8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2023

CleanSpark, Inc.

(Exact name of Registrant as Specified in Its Charter)

Nevada	001-39187	87-0449945
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2370 Corporate Circle, Suite 160
Henderson, Nevada		89074
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (702) 989-7692

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CLSK	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 9, 2023, the Company announced financial results for its first quarter ended June 30, 2023. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated August 9, 2023*
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
*	Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			CLEANSPARK, INC.
Date:	August 9, 2023	By:	/s/ Gary Vecchiarelli
			Gary Vecchiarelli, Chief Financial Officer

EX-99.1

CleanSpark Reports Third Quarter FY2023 Financial Results; Announces 16 EH/s Expansion Fully Funded

Achieved record revenue for the quarter of $45.5 million, net loss of $(14.2) million and Adjusted EBITDA of $13.3 million

Reports current cash and bitcoin holdings of $125 million; 16 EH/s target now fully funded

Reports operating hashrate over 9 EH/s, tripling hashrate year over year

LAS VEGAS, August 9, 2023 – CleanSpark, Inc. (Nasdaq: CLSK) (the “Company”), America’s Bitcoin Miner™, today reported financial results for the three and nine months ended June 30, 2023.

"We have fully funded our growth to 16 EH/s, including miners, facilities, and other infrastructure, on top of a record-breaking quarter in terms of growth and revenue,” said Zach Bradford, CEO. “We now operate over 9 EH/s of efficient computing power at some of the industry’s best all-in electric rates. That growth is translating to record-setting revenue. We have over $90 million in cash and almost 1,200 bitcoins on our balance sheet as of today. We continue to build on our longstanding track record of executing on our commitments, and I’m proud to say that this is a truly best-in-class team.”

“Creating certainty is an important part of our strategy, and today we have more than sufficient capital to fund our remaining contractual payments on miners and construction to achieve our 16 EH/s goal,” said Gary Vecchiarelli, CFO. “From my perspective, I really like the flexibility of our balance sheet and our operational performance. We have all the pieces in place, from people to capital, to extend our strong track record of growth and operational excellence.”

Q3 Financial Highlights

Financial Results for the Three Months Ended June 30, 2023

•Revenues for the quarter were $45.5 million, an increase of $14.5 million, or 47%, from $31.0 million for the same prior year period.

•The Company recognized a net loss for the three months ended June 30, 2023, of $(14.2) million, compared to a net loss of $(29.3) million for the same prior year period.

•Adjusted EBITDA* increased to $13.3 million, compared to Adjusted EBITDA of $5.1 million from the same prior year period.

•The Company saw sequential revenues increase in the third quarter of fiscal 2023 compared to the fiscal quarter ended March 31, 2022. Revenues increased $3 million, or 7%, from the preceding second quarter. The net loss of $14.2 million for the third quarter represented a $4.3 million improvement over the second quarter net loss of $18.5 million. The Adjusted EBITDA of $13.3 million in the third quarter represented an increase of $600 thousand or 5% compared to $12.7 million in the preceding second quarter.

Balance Sheet Highlights as of June 30, 2023

Assets

•Cash: $21.8 million

•Bitcoin: $13.9 million

•Total Current Assets: $52.7 million

•Total Mining Assets (including prepaid deposits & miners, net of accumulated depreciation): $441.8 million

•Total Assets: $652.8 million

Liabilities and Stockholders' Equity

•Current Liabilities: $37.4 million

•Total Liabilities: $49.2 million

•Total Stockholders' Equity: $603.6 million

The Company's liquidity, in cash and bitcoin, was approximately $35.7 million as of June 30, 2023. The Company's debt totaled $17.8 million at June 30, 2023.

*See "Non-GAAP Measure" and "Reconciliation of Adjusted EBITDA" below.

Investor Conference Call and Webcast

The Company will hold its third quarter 2023 earnings presentation and business update for investors and analysts today, August 9, 2023, at 1:30 p.m. PST/4:30 p.m. EST.

Webcast URL: https://www.cleanspark.com/investor-relations/clsk-earnings

The webcast will be accessible for at least 30 days on the Company's website and a transcript of the call will be available on the Company’s website following the call.

About CleanSpark

CleanSpark (NASDAQ: CLSK) is America's Bitcoin Miner. Since 2014, we've helped people achieve energy independence for their homes and businesses. In 2020, we transitioned that expertise to develop sustainable infrastructure for Bitcoin , an essential tool for financial independence and inclusion. We strive to leave the planet better than we found it by sourcing and investing in low-carbon energy, like wind, solar, nuclear, and hydro. We cultivate trust and transparency among our employees, the communities we operate in, and the people around the world who depend on Bitcoin . CleanSpark holds the 44th spot on the Financial Times' 2022 List of the 500 Fastest Growing Companies in the Americas and ranks thirteenth on Deloitte's Fast 500. For more information about CleanSpark, please visit our website at www.cleanspark.com .

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expectations for growth in the Company's bitcoin holdings and other statements regarding the Company's expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "intend," "may," "will," "plan," "goal" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. We have based these forward-looking statements largely on the Company's current expectations and projections about future events and financial trends that we believe may affect the Company's business, financial condition

and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: the success of the Company's bitcoin mining activities; the volatility of bitcoin value and energy prices; disruptions in the crypto asset markets; market perception of the Company's business and the crypto asset markets generally; increasing difficulty rates for bitcoin mining; bitcoin halving; new or additional governmental regulation; the anticipated delivery dates of new miners; the ability to successfully deploy new miners; the dependency on utility rate structures and government incentive programs; dependency on third-party power providers for expansion efforts and power rates; the ability to successfully integrate newly acquired operations; the risk that future revenue growth may not be realized; the impact of global pandemics (including COVID-19) and inflation on logistics and shipping; security and cybersecurity threats and hacks; and other risks described in the Company's prior press releases and in its filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for its fiscal year ended September 30, 2022 and any subsequent filings with the SEC. The forward-looking statements in this release are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. We undertake no obligation to revise or update these forward-looking statements or any of the foregoing factors, except as expressly required by applicable law.

Non-GAAP Measure

The Company presents adjusted EBITDA, which is not a measurement of financial performance under generally accepted accounting principles in the United States("GAAP"). The Company's non-GAAP "Adjusted EBITDA" excludes (i) impacts of interest, taxes, and depreciation; (ii) the Company's share-based compensation expense, unrealized gains/losses on securities, and, changes in the fair value of contingent consideration with respect to previously completed acquisitions, all of which are non-cash items that the Company believes are not reflective of the Company's general business performance, and for which the accounting requires management judgment, and the resulting expenses could vary significantly in comparison to other companies; (iii) non-cash impairment losses related to long-lived assets (including goodwill); (iv) realized gains and losses on sales of equity securities, the amounts of which are directly related to the unrealized gains and losses that are also excluded; (v) legal fees related to litigation and various transactions, which fees management does not believe are reflective of the Company's ongoing operating activities; (vi) gains and losses on disposal of assets, the majority of which are related to obsolete or unrepairable machines that are no longer deployed; (vii) gains and losses related to discontinued operations that would not be applicable to the Company's future business activities; and (viii) severance expenses. The Company previously excluded non-cash impairment losses related to digital assets and realized gains and losses on sales of bitcoin from our calculation of adjusted EBITDA, but has determined such items are part of the Company's normal ongoing operations and will no longer be excluding them from our calculation of adjusted EBITDA.

Management believes that providing this non-GAAP financial measure that excludes these items allows for meaningful comparisons between the Company's core business operating results and those of other companies, and provides the Company with an important tool for financial and

operational decision making and for evaluating its own core business operating results over different periods of time. In addition to management's internal use of non-GAAP adjusted EBITDA, management believes that adjusted EBITDA is also useful to investors and analysts in comparing the Company's performance across reporting periods on a consistent basis. Management believes the foregoing to be the case even though some of the excluded items involve cash outlays and some of them recur on a regular basis (although management does not believe any of such items are normal operating expenses necessary to generate our bitcoin related revenues). For example, the Company expects that share-based compensation expense, which is excluded from adjusted EBITDA, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, and directors. Additionally, management does not consider any of the excluded items to be expenses necessary to generate the Company's bitcoin related revenue.

The Company's adjusted EBITDA measure may not be directly comparable to similar measures provided by other companies in our industry, as other companies in the Company's industry may calculate non-GAAP financial results differently. The Company's adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating (loss) income or any other measure of performance derived in accordance with GAAP. Although management utilizes internally and presents adjusted EBITDA, the Company only utilizes that measure supplementally and does not consider it to be a substitute for, or superior to, the information provided by GAAP financial results.

Accordingly, adjusted EBITDA is not meant to be considered in isolation of, and should be read in conjunction with, the information contained in the Company's Consolidated Financial Statements, which have been prepared in accordance with GAAP.

CLEANSPARK, INC.

CONSOLIDATED BALANCE SHEETS

($ in thousands, except par value and share amounts)

	June 30, 2023		September 30, 2022
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	21,833	$	20,463
Accounts receivable, net		100		27
Inventory		1,037		216
Prepaid expense and other current assets		8,343		7,931
Bitcoin		13,925		11,147
Derivative investment asset		1,846		2,956
Investment in debt security, AFS, at fair value		696		610
Current assets held for sale		4,919		7,426
Total current assets	$	52,699	$	50,776
Property and equipment, net	$	482,428	$	376,781
Operating lease right of use asset		731		551
Intangible assets, net		5,116		6,485
Deposits on mining equipment		98,594		12,497
Other long-term asset		4,640		3,990
Goodwill		8,043		—
Long-term assets held for sale		552		1,545
Total assets	$	652,803	$	452,625
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	29,634	$	24,662
Operating lease liability		194		113
Finance lease liability		168		260
Current portion of long-term loans payable		7,076		7,786
Dividends payable		—		21
Current liabilities held for sale		348		1,199
Total current liabilities	$	37,420	$	34,041
Long-term liabilities
Operating lease liability, net of current portion		558		447
Finance lease liability, net of current portion		23		180
Loans payable, net of current portion		10,772		13,433
Long-term liabilities held for sale		382		512
Total liabilities	$	49,155	$	48,613

Stockholders' equity
Common stock; $0.001 par value; 300,000,000 shares authorized; 131,776,484 and    55,661,337 shares issued and outstanding, respectively		132			56
Preferred stock; $0.001 par value; 10,000,000 shares authorized; Series A    shares; 2,000,000 authorized; 1,750,000 and 1,750,000 issued and outstanding, respectively		2			2
Additional paid-in capital		861,082			599,898
Accumulated other comprehensive income		196			110
Accumulated deficit		(257,764	)		(196,054	)
Total stockholders' equity		603,648			404,012
Total liabilities and stockholders' equity	$	652,803		$	452,625

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, in thousands, except per share and share amounts)

	For the three months ended						For the nine months ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Revenues, net
Bitcoin mining revenue, net	$	45,427		$	30,942		$	115,661		$	104,882
Other services revenue		96			87			227			470
Total revenues, net	$	45,523		$	31,029		$	115,888		$	105,352
Costs and expenses
Cost of revenues (exclusive of depreciation and amortization shown below)		20,681			10,288			63,179			24,608
Professional fees		2,225			1,428			8,806			5,589
Payroll expenses		10,405			8,076			29,957			24,210
General and administrative expenses		5,064			2,119			13,117			6,708
Loss (gain) on disposal of assets		—			—			3			(643	)
Other impairment expense (related to bitcoin)		740			4,418			1,017			11,452
Realized (gain) loss on sale of bitcoin		143			5,235			(762	)		(2,026	)
Depreciation and amortization		21,850			14,781			62,525			32,660
Total costs and expenses	$	61,108		$	46,345		$	177,842		$	102,558
(Loss) Income from operations		(15,585	)		(15,316	)		(61,954	)		2,794
Other income (expense)
Other income		—			—			11			308
Change in fair value of contingent consideration		2,000			—			2,485			346
Realized gain on sale of equity security		—			—			—			1
Unrealized loss on equity security		—			—			—			(2	)
Unrealized (loss) gain on derivative security		105			(1,033	)		(1,110	)		(2,144	)
Interest income		52			52			174			137
Interest expense		(689	)		(314	)		(2,377	)		(375	)
Total other (expense) income		1,468			(1,295	)		(817	)		(1,729	)
(Loss) Income before income tax (expense) or benefit		(14,117	)		(16,611	)		(62,771	)		1,065
Income tax expense		—			—			—			—
(Loss) income from continuing operations	$	(14,117	)	$	(16,611	)	$	(62,771	)	$	1,065
Discontinued operations
Income (loss) from discontinued operations	$	(102	)	$	(12,729	)	$	1,061		$	(16,090	)
Income tax (expense) or benefit		—			—			—			—
Income (loss) on discontinued operations	$	(102	)	$	(12,729	)	$	1,061		$	(16,090	)
Net loss	$	(14,219	)	$	(29,340	)	$	(61,710	)	$	(15,025	)
Preferred stock dividends		—			—			—			335
Net loss attributable to common shareholders	$	(14,219	)	$	(29,340	)	$	(61,710	)	$	(15,360	)
Other comprehensive income		28			29			86			75
Total comprehensive loss attributable to common shareholders	$	(14,191	)	$	(29,311	)	$	(61,624	)	$	(15,285	)

(Loss) income from continuing operations per common share - basic	$	(0.12	)	$	(0.40	)	$	(0.72	)	$	0.02
Weighted average common shares outstanding - basic		114,844,402			41,277,090			87,248,719			41,010,826
(Loss) income from continuing operations per common share - diluted		(0.12	)		(0.40	)		(0.72	)		0.02
Weighted average common shares outstanding - diluted		114,844,402			41,277,090			87,638,134			41,092,028
(Loss) income on discontinued operations per common share - basic	$	(0.00	)	$	(0.31	)	$	0.01		$	(0.39	)
Weighted average common shares outstanding - basic		114,844,402			41,277,090			87,248,719			41,010,826
(Loss) income on discontinued operations per common share - diluted	$	(0.00	)	$	(0.31	)	$	0.01		$	(0.39	)
Weighted average common shares outstanding - diluted		114,844,402			41,277,090			87,638,134			41,092,028

CLEANSPARK, INC.

RECONCILIATION OF ADJUSTED EBITDA

(UNAUDITED)

	Three months ended June 30,
	2023			2022
Revenues, net
Digital currency mining revenue, net	$	45,427		$	30,942
Other services revenue		96			87
Total revenues, net	$	45,523		$	31,029
Net loss	$	(14,219	)	$	(29,340	)
Adjustments:
Loss on discontinued operations	$	102		$	12,729
Other impairment expense (related to Digital Currency)		—			—
Depreciation and amortization		21,850			14,781
Stock based compensation		5,947			5,213
Other income		—			—
Change in fair value of contingent consideration		(2,000)			—
Realized gain on sale of equity security		—			—
Unrealized gain on equity security		—			—
Unrealized loss on derivative security		(105)			1,033
Interest income	(52)			(52)
Interest expense	689			314
One-time legal fees related to litigation	1,036			143
One-time legal fees related to financing & business development transactions	85			189
Severance expenses	—			102
Total Adjusted EBITDA*	$	13,333		$	(5,112

	Three months ended March 31, 2023
Revenues, net
Digital currency mining revenue, net	$	42,488
Other services revenue		58
Total revenues, net	$	42,546
Net loss	$	(18,460)
Adjustments:
Gain on discontinued operations	$	294
Other impairment expense (related to Digital Currency)		—
Depreciation and amortization		21,346
Stock based compensation		5,743
Other income		—
Change in fair value of contingent consideration		—
Realized gain on sale of equity security		—
Unrealized loss on equity security		—
Unrealized gain on derivative security		(56)
Interest income	(52)
Interest expense	799
Gain on disposal of assets	3
One-time legal fees related to litigation	3,056
One-time legal fees related to financing & business development transactions	48
Severance expenses	—
Total Adjusted EBITDA	$	12,721

Investor Relations Contact Matt Schultz, Executive Chairmanir@cleanspark.com

Media Contacts Isaac Holyoak pr@cleanspark.com

BlocksBridge Consulting Nishant Sharma
cleanspark@blocksbridge.com

XML

Document And Entity Information	May 10, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 10, 2023
Entity Registrant Name	CLEANSPARK, INC.
Entity Central Index Key	0000827876
Entity Emerging Growth Company	false
Securities Act File Number	001-39187
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	87-0449945
Entity Address, Address Line One	2370 Corporate Circle, Suite 160
Entity Address, City or Town	Henderson
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89074
City Area Code	(702)
Local Phone Number	989-7692
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	CLSK
Security Exchange Name	NASDAQ