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Subsequent Events
6 Months Ended
Jun. 30, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 13 – SUBSEQUENT EVENTS

 

On July 8, 2022, the Company issued secured convertible promissory notes to investors in the aggregate principal amount of $3,600,000 (the “Secured Convertible Promissory Notes”) in exchange for an aggregate of $3,600,000. In connection with each Secured Convertible Promissory Note, the Company and its subsidiaries, Luna Squares LLC and Cosmos Infrastructure LLC, entered into a Guarantee and Security Agreement (the “Security Agreements”) with each investor, securing such investor’s Secured Convertible Promissory Note by specific, and separate application-specific integrated circuit (ASIC) mining hardware of Cosmos Infrastructure LLC. Each Security Agreement contains customary covenants and customary events of default, the occurrence of which could result in an acceleration of the Secured Convertible Promissory Notes. The Secured Convertible Promissory Notes are convertible at the option of the holder at a price of $0.85 per share of our common stock, except in the case of an event of default, during which the Secured Convertible Promissory Notes are convertible at the option of the holder into shares of the Company’s common stock, at a price of $0.80 per share. The Secured Convertible Promissory Notes bear interest of twenty percent (20%) per annum, except in the case of an event of default, during which they will bear interest of twenty-five percent (25%) per annum. One-half of the interest that accrues each month on the Secured Convertible Promissory Notes must be paid monthly. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable under the Secured Convertible Promissory Notes, is due and payable if not converted pursuant to the terms and conditions of the Secured Convertible Promissory Note on the earlier of (i) one year after its issuance, or (ii) following an event of default.

 

On July 17, 2022, the Company entered into a Securities Purchase Agreement with an institutional investor providing for the issuance and sale by the Company of 8,000,000 shares of the Company’s common stock, at a price of $0.80 per share, accompanied by warrants to purchase 10,000,000 shares of the Company’s common stock in a registered direct offering pursuant to a “shelf” registration statement on Form S-3 (File No. 333-264062). The warrants issued in this offering have an exercise price of $1.01 per share of our common stock, are exercisable 6 months after issuance and will expire five and one-half years following issuance. The exercise price of the warrants issued in this offering is subject to adjustment for stock splits, reverse splits, and similar capital transactions as described in the warrants. This offering closed on July 20, 2022. The net amount raised was $5.62 million.

 

On August 12, 2022, Mawson AU entered into a non-binding Memorandum of Understanding to, amongst other things, discuss the possibility of selling certain assets to its supplier, Faith Technologies Inc. (“FTI”) in return for FTI reducing amounts outstanding to FTI by Mawson AU by $4,598,800.