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Borrowings
 9 Months Ended
Sep. 30, 2023
Borrowings [Abstract]  
BORROWINGS

NOTE 7 – BORROWINGS

 

Marshall loan

 

In December 2021 MIG No. 1 Pty Ltd entered into a Secured Loan Facility Agreement with Marshall Investments MIG Pty Ltd. The loan matures in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments that commenced in December 2021. This loan facility is secured by direct assets of MIG No.1 Pty Ltd and a general security agreement given by the Company. Principal repayments began during November 2022. The loan matures in February 2024 and the total outstanding balance is $8.05 million as at September 30, 2023 and is classified as a current liability accordingly. MIG No. 1 Pty Ltd has not made a principal or interest payment since May 2023. MIG No. 1 Pty Ltd and Marshall are in ongoing discussions with respect to the loan and payment, and the loan terms generally. Marshall and MIG No. 1 Pty Ltd have each reserved their rights.

 

Celsius loan

 

On February 23, 2022, Luna Squares LLC entered into a Co-location Agreement with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna Squares LLC a principal amount of $20 million, for the purpose of funding the infrastructure required to meet the obligations of the Co-Location Agreement, for which Luna Squares LLC issued a Secured Promissory Note for repayment of such amount. The Secured Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps), and Luna Squares LLC is required to amortize the loan at a rate of 15% per quarter. Repayments to the principal amount began at the end of September 2022. The Secured Promissory Note matured and became due August 23, 2023, and the total outstanding balance as of September 30, 2023 is $8.24 million, which is classified as a current liability. Celsius Mining LLC transferred the benefit of the promissory note to Celsius Network Ltd. Celsius Mining LLC and Celsius Network Ltd filed for Chapter 11 bankruptcy protection on July 13, 2022.

 

W Capital loan

 

On September 2, 2022, Mawson AU entered into a Secured Loan Facility Agreement with W Capital Advisors Pty Ltd with a total loan facility of AUD$3.00 million (USD$1.9 million). This was amended on September 29, 2022, and the loan facility was increased to AUD$8.00 million (USD$5.2 million). During the nine-month period ending September 30, 2023, the Company received AUD$3.00 million (USD$1.99 million) from this loan facility. As at September 30, 2023, AUD$1.51 million (USD$0.97 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 (with an overdue rate provision of an additional 800bps) and is paid monthly. Principal repayments are paid ad hoc in line with the loan facility agreement. The Secured Loan Facility expired in March 2023. W Capital Advisors Pty Ltd and Mawson AU have each reserved their rights. On October 30, 2023, the directors of Mawson AU appointed voluntary administrators to Mawson AU, and all of Mawson AU’s debts including the Secured Loan Facility will be managed as part of the voluntary administration.

 

Convertible notes

 

On July 8, 2022, the Company issued secured convertible promissory notes to investors in the aggregate principal amount of $3.60 million (the “Secured Convertible Promissory Notes”) in exchange for an aggregate of $3.6 million in cash. On September 29, 2022, the Company entered into a letter variation relating to some 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. 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 (W Capital Advisors Pty Ltd) who was not a party to this variation opted to enter into an arrangement whereby it received pre-payment of interest but agreed that the principal amount of $0.50 million was not immediately required to be repaid. The convertible note matured in July 2023 and the Company is in ongoing discussions with the noteholder regarding a resolution. W Capital Advisors Pty Ltd and MIG Inc have each reserved their rights. Interest has been accrued from July onwards and therefore the outstanding balance is $0.53 million as at September 30, 2023, all of which is classified as a current liability.