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14. COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
14. COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES

 

Office leases

 

Utah Corporate Office

 

On November 22, 2019, the Company entered into a lease to relocate the corporate office to 1185 South 1800 West, Suite 3, Woods Cross, UT 84047. The agreement calls for the Company to make payments of $2,300 in base rent per month through February 28, 2021, unless otherwise cancelled the lease automatically renews annually. The lease was renewed through February 28 , 2022.

 

 

San Diego Office

 

On May 15, 2018, the Company executed a 37 month lease agreement, which commenced on July 1, 2018 at 4360 Viewridge Avenue, Suite C, San Diego, California. The agreement called for the Company to make payments of $4,057 in base rent per month through July 31, 2021 subject to an annual 3% rent escalation. The lease was terminated on July 31, 2021.  

 

Carlsbad Office

 

On June 17, 2021, the Company entered into a lease agreement at 2042 Corte Del Nogal, Suite C, Carlsbad, CA 92011. The agreement calls for the company to make monthly payments of $11,307 in base rent through June 30, 2026, subject to an annual 3% rent escalation.

 

Las Vegas Offices

 

On January 2, 2020, the Company entered into a sublease agreement with Blue Chip for office space at 8475 S. Eastern Ave., Suite 200, Las Vegas, NV 89123. The agreement calls for the Company to make monthly payments of $1,575 in base rent through January 1, 2021. The lease term is on an annual basis beginning January 2, 2020.

 

The Company assumed p2k’s lease agreement entered into on October 17, 2017, at 7955 W. Badura Ave., Suite 1040, Las Vegas, NV 89113. The agreement called for $1,801 in base rent through October 31, 2020. The Company did not renew this lease and it was terminated on October 31, 2020.

 

Contingent consideration

On August 31, 2020, the Company acquired GridFabric. Pursuant to the terms of the purchase agreement, additional shares of the Company’s common stock valued at up to $750,000 will be issuable if GridFabric achieves certain revenue and product release milestones.

 

On February 24, 2021, the Company acquired SWS. Pursuant to the terms of the purchase agreement, additional cash consideration of $2,500,000 will be payable if Solar Watt Solutions achieves certain revenue milestones.

 

Legal contingencies

From time to time, we may be subject to litigation. 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 have acquired 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.

 

For a description of our material pending legal proceedings, please see Part II, Item I of this Quarterly Report on Form 10Q.

  

15. MAJOR CUSTOMERS AND VENDORS

 

For the nine months ended June 30, 2021 and 2020, the Company had the following customers that represented more than 10% of our sales. We report revenue from both customers under our Energy Segment.

 

   June 30, 2021  June 30, 2020
Customer A   10.0%   60.3%
Customer B   —     14.1%

 

 

For the nine months ended June 30, 2021 and 2020, the Company had one supplier that represented more than 10% of our direct costs. Internally developed product costs and labor for services rendered are excluded from the calculation. We report costs from vendor A under our Energy Segment and vendor B under our Digital Currency Mining Segment.

 

   June 30, 2021  June 30, 2020
Vendor A   28.77%   85.7%
Vendor B   24.83%   —