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Debt, Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract] |
DEBT, COMMITMENTS AND CONTINGENCIES | NOTE 5 – DEBT, COMMITMENTS AND CONTINGENCIES Convertible Note On February 12, 2021, Cosmos issued 28,012,364 unsecured convertible promissory notes (the “Cosmos Notes”), which mandatorily convert into 0.0424 shares in Cosmos at the earlier of 6 months from February 12, 2021 or upon the occurrence of certain events. The notes accrue interest at the rate of 8% per annum which may be settled in stock or cash at the option of the company. The Cosmos Notes raised net proceeds of $20,275,349 comprising gross proceeds of $21,569,520 less transaction costs. The Cosmos Notes automatically converted into convertible notes of Mawson (“Mawson Notes”) upon close of the Cosmos Transaction on 9 March 2021. The Mawson Notes have substantially the same terms as the Cosmos notes and mandatorily convert into shares of Mawson the earlier of 6 months from February 12, 2021 or upon the occurrence of certain events at an issue price of $0.339 per Mawson share and will create 63,626,903 shares in total. Given the mandatory and fixed conversion the notes have been accounted for as equity. Debt On 25 January 2021 The Company entered into a Leveraged Account Agreement with Independent Reserve. This facility is denominated in Bitcoin (BTC) and enables the Company to borrow up to 10 BTC subject to certain margin requirements. As at March 31, 2021 the Company owed 10 BTC under this facility, which has been recorded within short term borrowings at its fair value of $399,206. Amounts owing under this facility are payable on demand. On January 27, 2021, Cosmos Infrastructure LLC (“Cosmos Infrastructure”) entered into an Equipment Purchase and Finance and Security Agreement with Foundry Digital LLC (“Foundry”) to purchase machinery that will be located at a facility hosted by Compute North LLC (“Compute North”). On February 5, 2021, the term of the agreement was further amended to have a final payment of January 27, 2022. Under the terms of the agreement, Cosmos Infrastructure purchased 500 Whatsminer M30S mining machines, paid a deposit of $264,000, and borrowed a total of $1,056,000. The facility will be repaid in full on the last payment date. Leases The Company owns 50% equity in Luna Squares, LLC. Luna Squares LLC leases a one-acre lot in the State of Georgia referred to as “Luna Squares” from the Development Authority of Washington County. The initial lease term is from May 1, 2020 until April 30, 2023. An amendment to the lease and exercise of option to lease was signed and in effect from February 23, 2021 (“Lease Amendment”). The Lease Amendment covers an additional 4 acres of the property, bringing the total to 5 acres under the lease. It also includes 5, 3-year extension options bringing a total optional lease period running until 2038. The Company leases the headquarters of its business operations at Level 5, 97 Pacific Highway, North Sydney NSW 2060 Australia, being 1,076 square feet of office space held under a license agreement ending December 31, 2021. Other than these leases, the Company does not lease any material assets. The Company believes that these offices and facilities are suitable and adequate for its operations as currently conducted and as currently foreseen. In the event additional or substitute offices and facilities are required, the Company believes that it could obtain such offices and facilities at commercially reasonable rates. Contingent obligation in relation to LO2A Refer note 2.

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