4. INVESTMENT IN INTERNATIONAL LAND ALLIANCE

6 Months Ended

Mar. 31, 2021

Schedule of Investments [Abstract]

4. INVESTMENT IN INTERNATIONAL LAND ALLIANCE

4. INVESTMENT IN INTERNATIONAL LAND ALLIANCE

International Land Alliance, Inc.

On November 5, 2019, the Company entered into a binding Memorandum of Understanding (the “MOU”) with International Land Alliance, Inc., a Wyoming corporation (“ILAL”), in order to lay a foundational framework where the Company will deploy its energy solutions products and services to ILAL, its energy projects, and its customers.

In connection with the MOU, and in order to support the power and energy needs of ILAL’s development and construction of certain projects, the Company entered into a Securities Purchase Agreement, dated as of November 6, 2019, with ILAL (the “ILAL SPA”).

Pursuant to the terms of the ILAL SPA, ILAL sold, and the Company purchased 1,000 shares of Series B Preferred Stock (the “Preferred Stock”) of ILAL for an aggregate purchase price of US $500,000 (the “Stock Transaction”), less certain expenses and fees. The Company also received 350,000 shares (“commitment shares”) of ILAL’s common stock. The Preferred Stock will accrue cumulative in-kind accruals at a rate of 12% per annum and may increase upon the occurrence of certain events. The Preferred is now convertible into common stock at a variable rate as calculated under the agreement terms.

The commitment shares are recorded at fair value as of March 31, 2021 of $729,500.

The Preferred Stock is recorded as an AFS debt security and is reported at its estimated fair value as of March 31, 2021. The Company identified a derivative instrument in accordance with ASC Topic No. 815 due to the variable conversion feature. Topic No. 815 requires the Company to account for the conversion feature on its balance sheet at fair value and account for changes in fair value as a derivative gain or loss.

The Black-Scholes model utilized the following inputs to value the derivative asset at the date in which the derivative asset was determined through March 31, 2021.

Fair value assumptions:	March 31, 2021
Risk free interest rate		0.09%
Expected term (months)		1.5
Expected volatility		141.83%
Expected dividends		0%