XML 27 R10.htm IDEA: XBRL DOCUMENT
v3.21.2

4. INVESTMENTS | 12 Months Ended
--- | ---
Sep. 30, 2021
Schedule of Investments [Abstract] |
4. INVESTMENTS | 4. INVESTMENTS As of September 30, 2021 and September 30, 2020, the Company had total investments of $5,661,036 and $3,075,269 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, 2021. Any change in the fair values of AFS debt securities are reported net of income tax as an element of Other Comprehensive income. The Company accrued interest on our available-for-sale debt securities totaling $399,863 and $187,562, as of September 30, 2021 and 2020, respectively, presented as prepaid expense and other current assets on the Consolidated Balance Sheets. The fair value of investment in Debt Securities is $494,608 and $500,000 as of September 30, 2021 and 2020. The Company has presented loss on fair value of preferred stock amounting to $5,392 for the year ended September 30, 2021 as part of other comprehensive loss in the Consolidated Statement of Operations and Comprehensive Loss. There was an immaterial loss or gain on the fair value of preferred stock for the year ended September 30, 2020. The Company has deemed this variable conversion feature of ILAL preferred stock as an embedded derivative instrument in accordance with ASC Topic No. 815. This topic requires the Company to account for the conversion feature on its balance sheet at fair value and account for changes in fair value as a derivative gain or loss. Unrealized gain or loss on fair valuation of this embedded feature is recognized as an income in Consolidated statements of Operations and Comprehensive Loss. Total fair value of investment in Derivative assets as of September 30, 2021 and 2020 is $4,905,656 and $2,115,269. 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 also received 350,000 shares (commitment shares) of ILALs common stock. The commitment shares were fully earned at the time of execution of the agreement. During the year ended September 30, 2021, out of 350,000 commitment shares, 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. Realized gain on sale of shares and the unrealized loss on fair value of the remaining shares amounted to $179,046 and $5,153, respectively Total fair value of investment in equity securities as on September 30, 2021 and 2020 is $10,772 and $210,000, respectively.
| • | 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 there were no impairments required for the years ended September 30, 2021 and 2020. Total value of this investment as of September 30, 2021 and 2020 is $250,000, respectively. Refer the table below for a reconciliation of carrying value of all investments for the year ended September 30, 2021 and 2020:
|  | ILAL Debt Securities |  | ILAL Derivative asset |  | ILAL Equity Securities |  | Law Clerk Equity Securities
Balance as of October 1, 2019 | $ | - | $ | - | $ | - | $ | -
Purchased during the year |  | 500,000 |  | - |  | 93,132 |  | 250,000
Unrealized gain on fair value recognized in income |  | - |  | 2,115,269 |  | 116,868 |  | -
Balance as of September 30, 2020 |  | 500,000 |  | 2,115,269 |  | 210,000 |  | 250,000
Shares sold during the year |  | - |  | - |  | (373,121) |  | -
Realized gain on fair value recognized income |  | - |  | - |  | 179,046 |  | -
Unrealized gain (loss) recognized in net income |  | - |  | 2,790,387 |  | (5,153) |  | -
Unrealized loss on fair value recognized in other comprehensive loss |  | (5,392) |  | - |  | - |  | -
Balance as of September 30, 2021 | $ | 494,608 | $ | 4,905,656 | $ | 10,772 | $ | 250,000

X
- Definition The entire disclosure for investment holdings. This includes the long positions of investments for the entity. It contains investments in affiliated and unaffiliated issuers. The investments include securities and non securities (i.e. commodities and futures contracts). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14) -URI http://asc.fasb.org/extlink&oid=122147990&loc=d3e611322-123010 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-12B) -URI http://asc.fasb.org/extlink&oid=122147990&loc=d3e611197-123010 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 5D -Subparagraph (SX 210.12-13D) -URI http://asc.fasb.org/extlink&oid=122147990&loc=SL120429264-123010 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-12) -URI http://asc.fasb.org/extlink&oid=122147990&loc=d3e611133-123010 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 5 -Subparagraph (SX 210.12-13) -URI http://asc.fasb.org/extlink&oid=122147990&loc=d3e611282-123010 + Details
Name: | us-gaap_InvestmentHoldingsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ScheduleOfInvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration