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4. INVESTMENTS | 9 Months Ended
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Jun. 30, 2022
Schedule of Investments [Abstract] |
INVESTMENTS | 4. INVESTMENTS As of June 30, 2022 and September 30, 2021, the Company had total investments of $3,581,776 and $5,661,036, respectively that comprise of the following: International Land Alliance, Inc. On November 5, 2019, the Company entered into a binding Memorandum of Understanding (the “MOU”) with International Land Alliance, Inc. (“ILAL”), a Wyoming corporation, to lay a foundational framework where the Company expects to deploy its energy solutions across the portfolio of ILAL, including 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. 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”) for 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 June 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 on our available-for-sale debt securities totaling $536,356 and $399,863 as of June 30, 2022 and September 30, 2021, respectively, presented as prepaid expense and other current assets on the Consolidated Balance Sheets. The fair value of investment in Debt Securities is $569,996 and $494,608 as of June 30, 2022 and September 30, 2021, respectively. The Company has included gain on change in fair value of preferred stock amounting to $28,796 and $75,388 respectively for the three month and nine month periods ended June 30, 2022, and $0 and $0 respectively for the three month and nine month periods ended June 30, 2021, as part of other comprehensive income in the Consolidated Statements of Operations and Comprehensive Income (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 income in the Consolidated Statements of Operations and Comprehensive Loss. Total fair value of investment in derivative assets as of June 30, 2022 and September 30, 2021, respectively was $2,761,780 and $4,905,656. 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. The Company recorded an unrealized loss on derivative assets for $1,032,579 and $2,143,876 respectively for the three and nine month periods ended June 30, 2022, compared to an unrealized gain (loss) on derivative assets for ($2,060,774) and $5,319,361 for the three and nine month periods ended June 30, 2021. The following table sets forth a reconciliation of carrying value of all investments as of June 30, 2022:
|  | ILAL Debt Securities |  |  | ILAL Derivative Asset |  |  | ILAL Equity Securities |  |  | Law Clerk Equity Securities |
Balance as of September 30, 2021 |  | $ | 494,608 |  |  | $ | 4,905,656 |  |  | $ | 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) |  |  | — |  |  |  | (2,143,876 | ) |  |  | (1,847 | ) |  |  | — |
Unrealized gain on fair value recognized in Other comprehensive income |  |  | 75,388 |  |  |  | — |  |  |  | — |  |  |  | — |
Balance as of June 30, 2022 |  | $ | 569,996 |  |  | $ | 2,761,780 |  |  | $ | — |  |  | $ | 250,000 |

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- 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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=122147990&loc=d3e611282-123010 + Details
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