Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 14, 2022 | Mar. 31, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2022 | ||
Document Fiscal Period Focus | FY | ||
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 | 941-8047 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | CLSK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 510,764,561 | ||
Entity Common Stock, Shares Outstanding | 71,711,381 | ||
Documents Incorporated by Reference [Text Block] | Certain portions of the registrant’s definitive proxy statement to be delivered to its shareholders in connection with the registrant’s 2022 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. | ||
ICFR Auditor Attestation Flag | false | ||
Share Price | $ 12.37 | ||
Auditor Location | Houston, Texas | ||
Auditor Name | MaloneBailey, LLP | ||
Auditor Firm ID | 206 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Cash and cash equivalents | ||
Cash and cash equivalents, including restricted cash | $ 20,462,570 | $ 18,040,327 |
Accounts receivable, net | 27,029 | 307,067 |
Inventory | 216,404 | 79,810 |
Prepaid expense and other current assets | 7,930,614 | 2,137,801 |
Bitcoin | 11,147,478 | 23,603,210 |
Derivative investment asset | 2,955,890 | 4,905,660 |
Investment in equity security | 0 | 260,772 |
Investment in debt security, AFS, at fair value | 610,108 | 494,608 |
Current assets held for sale | 7,425,881 | 7,897,066 |
Total current assets | 50,775,974 | 57,726,321 |
Property and equipment, net | 376,781,380 | 137,621,546 |
Operating lease right of use asset | 550,930 | 663,802 |
Intangible assets, net | 6,485,051 | 8,222,872 |
Deposits on mining equipment | 12,497,111 | 87,959,910 |
Other long-term asset | 3,989,652 | 875,538 |
Goodwill | 0 | 12,048,419 |
Long-term assets held for sale | 1,544,674 | 12,354,713 |
Total assets | 452,624,772 | 317,473,121 |
Current liabilities | ||
Accounts payable and accrued liabilities | 24,661,860 | 6,982,514 |
Operating lease liability | 112,955 | 104,131 |
Finance lease liability | 260,387 | 413,798 |
Acquisition liability | 0 | 300,000 |
Contingent consideration - | 0 | 820,802 |
Current portion of long-term loans payable | 7,786,049 | 0 |
Dividends payable | 20,828 | 0 |
Current liabilities held for sale | 1,198,696 | 1,441,777 |
Total current liabilities | 34,040,775 | 10,063,022 |
Long-term liabilities | ||
Operating lease liability, net of current portion | 447,591 | 560,546 |
Finance lease liability, net of current portion | 179,997 | 458,308 |
Loans payable, net of current portion | 13,433,068 | 0 |
Long-term liabilities held for sale | 511,530 | 674,779 |
Total Liabilities | 48,612,961 | 11,756,655 |
Stockholders' equity | ||
Common stock; $0.001 par value; 100,000,000 shares authorized; 55,661,240 and 37,395,945 shares issued and outstanding as of September 30, 2022 and September 30, 2021, respectively | 55,662 | 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 September30, 2022 and September 30, 2021, respectively | 1,750 | 1,750 |
Additional paid-in capital | 599,898,202 | 444,074,832 |
Accumulated other comprehensive income (loss) | 110,108 | (5,392) |
Accumulated deficit | (196,053,911) | (138,392,118) |
Total stockholders' equity | 404,011,811 | 305,716,466 |
Total liabilities and stockholders' equity | $ 452,624,772 | $ 317,473,121 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 17, 2021 | Mar. 16, 2021 | Oct. 02, 2020 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | 50,000,000 | 35,000,000 |
Common stock, shares outstanding | 55,661,337 | 37,395,945 | |||
Common stock, shares issued | 55,661,337 | 37,395,945 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, shares outstanding | 1,750,000 | 1,750,000 | |||
Preferred Stock, Shares Issued | 1,750,000 | 1,750,000 | |||
Series A Preferred Stock [Member] | |||||
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 | |||
Preferred stock, shares outstanding | 1,750,000 | 1,750,000 | |||
Preferred Stock, Shares Issued | 1,750,000 | 1,750,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues, net | ||
Bitcoin mining revenue, net | $ 130,999,686 | $ 38,846,633 |
Other services revenue | 524,759 | 440,472 |
Total revenues, net | 131,524,445 | 39,287,105 |
Costs and expenses | ||
Cost of revenues (exclusive of depreciation and amortization shown below) | 41,233,650 | 5,263,029 |
Professional fees | 6,469,064 | 6,538,062 |
Payroll expenses | 40,920,163 | 21,181,905 |
General and administrative expenses | 10,422,716 | 5,716,465 |
Gain on disposal of assets | (642,691) | 0 |
Other impairment expense (related to bitcoin) | 12,210,269 | 6,608,076 |
Impairment expense - other | 250,000 | 0 |
Impairment of goodwill | 12,048,419 | 977,388 |
Realized gain on sale of bitcoin | (2,567,101) | (3,104,378) |
Depreciation and amortization | 49,044,877 | 8,982,123 |
Total costs and expenses | 169,389,366 | 51,185,282 |
Loss from operations | (37,864,921) | (11,898,177) |
Other income (expense) | ||
Other Income | 308,036 | 544,777 |
Change in fair value of contingent consideration | 305,731 | 84,198 |
Realized gain on sale of equity security | 665 | 179,046 |
Unrealized loss on equity security | (1,847) | (5,153) |
Unrealized (loss) gain on derivative security | (1,949,770) | 2,790,387 |
Interest income | 190,540 | 221,488 |
Interest expense | (1,077,827) | (145,728) |
Total other (expense) income | (2,224,472) | 3,669,015 |
Loss before income tax (expense) or benefit | (40,089,393) | (8,229,162) |
Income tax expense | 0 | 0 |
Loss from continuing operations | (40,089,393) | (8,229,162) |
Loss from discontinued operations | (17,236,961) | (13,582,848) |
Income tax (expense) or benefit | 0 | 0 |
Loss on discontinued operations | (17,236,961) | (13,582,848) |
Net Loss | (57,326,354) | (21,812,010) |
Preferred stock dividends | 335,439 | 177,502 |
Net loss attributable to common shareholders | (57,661,793) | (21,989,512) |
Other comprehensive income (loss) | 115,500 | (5,392) |
Total comprehensive loss attributable to common shareholders | $ (57,546,293) | $ (21,994,904) |
Income (loss) from continuing operations per common share - basic | $ (0.95) | $ (0.29) |
Weighted average common shares outstanding- basic | 42,614,197 | 29,441,364 |
Income (loss) from continuing operations per common share - diluted | $ (0.95) | $ (0.29) |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
Loss on discontinued operations per common share - basic | $ (0.40) | $ (0.46) |
Weighted average common shares outstanding - basic | 42,614,197 | 29,441,364 |
Loss on discontinued operations per common share - diluted | $ (0.40) | $ (0.46) |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Beginning Balance, Value at Sep. 30, 2020 | $ 16,426,365 | $ 1,750 | $ 17,391 | $ 132,809,830 | $ (116,402,606) | |
Beginning Balance, Shares at Sep. 30, 2020 | 1,750,000 | 17,390,979 | ||||
Shares issued for business acquisition, shares | 976,828 | |||||
Shares issued for business acquisition, value | 15,784,372 | $ 996 | 15,783,376 | |||
Shares withheld for net settlement of restricted stock units related to tax withholdings | 0 | |||||
Exercise of options, shares | 389,745 | |||||
Exercise of options, value | 3,750,931 | $ 389 | 3,750,542 | |||
Preferred stock dividends | (177,502) | (177,502) | ||||
Shares issued for services, Shares | 631,765 | |||||
Shares issued for services, Value | 5,923,931 | $ 631 | 5,923,300 | |||
Shares issued under underwritten offering, net of offering costs, Shares | 16,978,734 | |||||
Shares issued under underwritten offering, net of offering costs, Value | 270,656,118 | $ 16,978 | 270,639,140 | |||
Shares returned in relation to business acquisition, Shares | (76,266) | |||||
Shares returned in relation to business acquisition, Value | (892,659) | $ (76) | (892,583) | |||
Shares returned for settlement of debt, value | $ (15) | 15 | ||||
Shares returned for settlement of debt, shares | (15,000) | |||||
Shares in escrow for business acquisition, Value | 10,581,886 | $ 1,100 | 10,580,786 | |||
Shares in escrow for business acquisition, Shares | 1,119,160 | |||||
Options and warrants issued for services | 5,480,426 | 5,480,426 | ||||
Net loss | (21,812,010) | (21,812,010) | ||||
Other comprehensive income (loss) | (5,392) | $ (5,392) | ||||
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 at Sep. 30, 2021 | 1,750,000 | 37,395,945 | ||||
Options and restricted stock units issued for services , Shares | 1,002,683 | |||||
Options and restricted stock units issued for services | 31,465,997 | $ 1,003 | 31,464,994 | |||
Shares withheld for net settlement of restricted stock units related to tax withholdings | (1,638,959) | (358,681) | (1,638,601) | |||
Shares Withheld for Net Settlement of Restricted Stock Units Related to Tax Withholdings, amount | $ (358) | |||||
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, shares | 105,423 | |||||
Exercise of options, value | 816,602 | $ 105 | 816,497 | |||
Preferred stock dividends | (335,439) | (335,439) | ||||
Shares issued under underwritten offering, net of offering costs, Shares | 17,740,081 | |||||
Shares issued under underwritten offering, net of offering costs, Value | 125,047,987 | $ 17,743 | 125,030,244 | |||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 8,404 | |||||
Shares issued for settlement of contingent consideration related to business acquisition | 150,011 | $ 8 | 150,003 | |||
Net loss | (57,326,354) | (57,326,354) | ||||
Other comprehensive income (loss) | 115,500 | 115,500 | ||||
Ending Balance, Value at Sep. 30, 2022 | $ 404,011,811 | $ 1,750 | $ 55,662 | $ 599,898,202 | $ 110,108 | $ (196,053,911) |
Ending Balance, Shares at Sep. 30, 2022 | 1,750,000 | 55,661,337 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net loss | $ (57,326,354) | $ (21,812,010) |
Less: Loss from discontinued Operations | 17,236,961 | 13,582,848 |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Unrealized (gain) loss on equity security | 1,847 | 5,153 |
Realized gain on sale of equity security | (665) | (179,046) |
Impairment of Bitcoin | 12,210,269 | 6,608,076 |
Realized gain on sale of Bitcoin | (2,567,101) | (3,104,378) |
Bitcoin issued for services | 611,244 | 296,592 |
Impairment of Goodwill | 12,048,419 | 977,388 |
Impairment of intangibles | 0 | 554,322 |
Impairment of investment in equity security | 250,000 | 0 |
Unrealized (gain) loss on derivative asset | 1,949,770 | (2,790,387) |
Gain on fair value of contingent consideration | (345,791) | (84,198) |
Non-cash lease expense | 112,872 | 1,105,482 |
Stock based compensation | 31,464,994 | 8,546,712 |
Depreciation and amortization | 49,044,877 | 9,336,941 |
Provision for bad debts | 810,346 | 246,453 |
Amortization of debt discount | 45,910 | 0 |
PPP loan forgiveness | 0 | (531,169) |
Loss on asset disposal | (642,691) | 0 |
Changes in operating assets and liabilities | ||
Mining of bitcoin | (130,999,686) | (38,846,633) |
Proceeds from sale of bitcoin | 133,201,006 | 11,443,132 |
Change in contract liabilities | 0 | (69,360) |
Decrease in operating lease liabilities | (104,131) | (1,104,610) |
Increase in accounts payable and accrued liabilities | 16,040,746 | 4,246,445 |
(Increase) in prepaid expenses and other current assets | (2,393,320) | (264,233) |
(Increase) in accounts receivables | (530,308) | (429,683) |
Decrease (Increase) in Inventory | (136,593) | 107,055 |
Long -term deposits paid | (2,176,461) | 0 |
Net cash provided by (used in) operating activities from Continuing Operations | 77,806,160 | (12,159,108) |
Net cash used in operating activities of Discontinued Operations | (6,362,067) | (11,827,102) |
Net cash provided by (used in) operating activities | 71,444,093 | (23,986,210) |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ||
Payments on miners (incl. deposits) | (171,181,268) | (89,260,010) |
Purchase of fixed assets | (19,285,904) | (139,234,948) |
Purchase of intangible assets | (225,000) | |
Settlement of holdbacks related to contingent consideration | (625,000) | 0 |
Investment in infrastructure development | 0 | (81,868) |
Proceeds from sale of miners | 3,497,654 | 0 |
Proceeds from the sale of equity securities | 9,590 | 373,121 |
Acquisition of WAHA, net of cash received | (19,771,610) | 0 |
Acquisition of ATL Data Center, net of cash received | 45,783 | |
Deposit on Acquisition of Mawson | (3,400,000) | 0 |
Net Cash Provided by (Used in) Investing Activities, Continuing Operations, Total | (210,981,538) | (228,157,922) |
Net Cash used in Investing Activities - Discontinued Operations | 0 | (1,000,136) |
Net cash used in investing activities | (210,981,538) | (229,158,058) |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ||
Payments on loans | (2,779,570) | (5,882,553) |
Payments on preferred dividends | (314,610) | (177,502) |
Payments on finance leases | (431,722) | (288,602) |
Proceeds from equipment backed loan | 19,620,356 | 0 |
Proceeds from exercise of options and warrants | 817,247 | 3,750,932 |
Proceeds from equity offerings, net | 125,047,987 | 270,656,118 |
Net cash provided by financing activities - Continued Operations | 141,959,688 | 268,058,393 |
Net cash provided by financing activities - Discontinued Operations | 0 | 0 |
Net cash provided by financing activities | 141,959,688 | 268,058,393 |
Net increase in cash and cash equivalents and restricted cash | 2,422,243 | 14,914,125 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Beginning Balance | 18,040,327 | 3,126,202 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Ending Balance | 20,462,570 | 18,040,327 |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | 1,026,363 | 156,204 |
Cash paid for tax | 0 | 0 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Day one recognition of right of use asset and liability | 0 | 1,543,719 |
Right of use asset and liability written off due to lease termination | 0 | 695,551 |
Shares and options issued for business acquisition | 0 | 25,473,675 |
Cashless exercise of options and warrants | $ 0 | $ 74 |
Shares issued as collateral returned to treasury | 0 | 15 |
Shares and options issued for services | $ 0 | $ 2,857,646 |
Shares withheld for net settlement of restricted stock units related to tax withholdings | 1,638,959 | 0 |
Fixed assets purchased through finance transactions | 212,421 | 0 |
Shares issued for settlement of seller agreements related to acquisition | 150,011 | 0 |
Shares returned as part of settlement of seller agreements related to acquisition | 233 | 0 |
Preferred shares dividends accrued | 20,828 | 0 |
Unrealized gain on investment in available-for-sale debt security | $ 115,500 | $ 0 |
1. ORGANIZATION AND LINE OF BUS
1. ORGANIZATION AND LINE OF BUSINESS | 12 Months Ended |
Sep. 30, 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,” "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 sustainable bitcoin mining company. The Company, through itself and its wholly owned subsidiaries, has operated in the bitcoin mining sector since December 2020. Lines of Business Bitcoin Mining Business Through CleanSpark, Inc., and the Company’s wholly owned subsidiaries, ATL Data Centers LLC (“ATL”), CleanBlok, Inc. (“CleanBlok”), CleanSpark DW, LLC, and CleanSpark GLP, LLC, the Company mines bitcoin. The Company entered the bitcoin mining industry through its 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. The Company currently intends to acquire additional facilities, equipment and infrastructure capacity to continue to expand our bitcoin mining operations. Through the Company’s subsidiaries CSRE Properties Norcross, LLC, CSRE Property Management Company, LLC, CSRE Properties, LLC, CSRE Properties Washington, LLC and CSRE Properties Sandersville, LLC the Company maintains real property holdings. Discontinued Operations As of June 30, 2022, the Company deemed its energy operations to be discontinued operations due to its strategic decision to strictly focus on its bitcoin mining operations and divest of the majority of its energy assets. Through our discontinued operations segment, we previously provided energy solutions through our wholly-owned subsidiaries CleanSpark, LLC, CleanSpark Critical Power Systems, Inc., GridFabric, LLC, and Solar Watt Solutions, Inc. These solutions consisted of engineering, design and software solutions, custom hardware solutions, Open Automated Demand response (“OpenADR”), solar, energy storage for microgrid and distributed energy systems. The Company has since sold the majority of its software and intellectual property assets related to the Energy Segment, and is in the process of selling additional remaining inventory and assets. We still own patented gasification energy technologies and are not currently planning to sell or market these technologies. Our technology converts organic material into synthesis gas, which can be used as fuel for a variety of applications and as feedstock for the generation of DME (Di-Methyl Ether). Other business activities Through ATL, the Company also provides traditional data center services to a small number of remaining customers, such as providing customers with rack space, power and equipment, and offers several cloud services including virtual services, virtual storage, and data backup services. The Company is in the process of offloading those customers. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Liquidity The accompanying audited 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 have been filed with the SEC on December 14, 2022 (“Form 10-K”). As shown in the accompanying audited consolidated financial statements, the Company incurred a net loss from continuing operations of $ 40,089,393 and $ 8,229,162 during the years ended September 30, 2022 and September 30, 2021, respectively. While the Company has experienced negative cash flows from investing activities due to its continued investments in capital expenditures in support of its bitcoin mining operations, it has generated positive cash flows from operating and financing activities in fiscal 2022. 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 ("ATM") offering facility and debt financing through the lending arrangement the Company entered into in April 2022 (see Note 9 and Note 11). As of September 30, 2022 and September 30, 2021, the Company had working capital of $ 16,735,199 and $ 47,663,299 , respectively. Principles of Consolidation The accompanying audited 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. As of June 30, 2022, the Company deemed its energy operations to be discontinued operation due to its strategic shift to strictly focus on its bitcoin mining operations and divest of its energy assets. The disposal groups related to the energy operations are part of the following entities: CleanSpark, LLC, CleanSpark Critical Power Systems Inc., GridFabric, LLC, and Solar Watt Solutions, Inc. Going Concern The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The evaluation of going concern under the accounting guidance requires significant judgment which involves the Company to consider that it has historically incurred losses in recent years as it has prepared to grow its business through acquisition opportunities. The Company must also consider its current liquidity as well as future market and economic conditions that may be deemed outside the control of the Company as it relates to obtaining financing and generating future profits. As of September 30, 2022, the Company had $ 20,462,570 of available cash on-hand and Bitcoin with a fair market value of $ 11,147,478 . In determining whether there is substantial doubt about the Company’s ability to continue as a going concern, the Company may consider the effects of any mitigating plans for additional sources of financing. The Company identified additional financing sources it believes are currently available to fund its operations and drive future growth that include (i) the ability to access capital using the ATM equity offering program available to the Company whereby the Company may sell additional shares of its common stock (discussed in Note 11 – Stockholders’ Equity), and (ii) the ability to raise additional financing from other sources. (Refer to Note 11 for further details). 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 bitcoin impairment, intangible assets acquired, impairments and estimations of long-lived assets, revenue recognition from bitcoin mining, valuation of derivative assets and liabilities, available-for-sale investments, allowances for uncollectible accounts, valuation of bitcoin, 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. 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 for our bitcoin mining segment (sole reporting unit as of September 2022) by type of revenue is provided below. Revenues from bitcoin 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 bitcoin, 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 bitcoin award received is determined using the spot price of the related bitcoin on the date earned. There is currently no definitive guidance under GAAP or alternative accounting framework for the accounting for bitcoin 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. The total revenue recognized from bitcoin mining for the years ended September 30, 2022 and September 30, 2021 is $ 130,999,686 and $ 38,846,633 , respectively. 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. The total revenue recognized from data center services for the years ended September 30, 2022 and September 30, 2021 is $ 524,759 and $ 440,472 , respectively. Cost of Revenues Bitcoin mining segment (sole reportable segment) The Company includes energy costs and external co-location mining hosting fees in cost of revenues. 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 sheets that agrees to the total of those amounts as presented in the consolidated statements of cash flows. September 30, September 30, Cash and cash equivalents, excluding restricted cash $ 20,462,570 $ 14,571,198 Restricted cash - construction escrow account — 3,469,129 Cash and cash equivalents, including restricted cash $ 20,462,570 $ 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: September 30, September 30, Accounts Receivable, gross $ 246,839 $ 307,067 Provision for doubtful allowances ( 219,810 ) — Total Accounts Receivable, net $ 27,029 $ 307,067 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 September 30, 2022 and 2021 , respectively. 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 supplies, 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. Investment securities Investment securities include debt securities and equity securities. Debt securities are classified as available for sale (“AFS”) and are reported as an asset in the Consolidated Balance Sheets at their estimated fair value. As the fair values of AFS debt securities change, the changes are reported net of income tax as an element of OCI, except for other-than-temporarily-impaired securities. When AFS debt securities are sold, the unrealized gains or losses are reclassified from OCI to non-interest income. Securities classified as AFS are securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security. For individual debt securities where the Company either intends to sell the security or more likely than not will not recover all of its amortized cost, OTTI (other than temporary impairment) is recognized in earnings equal to the entire difference between the security's cost basis and its fair value at the balance sheet date. For individual debt securities for which a credit loss has been recognized in earnings, interest accruals and amortization and accretion of premiums and discounts are suspended when the credit loss is recognized. Interest received after accruals have been suspended is recognized in income on a cash basis. The Company holds investments in both publicly held and privately held equity securities. However, as described in Note 1, the Company is primarily doing business of in the bitcoin mining sector, and not in the business of investing in securities. Privately held equity securities are recorded at cost and adjusted for observable transactions for same or similar investments of the issuer (referred to as the measurement alternative) or impairment. All gains and losses on privately held equity securities, realized or unrealized, are recorded through gains or losses on equity securities on the consolidated statement of operations and comprehensive loss. Publicly held equity securities are based on fair value accounting with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations and comprehensive loss. 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 $ 20,212,570 and $ 17,790,327 for periods ended September 30, 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 covered by FDIC limits was $ 11,147,478 and $ 23,603,210 for the periods ended September 30, 2022 and 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. In fiscal year ended September 30, 2022 , revenue is concentrated with one mining pool operator and all bitcoin reside in one exchange. Refer to Note 16 - Major Customers and Vendors. Leases In accordance with ASC 842, the Company assesses whether an arrangement contains a lease at contract inception. When an arrangement contains a lease, the Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in “Fixed Assets, net.” All other leases are categorized as operating leases. The Company records right-of use ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments. Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less. Some leases include multiple year renewal options. The Company’s decision to exercise these renewal options is based on an assessment of its current business needs and market factors at the time of the renewal. Currently, the Company has no leases for which the option to renew is reasonably certain and therefore, options to renew were not factored into the calculation of its right of use asset and lease liability as of September 30, 2022. For all classes of underlying assets, the Company has elected to not separate lease from non-lease components. 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 13 – Stock-Based Compensation. 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 September 30, 2022 and 2021 , there were 7,069,706 and 2,173,578 , respectively, units of common stock equivalents that consist of options, warrants, and restricted stock units, as well as 5,250,000 shares issuable upon preferred stock conversions, that were excluded from the current and prior period diluted (loss) per share calculation as their effect is anti-dilutive. Provided below is the loss per share calculation for the years ended September 30, 2022 and 2021: For the Year 2022 2021 Continuing Operations Numerator Income (loss) from continuing operations $ ( 40,089,393 ) $ ( 8,229,162 ) Preferred stock dividends 335,439 177,502 Income (loss) from continuing operations attributable to common shareholders $ ( 40,424,832 ) $ ( 8,406,664 ) Denominator Weighted- average common shares outstanding, 42,614,197 29,441,364 Dilutive impact of stock options and other share-based awards — — Weighted- average common shares outstanding, 42,614,197 29,441,364 Income (loss) from continuing operations per common share attributable to common shareholders Basic $ ( 0.95 ) $ ( 0.29 ) Diluted $ ( 0.95 ) $ ( 0.29 ) Discontinued Operations Numerator Loss on discontinued operations $ ( 17,236,961 ) $ ( 13,582,848 ) Denominator Weighted- average common shares outstanding, 42,614,197 29,441,364 Dilutive impact of stock options and other share-based awards — — Weighted- average common shares outstanding, 42,614,197 29,441,364 Loss on discontinued operations per common share attributable to common shareholders Basic $ ( 0.40 ) $ ( 0.46 ) Diluted $ ( 0.40 ) $ ( 0.46 ) Property and equipment Property and equipment are stated at cost less accumulated depreciation. Construction in progress is the construction or development of assets that has 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) Land Improvements 15 Building 30 Leasehold improvements Shorter of lease term or 15 years Miners 3 - 5 Mining Equipment 3 - 15 Infrastructure asset Shorter of lease term or 5 years Machinery and equipment 1 - 10 Furniture and fixtures 3 - 7 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 years ended September 30, 2022 and September 30, 2021 the Company did not record an impairment expense for assets within its continuing operations. However, in connection with property and equipment in our discontinued operations, an impairment expense in the approximate amount of $ 32,000 was recognized and included in loss from discontinued operations in the consolidated statements of operations and comprehensive loss. Business combinations, Intangible Assets and Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations, where the total purchase price is allocated to the identified assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The difference between the purchase price, including any contingent consideration, and the fair value of net assets acquired is recorded as goodwill. Contingent consideration transferred is initially recognized at fair value. Contingent consideration classified as a liability or an asset is remeasured to fair value each period until settlement, with changes recognized in profit or loss. Contingent consideration classified as equity is not remeasured. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. The Company reviews its indefinite lived intangibles and goodwill for impairment annually or whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed an assessment of indefinite lived intangibles and goodwill for the year end September 30, 2022. During the years ended September 30, 2022 and 2021, the Company incurred the following impairment losses: September 30, 2022 September 30, 2021 Impairment of bitcoin $ 12,210,269 $ 6,608,076 Impairment of goodwill 12,048,419 — Total impairment loss $ 24,258,688 $ 6,608,076 2022 Goodwill Impairment analysis In completing the 2022 annual goodwill impairment analysis, the Company elected to perform a quantitative assessment for our goodwill. The assessment involves comparing the carrying value of the entity, including goodwill, to its estimated fair value. In accordance with ASU 2017-04, a goodwill impairment charge is recorded for the amount by which the carrying value unit exceeds the fair value of the reporting unit. In determining the fair value for which the quantitative assessment was performed, the Company engaged a valuation specialist to perform the quantitative impairment analysis. The valuation report included a combination of the market and income approach to test for goodwill impairment. The income approach is a valuation technique under which we estimate future cash flows using the financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, revenue is projected and applied to fixed and variable cost experience rates to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate the estimated fair value. The discount rate used was the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the estimated fair value, several factors were estimated, including projected operating results, growth rates, economic conditions, anticipated future cash flows and the discount rate. The market valuation approach evaluated the company's market value as compared to the net asset balance. The assessment indicated that impairment of goodwill was necessary. Based on the assessment for impairment, the Company recognized an impairment expense of goodwill of $ 12,048,419 for the year ended September 30, 2022. In completing the 2021 annual goodwill impairment analysis, there were no impairments recognized. The following table reflects goodwill activity for the years ended September 30, 2022 and 2021, respectively: Total Goodwill- September 30, 2020 $ — New Acquisitions 12,048,419 Impairment — Goodwill- September 30, 2021 12,048,419 New Acquisitions — Impairment ( 12,048,419 ) Goodwill- September 30, 2022 $ — The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between two and twenty years as follows: Useful life (years) Websites 3 Software 4 - 7 Strategic contract 5 Bitcoin Bitcoin are included in current assets in the consolidated balance sheets. Bitcoin is 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 bitcoin 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. Bitcoin earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of bitcoin are also included within operating activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in operating costs and expenses 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 bitcoin for the years ended September 30, 2022 and 2021: Amount Balance as on September 30, 2020 $ — Addition of bitcoin 38,846,633 Sale of bitcoin ( 11,443,132 ) Bitcoin issued for services ( 296,593 ) Realized gain on sale of bitcoin 3,104,378 Impairment loss ( 6,608,076 ) Balance as on September 30, 2021 $ 23,603,210 Addition of bitcoin 130,999,686 Sale of bitcoin ( 133,201,006 ) Bitcoin issued for services ( 611,244 ) Realized gain on sale of bitcoin 2,567,101 Impairment loss ( 12,210,269 ) Balance as on September 30, 2022 $ 11,147,478 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, accrued expenses and short-term portion of loan payable approximate their fair values because of the short-term nature of these instruments. The carrying amount of the Company's long-term portion of loan payable is also stated at fair value since the stated rate of interest approximates market rates. 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 consolidated balance sheets on a recurring basis, and their level within the fair value hierarchy as of September 30, 2022 and September 30, 2021: September 30, 2022: Amount Level 1 Level 2 Level 3 Derivative asset $ 2,955,890 $ — $ — $ 2,955,890 Investment in debt security 610,108 — — 610,108 Total $ 3,565,998 $ — $ — $ 3,565,998 September 30, 2021: Amount Level 1 Level 2 Level 3 Derivative asset $ 4,905,660 $ — $ — $ 4,905,660 Investment in equity security 10,772 10,772 — — Investment in debt security 494,608 — — 494,608 Contingent cash consideration 820,802 — — 820,802 Total $ 6,231,842 $ 10,772 $ — $ 6,221,070 There were no transfers between Level 1, 2 or 3 during the years ended September 30, 2022 and 2021. The activities of the financial instruments that are measured and recorded at fair value on the Company's balance sheets on a rec |
3. DISCONTINUED OPERATIONS
3. DISCONTINUED OPERATIONS | 12 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | 3. DISCONTINUED OPERATIONS The Company determined to make available for sale the asset groups related to the energy segment due to its strategic shift to strictly focus on its bitcoin mining operations. As a result, the Energy segments' results of operations have been reclassified as discontinued operations on a retrospective basis for all periods presented. Accordingly, the assets and liabilities of this segment are separately reported as “assets and liabilities held for sale” as of September 30, 2022 and 2021 in the consolidated balance sheets. The results of operations of this segment, for all periods, are separately reported as “discontinued operations” in the consolidated statements of operations and comprehensive loss . Provided below are the key areas of the financials that constitute the discontinued operations: September 30, 2022 September 30, 2021 ASSETS Current assets Accounts receivable, net $ 2,813,166 $ 2,312,890 Inventory 4,399,915 2,592,933 Prepaid expense and other current assets 212,800 2,991,243 Total current assets held for sale $ 7,425,881 $ 7,897,066 Property and equipment, net 11,284 53,193 Operating lease right of use asset 665,071 824,435 Intangible assets, net 868,319 4,476,306 Goodwill — 7,000,779 Long-term assets held for sale $ 1,544,674 $ 12,354,713 Total assets held for sale $ 8,970,555 $ 20,251,779 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 918,758 $ 1,289,713 Contract liabilities 116,690 — Operating lease liability 163,248 152,064 Total current liabilities held for sale 1,198,696 1,441,777 Long-term liabilities Operating lease liability, net of current portion 511,530 674,779 Total liabilities held for sale $ 1,710,226 $ 2,116,556 For the year ended September 30, September 30, Revenues, net Energy hardware, software and services revenue $ 9,667,290 $ 10,151,010 Total revenues, net 9,667,290 10,151,010 Costs and expenses Cost of revenues (exclusive of depreciation and amortization shown below) 8,710,760 8,701,681 Professional fees 115,960 486,583 Payroll expenses 4,911,322 4,173,778 General and administrative expenses 1,640,920 823,508 Impairment expense - fixed assets 31,833 — Impairment expense - intangibles 1,402,016 1,531,711 Impairment expense - other 871,649 — Impairment expense - goodwill 7,000,779 4,746,000 Depreciation and amortization 2,215,537 3,262,245 Total costs and expenses 26,900,776 23,725,506 Loss from operations ( 17,233,486 ) ( 13,574,496 ) Other income (expense) Interest expense ( 3,475 ) ( 8,352 ) Total other income (expense) ( 3,475 ) ( 8,352 ) Loss before income tax (expense) or benefit ( 17,236,961 ) ( 13,582,848 ) Income tax (expense) or benefit — — Net loss $ ( 17,236,961 ) $ ( 13,582,848 ) |
4. ACQUISITIONS
4. ACQUISITIONS | 12 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | 4. ACQUISITIONS Acquisitions Relating to Continuing Operations SPRE COMMERCIAL GROUP, INC. AND WAHA TECHNOLOGIES, INC. On August 17, 2022, the Company, through its wholly owned subsidiary, CSRE Properties Washington, LLC, (“CSRE”), completed the purchase of real property, together with all improvements situated thereon and all rights, easements and appurtenances belonging thereto (collectively, the “Property”), from SPRE Commercial Group, Inc. f/k/a WAHA, Inc. (“SPRE”), (the “Seller”), pursuant to a Land Purchase and Sale Agreement dated as of August 5, 2022 and amended on August 17, 2022. Additionally, on August 17, 2022, in connection with the Land Purchase and Sale Agreement, the Company completed the purchase of a mix of S19 and S19 J Pro bitcoin miners with a total processing power equal to approximately 341,985 terahashes, pursuant to an equipment purchase and sale agreement (together with the Land Purchase and Sale Agreement, the “Acquisition”), from Waha Technologies, Inc., a Georgia corporation (“WAHA”, collectively with the Seller "WAHA & SPRE" or the "Sellers"), an affiliate of the Seller. Pursuant to the Land Purchase and Sale Agreement and the Equipment Purchase and Sale Agreement the Company acquired substantially all of WAHA & SPRE's assets. The transaction was accounted for as an acquisition of a business. Total consideration for the Property and miners consisted of (i) $1,961,747 in financing provided by the Seller to the Company at an interest rate of 12% per annum, to be repaid in 12 monthly installments of $173,651, (ii) the Company’s assumption of a mortgage with a maximum principal amount of $2,158,253 and an interest rate of 13% and (iii) $19,771,610 of cash consideration paid by the Company to the Seller. Acquisition related costs of $118,058, consisting primarily of legal and recording fees, were expensed as incurred in accordance with ASC 805 and are reflected in professional fees on the Consolidated Statements of Operations and Comprehensive Loss. The Company determined the fair value of the consideration given to the Sellers in connection with the transaction and the allocation of the purchase price in accordance with ASC 820 were as follows: Consideration: Fair Value Cash $ 19,771,610 Financing provided by Seller 1,961,747 Mortgage assumed 2,158,253 Total Consideration $ 23,891,610 Purchase Price Allocation Preliminary Land $ 100,000 Building/Improvements 14,700,000 Miners 9,091,610 Total $ 23,891,610 The total purchase price was allocated to identifiable assets deemed acquired based on their estimated fair values. The fair values of the assets have been recorded and are reflected in property and equipment, net on the Company's Consolidated Balance Sheets in this annual report. The useful life for the building and improvements is estimated to be 30 years consistent with the Company's policy. The useful life for miners was estimated to be 3 years consistent with the Company's policy for depreciating used miners. Land is not depreciated. Financing provided by the Seller and the mortgage assumed have been recorded as loans payable and are reflected in the Company's Consolidated Balance Sheets. 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 . The Company determined the fair value of the consideration given to the sellers of ATL in connection with the transaction in accordance with ASC 820 was as follows: Consideration Preliminary Allocation at Acquisition Date Adjustments to Fair Value Final Allocation at Acquisition Date 642,309 shares of common stock $ 8,407,826 — $ 8,407,826 975,976 shares of common stock – held in escrow 12,775,525 — 12,775,525 Total Consideration $ 21,183,351 — $ 21,183,351 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 nonsatisfaction of certain indemnification claims 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 claims 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 due to the non-satisfaction of certain indemnification claims, 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 $ 6.9 million 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, net ( 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 bitcoin mining business. The other assets and liabilities assumed include $ 5,670,000 of bitcoin 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. Net sales and net income of this business included in CleanSpark’s consolidated results of operations in fiscal year 2021 were approximately $ 30,234,683 and $ 14,449,160 , respectively. Acquisitions Relating to Discontinued Operations 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 consideration 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, net ( 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. Pro forma of Consolidated Financial Statements (Unaudited) The following is the unaudited pro forma information for continuing operations assuming the acquisition of WAHA & SPRE occurred on October 1, 2020: For the Year Ended September 30, September 30, 2021 Net sales from continuing operations $ 161,090,831 $ 55,571,697 Loss from continuing operations $ ( 34,488,387 ) $ ( 5,457,907 ) Loss from continuing operations per common share - basic $ ( 0.81 ) $ ( 0.19 ) Weighted average common shares outstanding – basic 42,614,197 29,441,364 Loss from continuing operations per common share - diluted $ ( 0.81 ) $ ( 0.19 ) Weighted average common shares outstanding – diluted 42,614,197 29,441,364 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. |
5. INVESTMENTS
5. INVESTMENTS | 12 Months Ended |
Sep. 30, 2022 | |
Schedule of Investments [Abstract] | |
INVESTMENTS | 5. INVESTMENTS As of September 30, 2022 and September 30, 2021, the Company had total investments of $ 3,565,998 and $ 5,661,040 that comprise of the following: International Land Alliance, Inc. On November 5, 2019, the Company entered in a binding Memorandum of Understanding (the “MOU”) with International Land Alliance, Inc. (“ILAL”), a Wyoming corporation, to lay a foundational framework where the Company will deploy its energy solutions products and services to ILAL, 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. Investment in Debt Securities (Preferred Stock) and related Embedded Derivative Asset 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”) 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 September 30, 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 (net of allowance) on our available-for-sale debt securities totaling $ 0 and $ 399,863 , as of September 30, 2022 and 2021, respectively, is included in prepaid expense and other current assets on the Consolidated Balance Sheets. The fair value of our investment in Debt Securities is $ 610,108 and $ 494,608 as of September 30, 2022 and 2021 , respectively. The Company has included gain (loss) on fair value of preferred stock amounting to $ 115,500 and ( $ 5,392 ) for the years ended September 30, 2022 and 2021, respectively, as part of other comprehensive loss in the Consolidated Statements of Operations and Comprehensive 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 the Consolidated Statements of Operations and Comprehensive Loss. Total fair value of investment in Derivative assets as of September 30, 2022 and 2021 is $ 2,955,890 and $ 4,905,660 . 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. Commitment shares - Common stock of ILAL Pursuant to the terms of the SPA with ILAL, the Company received 350,000 shares (commitment shares) of ILALs common stock. The commitment shares were fully earned at the time of execution of the agreement. The Company sold 334,611 shares at various prices and fair valued the remaining 15,389 shares at the closing stock price of ILAL as of September 30, 2021. During the year ended September 30, 2022 , the Company sold 15,389 commitment shares, and recorded realized gain on sale of shares for $ 665 . Investment in Equity Securities- LawClerk In February 2020, the Company made a $ 250,000 strategic relationship investment in LawClerk for 200,000 Series A Preferred Shares of LawClerk. This investment is recorded on a cost basis and adjusted for observable transactions for same or similar investments of the issuer (referred to as the measurement alternative) or impairment. The Company annually performs impairment analysis on this investment and concluded that the investment was not recoverable and accordingly recorded an impairment of $ 250,000 for the year ended September 30, 2022. Refer the table below for a reconciliation of carrying value of all investments for the year ended September 30, 2022 and 2021: ILAL ILAL ILAL Law Balance as of September 30, 2020 $ 500,000 $ 2,115,273 $ 210,000 $ 250,000 Shares sold during the year — — ( 373,121 ) — Realized gain on fair value recognized in other income (expense) — — 179,046 — Unrealized gain (loss) recognized in other income (expense) — 2,790,387 ( 5,153 ) — Unrealized loss on fair value recognized in Other comprehensive income ( 5,392 ) — - — Balance as of September 30, 2021 $ 494,608 $ 4,905,660 $ 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) — ( 1,949,770 ) ( 1,847 ) Impairment loss ( 250,000 ) Unrealized gain on fair value recognized in Other comprehensive income 115,500 — - — Balance as of September 30, 2022 $ 610,108 $ 2,955,890 $ — $ — |
6. INTANGIBLE ASSETS
6. INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 6. INTANGIBLE ASSETS Intangible assets consist of the following as of September 30, 2022 and 2021: September 30, 2022 September 30, 2021 Intangible assets Accumulated amortization Net intangible assets Intangible assets Accumulated amortization Net intangible assets Software $ 210,000 $ — $ 210,000 $ — $ — $ — Websites 23,115 ( 11,448 ) 11,667 8,115 ( 8,115 ) — Strategic Contract 9,799,970 ( 3,536,586 ) 6,263,384 9,799,970 ( 1,577,098 ) 8,222,872 Total $ 10,033,085 ( 3,548,034 ) $ 6,485,051 $ 9,808,085 $ ( 1,585,213 ) $ 8,222,872 Amortization expense for the years ended September 30, 2022 and 2021 was $ 1,963,328 and $ 1,577,098 , respectively. During the years ended September 30, 2022 and 2021 the Company did no t incur impairment losses related to the above intangible assets. The strategic contract relates to supply of a critical input to our bitcoin mining business at significantly low prices compared to market. During the year ended September 30, 2021, the initial allocation of $ 7,457,970 was adjusted by $ 2,342,000 . The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows: Year September 30, 2022 2023 $ 2,017,494 2024 2,017,494 2025 2,014,160 2026 435,903 2027 - Thereafter - Total $ 6,485,051 |
7. PROPERTY AND EQUIPMENT
7. PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT Property and equipment consist of the following as of September 30, 2022 and September 30, 2021: September 30, 2022 September 30, 2021 Land $ 2,977,619 $ 2,877,619 Land improvements 1,529,937 — Building and improvements 32,332,251 8,170,680 Leasehold improvements 114,362 59,114 Miners 356,500,871 120,330,768 Mining equipment 17,586,847 2,817,074 Infrastructure 12,421,756 81,868 Machinery and equipment 1,268,932 239,283 Furniture and fixtures 331,444 107,660 Construction in progress 4,816,189 10,498,311 Total 429,880,208 145,182,377 Less: accumulated depreciation ( 53,098,828 ) ( 7,560,831 ) Property and equipment, net $ 376,781,380 $ 137,621,546 Depreciation expense for the years ended September 30, 2022 and 2021 was $ 47,081,550 and $ 7,405,025 , respectively. During the year ended September 30, 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 year ended September 30, 2021. The Company placed-in service property and equipment of $ 265,204,734 during the year ended September 30, 2022. This increase in fixed assets primarily consisted of miners and mining equipment amounting to $ 245,706,410 . Construction in progress: The Company is expanding its facilities in Georgia. The Company has cancellable purchase commitments for approximately $ 30 million related to purchase of miners as of September 30, 2022 , and the Company has paid $ 3 million towards these commitments as of the end of this period. As of September 30, 2022 , the remaining commitment for future payments was $ 27 million. As of September 30, 2022 and September 30, 2021, the Company has outstanding deposits for miners and mining equipment totaling $ 12.5 million a nd $ 88 million, resp ectively. 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. |
8. LEASES
8. LEASES | 12 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | 8. 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 in the Consolidated Statements of Operations and Comprehensive Loss consist of the following: For the year ended September 30, September 30, Operating lease cost (1) $ 112,869 $ 10,674 Finance lease cost: Depreciation expense financed assets $ 379,260 $ 302,359 Interest on lease obligations $ 37,886 $ 44,726 (1) Included in general and administrative expenses Other lease information is as follows: For the year ended September 30, September 30, Cash paid for amounts included in Operating cash outflows from operating leases $ 131,425 $ 12,687 Operating cash outflows from finance leases $ 38,125 $ 42,992 Financing cash outflows from finance leases $ 519,273 $ 181,475 September 30, September 30, Weighted-average remaining lease term - 1.5 years 2.5 years Weighted-average remaining lease term - 1.53 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 September 30, 2022: Fiscal Year Operating Finance 2023 $ 135,368 $ 274,651 2024 139,429 161,766 2025 143,612 21,607 2026 147,920 1,853 2027 50,660 — Thereafter - — Gross lease liabilities 616,989 459,877 Less: imputed interest ( 56,443 ) ( 19,493 ) Present value of lease liabilities $ 560,546 $ 440,384 Less: Current portion of lease liabilities ( 112,955 ) ( 260,387 ) Total lease liabilities, net of current portion $ 447,591 $ 179,997 |
9. LOANS
9. LOANS | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
LOAN | 9. LOANS The following table reflects our outstanding loans as of September 30, 2022: Maturity Date Rate Debt Balance, Net Master Equipment Financing Arrangement Apr-25 13.80 % $ 17,073,111 SPRE Commercial Group, Inc. Aug-23 12.00 % 1,806,558 Marquee Funding Partners Jul-26 - Feb-27 13.00 % 2,127,027 Auto Loans Oct-28 9.00 - 9.20 % 212,421 Total Loans Outstanding $ 21,219,117 Less: current portion of long-term loans ( 7,786,049 ) Long-term loans, excluding current portion $ 13,433,068 The following table reflects the principal amount of loan maturities due over the next five years and beyond as of September 30, 2022: 5-Year Loan Maturities Outstanding Loan FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Thereafter Total Master Equipment Financing Arrangment $ 5,677,314 $ 6,508,398 $ 5,221,133 $ - $ - $ - $ 17,406,845 SPRE Commercial Group, Inc. 1,806,558 - - - - - 1,806,558 Marquee Funding Partners 402,179 457,693 520,869 592,766 153,520 - 2,127,027 Auto Loans 24,662 30,464 33,341 36,489 39,935 47,530 212,421 Total principal amount of loan payments by fiscal year $ 7,910,713 $ 6,996,555 $ 5,775,343 $ 629,255 $ 193,455 $ 47,530 $ 21,552,851 Unamortized deferred financing costs and discounts on Master Equipment Financing Arrangement ( 333,734 ) Total loan book value as of September 30, 2022 $ 21,219,117 Description of Outstanding Loans Master Equipment Financing Agreement 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 . The loan is collateralized with 3,336 S19j Pro miners and carries and effective interest rate of 13.80 %. The Company recorded a loan discount of approximately $ 379,000 , of which $ 46,000 was amortized and recorded to interest expense during the year ended September 30, 2022. SPRE Commercial Group, Inc. In connection with the acquisition of WAHA, the Company entered into a financing arrangement with the seller. The loan has a term of 12 months with monthly payments of $ 173,651 and a stated interest rate of 12 %. Marquee Funding Partners In connection with the acquisition of WAHA, certain assets were encumbered with mortgages which the Company assumed. The mortgages assumed have a combined balance of $ 2,158,253 and remaining payment terms ranging from 47 - 54 months and annual interest of 13 %. Auto Loans In September 2022, the Company purchased vehicles through financing arrangements with combined principal amount of $ 212,421 . The loans are for a term of 72 months with annual interest of 9 %. The loans are secured with the purchased vehicles. Paycheck Protection Program Loan On May 7, 2020, the Company applied for a loan from Celtic Bank Corporation, as lender, pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as administered by the U.S. Small Business Administration (the "SBA"). On May 15, 2020, the loan was approved, and the Company received the proceeds from the loan in the amount of $ 531,169 (the “PPP Loan”). The Company applied for and received loan forgiveness from the SBA on March 23, 2021. The entire principal balance and interest charges were forgiven. The gain on loan forgiveness of $ 531,169 is included in other income in the consolidated statements of operations and comprehensive loss for the year ended September 30, 2021 . |
10. RELATED PARTY TRANSACTIONS
10. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Zachary Bradford Chief Executive Officer, Director and Former Chief Financial Officer During the years ended September 30, 2022 and 2021, the Company paid Blue Chip Accounting, LLC (“Blue Chip”) $ 47,075 and $ 183,075 , 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. During the years ended September 30, 2022 and 2021 , $ 4,575 and $ 18,300 , respectively, was paid to Blue Chip for rent. The sublease and engagement for accounting services was terminated on December 31, 2021. |
11. STOCKHOLDERS_ EQUITY
11. STOCKHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS EQUITY | 11. 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 September 30, 2022, there were 55,661,337 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. Under the Certificate of Designation for the Series A Preferred Stock, holders of shares of Series A Preferred Stock are entitled to quarterly dividends on 2 % of our earnings before interest, taxes and amortization. The dividends are payable in cash or common stock. The preferred stock dividend for the year ended September 30, 2022 was $ 335,439 , which the Company paid $ 314,611 and has a preferred stock dividend payable in the amount of $ 20,828 . The preferred dividend was $ 177,502 for the year ended September 30, 2021 and was paid in the 2021 fiscal year. The holders will also have a liquidation preference on the stated value of $ 0.02 per share plus any accumulated but unpaid dividends. The holders are further entitled to have us redeem their Series A Preferred Stock for three shares of common stock in the event of a change of control and they are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of forty-five (45) votes for each share held. Amendment to Articles of Incorporation On October 2, 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to increase its authorized shares of common stock to 35,000,000 . On March 16, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to increase its authorized shares of common stock to 50,000,000 . On September 17, 2021, the Company filed its First Amended and Restated Articles of Incorporation (the “Amended and Restated Articles”) with the Secretary of State of the State of Nevada, which Amended and Restated Articles became effective upon filing. The Amended and Restated Articles were previously approved by the Company’s Board, subject to stockholder approval, on July 16, 2021, and were approved by the Company’s stockholders at the Company’s Annual Meeting and, among other things, increased the Company’s authorized shares of common stock to 100,000,000 . Common Stock issuances for the year ended September 30, 2022 The Company issued 638,764 common shares in relation to restricted stock units issued for service. The Company issued 105,423 common shares in relation to the exercise of stock options with proceeds received of 816,602 . The Company issue d 5,238 common shares valued at $ 60,043 as c ompensation for Director services. The Company is sued 8,404 common shares valued at $ 150,011 for settlemen t of contingent consideration related to business acquisition. The Company issued 17,740,081 common shares in relation to equity raises through its At-the-Market offering facility, net of offering costs, for net proceeds of $ 125,047,987 . Common stock returned during the year ended September 30, 2022 The Company had 232,518 shares o f common stock returned back to the Company as part of the settlement of contingent consideration and holdbacks related to business acquisition. Common Stock issuances for the year ended September 30, 2021 The Company issued 4,444,445 shares of the Company’s common stock in connection with its underwritten equity offering at a price of $ 9.00 per share for net proceeds of approximately $ 37.05 million. The Company issued 9,090,910 shares of the Company’s common stock in connection with its underwritten public equity offering at a price of $ 22.00 per share for net proceeds of approximately $ 187.2 million. The Company issued 236,000 shares of common stock as settlement of accrued bonus compensation related to the year ended September 30, 2020. The fair value of these shares was approximately $ 1.9 million and was fully expensed for in the prior year. The Company issued 327,725 shares of common stock for the current year related to bonus compensation. The fair value of these shares is approximately $ 3.07 million. The Company issued 1,618,285 shares of common stock in relation to the acquisition of ATL, which includes 809,142 shares held in escrow. The Company issued 477,703 shares of common stock in relation to the acquisition of SWS, which includes 310,000 shares held in escrow. (See Note 4 for additional details) The Company issued 57,045 shares of common stock for services rendered for a total fair value of approximately $ 815,000 which has been fully expensed during the year ended September 30, 2021. The Company issued 389,745 shares of common stock in relation to the exercise of stock options and warrants. (See Notes 12 and 13 for additional details) The Company issued 15,577 restricted stock units to certain SWS employees as part of the transaction to incentivize the employees for retention purposes. These restricted stock units vest over a period of one year . As of September 30, 2021, 4,582 of the restricted stock units had been forfeited. (See Note 13 for additional details) On June 3, 2021, the Company entered into an At-the-Market Offering Agreement (“ATM”) with H.C. Wainwright & Co., LLC, to create an at-the-market equity program under which the Company may, from time to time, offer and sell shares of its common stock having an aggregate gross offering price of up to $ 500,000,000 to or through H.C. Wainwright & Co., LLC. During the year ended September 30, 2021, the Company issued 3,443,379 shares of the Company’s common stock under the ATM for net proceeds of $ 46.4 million. The shares were sold pursuant to a prospectus dated March 15, 2021 and a prospectus supplement dated June 3, 2021 filed with the SEC. Common stock returned during the year ended September 30, 2021 As a result of an adjustment of holdback shares to actual milestones earned in relation to the p2k acquisition, 8,072 shares were returned and cancelled. As a result of an adjustment of holdback shares pursuant to Article II and Schedule A of that certain Agreement and Plan of ATL Merger in connection with the acquisition of ATL, 68,194 shares were returned and cancelled. (See Note 4 for additional details) 15,000 shares, held in escrow as collateral, were returned from a lender on September 30, 2021. |
12. STOCK WARRANTS
12. STOCK WARRANTS | 12 Months Ended |
Sep. 30, 2022 | |
Stock Warrants | |
12. STOCK WARRANTS | 12. STOCK WARRANTS The following is a summary of stock warrant activity during the years ended September 30, 2022 and September 30, 2021. Number of Weighted Balance, September 30, 2020 1,299,065 $ 21.78 Warrants granted — — Warrants expired ( 432,721 ) 15.00 Warrants canceled — — Warrants exercised ( 250,790 ) 11.77 Balance, September 30, 2021 615,554 $ 30.72 Warrants granted — — Warrants expired ( 413,334 ) 39.38 Warrants canceled — — Warrants exercised — — Balance, September 30, 2022 202,220 $ 13.03 As of September 30, 2022, there are warrants exercisable to purchase 202,220 shares of common stock in the Company and there are no w arrants that are unvested. All outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices. As of September 30, 2022 , the outstanding warrants have a weighted average remaining term of 2.92 years and an intrinsic value of $ 0 . During the year ended September 30, 2022, there were no exercise of warrants. Warrant activity for the year ended September 30, 2021 During the year ended September 30, 2021, a total of 173,990 shares of the Company’s common stock were issued in connection with the exercise of common stock warrants at exercise prices ranging from $ 3.36 and $ 20.00 , for total consideration of $ 2,883,623 . Additionally, a total of 74,437 shares of the Company’s common stock were issued in connection with the cashless exercise of 76,800 common stock warrants at exercise prices ranging from $ 0.83 to $ 3.67 . |
13. STOCK-BASED COMPENSATION
13. STOCK-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | 13. 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 September 30, 2022 , there were 89,889 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 grant ed 89,445 n on-qualified options pursuant to the Plan during the year ended September 30, 2022. The Company recognized $ 31,464,994 and $ 8,546,712 for the years ended September 30, 2022 and September 30, 2021, respectively, in stock-based compensation. STOCK OPTIONS The following is a summary of stock option activity during the year ended September 30, 2022 and 2021: Number of Weighted Average Balance, September 30, 2020 277,948 6.34 Options granted 1,469,250 19.32 Options expired ( 12,975 ) 10.53 Options canceled/forfeited ( 45,876 ) 16.31 Options exercised ( 141,318 ) 6.14 Balance, September 30, 2021 1,547,029 18.35 Options granted 215,750 14.47 Options canceled/forfeited ( 238,418 ) 15.40 Options exercised ( 105,423 ) 7.43 Balance, September 30, 2022 1,418,938 19.11 As of September 30, 2022 , there are options exercisable to purchase 784,785 shares of common stock in the Company and 634,153 unvested options outstanding that cannot be exercised until vesting conditions are met. As of September 30, 2022 , the outstanding options have a weighted average remaining term of 3.86 years and an no intrinsic value. Option activity for the year ended September 30, 2022 During the year ended September 30, 2022 , a total of 105,423 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 net proceeds of $ 816,602 . For the year ended September 30, 2022 , the Company also granted 215,750 options with a total fair value of $ 3,121,350 to purchase shares of common stock to employees. The Black-Scholes model utilized the following inputs to value the options granted during year ended September 30, 2022: Fair value assumptions Options: September 30, 2022 Risk free interest rate 1.04 % - 3.65 % Expected term (years) 4.99 - 7.35 Expected volatility 187.18 % - 533.00 % Expected dividends 0 % As of September 30, 2022 , the Company expects to recognize $ 14,206,420 of stock-based compensation for the non-vested outstanding options over a weighted-average period of 1.63 years. Option activity for the year ended September 30, 2021 During the year ended September 30, 2021, a total of 141,318 shares of the Company’s common stock were issued in connection with the exercise of 141,318 common stock options at exercise prices ranging from $ 4.65 to $ 24.40 , for a total consideration of $ 867,308 . During the year ended September 30, 2021, the Company granted 1,469,250 options with a total fair value of $ 21,582,485 to purchase shares of common stock to employees. The Company offset $ 953,125 of stock compensation expense against bonuses accrued during the prior year and recognized $ 7,731,606 during the year. The shares were granted at quoted market prices ranging from $ 7.55 to $ 34.67 and were valued at issuance using the Black Scholes model. The Black-Scholes model utilized the following inputs to value the options granted during year ended September 30, 2021: Fair value assumptions Options: September 30, 2021 Risk free interest rate 0.10 % - 0.41 % Expected term (years) 1.50 - 5.25 Expected volatility 140 % - 239 % Expected dividends 0 % RESTRICTED STOCK UNITS The Company grants restricted stock units ("RSU"s) that contain either a) service conditions, or 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. RSU's that contain market conditions will vest based on the terms of the agreement and generally are either 1 year or over the employee's term of employment. The Company recognizes the expense equal to the total fair value of the common stock price on the grant date. The expense is recorded ratably over the service period. 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, 2020 — $ - $ - Granted 579,302 10.53 Vested ( 558,475 ) 10.03 Forfeited ( 9,832 ) 17.98 Outstanding at September 30, 2021 10,995 $ 27.73 $ - Granted 7,306,250 7.18 Vested ( 1,757,938 ) 13.37 Forfeited ( 110,759 ) 15.27 Outstanding at September 30, 2022 5,448,548 $ 4.93 $ 17,326,383 During the year ended September 30, 2022 , the Company granted 1,176,250 RSUs, which comprised of 120,000 that were service condition based, 146,250 that were performance condition based, and 910,000 that were market condition based awards. The market condition based RSUs consist of 60,000 units that were perpetual in nature, and therefore, are given a derived service period of 5 years. The remaining 810,000 RSUs had 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 inputs of these market based RSUs are as follows: Fair value assumptions RSUs: September 30, 2022 Risk free interest rate 0.14 % - 1.26 % Expected term (years) 1.00 - 5.00 Expected volatility 111.37 % - 172.18 % Cost of equity 20.00 % - 21.00 % On September 12, 2022, the Compensation Committee approved to immediately vest the 810,000 market based RSUs that were subject to the 1 -year stated service period. Accordingly, the Company recorded an incremental stock-based compensation expense of $ 3.96 million in the fiscal year September 30, 2022. Additionally, on September 12, 2022, the Compensation Committee approved the following modifications and grants, each of which are pending ratification by shareholders: (1) to grant 2,565,000 service condition based RSUs which will vest over a 3-year period beginning on the grant date, (2) to grant 2,565,000 performance based RSUs which are expected to vest within a 12-month period, (3) to modify the market condition based 60,000 units that were perpetual in nature, and 10,000 unvested service condition RSUs, and were replaced with; (3a) 120,000 service condition based RSUs that vest over a 3-year period, (3b) 120,000 performance based RSUs, which are expected to vest within 12 months from date of modification. (4) to grant 760,000 restricted stock units, which shall vest on the later of the grant date and the Shareholder Approval Date. As of September 30, 2022 , the Company had approximately $ 26 million unrecognized compensation cost related to restricted stock unit awards that will be recognized over a weighted average period of 2 years. The Company recognized stock-based compensation expenses related to restricted stock units, of $ 23,661,327 and $ 3,862,679 for fiscal years ended 2022 and 2021 . The Company recognized $ 1,904,520 in stock-based compensation expense for restricted stock units issued in 2021 related to 2020 bonuses. |
14. INCOME TAXES
14. INCOME TAXES | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently. FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. Due to the enactment of the Tax Reform Act of 2017, we have calculated our deferred tax assets using an estimated corporate tax rate of 21 %. U.S. Tax codes and laws may be subject to further reform or adjustment which may have a material impact to the Company’s deferred tax assets and liabilities. For the years ended September 30, 2022 and 2021 the Company's income (loss) from continuing operations before provision for income taxes were as follows: September 30, 2022 September 30, 2021 Domestic $ ( 40,089,393 ) $ ( 8,229,162 ) Foreign - - Loss before income taxes $ ( 40,089,393 ) $ ( 8,229,162 ) The component of the provision for income taxes in the years ended September 30, 2022, 2021, and 2020 were as follows: September 30, 2022 September 30, 2021 Current: Federal $ - $ - State - - Deferred: Federal $ - $ - State - - Provision for income taxes $ - $ - Income tax benefit attributable to loss from continuing operations differed from the amounts computed by applying the statutory U.S federal income tax rate of 21 % to pretax loss from continuing operations as a result of the following: September 30, 2022 September 30, 2021 Tax Benefit at Federal statutory rate $ ( 8,417,258 ) $ ( 1,728,117 ) Tax Benefit at State rate ( 303,448 ) ( 62,300 ) Meals and Entertainment 30,339 114 Stock Based Compensation 2,060,702 - Non deductible Payroll expense - ( 231,134 ) ISO - Disqualifying Dispositions ( 58,493 ) Penalties - 375 True Ups 4,407,634 323,497 R&D Credits ( 200,000 ) ( 200,457 ) Discontinued Operations ( 3,750,257 ) ( 2,955,236 ) Other ( 1,569 ) ( 1,172 ) Change in Valuation Allowance 6,232,350 4,854,430 $ - $ - The significant components of the Company's deferred tax assets and liabilities as of September 30, 2022 and 2021 were as follows: September 30, 2022 September 30, 2021 Deferred Tax Assets: Right of Use - Lease Liability $ 268,771 $ - Charitable Contributions 7,034 507 Section 1231 Loss Carryforwards 1,183,440 2,995,030 Tax Credits 400,457 200,457 Stock Based Compensation 3,740,106 135,366 Interest Expense Carryforwards 193,804 - Net Operating Loss carryforwards 93,052,447 42,880,598 Gross Deferred Tax Assets $ 98,846,059 $ 46,211,958 Valuation Allowance ( 28,756,392 ) ( 22,524,043 ) Total deferred tax assets, net of valuation allowance $ 70,089,667 $ 23,687,915 Deferred Tax Liabilities Right of Use - Lease Asset $ ( 264,566 ) $ - Prepaid Expenses ( 222,566 ) ( 187,790 ) Unrealized Gain on Derivative Asset ( 85,415 ) ( 857,243 ) Unrealized Gain on Equity Security ( 62,859 ) ( 63,261 ) Gain/Loss on Sale of Assets not on TR ( 25,732 ) ( 602 ) Fixed Assets & Intangible Assets ( 69,428,529 ) ( 22,579,019 ) Net Deferred Tax Assets $ - $ - For the year ended September 30, 2022, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable as of September 30, 2022. Accordingly, the Company established a full valuation allowance against its deferred tax assets. As of September 30, 2022, the Company had $ 417.8 million of federal and $ 91.6 million of state net operating loss carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $ 358.6 million have an indefinite life. The federal net operating losses began to expire in 2007, while state net operating losses begin to expire in 2025. The Company's ability to utilize its federal and state net operating loss carryforwards and federal tax credit carryforwards to reduce future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that may have resulted in a change in ownership as defined by Internal Revenue Code ("IRC") Section 382, for which the Company is in the process of completing a study. In the event that the Company has such a change in ownership, the Company's utilization of these carryforwards could be severely restricted and could result in the expiration of a significant amount of these carryforwards prior to the Company recognizing their benefit. The Company files income tax returns in the U.S. federal and state jurisdictions. The 2018-2021 tax years generally remain subject to examination by the IRS and various state taxing authorities, although the Company is not currently under examination in any jurisdiction. The Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted March 27, 2020. Among the business provisions, the CARES Act provided for various payroll tax incentives, changes to net operating loss carryback and carryforward rules, business interest expense limitation increases, and bonus depreciation on qualified improvement property. Additionally, the Consolidated Appropriations Act of 2021 was signed on December 27, 2020 which provided additional COVID relief provisions for businesses. The Company has evaluated the impact of both the Acts and has determined that any impact is not material to its financial statements. |
15. COMMITMENTS AND CONTINGENCI
15. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Purchase of bitcoin mining equipment The Company has cancellable purchase commitments totaling approximately $ 27 million related to purchase of miners and approximately $ 1.5 million related to purchase of mining operations related equipment and construction projects as of September 30, 2022 , and the Company has paid approximately $ 3 million towards these commitments as of the end of this period. As of September 30, 2022 , the remaining commitment for future payments was approximately $ 28.5 million. 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 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 September 30, 2022, the Company did not 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 September 30, 2022: 2023 2024 2025 2026 2027 Total Recorded contractual obligations: Operating lease obligations $ 135,368 $ 139,429 $ 143,612 $ 147,920 $ 50,659 $ 616,988 Finance Lease obligations 274,651 161,766 21,607 1,853 - 459,877 Mining equipment 27,000,000 - - - - 27,000,000 Mining operations related equipment 1,504,093 - - - - 1,504,093 Total $ 28,914,112 $ 301,195 $ 165,219 $ 149,773 $ 50,659 $ 29,580,958 Contingent Consideration GridFabric, LLC 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, LLC 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, LLC resulting in a payment of 8,404 shares of common stock valued at $ 150,000 . Solar Watt Solutions, Inc. 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 filed their opposition on June 27, 2022. Defendants’ reply in further support of their Motion to Dismiss was filed on August 11, 2022. The parties are awaiting a decision or oral argument on the Motion to Dismiss. 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. SWS served discovery on Pathion in May 2022; Pathion did not serve responses. Accordingly, SWS filed a Motion for Order Establishing Admissions and for Sanctions on July 25, 2022, and was awarded $ 1,750 in sanctions. The parties are currently engaged in discovery process. Darfon America Corp., etc. vs. CleanSpark, Inc., etc., et al. On August 18, 2022, Darfon America Corp filed a breach of contract suit in connection with a purchase contract for batteries. In short, Plaintiff contends that the Company ordered batteries and did not pay for them. Plaintiff is seeking $ 5.4 million in damages and additional co sts and fees. The Company contends, among other things, that the batteries did not meet the necessary specifications. This case is in a very early stage as discovery has only just commenced. The Company is confident in its legal position and does not anticipate a loss. |
16. MAJOR CUSTOMERS AND VENDORS
16. MAJOR CUSTOMERS AND VENDORS | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Major Customers, Policy | 16. MAJOR CUSTOMERS AND VENDORS The bitcoin 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. Year Ended September 30, 2022 September 30, 2021 Mining Pool Operator A 0.02 % 55.72 % Mining Pool Operator B 99.98 % 44.28 % The Company had the following significant suppliers of mining equipment. Year Ended September 30, 2022 September 30, 2021 Vendor A 75.57 % 49.90 % Vendor B 21.05 % 2.80 % Vendor C 1.68 % 37.44 % |
17. SUBSEQUENT EVENTS
17. SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS We have evaluated events occurring between the end of the most recent fiscal year and the date the financial statements were issued through December 14, 2022. There were no material subsequent events except as disclosed below: Mawson Purchase Agreement On October 8, 2022, the Company completed the acquisition of a lease for approximately 16.35 acres of real property located in Sandersville, Washington County, Georgia (the “Property”), all personal property located on the Property and 6,349 application-specific integrated circuit miners (the “ASICs”) from subsidiaries of Mawson Infrastructure Group, Inc. a Delaware corporation (“Mawson”), who is the selling shareholder named herein (the “Mawson Transaction”), all pursuant to a Purchase and Sale Agreement dated September 8, 2022 (the “Purchase Agreement”) and an Equipment Purchase and Sale Agreement dated September8, 2022. The Company paid the following consideration to Mawson for the Property: (i) $ 13.5 million in cash; (ii) 1,590,175 shares (the “Closing Shares”) of our common stock, par value $ 0.001 per share (which had a value of approximately $ 4.8 million based upon the closing price of the common stock on October 7, 2022), and (iii) $ 6.5 million in seller financing in the form of a promissory note. We also agreed to pay up to $ 9.02 million in cash within 15 days of the closing for the ASICs. The following additional consideration may be payable to Mawson following the closing: up to 1,100,890 shares of our common stock (the “Earn-out Shares” and, together with the Closing Shares, the “Company Shares”) (which have a value of approximately $ 3.3 million based upon the closing price of our common stock on October 7, 2022), based upon the number of modular data centers on the Property occupied by Mawson being emptied and made available for our use; and up to an additional $ 2.0 million in a seller-financed earn-out payable at least 60 days post-closing if we are able to utilize at least an additional 150 MW of power on the Property by the six month anniversary of the closing. Disposal of Certain Energy Assets On November 18, 2022, the Company completed the sale of certain assets of its discontinued energy business. The transaction involved the sale of certain software rights and assets for approximately $ 2.75 million. At-the-Market Equity Issuances Subsequent to September 30, 2022, the Company issued 14,481,208 common shares in relation to equity raises through its At-the-Market offering facility, net of offering costs, for net proceeds of approximat ely $ 41,344,000 . |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Liquidity | Basis of Presentation and Liquidity The accompanying audited 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 have been filed with the SEC on December 14, 2022 (“Form 10-K”). As shown in the accompanying audited consolidated financial statements, the Company incurred a net loss from continuing operations of $ 40,089,393 and $ 8,229,162 during the years ended September 30, 2022 and September 30, 2021, respectively. While the Company has experienced negative cash flows from investing activities due to its continued investments in capital expenditures in support of its bitcoin mining operations, it has generated positive cash flows from operating and financing activities in fiscal 2022. 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 ("ATM") offering facility and debt financing through the lending arrangement the Company entered into in April 2022 (see Note 9 and Note 11). As of September 30, 2022 and September 30, 2021, the Company had working capital of $ 16,735,199 and $ 47,663,299 , respectively. |
Principles of Consolidation | Principles of Consolidation The accompanying audited 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. As of June 30, 2022, the Company deemed its energy operations to be discontinued operation due to its strategic shift to strictly focus on its bitcoin mining operations and divest of its energy assets. The disposal groups related to the energy operations are part of the following entities: CleanSpark, LLC, CleanSpark Critical Power Systems Inc., GridFabric, LLC, and Solar Watt Solutions, Inc. |
Going Concern | Going Concern The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The evaluation of going concern under the accounting guidance requires significant judgment which involves the Company to consider that it has historically incurred losses in recent years as it has prepared to grow its business through acquisition opportunities. The Company must also consider its current liquidity as well as future market and economic conditions that may be deemed outside the control of the Company as it relates to obtaining financing and generating future profits. As of September 30, 2022, the Company had $ 20,462,570 of available cash on-hand and Bitcoin with a fair market value of $ 11,147,478 . In determining whether there is substantial doubt about the Company’s ability to continue as a going concern, the Company may consider the effects of any mitigating plans for additional sources of financing. The Company identified additional financing sources it believes are currently available to fund its operations and drive future growth that include (i) the ability to access capital using the ATM equity offering program available to the Company whereby the Company may sell additional shares of its common stock (discussed in Note 11 – Stockholders’ Equity), and (ii) the ability to raise additional financing from other sources. (Refer to Note 11 for further details). |
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 bitcoin impairment, intangible assets acquired, impairments and estimations of long-lived assets, revenue recognition from bitcoin mining, valuation of derivative assets and liabilities, available-for-sale investments, allowances for uncollectible accounts, valuation of bitcoin, 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. |
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 for our bitcoin mining segment (sole reporting unit as of September 2022) by type of revenue is provided below. Revenues from bitcoin 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 bitcoin, 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 bitcoin award received is determined using the spot price of the related bitcoin on the date earned. There is currently no definitive guidance under GAAP or alternative accounting framework for the accounting for bitcoin 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. The total revenue recognized from bitcoin mining for the years ended September 30, 2022 and September 30, 2021 is $ 130,999,686 and $ 38,846,633 , respectively. 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. The total revenue recognized from data center services for the years ended September 30, 2022 and September 30, 2021 is $ 524,759 and $ 440,472 , respectively. |
Cost of Revenues | Cost of Revenues Bitcoin mining segment (sole reportable segment) The Company includes energy costs and external co-location mining hosting fees in cost of revenues. |
Cash and cash equivalents including restricted cash | 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 sheets that agrees to the total of those amounts as presented in the consolidated statements of cash flows. September 30, September 30, Cash and cash equivalents, excluding restricted cash $ 20,462,570 $ 14,571,198 Restricted cash - construction escrow account — 3,469,129 Cash and cash equivalents, including restricted cash $ 20,462,570 $ 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: September 30, September 30, Accounts Receivable, gross $ 246,839 $ 307,067 Provision for doubtful allowances ( 219,810 ) — Total Accounts Receivable, net $ 27,029 $ 307,067 |
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 September 30, 2022 and 2021 , respectively. |
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 supplies, 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. |
Investment securities | Investment securities Investment securities include debt securities and equity securities. Debt securities are classified as available for sale (“AFS”) and are reported as an asset in the Consolidated Balance Sheets at their estimated fair value. As the fair values of AFS debt securities change, the changes are reported net of income tax as an element of OCI, except for other-than-temporarily-impaired securities. When AFS debt securities are sold, the unrealized gains or losses are reclassified from OCI to non-interest income. Securities classified as AFS are securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security. For individual debt securities where the Company either intends to sell the security or more likely than not will not recover all of its amortized cost, OTTI (other than temporary impairment) is recognized in earnings equal to the entire difference between the security's cost basis and its fair value at the balance sheet date. For individual debt securities for which a credit loss has been recognized in earnings, interest accruals and amortization and accretion of premiums and discounts are suspended when the credit loss is recognized. Interest received after accruals have been suspended is recognized in income on a cash basis. The Company holds investments in both publicly held and privately held equity securities. However, as described in Note 1, the Company is primarily doing business of in the bitcoin mining sector, and not in the business of investing in securities. Privately held equity securities are recorded at cost and adjusted for observable transactions for same or similar investments of the issuer (referred to as the measurement alternative) or impairment. All gains and losses on privately held equity securities, realized or unrealized, are recorded through gains or losses on equity securities on the consolidated statement of operations and comprehensive loss. Publicly held equity securities are based on fair value accounting with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations and comprehensive loss. |
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 $ 20,212,570 and $ 17,790,327 for periods ended September 30, 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 covered by FDIC limits was $ 11,147,478 and $ 23,603,210 for the periods ended September 30, 2022 and 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. In fiscal year ended September 30, 2022 , revenue is concentrated with one mining pool operator and all bitcoin reside in one exchange. Refer to Note 16 - Major Customers and Vendors. |
Leases | Leases In accordance with ASC 842, the Company assesses whether an arrangement contains a lease at contract inception. When an arrangement contains a lease, the Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in “Fixed Assets, net.” All other leases are categorized as operating leases. The Company records right-of use ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments. Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less. Some leases include multiple year renewal options. The Company’s decision to exercise these renewal options is based on an assessment of its current business needs and market factors at the time of the renewal. Currently, the Company has no leases for which the option to renew is reasonably certain and therefore, options to renew were not factored into the calculation of its right of use asset and lease liability as of September 30, 2022. For all classes of underlying assets, the Company has elected to not separate lease from non-lease components. |
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 13 – Stock-Based Compensation. |
Earnings (loss) per share | 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 September 30, 2022 and 2021 , there were 7,069,706 and 2,173,578 , respectively, units of common stock equivalents that consist of options, warrants, and restricted stock units, as well as 5,250,000 shares issuable upon preferred stock conversions, that were excluded from the current and prior period diluted (loss) per share calculation as their effect is anti-dilutive. Provided below is the loss per share calculation for the years ended September 30, 2022 and 2021: For the Year 2022 2021 Continuing Operations Numerator Income (loss) from continuing operations $ ( 40,089,393 ) $ ( 8,229,162 ) Preferred stock dividends 335,439 177,502 Income (loss) from continuing operations attributable to common shareholders $ ( 40,424,832 ) $ ( 8,406,664 ) Denominator Weighted- average common shares outstanding, 42,614,197 29,441,364 Dilutive impact of stock options and other share-based awards — — Weighted- average common shares outstanding, 42,614,197 29,441,364 Income (loss) from continuing operations per common share attributable to common shareholders Basic $ ( 0.95 ) $ ( 0.29 ) Diluted $ ( 0.95 ) $ ( 0.29 ) Discontinued Operations Numerator Loss on discontinued operations $ ( 17,236,961 ) $ ( 13,582,848 ) Denominator Weighted- average common shares outstanding, 42,614,197 29,441,364 Dilutive impact of stock options and other share-based awards — — Weighted- average common shares outstanding, 42,614,197 29,441,364 Loss on discontinued operations per common share attributable to common shareholders Basic $ ( 0.40 ) $ ( 0.46 ) Diluted $ ( 0.40 ) $ ( 0.46 ) |
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 has 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) Land Improvements 15 Building 30 Leasehold improvements Shorter of lease term or 15 years Miners 3 - 5 Mining Equipment 3 - 15 Infrastructure asset Shorter of lease term or 5 years Machinery and equipment 1 - 10 Furniture and fixtures 3 - 7 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 years ended September 30, 2022 and September 30, 2021 the Company did not record an impairment expense for assets within its continuing operations. However, in connection with property and equipment in our discontinued operations, an impairment expense in the approximate amount of $ 32,000 was recognized and included in loss from discontinued operations in the consolidated statements of operations and comprehensive loss. |
Business combinations, Intangible Assets and Goodwill | Business combinations, Intangible Assets and Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations, where the total purchase price is allocated to the identified assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The difference between the purchase price, including any contingent consideration, and the fair value of net assets acquired is recorded as goodwill. Contingent consideration transferred is initially recognized at fair value. Contingent consideration classified as a liability or an asset is remeasured to fair value each period until settlement, with changes recognized in profit or loss. Contingent consideration classified as equity is not remeasured. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. The Company reviews its indefinite lived intangibles and goodwill for impairment annually or whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed an assessment of indefinite lived intangibles and goodwill for the year end September 30, 2022. During the years ended September 30, 2022 and 2021, the Company incurred the following impairment losses: September 30, 2022 September 30, 2021 Impairment of bitcoin $ 12,210,269 $ 6,608,076 Impairment of goodwill 12,048,419 — Total impairment loss $ 24,258,688 $ 6,608,076 2022 Goodwill Impairment analysis In completing the 2022 annual goodwill impairment analysis, the Company elected to perform a quantitative assessment for our goodwill. The assessment involves comparing the carrying value of the entity, including goodwill, to its estimated fair value. In accordance with ASU 2017-04, a goodwill impairment charge is recorded for the amount by which the carrying value unit exceeds the fair value of the reporting unit. In determining the fair value for which the quantitative assessment was performed, the Company engaged a valuation specialist to perform the quantitative impairment analysis. The valuation report included a combination of the market and income approach to test for goodwill impairment. The income approach is a valuation technique under which we estimate future cash flows using the financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, revenue is projected and applied to fixed and variable cost experience rates to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate the estimated fair value. The discount rate used was the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the estimated fair value, several factors were estimated, including projected operating results, growth rates, economic conditions, anticipated future cash flows and the discount rate. The market valuation approach evaluated the company's market value as compared to the net asset balance. The assessment indicated that impairment of goodwill was necessary. Based on the assessment for impairment, the Company recognized an impairment expense of goodwill of $ 12,048,419 for the year ended September 30, 2022. In completing the 2021 annual goodwill impairment analysis, there were no impairments recognized. The following table reflects goodwill activity for the years ended September 30, 2022 and 2021, respectively: Total Goodwill- September 30, 2020 $ — New Acquisitions 12,048,419 Impairment — Goodwill- September 30, 2021 12,048,419 New Acquisitions — Impairment ( 12,048,419 ) Goodwill- September 30, 2022 $ — The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between two and twenty years as follows: Useful life (years) Websites 3 Software 4 - 7 Strategic contract 5 |
Digital Currency | Bitcoin are included in current assets in the consolidated balance sheets. Bitcoin is 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 bitcoin 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. Bitcoin earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of bitcoin are also included within operating activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in operating costs and expenses 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 bitcoin for the years ended September 30, 2022 and 2021: Amount Balance as on September 30, 2020 $ — Addition of bitcoin 38,846,633 Sale of bitcoin ( 11,443,132 ) Bitcoin issued for services ( 296,593 ) Realized gain on sale of bitcoin 3,104,378 Impairment loss ( 6,608,076 ) Balance as on September 30, 2021 $ 23,603,210 Addition of bitcoin 130,999,686 Sale of bitcoin ( 133,201,006 ) Bitcoin issued for services ( 611,244 ) Realized gain on sale of bitcoin 2,567,101 Impairment loss ( 12,210,269 ) Balance as on September 30, 2022 $ 11,147,478 |
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, accrued expenses and short-term portion of loan payable approximate their fair values because of the short-term nature of these instruments. The carrying amount of the Company's long-term portion of loan payable is also stated at fair value since the stated rate of interest approximates market rates. 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 consolidated balance sheets on a recurring basis, and their level within the fair value hierarchy as of September 30, 2022 and September 30, 2021: September 30, 2022: Amount Level 1 Level 2 Level 3 Derivative asset $ 2,955,890 $ — $ — $ 2,955,890 Investment in debt security 610,108 — — 610,108 Total $ 3,565,998 $ — $ — $ 3,565,998 September 30, 2021: Amount Level 1 Level 2 Level 3 Derivative asset $ 4,905,660 $ — $ — $ 4,905,660 Investment in equity security 10,772 10,772 — — Investment in debt security 494,608 — — 494,608 Contingent cash consideration 820,802 — — 820,802 Total $ 6,231,842 $ 10,772 $ — $ 6,221,070 There were no transfers between Level 1, 2 or 3 during the years ended September 30, 2022 and 2021. The activities of the financial instruments that are measured and recorded at fair value on the Company's balance sheets on a recurring basis during years ended September 30, 2022 and 2021 are included in Note 5 - Investments. |
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 September 30, 2022 and 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 consolidated statements of operations and comprehensive loss in the provision for income taxes. As of September 30, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions. Income tax expense/(benefit) from operations for the years ended September 30, 2022 and 2021 was $ 0 and $ 0 in each period, which resulted primarily from maintaining a full valuation allowance against the Company's deferred tax assets. |
Segment Reporting | Segment Reporting The Company determines its operating segments based on how the Chief Operating Decision Maker ("CODM") views and evaluates operations, performance and allocates resources. As of June 30, 2022, the Company only has the bitcoin mining business as its operating segment due to its determination to consider the energy business as discontinued operation based on its decision to make a strategic shift to focus on the bitcoin mining business and divest of its energy assets. |
Discontinued Operations | Discontinued Operations The Company deems it appropriate to classify a business as a discontinued operation if the related disposal group meets all the following criteria: 1) The disposal group is a component of the Company; 2) The component meets the held-for-sale criteria; and 3) The disposal of the component represents a strategic shift that has a major effect on the Company's operations and financial results. As of June 30, 2022, the Company deemed its energy operations to be discontinued operation due to its strategic shift to strictly focus on its bitcoin mining operations and divest of its energy assets |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. In June 2022, the Company made a strategic shift to focus on the bitcoin mining business and divest its energy assets. As a result, assets and liabilities related to the energy segment have been classified as held for sale for all periods presented. Additionally, amounts previously presented as part of continuing operations have been reclassified into discontinued operations for all periods presented. Additionally, the following reclassifications had no effect on the reported results of operations or net assets of the Company and are as follows: • The intangible assets, net presentation has been updated to include capitalized software, net, which was previously presented separately on the balance sheet. Additionally, infrastructure asset has been reclassified from intangible assets, net to property and equipment, net in the current year. |
Commitments and contingencies | Commitments and contingencies The Company is subject to the possibility of various loss contingencies and loss recoveries, such as legal proceedings and claims arising out of its business. The Company considers the likelihood of loss or impairment of an asset, or the incurrence of a liability, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information available with its external and internal counsel to determine whether an accrual is required, an accrual should be adjusted or a range of possible loss should be disclosed. |
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 ASU 2020-06, “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) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that agrees to the total of those amounts as presented in the consolidated statements of cash flows. September 30, September 30, Cash and cash equivalents, excluding restricted cash $ 20,462,570 $ 14,571,198 Restricted cash - construction escrow account — 3,469,129 Cash and cash equivalents, including restricted cash $ 20,462,570 $ 18,040,327 |
Schedule of Accounts receivable | Accounts receivable, net consists of the following: September 30, September 30, Accounts Receivable, gross $ 246,839 $ 307,067 Provision for doubtful allowances ( 219,810 ) — Total Accounts Receivable, net $ 27,029 $ 307,067 |
Schedule of earnings per share basic and diluted | Provided below is the loss per share calculation for the years ended September 30, 2022 and 2021: For the Year 2022 2021 Continuing Operations Numerator Income (loss) from continuing operations $ ( 40,089,393 ) $ ( 8,229,162 ) Preferred stock dividends 335,439 177,502 Income (loss) from continuing operations attributable to common shareholders $ ( 40,424,832 ) $ ( 8,406,664 ) Denominator Weighted- average common shares outstanding, 42,614,197 29,441,364 Dilutive impact of stock options and other share-based awards — — Weighted- average common shares outstanding, 42,614,197 29,441,364 Income (loss) from continuing operations per common share attributable to common shareholders Basic $ ( 0.95 ) $ ( 0.29 ) Diluted $ ( 0.95 ) $ ( 0.29 ) Discontinued Operations Numerator Loss on discontinued operations $ ( 17,236,961 ) $ ( 13,582,848 ) Denominator Weighted- average common shares outstanding, 42,614,197 29,441,364 Dilutive impact of stock options and other share-based awards — — Weighted- average common shares outstanding, 42,614,197 29,441,364 Loss on discontinued operations per common share attributable to common shareholders Basic $ ( 0.40 ) $ ( 0.46 ) Diluted $ ( 0.40 ) $ ( 0.46 ) |
Schedule of estimated useful life of asset | Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Useful life (years) Land Improvements 15 Building 30 Leasehold improvements Shorter of lease term or 15 years Miners 3 - 5 Mining Equipment 3 - 15 Infrastructure asset Shorter of lease term or 5 years Machinery and equipment 1 - 10 Furniture and fixtures 3 - 7 |
Summary of Impairment Loss | During the years ended September 30, 2022 and 2021, the Company incurred the following impairment losses: September 30, 2022 September 30, 2021 Impairment of bitcoin $ 12,210,269 $ 6,608,076 Impairment of goodwill 12,048,419 — Total impairment loss $ 24,258,688 $ 6,608,076 |
Summary of Segment Wise Goodwill Activity | The following table reflects goodwill activity for the years ended September 30, 2022 and 2021, respectively: Total Goodwill- September 30, 2020 $ — New Acquisitions 12,048,419 Impairment — Goodwill- September 30, 2021 12,048,419 New Acquisitions — Impairment ( 12,048,419 ) Goodwill- September 30, 2022 $ — |
Summary of finite lived intangible assets useful lives | The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between two and twenty years as follows: Useful life (years) Websites 3 Software 4 - 7 Strategic contract 5 |
Schedule of Activities of Digital Currencies | The following table presents the activities of the bitcoin for the years ended September 30, 2022 and 2021: Amount Balance as on September 30, 2020 $ — Addition of bitcoin 38,846,633 Sale of bitcoin ( 11,443,132 ) Bitcoin issued for services ( 296,593 ) Realized gain on sale of bitcoin 3,104,378 Impairment loss ( 6,608,076 ) Balance as on September 30, 2021 $ 23,603,210 Addition of bitcoin 130,999,686 Sale of bitcoin ( 133,201,006 ) Bitcoin issued for services ( 611,244 ) Realized gain on sale of bitcoin 2,567,101 Impairment loss ( 12,210,269 ) Balance as on September 30, 2022 $ 11,147,478 |
Schedule of financial instruments | The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, and their level within the fair value hierarchy as of September 30, 2022 and September 30, 2021: September 30, 2022: Amount Level 1 Level 2 Level 3 Derivative asset $ 2,955,890 $ — $ — $ 2,955,890 Investment in debt security 610,108 — — 610,108 Total $ 3,565,998 $ — $ — $ 3,565,998 September 30, 2021: Amount Level 1 Level 2 Level 3 Derivative asset $ 4,905,660 $ — $ — $ 4,905,660 Investment in equity security 10,772 10,772 — — Investment in debt security 494,608 — — 494,608 Contingent cash consideration 820,802 — — 820,802 Total $ 6,231,842 $ 10,772 $ — $ 6,221,070 |
3. DISCONTINUED OPERATIONS (Tab
3. DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | . Provided below are the key areas of the financials that constitute the discontinued operations: September 30, 2022 September 30, 2021 ASSETS Current assets Accounts receivable, net $ 2,813,166 $ 2,312,890 Inventory 4,399,915 2,592,933 Prepaid expense and other current assets 212,800 2,991,243 Total current assets held for sale $ 7,425,881 $ 7,897,066 Property and equipment, net 11,284 53,193 Operating lease right of use asset 665,071 824,435 Intangible assets, net 868,319 4,476,306 Goodwill — 7,000,779 Long-term assets held for sale $ 1,544,674 $ 12,354,713 Total assets held for sale $ 8,970,555 $ 20,251,779 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 918,758 $ 1,289,713 Contract liabilities 116,690 — Operating lease liability 163,248 152,064 Total current liabilities held for sale 1,198,696 1,441,777 Long-term liabilities Operating lease liability, net of current portion 511,530 674,779 Total liabilities held for sale $ 1,710,226 $ 2,116,556 For the year ended September 30, September 30, Revenues, net Energy hardware, software and services revenue $ 9,667,290 $ 10,151,010 Total revenues, net 9,667,290 10,151,010 Costs and expenses Cost of revenues (exclusive of depreciation and amortization shown below) 8,710,760 8,701,681 Professional fees 115,960 486,583 Payroll expenses 4,911,322 4,173,778 General and administrative expenses 1,640,920 823,508 Impairment expense - fixed assets 31,833 — Impairment expense - intangibles 1,402,016 1,531,711 Impairment expense - other 871,649 — Impairment expense - goodwill 7,000,779 4,746,000 Depreciation and amortization 2,215,537 3,262,245 Total costs and expenses 26,900,776 23,725,506 Loss from operations ( 17,233,486 ) ( 13,574,496 ) Other income (expense) Interest expense ( 3,475 ) ( 8,352 ) Total other income (expense) ( 3,475 ) ( 8,352 ) Loss before income tax (expense) or benefit ( 17,236,961 ) ( 13,582,848 ) Income tax (expense) or benefit — — Net loss $ ( 17,236,961 ) $ ( 13,582,848 ) |
4. ACQUISITIONS (Tables)
4. ACQUISITIONS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of WAHA and SPRE Consideration | The Company determined the fair value of the consideration given to the Sellers in connection with the transaction and the allocation of the purchase price in accordance with ASC 820 were as follows: Consideration: Fair Value Cash $ 19,771,610 Financing provided by Seller 1,961,747 Mortgage assumed 2,158,253 Total Consideration $ 23,891,610 |
Schedule of WAHA and SPRE Purchase Price Allocation | Purchase Price Allocation Preliminary Land $ 100,000 Building/Improvements 14,700,000 Miners 9,091,610 Total $ 23,891,610 |
Schedule 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 consideration 533,002 167,685 shares of common stock 4,649,905 Total Consideration $ 6,687,907 |
Schedule 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, net ( 77,235 ) ( 245,393 ) ( 322,628 ) Total $ 6,687,907 $ — $ 6,687,907 |
Schedule of ATL Consideration | The Company determined the fair value of the consideration given to the sellers of ATL in connection with the transaction in accordance with ASC 820 was as follows: Consideration Preliminary Allocation at Acquisition Date Adjustments to Fair Value Final Allocation at Acquisition Date 642,309 shares of common stock $ 8,407,826 — $ 8,407,826 975,976 shares of common stock – held in escrow 12,775,525 — 12,775,525 Total Consideration $ 21,183,351 — $ 21,183,351 |
Schedule 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, net ( 479,864 ) ( 1,077,833 ) ( 1,557,697 ) Total $ 21,183,351 $ — $ 21,183,351 |
Schedule Unaudited Pro Forma Information Assuming Acquisitions | The following is the unaudited pro forma information for continuing operations assuming the acquisition of WAHA & SPRE occurred on October 1, 2020: For the Year Ended September 30, September 30, 2021 Net sales from continuing operations $ 161,090,831 $ 55,571,697 Loss from continuing operations $ ( 34,488,387 ) $ ( 5,457,907 ) Loss from continuing operations per common share - basic $ ( 0.81 ) $ ( 0.19 ) Weighted average common shares outstanding – basic 42,614,197 29,441,364 Loss from continuing operations per common share - diluted $ ( 0.81 ) $ ( 0.19 ) Weighted average common shares outstanding – diluted 42,614,197 29,441,364 |
5. INVESTMENTS (Tables)
5. INVESTMENTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Schedule of Investments [Abstract] | |
Summary of Reconciliation of carrying value of all investments | Refer the table below for a reconciliation of carrying value of all investments for the year ended September 30, 2022 and 2021: ILAL ILAL ILAL Law Balance as of September 30, 2020 $ 500,000 $ 2,115,273 $ 210,000 $ 250,000 Shares sold during the year — — ( 373,121 ) — Realized gain on fair value recognized in other income (expense) — — 179,046 — Unrealized gain (loss) recognized in other income (expense) — 2,790,387 ( 5,153 ) — Unrealized loss on fair value recognized in Other comprehensive income ( 5,392 ) — - — Balance as of September 30, 2021 $ 494,608 $ 4,905,660 $ 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) — ( 1,949,770 ) ( 1,847 ) Impairment loss ( 250,000 ) Unrealized gain on fair value recognized in Other comprehensive income 115,500 — - — Balance as of September 30, 2022 $ 610,108 $ 2,955,890 $ — $ — |
6. INTANGIBLE ASSETS (Tables)
6. INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following as of September 30, 2022 and 2021: September 30, 2022 September 30, 2021 Intangible assets Accumulated amortization Net intangible assets Intangible assets Accumulated amortization Net intangible assets Software $ 210,000 $ — $ 210,000 $ — $ — $ — Websites 23,115 ( 11,448 ) 11,667 8,115 ( 8,115 ) — Strategic Contract 9,799,970 ( 3,536,586 ) 6,263,384 9,799,970 ( 1,577,098 ) 8,222,872 Total $ 10,033,085 ( 3,548,034 ) $ 6,485,051 $ 9,808,085 $ ( 1,585,213 ) $ 8,222,872 |
Schedule of amortization expense of intangible assets | The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows: Year September 30, 2022 2023 $ 2,017,494 2024 2,017,494 2025 2,014,160 2026 435,903 2027 - Thereafter - Total $ 6,485,051 |
7. PROPERTY AND EQUIPMENT (Tabl
7. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following as of September 30, 2022 and September 30, 2021: September 30, 2022 September 30, 2021 Land $ 2,977,619 $ 2,877,619 Land improvements 1,529,937 — Building and improvements 32,332,251 8,170,680 Leasehold improvements 114,362 59,114 Miners 356,500,871 120,330,768 Mining equipment 17,586,847 2,817,074 Infrastructure 12,421,756 81,868 Machinery and equipment 1,268,932 239,283 Furniture and fixtures 331,444 107,660 Construction in progress 4,816,189 10,498,311 Total 429,880,208 145,182,377 Less: accumulated depreciation ( 53,098,828 ) ( 7,560,831 ) Property and equipment, net $ 376,781,380 $ 137,621,546 |
8. LEASES (Tables)
8. LEASES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease costs | The Company's lease costs recognized in the Consolidated Statements of Operations and Comprehensive Loss consist of the following: For the year ended September 30, September 30, Operating lease cost (1) $ 112,869 $ 10,674 Finance lease cost: Depreciation expense financed assets $ 379,260 $ 302,359 Interest on lease obligations $ 37,886 $ 44,726 (1) Included in general and administrative expenses |
Other Lease Information | Other lease information is as follows: For the year ended September 30, September 30, Cash paid for amounts included in Operating cash outflows from operating leases $ 131,425 $ 12,687 Operating cash outflows from finance leases $ 38,125 $ 42,992 Financing cash outflows from finance leases $ 519,273 $ 181,475 |
Weighted-average Remaining Lease Terms | September 30, September 30, Weighted-average remaining lease term - 1.5 years 2.5 years Weighted-average remaining lease term - 1.53 years 3.2 years Weighted-average discount rate - operating 4.50 % 4.50 % Weighted-average discount rate - finance 5.50 % 5.50 % |
Contractual Maturity of Lease Liability | The following is a schedule of the Company's lease liabilities by contractual maturity as of September 30, 2022: Fiscal Year Operating Finance 2023 $ 135,368 $ 274,651 2024 139,429 161,766 2025 143,612 21,607 2026 147,920 1,853 2027 50,660 — Thereafter - — Gross lease liabilities 616,989 459,877 Less: imputed interest ( 56,443 ) ( 19,493 ) Present value of lease liabilities $ 560,546 $ 440,384 Less: Current portion of lease liabilities ( 112,955 ) ( 260,387 ) Total lease liabilities, net of current portion $ 447,591 $ 179,997 |
9. LOANS (Tables)
9. LOANS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of loans outstanding | The following table reflects our outstanding loans as of September 30, 2022: Maturity Date Rate Debt Balance, Net Master Equipment Financing Arrangement Apr-25 13.80 % $ 17,073,111 SPRE Commercial Group, Inc. Aug-23 12.00 % 1,806,558 Marquee Funding Partners Jul-26 - Feb-27 13.00 % 2,127,027 Auto Loans Oct-28 9.00 - 9.20 % 212,421 Total Loans Outstanding $ 21,219,117 Less: current portion of long-term loans ( 7,786,049 ) Long-term loans, excluding current portion $ 13,433,068 |
Schedule of principal amount of loan maturities due over the years | The following table reflects the principal amount of loan maturities due over the next five years and beyond as of September 30, 2022: 5-Year Loan Maturities Outstanding Loan FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Thereafter Total Master Equipment Financing Arrangment $ 5,677,314 $ 6,508,398 $ 5,221,133 $ - $ - $ - $ 17,406,845 SPRE Commercial Group, Inc. 1,806,558 - - - - - 1,806,558 Marquee Funding Partners 402,179 457,693 520,869 592,766 153,520 - 2,127,027 Auto Loans 24,662 30,464 33,341 36,489 39,935 47,530 212,421 Total principal amount of loan payments by fiscal year $ 7,910,713 $ 6,996,555 $ 5,775,343 $ 629,255 $ 193,455 $ 47,530 $ 21,552,851 Unamortized deferred financing costs and discounts on Master Equipment Financing Arrangement ( 333,734 ) Total loan book value as of September 30, 2022 $ 21,219,117 |
12. STOCK WARRANTS (Tables)
12. STOCK WARRANTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Stock Warrants | |
Summary of stock warrant activity | The following is a summary of stock warrant activity during the years ended September 30, 2022 and September 30, 2021. Number of Weighted Balance, September 30, 2020 1,299,065 $ 21.78 Warrants granted — — Warrants expired ( 432,721 ) 15.00 Warrants canceled — — Warrants exercised ( 250,790 ) 11.77 Balance, September 30, 2021 615,554 $ 30.72 Warrants granted — — Warrants expired ( 413,334 ) 39.38 Warrants canceled — — Warrants exercised — — Balance, September 30, 2022 202,220 $ 13.03 |
13. STOCK-BASED COMPENSATION (T
13. STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Share-Based Payment Arrangement, Option, Activity | The following is a summary of stock option activity during the year ended September 30, 2022 and 2021: Number of Weighted Average Balance, September 30, 2020 277,948 6.34 Options granted 1,469,250 19.32 Options expired ( 12,975 ) 10.53 Options canceled/forfeited ( 45,876 ) 16.31 Options exercised ( 141,318 ) 6.14 Balance, September 30, 2021 1,547,029 18.35 Options granted 215,750 14.47 Options canceled/forfeited ( 238,418 ) 15.40 Options exercised ( 105,423 ) 7.43 Balance, September 30, 2022 1,418,938 19.11 |
Schedule of Share-Based Payment Arrangement, Restricted Stock Unit, Activity | 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, 2020 — $ - $ - Granted 579,302 10.53 Vested ( 558,475 ) 10.03 Forfeited ( 9,832 ) 17.98 Outstanding at September 30, 2021 10,995 $ 27.73 $ - Granted 7,306,250 7.18 Vested ( 1,757,938 ) 13.37 Forfeited ( 110,759 ) 15.27 Outstanding at September 30, 2022 5,448,548 $ 4.93 $ 17,326,383 |
Schedule of Fair Value Assumption Restricted Stock Unit | The Black-Scholes model utilized the following inputs to value the options granted during year ended September 30, 2022: Fair value assumptions Options: September 30, 2022 Risk free interest rate 1.04 % - 3.65 % Expected term (years) 4.99 - 7.35 Expected volatility 187.18 % - 533.00 % Expected dividends 0 % The Black-Scholes model utilized the following inputs to value the options granted during year ended September 30, 2021: Fair value assumptions Options: September 30, 2021 Risk free interest rate 0.10 % - 0.41 % Expected term (years) 1.50 - 5.25 Expected volatility 140 % - 239 % Expected dividends 0 % The inputs of these market based RSUs are as follows: Fair value assumptions RSUs: September 30, 2022 Risk free interest rate 0.14 % - 1.26 % Expected term (years) 1.00 - 5.00 Expected volatility 111.37 % - 172.18 % Cost of equity 20.00 % - 21.00 % On September 12, 2022, the Compensation Committee approved to immediately vest the 810,000 market based RSUs that were subject to the 1 -year stated service period. Accordingly, the Company recorded an incremental stock-based compensation expense of $ 3.96 million in the fiscal year September 30, 2022. Additionally, on September 12, 2022, the Compensation Committee approved the following modifications and grants, each of which are pending ratification by shareholders: (1) to grant 2,565,000 service condition based RSUs which will vest over a 3-year period beginning on the grant date, (2) to grant 2,565,000 performance based RSUs which are expected to vest within a 12-month period, (3) to modify the market condition based 60,000 units that were perpetual in nature, and 10,000 unvested service condition RSUs, and were replaced with; (3a) 120,000 service condition based RSUs that vest over a 3-year period, (3b) 120,000 performance based RSUs, which are expected to vest within 12 months from date of modification. (4) to grant 760,000 restricted stock units, which shall vest on the later of the grant date and the Shareholder Approval Date. |
14. INCOME TAXES (Tables)
14. INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Provision for Income Tax Expense | The component of the provision for income taxes in the years ended September 30, 2022, 2021, and 2020 were as follows: September 30, 2022 September 30, 2021 Current: Federal $ - $ - State - - Deferred: Federal $ - $ - State - - Provision for income taxes $ - $ - |
Schedule of Income (Loss) before Income Taxes | For the years ended September 30, 2022 and 2021 the Company's income (loss) from continuing operations before provision for income taxes were as follows: September 30, 2022 September 30, 2021 Domestic $ ( 40,089,393 ) $ ( 8,229,162 ) Foreign - - Loss before income taxes $ ( 40,089,393 ) $ ( 8,229,162 ) |
Statutory U.S federal income tax rate | Income tax benefit attributable to loss from continuing operations differed from the amounts computed by applying the statutory U.S federal income tax rate of 21 % to pretax loss from continuing operations as a result of the following: September 30, 2022 September 30, 2021 Tax Benefit at Federal statutory rate $ ( 8,417,258 ) $ ( 1,728,117 ) Tax Benefit at State rate ( 303,448 ) ( 62,300 ) Meals and Entertainment 30,339 114 Stock Based Compensation 2,060,702 - Non deductible Payroll expense - ( 231,134 ) ISO - Disqualifying Dispositions ( 58,493 ) Penalties - 375 True Ups 4,407,634 323,497 R&D Credits ( 200,000 ) ( 200,457 ) Discontinued Operations ( 3,750,257 ) ( 2,955,236 ) Other ( 1,569 ) ( 1,172 ) Change in Valuation Allowance 6,232,350 4,854,430 $ - $ - |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the Company's deferred tax assets and liabilities as of September 30, 2022 and 2021 were as follows: September 30, 2022 September 30, 2021 Deferred Tax Assets: Right of Use - Lease Liability $ 268,771 $ - Charitable Contributions 7,034 507 Section 1231 Loss Carryforwards 1,183,440 2,995,030 Tax Credits 400,457 200,457 Stock Based Compensation 3,740,106 135,366 Interest Expense Carryforwards 193,804 - Net Operating Loss carryforwards 93,052,447 42,880,598 Gross Deferred Tax Assets $ 98,846,059 $ 46,211,958 Valuation Allowance ( 28,756,392 ) ( 22,524,043 ) Total deferred tax assets, net of valuation allowance $ 70,089,667 $ 23,687,915 Deferred Tax Liabilities Right of Use - Lease Asset $ ( 264,566 ) $ - Prepaid Expenses ( 222,566 ) ( 187,790 ) Unrealized Gain on Derivative Asset ( 85,415 ) ( 857,243 ) Unrealized Gain on Equity Security ( 62,859 ) ( 63,261 ) Gain/Loss on Sale of Assets not on TR ( 25,732 ) ( 602 ) Fixed Assets & Intangible Assets ( 69,428,529 ) ( 22,579,019 ) Net Deferred Tax Assets $ - $ - |
15. COMMITMENTS AND CONTINGEN_2
15. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Guarantor Obligations [Table Text Block] | The following table sets forth certain information concerning our obligations to make contractual future payments towards our agreements as of September 30, 2022: 2023 2024 2025 2026 2027 Total Recorded contractual obligations: Operating lease obligations $ 135,368 $ 139,429 $ 143,612 $ 147,920 $ 50,659 $ 616,988 Finance Lease obligations 274,651 161,766 21,607 1,853 - 459,877 Mining equipment 27,000,000 - - - - 27,000,000 Mining operations related equipment 1,504,093 - - - - 1,504,093 Total $ 28,914,112 $ 301,195 $ 165,219 $ 149,773 $ 50,659 $ 29,580,958 Contingent Consideration |
16. MAJOR CUSTOMERS AND VENDO_2
16. MAJOR CUSTOMERS AND VENDORS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | For these purposes customers are defined as the Company’s mining pool operators. Year Ended September 30, 2022 September 30, 2021 Mining Pool Operator A 0.02 % 55.72 % Mining Pool Operator B 99.98 % 44.28 % |
Purchase and Supply Commitment, Excluding Long-Term Commitment [Text Block] | The Company had the following significant suppliers of mining equipment. Year Ended September 30, 2022 September 30, 2021 Vendor A 75.57 % 49.90 % Vendor B 21.05 % 2.80 % Vendor C 1.68 % 37.44 % |
1. ORGANIZATION AND LINE OF B_2
1. ORGANIZATION AND LINE OF BUSINESS (Details Narrative) | 12 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity Incorporation, Date of Incorporation | Oct. 15, 1987 |
2. SUMMARY OF SIGNIFICANT ACCO
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents, excluding restricted cash | $ 20,462,570 | $ 14,571,198 |
Restricted cash - construction escrow account | 0 | 3,469,129 |
Cash and cash equivalents, including restricted cash | $ 20,462,570 | $ 18,040,327 |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Accounts Receivable, gross | $ 246,839 | $ 307,067 |
Provision for doubtful allowances | (219,810) | 0 |
Total Accounts Receivable, net | $ 27,029 | $ 307,067 |
2. SUMMARY OF SIGNIFICANT ACC_5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Basic Earnings and Diluted Per Share (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator | ||
Income (loss) from continuing operations | $ (40,089,393) | $ (8,229,162) |
Loss on discontinued operations | (17,236,961) | (13,582,848) |
Preferred stock dividends | $ 335,439 | $ 177,502 |
Denominator | ||
Weighted average common shares outstanding- basic | 42,614,197 | 29,441,364 |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
Income (loss) from continuing operations per common share attributable to common shareholders | ||
Basic | $ (0.40) | $ (0.46) |
Diluted | $ (0.40) | $ (0.46) |
Discontinued Operations [Member] | ||
Numerator | ||
Loss on discontinued operations | $ (17,236,961) | $ (13,582,848) |
Denominator | ||
Weighted average common shares outstanding- basic | 42,614,197 | 29,441,364 |
Dilutive impact of stock options and other share-based awards | 0 | 0 |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
Income (loss) from continuing operations per common share attributable to common shareholders | ||
Basic | $ (0.40) | $ (0.46) |
Diluted | $ (0.40) | $ (0.46) |
Continuing Operations | ||
Numerator | ||
Income (loss) from continuing operations | $ (40,089,393) | $ (8,229,162) |
Preferred stock dividends | 335,439 | 177,502 |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Noncontrolling Interest | $ (40,424,832) | $ (8,406,664) |
Denominator | ||
Weighted average common shares outstanding- basic | 42,614,197 | 29,441,364 |
Dilutive impact of stock options and other share-based awards | 0 | 0 |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
Income (loss) from continuing operations per common share attributable to common shareholders | ||
Basic | $ (0.95) | $ (0.29) |
Diluted | $ (0.95) | $ (0.29) |
2. SUMMARY OF SIGNIFICANT ACC_6
2. SUMMARY OF SIGNIFICANT ACCOUNTING ACCOUNTING POLICIES - Useful Life of Property and Equipment (Details) | 12 Months Ended |
Sep. 30, 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 |
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 |
Minerals [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Minerals [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 | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
2. SUMMARY OF SIGNIFICANT ACC_7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of impairment losses (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
Impairment of bitcoin | $ 12,210,269 | $ 6,608,076 |
Impairment of goodwill | 12,048,419 | 977,388 |
Goodwill and Intangible Asset Impairment, Total | $ 24,258,688 | $ 6,608,076 |
2. SUMMARY OF SIGNIFICANT ACC_8
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Wise Goodwill Activity (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill | $ 0 | $ 12,048,419 | |
Impairment of Goodwill | 12,048,419 | 977,388 | |
Total [Member] | |||
Goodwill | 0 | 12,048,419 | $ 0 |
New Acquisitions | 0 | 12,048,419 | |
Impairment of Goodwill | $ (12,048,419) | $ 0 |
2. SUMMARY OF SIGNIFICANT ACC_9
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Life (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Websites [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 4 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 7 years |
Strategic Contract [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
2. SUMMARY OF SIGNIFICANT AC_10
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Activities of Digital Currencies (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
Other Assets, Fair Value Disclosure | $ 23,603,210 | $ 0 |
Addition of bitcoin | 130,999,686 | 38,846,633 |
Sale of bitcoin | (133,201,006) | (11,443,132) |
Bitcoin issued for services | (611,244) | (296,593) |
Realized gain on sale of bitcoin, including services | 2,567,101 | 3,104,378 |
Impairment loss | (12,210,269) | (6,608,076) |
Other Assets, Fair Value Disclosure | $ 11,147,478 | $ 23,603,210 |
2. SUMMARY OF SIGNIFICANT AC_11
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Net Investment Income [Line Items] | ||
Derivative Asset | $ 2,955,890 | $ 4,905,660 |
Investment in equity security | 0 | 260,772 |
Amount [Member] | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 2,955,890 | 4,905,660 |
Investment in equity security | 10,772 | |
Investment in debt security | 610,108 | 494,608 |
Contingent cash consideration | 820,802 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | 3,565,998 | 6,231,842 |
Level 1 | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 0 | 0 |
Investment in equity security | 10,772 | |
Investment in debt security | 0 | 0 |
Contingent cash consideration | 0 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | 0 | 10,772 |
Level 2 | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 0 | 0 |
Investment in equity security | 0 | |
Investment in debt security | 0 | 0 |
Contingent cash consideration | 0 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | 0 | 0 |
Level 3 | ||
Net Investment Income [Line Items] | ||
Derivative Asset | 2,955,890 | 4,905,660 |
Investment in equity security | 0 | |
Investment in debt security | 610,108 | 494,608 |
Contingent cash consideration | 820,802 | |
Financial Instruments, Owned, Principal Investments, at Fair Value | $ 3,565,998 | $ 6,221,070 |
2. SUMMARY OF SIGNIFICANT AC_12
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Product Information [Line Items] | ||
Income (loss) from continuing operations | $ (40,089,393) | $ (8,229,162) |
Banking Regulation, Total Capital, Actual | 16,735,199 | 47,663,299 |
Cash | 20,462,570 | |
Bitcoin Value | 11,147,478 | |
Bitcoin mining revenue, net | 130,999,686 | 38,846,633 |
Revenues | 131,524,445 | 39,287,105 |
Discontinued Operation, Tax Effect of Discontinued Operation | 0 | 0 |
Impairment of property and equipment | 32,000 | |
Income tax expense | 0 | 0 |
FDIC Indemnification Asset, Period Increase (Decrease) | 20,212,570 | 17,790,327 |
Impairment of Goodwill | $ 12,048,419 | $ 977,388 |
Outstanding Options Warrants [Member] | ||
Product Information [Line Items] | ||
Common Stock, Shares Subscribed but Unissued | 7,069,706 | 2,173,578 |
Preferred Stock, Convertible, Shares Issuable | 5,250,000 | |
Bitcoin [Member] | ||
Product Information [Line Items] | ||
FDIC Indemnification Asset, Period Increase (Decrease) | $ 11,147,478 | $ 23,603,210 |
Data Service Centers [Member] | ||
Product Information [Line Items] | ||
Revenues | $ 524,759 | $ 440,472 |
3.DISCONTINUED OPERATIONS - Sum
3.DISCONTINUED OPERATIONS - Summary of balance sheet disclosure (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Current assets | ||
Accounts receivable, net | $ 2,813,166 | $ 2,312,890 |
Inventory | 4,399,915 | 2,592,933 |
Prepaid expense and other current assets | 212,800 | 2,991,243 |
Total current assets held for sale | 7,425,881 | 7,897,066 |
Property and equipment, net | 11,284 | 53,193 |
Operating lease right of use asset | 665,071 | 824,435 |
Intangible assets, net | 868,319 | 4,476,306 |
Goodwill | 0 | 7,000,779 |
Long Term Assets Held For Sale, Total | 1,544,674 | 12,354,713 |
Total assets held for sale | 8,970,555 | 20,251,779 |
Current liabilities | ||
Accounts payable and accrued liabilities | 918,758 | 1,289,713 |
Contract liabilities | 116,690 | 0 |
Operating lease liability | 163,248 | 152,064 |
Current liabilities held for sale | 1,198,696 | 1,441,777 |
Operating lease liability, net of current portion | 511,530 | 674,779 |
Total liabilities held for sale | $ 1,710,226 | $ 2,116,556 |
3.DISCONTINUED OPERATIONS - S_2
3.DISCONTINUED OPERATIONS - Summary of Income statement (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues, net | ||
Energy hardware, software and services revenue | $ 9,667,290 | $ 10,151,010 |
Total revenues, net | 9,667,290 | 10,151,010 |
Costs and expenses | ||
Cost of revenues (exclusive of depreciation and amortization shown below) | 8,710,760 | 8,701,681 |
Professional fees | 115,960 | 486,583 |
Payroll expenses | 4,911,322 | 4,173,778 |
General and administrative expenses | 1,640,920 | 823,508 |
Impairment expense - fixed assets | 31,833 | 0 |
Impairment expense - intangibles | 1,402,016 | 1,531,711 |
Impairment expense - other | 871,649 | 0 |
Impairment expense - goodwill | 7,000,779 | 4,746,000 |
Depreciation and amortization | 2,215,537 | 3,262,245 |
Total costs and expenses | 26,900,776 | 23,725,506 |
Loss from operations | (17,233,486) | (13,574,496) |
Other income (expense) | ||
Interest expense | (3,475) | (8,352) |
Total other income (expense) | (3,475) | 8,352 |
Loss before income tax (expense) or benefit | (17,236,961) | (13,582,848) |
Income tax (expense) or benefit | 0 | 0 |
Net loss | $ (17,236,961) | $ (13,582,848) |
4. ACQUISITIONS - Schedule of W
4. ACQUISITIONS - Schedule of WAHA and SPRE Consideration (Details) - USD ($) | Aug. 17, 2022 | Jan. 31, 2022 |
Business Acquisition [Line Items] | ||
Cash | $ 625,000 | |
WAHA and SPRE [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 19,771,610 | |
Financing provided by Seller | 1,961,747 | |
Mortgage assumed | 2,158,253 | |
Total Consideration | $ 23,891,610 |
4. ACQUISITIONS - Schedule of_2
4. ACQUISITIONS - Schedule of WAHA and SPRE Purchase Price Allocation (Details) - USD ($) | Sep. 30, 2022 | Aug. 17, 2022 | Sep. 30, 2021 |
Business Acquisition [Line Items] | |||
Miners | $ 356,500,871 | $ 120,330,768 | |
WAHA and SPRE [Member] | |||
Business Acquisition [Line Items] | |||
Total Consideration | $ 23,891,610 | ||
WAHA and SPRE [Member] | Preliminary Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Land | 100,000 | ||
Building/Improvements | 14,700,000 | ||
Miners | 9,091,610 | ||
Total Consideration | $ 23,891,610 |
4. ACQUISITIONS - Schedule of A
4. ACQUISITIONS - Schedule of ATL Consideration (Details) - USD ($) | 12 Months Ended | |
Dec. 09, 2020 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Shares issued for business acquisition, value | $ 15,784,372 | |
A T L Data Centers Member | ||
Business Acquisition [Line Items] | ||
Shares issued for settlement of contingent consideration related to business acquisition, Shares | 1,618,285 | |
Weighted Average Number of Shares, Contingently Issuable | 809,142 | |
A T L Data Centers Member | Preliminary Allocation [Member] | ||
Business Acquisition [Line Items] | ||
Shares issued for business acquisition, value | $ 8,407,826 | |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount | 12,775,525 | |
Total Consideration | 21,183,351 | |
A T L Data Centers Member | Adjustments To Fair Value [Member] | ||
Business Acquisition [Line Items] | ||
Shares issued for business acquisition, value | 0 | |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount | 0 | |
Total Consideration | 0 | |
A T L Data Centers Member | Final Allocation [Member] | ||
Business Acquisition [Line Items] | ||
Shares issued for business acquisition, value | 8,407,826 | |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount | 12,775,525 | |
Total Consideration | $ 21,183,351 | |
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 |
4. ACQUISITIONS - Schedule of_3
4. ACQUISITIONS - Schedule of ATL Purchase Price Allocation (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 09, 2020 |
Business Acquisition [Line Items] | |||
Strategic contract | $ 29,580,958 | $ 7,457,970 | |
Goodwill | $ 0 | $ 12,048,419 | |
A T L Data Centers Member | Preliminary Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Strategic contract | $ 7,457,970 | ||
Goodwill | 14,205,245 | ||
Other Assets and Liabilities assumed, net | (479,864) | ||
Total Consideration | 21,183,351 | ||
A T L Data Centers Member | Adjustments To Fair Value [Member] | |||
Business Acquisition [Line Items] | |||
Strategic contract | 2,342,000 | ||
Goodwill | (1,264,167) | ||
Other Assets and Liabilities assumed, net | (1,077,833) | ||
Total Consideration | 0 | ||
A T L Data Centers Member | Final Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Strategic contract | 9,799,970 | ||
Goodwill | 12,941,078 | ||
Other Assets and Liabilities assumed, net | (1,557,697) | ||
Total Consideration | $ 21,183,351 |
4. ACQUISITIONS - Schedule SWS
4. ACQUISITIONS - Schedule SWS Consideration (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Feb. 24, 2021 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | |||
Cash | $ 625,000 | ||
Shares issued for business acquisition, value | $ 15,784,372 | ||
S W S Earned On Closing [Member] | |||
Business Acquisition [Line Items] | |||
Shares issued for business acquisition, value | $ 5,490,000 | ||
Solar Watt Solutions [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 1,350,000 | ||
Shares issued for business acquisition, shares | 232,518 | ||
310,018 shares of common stock as contingent equity consideration | 533,002 | ||
Total Consideration | 6,687,907 | ||
Solar Watt Solutions [Member] | Restricted Stock Fair Value [Member] | |||
Business Acquisition [Line Items] | |||
Shares issued for business acquisition, value | $ 4,649,905 | ||
Solar Watt Solutions [Member] | Fair Value [Member] | |||
Business Acquisition [Line Items] | |||
Contingent consideration | 155,000 | ||
Solar Watt Solutions [Member] | S W S Equity [Member] | |||
Business Acquisition [Line Items] | |||
Shares issued for business acquisition, shares | 310,018 | ||
Solar Watt Solutions [Member] | S W S Earned On Closing [Member] | |||
Business Acquisition [Line Items] | |||
Shares issued for business acquisition, shares | 167,685 |
4. ACQUISITIONS - Schedule of S
4. ACQUISITIONS - Schedule of SWS Purchase Price Allocation (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Feb. 24, 2021 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 0 | $ 12,048,419 | |
Assets | 452,624,772 | 317,473,121 | |
Contingent consideration - | 0 | 820,802 | |
Total current liabilities | 34,040,775 | 10,063,022 | |
Total Liabilities | 48,612,961 | 11,756,655 | |
Additional paid-in capital | 599,898,202 | 444,074,832 | |
Total Liabilities and Stockholders' equity | 452,624,772 | 317,473,121 | |
Net loss | $ (57,326,354) | $ (21,812,010) | |
Solar Watt Solutions [Member] | |||
Business Acquisition [Line Items] | |||
Total Consideration | $ 6,687,907 | ||
Solar Watt Solutions [Member] | Preliminary Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Customer List | 5,122,733 | ||
Goodwill | 1,642,409 | ||
Other Assets and Liabilities assumed, net | (77,235) | ||
Total Consideration | 6,687,907 | ||
Solar Watt Solutions [Member] | Adjustments To Fair Value [Member] | |||
Business Acquisition [Line Items] | |||
Customer List | (4,932,733) | ||
Goodwill | 5,178,126 | ||
Other Assets and Liabilities assumed, net | (245,393) | ||
Total Consideration | 0 | ||
Solar Watt Solutions [Member] | Final Allocation [Member] | |||
Business Acquisition [Line Items] | |||
Customer List | 190,000 | ||
Goodwill | 6,820,535 | ||
Other Assets and Liabilities assumed, net | (322,628) | ||
Total Consideration | $ 6,687,907 |
4. ACQUISITIONS - Schedule of U
4. ACQUISITIONS - Schedule of Unaudited Pro Forma Information Assuming Acquisitions (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Net sales from continuing operations | $ 131,524,445 | $ 39,287,105 |
Loss from continuing operations | $ (57,661,793) | $ (21,989,512) |
Income (loss) from continuing operations per common share - basic | $ (0.95) | $ (0.29) |
Weighted average common shares outstanding- basic | 42,614,197 | 29,441,364 |
Income (loss) from continuing operations per common share - diluted | $ (0.95) | $ (0.29) |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
Pro Forma Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Net sales from continuing operations | $ 161,090,831 | $ 55,571,697 |
Loss from continuing operations | $ (34,488,387) | $ (5,457,907) |
Income (loss) from continuing operations per common share - basic | $ (0.81) | $ (0.19) |
Weighted average common shares outstanding- basic | 42,614,197 | 29,441,364 |
Income (loss) from continuing operations per common share - diluted | $ (0.81) | $ (0.19) |
Weighted average common shares outstanding - diluted | 42,614,197 | 29,441,364 |
4. ACQUISITIONS (Details Narrat
4. ACQUISITIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Aug. 17, 2022 | Feb. 24, 2021 | Dec. 09, 2020 | Aug. 17, 2022 | Jan. 31, 2022 | Feb. 24, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, value | $ 15,784,372 | |||||||
Business Combination, Contingent Consideration, Liability | $ 0 | 820,802 | ||||||
Net sales from continuing operations | 131,524,445 | 39,287,105 | ||||||
Net loss | $ (57,326,354) | (21,812,010) | ||||||
Stock Issued During Period, Value, Issued for Services | $ 5,923,931 | |||||||
Business Acquisition, Transaction Costs | $ 625,000 | |||||||
Common stock, shares issued | 55,661,337 | 37,395,945 | ||||||
Common Stock, Value, Issued | $ 55,662 | $ 37,394 | ||||||
Warrant Shares, Canceled | 0 | 0 | ||||||
Other Income | $ 308,036 | $ 544,777 | ||||||
Miners [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||||
Building And Improvements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 30 years | |||||||
S W S Earned On Closing [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, value | $ 5,490,000 | |||||||
S W S Escrow [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, shares | 310,018 | |||||||
Shares issued for business acquisition, value | $ 10,150,000 | |||||||
Solar Watt Solutions Adjusted [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
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. | |||||||
A T L Data Centers Member | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, shares | 1,618,285 | |||||||
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% | |||||||
Net sales from continuing operations | $ 30,234,683 | |||||||
Net loss | $ 14,449,160 | |||||||
Weighted Average Number of Shares, Contingently Issuable | 809,142 | |||||||
Change in fair value of contingent consideration | $ 892,659 | |||||||
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 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 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 | 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 | |||||||
Stock Issued During Period, Value, Issued for Services | $ 545,916 | |||||||
A T L Data Centers Member | Restricted Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, shares | 1,618,285 | |||||||
Solar Watt Solutions [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, shares | 232,518 | |||||||
Closed Block, Description | 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. | |||||||
Regulatory Asset, Amortization Period | 1 year 6 months | |||||||
Total Consideration | $ 6,687,907 | $ 6,687,907 | ||||||
Business Acquisition, Transaction Costs | $ 1,350,000 | $ 1,350,000 | ||||||
Rate of return on present value | 14% | |||||||
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 business acquisition, shares | 167,685 | |||||||
Solar Watt Solutions [Member] | Restricted Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued for business acquisition, shares | 477,703 | |||||||
Shares issued for business acquisition, value | $ 15,640,000 | |||||||
Shares Issued, Price Per Share | $ 32.74 | $ 32.74 | ||||||
Spre Commercial Group, Inc. & Waha Technologies, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition Of Land Purchase And Sale Agreement | Additionally, on August 17, 2022, in connection with the Land Purchase and Sale Agreement, the Company completed the purchase of a mix of S19 and S19 J Pro bitcoin miners with a total processing power equal to approximately 341,985 terahashes, pursuant to an equipment purchase and sale agreement (together with the Land Purchase and Sale Agreement, the “Acquisition”), from Waha Technologies, Inc., a Georgia corporation (“WAHA”, collectively with the Seller "WAHA & SPRE" or the "Sellers"), an affiliate of the Seller. Pursuant to the Land Purchase and Sale Agreement and the Equipment Purchase and Sale Agreement the Company acquired substantially all of WAHA & SPRE's assets. The transaction was accounted for as an acquisition of a business. | |||||||
Closing of Acquisition | Total consideration for the Property and miners consisted of (i) $1,961,747 in financing provided by the Seller to the Company at an interest rate of 12% per annum, to be repaid in 12 monthly installments of $173,651, (ii) the Company’s assumption of a mortgage with a maximum principal amount of $2,158,253 and an interest rate of 13% and (iii) $19,771,610 of cash consideration paid by the Company to the Seller. Acquisition related costs of $118,058, consisting primarily of legal and recording fees, were expensed as incurred in accordance with ASC 805 and are reflected in professional fees on the Consolidated Statements of Operations and Comprehensive Loss. |
5. INVESTMENTS - Reconciliation
5. INVESTMENTS - Reconciliation of carrying value of all investments (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Investment Holdings [Line Items] | ||
Beginning Balance | $ 494,608 | |
Impairment loss | (12,210,269) | $ (6,608,076) |
Ending Balance | 610,108 | 494,608 |
I L A L Debt Securities [Member] | ||
Investment Holdings [Line Items] | ||
Beginning Balance | 494,608 | 500,000 |
Shares sold during the year | 0 | 0 |
Realized gain on fair value recognized in other income (expense) | 0 | 0 |
Unrealized gain (loss) recognized in other income (expense) | 0 | 0 |
Unrealized loss on fair value recognized in Other comprehensive income | 115,500 | (5,392) |
Ending Balance | 610,108 | 494,608 |
I L A L Derivative Asset [Member] | ||
Investment Holdings [Line Items] | ||
Beginning Balance | 4,905,660 | 2,115,273 |
Shares sold during the year | 0 | 0 |
Realized gain on fair value recognized in other income (expense) | 0 | 0 |
Unrealized gain (loss) recognized in other income (expense) | (1,949,770) | 2,790,387 |
Unrealized loss on fair value recognized in Other comprehensive income | 0 | 0 |
Ending Balance | 2,955,890 | 4,905,660 |
I L A L Equity Securities [Member] | ||
Investment Holdings [Line Items] | ||
Beginning Balance | 10,772 | 210,000 |
Shares sold during the year | (9,590) | (373,121) |
Realized gain on fair value recognized in other income (expense) | 665 | 179,046 |
Unrealized gain (loss) recognized in other income (expense) | (1,847) | (5,153) |
Unrealized loss on fair value recognized in Other comprehensive income | 0 | 0 |
Ending Balance | 0 | 10,772 |
Law Clerk Equity Securities [Member] | ||
Investment Holdings [Line Items] | ||
Beginning Balance | 250,000 | 250,000 |
Shares sold during the year | 0 | 0 |
Realized gain on fair value recognized in other income (expense) | 0 | 0 |
Unrealized gain (loss) recognized in other income (expense) | 0 | |
Impairment loss | (250,000) | |
Unrealized loss on fair value recognized in Other comprehensive income | 0 | 0 |
Ending Balance | $ 0 | $ 250,000 |
5. INVESTMENTS (Details Narrati
5. INVESTMENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 29, 2020 | Nov. 05, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investment Holdings [Line Items] | |||||
Investments | $ 3,565,998 | $ 5,661,040 | |||
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 September 30, 2022. Any change in the fair values of AFS debt securities are reported net of income tax as an element of Other Comprehensive income. | ||||
Fair value of investment debt securities | 610,108 | 494,608 | |||
Other comprehensive income (loss) | 115,500 | (5,392) | |||
Loss on fair value of preferred stock | (110,108) | 5,392 | |||
Derivative investment asset | 2,955,890 | 4,905,660 | |||
Equity method investment, impairment | 250,000 | ||||
Gain (Loss) on Sale of Equity Investments | 665 | 179,046 | |||
Investment in equity security | 0 | 260,772 | |||
Other than Temporary Impairment Losses, Investments | $ 250,000 | 0 | |||
Commitment Shares | |||||
Investment Holdings [Line Items] | |||||
Common stock, shares sold | 15,389 | ||||
Gain (Loss) on Sale of Equity Investments | $ 665 | ||||
Interest Receivable On Investment In Debt Securities [Member] | |||||
Investment Holdings [Line Items] | |||||
Available for sale debt securities, Accrued interest | 0 | $ 399,863 | |||
International Land Alliance [Member] | |||||
Investment Holdings [Line Items] | |||||
Investment owned, Balance, Shares | 1,000 | ||||
Investment owned, Face amount | $ 500,000 | ||||
International Land Alliance [Member] | Commitment Shares | |||||
Investment Holdings [Line Items] | |||||
Common Stock, shares received | 350,000 | ||||
Common stock, shares sold | 334,611 | ||||
Common stock, fair value of remaining shares at closing stock price | 15,389 | ||||
Amount [Member] | |||||
Investment Holdings [Line Items] | |||||
Derivative investment asset | 2,955,890 | $ 4,905,660 | |||
Derivative Assets Investment Fair Value | 2,955,890 | 4,905,660 | |||
Investment in equity security | 10,772 | ||||
Law Clerk Equity Securities [Member] | |||||
Investment Holdings [Line Items] | |||||
Fair value of investment debt securities | $ 0 | $ 250,000 | $ 250,000 | ||
Series A Preferred shares, Strategic relationship investment | $ 250,000 | ||||
Series A Preferred shares, Strategic relationship investment, Shares | 200,000 |
6. INTANGIBLE ASSETS - Schedule
6. INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Websites | $ 23,115 | $ 8,115 |
Software | 210,000 | 0 |
Strategic Contract | 9,799,970 | 9,799,970 |
Intangible Assets, Gross (Excluding Goodwill), Total | 10,033,085 | 9,808,085 |
Accumulated Amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Websites | (11,448) | (8,115) |
Software | 0 | 0 |
Strategic Contract | 3,536,586 | 1,577,098 |
Intangible Assets, Gross (Excluding Goodwill), Total | 3,548,034 | 1,585,213 |
Total [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Websites | 11,667 | 0 |
Software | 210,000 | 0 |
Strategic Contract | 6,263,384 | 8,222,872 |
Intangible Assets, Gross (Excluding Goodwill), Total | $ 6,485,051 | $ 8,222,872 |
6. INTANGIBLE ASSETS - Amortiza
6. INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) | 12 Months Ended | |||||||
Sep. 30, 2028 | Sep. 30, 2027 | Sep. 30, 2026 | Sep. 30, 2025 | Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||
Amortization expense | $ 0 | $ 0 | $ 435,903 | $ 2,014,160 | $ 2,017,494 | $ 2,017,494 | $ 1,963,328 | $ 1,577,098 |
Future Amortization Of Intangible Assets | $ 6,485,051 |
6. INTANGIBLE ASSETS (Details N
6. INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |||||||
Sep. 30, 2028 | Sep. 30, 2027 | Sep. 30, 2026 | Sep. 30, 2025 | Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Accumulated amortization | $ 0 | $ 0 | $ 435,903 | $ 2,014,160 | $ 2,017,494 | $ 2,017,494 | $ 1,963,328 | $ 1,577,098 |
Impairment of software | 0 | 0 | ||||||
Contractual Obligation | 29,580,958 | 7,457,970 | ||||||
Stategic Contract Adjustment | 2,342,000 | |||||||
Intangible Assets | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Strategic Contract | $ 9,799,970 | $ 9,799,970 |
7. PROPERTY AND EQUIPMENT, NET
7. PROPERTY AND EQUIPMENT, NET - Schedule of Property Pant and Equipment (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Property, Plant and Equipment [Abstract] | ||
Mining equipment | $ 17,586,847 | $ 2,817,074 |
Miners | 356,500,871 | 120,330,768 |
Land Improvements | 1,529,937 | 0 |
Building and improvements | 32,332,251 | 8,170,680 |
Land | 2,977,619 | 2,877,619 |
Machinery and equipment | 1,268,932 | 239,283 |
Leasehold improvements | 114,362 | 59,114 |
Furniture and fixtures | 331,444 | 107,660 |
Infrastructure | 12,421,756 | 81,868 |
Construction in progress | 4,816,189 | 10,498,311 |
Property, Plant and Equipment, Gross, Total | 429,880,208 | 145,182,377 |
Less: accumulated depreciation | (53,098,828) | (7,560,831) |
Property and equipment, net | $ 376,781,380 | $ 137,621,546 |
7. PROPERTY AND EQUIPMENT (Deta
7. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 47,081,550 | $ 7,405,025 |
Property and equipment disposed value | 411,484 | 0 |
Gain on disposal of assets | (642,691) | 0 |
Loss on disposition of property and equipment | 278,170 | |
Commitment for future payments | 28,500,000 | |
Outstanding deposits | 12,497,111 | 87,959,910 |
Disposal of property and equipment | 4,390,160 | |
Miners Member | ||
Property, Plant and Equipment [Line Items] | ||
Payment to purchase commitment | 30,000,000 | |
Payment for commitments at the ending | 3,000,000 | |
Commitment for future payments | 27,000,000 | |
Outstanding deposits | 12,500,000 | $ 88,000,000 |
Placed-in Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Payments to purchase mining equipment | 265,204,734 | |
Miners and Mining Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Payments to purchase mining equipment | $ 245,706,410 |
8. LEASES - Lease costs (Detail
8. LEASES - Lease costs (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Leases [Abstract] | |||
Operating lease cost | [1] | $ 112,869 | $ 10,674 |
Finance lease cost: | |||
Amortization of right-of-use assets | 379,260 | 302,359 | |
Interest on lease obligations | $ 37,886 | $ 44,726 | |
[1] Included in general and administrative expenses |
8. LEASES - Other Lease Informa
8. LEASES - Other Lease Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 131,425 | $ 12,687 |
Operating cash flows from finance leases | 38,125 | 42,992 |
Financing cash flows from finance leases | $ 519,273 | $ 181,475 |
8. LEASES - Weighted-average Re
8. LEASES - Weighted-average Remaining Lease Terms (Details) | Sep. 30, 2022 | Sep. 30, 2021 |
Leases [Abstract] | ||
Weighted-average remaining lease term - operating leases | 1 year 6 months | 2 years 6 months |
Weighted-average remaining lease term -finance leases | 1 year 6 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% |
8. LEASES - Contractual Maturit
8. LEASES - Contractual Maturity of Lease Liability (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Less: Current portion of lease liabilities | $ (112,955) | $ (104,131) |
Less: Current portion of lease liabilities | (260,387) | $ (413,798) |
Operating Lease [Member] | ||
2023 | 135,368 | |
2024 | 139,429 | |
2025 | 143,612 | |
2026 | 147,920 | |
2027 | 50,660 | |
Thereafter | 0 | |
Gross lease liabilities | 616,989 | |
Less: imputed interest | (56,443) | |
Present value of lease liabilities | 560,546 | |
Less: Current portion of lease liabilities | (112,955) | |
Total lease liabilities, net of current portion | 447,591 | |
Finance Lease [Member] | ||
2023 | 274,651 | |
2024 | 161,766 | |
2025 | 21,607 | |
2026 | 1,853 | |
2027 | 0 | |
Thereafter | 0 | |
Gross lease liabilities | 459,877 | |
Less: imputed interest | (19,493) | |
Present value of lease liabilities | 440,384 | |
Less: Current portion of lease liabilities | (260,387) | |
Total lease liabilities, net of current portion | $ 179,997 |
9. LOANS - Schedule Of The Outs
9. LOANS - Schedule Of The Outstanding Loans (Details) | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Total Loans Outstanding | $ 21,219,117 |
Less: current portion of long-term loans | (7,786,049) |
Long-term loans, excluding current portion | $ 13,433,068 |
Master Equipment Financing Arrangment | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Apr-25 |
Debt Instrument, Interest Rate During Period | 13.80% |
Total Loans Outstanding | $ 17,073,111 |
SPRE Commercial Group | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Aug-23 |
Debt Instrument, Interest Rate During Period | 12% |
Total Loans Outstanding | $ 1,806,558 |
Marquee Funding Partners [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Jul-26 - Feb-27 |
Debt Instrument, Interest Rate During Period | 13% |
Total Loans Outstanding | $ 2,127,027 |
Auto Loans | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Oct-28 |
Total Loans Outstanding | $ 212,421 |
Auto Loans | Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate During Period | 9.20% |
Auto Loans | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate During Period | 9% |
9. LOANS - Schedule Of Principa
9. LOANS - Schedule Of Principal Amount Of Loan Maturities Due Over The Years (Details) | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | $ 21,552,851 |
Unamortized deferred financing costs and discounts on Master Equipment Financing Arrangement | (333,734) |
Total loan book value as of September 30, 2022 | 21,219,117 |
FY 2023 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 7,910,713 |
FY 2025 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 5,775,343 |
FY 2024 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 6,996,555 |
FY 2026 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 629,255 |
FY 2027 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 193,455 |
Thereafter [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 47,530 |
Master Equipment Financing Arrangment [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 17,406,845 |
Master Equipment Financing Arrangment [Member] | FY 2023 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 5,677,314 |
Master Equipment Financing Arrangment [Member] | FY 2025 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 5,221,133 |
Master Equipment Financing Arrangment [Member] | FY 2024 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 6,508,398 |
Master Equipment Financing Arrangment [Member] | FY 2026 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 0 |
Master Equipment Financing Arrangment [Member] | FY 2027 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 0 |
Master Equipment Financing Arrangment [Member] | Thereafter [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 0 |
SPRE Commercial Group, Inc. [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 1,806,558 |
SPRE Commercial Group, Inc. [Member] | FY 2023 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 1,806,558 |
Marquee Funding Partners [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 2,127,027 |
Marquee Funding Partners [Member] | FY 2023 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 402,179 |
Marquee Funding Partners [Member] | FY 2025 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 520,869 |
Marquee Funding Partners [Member] | FY 2024 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 457,693 |
Marquee Funding Partners [Member] | FY 2026 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 592,766 |
Marquee Funding Partners [Member] | FY 2027 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 153,520 |
Auto Loans [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 212,421 |
Auto Loans [Member] | FY 2023 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 24,662 |
Auto Loans [Member] | FY 2025 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 33,341 |
Auto Loans [Member] | FY 2024 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 30,464 |
Auto Loans [Member] | FY 2026 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 36,489 |
Auto Loans [Member] | FY 2027 [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | 39,935 |
Auto Loans [Member] | Thereafter [Member] | |
Short-Term Debt [Line Items] | |
Total principal amount of loan payments by fiscal year | $ 47,530 |
9. LOANS (Details Narrative)
9. LOANS (Details Narrative) - USD ($) | 12 Months Ended | |||
Apr. 22, 2022 | May 15, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Loan discount | $ 45,910 | $ 0 | ||
Amortization | 46,000 | |||
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net | $ (531,169) | |||
Trinity Capital Inc [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowings to finance | $ 35,000,000 | |||
Loan discount | $ 379,000 | |||
Effective interest rate | 13.80% | |||
Loan received | $ 20,000,000 | |||
Loan term | 36 months | |||
Remaining fundable amount | $ 15,000,000 | |||
Funding received | 20,000,000 | |||
Payments of Loan Costs | 701,624 | |||
Security deposit | $ 643,960 | |||
SPRE Commercial Group | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 12% | |||
Payments of Loan Costs | $ 173,651 | |||
Marquee Funding Partners [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage assumed | $ 2,158,253 | |||
Stated interest rate | 13% | |||
Marquee Funding Partners [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Term | 54 months | |||
Marquee Funding Partners [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Term | 47 months | |||
PPP Loan | ||||
Debt Instrument [Line Items] | ||||
Proceeds from Loans | $ 531,169 | |||
Auto Loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 212,421 | |||
Stated interest rate | 9% | |||
Debt Instrument, Term | 72 months |
10. RELATED PARTY TRANSACTIONS
10. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transaction [Line Items] | |||
Warrants issued to purchase shares of common stock, Exercise price | $ 13.03 | $ 30.72 | $ 21.78 |
Zachary Bradford Ownership | |||
Related Party Transaction [Line Items] | |||
Related party transaction, Ownership percentage by parent | 50% | ||
Blue Chip Accounting | |||
Related Party Transaction [Line Items] | |||
Payments for accounting, tax, administrative services and reimbursement for office supplies | $ 47,075 | $ 183,075 | |
Payments for Rent | $ 4,575 | $ 18,300 |
11. STOCKHOLDERS_ EQUITY (Detai
11. STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 17, 2021 | Jun. 03, 2021 | Mar. 16, 2021 | Oct. 02, 2020 | |
Class of Stock [Line Items] | |||||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | 50,000,000 | 35,000,000 | ||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | |||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||
Common stock, shares issued | 55,661,337 | 37,395,945 | |||||
Common stock, shares outstanding | 55,661,337 | 37,395,945 | |||||
Preferred stock, shares outstanding | 1,750,000 | 1,750,000 | |||||
Preferred Stock, Shares Issued | 1,750,000 | 1,750,000 | |||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||
Proceeds from issuance of private placement | $ 125,047,987 | $ 270,656,118 | |||||
Stock Issued During Period Value Stock Options Exercised | 816,602 | ||||||
Common Stock, Value, Issued | $ 55,662 | 37,394 | |||||
Shares issued for business acquisition, value | $ 15,784,372 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 105,423 | 141,318 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 5 years | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 238,418 | 45,876 | |||||
Shares returned and cancelled | 0 | 0 | |||||
Shares held in escrow as collateral, returned | 15,000 | ||||||
Shares issued for services, Value | $ 5,923,931 | ||||||
A T L Data Centers Member | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Acquisitions | 1,618,285 | ||||||
Weighted Average Number of Shares, Contingently Issuable | 809,142 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 68,194 | ||||||
Business acquisition [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Acquisitions | 8,404 | ||||||
Shares issued for business acquisition, value | $ 150,011 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 232,518 | ||||||
At-the-Market offering facility [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued | 17,740,081 | ||||||
Proceeds From Net Offering Costs | $ 125,047,987 | ||||||
Aggregate gross offering price | $ 500,000,000 | ||||||
Public Equity Offering Member | |||||||
Class of Stock [Line Items] | |||||||
Sale of Stock, Price Per Share | $ 22 | ||||||
Proceeds from issuance of private placement | $ 187,200,000 | ||||||
Stock Issued During Period, Shares, New Issues | 9,090,910 | ||||||
S W S Employee Issuance Member | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Employee Stock Ownership Plan | 15,577 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 1 year | ||||||
Restricted stock units, forfeited | 4,582 | ||||||
A T M Member | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from issuance of private placement | $ 46,400,000 | ||||||
Stock Issued During Period, Shares, New Issues | 3,443,379 | ||||||
Offering Issuance Member | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued | 4,444,445 | ||||||
Sale of Stock, Price Per Share | $ 9 | ||||||
Proceeds from issuance of private placement | $ 37,050,000 | ||||||
Employee Issuance Member | |||||||
Class of Stock [Line Items] | |||||||
Common stock shares issued, compensation | 236,000 | ||||||
Common Stock, Value, Issued | $ 1,900,000 | ||||||
Employee Issuance Two Member | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued | 327,725 | ||||||
Employee Issuance Three Member | |||||||
Class of Stock [Line Items] | |||||||
Common Stock, Value, Issued | $ 3,070,000 | ||||||
Stock Issued During Period, Shares, Issued for Services | 57,045 | ||||||
Shares issued for services, Value | $ 815,000 | ||||||
Director services [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock shares issued, compensation | 5,238 | ||||||
Common stock shares issued, compensation amount | $ 60,043 | ||||||
S W S Acquisition Member | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Acquisitions | 477,703 | ||||||
Weighted Average Number of Shares, Contingently Issuable | 310,000 | ||||||
Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 17,740,081 | 16,978,734 | |||||
Stock Issued During Period, Shares, Acquisitions | 976,828 | ||||||
Shares issued for business acquisition, value | $ 996 | ||||||
Stock Issued During Period, Shares, Issued for Services | 631,765 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 389,745 | ||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ (15) | ||||||
Stock Repurchased During Period, Shares | (76,266) | ||||||
Shares Issued During Period, Conversion of Convertible Securities | (15,000) | ||||||
Shares issued for services, Value | $ 631 | ||||||
P2 K Labs Acquisition Member | |||||||
Class of Stock [Line Items] | |||||||
Shares returned and cancelled | 8,072 | ||||||
Restricted Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 638,764 | ||||||
Series A Preferred | |||||||
Class of Stock [Line Items] | |||||||
Earnings before interest rate, dividends | 2% | ||||||
Preferred stock dividends paid | $ 335,439 | $ 177,502 | |||||
Preferred stock dividend, company paid | 314,611 | ||||||
Preferred stock dividend payable, amount | $ 20,828 | ||||||
Liquidation preference per share | $ 0.02 | ||||||
Common stock voting rights | forty-five (45) votes |
12. STOCK WARRANTS - Schedule o
12. STOCK WARRANTS - Schedule of Warrant Summary (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock Warrants | ||
Warrant Shares, Beginning Balance | 615,554 | 1,299,065 |
Warrant Shares, Granted | 0 | 0 |
Warrant Shares, Expired | (413,334) | (432,721) |
Warrant Shares, Canceled | 0 | 0 |
Warrant Shares, Exercised | 0 | (250,790) |
Warrant Shares, Ending Balance | 202,220 | 615,554 |
Weighted Average Outstanding at Beginning Balance | $ 30.72 | $ 21.78 |
Weighted Average Exercise, Granted | 0 | 0 |
Weighted Average Exercise, Expired | 39.38 | 15 |
Weighted Average Exercise, Canceled | 0 | 0 |
Weighted Average Exercise, Exercised | 0 | 11.77 |
Weighted Average Exercise Ending Balance | $ 13.03 | $ 30.72 |
12. STOCK WARRANTS (Details Nar
12. STOCK WARRANTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Weighted average outstanding warrants term | 2 years 11 months 1 day | ||
Weighted average outstanding warrants intrinsic value | $ 0 | ||
Stock Issued During Period, Value, New Issues | $ 125,047,987 | $ 270,656,118 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | 202,220 | ||
Unvested warrants outstanding | 0 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 13.03 | $ 30.72 | $ 21.78 |
Cashless Exercise [Member] | |||
Common stock issued | 74,437 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | 76,800 | ||
Cashless Exercise [Member] | Minimum [Member] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.83 | ||
Cashless Exercise [Member] | Maximum [Member] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.67 | ||
Warrant [Member] | |||
Common stock issued | 173,990 | ||
Total consideration | $ 2,883,623 | ||
Warrant [Member] | Minimum [Member] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.36 | ||
Warrant [Member] | Maximum [Member] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 20 |
13. STOCK-BASED COMPENSATION -
13. STOCK-BASED COMPENSATION - Schedule of Option Summary (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||
Number of Option Shares, Beginning Balance | 1,547,029 | 277,948 |
Weighted Average Exercise Price, Beginning Balance | $ 18.35 | $ 6.34 |
Options granted | 215,750 | 1,469,250 |
Weighted Average Exercise Price, Options granted | $ 14.47 | $ 19.32 |
Options expired | (12,975) | |
Weighted Average Exercise, Options expired | $ 10.53 | |
Options Canceled/Forfeited | (238,418) | (45,876) |
Weighted Average Exercise Price, Options canceled/forfeited | $ 15.40 | $ 16.31 |
Options exercised | (105,423) | (141,318) |
Weighted Average Exercise Price, Options exercised | $ 7.43 | $ 6.14 |
Number of Option Shares, Ending Balance | 1,418,938 | 1,547,029 |
Weighted Average Exercise Price Ending Balance | $ 19.11 | $ 18.35 |
13. STOCK-BASED COMPENSATION _2
13. STOCK-BASED COMPENSATION - Fair Value Assumptions 2021 (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Expected dividends | $ 0 | $ 0 |
Minimum [Member] | ||
Risk free interest rate | 1.04% | 0.10% |
Expected term (years) | 4 years 11 months 26 days | 1 year 6 months |
Expected volatility | 187.18% | 140% |
Minimum [Member] | Restricted Stock Units (RSUs) [Member] | ||
Risk free interest rate | 0.14% | |
Expected term (years) | 1 year | |
Expected volatility | 111.37% | |
Cost of equity | 20% | |
Maximum [Member] | ||
Risk free interest rate | 3.65% | 0.41% |
Expected term (years) | 7 years 4 months 6 days | 5 years 3 months |
Expected volatility | 533% | 239% |
Maximum [Member] | Restricted Stock Units (RSUs) [Member] | ||
Risk free interest rate | 1.26% | |
Expected term (years) | 5 years | |
Expected volatility | 172.18% | |
Cost of equity | 21% |
13.STOCK-BASED COMPENSATION - S
13.STOCK-BASED COMPENSATION - Schedule of Restricted Stock Summary (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Class of Stock [Line Items] | ||
Number of Option Shares, Beginning Balance | 1,547,029 | 277,948 |
Weighted Average Outstanding at Beginning Balance | $ 30.72 | $ 21.78 |
Weighted Average Exercise, Granted | 0 | 0 |
Weighted Average Exercise, Expired | $ 39.38 | $ 15 |
Number of Option Shares, Ending Balance | 1,418,938 | 1,547,029 |
Weighted Average Exercise Ending Balance | $ 13.03 | $ 30.72 |
Restricted [Member] | ||
Class of Stock [Line Items] | ||
Number of Option Shares, Beginning Balance | 10,995 | 0 |
Weighted Average Outstanding at Beginning Balance | $ 27.73 | $ 0 |
Aggregate Intrinsic Value Outstanding at Beginning | $ 0 | $ 0 |
Number of Shares, Granted | 7,306,250 | 579,302 |
Weighted Average Exercise, Granted | $ 7.18 | $ 10.53 |
Number of Shares, Vested | (1,757,938) | (558,475) |
Weighted Average Exercise, Vested | $ 13.37 | $ 10.03 |
Number of Shares, Forfeited | (110,759) | (9,832) |
Weighted Average Exercise, Expired | $ 15.27 | $ 17.98 |
Number of Option Shares, Ending Balance | 5,448,548 | 10,995 |
Weighted Average Exercise Ending Balance | $ 4.93 | $ 27.73 |
Aggregate Intrinsic Value Outstanding at Ending | $ 17,326,383 | $ 0 |
13. STOCK-BASED COMPENSATION (D
13. STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||
Sep. 12, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | 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 | $ 31,464,994 | $ 8,546,712 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 784,785 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Nonvested, Number of Shares | 634,153 | |||||||
Share-Based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 3 years 10 months 9 days | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 105,423 | 141,318 | ||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 816,602 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 1 year 7 months 17 days | |||||||
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-Based Compensation Cost | $ 3,740,106 | $ 135,366 | ||||||
Share-Based Payment Arrangement, Expense | $ 23,661,327 | $ 3,862,679 | $ 1,904,520 | |||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 60,000 | 120,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 5 years | |||||||
Total consideration for options exercised | $ 816,602 | |||||||
Stock-based compensation expense, incremental | $ 3,960,000 | |||||||
Minimum [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 7.55 | |||||||
Maximum [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 34.67 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 2 years | |||||||
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-Based Compensation Cost | $ 26,000,000 | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 1,176,250 | |||||||
Service period based grant, shares | 146,250 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 1 year | 1 year | ||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Shares Issued, Price Per Share | $ 11.03 | |||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Shares Issued, Price Per Share | $ 17.89 | |||||||
Option Stock Based Compensation [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-based Payment Arrangement, Noncash Expense | $ 31,464,994 | $ 8,546,712 | ||||||
Options, Granted One | Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 2,565,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||||||
Options, Granted Two | Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 12 months | |||||||
Service period based grant, shares | 2,565,000 | |||||||
Options, Granted Three | Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 60,000 | |||||||
Unvested service condition | 10,000 | |||||||
Options Granted Four | Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Service period based grant, shares | 760,000 | |||||||
Added Shares [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares | 2,000,000 | |||||||
Equity Incentive Plan 2017 [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Common Stock, Shares Subscribed but Unissued | 89,889 | |||||||
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 | ||||||
Options | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-based Payment Arrangement, Noncash Expense | $ 14,206,420 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 105,423 | 141,318 | ||||||
[custom:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionEquityInstrumentsExercised] | 141,318 | |||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 867,308 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 89,445 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 3,121,350 | |||||||
Options | 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 | ||||||
Options | 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 | $ 24.40 | ||||||
Employees | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 215,750 | 1,469,250 | ||||||
Other Comprehensive Income (Loss), Financial Liability, Fair Value Option, after Reclassification Adjustment, Tax | $ 21,582,485 | |||||||
Compensation Expense, Excluding Cost of Good and Service Sold | 953,125 | |||||||
Share-Based Payment Arrangement, Expense | $ 7,731,606 | |||||||
Employees | Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 1 year | |||||||
Restricted Stock Awards [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 810,000 | 810,000 | 910,000 | |||||
Grants | Options, Granted Three | Restricted Stock Units (RSUs) [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 12 months | |||||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 120,000 | |||||||
Service period based grant, shares | 120,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years |
14. INCOME TAXES - Schedule of
14. INCOME TAXES - Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (40,089,393) | $ (8,229,162) |
Foreign | 0 | 0 |
Loss before income taxes | $ (40,089,393) | $ (8,229,162) |
14. INCOME TAXES - Component of
14. INCOME TAXES - Component of the provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Current, Federal | $ 0 | $ 0 |
Current, State | 0 | 0 |
Deferred, Federal | 0 | 0 |
Deferred, State | 0 | 0 |
Provision for income taxes | $ 0 | $ 0 |
14. INCOME TAXES - Schedule o_2
14. INCOME TAXES - Schedule of pretax loss from continuing operations (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Tax Benefit at Federal statutory rate | $ (8,417,258) | $ (1,728,117) |
Tax Benefit at State Rate | (303,448) | (62,300) |
Meals and Entertainment | 30,339 | 114 |
Stock Based Compensation | 2,060,702 | 0 |
Non deductible Payroll expense | 0 | (231,134) |
ISO - Disqualifying Dispositions | (58,493) | |
Penalties | 0 | 375 |
True Ups | 4,407,634 | 323,497 |
R&D Credits | (200,000) | (200,457) |
Discontinued Operations | (3,750,257) | (2,955,236) |
Other | 1,569 | 1,172 |
Change in Valuation Allowance | $ 6,232,350 | $ 4,854,430 |
14. INCOME TAXES - Schedule o_3
14. INCOME TAXES - Schedule of Deferred Tax Assets (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Right of Use - Lease Liability | $ 268,771 | $ 0 |
Charitable Contributions | 7,034 | 507 |
Section 1231 Loss Carryforwards | 1,183,440 | 2,995,030 |
Tax Credits | 400,457 | 200,457 |
Stock Based Compensation | 3,740,106 | 135,366 |
Interest Expense Carryforwards | 193,804 | 0 |
Net Operating Loss carryforwards | 93,052,447 | 42,880,598 |
Gross Deferred Tax Assets | 98,846,059 | 46,211,958 |
Valuation Allowance | (28,756,392) | (22,524,043) |
Total deferred tax assets, net of valuation allowance | 70,089,667 | 23,687,915 |
Right of Use - Lease Asset | (264,566) | 0 |
Prepaid Expenses | (222,566) | (187,790) |
Unrealized Gain on Derivative Asset | (85,415) | (857,243) |
Unrealized Gain on Equity Security | (62,859) | (63,261) |
Gain/Loss on Sale of Assets not on TR | (25,732) | (602) |
Fixed Assets & Intangible Assets | (69,428,529) | (22,579,019) |
Net Deferred Tax Assets | $ 0 | $ 0 |
14. INCOME TAXES (Details Narra
14. INCOME TAXES (Details Narrative) $ in Millions | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | $ 417.8 |
Income Tax Rate | 21% |
Statutory U.S federal income tax rate | 21% |
Deferred tax assets, operating loss carryforwards, state | $ 91.6 |
Net Operating Loss carryforwards | $ 358.6 |
15. COMMITMENTS AND CONTINGEN_3
15. COMMITMENTS AND CONTINGENCIES - Schedule of Contractual Future Payments Obligations (Details) (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Product Liability Contingency [Line Items] | ||
2023 | $ 28,914,112 | |
2024 | 301,195 | |
2025 | 165,219 | |
2026 | 149,773 | |
2027 | 50,659 | |
Contractual Obligation, Total | 29,580,958 | $ 7,457,970 |
Operating Lease [Member] | ||
Product Liability Contingency [Line Items] | ||
2023 | 135,368 | |
2024 | 139,429 | |
2025 | 143,612 | |
2026 | 147,920 | |
2027 | 50,659 | |
Contractual Obligation, Total | 616,988 | |
Finance Lease [Member] | ||
Product Liability Contingency [Line Items] | ||
2023 | 274,651 | |
2024 | 161,766 | |
2025 | 21,607 | |
2026 | 1,853 | |
Contractual Obligation, Total | 459,877 | |
Mining Equipment [Member] | ||
Product Liability Contingency [Line Items] | ||
2023 | 27,000,000 | |
Contractual Obligation, Total | 27,000,000 | |
Mining Operations Equipment [Member] | ||
Product Liability Contingency [Line Items] | ||
2023 | 1,504,093 | |
Contractual Obligation, Total | $ 1,504,093 |
15. COMMITMENTS AND CONTINGEN_4
15. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Jul. 25, 2022 | Nov. 23, 2021 | Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 18, 2022 | Mar. 29, 2022 | Dec. 31, 2021 | Feb. 24, 2021 | Aug. 31, 2020 | Aug. 31, 2019 | |
Long-Term Purchase Commitment [Line Items] | |||||||||||
Payments to Acquire Assets, Investing Activities | $ 3,000,000 | ||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 28,500,000 | ||||||||||
Stock Issued During Period, Value, Other | $ 5,480,426 | ||||||||||
Damages and Additional Costs and Fees | $ 5,400,000 | ||||||||||
Solar Watt Solutions, Inc., v. Pathion, Inc [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Loss Contingency, Estimate of Possible Loss | $ 418,606 | ||||||||||
Electricity cost per month | 15,000 | ||||||||||
Amount of claim in suit | $ 500,000 | ||||||||||
Lawsuit filing date | January 6, 2022 | ||||||||||
SWS Sellers [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 625,000 | ||||||||||
Stock Issued During Period, Shares, Other | 77,500 | ||||||||||
Stock Issued During Period, Shares, New Issues | 232,518 | ||||||||||
Solar Watt Solutions [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 615,249 | ||||||||||
Pledged Assets Separately Reported Other Assets As Collateral At Fair Value | $ 155,000 | ||||||||||
Awarded Sanction | $ 1,750 | ||||||||||
Solar Watt Solutions [Member] | Cash 1 [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 2,500,000 | ||||||||||
Grid Fabric L L C [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Asset Acquisition, Contingent Consideration, Liability | $ 500,000 | $ 750,000 | |||||||||
Stock Issued During Period, Shares, Other | 8,404 | ||||||||||
Grid Fabric L L C [Member] | Contingent Consideration [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Stock Issued During Period, Value, Other | $ 150,000 | ||||||||||
Lancium [Member] | Transmission Service Agreement [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Initial term | 5 years | ||||||||||
Renewal term | 2 years | ||||||||||
Notice Period for Agreement Non-Renewal | 90 days | ||||||||||
Miners Member | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Long Term Purchase Commitment Amount | $ 27,000,000 | ||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 27,000,000 | ||||||||||
Mining Equipment [Member] | |||||||||||
Long-Term Purchase Commitment [Line Items] | |||||||||||
Long Term Purchase Commitment Amount | $ 1,500,000 |
16. MAJOR CUSTOMERS AND VENDO_3
16. MAJOR CUSTOMERS AND VENDORS (Additional Information) (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Bitcoin [Member] | |
Representation of company's revenue, percent | 10% |
16. MAJOR CUSTOMERS AND VENDO_4
16. MAJOR CUSTOMERS AND VENDORS - Digital currency mining segment major customers (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Mining Pool Operator A [Member] | ||
Concentration Risk, Percentage | 0.02% | 55.72% |
Mining Pool Operator B [Member] | ||
Concentration Risk, Percentage | 99.98% | 44.28% |
16. MAJOR CUSTOMERS AND VENDO_5
16. MAJOR CUSTOMERS AND VENDORS - Digital currency mining segment major suppliers (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member] | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Mining Vendor A | ||
Concentration Risk, Percentage | 75.57% | 49.90% |
Mining Vendor B | ||
Concentration Risk, Percentage | 21.05% | 2.80% |
Mining Vendor C | ||
Concentration Risk, Percentage | 1.68% | 37.44% |
17. SUBSEQUENT EVENTS (Details
17. SUBSEQUENT EVENTS (Details Narrative) | 12 Months Ended | ||||
Nov. 18, 2022 USD ($) | Oct. 01, 2022 USD ($) shares | Sep. 30, 2022 USD ($) Servers $ / shares shares | Sep. 30, 2021 USD ($) $ / shares | Oct. 08, 2022 a | |
Subsequent Event [Line Items] | |||||
Common stock value per share | $ / shares | $ 0.001 | $ 0.001 | |||
Stock Issued During Period, Value, Other | $ 5,480,426 | ||||
Mawson Purchase Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock value per share | $ / shares | $ 0.001 | ||||
Business Acquisition purchase common stocks shares | shares | 1,590,175 | ||||
Business acquisition purchase value | $ 4,800,000 | ||||
Promissory notes | 6,500,000 | ||||
Cash Payment | 9,020,000 | ||||
Contingent cash consideration | 13,500,000 | ||||
Earn-out payable | $ 2,000,000 | ||||
Stock Issued During Period, Shares, Other | shares | 1,100,890 | ||||
Stock Issued During Period, Value, Other | $ 3,300,000 | ||||
Mining Servers Purchased | Servers | 150 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Sale of certain software rights and assets | $ 2,750,000 | ||||
Subsequent Event [Member] | Georgia Power Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Area of Real Estate Property | a | 16.35 | ||||
Subsequent Event [Member] | At The Market Equity Issuances [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock shares issued | shares | 14,481,208 | ||||
Proceeds from Issuance of Common Stock | $ 41,344,000 |