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Significant Transactions
 12 Months Ended
Dec. 31, 2022
Significant Transactions Disclosure [Abstract]  
SIGNIFICANT TRANSACTIONS
NOTE 13:- SIGNIFICANT TRANSACTIONS

 

1.On September 8, 2022, the Company entered into a (i) Purchase and Sale Agreement with CleanSpark, and (ii) an Equipment Purchase and Sale Agreement. Pursuant of the Purchase Agreement, CleanSpark assumed from the Company a lease for approximately 16.35 acres of real property located in Sandersville, Washington County, Georgia, and all personal property situated on the Property. This transaction closed on October 8, 2022, and CleanSpark paid the following consideration to the Company pursuant to the Purchase Agreement: (i) $13.50 million in cash; (ii) 1,590,175 shares of common stock, par value $0.001 per share of CleanSpark (valued at $4.8 million on October 7, 2022), and (iii) $6.5 million in Seller financing in the form of promissory notes. Pursuant to the Equipment Purchase Agreement, CleanSpark purchased from the Company, application-specific integrated circuit miners, this transaction closed on October 8, 2022, for $9.48 million in cash (which was later reduced to $9.02 million upon reduction in the number of miners). There is also additional potential consideration payable pursuant to the Purchase and Sale Agreement of; (i) up to 1,100,890 shares of CleanSpark Common Stock dependent the number of modular data centers on the Property occupied by the Company being emptied and made available for use by CleanSpark. We achieved this additional consideration on December 30, 2022 and received the shares on January 13, 2023, and (ii) $2 million in cash if CleanSpark is able to utilize at least an additional 150 MW of power on the property by the six month anniversary of the Closing Date, this was not achieved by the end of December 31, 2022.

 

The profit on sale recognized in the consolidated statement of operations is outlined below:

 

   October 8, 2022 
Cash  $22,517,954 
Financing provided by seller   6,500,000 
1,590,175 shares of CLSK common stock   4,802,329 
Total purchase price  $33,820,283 
      
Contingent Consideration earned     
      
Earn-out Shares of CLSK common stock   2,245,815 
Total contingent consideration earned  $2,245,815 
      
Total consideration  $36,066,098 
      
Less costs associated with sale of assets:     
Processing machines (Miners)   9,051,369 
Impairment on miners   5,447,199 
Modular data center   7,669,285 
Transformers   2,591,275 
Plant and equipment   2,695,144 
Other   335,386 
      
Total costs associated with sale of assets   27,789,658 
      
Profit on sale of site  $8,276,440 

 

  2. On March 8, 2023, the Company entered into an agreement with BMF HOLDING GP PTE. LTD to sell all its member interests in Luna Squares Texas LLC, a Delaware limited liability company, which is a wholly-owned subsidiary of the Company.  Luna Squares Texas LLC holds four Texas leases, and certain related contracts.  In addition, the Company sold 59 transformers in connection with those Texas leases. This transaction is due to close on March 31, 2023, therefore all assets and liabilities that were included in this sale have been classified as held for sale. Refer to NOTE 8 for further details.

 

  3. During the year ended December 31, 2022 Mawson AU Limited sold equipment to and entered into intellectual property agreements with TDI in exchange for shares in TDI. From November 23, 2022 Mawson AU Limited became a 34.9% shareholder of TDI and therefore was accounted for as an equity investment from this date. Total consideration for this transaction after impairment was $2.10, refer to NOTE 4 for further details.

 

  4. During June 2022 the Company entered into a power pricing agreement with Energy Harbor LLC, the energy supplier to the Company’s Pennsylvania facility. The contract allows us to trade our energy to achieve net energy benefits. We have recognized a derivative asset on our balance sheet for the contract, which has been measured at fair value with any changes in fair value recognized in our statement of operations.

 

  5.

On February 23, 2022, Luna Squares LLC entered into a loan agreement with Celsius Mining LLC for a principal amount of $20,000,000. The Secured Promissory Note accrues interest daily at a rate of 12% per annum. The Secured Promissory Note has a maturity date of August 23, 2023, and the outstanding balance is $14.0 million as at December 31, 2022. Celsius Mining LLC filed for Chapter 11 bankruptcy protection on July 13, 2022. The Company does not anticipate any changes to the terms of the loan agreement and security arrangements have not changed as at the date of this report as a result of Celsius Mining LLC’s bankruptcy filing.

     
  6. On September 2, 2022, Mawson Infrastructure Group Pty Ltd entered into a Secured Loan Facility Agreement with W Capital Advisors Pty Ltd with a total loan facility of AUD$3 million (USD$1.9 million). This was amended on September 29, 2022, and the loan facility was increased to AUD$8 million (USD$5.2 million). As at December 31, 2022, AUD$4.96 million (USD$3.37 million) has been drawn down from this facility, all of which is classified as a current liability. The Secured Loan Facility accrues interest daily at a rate of 12% per annum and is paid monthly. The loan matures in March 2023, however the Company expects to amend the current loan with W Capital Advisors Pty Ltd prior to the due date to extend the maturity date.
     
  7. 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”). On September 29, 2022, the Company entered into a letter of variation relating to most of the Secured Convertible Promissory Notes, with an aggregate principal amount of $3.1 million, which gave those holders the option to elect for pre-payment (including accrued interest to maturity) subject to certain conditions. Payments of the interest could be made partially in common stock of the Company. All of the investors included in this letter variation elected for the pre-payment option and therefore there were $3.1 million principal repayments made during November 2022. The final convertible noteholder who was not a party to this variation opted to enter into another arrangement whereby it received pre-payment of interest, but agreed that repayment of the principal was not required until the originally agreed Repayment Date.