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14. STOCK WARRANTS

12 Months Ended

Sep. 30, 2020

The following is a summary of stock warrant activity during the years ended September 30, 2020 and September 30, 2019.

	Number of Warrant Shares			Weighted Average Exercise Price
Balance, September 30, 2018		898,930		$	8.90
Warrants granted		641,335			32.20
Warrants expired		—			—
Warrants canceled		—			—
Warrants exercised		(226,200	)		0.80
Balance, September 30, 2019		1,314,065		$	21.70
Warrants granted		—		$	—
Warrants expired		—			—
Warrants canceled		—			—
Warrants exercised		(15,000	)		8.00
Balance, September 30, 2020		1,299,065		$	21.78

As of September 30, 2020, the outstanding warrants have a weighted average remaining term of was 1.96 years and an intrinsic value of $1,702,464.

As of September 30, 2020, there are warrants exercisable to purchase 1,276,208 shares of common stock in the Company and 22,857 unvested warrants outstanding that cannot be exercised until vesting conditions are met. 996,198 of the warrants require a cash investment to exercise as follows , 5,000 required a cash investment of $8.00 per share, 449,865 require a cash investment of $15.00 per share, 125,000 require a cash investment of $20.00 per share, 103,000 require a cash investment of $25.00 per share, 200,000 require an investment of $35.00 per share, 10,000 require an investment of $40.00 per share, 60,000 require an investment of $50.00 per share, 38,333 require a cash investment of $75.00 per share and 5,000 require a cash investment of $100.00 per share. 302,867 of the outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices.

During the year ended September 30, 2020, the Company recognized $1,158,709 in stock-based compensation for the outstanding warrants.

As of September 30, 2020, there was no remaining unamortized stock-based compensation related to outstanding warrants.

Warrant activity for the year ended September 30, 2020

On September 25, 2020, a total of 6,913 shares of the Company’s common stock were issued in connection with the cashless exercise of 15,000 common stock warrants at an exercise price of $8.00.

Warrant activity for the year ended September 30, 2019

On October 15, 2018, the Company entered into an agreement with a consultant for services. Under this agreement the Company agreed to issue 3,000 warrants to purchase shares of the Company’s common stock at an exercise price of $25.00 for a period of five years which vest evenly over a six-month period from the agreement date. During the year ended September 30, 2019, the Company recorded stock compensation of $68,643 as a result of the stock issued under the agreement. The warrants were valued using the Black-Scholes valuation model.

On December 31, 2018, in connection with a Securities purchase agreement (see Note 10 for additional details) the Company issued Common Stock Purchase Warrants to acquire up to 308,333 shares of common stock for a term of three years on a cash-only basis at an exercise price of $20.00 per share with respect to 125,000 Warrant Shares, $25.00 with respect to 100,000 Warrant Shares, $50.00 with respect to 50,000 Warrant Shares and $75.00 with respect to 33,333 Warrant Shares.

On August 28, 2018, in connection with the Consulting agreement executed with Zero Positive, LLC the Company issued warrants to purchase 90,000 shares of common stock at an exercise price of $8.00 per share to Zero Positive. The warrants were valued at $2,607,096 using the Black Scholes option pricing model. The warrants vest as follows: 30,000 warrants vested immediately, the balance vest evenly on the last day of each month over the forty-two months beginning August 31, 2018. As of September 30, 2019, 50,000 warrants had vested, and the Company recorded an expense of $496,590 during the year ended September 30, 2019.

On January 22, 2019, in accordance with a merger agreement, CleanSpark issued; a five year warrant to purchase 50,000 shares of CleanSpark common stock at an exercise price of $16.00 per share, and a five year warrant to purchase 50,000 shares of CleanSpark common stock at an exercise price of $20.00 per share. The warrants were valued at $1,102,417 and $1,102,107, respectively.

On April 18, 2019, in connection with a Securities purchase agreement (see Note 10 for additional details) the Company issued Common Stock Purchase Warrants to acquire up to 230,000 shares of common stock for a term of three years on a cash-only basis at an exercise price of $35.00 per share with respect to 200,000 Warrant Shares, $40.00 with respect to 10,000 Warrant Shares, $50.00 with respect to 10,000 Warrant Shares, $75.00 with respect to 5,000 Warrant Shares and $100.00 with respect to 5,000 Warrant Shares.

The Black-Scholes model utilized the following inputs to value the warrants granted during the year ended September 30, 2019:

Fair value assumptions – Warrants:	September 30, 2019
Risk free interest rate		2.36% - 3.01%
Expected term (years)		3-5
Expected volatility		254% - 268%
Expected dividends		0%

During the year ended September 30, 2019, the Company issued 217,896 shares of common stock in connection with the cashless exercise of 225,000 common stock warrants at an exercise price of $0.83.