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Subsidiary Deconsolidation

12 Months Ended

Dec. 31, 2024

Subsidiary Deconsolidation [Abstract]

NOTE 3: SUBSIDIARY DECONSOLIDATION

The Company currently operates facilities in the United States of America and does not have operating sites in Australia.

MIG No.1

Liquidation and Deconsolidation of an Australian entity MIG No. 1

On March 19, 2024, the Company’s subsidiary MIG No.1, an Australian entity, was placed into an Australian court appointed liquidation due to it being deemed insolvent in Australia. The liquidation of an insolvent company in Australia allows an independent registered Australian liquidator (the liquidator) to take control of the Australian entity so its affairs can be wound up in an orderly and fair way and to benefit creditors. In the instance of MIG No.1, it is an Australian court liquidation, where a liquidator is appointed by the Australian court to wind up a company following an application (by a creditor of MIG No.1). As a result of this court appointed liquidation, the Company ceded authority for managing this Australian entity to the Australian liquidator, and the Company could not carry on MIG No.1’s activities in the ordinary course of business. For these reasons, it was concluded that the Company had ceded control of MIG No.1, and no longer had significant influence over this Australian entity since the liquidator was in control of this Australian entity. Therefore, MIG No.1 loss of control was effective when it was placed into Australian court appointed liquidation on March 19, 2024, and was deconsolidated at this date, in accordance with ASC 810-10-15. In order to deconsolidate this Australian entity, MIG No.1, the carrying values of the assets, liabilities and equity components previously recognized in accumulated other comprehensive income of MIG No.1 were removed from the Company’s consolidated balance sheet as of March 19, 2024, in accordance with ASC 810, Consolidation. The net impact of removing the assets and liabilities resulted in a loss on deconsolidation of $12.4 million being recorded in the consolidated statement of operations.

Investment in MIG No.1

The investment in MIG No. 1 held by the Company was accounted for under ASC 321, Investments — Equity Securities as it was concluded the Company did not have significant influence over MIG No. 1 from March 19, 2024. The fair value of MIG No.1 was estimated to be $0 at the time of the deconsolidation, MIG No.1 had negative equity, and its directors have no intention to carry out this business in the future.

Australian entity MIG No.1 Secured Loan Facility Agreement

MIG No. 1 has a Secured Loan Facility Agreement with Marshall. The loan matured in February 2024 and the total outstanding balance is $9.9 million as of December 31, 2024. The Company is included as a guarantor of this loan.

Mawson AU Pty Ltd

Liquidation and Deconsolidation of an Australian entity Mawson AU Pty Ltd

On April 23, 2024, the Company’s Australian entity and a subsidiary, Mawson AU was placed into an Australian court appointed liquidation. As a result of this court appointed liquidation, the Company ceded authority for this Australian entity to the Australian liquidator. It was concluded that the Company had ceded control of Mawson AU, and no longer had significant influence over this Australian entity since the liquidator was in control of this Australian entity. Therefore, Mawson AU loss of control was effective when it was placed into Australian court appointed liquidation on April 23, 2024, and was deconsolidated at this date, in accordance with ASC 810-10-15. In order to deconsolidate this Australian entity, Mawson AU, the carrying values of the assets, liabilities and equity components previously recognized in accumulated other comprehensive income of Mawson AU were removed from the Company’s consolidated balance sheet as of April 23, 2024, in accordance with ASC 810, Consolidation. The net impact of removing the assets and liabilities resulted in a gain on deconsolidation of $3.5 million being recorded in the consolidated statement of operations.

Investment in the Australian entity Mawson AU Pty Ltd

The investment in this Australian entity, Mawson AU, held by the Company was accounted for under ASC 321, Investments — Equity Securities as it was concluded the Company did not have significant influence over Mawson AU from April 23, 2024. The fair value of Mawson AU was estimated to be $0 at the time of the deconsolidation.

Treatment of intercompany balances

The Company had total receivables owed from Mawson AU of $3.8 million. In accordance with ASC 310, these receivables have been treated as external receivables from the date of liquidation, April 23, 2024 and written off in net loss on the deconsolidation in the consolidated financial statements.

Mawson Services Pty Ltd

Liquidation and Deconsolidation of an Australian entity Mawson Services Pty Ltd

On April 29, 2024, the Company’s Australian entity and a subsidiary, Mawson SPL was placed into an Australian court appointed liquidation. As a result of this court appointed liquidation, the Company ceded authority for this Australian entity to the Australian liquidator. For these reasons, it was concluded that the Company had ceded control of Mawson SPL, and no longer had significant influence over this Australian entity since the liquidator was in control of this Australian entity. Therefore, Mawson SPL loss of control was effective when it was placed into Australian court appointed liquidation on April 29, 2024, and was deconsolidated at this date, in accordance with ASC 810-10-15. In order to deconsolidate this Australian entity, Mawson SPL, the carrying values of the assets, liabilities and equity components previously recognized in accumulated other comprehensive income of Mawson SPL were removed from the Company’s consolidated balance sheet as of April 29, 2024, in accordance with ASC 810, Consolidation. The net impact of removing the assets and liabilities resulted in a gain on deconsolidation of $0.2 million being recorded in the consolidated statement of operations.

Investment in the Australian entity Mawson Services Pty Ltd

The investment in this Australian entity, Mawson SPL, held by the Company was accounted for under ASC 321, Investments — Equity Securities as it was concluded the Company did not have significant influence over Mawson SPL from April 29, 2024. The fair value of Mawson SPL was estimated to be $0 at the time of the deconsolidation.

Summary of the impact on consolidated statement of operations

	Year ended December 31,
	2024			2023

Deconsolidation gain (loss) - MIG No. 1	$	(12,359,353	)	$	-
Deconsolidation gain (loss) - Mawson AU		(278,263	)		-
Deconsolidation gain (loss) - Mawson SPL		193,520			-
Deconsolidation gain (loss) - Mawson PL		-			3,797,784
Foreign exchange gain (loss) - Mawson PL		-			5,675,195
Total gain (loss) on deconsolidation	$	(12,444,097	)	$	9,472,976