Company: CLSKW
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0000950170-25-015470
Chunk: 21

Company: CLEANSPARK, INC.
Filing Date: 2025-02-06
Form: 10-Q
Item: Item 1
Chunk 21
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, the Interest Rate Swap Derivative was fair valued at a $100 unrealized loss.

F-18

International Land Alliance, Inc.On November 6, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with International Land Alliance, Inc. (“ILAL”), a Wyoming corporation, to support the power and energy needs of ILAL's development and construction of certain projects.ILAL Series B Preferred Stock (Investment in Debt Securities) and Embedded ILAL Derivative AssetPursuant to the terms of the SPA with ILAL, the Company purchased 1,000 shares of Series B Preferred Stock of ILAL (the “Series B Preferred Stock”) for an aggregate purchase price of $500 less certain expenses and fees. The Series B Preferred Stock accrues cumulative dividends in-kind at a rate of 12% per annum and was redeemable on August 6, 2020. The Series B Preferred Stock can be converted into common stock at a variable rate (refer to the discussion on embedded derivative assets below). This variable conversion ratio will increase by 10% with the occurrence of certain events. Since the investments were not redeemed on August 6, 2020, they are now redeemable at the Company’s option in cash or into common stock, based on the conversion ratio. The Series B Preferred Stock is recorded as an available for sale ("AFS") debt security and is reported at its estimated fair value as of December 31, 2024. Any change in the fair values of AFS debt securities are reported net of income tax as an element of Other Comprehensive income.The Company accrued no interest (net of allowance) on its available-for-sale debt securities as of December 31, 2024 and September 30, 2024, respectively. The fair value of the Company’s investment in the Series B Preferred Stock was $950 and $918 as of December 31, 2024 and September 30, 2024, respectively. The Company has included gain on fair value of Series B Preferred Stock amounting to $32 and $29 for the three months ended December 31, 2024 and 2024 and 2023, respectively, as part of other comprehensive income in the condensed consolidated statements of operations and comprehensive income.The Company has deemed the variable conversion feature (the “ILAL Derivative Asset”) of Series B Preferred Stock an embedded derivative instrument in accordance with ASC 815, Derivatives and Hedging. This topic requires the Company to account for the IL