9. LOANS

12 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

LOAN

9. LOANS

The following table reflects our outstanding loans as of September 30, 2022:

	Maturity Date	Rate	Debt Balance, Net
Master Equipment Financing Arrangement	Apr-25	13.80%	$	17,073,111
SPRE Commercial Group, Inc.	Aug-23	12.00%		1,806,558
Marquee Funding Partners	Jul-26 - Feb-27	13.00%		2,127,027
Auto Loans	Oct-28	9.00-9.20%		212,421
Total Loans Outstanding			$	21,219,117
Less: current portion of long-term loans				(7,786,049	)
Long-term loans, excluding current portion			$	13,433,068

The following table reflects the principal amount of loan maturities due over the next five years and beyond as of September 30, 2022:

	5-Year Loan Maturities
Outstanding Loan	FY 2023		FY 2024		FY 2025		FY 2026		FY 2027		Thereafter		Total
Master Equipment Financing Arrangment	$	5,677,314	$	6,508,398	$	5,221,133	$	-	$	-	$	-	$	17,406,845
SPRE Commercial Group, Inc.		1,806,558		-		-		-		-		-		1,806,558
Marquee Funding Partners		402,179		457,693		520,869		592,766		153,520		-		2,127,027
Auto Loans		24,662		30,464		33,341		36,489		39,935		47,530		212,421
Total principal amount of loan payments by fiscal year	$	7,910,713	$	6,996,555	$	5,775,343	$	629,255	$	193,455	$	47,530	$	21,552,851
Unamortized deferred financing costs and discounts on Master Equipment Financing Arrangement														(333,734	)
Total loan book value as of September 30, 2022													$	21,219,117

Description of Outstanding Loans

Master Equipment Financing Agreement

On April 22, 2022, the Company entered into a Master Equipment Financing Agreement with Trinity Capital Inc., as the Lender (the “Financing Agreement”). The Financing Agreement provides for up to $35 million of borrowings to finance the Company’s acquisition of blockchain computing equipment. The Company received a loan of $20 million at closing, with the remaining $15 million fundable upon the Company's request, if requested no later than December 31, 2022, subject to certain customary conditions. The loan draws have a term of 36 months from issuance with a monthly rate factor of at least 0.032198 payable monthly on the total cost of the equipment purchased with such borrowing. The Financing Agreement contains standard financial reporting requirements and certain other affirmative obligations, failure of which to comply with could result in an event of default under the Financing Agreement. In such an event, the Lender could exercise certain remedies including, but not limited to, declaring that all amounts outstanding under the Financing Agreement, together with accrued interest, be declared immediately due and payable. The Company received funding of $20 million at close, which included closing costs of $701,624 and security deposit of $643,960. The loan is collateralized with 3,336 S19j Pro miners and carries and effective interest rate of 13.80%.

The Company recorded a loan discount of approximately $379,000, of which $46,000 was amortized and recorded to interest expense during the year ended September 30, 2022.

SPRE Commercial Group, Inc.

In connection with the acquisition of WAHA, the Company entered into a financing arrangement with the seller. The loan has a term of 12 months with monthly payments of $173,651 and a stated interest rate of 12%.

Marquee Funding Partners

In connection with the acquisition of WAHA, certain assets were encumbered with mortgages which the Company assumed. The mortgages assumed have a combined balance of $2,158,253 and remaining payment terms ranging from 47-54 months and annual interest of 13%.

Auto Loans

In September 2022, the Company purchased vehicles through financing arrangements with combined principal amount of $212,421. The loans are for a term of 72 months with annual interest of 9%. The loans are secured with the purchased vehicles.

Paycheck Protection Program Loan

On May 7, 2020, the Company applied for a loan from Celtic Bank Corporation, as lender, pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as administered by the U.S. Small Business Administration (the "SBA"). On May 15, 2020, the loan was approved, and the Company received the proceeds from the loan in the amount of $531,169 (the “PPP Loan”). The Company applied for and received loan forgiveness from the SBA on March 23, 2021. The entire principal balance and interest charges were forgiven. The gain on loan forgiveness of $531,169 is included in other income in the consolidated statements of operations and comprehensive loss for the year ended September 30, 2021.