Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2016 | Feb. 13, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Cleanspark, Inc. | |
Entity Central Index Key | 827,876 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 32,487,221 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2016 | Mar. 25, 2014 |
Current assets | ||
Accounts receivable | $ 75,107 | $ 57,095 |
Due from Shareholder | 49,000 | 53,020 |
Cash | 205,392 | 436,529 |
Prepaid expense | 38,212 | 57,722 |
Flexpower system | 19,358,056 | 19,675,986 |
Goodwill | 4,919,858 | 4,919,858 |
Total current assets | 367,711 | 604,366 |
Microgrid Assets | 4,509,705 | 4,567,838 |
Intangible assets | 2,418,485 | 2,467,930 |
Fixed Assets | 736,938 | 782,975 |
Deposits | (6,331) | (589) |
Total assets | 32,317,084 | 33,019,542 |
Current liabilities | ||
Customer deposits | 21,650 | |
Due to related parties | 91,554 | 63,973 |
Accounts payable and accrued liabilities | 266,401 | 291,187 |
Loans | 2,261 | |
Total current liabilities | 379,605 | 357,421 |
Total liabilities | 379,605 | 357,421 |
Stockholders' equity (deficit) | ||
Common stock; $0.001 par value; 100,000,000 shares authorized; 32,318,471 and 27,834,415 shares issued and outstanding as of December 31, 2016 and September 30, 2016, respectively | 32,318 | 27,834 |
Preferred stock; $0.001 par value; 10,000,000 shares authorized; 1,000,000 and 1,000,000 shares issued and outstanding as of December 31, 2016 and September 30, 2016, respectively | 1,000 | 1,000 |
Additional paid-in capital | 39,131,643 | 39,068,127 |
Accumulated earnings (deficit) | (7,227,482) | |
Total stockholders' equity (deficit) | 31,937,479 | 32,662,121 |
Total liabilities and stockholders' equity (deficit) | $ 32,317,084 | $ 33,019,542 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Mar. 25, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, par value | $ 0.001 | |
Common Stock, Shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 32,318,471 | 27,834,415 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 400,000 | 1,000,000 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 83,884 | |
Cost of revenues | 17,974 | |
Gross profit | 65,910 | |
Operating expenses | ||
Professional fees | 289,344 | 46,362 |
Research and development | 368 | 1,458 |
General and administrative expenses | 67,265 | 17,068 |
Depreciation and amortization | 488,758 | 7,128 |
Total operating expenses | 845,735 | 72,016 |
Loss from operations | (779,825) | (72,016) |
Other income (expense) | ||
Loss on disposal of assets | (12,817) | |
Total other income (expense) | 12,817 | |
Net income (loss) | $ (792,642) | $ (72,016) |
Basic income (loss) per common share | $ (0.03) | $ 0 |
Basic weighted average common shares outstanding | 29,725,302 | 20,502,002 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities | ||
Net loss | $ (792,642) | $ (72,016) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Stock based consulting | 41,518 | 13,836 |
Depreciation and amortization | 488,758 | 7,128 |
Changes in assets and liabilities | ||
(Increase) decrease in prepaid expense | (22,008) | |
(Increase) decrease in deposits | (5,742) | |
Increase in accounts receivable | (18,012) | |
Increase in shareholder receivable | 4,020 | |
Increase in customer deposits | 21,650 | |
Increase (decrease) in accounts payable | (24,786) | (15,752) |
Increase (decrease) in accounts payable related party | 27,581 | |
Net cash from operating activities | (279,663) | (66,804) |
Cash Flows from investing | ||
Purchase of intangible assets | (19,387) | (2,275) |
Purchase of fixed assets | (32,634) | (9,444) |
Investment in Flexpower system | (17,643) | |
Loss on disposal of fixed assets | (12,817) | |
Net cash used in investing activities | (17,213) | (11,719) |
Cash Flows from Financing Activities | ||
Payments on short-term loans | (2,261) | |
Proceeds from issuance of common stock | 68,000 | 130,000 |
Net cash from financing activities | 65,739 | 130,000 |
Net increase (decrease) in Cash | (231,137) | 51,477 |
Ending cash balance | 205,392 | 140,010 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | ||
Cash paid for tax | ||
Non-Cash investing and financing transactions | ||
Cashless exercise of options | $ 4,399 |
ORGANIZATION AND LINE OF BUSINE
ORGANIZATION AND LINE OF BUSINESS | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Line of Business | 1. ORGANIZATION AND LINE OF BUSINESS Organization CleanSpark, Inc. (the "Company") was incorporated in the state of Nevada on October 15, 1987 as SmartData Corporation. SmartData conducted a 504 public offering in the State of Nevada in December 1987 and began trading publicly in January 1988. Due to a series of unfortunate events, including the untimely death of the founding CEO, SmartData discontinued active business operations in 1992. On March 25, 2014, the Company entered into an Asset and Intellectual Property Purchase Agreement pursuant to which the Company acquired: (i) all Intellectual Property rights, title and interest in Patent # 8,105,401 'Parallel Path, Downdraft Gasifier Apparatus and Method' and Patent # 8,518,133 'Parallel Path, Downdraft Gasifier Apparatus and Method' and (ii) all of the Property rights, title and interest in a 32 inch Downdraft Gasifier ("Gasifier) and (iii) assumed of $156,900 in liabilities. In December 2014, the Company changed its name to Stratean Inc. through a short-form merger in order to better reflect the new business plan. On July 1, 2016, the Company entered into an Asset Purchase Agreement, as amended (the Purchase Agreement), with CleanSpark Holdings LLC, CleanSpark LLC, CleanSpark Technologies LLC and Specialized Energy Solutions, Inc. (together, the Seller). Pursuant to the Purchase Agreement, the Company acquired CleanSpark, LLC and all the assets related to Seller and its line of business and assumed $200,000 in liabilities. In October 2016, the Company changed its name to CleanSpark, Inc. through a short-form merger in order to better reflect the brand identity. Line of Business Through the acquisition of CleanSpark, LLC, the Company provides microgrid solutions to military, commercial and residential properties. The services offered consist of turn-key microgrid implementation services, microgrid design and engineering, project development consulting services and solar photovoltaic installation and consulting. The work is performed under fixed price bid contracts, and negotiated price contracts. The Company performed all of its work in California during 2016. The Company also continues to pursue the development of its gasification technologies for commercial deployment. The Company has been granted multiple patents protecting what it believe to be a breakthrough design for the next generation in waste-to-energy technology. The increased efficiency compared to existing solutions results in a significantly lower cost per watt of electricity produced. The Company has completed a commercial prototype and has completed preliminary testing and it is currently working with its manufacturing partners to improve durability and efficiency. Upon completion of product development, The Company intends to deploy its gasification solutions to the Companys pipeline of commercial microgrid customers in order maximize the conversion of its customer waste streams into electricity. |
BASIS OF PRESENTATION AND GOING
BASIS OF PRESENTATION AND GOING CONCERN | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND GOING CONCERN | 2. BASIS OF PRESENTATION AND GOING CONCERN The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. Going concern |
SUMMARY OF SIGNIFICANT POLICIES
SUMMARY OF SIGNIFICANT POLICIES | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT POLICIES | 3. SUMMARY OF SIGNIFICANT POLICIES This summary of significant accounting policies of CleanSpark Inc. is presented to assist in understanding the Companys consolidated financial statements. The consolidated financial statements and notes are representations of the Companys management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the consolidated financial statements. Principles of Consolidation The accompanying consolidated financial statements include the accounts of CleanSpark, Inc., and its wholly owned operating subsidiaries, CleanSpark, LLC, and CleanSpark, II, LLC. All material intercompany transactions have been eliminated upon consolidation of these entities. Use of estimates Revenue Recognition Revenues and related costs on construction contracts are recognized using the percentage of completion method of accounting in accordance with ASC 605-35, Accounting for Performance of Construction-Type and Certain Production Type Contracts (ASC 605-35). Under this method, contract revenues and related expenses are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Costs include direct material, direct labor, subcontract labor and any allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Asset, Costs in excess of billings, represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, Billings in excess of costs, represents billings in excess of revenues recognized on contracts in progress. At December 31, 2016 and September 30, 2016, the costs in excess of billings balance were $0 and $0, and the billings in excess of costs balance were $0 and $0, respectively. Accounts receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. Retention receivable is the amount withheld by a customer until a contract is completed. Retention receivables of $0 and $0 were included in the balance of trade accounts receivable as of December 31, 2016 and September 30, 2016, respectively. Accounts Receivable Cash and cash equivalents Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of December 31, 2016, the cash balance in excess of the FDIC limits was $0. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. Fair Value of Financial Instruments As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Warranty Liability Stock-based compensation Compensation-Stock Compensation, Non-Employee Stock Based Compensation Earnings (loss) per share Earnings Per Share, Long-lived Assets Indefinite Lived Intangibles and Goodwill Assets 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 tangible and identified intangible 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 purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and 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 a qualitative assessment of indefinite lived intangibles and goodwill at September 30, 2016, and determined there was no impairment of indefinite lived intangibles and goodwill. Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Managements estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Income taxes Income Taxes Segment Reporting Recently Issued Accounting Pronouncements |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Business Acquisition | 4. BUSINESS ACQUISITION On July 1, 2016, the Company entered into the Purchase Agreement with Seller. Pursuant to the Purchase Agreement, the Company acquired all the assets related to Seller and its line of business and assumed certain liabilities. The Assets the Company purchased from Seller include: Equipment and other tangible assets; Domain names, websites and intellectual property; All rights to causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by the Seller; Contracts to which Seller is bound; Current and future customer accounts, including accounts receivable; The holdings that CleanSpark Holdings LLC has in CleanSpark LLC, and any investments it has as well; and Any other assets of any nature whatsoever that are related to or used in connection with the business of Seller and its goodwill. On July 20, 2016, the parties to the Purchase Agreement entered into an amendment (the Amendment) that revised the assets to be acquired under the Purchase Agreement. Specifically, the parties decided on the following: Specialized Energy Solutions, Inc. would transfer and assign the ability to use its name and all of its Intellectual Property to CleanSpark II, LLC, and thereafter Specialized Energy Solutions, Inc. will not be included in the Assets acquired; and Clean Spark Technologies, LLC agrees to transfer and assign all of its Intellectual Property to CleanSpark II, LLC, and thereafter Clean Spark Technologies, LLC will not be included in the Assets acquired. The Amendment also included an option to acquire Specialized Energy Solutions, Inc. and Clean Spark Technologies, LLC, which the parties agreed upon as follows: CleanSpark II, LLC is hereby granted a 3-year exclusive option to purchase Specialized Energy Solutions, Inc. for 1,000 shares of CleanSpark Inc. Common Stock; and CleanSpark II, LLC is hereby granted a 3-year exclusive option to purchase Clean Spark Technologies, LLC for 1,000 shares of CleanSpark Inc. Common Stock. On August 19, 2016, the parties to the Purchase Agreement entered into a second amendment that revised the Closing Date of the transaction. The Assumed Liabilities, consisted of certain accounts payable amounting to approximately $262,873 arising out of the Assets. Per the agreement the liabilities were to be limited to $200,000 therefore $62,873 must be reimbursed by CleanSpark Holdings, LLC. As consideration, the Company issued to Seller six million (6,000,000) shares of common stock with a fair value of $18,420,000 and five-year warrants to purchase four million five hundred thousand (4,500,000) shares of common stock at an exercise price of $1.50 per share. The warrants were valued at $13,675,500 using the Black Scholes option pricing model based upon the following assumptions: term of 5 years, risk free interest rate of 1.0%, a dividend yield of 0% and volatility rate of 218%. The warrants were fully earned and vested on July 1, 2016. Simultaneously with the Purchase Agreement, the Company entered into certain ancillary agreements (the Ancillary Agreements) with Seller, consisting of a bill of sale, intellectual property assignment and lock-up agreement. The lock-up agreement prevents Seller from selling the Companys securities in the public market for a year. The Purchase Agreement contained customary representations, warranties and covenants. In addition, the Company and Seller agreed to appoint one (1) candidate chosen by Seller to the board of directors of the Company. As a result, Bryan Huber was appointed as a member of the board of directors. The term of the appointment of shall be in accordance with the Companys bylaws. CleanSpark provides microgrid, design, engineering, installation and consulting services to military, commercial and residential customers. The acquisition is designed to enhance the Companys services for renewable technology and provide a pipeline for deployment of its gasification technology. As a result of the Purchase Agreement, CleanSpark, LLC became a wholly-owned subsidiary of the Company. The acquisition was accounted for under ASC 805 and the transaction was valued for accounting purposes at $32,095,500, which was the fair value of the Assets acquired at time of acquisition. The assets and liabilities of the Seller were recorded at their respective fair values as of the date of acquisition. Since the Company determined there were no other separately identifiable intangible assets, any difference between the cost of the acquired entity and the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The acquisition date estimated fair value of the consideration transferred consisted of the following: Shares of Common Stock $ 18,420,000 Stock warrants 13,675,500 Total purchase price $ 32,095,500 Tangible assets acquired $ 4,911,367 Liabilities assumed (262,573) Net tangible assets 4,648,794 Intangible assets acquired 22,526,847 Goodwill 4,919,859 Total purchase price $ 32,095,500 Key factors that make up the goodwill created by the transaction include knowledge and experience of the acquired team and infrastructure. Pro forma results The following tables set forth the unaudited pro forma results of the Company as if the acquisition of Seller had taken place on the first day of the periods presented. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of the first day of the periods presented. Three Months ended, December 31, 2015 Total revenues $ 1,863,727 Net Income (loss) (957,158 ) Basic net income (loss) per common share $ (0.04 ) |
FIXED ASSETS
FIXED ASSETS | 3 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | 5. FIXED ASSETS During the quarter ending December 31, 2016, the Company disposed of fixed assets with a net book value of $19,817 in exchange for consideration of $7,000. As a result, the company reported a $12,817 loss on disposal of assets for the three months ending December 31, 2016. Fixed assets consist of the following as of December 31, 2016 and September 30, 2016: December 31, 2016 September 30, 2016 Machinery and equipment $ 747,931 $ 769,276 Furniture and fixtures 72,253 72,484 Total 820,184 841,760 Less: accumulated depreciation (83,246 ) (58,785 ) Fixed assets, net $ 736,938 $ 782,975 Depreciation expense for the three months ended December 31, 2016 and 2015 was $26,220 and $6,451, respectively. |
MICROGRID ASSETS
MICROGRID ASSETS | 3 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
MicroGrid Assets | 10. PREPAID EXPENSES Prepaid expenses consist of the following as of December 31, 2016 and September 30, 2016: December 31, 2016 September 30, 2016 Prepaid stock compensation $ 8,612 $ 50,130 Prepaid rents 3,400 850 Prepaid dues and subscriptions 10,000 Prepaid materials 15,526 Prepaid insurance 674 6,742 Total prepaid expenses $ 38,212 $ 57,722 On January 22, 2016, the Company appointed Mr. Greg Gohlinghorst as a member of the Companys board of advisors. He was issued 35,000 shares of common stock for his appointment. The shares were valued at $105,000 or $3.00 per share. The amount was capitalized as a prepaid expense and is being amortized over a twelve-month term; during the three months ended December 31, 2016, the Company recorded an expense of $26,394. On January 15, 2016, the Company entered into an Investor Relations Consulting Agreement with Hayden IR (HIR) to serve as our investor relations firm for a period of twelve months. Under the Agreement, HIRs responsibilities include: implementing and maintaining an ongoing market support system to expand awareness of the Company in the investment community; arranging conference calls and interviews; providing feedback on expectations of results and company value; assisting with the presentation of periodic results of operations; monitoring newswires and industry publications; drafting and coordinating press releases, among other services. As compensation for the services under the Agreement, the Company agreed to pay HIR a cash monthly fee of $3,500 for the first six months of the agreement. The monthly fee increased to $6,500 starting in the seventh month. The Company also agreed to issue to HIR 20,000 shares of restricted common stock within 30 days of execution. The shares were valued at $60,000 or $3.00 per share. The Stock compensation has been recorded as a prepaid expense and is being amortized evenly over the twelve-month service period. During the three months ending December 31, 2016, the Company recorded $15,124 in stock based compensation associated with this agreement. On October 1, 2016, the Company executed a six-month lease agreement for warehouse space that calls for the Company to make payments of $850 per month. The Company prepaid the entire lease term. The prepaid lease is being amortized over the six-month term; during the three months ended December 31, 2016, the Company recorded an expense of $2,550. |
FLEXPOWER SYSTEM
FLEXPOWER SYSTEM | 3 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Flexpower System | 7. FLEXPOWER SYSTEM A microgrid is comprised of any number of generation, energy storage, and smart distribution assets that serve single or multiple loads, both connected to the grid and islanded. The FlexPower system is an integrated microgrid control platform that seamlessly integrates energy generation with energy storage devices and controls facility loads to provide energy security in real time. The system is able to interoperated with the local utility grid and allows users the ability to obtain the most cost effective power for a facility. The FlexPower system is ideal for commercial, industrial, mining, defense, campus and community users ranging from 4 kw to 100 MW and beyond and can deliver power at or below the current cost of utility power. The FlexPower System proprietary software and methodology was acquired as part of the CleanSpark acquisition and the project was capitalized at $20,007,624, which was the fair value of the assets at the time of the acquisition. The FlexPower system consist of the following as of December 31, 2016 and September 30, 2016: December 31, 2016 September 30, 2016 FlexPower System $ 20,025,267 $ 20,007,624 Less: accumulated amortization (667,211 ) (331,638 ) Intangible assets, net $ 19,358,056 $ 19,675,986 Amortization expense for the three months ended December 31, 2016 and 2015 was $335,573 and $0, respectively. |
INTANGIBLE AND OTHER ASSETS
INTANGIBLE AND OTHER ASSETS | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE AND OTHER ASSETS | 8. INTANGIBLE AND OTHER ASSETS Intangible assets consist of the following as of December 31, 2016 and September 30, 2016: December 31, 2016 September 30, 2016 Patents $ 83,841 $ 82,641 Websites 10,632 9,777 Brand and Client lists 2,497,472 2,497,472 Trademarks 5,928 4,858 Software 26,990 10,728 Less: accumulated amortization (206,378 ) (137,546 ) Intangible assets, net $ 2,418,485 $ 2,467,930 Amortization expense for the three months ended December 31, 2016 and 2015 was $68,832 and $677, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS On October 1, 2014, the Company entered into a Consulting agreement with Matthew Schultz, its Chief Executive Officer for management services. In accordance with this agreement, Mr. Schultz provides services to the Company in exchange for $7,500 to $15,000 per month plus additional reimbursable expenses incurred. The term of the agreement was one month and automatically renewed each month until cancelled by either party. During the quarter ending December 31, 2016, Mr. Schultz was paid $30,076 in accordance with this agreement and is owed $29,924 in accrued compensation as of December 31, 2016. On July 1, 2016, the Company entered into a Consulting agreement with Zachary Bradford, its President and Chief Financial Officer for management services. In accordance with this agreement, Mr. Bradford provides services to the Company in exchange for $15,000 per month plus reimbursable expenses incurred. During the quarter ending December 31, 2016, Mr. Bradford was paid $25,000 under this this agreement and was owed $50,000 in accrued compensation as of December 31, 2016. On July 1, 2016, the Company entered into a Consulting agreement with Bryan Huber, its Chief Operating Officer for management services. In accordance with this agreement, Mr. Huber provided services to the Company in exchange for $2,000 per week plus reimbursable expenses incurred. During the quarter ending December 31, 2016, Mr. Huber was paid $32,000 under this this agreement and was owed $6,000 in accrued compensation as of December 31, 2016. On July 1, 2016, as part of the acquisition of the assets of CleanSpark, LLC, the Company agreed to assume certain trade payables not to exceed $200,000 associated with the ongoing business. On the date of the acquisition, the Company assumed $262,573 in liabilities and, as a result, $62,573 became reimbursable by CleanSpark Holdings, LLC who is now a shareholder. $49,000 was due from CleanSpark Holdings as of December 31, 2016. During the quarter ending December 31, 2016, the Company received net reimbursements of $4,020 related to this balance. |
PREPAID EXPENSES
PREPAID EXPENSES | 3 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | 10. PREPAID EXPENSES Prepaid expenses consist of the following as of December 31, 2016 and September 30, 2016: December 31, 2016 September 30, 2016 Prepaid stock compensation $ 8,612 $ 50,130 Prepaid rents 3,400 850 Prepaid dues and subscriptions 10,000 Prepaid materials 15,526 Prepaid insurance 674 6,742 Total prepaid expenses $ 38,212 $ 57,722 On January 22, 2016, the Company appointed Mr. Greg Gohlinghorst as a member of the Companys board of advisors. He was issued 35,000 shares of common stock for his appointment. The shares were valued at $105,000 or $3.00 per share. The amount was capitalized as a prepaid expense and is being amortized over a twelve-month term; during the three months ended December 31, 2016, the Company recorded an expense of $26,394. On January 15, 2016, the Company entered into an Investor Relations Consulting Agreement with Hayden IR (HIR) to serve as our investor relations firm for a period of twelve months. Under the Agreement, HIRs responsibilities include: implementing and maintaining an ongoing market support system to expand awareness of the Company in the investment community; arranging conference calls and interviews; providing feedback on expectations of results and company value; assisting with the presentation of periodic results of operations; monitoring newswires and industry publications; drafting and coordinating press releases, among other services. As compensation for the services under the Agreement, the Company agreed to pay HIR a cash monthly fee of $3,500 for the first six months of the agreement. The monthly fee increased to $6,500 starting in the seventh month. The Company also agreed to issue to HIR 20,000 shares of restricted common stock within 30 days of execution. The shares were valued at $60,000 or $3.00 per share. The Stock compensation has been recorded as a prepaid expense and is being amortized evenly over the twelve-month service period. During the three months ending December 31, 2016, the Company recorded $15,124 in stock based compensation associated with this agreement. On October 1, 2016, the Company executed a six-month lease agreement for warehouse space that calls for the Company to make payments of $850 per month. The Company prepaid the entire lease term. The prepaid lease is being amortized over the six-month term; during the three months ended December 31, 2016, the Company recorded an expense of $2,550. |
STOCKHOLDERS EQUITY (DEFICIT)
STOCKHOLDERS EQUITY (DEFICIT) | 3 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS EQUITY (DEFICIT) | 11. STOCKHOLDERS EQUITY (DEFICIT) Overview The Companys 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 December 31, 2016, there were 32,318,471 shares of common stock issued and outstanding and 1,000,000 shares of preferred stock issued and outstanding. Description of Common Stock The Companys common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law or provided in any resolution adopted by the Companys board of directors with respect to any series of preferred stock, the holders of common stock will possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of the Companys common stock representing fifty percent (50%) of the Companys capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders. A vote by the holders of a majority of the Companys outstanding shares is required to effectuate certain fundamental corporate changes such as a liquidation, merger or an amendment to the Companys articles of incorporation. Subject to any preferential rights of any outstanding series of preferred stock created by the Companys board of directors from time to time, the holders of shares of common stock will be entitled to such cash dividends as may be declared from time to time by the Companys board of directors from funds available therefor. Subject to any preferential rights of any outstanding series of preferred stock created from time to time by the Companys board of directors, upon liquidation, dissolution or winding up, the holders of shares of common stock will be entitled to receive pro rata all assets available for distribution to such holders. In the event of any merger or consolidation of the Company with or into another company in connection with which shares of the Companys common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of the Companys common stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash). Holders of the Companys common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Companys common stock. Description of Preferred Stock The Companys board of directors is authorized to divide the authorized shares of the Companys preferred stock into one or more series, each of which must be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. The Companys board of directors is authorized, within any limitations prescribed by law and the Companys articles of incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock, including, but not limited to, the following: the rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends accrue; whether shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption; the amount payable upon shares in the event of voluntary or involuntary liquidation; sinking fund or other provisions, if any, for the redemption or purchase of shares; the terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion; voting powers, if any, provided that if any of the preferred stock or series thereof have voting rights, such preferred stock or series shall vote only on a share for share basis with the common stock on any matter, including, but not limited to, the election of directors, for which such preferred stock or series has such rights; and, subject to the foregoing, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares or such series as the board of directors may, at the time so acting, lawfully fix and determine under the laws of the State of Nevada. On April 15, 2015, the Company filed a Certificate of Amendment to the Companys Articles of Incorporation (the Certificate of Amendment) with the Nevada Secretary of State. The Certificate of Amendment authorized ten million (10,000,000) shares of preferred stock. The Companys Board of Directors and a majority of its shareholders approved the Certificate of Amendment. On April 15, 2015, pursuant to Article IV of our Articles of Incorporation, the Companys Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up to one million (1,000,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will be entitled to quarterly dividends on 2% of our earnings before interest, taxes and amortization. The dividends are payable in cash or common stock. The holders will also have a liquidation preference on the state value of $0.02 per share plus any accumulated but unpaid dividends. The holders are further entitled to have the Company 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 the Companys common stock on all matters submitted to shareholders at a rate of forty-five (45) votes for each share held. Common Stock issuances During the period commencing October 1, 2016 through December 31, 2016, the Company received $68,000 from 4 investors pursuant to private placement agreements with the investors to purchase 85,000 shares of the Companys $0.001 par value common stock at a purchase price equal to $0.80 for each share of Common stock. In November of 2016, the Company issued 2,932,704 shares of common stock to two officers for the cashless exercise of 3,000,000 options. In December of 2016, the Company issued 1,466,352 shares of common stock to a director for the cashless exercise of 1,500,000 options. |
STOCK WARRANTS
STOCK WARRANTS | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
STOCK WARRANTS | 12. STOCK WARRANTS The following is a summary of stock warrants activity during the year ended September 30, 2016 and 2015. Number of Shares Weighted Average Exercise Price Balance, September 30, 2014 8,097,600 $ 0.10 Warrants granted and assumed 5,014,500 $ 1.38 Warrants expired Warrants canceled Warrants exercised Balance, September 30, 2015 13,112,100 $ 0.59 Warrants granted and assumed $ Warrants expired Warrants canceled Warrants exercised 4,500,000 0.083 Balance, September 30, 2016 8,612,100 $ 0.85 As of September 30, 2016, there are warrants exercisable to purchase 8,612,100 shares of common stock in the Company. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES On January 22, 2016, the Company relocated its corporate office to 70 North Main Street, Suite 105, Bountiful, Utah 84010. The Company executed a one-year lease agreement that calls for the Company to make payments of $850 per month. The Company has prepaid rent for January 2017. Future minimum lease payments under the operating leases for the facilities as of December 31, 2016, are $0. At the conclusion of the lease term the Company intends to continue occupying the leased space on a month to month basis. CleanSpark, LLC has agreed to warranty and maintain the microgrid assets located on the fractalgrid demonstration facility to Camp Pendleton Marine Corp Base. In exchange, the Company has been granted the permission to locate its system on the base and the access to conduct guided tours of the fractalgrid demonstration facility for the Companys potential customers. On December 16, 2016, the Company executed an 18-month lease agreement at 6365 Nancy Ridge Drive, 2 nd |
MAJOR CUSTOMER
MAJOR CUSTOMER | 3 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
MAJOR CUSTOMER | 14. MAJOR CUSTOMER For the three months ended December 31, 2016 and 2015, the Company had the following customers that represented more than 10% of sales. December 31, 2016 December 31, 2015 Bethel-Webcor JV-1 38.1 % Jacobs/ HDR a joint venture 46.7 % Considine Companies 4.5 % Sungevity 10.7 % For the quarters ended December 31, 2016 and 2015, the Company had no suppliers that represented more than 10% of direct material costs. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS During the period commencing January 1, 2017 through February 9, 2017, the Company received $95,000 from 4 investors pursuant to private placement agreements with the investors to purchase 118,750 shares of the Companys $0.001 par value common stock at a purchase price equal to $0.80 for each share of Common stock. On February 9, 2017, the Company entered into a Debt Settlement Agreement with Webcor Construction LP (Webcor) to settle $158,753 in debt owed to Webcor. The Company agreed to pay Webcor $58,000 on or before February 28, 2017 and to issue 50,000 shares of the Companys common stock within 4 days of execution. Upon receipt of payment, Webcor agreed to release the full amount of the debt. As of the date of this filing, the shares have been issued and the Company intends to pay the $58,000 in cash prior to February 28, 2017. The shares issued were deemed to have a fair value of $212,500 on the date of the transaction and a loss on settlement of debt of $111,747 was recorded as a result of the Debt Settlement Agreement. On February 6, 2017, the Company and CleanSpark Holdings, LLC (Holdings) entered into an Assumption of Debt Agreement to settle Debts Holdings owed the Company related to the June, 30, 2016 Purchase Agreement. Pursuant to the Purchase Agreement, the Company agreed to assume up to $200,000 in liabilities arising out of the assets. In the course of due diligence, CleanSpark discovered that they had actually assumed $275,586 in liabilities. As a result of the overage in assumed liabilities, Holdings had paid the Company $25,000 and remained indebted to CleanSpark for the overage amount of $50,586. Holdings agreed to reassume $44,919 in settlement of the full amount of the debt overage and the Company agreed to accept the assumption of $44,919 in settlement of the full amount of the Debt overage. A loss on settlement of debt of $5,667 was recorded by the Company as a result of the agreement. |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Fair Value of the consideration transferred | Shares of Common Stock $ 18,420,000 Stock warrants 13,675,500 Total purchase price $ 32,095,500 Tangible assets acquired $ 4,911,367 Liabilities assumed (262,573) Net tangible assets 4,648,794 Intangible assets acquired 22,526,847 Goodwill 4,919,859 Total purchase price $ 32,095,500 |
Pro Forma Results | Three Months ended, December 31, 2015 Total revenues $ 1,863,727 Net Income (loss) (957,158 ) Basic net income (loss) per common share $ (0.04 ) |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | December 31, 2016 September 30, 2016 Machinery and equipment $ 747,931 $ 769,276 Furniture and fixtures 72,253 72,484 Total 820,184 841,760 Less: accumulated depreciation (83,246 ) (58,785 ) Fixed assets, net $ 736,938 $ 782,975 |
MICROGRID ASSETS (Tables)
MICROGRID ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Microgrid Assets | December 31, 2016 September 30, 2016 Camp Pendleton FractalGrid $ 4,625,339 $ 4,625,339 Less: accumulated depreciation (115,634 ) (57,501 ) Fixed assets, net $ 4,509,705 $ 4,567,838 |
FlEXPOWER SYSTEM (Tables)
FlEXPOWER SYSTEM (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Flexpower System | December 31, 2016 September 30, 2016 FlexPower System $ 20,025,267 $ 20,007,624 Less: accumulated amortization (667,211 ) (331,638 ) Intangible assets, net $ 19,358,056 $ 19,675,986 |
INTANGIBLE AND OTHER ASSETS (Ta
INTANGIBLE AND OTHER ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | December 31, 2016 September 30, 2016 Patents $ 83,841 $ 82,641 Websites 10,632 9,777 Brand and Client lists 2,497,472 2,497,472 Trademarks 5,928 4,858 Software 26,990 10,728 Less: accumulated amortization (206,378 ) (137,546 ) Intangible assets, net $ 2,418,485 $ 2,467,930 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | December 31, 2016 September 30, 2016 Prepaid stock compensation $ 8,612 $ 50,130 Prepaid rents 3,400 850 Prepaid dues and subscriptions 10,000 Prepaid materials 15,526 Prepaid insurance 674 6,742 Total prepaid expenses $ 38,212 $ 57,722 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Warrant Summary | Number of Shares Weighted Average Exercise Price Balance, September 30, 2014 8,097,600 $ 0.10 Warrants granted and assumed 5,014,500 $ 1.38 Warrants expired Warrants canceled Warrants exercised Balance, September 30, 2015 13,112,100 $ 0.59 Warrants granted and assumed $ Warrants expired Warrants canceled Warrants exercised 4,500,000 0.083 Balance, September 30, 2016 8,612,100 $ 0.85 |
MAJOR CUSTOMER (Tables)
MAJOR CUSTOMER (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Major Customers | December 31, 2016 December 31, 2015 Bethel-Webcor JV-1 38.1 % Jacobs/ HDR a joint venture 46.7 % Considine Companies 4.5 % Sungevity 10.7 % |
ORGANIZATION AND LINE OF BUSI29
ORGANIZATION AND LINE OF BUSINESS (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2016 | Jul. 01, 2016 | Mar. 25, 2014 | |
Date of Incorporation | Oct. 15, 1987 | ||
Date began publically trading | Jan. 22, 2016 | ||
Common Stock, par value | $ 0.001 | ||
Liabilities Assumed | $ 200,000 | $ 156,900 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) | Dec. 31, 2016USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated earnings (deficit) | $ (7,227,482) |
SUMMARY OF SIGNIFICANT POLICI31
SUMMARY OF SIGNIFICANT POLICIES (Details) | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of CleanSpark, Inc., and its wholly owned operating subsidiaries, CleanSpark, LLC, and CleanSpark, II, LLC. All material intercompany transactions have been eliminated upon consolidation of these entities. |
Use of Estimates | Use of estimates |
Cash And Cash Equivelents | Cash and cash equivalents |
Accounts Receivable | Accounts Receivable |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Revenue recognition | Revenue Recognition Revenues and related costs on construction contracts are recognized using the percentage of completion method of accounting in accordance with ASC 605-35, Accounting for Performance of Construction-Type and Certain Production Type Contracts (ASC 605-35). Under this method, contract revenues and related expenses are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Costs include direct material, direct labor, subcontract labor and any allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Asset, Costs in excess of billings, represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, Billings in excess of costs, represents billings in excess of revenues recognized on contracts in progress. At December 31, 2016 and September 30, 2016, the costs in excess of billings balance were $0 and $0, and the billings in excess of costs balance were $0 and $0, respectively. Accounts receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. Retention receivable is the amount withheld by a customer until a contract is completed. Retention receivables of $0 and $0 were included in the balance of trade accounts receivable as of December 31, 2016 and September 30, 2016, respectively. Accounts Receivable Cash and cash equivalents Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of December 31, 2016, the cash balance in excess of the FDIC limits was $0. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. |
Long-lived Assets | Long-lived Assets |
Stock-based compensation | Stock-based compensation Compensation-Stock Compensation, |
Income taxes | Income taxes Income Taxes |
Non-Employee Stock Based Compensation | Non-Employee Stock Based Compensation |
Earnings (loss) per share | Earnings (loss) per share Earnings Per Share, |
Recent Accounting Pronouncements | The Company has evaluated all other recent accounting pronouncements through September 30, 2015, and believes that none of them will have a material effect on the Companys consolidated financial position, results of operations or cash flows. |
Warranty Liability | Warranty Liability |
Goodwill | Indefinite Lived Intangibles and Goodwill Assets 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 tangible and identified intangible 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 purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and 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 a qualitative assessment of indefinite lived intangibles and goodwill at September 30, 2016, and determined there was no impairment of indefinite lived intangibles and goodwill. |
Business Combinations | Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Managements estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Segment Reporting | Segment Reporting |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
Concentration Risk | Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of December 31, 2016, the cash balance in excess of the FDIC limits was $0. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. |
SUMMARY OF SIGNIFICANT POLICI32
SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Mar. 25, 2014 | |
Accounting Policies [Abstract] | |||
Cash | $ 205,392 | $ 436,529 | $ 436,529 |
Revenues | $ 83,884 |
BUSINESS ACQUISITION (Details)
BUSINESS ACQUISITION (Details) | 3 Months Ended |
Dec. 31, 2016USD ($)shares | |
Accounting Policies [Abstract] | |
Shares of Common Stock | shares | 18,420,000 |
Stock Warrants | shares | 13,675,500 |
Total Purchase Price | $ 32,095,500 |
Tangible Assets Acquired | 4,911,367 |
Liabilities Assumed | (262,573) |
Net Tangible Assets | 4,648,794 |
Intangible Assets Acquired | 22,526,847 |
Goodwill | 4,919,589 |
Total Purchase Price | 32,095,500 |
Total Revenues | 1,863,727 |
Net Income (Loss) | $ (957,158) |
Basic and dilutedincome (loss) per common share | (4.00%) |
BUSINESS ACQUISITION (Details n
BUSINESS ACQUISITION (Details narrative) | 3 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Accounting Policies [Abstract] | |
Date of Transaction | Aug. 19, 2016 |
Accounts Payable | $ 262,873 |
Liabilities limited to | 200,000 |
Liabilities to be Reimbursed | $ 62,873 |
Shares issued to Seller | shares | 6,000,000 |
Fair Value of Shares Issued | $ 18,420,000 |
Exercise Price Per Share | $ / shares | $ 1.5 |
Warrants to purchase shares | shares | 4,500,000 |
Value of Warrants Issued | $ 13,675,500 |
details | As consideration, the Company issued to Seller six million (6,000,000) shares of common stock with a fair value of $18,420,000 and five-year warrants to purchase four million five hundred thousand (4,500,000) shares of common stock at an exercise price of $1.50 per share. The warrants were valued at $13,675,500 using the Black Scholes option pricing model based upon the following assumptions: term of 5 years, risk free interest rate of 1.0%, a dividend yield of 0% and volatility rate of 218%. The warrants were fully earned and vested on July 1, 2016. |
Fair Value of Asset Acquired | $ 32,095,500 |
FIXED ASSETS - Schedule of Prop
FIXED ASSETS - Schedule of Property Pant and Equipment (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Mar. 25, 2014 |
Property, Plant and Equipment [Abstract] | |||
Machinery and equipment | $ 747,931 | $ 769,276 | |
Tenat improvements | 1,533 | ||
Furniture and fixtures | 72,253 | 72,484 | |
Total | 820,184 | 841,760 | |
Less: accumulated depreciation | (83,246) | (58,785) | |
Fixed assets, net of accumulated depreciation | $ 736,938 | $ 782,975 | $ 782,975 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Depreciation Expense | $ 26,220 | $ 6,451 |
MICROGRID ASSETS (Details)
MICROGRID ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Camp Pedleton FractalGrid | $ 4,625,339 | $ 4,625,339 |
Less Accumulated Depreciation | (115,634) | (57,501) |
Fixed Assets, net | $ 4,509,705 | $ 4,567,838 |
MICROGRID ASSETS (Details narra
MICROGRID ASSETS (Details narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Capitalization of Project | $ 4,625,339 | |
Depreciation Expense | $ 58,133 | $ 0 |
FLEXPOWER SYSTEM (Details)
FLEXPOWER SYSTEM (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | ||
FlexPower System | $ 20,025,267 | $ 20,007,624 |
Less: Accumulated Depreciation | (667,211) | (331,638) |
Intangible Assets Net | $ 19,358,056 | $ 19,675,986 |
FLEXPOWER SYSTEM (Details Narra
FLEXPOWER SYSTEM (Details Narrative) | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Project Capitalization | $ 20,007,624 |
Amortization Expense | $ 331,638 |
INTANGIBLE AND OTHER ASSETS - S
INTANGIBLE AND OTHER ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Mar. 25, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Patents | $ 83,841 | $ 82,641 | |
Websites | 10,632 | 9,777 | |
Brand and Client List | 2,497,472 | 2,497,472 | |
Trademarks | 5,928 | 4,858 | |
Software | 26,990 | 10,728 | |
Less: accumulated depreciation | (206,378) | (137,546) | |
Fixed assets, net of accumulated depreciation | $ 2,418,485 | $ 2,467,930 | $ 2,467,930 |
INTANGIBLE AND OTHER ASSETS (De
INTANGIBLE AND OTHER ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||
Amortization Expense | $ 68,832 | $ 677 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Mar. 25, 2014 | |
Professional fees | $ 289,344 | $ 46,362 | $ 3,377,956 | ||
Common Stock, Issued | 85,000 | ||||
Common Stock, Par Value | $ 0.001 | ||||
Common Stock, Fair Value | $ 32,318 | $ 27,834 | $ 20,378 | $ 27,834 | |
Reimbursements Received | $ 9,553 | ||||
Acquisition | |||||
Date of Agreement | Dec. 31, 2014 | ||||
Common Stock, Issued | 57,474 | ||||
Trade Payables not to exceed | $ 200,000 | ||||
Assumed Liabilities | 262,573 | ||||
Reimbursable Liabilities | $ 62,573 | ||||
Consulting Agmt 2 | |||||
Date of Agreement | Jul. 1, 2016 | ||||
Professional fees | $ 15,000 | ||||
Professional fees owed | $ 30,000 | ||||
Consulting Agmt | |||||
Date of Agreement | Oct. 1, 2014 | ||||
Monthly Fee | $ 7,500 | ||||
Term of Agreement | 1 month | ||||
Professional fees | $ 97,500 | ||||
Professional fees owed | $ 15,000 |
PREPAID EXPENSES - (Details)
PREPAID EXPENSES - (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Prepaid Expenses - Schedule Of Fixed Assets Details | ||
Prepaid Stock Compensation | $ 8,612 | $ 50,130 |
Prepaid rents | 3,400 | 850 |
Prepaid Dues and Subcription | 10,000 | |
Prepaid Materials | 1,526 | |
Prepaid Insurance | 674 | 6,742 |
Total prepaid expenses | $ 38,212 | $ 57,722 |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) | 3 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Date of Agreement | Jan. 22, 2016 |
Stock Based Compensation | $ 42,575 |
Board Member | |
Date Vested | Mar. 15, 2015 |
Options Granted, Shares | shares | 180,000 |
Strike Price | $ / shares | $ 0.083 |
Options Granted, Fair Value | $ 54,411 |
Prepaid expense | $ 24,232 |
Options Term | 5 years |
Risk Free Interest Rate | 2.11% |
Dividend Yield | 0.00% |
Volatility Rate | 11000.00% |
Consulting Agmt | |
Date of Agreement | Jan. 15, 2016 |
Options Granted, Fair Value | $ 6,720 |
Value Per Share | $ / shares | $ 0.33 |
Options Term | 1 year |
Shares Issued | shares | 20,000 |
Cash Monthly Fee First Six Months | $ 3,500 |
Cash Monthly Fee First Last Months | $ 6,500 |
Board Advisor | |
Date of Agreement | Jan. 22, 2016 |
Strike Price | $ / shares | $ 0.33 |
Options Granted, Fair Value | $ 11,666 |
Prepaid expense | $ 7,299 |
Shares Issued | shares | 35,000 |
Consulting Agmt | |
Stock Based Compensation | $ 3,075 |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2014 | Mar. 25, 2014 | |
Common Stock, Shares authorized | 100,000,000 | 100,000,000 | |
Common Stock, par value | $ 0.001 | ||
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 | |
Preferred Stock, par value | $ 0.001 | $ 0.001 | |
Common Stock, shares issued | 32,318,471 | 27,834,415 | |
Preferred Stock, Shares issued | 400,000 | 1,000,000 | |
Series A Preferred Stock, Shares | 1,000,000 | ||
Series A Preferred Stock, Par Value | $ .001 | ||
Shares issued for direct investment | 85,000 | ||
Shares issued for direct investment, value | $ 68,000 | $ 200,000 | |
Dividend Rate | 2.00% | ||
Liquidation Preference Per Share | $ .02 | ||
Date of Certificate of Amendment | Apr. 15, 2015 | ||
Voting rates for shareholders | 45 |
STOCK WARRANTS - Schedule of Wa
STOCK WARRANTS - Schedule of Warrant Summary (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Stock Warrants - Schedule Of Warrant Summary Details | ||
Beginning Balance, number of shares | 8,097,600 | 60,000 |
Beginning Balance, weighted average exercise price | $ 0.10 | $ 0.36 |
Warrants Granted and Assumed, number of shares | 514,500 | 13,112,100 |
Warrants Granted and Assumed, weighted average exercise price | $ 0.36 | $ 0.10 |
Warrants exercised, weighted average exercise price | $ .083 | |
Warrants expired, number of shares | 4,500,000 | |
Ending Balance, number of shares | 8,612,100 | 8,097,600 |
Ending Balance, weighted average exercise price | $ 0.11 | $ 0.10 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Lease Agreements | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Monthly Rent Expense | $ 850 |
Term of Agreement | 1 year |
Date of Lease Termination | Jan. 22, 2016 |
MAJOR CUSTOMER (Details)
MAJOR CUSTOMER (Details) | Dec. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
Bethel-Webcor | 3810.00% | |
Jacobs/HDR a joint venture | 4670.00% | |
Considine Companies | 450.00% | |
Sungevity | 1070.00% |
MAJOR CUSTOMER (Details Narrati
MAJOR CUSTOMER (Details Narrative) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Customer Representation Percentage | 1000.00% | 1000.00% |
Supplier Representaion Percentage | 0.00% | 0.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 3 Months Ended | |||
Dec. 31, 2016 | Dec. 29, 2016 | Feb. 09, 2017 | Feb. 06, 2017 | |
Issuance of Shares | 2,932,704 | |||
Webcor Construction Settment | $ 158,753 | |||
Agreement to pay before Feburary 8 | $ 58,000 | |||
Stock to be issued to Webcor | 50,000 | |||
Fair Value of Shares | $ 212,500 | |||
Loss on debt to Webcor | $ 111,747 | |||
Assumption of Liabilities | $ 200,000 | |||
Actual Liabilities Incurred | 275,586 | |||
Liabilities Paid back | 25,000 | |||
Indebted to Cleanspark | 50,586 | |||
Settlement | 44,919 | |||
Loss on settlement of debt | $ 5,667 | |||
Private Placement | ||||
Issuance of Shares | 95,000 | |||
Shares purchased by investors | 118,750 | |||
Par Value Per Share | $ 0.001 | |||
Purchase Price Per Share Value | 80.00% | |||
Cash Received on Investment | $ 95,000 |
Uncategorized Items - clsk-2016
Label | Element | Value |
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | $ 436,529 |
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | $ 88,533 |