for the next twelve months. In addition, the Company has access to equity financing through its At-the-Market offering facility and debt financing through the lending arrangement the Company entered into in April 2022 (see Note 15). As of March 31, 2022, the Company had working capital of $ 19,378,547 . |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include estimates used to review the Company’s goodwill and digital currency impairment, intangible assets acquired, impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, revenue recognition from digital currency mining, valuation of derivative assets and liabilities, available-for-sale investments, allowances for uncollectible accounts, valuation of digital currencies, valuation of contingent consideration, warranty, and the valuations of share based awards. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions including, but not limited to, the ultimate impact that the ongoing COVID-19 pandemic may have on the Company’s operations. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board's (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five steps be followed in evaluating revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Our accounting policy on revenue recognition by type of revenue is provided below. Revenues from digital currency mining The Company has entered into contracts with digital asset mining pool operators to provide computing power to the mining pools. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives ( less net digital asset transaction fees to the mining pool operator), for successfully adding a block to the blockchain, plus a fractional share of the transaction fees attached to that blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The transaction consideration the Company receives is noncash consideration, in the form of digital currency, which the Company measures at fair value on the date received which is not materially different than the fair value at contract inception or time the Company has earned the award from the mining pools. Fair value of the digital currency award received is determined using the spot price of the related digital currency on the date earned. There is currently no definitive guidance under GAAP or alternative accounting framework for the accounting for digital currencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Engineering & Construction Contracts and Service Contracts The Company recognizes engineering and construction contract revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. Engineering and construction contracts are generally accounted for as a single unit of account (a single performance obligation) and are not segmented between types of services. The Company recognizes revenue based primarily on contract cost incurred to date compared to total estimated contract cost (an input method). The input method is the most faithful depiction of the Company’s performance because it directly measures the value of the services transferred to the customer. Customer-furnished materials, labor and equipment and, in certain cases, subcontractor materials, labor and equipment, are included in revenue and cost of revenue when management believes that the Company is acting as a principal rather than as an agent (i.e., the Company integrates the materials, labor and equipment into the deliverables promised to the customer). Customer-furnished materials are only included in revenue and cost when the contract includes construction activity and the Company has visibility into the amount the customer is paying for the materials or there is a reasonable basis for estimating the amount. The Company recognizes revenue, but not profit, on certain uninstalled materials that are not specifically produced, fabricated, or constructed for a project. Revenue on these uninstalled materials is recognized when the cost is incurred (when control is transferred). Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the client. Project mobilization costs are generally charged to project costs as incurred when they are an integrated part of the performance obligation being transferred to the client. Customer payments on engineering and construction contracts are typically due within 30 to 45 days of billing, depending on the contract. The Company recognizes energy (solar panel and battery) installation contract revenue for residential customers at a point in time upon completion of the installation. The revenues associated with energy installations for commercial customers are recognized over a period of time as noted in the engineering and construction contract revenue disclosure above. For service contracts (including maintenance contracts) in which the Company has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, revenue is recognized when services are performed and contractually billable. Service contracts that include multiple performance obligations are segmented between types of services. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using an estimate of the stand-alone selling price of each distinct service in the contract. Revenue recognized on service contracts that have not been billed to clients is classified as a current asset under contract assets on the Consolidated Balance Sheets. Amounts billed to clients in excess of revenue recognized on service contracts to date are classified as a current liability under contract liabilities. Customer payments on service contracts are typically due within 30 days of billing, depending on the contract. Revenues from Sale of Equipment Performance Obligations Satisfied at a point in time. We recognize revenue on agreements for equipment we sell on a standardized basis to the market at a point in time. We recognize revenue at the point in time that the customer obtains control of the good, which is generally upon shipment or when the customer has physical possession of the product depending on contract terms. We use proof of delivery for certain large equipment with more complex logistics, whereas the delivery of other equipment is estimated based on historical averages of in-transit periods (i.e., time between shipment and delivery). Generally, shipping costs are included in the price of equipment unless the customer requests a non-standard shipment. In situations where an alternative shipment arrangement has been made, the Company recognizes the shipping revenue upon customer receipt of the shipment. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. We generally do not provide for anticipated losses on point in time transactions prior to transferring control of the equipment to the customer. Our billing terms for these point in time equipment contracts vary and generally coincide with shipment to the customer; however, within certain businesses, we receive progress payments from customers for large equipment purchases, which is generally to reserve production slots with our manufacturing partners, which are recorded as contract liabilities. Due to the customized nature of the equipment, the Company does not allow for customer returns. Service Performance obligations satisfied over time. We enter into long-term product service agreements with our customers primarily within our microgrid segment. These agreements require us to provide preventative maintenance, and standby support services that include certain levels of assurance regarding system performance throughout the contract periods, and these contracts will generally range from 1 to 10 years. We account for items that are integral to the maintenance of the equipment as part of our service-related performance obligation, unless the customer has a substantive right to make a separate purchasing decision (e.g., equipment upgrade). Contract modifications that extend or revise contract terms are not uncommon and generally result in our recognizing the impact of the revised terms prospectively over the remaining life of the modified contract (i.e., effectively like a new contract). Revenues are recognized for these arrangements on a straight-line basis consistent with the nature, timing and extent of our services, which primarily relate to routine maintenance and as needed product repairs. Our billing terms for these contracts vary, but we generally invoice periodically as services are provided. Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables (typically for cost reimbursable contracts) and contract work in progress (typically for fixed-price contracts). There were no contracts assets as of March 31, 2022 and September 30, 2021. Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed under the terms of the contract. There are no advances that are payments on account of contract assets that have been deducted from contract assets as of March 31, 2022 and September 30, 2021. Contract liabilities represent deferred revenues as of March 31, 2022. The Company recorded $ 188,929 and $ 296,964 in contract liabilities as of March 31, 2022 and September 30, 2021, respectively. Revenues from software The Company derives its software revenue from both subscription fees from customers for access to its energy software offerings and software license sales and support services. Revenues from software licenses are generally recognized upfront when the software is made available to the customer and revenues from the related support is generally recognized ratably over the contract term. The Company’s policy is to exclude sales and other indirect taxes when measuring the transaction price of its subscription agreements. The Company’s subscription agreements generally have monthly or annual contractual terms. Revenue is recognized ratably over the related contractual term beginning on the date that the platform is made available to a customer. Access to the platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Revenues from design, software development and other technology-based consulting services For service contracts performed under Master Services Agreements (“MSA”) and accompanying Statement(s) of Work (“SOW”), revenue is recognized based on the performance obligation(s) outlined in the SOW which is typically hours worked or specific deliverable milestones. In the case of a milestone-based SOW, the Company recognizes revenues as each deliverable is signed off by the customer. Revenues from data center services The Company provides data services such as providing its customers with rack space, power and equipment, and cloud services such as virtual services, virtual storage, and data backup services, generally based on monthly services provided at a defined price included in the contracts. The performance obligations are the services provided to a customer for the month based on the contract. The transaction price is the price agreed with the customer for the monthly services provided and the revenues are recognized monthly based on the services rendered for the month. Variable Consideration The nature of the Company’s contracts gives rise to several types of variable consideration, including claims and unpriced change orders; awards and incentive fees; and liquidated damages and penalties. The Company recognizes revenue for variable consideration when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company estimates the amount of revenue to be recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regard to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the Company’s performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. If the requirements for recognizing revenue for claims or unapproved change orders are met, revenue is recorded only when the costs associated with the claims or unapproved change orders have been incurred. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for claims accounting have been satisfied. The Company generally provides limited warranties for work performed under its engineering and construction contracts. The warranty periods typically extend for a limited duration following substantial completion of the Company’s work on a project. Historically, warranty claims have not resulted in material costs incurred. Practical Expedients If the Company has a right to consideration from a customer in an amount that corresponds directly with the value of the Company’s performance completed to date (a service contract in which the Company bills a fixed amount for each hour of service provided), the Company recognizes revenue in the amount to which it has a right to invoice for services performed. The Company does not adjust the contract price for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a service to a customer and when the customer pays for that service will be one year or less. The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are collected by the Company from its customers (use taxes, value added taxes, some excise taxes). |
Cost of Revenues | Cost of Revenues The Company includes the following in cost of revenues: energy costs, materials costs, manufacturing and logistics costs, freight costs, inventory write-downs, hosting services costs. The recognition of cost of revenue for our energy segment is dependent upon the revenue stream that it pertains to, refer below: 1. Products and related services delivered at a point in time. Cost of revenue from these products and related services is recognized when the Company transfers control of the product to the customer, which is generally upon shipment. 2. Products and related services delivered over time. Cost of revenue from these products and related services is recognized over the related service period. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash and amounts due from banks and restricted cash. The Company’s restricted cash represents amounts held in trust for certain construction projects. The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statements of cash flows. March 31, September 30, Cash and cash equivalents, excluding restricted cash $ 1,695,718 $ 14,571,198 Restricted cash - construction escrow account 217,229 3,469,129 Cash and cash equivalents, including restricted cash $ 1,912,947 $ 18,040,327 |
Accounts receivable | Accounts receivable Accounts receivable is comprised of uncollateralized customer obligations due under normal trade terms. They are initially recorded at the invoiced amount upon the sale of goods or services to customers, and do not bear interest. The Company performs ongoing credit evaluation of its customers and management closely monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The carrying amount of accounts receivable is reviewed periodically for collectability. If management determines that collection is unlikely, an allowance that reflects management’s best estimate of the amounts that will not be collected is recorded. Accounts receivable, net consists of the following: March 31, September 30, Accounts Receivable, gross $ 6,796,293 $ 2,891,784 Other receivables 733,468 421,681 Provision for doubtful allowances ( 693,508 ) ( 693,508 ) Total Accounts Receivable, net $ 6,836,253 $ 2,619,957 |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value with cost being measured on a first-in, first-out basis. For solar panel and battery installations, the Company transfers component parts from inventories to cost of goods sold once installation is complete. The Company periodically reviews inventories for unusable and obsolete items based on assumptions about future demand and market conditions. Based on this evaluation, provisions are made to write inventories down to their net realizable value. There were no write-downs of inventory as of March 31, 2022 and September 30, 2021, respectively. The composition of inventory as of March 31, 2022 and September 30, 2021 are as follows: March 31, September 30, Batteries and solar panels $ 595,432 $ 1,819,398 Supplies and other 663,992 853,346 Total inventory $ 1,259,423 $ 2,672,744 |
Prepaid expense and other current assets | Prepaid expense and other current assets The Company records a prepaid expense for costs paid but not yet incurred. Those expected to be incurred within one year are recognized and shown as a short-term pre-paid expense. Any costs expected to be incurred outside of one year would be considered other long-term assets. Other current assets are assets that consist of deposits and interest receivable. Deposits and interest we expect to receive within one year are shown as short-term. Those we expect to receive outside of one year are shown as other long-term assets. |
Concentration Risk | Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. The cash balance, in excess of the FDIC limits was $ 1,098,786 and $ 17,790,327 as of March 31, 2022 and September 30, 2021, respectively. The accounts offered by custodians of the Company’s bitcoin are not insured by the FDIC. The fair market value of bitcoin held in accounts not covered by FDIC limits was $ 17,045,640 and $ 23,603,210 as of March 31, 2022 and September 30, 2021, respectively. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. The Company has certain customers and vendors who individually represented 10 % or more of the Company’s revenue or capital expenditures. Please refer to Note 13 - Major Customers and Vendors. |
Stock -based compensation | Stock-based compensation The Company follows the guidelines in FASB Codification Topic ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. For equity awards granted by the Company that are contingent upon market-based conditions, the Company fair values these awards using the Monte Carlo simulation model. For discussion of accounting for restricted stock units (RSUs), please refer Note 11 – Stock-Based Compensation. |
Earnings (loss) per share | Earnings (loss) per share The Company reports earnings (loss) per share in accordance with FASB ASC 260-10 “Earnings Per Share,” which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. As of March 31, 2022, 489,282 units of common stock equivalents that consist of options, warrants and restricted stock units were excluded from the calculation of the diluted (loss) per share calculation for the three months ended March 31, 2022 as their effect is anti-dilutive. For the Three Months For the Six Months 2022 2021 2022 2021 Numerator Consolidated net income (loss) attributable to common shareholders $ ( 191,563 ) $ 7,222,535 $ 13,979,581 $ 55,005 Denominator Weighted- average common shares outstanding, 41,336,342 25,925,259 40,802,319 24,025,557 Dilutive impact of stock options and other share-based awards — 6,772,604 58,733 6,772,604 Weighted- average common shares outstanding, 41,336,342 32,697,863 40,861,052 30,798,161 Net income (loss) per common share attributable Basic $ ( 0.00 ) $ 0.28 $ 0.34 $ 0.00 Diluted $ ( 0.00 ) $ 0.22 $ 0.34 $ 0.00 |
Property and equipment | Property and equipment Property and equipment are stated at cost less accumulated depreciation. Construction in progress is the construction or development of assets that have not yet been placed in service for its intended use. Depreciation for machinery and equipment, mining equipment, buildings, furniture and fixtures and leasehold improvements commences once they are ready for its intended use. Leasehold improvements are depreciated on a straight-line basis over the shorter of their estimated useful lives or the terms of the related leases. Land is not depreciated. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Useful life (years) Building 30 Land Improvements 15 Machinery and equipment 1 - 10 Office Equipment 3 - 7 Mining equipment 3 - 15 Miners 3 - 5 Infrastructure asset Shorter of estimated lease term or 15 years Leasehold improvements Shorter of estimated lease term or 5 years Furniture and fixtures 1 - 5 In accordance with the FASB ASC 360-10, "Property, Plant and Equipment” the carrying value of property and equipment, and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the three and six months ended March 31, 2022 and March 31, 2021 the Company did no t record an impairment expense. |
Digital Currency | Digital Currency Digital currencies are included in current assets in the consolidated balance sheets. Digital currencies are recorded at cost less impairment. They are classified as indefinite-lived intangible assets in accordance with ASC 350, Intangibles — Goodwill and Other, and are accounted for in connection with the Company’s revenue recognition policy detailed above and in Note 2 – Summary of Significant Accounting Policies. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. Quantitative impairment is measured using the quoted price of the digital currency at the time its fair value is being measured in accordance with ASC 820, Fair Value Measurement. Quoted prices are obtained from the principal market. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted as per ASC 350, Intangibles – Goodwill and Other. Digital currencies earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of digital currencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the consolidated statements of operations and comprehensive income (loss). The Company accounts for its gains or losses in accordance with the first in first out (“FIFO”) method of accounting. The following table presents the activities of the digital currencies for the six months ended March 31, 2022: Amount Balance as on September 30, 2021 $ 23,603,210 Addition of digital currencies 73,940,317 Sale of digital currencies ( 80,430,113 ) Digital currencies issued for services ( 294,992 ) Realized gain on sale of digital currencies 7,260,909 Impairment loss ( 7,033,691 ) Balance as on March 31, 2022 $ 17,045,640 |
Fair Value Measurement of financial instruments, derivative asset and contingent consideration | Fair Value Measurement of financial instruments, derivative asset and contingent consideration Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable. Level 1 Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily-available pricing sources for comparable instruments. Level 3 Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. The carrying value of cash, accounts payable and accrued expenses, and debt approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments. The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of March 31, 2022 and September 30, 2021: March 31, 2022 Amount Level 1 Level 2 Level 3 Derivative asset $ 3,794,359 $ - $ - $ 3,794,359 Investment in debt security 541,200 - - 541,200 Total $ 4,335,559 $ - $ - $ 4,335,559 September 30, 2021 Amount Level 1 Level 2 Level 3 Derivative asset $ 4,905,656 $ - $ - $ 4,905,656 Investment in equity security 10,772 10,772 - - Investment in debt security 494,608 - - 494,608 Contingent cash consideration 820,802 - - 820,802 Total $ 6,231,838 $ 10,772 $ - $ 6,221,066 There were no transfers between Level 1, 2 or 3 during the three and six months ended March 31, 2022 and 2021. |
Income taxes | Income taxes The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company had no uncertain tax positions as of March 31, 2022 and September 30, 2021. Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from managements estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of March 31, 2022 and September 30, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. Income tax expense/(benefit) from operations for the three and six months ended March 31, 2022 and 2021 was $ 0 in each period, which resulted primarily from maintaining a full valuation allowance against the Company's deferred tax assets. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or net assets of the Company. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. The Company has two reportable segments, namely, (1) Digital Currency Mining Segment and (2) Energy Segment. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. This new guidance is effective for the Company for its fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is evaluating its potential impact but does not expect the new standard to have a material impact on the Company's results of operations or cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments on October 1, 2020 (“ASU 2016-13”). ASU 2016-13 requires entities to use a new forward-looking “expected loss” model that reflects expected credit losses, including credit losses related to trade receivables, and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates, which generally will result in the earlier recognition of allowances for losses. As the Company was a Smaller Reporting Company at the time of issuance of the ASU, the Company expects to adopt the ASU effective October 1, 2023, including the interim periods within the fiscal year. Early application of the adoption is permitted. The Company is evaluating its potential impact but does not expect the new standard to have a material impact on the Company's results of operations or cash flows. In August 2020, the FASB issued ASU2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40),” which reduces the number of accounting models in ASC 470-20 that require separate accounting for embedded conversion features. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. The treasury stock method should no longer be used to calculate diluted net income per share for convertible instruments. The amendment will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We expect the adoption of ASU 2020-06 to not have a material impact on the Company’s financial statements or disclosures. |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents | March 31, September 30, Cash and cash equivalents, excluding restricted cash $ 1,695,718 $ 14,571,198 Restricted cash - construction escrow account 217,229 3,469,129 Cash and cash equivalents, including restricted cash $ 1,912,947 $ 18,040,327 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable | Accounts receivable, net consists of the following: March 31, September 30, Accounts Receivable, gross $ 6,796,293 $ 2,891,784 Other receivables 733,468 421,681 Provision for doubtful allowances ( 693,508 ) ( 693,508 ) Total Accounts Receivable, net $ 6,836,253 $ 2,619,957 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Inventories Current | The composition of inventory as of March 31, 2022 and September 30, 2021 are as follows: March 31, September 30, Batteries and solar panels $ 595,432 $ 1,819,398 Supplies and other 663,992 853,346 Total inventory $ 1,259,423 $ 2,672,744 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of earnings per share, basic and diluted | For the Three Months For the Six Months 2022 2021 2022 2021 Numerator Consolidated net income (loss) attributable to common shareholders $ ( 191,563 ) $ 7,222,535 $ 13,979,581 $ 55,005 Denominator Weighted- average common shares outstanding, 41,336,342 25,925,259 40,802,319 24,025,557 Dilutive impact of stock options and other share-based awards — 6,772,604 58,733 6,772,604 Weighted- average common shares outstanding, 41,336,342 32,697,863 40,861,052 30,798,161 Net income (loss) per common share attributable Basic $ ( 0.00 ) $ 0.28 $ 0.34 $ 0.00 Diluted $ ( 0.00 ) $ 0.22 $ 0.34 $ 0.00 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING ACCOUNTING POLICIES - Useful Life of Property and Equipment | Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Useful life (years) Building 30 Land Improvements 15 Machinery and equipment 1 - 10 Office Equipment 3 - 7 Mining equipment 3 - 15 Miners 3 - 5 Infrastructure asset Shorter of estimated lease term or 15 years Leasehold improvements Shorter of estimated lease term or 5 years Furniture and fixtures 1 - 5 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Activities of Digital Currencies | The following table presents the activities of the digital currencies for the six months ended March 31, 2022: Amount Balance as on September 30, 2021 $ 23,603,210 Addition of digital currencies 73,940,317 Sale of digital currencies ( 80,430,113 ) Digital currencies issued for services ( 294,992 ) Realized gain on sale of digital currencies 7,260,909 Impairment loss ( 7,033,691 ) Balance as on March 31, 2022 $ 17,045,640 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Financial Instruments That are Recorded at Fair Value | The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of March 31, 2022 and September 30, 2021: March 31, 2022 Amount Level 1 Level 2 Level 3 Derivative asset $ 3,794,359 $ - $ - $ 3,794,359 Investment in debt security 541,200 - - 541,200 Total $ 4,335,559 $ - $ - $ 4,335,559 September 30, 2021 Amount Level 1 Level 2 Level 3 Derivative asset $ 4,905,656 $ - $ - $ 4,905,656 Investment in equity security 10,772 10,772 - - Investment in debt security 494,608 - - 494,608 Contingent cash consideration 820,802 - - 820,802 Total $ 6,231,838 $ 10,772 $ - $ 6,221,066 |
3. ACQUISITIONS (Tables)
3. ACQUISITIONS (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of SWS Consideration | The Company determined the fair value of the consideration given to the sellers of SWS in connection with the transaction in accordance with ASC 820 was as follows: Consideration: Fair Value Cash $ 1,350,000 Contingent consideration 155,000 310,018 shares of common stock as contingent equity $ 533,002 167,685 shares of common stock 4,649,905 Total Consideration $ 6,687,907 |
Summary of SWS Purchase Price Allocation | Preliminary Adjustments Final Customer List $ 5,122,733 $ ( 4,932,733 ) $ 190,000 Goodwill 1,642,409 5,178,126 6,820,535 Other Assets and Liabilities assumed, ( 77,235 ) ( 245,393 ) ( 322,628 ) Total $ 6,687,907 $ — $ 6,687,907 |
Summary of ATL Purchase Price Allocation | Purchase Price Allocation Preliminary Adjustments Final Strategic Contract $ 7,457,970 $ 2,342,000 $ 9,799,970 Goodwill 14,205,245 ( 1,264,167 ) 12,941,078 Other Assets and Liabilities assumed, ( 479,864 ) ( 1,077,833 ) ( 1,557,697 ) Total $ 21,183,351 $ — $ 21,183,351 |
Schedule of Unaudited Pro Forma Information Assuming Acquisitions | he following is the unaudited pro forma information assuming the acquisition of ATL and SWS occurred on October 1, 2020: For the three months ended For the six months ended March 31, 2021 March 31, 2021 Net sales $ 8,907,200 $ 12,967,229 Net income (loss) $ 7,208,568 $ ( 551,184 ) Net income / (loss) per common share – basic $ 0.27 $ ( 0.02 ) Weighted average common shares outstanding – basic 26,402,962 26,121,545 Net income / (loss) per common share – diluted $ 0.22 $ ( 0.02 ) Weighted average common shares outstanding – diluted 33,175,566 26,121,545 |
4. INVESTMENTS (Tables)
4. INVESTMENTS (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Schedule of Investments [Abstract] | |
Summary of Reconciliation of carrying value of all investments | reconciliation of carrying value of all investments as of March 31, 2022 and September 30, 2021: ILAL ILAL ILAL Law Balance as of September 30, 2021 $ 494,608 $ 4,905,656 $ 10,772 $ 250,000 Shares sold during the year — — ( 9,590 ) — Realized gain on fair value recognized in other income/expense — — 665 — Unrealized loss recognized in other income/expense — ( 1,111,297 ) ( 1,847 ) — Unrealized gain on fair value recognized in other comprehensive income 46,592 — — — Balance as of March 31, 2022 $ 541,200 $ 3,794,359 $ — $ 250,000 |
5. INTANGIBLE ASSETS (Tables)
5. INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | Intangible assets consist of the following as of March 31, 2022 and September 30, 2021: March 31, 2022 Intangible assets Accumulated amortization Total Patents $ 74,113 $ 34,552 $ 39,561 Websites 23,115 8,915 14,200 Customer list and non-compete agreement 6,892,024 5,981,767 910,257 Design assets 123,000 123,000 - Trademarks 5,928 2,480 3,448 Engineering trade secrets 4,370,269 3,282,677 1,087,592 Software 870,000 344,375 525,625 Strategic Contract 9,799,970 2,568,129 7,231,841 mPulse software 741,846 291,609 450,237 Total $ 22,900,265 $ 12,637,504 $ 10,262,761 September 30, 2021 Intangible assets Accumulated amortization Total Patents $ 74,112 $ 28,329 $ 45,783 Websites 8,115 8,115 — Customer list and non-compete agreement 6,892,024 4,940,456 1,951,568 Design assets 123,000 123,000 — Trademarks 5,928 2,236 3,692 Engineering trade secrets 4,370,269 2,943,173 1,427,096 Software 870,000 325,519 544,481 Strategic Contract 9,799,970 1,577,098 8,222,872 mPulse software 741,846 238,161 503,685 Total $ 22,885,264 $ 10,186,087 $ 12,699,177 |
5. INTANGIBLE ASSETS - Amortization Expense | The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows: Year March 31, 2022 $ 2,063,365 2023 2,908,616 2024 2,827,374 2025 2,000,726 2026 439,811 Thereafter 22,869 $ 10,262,761 |
6. PROPERTY AND EQUIPMENT (Tabl
6. PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: March 31, September 30, Mining equipment $ 11,782,820 $ 2,823,218 Miners 256,063,805 120,330,769 Land Improvements 1,529,937 — Office Equipment 167,329 126,584 Land and building 12,624,608 11,048,299 Machinery and equipment 331,172 323,682 Leasehold improvements 158,110 69,056 Furniture and fixtures 82,601 30,934 Infrastructure 12,439,515 81,868 Construction in progress 4,172,407 10,498,311 Less: accumulated depreciation ( 23,022,215 ) ( 7,657,982 ) Property and equipment, net $ 276,330,089 $ 137,674,739 |
7. LEASES (Tables)
7. LEASES (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
7. LEASES - Lease costs | The Company's lease costs recognized during the three and six months ended March 31, 2022 and 2021 in the Consolidated Statements of Operations and Comprehensive Income (Loss) consist of the following: For the three months ended For the six months ended March 31, March 31, March 31, March 31, Operating lease cost (1) $ 83,237 $ 152,848 $ 166,475 $ 189,006 Finance lease cost: Amortization of right-of-use assets $ 94,815 $ 90,981 $ 189,630 $ 112,729 Interest on lease obligations $ 10,125 $ 14,645 $ 21,512 $ 18,223 (1) Included in general and administrative expenses |
7. LEASES - Other Lease Information | Other lease information is as follows: For the six months ended March 31, March 31, Cash paid for amounts included in Operating cash flows from operating $ 157,780 $ 158,874 Financing cash flows from finance leases $ 206,063 $ 124,644 |
7. LEASES - Weighted-average Remaining Lease Terms | March 31, September 30, 2021 Weighted-average remaining lease term - 4.54 years 5 years Weighted-average remaining lease term - 1.78 years 3.2 years Weighted-average discount rate - operating 4.50 % 4.50 % Weighted-average discount rate - finance 5.50 % 5.50 % |
7. LEASES - Contractual Maturity of Lease Liability | The following is a schedule of the Company's lease liabilities by contractual maturity as of March 31, 2022: Fiscal Year Operating Finance 2022 $ 159,125 $ 198,047 2023 324,949 295,541 2024 333,234 131,164 2025 341,767 11,092 2026 299,039 - Thereafter 37,301 - Gross lease liabilities 1,495,415 635,844 Less: imputed interest ( 129,884 ) ( 32,075 ) Present value of lease liabilities $ 1,365,531 $ 603,769 Less: Current portion of lease liabilities ( 321,600 ) ( 345,817 ) Total lease liabilities, net of current portion $ 1,043,931 $ 257,952 |
10. STOCK WARRANTS (Tables)
10. STOCK WARRANTS (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Stock Warrants | |
10. STOCK WARRANTS - Schedule of Warrant Summary | The following is a summary of stock warrant activity during the six months ended March 31, 2022: Number of Weighted Balance, September 30, 2021 615,704 $ 30.72 Warrants granted — — Warrants expired ( 183,334 ) 40.91 Warrants canceled — — Warrants exercised — — Balance, March 31, 2022 432,370 26.39 |
11. STOCK-BASED COMPENSATION (T
11. STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Option Summary | The following is a summary of stock option activity during the six months ended March 31, 2022: Number of Weighted Average Balance, September 30, 2021 1,547,029 18.35 Options granted 197,250 15.29 Options expired - - Options canceled/forfeited ( 157,885 ) 18.59 Options exercised ( 99,230 ) 7.39 Balance, March 31, 2022 1,487,164 18.69 |
Fair Value Option, Disclosures | The Black-Scholes model utilized the following inputs to value the options granted during the six months ended March 31, 2022: Fair value assumptions Options: March 31, Risk free interest rate 0.10 % - 2.55 % Expected term (years) 1.50 - 6.02 Expected volatility 140 % - 533 % Expected dividends 0 % |
Schedule of Restricted Stock Summary | The following table summarizes the performance-based restricted stock units at the maximum award amounts based upon the respective performance share agreements. Actual shares that will vest depend on the attainment of the performance-based criteria. Number of Weighted Aggregate Outstanding at September 30, 2021 10,995 $ 11.59 $ 84,839 Granted 1,106,250 14.68 13,684,313 Vested ( 77,885 ) 20.15 1,569,280 Forfeited ( 40,759 ) 20.48 458,729 Outstanding at March 31, 2022 998,601 $ 14.15 $ 12,352,694 |
12. COMMITMENTS AND CONTINGEN_2
12. COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Future Payments Obligations | The following table sets forth certain information concerning our obligations to make contractual future payments towards our agreements as of March 31, 2022: 2022 2023 2024 2025 2026 Thereafter Total Recorded contractual obligations: Operating lease obligations $ 159,125 $ 324,949 $ 333,234 $ 341,767 $ 299,039 $ 37,301 $ 1,495,415 Finance Lease obligations 198,047 295,541 131,164 11,092 - - 635,844 Mining equipment 20,396,770 - - - - - 20,396,770 Mining operations related equipment 3,774,435 - - - - - 3,774,435 Total $ 24,528,377 $ 620,490 $ 464,398 $ 352,859 $ 299,039 $ 37,301 $ 26,302,464 |
13. MAJOR CUSTOMERS AND VENDO_2
13. MAJOR CUSTOMERS AND VENDORS (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
16. MAJOR CUSTOMERS AND VENDORS - Digital currency mining segment major customers | For these purposes customers are defined as the Company’s mining pool operators. Three Months Ended March 31, 2022 March 31, 2021 Mining Pool Operator A 99.99 % — Mining Pool Operator B 0.01 % 100.00 % For the six months ended March 31, 2022 and 2021, the digital currency mining business had the following customers that represented more than 10 % of revenue. For these purposes customers are defined as the Company’s mining pool operators. Six Months Ended March 31, 2022 March 31, 2021 Mining Pool Operator A 99.95 % — Mining Pool Operator B 0.05 % 100.00 % |
16. MAJOR CUSTOMERS AND VENDORS - Digital currency mining segment major suppliers | Company had the following significant suppliers of mining equipment. Three Months Ended March 31, 2022 March 31, 2021 Vendor A 90.85 % — Vendor B — 57.94 % Vendor C — 23.69 % Vendor D — 18.37 % For the six months ended March 31, 2022 and 2021, the Company had the following significant suppliers of mining equipment. Six Months Ended March 31, 2022 March 31, 2021 Vendor A 71.70 % — Vendor B 24.03 % — Vendor C — 46.77 % Vendor D — 27.49 % Vendor E — 14.91 % |
16. MAJOR CUSTOMERS AND VENDORS - Energy segment major customers | energy business had the following customers that represented more than 10 % of revenue. Three Months Ended March 31, 2022 March 31, 2021 Customer A 37.39 % 39.06 % Customer B — 12.47 % Customer C — 10.17 % For the six months ended March 31, 2022 and 2021, the energy business had the following customers that represented more than 10 % of revenue. Six Months Ended March 31, 2022 March 31, 2021 Customer A 30.01 % 56.00 % Customer B — 12.25 % |
16. MAJOR CUSTOMERS AND VENDORS - Energy segment major suppliers | Company had the following suppliers that represented more than 10 % of direct material costs. Three Months Ended March 31, 2022 March 31, 2021 Vendor A 20.23 % 22.24 % Vendor B 17.82 % — Vendor C 12.06 % — Vendor D — 23.90 % For the six months ended March 31, 2022 and 2021, the Company had the following suppliers that represented more than 10 % of direct material costs. Six Months Ended March 31, 2022 March 31, 2021 Vendor A 38.87 % — Vendor B 11.76 % — Vendor C — 15.62 % Vendor D — 14.54 % Vendor E — 12.91 % |
14. SEGMENT REPORTING (Tables)
14. SEGMENT REPORTING (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule Of Segment Reporting Information | Intersegment transactions, which were at market price, are included in the “Other revenue and eliminations” and “Corporate items and eliminations” in the table below. Three Months Ended March 31, 2022 March 31, 2021 Revenue Energy $ 4,585,971 $ 1,313,530 Digital Currency Mining 36,965,739 6,715,792 Total segment revenues 41,551,710 8,029,322 Other revenue and eliminations 86,282 90,366 Consolidated Revenues 41,637,992 8,119,688 Profit Energy 945,534 292,023 Digital Currency Mining 28,476,493 6,251,287 Total segment profit 29,422,027 6,543,310 Corporate items and eliminations (including ( 29,592,762 ) 856,730 Net income/(loss) $ ( 170,735 ) $ 7,400,040 Six Months Ended March 31, 2022 March 31, 2021 Revenue Energy $ 8,556,181 $ 2,827,233 Digital Currency Mining 73,940,317 7,449,202 Total segment revenues 82,496,498 10,276,435 Other revenue and eliminations 383,463 100,824 Consolidated Revenues 82,879,961 10,377,259 Profit Energy 1,931,774 389,853 Digital Currency Mining 59,809,483 7,107,416 Total segment profit 61,741,257 7,497,269 Corporate items and eliminations (including ( 47,426,237 ) ( 7,264,759 ) Net income $ 14,315,020 $ 232,510 |
Schedule of segment assets | A summary of segment assets is as follows: March 31, 2022 September 30, 2021 Digital Currency Mining $ 375,183,757 $ 270,995,942 Energy 25,267,292 17,507,314 Other and Corporate assets 24,346,255 28,969,865 Total $ 424,797,304 $ 317,473,121 |
Schedule of Long Lived Assets | The Company operates its business only in the United States. Total additions in long-lived assets for the three months and six months ended March 31, 2022 and 2021: Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Digital Currency Energy Corporate Digital Currency Energy Corporate Property and Equipment 97,273,057 13,939 78,393 9,001,813 70,688 1,945 Intangibles - - 15,000 - 190,000 - Total 97,273,057 13,939 93,393 9,001,813 260,688 1,945 Six Months Ended Six Months Ended March 31, 2022 March 31, 2021 Digital Currency Energy Corporate Digital Currency Energy Corporate Property and Equipment 168,566,562 29,993 148,202 10,259,396 83,554 8,160 Intangibles - - 15,000 - 190,000 - Total 168,566,562 29,993 163,202 10,259,396 273,554 8,160 |
1. ORGANIZATION AND LINE OF B_2
1. ORGANIZATION AND LINE OF BUSINESS (Details Narrative) | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity Incorporation, Date of Incorporation | Oct. 15, 1987 |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents, excluding restricted cash | $ 1,695,718 | $ 14,571,198 |
Restricted cash - construction escrow account | 217,229 | 3,469,129 |
Cash and cash equivalents, including restricted cash | $ 1,912,947 | $ 18,040,327 |
2. SUMMARY OF SIGNIFICANT ACC_5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Accounts Receivable, gross | $ 6,796,293 | $ 2,891,784 |
Other receivables | 733,468 | 421,681 |
Provision for doubtful allowances | (693,508) | (693,508) |
Total Accounts Receivable, net | $ 6,836,253 | $ 2,619,957 |
2. SUMMARY OF SIGNIFICANT ACC_6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Inventories Current (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Batteries and solar panels | $ 595,432 | $ 1,819,398 |
Supplies and other | 663,992 | 853,346 |
Total inventory | $ 1,259,423 | $ 2,672,744 |
2. SUMMARY OF SIGNIFICANT ACC_7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Basic Earnings and Diluted Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator | ||||
Consolidated net income (loss) attributable to common shareholders | $ (191,563) | $ 7,222,535 | $ 13,979,581 | $ 55,005 |
Denominator | ||||
Weighted- average common shares outstanding, basic | 41,336,342 | 25,925,259 | 40,802,319 | 24,025,557 |
Dilutive impact of stock options and other share-based awards | 0 | 6,772,604 | 58,733 | 6,772,604 |
Weighted- average common shares outstanding, diluted | 41,336,342 | 32,697,863 | 40,861,052 | 30,798,161 |
Net income (loss) per common share attributable | ||||
Basic | $ 0 | $ 0.28 | $ 0.34 | $ 0 |
Diluted | $ 0 | $ 0.22 | $ 0.34 | $ 0 |
2. SUMMARY OF SIGNIFICANT ACC_8
2. SUMMARY OF SIGNIFICANT ACCOUNTING ACCOUNTING POLICIES - Useful Life of Property and Equipment (Details) | 6 Months Ended |
Mar. 31, 2022 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 30 years |
Land Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Mining Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Mining Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Miners [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Miners [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Infrastructure Asset [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
2. SUMMARY OF SIGNIFICANT ACC_9
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Activities of Digital Currencies (Details) | 6 Months Ended |
Mar. 31, 2022USD ($) | |
Accounting Policies [Abstract] | |
Beginning Balance | $ 23,603,210 |
Addition of digital currencies | 73,940,317 |
Sale of digital currencies | (80,430,113) |
Digital Currency Issued For Services | (294,992) |
Realized gain on sale of digital currencies | 7,260,909 |
Impairment loss | (7,033,691) |
Ending balance | $ 17,045,640 |
2. SUMMARY OF SIGNIFICANT AC_10
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Net Investment Income [Line Items] | ||
Derivative Asset | $ 3,794,359 | $ 4,905,656 |
Equity Securities, FV-NI, Current | 250,000 | 260,772 |
Amount [Member] | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 3,794,359 | 4,905,656 |
Equity Securities, FV-NI, Current | 10,772 | |
Debt Securities | 541,200 | 494,608 |
Business Combination, Contingent Consideration, Asset | 820,802 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | 4,335,559 | 6,231,838 |
Level 1 | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 0 | 0 |
Equity Securities, FV-NI, Current | 10,772 | |
Debt Securities | 0 | 0 |
Business Combination, Contingent Consideration, Asset | 0 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | 0 | 10,772 |
Level 2 | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 0 | 0 |
Equity Securities, FV-NI, Current | 0 | |
Debt Securities | 0 | 0 |
Business Combination, Contingent Consideration, Asset | 0 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | 0 | 0 |
Level 3 | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 3,794,359 | 4,905,656 |
Equity Securities, FV-NI, Current | 0 | |
Debt Securities | 541,200 | 494,608 |
Business Combination, Contingent Consideration, Asset | 820,802 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | $ 4,335,559 | $ 6,221,066 |
2. SUMMARY OF SIGNIFICANT AC_11
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Product Information [Line Items] | ||||||
Net income (loss) | $ (170,735) | $ 7,400,040 | $ (7,167,530) | $ 14,315,020 | $ 232,510 | |
Working Capital | 19,378,547 | 19,378,547 | ||||
Contract assets | 0 | 0 | $ 0 | |||
Contract liabilities | 188,929 | 188,929 | 296,964 | |||
Income Tax Examination, Penalties Accrued | 0 | 0 | 0 | |||
Inventory Write-down | 0 | 0 | ||||
Income Tax Expense Benefit | 0 | 0 | 0 | 0 | ||
FDIC Indemnification Asset, Period Increase (Decrease) | $ 1,098,786 | 17,790,327 | ||||
Common shares issued in relation to exercise of options | 99,230 | |||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 | ||
Options, warrants and restricted stock units | ||||||
Product Information [Line Items] | ||||||
Common shares issued in relation to exercise of options | 489,282 | |||||
Bitcoin [Member] | ||||||
Product Information [Line Items] | ||||||
FDIC Indemnification Asset, Period Increase (Decrease) | $ 17,045,640 | $ 23,603,210 | ||||
Revenue From Rights Concentration Risk | Major Customers and Vendors | Revenue | ||||||
Product Information [Line Items] | ||||||
Concentration Risk Percentage | 10.00% |
3. ACQUISITIONS - Summary of SW
3. ACQUISITIONS - Summary of SWS Consideration (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 24, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Cash | $ 625,000 | |||
310,018 shares of common stock as contingent equity consideration | $ 533,002 | |||
167,685 shares of common stock | $ 13,246,704 | $ 21,183,351 | ||
Solar Watt Solutions [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | 1,350,000 | |||
Acquisition Costs, Cumulative | 6,687,907 | |||
Solar Watt Solutions [Member] | Restricted Stock Fair Value [Member] | ||||
Business Acquisition [Line Items] | ||||
167,685 shares of common stock | $ 4,649,905 | |||
Solar Watt Solutions [Member] | Fair Value [Member] | ||||
Business Acquisition [Line Items] | ||||
Weighted Average Number of Shares, Contingently Issuable | 155,000 |
3. ACQUISITIONS - Summary of _2
3. ACQUISITIONS - Summary of SWS Consideration (Parenthetical) (Details) - shares | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2022 | Feb. 24, 2021 | Feb. 24, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 150,011 | |||
Solar Watt Solutions, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 232,518 | |||
Solar Watt Solutions, Inc. [Member] | S W S Equity [Member] | ||||
Business Acquisition [Line Items] | ||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 310,018 | |||
Solar Watt Solutions, Inc. [Member] | S W S Earned On Closing [Member] | ||||
Business Acquisition [Line Items] | ||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 167,685 | 167,685 |
3. ACQUISITIONS - Summary of _3
3. ACQUISITIONS - Summary of SWS Purchase Price Allocation (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Feb. 24, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 19,049,198 | $ 19,049,198 | |
Solar Watt Solutions [Member] | |||
Business Acquisition [Line Items] | |||
Finite-Lived Customer Lists, Gross | $ 5,122,733 | ||
Goodwill | 1,642,409 | ||
Business Combination, Assets and Liabilities Arising from Contingencies, Amount Recognized, Other than at Fair Value, Net | (77,235) | ||
Acquisition Costs, Cumulative | 6,687,907 | ||
Solar Watt Solutions [Member] | Final Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Finite-Lived Customer Lists, Gross | 190,000 | ||
Goodwill | 6,820,535 | ||
Business Combination, Assets and Liabilities Arising from Contingencies, Amount Recognized, Other than at Fair Value, Net | (322,628) | ||
Acquisition Costs, Cumulative | 6,687,907 | ||
Solar Watt Solutions [Member] | Adjustments To Fair Value [Member] | |||
Business Acquisition [Line Items] | |||
Finite-Lived Customer Lists, Gross | (4,932,733) | ||
Goodwill | 5,178,126 | ||
Business Combination, Assets and Liabilities Arising from Contingencies, Amount Recognized, Other than at Fair Value, Net | (245,393) | ||
Acquisition Costs, Cumulative | $ 0 |
3. ACQUISITIONS - Summary of AT
3. ACQUISITIONS - Summary of ATL Purchase Price Allocation (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Dec. 09, 2020 |
Business Acquisition [Line Items] | |||
Gross lease liabilities | $ 26,302,464 | ||
Goodwill | $ 19,049,198 | $ 19,049,198 | |
A T L Data Centers [Member] | Preliminary Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Gross lease liabilities | $ 7,457,970 | ||
Goodwill | 14,205,245 | ||
Other Assets and Liabilities assumed, net | (479,864) | ||
Acquisition Costs, Cumulative | 21,183,351 | ||
A T L Data Centers [Member] | Final Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Gross lease liabilities | 9,799,970 | ||
Goodwill | 12,941,078 | ||
Other Assets and Liabilities assumed, net | (1,557,697) | ||
Acquisition Costs, Cumulative | 21,183,351 | ||
A T L Data Centers [Member] | Adjustments To Fair Value [Member] | |||
Business Acquisition [Line Items] | |||
Gross lease liabilities | 2,342,000 | ||
Goodwill | (1,264,167) | ||
Other Assets and Liabilities assumed, net | (1,077,833) | ||
Acquisition Costs, Cumulative | $ 0 |
3. ACQUISITIONS (Details Narrat
3. ACQUISITIONS (Details Narrative) - USD ($) | Jan. 31, 2022 | Dec. 09, 2020 | Jan. 31, 2022 | Feb. 24, 2021 | Feb. 24, 2021 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Sep. 30, 2021 |
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 150,011 | |||||||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 13,246,704 | $ 21,183,351 | ||||||||
shares issued for service | $ 71,497 | $ 3,011,634 | ||||||||
Business Acquisition, Transaction Costs | $ 625,000 | $ 625,000 | ||||||||
S W S Earned On Closing [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 5,490,000 | |||||||||
S W S Escrow [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 310,018 | |||||||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 10,150,000 | |||||||||
Solar Watt Solutions [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 232,518 | |||||||||
Closed Block, Description | all such shares subject to a lock up of no less than 180 days and a leak out of no more than 10% of average daily trading value of the prior 30 days for a period of 36 months following the closing, and (ii) up to $3,850,000 in cash to the Sellers, minus the Sellers’ debt, minus the difference between the Actual Amount and Expected Amount consisting of: (a) $1,350,000 (no changes post acquisition date) in cash payable on a pro rata basis to Sellers at closing, less payment of $500,000 (no changes post acquisition date) to settle Sellers’ debt at closing, which includes (x) $200,000 (no changes post acquisition date) in cash held back by the Company to satisfy potential damages from indemnification claims and any amounts owed pursuant to post-closing adjustments, (y) an additional $100,000 (no changes post acquisition date) in cash held back by the Company to satisfy any amounts owed pursuant to post-closing adjustments, and (b) up to $2,500,000 (fair valued at $155,000 at acquisition date) in cash held back by the Company and only payable pro rata to Sellers upon meeting certain future milestones and subject to satisfaction of any amounts owing from SWS to the Company resulting from damages required to be indemnified under the SWS Merger Agreement. | |||||||||
Regulatory asset amortization period | 1 year 6 months | |||||||||
Rate of return on present value | 14.00% | |||||||||
Business Acquisition, Transaction Costs | $ 1,350,000 | $ 1,350,000 | ||||||||
Solar Watt Solutions [Member] | Cash 1 [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common Stock Held in Escrow | 77,500 | |||||||||
Solar Watt Solutions [Member] | S W S Earned On Closing [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 167,685 | 167,685 | ||||||||
Solar Watt Solutions [Member] | Restricted Stock [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 477,703 | |||||||||
Shares issued for settlement of contingent consideration related to business acquisition | $ 15,640,000 | |||||||||
Stock issued per share | $ 32.74 | $ 32.74 | ||||||||
A T L Data Centers [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Closed Block, Description | with all such shares subject to a lock up of no less than 180 days and a leak out of no more than 10% of the average daily trading value of the prior 30 days. | |||||||||
Financial Guarantee Insurance Contracts, Premium Received over Contract Period, Premium Receivable, Weighted Average Risk Free Discount Rate | 6.40% | |||||||||
Weighted Average Number of Shares, Contingently Issuable | 975,976 | |||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 892,659,000 | |||||||||
Noncash or Part Noncash Acquisition, Debt Assumed | $ 6,900,000 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equipment | $ 5,670,000 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | $ 5,475,000 | |||||||||
Capitalized Contract Cost, Amortization Period | 5 years | |||||||||
A T L Data Centers [Member] | Earned On Closing [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 642,309 | |||||||||
A T L Data Centers [Member] | Escrow [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted Average Number of Shares, Contingently Issuable | 975,976 | |||||||||
A T L Data Centers [Member] | Released To Selling Members [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 515,724 | |||||||||
A T L Data Centers [Member] | Returned To Company [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted Average Number of Shares, Common Stock Subject to Repurchase or Cancellation | 68,194 | |||||||||
A T L Data Centers [Member] | Remaining Escrow [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted Average Number of Shares, Contingently Issuable | 392,058 | |||||||||
A T L Data Centers [Member] | Holdback Shares [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted Average Number of Shares, Contingently Issuable | 72,989 | |||||||||
A T L Data Centers [Member] | Milestone Holdback [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted Average Number of Shares, Contingently Issuable | 319,069 | |||||||||
A T L Data Centers [Member] | Broker [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 41,708 | |||||||||
shares issued for service | $ 545,916 | |||||||||
A T L Data Centers [Member] | Restricted Stock [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 1,618,285 |
3. Acquisitions - Schedule of U
3. Acquisitions - Schedule of Unaudited Pro Forma Information Assuming Acquisitions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Net sales | $ 41,637,992 | $ 8,119,688 | $ 82,879,961 | $ 10,377,258 | |
Net income (loss) | $ (170,735) | $ 7,400,040 | $ (7,167,530) | $ 14,315,020 | $ 232,510 |
Income (loss) per common share - basic | $ 0 | $ (0.28) | $ (0.34) | $ 0 | |
Income (loss) per common share - diluted | $ 0 | $ (0.22) | $ (0.34) | $ 0 | |
Weighted- average common shares outstanding - diluted | 41,336,342 | 32,697,863 | 40,861,052 | 30,798,161 | |
Pro Forma Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Net sales | $ 8,907,200 | $ 12,967,229 | |||
Net income (loss) | $ 7,208,568 | $ (551,184) | |||
Income (loss) per common share - basic | $ 0.27 | $ (0.02) | |||
Weighted average common shares outstanding - basic | 26,402,962 | 26,121,545 | |||
Income (loss) per common share - diluted | $ 0.22 | $ 0.02 | |||
Weighted- average common shares outstanding - diluted | 33,175,566 | 26,121,545 |
4. INVESTMENTS - Reconciliation
4. INVESTMENTS - Reconciliation of carrying value of all investments (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | |
Investment Holdings [Line Items] | ||
Investment Owned, at Fair Value | $ 541,200 | $ 494,608 |
I L A L Debt Securities [Member] | ||
Investment Holdings [Line Items] | ||
Investment Owned, at Fair Value | 541,200 | 494,608 |
Shares sold during the year | 0 | |
Realized gain on fair value recognized income in other income/expense | 0 | |
Unrealized loss recognized in net income in other income/expense | 0 | |
Unrealized gain on fair value recognized in other comprehensive income | 46,592 | |
I L A L Derivative Asset [Member] | ||
Investment Holdings [Line Items] | ||
Investment Owned, at Fair Value | 3,794,359 | 4,905,656 |
Shares sold during the year | 0 | |
Realized gain on fair value recognized income in other income/expense | 0 | |
Unrealized loss recognized in net income in other income/expense | (1,111,297) | |
Unrealized gain on fair value recognized in other comprehensive income | 0 | |
I L A L Equity Securities [Member] | ||
Investment Holdings [Line Items] | ||
Investment Owned, at Fair Value | 0 | 10,772 |
Shares sold during the year | (9,590) | |
Realized gain on fair value recognized income in other income/expense | 665 | |
Unrealized loss recognized in net income in other income/expense | (1,847) | |
Unrealized gain on fair value recognized in other comprehensive income | 0 | |
Law Clerk Equity Securities [Member] | ||
Investment Holdings [Line Items] | ||
Investment Owned, at Fair Value | 250,000 | $ 250,000 |
Shares sold during the year | 0 | |
Realized gain on fair value recognized income in other income/expense | 0 | |
Unrealized loss recognized in net income in other income/expense | 0 | |
Unrealized gain on fair value recognized in other comprehensive income | $ 0 |
4. INVESTMENTS (Details Narrati
4. INVESTMENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Nov. 05, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Investment Holdings [Line Items] | ||||||
Investments | $ 4,585,559 | $ 4,585,559 | $ 5,661,036 | |||
Investment Owned, at Fair Value | 541,200 | 541,200 | 494,608 | |||
Loss on preferred stock other comprehensive income loss | 28,479 | $ 0 | 46,592 | $ 0 | ||
Unrealized Gain (Loss) on Derivatives | 1,410,146 | $ 8,400,629 | 1,111,297 | $ 7,380,135 | ||
Interest Receivable On Investment In Debt Securities [Member] | ||||||
Investment Holdings [Line Items] | ||||||
Prepaid Expense and Other Assets | 484,000 | 484,000 | 399,863 | |||
International Land Alliance | ||||||
Investment Holdings [Line Items] | ||||||
Investment Owned, Balance, Shares | 1,000 | |||||
Investment Owned, Face Amount | $ 500,000 | |||||
Debt Instrument, Convertible, Terms of Conversion Feature | The Series B Preferred Stock accrue cumulative in-kind accruals at a rate of 12% per annum and were redeemable on August 6, 2020. The Preferred Stock can be converted into common stock at a variable rate (refer the discussion on embedded derivative assets below). This variable conversion ratio will increase by 10% with the occurrence of certain events. Since the investments were not redeemed on August 6, 2020, they are now redeemable at the Company`s option in cash or into common stock, based on the conversion ratio. The Preferred Stock is recorded as an AFS debt security and is reported at its estimated fair value as of March 31, 2022. Any change in the fair values of AFS debt securities are reported net of income tax as an element of Other Comprehensive income. | |||||
Amount [Member] | ||||||
Investment Holdings [Line Items] | ||||||
Derivative assets investment fair value | $ 3,794,359 | $ 3,794,359 | $ 4,905,656 |
5. INTANGIBLE ASSETS - Schedul
5. INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Patents | $ 74,113 | $ 74,112 |
Websites | 23,115 | 8,115 |
Customer list and non-compete agreement | 6,892,024 | 6,892,024 |
Design assets | 123,000 | 123,000 |
Trademarks | 5,928 | 5,928 |
Engineering trade secrets | 4,370,269 | 4,370,269 |
Software | 870,000 | 870,000 |
Strategic Contract | 9,799,970 | 9,799,970 |
mPulse software | 741,846 | 741,846 |
Intangible Assets, Gross (Excluding Goodwill), Total | 22,900,265 | 22,885,264 |
Accumulated Amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Patents | 34,552 | 28,329 |
Websites | 8,915 | 8,115 |
Customer list and non-compete agreement | 5,981,767 | 4,940,456 |
Design assets | 123,000 | 123,000 |
Trademarks | 2,480 | 2,236 |
Engineering trade secrets | 3,282,677 | 2,943,173 |
Software | 344,375 | 325,519 |
Strategic Contract | 2,568,129 | 1,577,098 |
mPulse software | 291,609 | 238,161 |
Intangible Assets, Gross (Excluding Goodwill), Total | 12,637,504 | 10,186,087 |
Total [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Patents | 39,561 | 45,783 |
Websites | 14,200 | 0 |
Customer list and non-compete agreement | 910,257 | 1,951,568 |
Design assets | 0 | 0 |
Trademarks | 3,448 | 3,692 |
Engineering trade secrets | 1,087,592 | 1,427,096 |
Software | 525,625 | 544,481 |
Strategic Contract | 7,231,841 | 8,222,872 |
mPulse software | 450,237 | 503,685 |
Intangible Assets, Gross (Excluding Goodwill), Total | $ 10,262,761 | $ 12,699,177 |
5. INTANGIBLE ASSETS (Details N
5. INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2027 | Dec. 31, 2026 | Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||
Amortization of Intangible Assets | $ 1,225,873 | $ 1,403,483 | $ 2,451,417 | $ 2,309,974 | $ 22,869 | $ 439,811 | $ 2,000,726 | $ 2,827,374 | $ 2,908,616 | $ 2,063,365 |
5. INTANGIBLE ASSETS - Amortiza
5. INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2027 | Dec. 31, 2026 | Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||
Amortization of Intangible Assets | $ 1,225,873 | $ 1,403,483 | $ 2,451,417 | $ 2,309,974 | $ 22,869 | $ 439,811 | $ 2,000,726 | $ 2,827,374 | $ 2,908,616 | $ 2,063,365 |
Future amortization of intangible assets | $ 10,262,761 |
6. PROPERTY AND EQUIPMENT, NET
6. PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Property, Plant and Equipment [Abstract] | ||
Mining equipment | $ 11,782,820 | $ 2,823,218 |
Miners | 256,063,805 | 120,330,769 |
Land Improvements | 1,529,937 | 0 |
Office Equipment | 167,329 | 126,584 |
Land and building | 12,624,608 | 11,048,299 |
Machinery and equipment | 331,172 | 323,682 |
Leasehold improvements | 158,110 | 69,056 |
Furniture and fixtures | 82,601 | 30,934 |
Infrastructure | 12,439,515 | 81,868 |
Construction in progress | 4,172,407 | 10,498,311 |
Less: accumulated depreciation | (23,022,215) | (7,657,982) |
Property and equipment, net | $ 276,330,089 | $ 137,674,739 |
6. PROPERTY AND EQUIPMENT (Deta
6. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 10,435,760 | $ 706,417 | $ 16,907,784 | $ 930,324 | |
Property and equipment disposed value | 411,484 | 0 | 411,484 | $ 0 | |
Loss on disposition of property and equipment | 278,170 | ||||
Disposal of property and equipment | 3,978,676 | 4,390,160 | |||
(Gain) on disposal of assets | 920,861 | $ 0 | 642,691 | ||
Outstanding deposits | 69,902,321 | 69,902,321 | $ 87,959,910 | ||
Mining Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Purchased of mining equipment | 160,345,487 | ||||
Outstanding deposits | $ 69,902,321 | 69,902,321 | |||
Miners [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Purchased of mining equipment | 135,733,036 | ||||
In-Kind Miners [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Purchased of mining equipment | 308,038 | ||||
Equipments [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Purchased of mining equipment | 8,959,602 | ||||
Infrastructure [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Purchased of mining equipment | $ 12,357,647 |
7. LEASES - Lease costs (Detail
7. LEASES - Lease costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | ||
Leases [Abstract] | |||||
Operating lease cost (1) | [1] | $ 83,237 | $ 152,848 | $ 166,475 | $ 189,006 |
Amortization of right-of-use assets | 94,815 | 90,981 | 189,630 | 112,729 | |
Interest on lease obligations | $ 10,125 | $ 14,645 | $ 21,512 | $ 18,223 | |
[1] | Included in general and administrative expenses |
7. LEASES - Other Lease Informa
7. LEASES - Other Lease Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 157,780 | $ 158,874 |
Financing cash flows from finance leases | $ 206,063 | $ 124,644 |
7. LEASES - Weighted-average Re
7. LEASES - Weighted-average Remaining Lease Terms (Details) | Mar. 31, 2022 | Sep. 30, 2021 |
Leases [Abstract] | ||
Weighted-average remaining lease term - operating leases | 4 years 6 months 14 days | 5 years |
Weighted-average remaining lease term - finance leases | 1 year 9 months 10 days | 3 years 2 months 12 days |
Weighted-average discount rate - operating leases | 4.50% | 4.50% |
Weighted-average discount rate - finance leases | 5.50% | 5.50% |
7. LEASES - Contractual Maturit
7. LEASES - Contractual Maturity of Lease Liability (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 |
Lessee, Operating Lease, Liability, to be Paid Due | $ 1,365,531 | |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 324,949 | |
Lessee, Operating Lease, Liability, to be Paid, Year Three | 333,234 | |
Lessee, Operating Lease, Liability, to be Paid, Year Four | 341,767 | |
Lessee, Operating Lease, Liability, to be Paid, Year Five | 299,039 | |
Lessee, Operating Lease, Liability, to be Paid, after Year Five | 37,301 | |
Finance Lease, Liability, Payment, Due Due | 603,769 | |
Finance Lease, Liability, to be Paid, Year Two | 295,541 | |
Finance Lease, Liability, to be Paid, Year Three | 131,164 | |
Finance Lease, Liability, to be Paid, Year Four | 11,092 | |
Finance Lease, Liability, to be Paid, Year Five | 0 | |
Finance Lease, Liability, to be Paid, after Year Five | 0 | |
Total lease liabilities, net of current portion | 1,495,415 | |
Total finance lease liabilities, net of current portion | 635,844 | |
Accounts Payable, Interest-bearing, Noncurrent | (129,884) | |
Less: imputed interest | 32,075 | |
Finance Lease, Liability, to be Paid, Year One | 198,047 | |
Lessee, Operating Lease, Liability, to be Paid, Year One | 159,125 | |
Less: Current portion of lease liabilities | (321,600) | $ (256,195) |
Less: Current portion of finance lease liabilities | (345,817) | $ (413,798) |
Total lease liabilities, net of current portion | 1,043,931 | |
Total finance lease liabilities, net of current portion | $ 257,952 |
8. RELATED PARTY TRANSACTIONS (
8. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Zachary Bradford Ownership | ||||
Related Party Transaction [Line Items] | ||||
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest | 50.00% | |||
Blue Chip Accounting | ||||
Related Party Transaction [Line Items] | ||||
Sublease and engagement for accounting services termination date | Dec. 31, 2021 | |||
Payment for Administrative Fees | $ 0 | $ 50,675 | $ 47,075 | $ 80,675 |
Payments for Rent | $ 0 | $ 4,575 | $ 4,575 | $ 9,150 |
9. STOCKHOLDERS' EQUITY (Detail
9. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Sep. 30, 2021 | |
Class of Stock [Line Items] | ||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | ||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||
Common stock, shares issued | 41,290,587 | 37,395,945 | ||
Common stock, shares outstanding | 41,290,587 | 37,395,945 | ||
Preferred Stock, Shares Outstanding | 1,750,000 | 1,750,000 | ||
Preferred stock, shares issued | 1,750,000 | 1,750,000 | ||
Common shares issued in relation to exercise of options | 99,230 | |||
Common Shares Returned | 232,518 | |||
Common stock value as compensation | $ 71,497 | $ 3,011,634 | ||
Seller Agreements Related to Business Acquisition [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued | 8,404 | |||
Settlement of contingent consideration related to business acquisition | $ 150,011 | |||
Director [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock value as compensation | 30,032 | |||
Compensation | $ 1,874 | |||
At-the-Market offering facility [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued | 4,017,652 | |||
Proceeds from net offering costs | $ 67,988,993 |
10. STOCK WARRANTS - Schedule o
10. STOCK WARRANTS - Schedule of Warrant Summary (Details) | 6 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Stock Warrants | |
Number of Shares, Begnning Balance | shares | 615,704 |
Weighted Average Outstanding at Beginning Balance | $ / shares | $ 30.72 |
Number of Shares, Warrants granted | shares | 0 |
Weighted Average Exercise, Warrants granted | $ / shares | $ 0 |
Number of Shares, Warrants expired | shares | (183,334) |
Weighted Average Exercise, Warrants expired | $ / shares | $ 40.91 |
Number of Shares, Warrants canceled | shares | 0 |
Weighted Average Exercise, Warrants canceled | $ / shares | $ 0 |
Number of Shares, Warrants exercised | shares | 0 |
Weighted Average Exercise, Warrants exercised | $ / shares | $ 0 |
Number of Shares, Ending Balance | shares | 432,370 |
Weighted Average Exercise, Ending Balance | $ / shares | $ 26.39 |
10. STOCK WARRANTS (Details Nar
10. STOCK WARRANTS (Details Narrative) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2022USD ($)shares | Mar. 31, 2022USD ($)shares | |
Weighted average remaining term outstanding warrants | 1 year 7 months 13 days | |
Weighted average intrinsic value outstanding warrants | $ | $ 467,940 | $ 467,940 |
Exercise of warrants | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 432,370 | 432,370 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 0 | 0 |
11. STOCK-BASED COMPENSATION -
11. STOCK-BASED COMPENSATION - Schedule of Option Summary (Details) | 6 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Equity [Abstract] | |
Number of Option Shares, Beginning Balance | shares | 1,547,029 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 18.35 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period | shares | 197,250 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 15.29 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | shares | 0 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ / shares | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Canceled/Forfeited in Period | shares | (157,885) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Canceled/Forfeited in Period, Weighted Average Exercise Price | $ / shares | $ 18.59 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | shares | (99,230) |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares | $ 7.39 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance, March 31, 2022 | shares | 1,487,164 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 18.69 |
11. STOCK-BASED COMPENSATION _2
11. STOCK-BASED COMPENSATION - Fair Value Assumptions 2021 (Details) | 6 Months Ended |
Mar. 31, 2022USD ($) | |
Expected term (years) | 2 years 18 days |
Expected dividends | $ 0 |
Minimum [Member] | |
Risk free interest rate | 0.10% |
Expected term (years) | 1 year 6 months |
Expected volatility | 140.00% |
Maximum [Member] | |
Risk free interest rate | 2.55% |
Expected term (years) | 6 years 7 days |
Expected volatility | 533.00% |
11. STOCK-BASED COMPENSATION _3
11. STOCK-BASED COMPENSATION - Schedule of Restricted Stock Summary (Details) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | |
Class of Stock [Line Items] | ||
Number of Shares Outstanding at Beginning | shares | 998,601 | 10,995 |
Weighted Average Grant-Date Fair Value Per Share Outstanding at Beginning | $ 26.39 | $ 30.72 |
Stock Issued During Period, Shares, Restricted Stock Award, Gross | shares | 1,106,250 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0 | |
Restricted stock vested during period | shares | 77,885 | |
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | shares | (40,759) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 40.91 | |
Number of Shares Outstanding at Ending | shares | 998,601 | 10,995 |
Weighted Average Exercise, Ending Balance | $ 26.39 | $ 30.72 |
Restricted [Member] | ||
Class of Stock [Line Items] | ||
Weighted Average Grant-Date Fair Value Per Share Outstanding at Beginning | $ 14.15 | $ 11.59 |
Aggregate Intrinsic Value Outstanding at Beginning | $ | $ 12,352,694 | $ 84,839 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 14.68 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Intrinsic Value, Amount Per Share | $ | $ 13,684,313 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Intrinsic Value, Amount Per Share | $ 20.15 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ | $ 1,569,280 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 20.48 | |
Share based compensation arrangement by share based payment award | $ | $ 458,729 | |
Weighted Average Exercise, Ending Balance | $ 14.15 | $ 11.59 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding | $ | $ 12,352,694 | $ 84,839 |
11. STOCK-BASED COMPENSATION (D
11. STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 15, 2021 | Oct. 07, 2020 | Jun. 19, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares | 3,500,000 | ||||||
Share-based Payment Arrangement, Noncash Expense | $ 12,303,091 | $ 5,199,658 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 632,753 | 632,753 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 854,508 | 854,508 | |||||
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 1 year 7 months 9 days | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 2 years 18 days | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 1,303,773 | $ 1,303,773 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 2,958,367 | $ 2,958,367 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 99,230 | ||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 1,106,250 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 9 months | ||||||
Unrecognized compensation cost | $ 7,755,679 | $ 7,755,679 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||||||
Service Period Based Grant Shares | 146,250 | ||||||
Proceeds from exercise of options and warrants | $ 480,197 | $ 3,346,559 | |||||
Total consideration for options exercised | $ 733,170 | ||||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 60,000 | 90,000 | |||||
Minimum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 1 year 6 months | ||||||
Fair value of market RSUs | $ 11.03 | $ 11.03 | |||||
Maximum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 7 days | ||||||
Fair value of market RSUs | $ 17.89 | $ 17.89 | |||||
Added Shares [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares | 2,000,000 | ||||||
Amended Equity Incentive Plan 2017 [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares | 1,500,000 | 300,000 | |||||
Common Stock, Shares Subscribed but Unissued | 370,821 | 370,821 | |||||
Combined voting rights percent | 10.00% | ||||||
Options [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based Payment Arrangement, Noncash Expense | $ 13,096,168 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 99,230 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 64,000 | ||||||
Employees [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 197,250 | ||||||
Option Stock Based Compensation [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share Based Compensation | 6,553,984 | 231,361 | 12,303,091 | 1,163,401 | |||
Common stock options [Member] | Minimum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 4.65 | $ 4.65 | |||||
Common stock options [Member] | Maximum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 15.10 | $ 15.10 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 1,106,250 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||||||
Risk free rate, minimum | 0.14% | ||||||
Risk free rate, maximum | 1.26% | ||||||
Volatility rate, minimum | 111.37% | ||||||
Volatility rate, maximum | 172.18% | ||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Expected Term | 1 year | ||||||
Cost of equity rate | 20.00% | ||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Expected Term | 5 years | ||||||
Cost of equity rate | 21.00% | ||||||
Restricted Stock Awards [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 810,000 | 870,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year |
12. COMMITMENTS AND CONTINGEN_3
12. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Nov. 23, 2021 | Jan. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 29, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Feb. 24, 2021 | Aug. 31, 2020 | Aug. 31, 2019 |
Long-term Purchase Commitment [Line Items] | |||||||||||
Stock Issued During Period, Shares, Other | 777,517 | 1,339,009 | |||||||||
Long Term Purchase Commitment Amount | $ 87,300,000 | ||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 24,200,000 | ||||||||||
Contractual future payment obligations | 26,302,464 | ||||||||||
Infrastructure Assets [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Long Term Purchase Commitment Amount | 10,600,000 | ||||||||||
Payments to Acquire Assets, Investing Activities | $ 73,700,000 | ||||||||||
Grid Fabric [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Stock Issued During Period, Shares, Other | 8,404 | ||||||||||
Grid Fabric [Member] | Contingent Consideration [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Common stock released, shares | $ 150,000 | ||||||||||
Solar Watt Solutions, Inc., v. Pathion, Inc. [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Lawsuit filing date | January 6, 2022 | ||||||||||
Amount paid for solar batteries | $ 418,606 | ||||||||||
Electricity cost per month | $ 15,000 | ||||||||||
Amount of claim in suit | 500,000 | ||||||||||
Grid Fabric L L C [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 500,000 | $ 750,000 | |||||||||
Solar Watt Solutions, Inc. [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 615,249 | ||||||||||
Fair value of cash consideration | $ 155,000 | ||||||||||
Solar Watt Solutions, Inc. [Member] | Cash 1 [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 2,500,000 | ||||||||||
SWS Sellers [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 625,000 | ||||||||||
Stock Issued During Period, Shares, Other | 77,500 | ||||||||||
Common stock back to company | 232,518 | ||||||||||
Lancium [Member] | Agreement [Member] | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Initial term | 5 years | ||||||||||
Renewal term | 2 years | ||||||||||
Notice period for agreement Non-renew | 90 days | ||||||||||
Contractual future payment obligations | $ 0 |
12. COMMITMENTS AND CONTINGEN_4
12. COMMITMENTS AND CONTINGENCIES - Schedule of Contractual Future Payments Obligations (Details) | Mar. 31, 2022USD ($) |
Product Liability Contingency [Line Items] | |
2022 | $ 24,528,377 |
2023 | 620,490 |
2024 | 464,398 |
2025 | 352,859 |
2026 | 299,039 |
Thereafter | 37,301 |
Contractual Obligation, Total | 26,302,464 |
Finance Lease [Member] | |
Product Liability Contingency [Line Items] | |
2022 | 198,047 |
2023 | 295,541 |
2024 | 131,164 |
2025 | 11,092 |
2026 | 0 |
Thereafter | 0 |
Contractual Obligation, Total | 635,844 |
Operating Lease [Member[ | |
Product Liability Contingency [Line Items] | |
2022 | 159,125 |
2023 | 324,949 |
2024 | 333,234 |
2025 | 341,767 |
2026 | 299,039 |
Thereafter | 37,301 |
Contractual Obligation, Total | 1,495,415 |
Mining Equipment [Member] | |
Product Liability Contingency [Line Items] | |
2022 | 20,396,770 |
Contractual Obligation, Total | 20,396,770 |
Mining Operations Equipment [Member] | |
Product Liability Contingency [Line Items] | |
2022 | 3,774,435 |
Contractual Obligation, Total | $ 3,774,435 |
13. MAJOR CUSTOMERS AND VENDO_3
13. MAJOR CUSTOMERS AND VENDORS (Additional Information) (Details) - Minimum [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Digital Currency Mining [Member] | ||||
Representation of company's revenue, percent | 10.00% | 10.00% | 10.00% | 10.00% |
Energy [Member] | ||||
Representation of company's revenue, percent | 10.00% | 10.00% | 10.00% | 10.00% |
Company's Suppliers [Member] | ||||
Representation of company's direct material cost, percent | 10.00% | 10.00% | 10.00% | 10.00% |
13. MAJOR CUSTOMERS AND VENDO_4
13. MAJOR CUSTOMERS AND VENDORS - Digital currency mining segment major customers (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Mining Pool Operator A [Member] | ||||
Concentration Risk, Percentage | 99.99% | 0.00% | 99.95% | 0.00% |
Mining Pool Operator B [Member] | ||||
Concentration Risk, Percentage | 0.01% | 100.00% | 0.05% | 100.00% |
13. MAJOR CUSTOMERS AND VENDO_5
13. MAJOR CUSTOMERS AND VENDORS - Digital currency mining segment major suppliers (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Mining Vendor A [Member] | ||||
Concentration Risk, Percentage | 90.85% | 0.00% | 71.70% | 0.00% |
Mining Vendor B [Member] | ||||
Concentration Risk, Percentage | 0.00% | 57.94% | 24.03% | 0.00% |
Mining Vendor C [Member] | ||||
Concentration Risk, Percentage | 0.00% | 23.69% | 0.00% | 46.77% |
Mining Vendor D [Member] | ||||
Concentration Risk, Percentage | 0.00% | 18.37% | 0.00% | 27.49% |
Mining Vendor E [Member] | ||||
Concentration Risk, Percentage | 0.00% | 14.91% |
13. MAJOR CUSTOMERS AND VENDO_6
13. MAJOR CUSTOMERS AND VENDORS - Energy segment major customers (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Energy Customer A [Member] | ||||
Concentration Risk, Percentage | 37.39% | 39.06% | 30.01% | 56.00% |
Energy Customer B [Member] | ||||
Concentration Risk, Percentage | 12.47% | 0.00% | 12.25% | |
Energy Customer C [Member] | ||||
Concentration Risk, Percentage | 10.17% |
13. MAJOR CUSTOMERS AND VENDO_7
13. MAJOR CUSTOMERS AND VENDORS - Energy segment major suppliers (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Energy Vendor A [Member] | ||||
Concentration Risk, Percentage | 20.23% | 22.24% | 38.87% | 0.00% |
Energy Vendor B [Member] | ||||
Concentration Risk, Percentage | 17.82% | 0.00% | 11.76% | 0.00% |
Energy Vendor C [Member] | ||||
Concentration Risk, Percentage | 12.06% | 0.00% | 0.00% | 15.62% |
Energy Vendor D [Member] | ||||
Concentration Risk, Percentage | 0.00% | 23.90% | 0.00% | 14.54% |
Energy Vendor E [Member] | ||||
Concentration Risk, Percentage | 12.91% |
14. SEGMENT REPORTING - Segment
14. SEGMENT REPORTING - Segment Information (Details) | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | Sep. 30, 2021USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Number of Reportable Segments | Segment | 2 | |||||
Revenues | $ 41,637,992 | $ 8,119,688 | $ 82,879,961 | $ 10,377,258 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (163,084) | 7,222,535 | 14,026,173 | 55,005 | ||
Net income (loss) | (170,735) | 7,400,040 | $ (7,167,530) | 14,315,020 | 232,510 | |
Assets | 424,797,304 | 424,797,304 | $ 317,473,121 | |||
Energy [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 4,585,971 | 1,313,530 | 8,556,181 | 2,827,233 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (945,534) | (292,023) | (1,931,774) | (389,853) | ||
Assets | 25,267,292 | 17,507,314 | 25,267,292 | 17,507,314 | ||
Property and Equipment | 13,939 | 70,688 | 29,993 | 83,554 | ||
Intangibles | 190,000 | 190,000 | ||||
Total | 13,939 | 260,688 | 29,993 | 273,554 | ||
Digital Currency Mining [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 36,965,739 | 6,715,792 | 73,940,317 | 7,449,202 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 28,476,493 | 6,251,287 | 59,809,483 | 7,107,416 | ||
Assets | 375,183,757 | 270,995,942 | 375,183,757 | 270,995,942 | ||
Property and Equipment | 97,273,057 | 9,001,813 | 168,566,562 | 10,259,396 | ||
Intangibles | ||||||
Total | 97,273,057 | 9,001,813 | 168,566,562 | 10,259,396 | ||
Total [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 41,551,710 | 8,029,322 | 82,496,498 | 10,276,435 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 29,422,027 | 6,543,310 | 61,741,257 | 7,497,269 | ||
Assets | 424,797,304 | 317,473,121 | 424,797,304 | 317,473,121 | ||
Other Revenue And Eliminations [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 86,282 | 90,366 | 383,463 | 100,824 | ||
Consolidated Revenues [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 41,637,992 | 8,119,688 | 82,879,961 | 10,377,259 | ||
Corporate Items And Eliminations [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (29,592,762) | 856,730 | (47,426,237) | (7,264,759) | ||
Corporate Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Property and Equipment | 78,393 | 1,945 | 148,202 | 8,160 | ||
Intangibles | 15,000 | 15,000 | ||||
Total | 93,393 | 1,945 | 163,202 | 8,160 | ||
Other and Corporate Assets [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | $ 24,346,255 | $ 28,969,865 | $ 24,346,255 | $ 28,969,865 |
15. SUBSEQUENT EVENTS (Details
15. SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 22, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 |
Subsequent Event [Line Items] | ||||
Received a loan | $ 257,952 | $ 458,308 | ||
Common shares issued in relation to exercise of options | 99,230 | |||
Proceeds from stock options Exercises | $ 74 | |||
Trinity Capital Inc | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Borrowings | $ 35,000,000 | |||
Received a loan | 20,000,000 | |||
Security deposit | 643,960 | |||
Funding closing costs | 701,624 | |||
Proceeds from at the market financing instruments | $ 15,000,000 |