[10-Q] CleanSpark, Inc. Warrant Quarterly Earnings Report
CleanSpark (CLSK) posted a strong fiscal Q3-25. Bitcoin-mining revenue nearly doubled to $198.6 M (Q3-24: $104.1 M) while cost of revenue rose more moderately to $90.1 M, lifting gross profit to $108.5 M. A $268.7 M unrealized gain on fair-value remeasurement of bitcoin drove operating income to $246.2 M versus a $249.1 M loss a year ago. Net income attributable to common shareholders was $251.8 M ($0.78 diluted EPS) compared with a $236.2 M loss (-$1.03 EPS) in the prior-year quarter.
Year-to-date (9 mo). Revenue advanced 87% to $542.7 M, and net income swung to $365.4 M from an $83.6 M loss.
Balance sheet. Assets grew to $3.10 B (Sep-24: $1.96 B) as bitcoin holdings appreciated to $1.08 B (10,075 BTC). Cash fell to $34.6 M, offset by a $202.7 M long-term bitcoin reserve. Debt expanded sharply: current loans $176.4 M (Sep-24: $58.8 M) and long-term loans $643.9 M (Sep-24: $7.2 M). Equity increased to $2.15 B.
Cash flow. Operating cash outflow was $341.6 M; capex and miner purchases consumed $441.2 M. Financing provided $696.5 M, driven by $812.2 M new debt, $186.8 M equity issuance, and a $145 M share buyback.
Strategic moves. The company closed the $128.2 M GRIID Infrastructure acquisition, added multiple Georgia, Tennessee and Mississippi sites, and early-adopted ASC 350-60, now marking bitcoin at fair value. Treasury policy shifted to classify 202 M USD of bitcoin as long-term holdings.
CleanSpark (CLSK) ha registrato un solido terzo trimestre fiscale 2025. I ricavi dal mining di Bitcoin sono quasi raddoppiati, raggiungendo 198,6 milioni di dollari (Q3-24: 104,1 milioni), mentre i costi di ricavo sono aumentati in modo più contenuto a 90,1 milioni, portando il profitto lordo a 108,5 milioni di dollari. Un guadagno non realizzato di 268,7 milioni derivante dalla rivalutazione a fair value dei bitcoin ha spinto l'utile operativo a 246,2 milioni, rispetto a una perdita di 249,1 milioni dell'anno precedente. L'utile netto attribuibile agli azionisti ordinari è stato di 251,8 milioni di dollari (utile diluito per azione di 0,78 dollari), a fronte di una perdita di 236,2 milioni (-1,03 dollari per azione) nello stesso trimestre dell'anno precedente.
Risultati da inizio anno (9 mesi). I ricavi sono cresciuti dell'87%, raggiungendo 542,7 milioni di dollari, e l'utile netto è passato a 365,4 milioni da una perdita di 83,6 milioni.
Bilancio. Gli attivi sono aumentati a 3,10 miliardi di dollari (settembre 2024: 1,96 miliardi), con le partecipazioni in bitcoin che sono salite a 1,08 miliardi (10.075 BTC). La liquidità è scesa a 34,6 milioni, compensata da una riserva a lungo termine in bitcoin di 202,7 milioni. Il debito è cresciuto significativamente: prestiti correnti a 176,4 milioni (settembre 2024: 58,8 milioni) e prestiti a lungo termine a 643,9 milioni (settembre 2024: 7,2 milioni). Il patrimonio netto è salito a 2,15 miliardi.
Flusso di cassa. L'uscita di cassa operativa è stata di 341,6 milioni; gli investimenti in capitale e l'acquisto di miner hanno assorbito 441,2 milioni. Il finanziamento ha fornito 696,5 milioni, trainato da 812,2 milioni di nuovo debito, 186,8 milioni da emissione azionaria e un riacquisto di azioni per 145 milioni.
Mosse strategiche. L'azienda ha completato l'acquisizione di GRIID Infrastructure per 128,2 milioni, ha aggiunto più siti in Georgia, Tennessee e Mississippi, e ha adottato anticipatamente il principio contabile ASC 350-60, ora valutando i bitcoin al fair value. La politica di tesoreria è cambiata classificando 202 milioni di dollari in bitcoin come partecipazioni a lungo termine.
CleanSpark (CLSK) presentó un sólido tercer trimestre fiscal 2025. Los ingresos por minería de Bitcoin casi se duplicaron a 198,6 millones de dólares (Q3-24: 104,1 millones), mientras que el costo de ingresos aumentó de forma más moderada a 90,1 millones, elevando la ganancia bruta a 108,5 millones. Una ganancia no realizada de 268,7 millones por la revalorización a valor razonable de bitcoin impulsó el ingreso operativo a 246,2 millones, frente a una pérdida de 249,1 millones del año anterior. La utilidad neta atribuible a los accionistas comunes fue de 251,8 millones de dólares (EPS diluido de 0,78 dólares) comparado con una pérdida de 236,2 millones (-1,03 EPS) en el mismo trimestre del año anterior.
Acumulado a la fecha (9 meses). Los ingresos aumentaron un 87% hasta 542,7 millones, y la utilidad neta pasó a 365,4 millones desde una pérdida de 83,6 millones.
Balance general. Los activos crecieron a 3,10 mil millones de dólares (septiembre 2024: 1,96 mil millones), mientras que las tenencias de bitcoin se apreciaron a 1,08 mil millones (10,075 BTC). El efectivo bajó a 34,6 millones, compensado por una reserva a largo plazo en bitcoin de 202,7 millones. La deuda se expandió considerablemente: préstamos corrientes de 176,4 millones (septiembre 2024: 58,8 millones) y préstamos a largo plazo de 643,9 millones (septiembre 2024: 7,2 millones). El patrimonio aumentó a 2,15 mil millones.
Flujo de caja. El flujo de caja operativo fue negativo en 341,6 millones; la inversión en capital y compra de mineros consumió 441,2 millones. El financiamiento aportó 696,5 millones, impulsado por 812,2 millones en nueva deuda, 186,8 millones en emisión de acciones y una recompra de acciones por 145 millones.
Movimientos estratégicos. La compañía cerró la adquisición de GRIID Infrastructure por 128,2 millones, añadió múltiples sitios en Georgia, Tennessee y Mississippi, y adoptó anticipadamente la norma ASC 350-60, ahora valorando bitcoin a valor razonable. La política de tesorería cambió para clasificar 202 millones de dólares en bitcoin como tenencias a largo plazo.
CleanSpark(CLSK)는 2025 회계연도 3분기에 강력한 실적을 기록했습니다. 비트코인 채굴 수익은 거의 두 배로 증가하여 1억 9,860만 달러(Q3-24: 1억 410만 달러)를 기록했고, 매출원가는 더 완만하게 증가하여 9,010만 달러에 이르렀으며, 이로 인해 총이익은 1억 850만 달러에 달했습니다. 비트코인 공정가치 재측정에서 발생한 2억 6,870만 달러의 미실현 이익 덕분에 영업이익은 2억 4,620만 달러로 전년 동기 2억 4,910만 달러 손실에서 흑자로 전환했습니다. 보통주주 귀속 순이익은 2억 5,180만 달러(희석 주당순이익 0.78달러)로 전년 동기 2억 3,620만 달러 손실(주당순손실 1.03달러)에서 크게 개선되었습니다.
연초부터 9개월 누적. 매출은 87% 증가한 5억 4,270만 달러에 달했고, 순이익은 8,360만 달러 손실에서 3억 6,540만 달러 흑자로 전환했습니다.
재무상태표. 자산은 31억 달러로 증가했으며(2024년 9월: 19억 6,000만 달러), 비트코인 보유액은 10,075 BTC로 10억 8,000만 달러까지 상승했습니다. 현금은 3,460만 달러로 감소했으나, 2억 270만 달러의 장기 비트코인 준비금으로 상쇄되었습니다. 부채는 크게 확대되어, 단기 대출은 1억 7,640만 달러(2024년 9월: 5,880만 달러), 장기 대출은 6억 4,390만 달러(2024년 9월: 720만 달러)를 기록했습니다. 자본은 21억 5,000만 달러로 증가했습니다.
현금 흐름. 영업 현금 유출은 3억 4,160만 달러였으며, 설비 투자 및 채굴기 구매에 4억 4,120만 달러가 소요되었습니다. 자금 조달로 6억 9,650만 달러가 유입되었으며, 이 중 8억 1,220만 달러의 신규 부채, 1억 8,680만 달러의 주식 발행, 1억 4,500만 달러의 자사주 매입이 포함되었습니다.
전략적 움직임. 회사는 1억 2,820만 달러 규모의 GRIID Infrastructure 인수를 완료하고, 조지아, 테네시, 미시시피에 여러 사이트를 추가했으며, ASC 350-60 회계 기준을 조기 도입하여 비트코인을 공정가치로 평가하기 시작했습니다. 재무 정책도 변경되어 2억 20만 달러 상당의 비트코인을 장기 보유 자산으로 분류했습니다.
CleanSpark (CLSK) a publié un solide troisième trimestre fiscal 2025. Les revenus issus du minage de Bitcoin ont presque doublé pour atteindre 198,6 millions de dollars (T3-24 : 104,1 millions), tandis que le coût des revenus a augmenté plus modérément à 90,1 millions, portant le bénéfice brut à 108,5 millions. Un gain non réalisé de 268,7 millions résultant de la réévaluation à la juste valeur des bitcoins a fait passer le résultat d'exploitation à 246,2 millions, contre une perte de 249,1 millions un an plus tôt. Le bénéfice net attribuable aux actionnaires ordinaires s'est élevé à 251,8 millions de dollars (BPA dilué de 0,78 $), contre une perte de 236,2 millions (-1,03 $ de BPA) au trimestre précédent.
Depuis le début de l'année (9 mois). Le chiffre d'affaires a progressé de 87 % pour atteindre 542,7 millions, et le bénéfice net est passé à 365,4 millions, contre une perte de 83,6 millions.
Bilan. Les actifs ont augmenté pour atteindre 3,10 milliards (septembre 2024 : 1,96 milliard), tandis que les avoirs en bitcoins se sont appréciés à 1,08 milliard (10 075 BTC). La trésorerie a chuté à 34,6 millions, compensée par une réserve à long terme en bitcoins de 202,7 millions. La dette a fortement augmenté : prêts courants de 176,4 millions (septembre 2024 : 58,8 millions) et prêts à long terme de 643,9 millions (septembre 2024 : 7,2 millions). Les capitaux propres ont augmenté à 2,15 milliards.
Flux de trésorerie. La sortie de trésorerie opérationnelle s'est élevée à 341,6 millions ; les dépenses en capital et achats de mineurs ont consommé 441,2 millions. Le financement a apporté 696,5 millions, porté par 812,2 millions de nouvelle dette, 186,8 millions d'émission d'actions et un rachat d'actions de 145 millions.
Mouvements stratégiques. La société a finalisé l'acquisition de GRIID Infrastructure pour 128,2 millions, ajouté plusieurs sites en Géorgie, Tennessee et Mississippi, et adopté de manière anticipée la norme ASC 350-60, marquant désormais les bitcoins à la juste valeur. La politique de trésorerie a été modifiée pour classer 202 millions de dollars de bitcoins en actifs à long terme.
CleanSpark (CLSK) verzeichnete ein starkes fiskalisches Q3-25. Die Einnahmen aus dem Bitcoin-Mining haben sich nahezu verdoppelt und erreichten 198,6 Mio. USD (Q3-24: 104,1 Mio. USD), während die Umsatzkosten moderater auf 90,1 Mio. USD stiegen, was den Bruttogewinn auf 108,5 Mio. USD anhob. Ein unrealisierter Gewinn von 268,7 Mio. USD aus der Neubewertung von Bitcoin zum Fair Value trieb das Betriebsergebnis auf 246,2 Mio. USD, gegenüber einem Verlust von 249,1 Mio. USD im Vorjahr. Der den Stammaktionären zurechenbare Nettogewinn betrug 251,8 Mio. USD (verwässertes EPS von 0,78 USD) im Vergleich zu einem Verlust von 236,2 Mio. USD (-1,03 USD EPS) im Vorjahresquartal.
Jahresergebnis (9 Monate). Der Umsatz stieg um 87 % auf 542,7 Mio. USD, und der Nettogewinn drehte sich von einem Verlust von 83,6 Mio. USD zu einem Gewinn von 365,4 Mio. USD.
Bilanz. Die Vermögenswerte wuchsen auf 3,10 Mrd. USD (Sep-24: 1,96 Mrd. USD), während sich die Bitcoin-Bestände auf 1,08 Mrd. USD (10.075 BTC) aufwerteten. Die liquiden Mittel sanken auf 34,6 Mio. USD, ausgeglichen durch eine langfristige Bitcoin-Reserve von 202,7 Mio. USD. Die Verschuldung stieg stark an: kurzfristige Kredite 176,4 Mio. USD (Sep-24: 58,8 Mio. USD) und langfristige Kredite 643,9 Mio. USD (Sep-24: 7,2 Mio. USD). Das Eigenkapital stieg auf 2,15 Mrd. USD.
Cashflow. Der operative Cashflow war mit 341,6 Mio. USD negativ; Investitionen in Sachanlagen und Miner-Käufe beliefen sich auf 441,2 Mio. USD. Die Finanzierung brachte 696,5 Mio. USD, angetrieben durch 812,2 Mio. USD neue Schulden, 186,8 Mio. USD Kapitalerhöhung und einen Aktienrückkauf von 145 Mio. USD.
Strategische Maßnahmen. Das Unternehmen schloss die Übernahme von GRIID Infrastructure für 128,2 Mio. USD ab, fügte mehrere Standorte in Georgia, Tennessee und Mississippi hinzu und führte frühzeitig ASC 350-60 ein, wodurch Bitcoin nun zum Fair Value bewertet wird. Die Treasury-Politik wurde geändert, sodass 202 Mio. USD an Bitcoin als langfristige Bestände klassifiziert werden.
- Revenue growth 91% YoY to $198.6 M demonstrates expanding hash-rate capacity.
- Net income swung to $251.8 M profit from a $236.2 M loss, improving EPS to $0.78 diluted.
- Equity base rose to $2.15 B, strengthening capital structure despite expansion.
- GRIID acquisition completed, adding strategic Tennessee assets and 120 M goodwill-backed synergies.
- Cash balance fell 72% since Sep-24 to $34.6 M, pressuring liquidity.
- Total debt surged to $820 M, increasing interest burden and refinancing risk.
- Operating cash outflow of $341.6 M and capex of $516 M highlight continued negative free cash flow.
- High earnings volatility driven by $268.7 M non-cash bitcoin revaluation gains.
Insights
TL;DR: Revenue up 91%, large bitcoin revaluation swing turns $236 M loss into $252 M profit; leverage and cash burn rise.
CleanSpark delivered impressive top-line and bottom-line reversals, reflecting scale-up of hash-rate capacity and a favorable bitcoin price. Gross margin of 55% underscores improved energy efficiency. However, the P&L is highly dependent on non-cash bitcoin fair-value gains (≈$269 M this quarter). Ex-FV, operating cash flow was -$342 M, highlighting a cash-hungry build-out strategy. Debt jumped to $820 M including convertible notes, lifting financial risk, yet equity cushion remains at 69% of total assets. Strategic acquisitions (GRIID and additional sites) diversify geography and future power access but will demand further capex. Investors should watch bitcoin price sensitivity, execution on new facilities, and progress toward positive free cash flow.
TL;DR: Balance sheet bitcoin exposure and leverage materially higher; liquidity tight at $34 M cash.
The company’s risk profile is concentrated in two areas: (1) market risk from holding 10,075 BTC (≈35% of assets) and posting part of it as collateral, and (2) financial risk from rapid debt accumulation—current and long-term borrowings total $820 M versus $34 M cash. Operating cash burn and $382 M miner capex amplify liquidity pressure; any prolonged bitcoin downturn could trigger collateral calls and covenant stress. The $145 M share repurchase further reduced cash. While equity remains robust, CleanSpark’s ability to refinance, hedge or monetize bitcoin will dictate solvency through future volatility.
CleanSpark (CLSK) ha registrato un solido terzo trimestre fiscale 2025. I ricavi dal mining di Bitcoin sono quasi raddoppiati, raggiungendo 198,6 milioni di dollari (Q3-24: 104,1 milioni), mentre i costi di ricavo sono aumentati in modo più contenuto a 90,1 milioni, portando il profitto lordo a 108,5 milioni di dollari. Un guadagno non realizzato di 268,7 milioni derivante dalla rivalutazione a fair value dei bitcoin ha spinto l'utile operativo a 246,2 milioni, rispetto a una perdita di 249,1 milioni dell'anno precedente. L'utile netto attribuibile agli azionisti ordinari è stato di 251,8 milioni di dollari (utile diluito per azione di 0,78 dollari), a fronte di una perdita di 236,2 milioni (-1,03 dollari per azione) nello stesso trimestre dell'anno precedente.
Risultati da inizio anno (9 mesi). I ricavi sono cresciuti dell'87%, raggiungendo 542,7 milioni di dollari, e l'utile netto è passato a 365,4 milioni da una perdita di 83,6 milioni.
Bilancio. Gli attivi sono aumentati a 3,10 miliardi di dollari (settembre 2024: 1,96 miliardi), con le partecipazioni in bitcoin che sono salite a 1,08 miliardi (10.075 BTC). La liquidità è scesa a 34,6 milioni, compensata da una riserva a lungo termine in bitcoin di 202,7 milioni. Il debito è cresciuto significativamente: prestiti correnti a 176,4 milioni (settembre 2024: 58,8 milioni) e prestiti a lungo termine a 643,9 milioni (settembre 2024: 7,2 milioni). Il patrimonio netto è salito a 2,15 miliardi.
Flusso di cassa. L'uscita di cassa operativa è stata di 341,6 milioni; gli investimenti in capitale e l'acquisto di miner hanno assorbito 441,2 milioni. Il finanziamento ha fornito 696,5 milioni, trainato da 812,2 milioni di nuovo debito, 186,8 milioni da emissione azionaria e un riacquisto di azioni per 145 milioni.
Mosse strategiche. L'azienda ha completato l'acquisizione di GRIID Infrastructure per 128,2 milioni, ha aggiunto più siti in Georgia, Tennessee e Mississippi, e ha adottato anticipatamente il principio contabile ASC 350-60, ora valutando i bitcoin al fair value. La politica di tesoreria è cambiata classificando 202 milioni di dollari in bitcoin come partecipazioni a lungo termine.
CleanSpark (CLSK) presentó un sólido tercer trimestre fiscal 2025. Los ingresos por minería de Bitcoin casi se duplicaron a 198,6 millones de dólares (Q3-24: 104,1 millones), mientras que el costo de ingresos aumentó de forma más moderada a 90,1 millones, elevando la ganancia bruta a 108,5 millones. Una ganancia no realizada de 268,7 millones por la revalorización a valor razonable de bitcoin impulsó el ingreso operativo a 246,2 millones, frente a una pérdida de 249,1 millones del año anterior. La utilidad neta atribuible a los accionistas comunes fue de 251,8 millones de dólares (EPS diluido de 0,78 dólares) comparado con una pérdida de 236,2 millones (-1,03 EPS) en el mismo trimestre del año anterior.
Acumulado a la fecha (9 meses). Los ingresos aumentaron un 87% hasta 542,7 millones, y la utilidad neta pasó a 365,4 millones desde una pérdida de 83,6 millones.
Balance general. Los activos crecieron a 3,10 mil millones de dólares (septiembre 2024: 1,96 mil millones), mientras que las tenencias de bitcoin se apreciaron a 1,08 mil millones (10,075 BTC). El efectivo bajó a 34,6 millones, compensado por una reserva a largo plazo en bitcoin de 202,7 millones. La deuda se expandió considerablemente: préstamos corrientes de 176,4 millones (septiembre 2024: 58,8 millones) y préstamos a largo plazo de 643,9 millones (septiembre 2024: 7,2 millones). El patrimonio aumentó a 2,15 mil millones.
Flujo de caja. El flujo de caja operativo fue negativo en 341,6 millones; la inversión en capital y compra de mineros consumió 441,2 millones. El financiamiento aportó 696,5 millones, impulsado por 812,2 millones en nueva deuda, 186,8 millones en emisión de acciones y una recompra de acciones por 145 millones.
Movimientos estratégicos. La compañía cerró la adquisición de GRIID Infrastructure por 128,2 millones, añadió múltiples sitios en Georgia, Tennessee y Mississippi, y adoptó anticipadamente la norma ASC 350-60, ahora valorando bitcoin a valor razonable. La política de tesorería cambió para clasificar 202 millones de dólares en bitcoin como tenencias a largo plazo.
CleanSpark(CLSK)는 2025 회계연도 3분기에 강력한 실적을 기록했습니다. 비트코인 채굴 수익은 거의 두 배로 증가하여 1억 9,860만 달러(Q3-24: 1억 410만 달러)를 기록했고, 매출원가는 더 완만하게 증가하여 9,010만 달러에 이르렀으며, 이로 인해 총이익은 1억 850만 달러에 달했습니다. 비트코인 공정가치 재측정에서 발생한 2억 6,870만 달러의 미실현 이익 덕분에 영업이익은 2억 4,620만 달러로 전년 동기 2억 4,910만 달러 손실에서 흑자로 전환했습니다. 보통주주 귀속 순이익은 2억 5,180만 달러(희석 주당순이익 0.78달러)로 전년 동기 2억 3,620만 달러 손실(주당순손실 1.03달러)에서 크게 개선되었습니다.
연초부터 9개월 누적. 매출은 87% 증가한 5억 4,270만 달러에 달했고, 순이익은 8,360만 달러 손실에서 3억 6,540만 달러 흑자로 전환했습니다.
재무상태표. 자산은 31억 달러로 증가했으며(2024년 9월: 19억 6,000만 달러), 비트코인 보유액은 10,075 BTC로 10억 8,000만 달러까지 상승했습니다. 현금은 3,460만 달러로 감소했으나, 2억 270만 달러의 장기 비트코인 준비금으로 상쇄되었습니다. 부채는 크게 확대되어, 단기 대출은 1억 7,640만 달러(2024년 9월: 5,880만 달러), 장기 대출은 6억 4,390만 달러(2024년 9월: 720만 달러)를 기록했습니다. 자본은 21억 5,000만 달러로 증가했습니다.
현금 흐름. 영업 현금 유출은 3억 4,160만 달러였으며, 설비 투자 및 채굴기 구매에 4억 4,120만 달러가 소요되었습니다. 자금 조달로 6억 9,650만 달러가 유입되었으며, 이 중 8억 1,220만 달러의 신규 부채, 1억 8,680만 달러의 주식 발행, 1억 4,500만 달러의 자사주 매입이 포함되었습니다.
전략적 움직임. 회사는 1억 2,820만 달러 규모의 GRIID Infrastructure 인수를 완료하고, 조지아, 테네시, 미시시피에 여러 사이트를 추가했으며, ASC 350-60 회계 기준을 조기 도입하여 비트코인을 공정가치로 평가하기 시작했습니다. 재무 정책도 변경되어 2억 20만 달러 상당의 비트코인을 장기 보유 자산으로 분류했습니다.
CleanSpark (CLSK) a publié un solide troisième trimestre fiscal 2025. Les revenus issus du minage de Bitcoin ont presque doublé pour atteindre 198,6 millions de dollars (T3-24 : 104,1 millions), tandis que le coût des revenus a augmenté plus modérément à 90,1 millions, portant le bénéfice brut à 108,5 millions. Un gain non réalisé de 268,7 millions résultant de la réévaluation à la juste valeur des bitcoins a fait passer le résultat d'exploitation à 246,2 millions, contre une perte de 249,1 millions un an plus tôt. Le bénéfice net attribuable aux actionnaires ordinaires s'est élevé à 251,8 millions de dollars (BPA dilué de 0,78 $), contre une perte de 236,2 millions (-1,03 $ de BPA) au trimestre précédent.
Depuis le début de l'année (9 mois). Le chiffre d'affaires a progressé de 87 % pour atteindre 542,7 millions, et le bénéfice net est passé à 365,4 millions, contre une perte de 83,6 millions.
Bilan. Les actifs ont augmenté pour atteindre 3,10 milliards (septembre 2024 : 1,96 milliard), tandis que les avoirs en bitcoins se sont appréciés à 1,08 milliard (10 075 BTC). La trésorerie a chuté à 34,6 millions, compensée par une réserve à long terme en bitcoins de 202,7 millions. La dette a fortement augmenté : prêts courants de 176,4 millions (septembre 2024 : 58,8 millions) et prêts à long terme de 643,9 millions (septembre 2024 : 7,2 millions). Les capitaux propres ont augmenté à 2,15 milliards.
Flux de trésorerie. La sortie de trésorerie opérationnelle s'est élevée à 341,6 millions ; les dépenses en capital et achats de mineurs ont consommé 441,2 millions. Le financement a apporté 696,5 millions, porté par 812,2 millions de nouvelle dette, 186,8 millions d'émission d'actions et un rachat d'actions de 145 millions.
Mouvements stratégiques. La société a finalisé l'acquisition de GRIID Infrastructure pour 128,2 millions, ajouté plusieurs sites en Géorgie, Tennessee et Mississippi, et adopté de manière anticipée la norme ASC 350-60, marquant désormais les bitcoins à la juste valeur. La politique de trésorerie a été modifiée pour classer 202 millions de dollars de bitcoins en actifs à long terme.
CleanSpark (CLSK) verzeichnete ein starkes fiskalisches Q3-25. Die Einnahmen aus dem Bitcoin-Mining haben sich nahezu verdoppelt und erreichten 198,6 Mio. USD (Q3-24: 104,1 Mio. USD), während die Umsatzkosten moderater auf 90,1 Mio. USD stiegen, was den Bruttogewinn auf 108,5 Mio. USD anhob. Ein unrealisierter Gewinn von 268,7 Mio. USD aus der Neubewertung von Bitcoin zum Fair Value trieb das Betriebsergebnis auf 246,2 Mio. USD, gegenüber einem Verlust von 249,1 Mio. USD im Vorjahr. Der den Stammaktionären zurechenbare Nettogewinn betrug 251,8 Mio. USD (verwässertes EPS von 0,78 USD) im Vergleich zu einem Verlust von 236,2 Mio. USD (-1,03 USD EPS) im Vorjahresquartal.
Jahresergebnis (9 Monate). Der Umsatz stieg um 87 % auf 542,7 Mio. USD, und der Nettogewinn drehte sich von einem Verlust von 83,6 Mio. USD zu einem Gewinn von 365,4 Mio. USD.
Bilanz. Die Vermögenswerte wuchsen auf 3,10 Mrd. USD (Sep-24: 1,96 Mrd. USD), während sich die Bitcoin-Bestände auf 1,08 Mrd. USD (10.075 BTC) aufwerteten. Die liquiden Mittel sanken auf 34,6 Mio. USD, ausgeglichen durch eine langfristige Bitcoin-Reserve von 202,7 Mio. USD. Die Verschuldung stieg stark an: kurzfristige Kredite 176,4 Mio. USD (Sep-24: 58,8 Mio. USD) und langfristige Kredite 643,9 Mio. USD (Sep-24: 7,2 Mio. USD). Das Eigenkapital stieg auf 2,15 Mrd. USD.
Cashflow. Der operative Cashflow war mit 341,6 Mio. USD negativ; Investitionen in Sachanlagen und Miner-Käufe beliefen sich auf 441,2 Mio. USD. Die Finanzierung brachte 696,5 Mio. USD, angetrieben durch 812,2 Mio. USD neue Schulden, 186,8 Mio. USD Kapitalerhöhung und einen Aktienrückkauf von 145 Mio. USD.
Strategische Maßnahmen. Das Unternehmen schloss die Übernahme von GRIID Infrastructure für 128,2 Mio. USD ab, fügte mehrere Standorte in Georgia, Tennessee und Mississippi hinzu und führte frühzeitig ASC 350-60 ein, wodurch Bitcoin nun zum Fair Value bewertet wird. Die Treasury-Politik wurde geändert, sodass 202 Mio. USD an Bitcoin als langfristige Bestände klassifiziert werden.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from __________ to __________ |
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(I.R.S. Employer Identification No.) |
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(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☐ Accelerated filer |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of August 5, 2025, there were
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
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Item 1: |
Financial Statements |
5 |
Item 2: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3: |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4: |
Controls and Procedures |
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PART II – OTHER INFORMATION
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Item 1: |
Legal Proceedings |
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Item 1A: |
Risk Factors |
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Item 2: |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3: |
Defaults Upon Senior Securities |
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Item 4: |
Mine Safety Disclosures |
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Item 5: |
Other Information |
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Item 6: |
Exhibits |
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2
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, future hash rate capacity, industry and business trends, equity compensation, business strategy, plans, market growth and objectives for future operations.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our 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:
3
The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.
As used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context requires otherwise, references to “CleanSpark,” the “Company,” “we,” “us,” and “our” refer to CleanSpark, Inc. and its consolidated subsidiaries.
GENERAL
We encourage investors and others interested in CleanSpark to review the information that we make available on our website at https://www.cleanspark.com/investor-relations, in addition to our filings with the SEC, webcasts, press releases and conference calls. Information contained on our website is not part of this Quarterly Report on Form 10-Q.
WHERE YOU CAN FIND MORE INFORMATION
All reports we file with the SEC are available for download free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC’s website at www.sec.gov. We also make electronic copies of our reports available for download, free of charge, through our website at https://www.cleanspark.com/investor-relations as soon as reasonably practicable after filing such material with the SEC. Information contained on our website is not part of this Quarterly Report on Form 10-Q.
4
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our condensed consolidated financial statements included in this Quarterly Report Form 10-Q are as follows:
Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and September 30, 2024; |
F-1 |
Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended June 30, 2025 and 2024 (unaudited); |
F-3 |
Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended June 30, 2025 and 2024 (unaudited); |
F-5 |
Condensed Consolidated Statements of Cash Flow for the nine months ended June 30, 2025 and 2024 (unaudited); and |
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Notes to Condensed Consolidated Financial Statements (unaudited). |
F-9 |
This Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on December 3, 2024.
The accompanying condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC's instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended June 30, 2025 are not necessarily indicative of the results that can be expected for the full fiscal year.
5
CLEANSPARK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share amounts)
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June 30, |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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Restricted cash |
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Prepaid expense and other current assets |
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Bitcoin - current |
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Receivable from bitcoin collateral |
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Note receivable from GRIID (see Note 5) |
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Derivative investments |
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Investment in debt security, AFS, at fair value |
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Total current assets |
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Bitcoin - noncurrent |
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Property and equipment, net |
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Operating lease right of use assets |
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Intangible assets, net |
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Deposits on miners and mining equipment |
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Other long-term assets |
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Goodwill |
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Total assets |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable |
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Accrued liabilities |
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Other current liabilities |
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Current portion of loans payable |
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Dividends payable |
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Total current liabilities |
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Long-term liabilities |
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Loans payable, net of current portion, debt discount and debt issuance costs |
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Deferred income taxes |
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Other long-term liabilities |
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Total liabilities |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-1
CLEANSPARK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands, except par value and share amounts)
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Stockholders' equity |
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Preferred stock; $ |
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Common stock; $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Treasury stock at cost; |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
CLEANSPARK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited, in thousands, except per share and share amounts)
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For the three months ended |
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For the nine months ended |
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Revenues, net |
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Bitcoin mining revenue, net |
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Costs and expenses |
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Cost of revenues (exclusive of depreciation and amortization shown below) |
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Professional fees |
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Payroll expenses |
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General and administrative expenses |
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Loss (gain) on disposal of assets |
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(Gain) loss on fair value of bitcoin, net (see Note 2 and Note 4) |
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Impairment expense - fixed assets |
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Impairment expense - other |
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Depreciation and amortization |
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Total costs and expenses |
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Income (loss) from operations |
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Other income (expense) |
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Gain on bitcoin collateral |
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(Loss) gain on derivative securities |
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( |
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Interest income |
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Interest expense |
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Other income |
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Total other income |
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$ |
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$ |
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$ |
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$ |
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Income (loss) before income tax expense (benefit) |
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Income tax expense (benefit) |
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Net income (loss) |
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$ |
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$ |
( |
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$ |
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$ |
( |
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Preferred stock dividends |
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Net income (loss) attributable to common shareholders |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Other comprehensive (loss) income, net of tax |
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Total comprehensive income (loss) attributable to common shareholders |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
CLEANSPARK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)
(Unaudited, in thousands, except per share and share amounts)
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For the three months ended |
|
|
For the nine months ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
||||
Income (loss) from continuing operations per common share - basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations per common share - diluted |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
CLEANSPARK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in thousands, except share amounts)
Three months ended June 30, 2025
|
|
Preferred Stock |
|
|
Common Stock |
|
|
Treasury |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Stock |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Equity |
|
|||||||||
Balance, March 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Options and restricted stock units issued for services |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Preferred stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Exercise of options and warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Other comprehensive loss (net of tax) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance, June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Nine months ended June 30, 2025
|
|
Preferred Stock |
|
|
Common Stock |
|
|
Treasury |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Stock |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Equity |
|
|||||||||
Balance, September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Options and restricted stock units issued for services |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares issued for business acquisition |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Warrants issued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Warrants reclassified as equity awards |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Purchase of capped call |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Exercise of options and warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares issued under equity offering, net of offering costs |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Preferred stock series X redemption |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
CLEANSPARK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(Unaudited, in thousands, except share amounts)
Three months ended June 30, 2024
|
|
Preferred Stock |
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Equity |
|
||||||||
Balance, March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Options and restricted stock units issued for services |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Shares withheld for net settlement of restricted stock units related to tax withholdings |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Shares issued under equity offering, net of offering costs |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Exercise of options and warrants |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Nine months ended June 30, 2024
|
|
Preferred Stock |
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Equity |
|
||||||||
Balance, September 30, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Cumulative effect of change in accounting principle (See Note 2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Options and restricted stock units issued for services |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Shares withheld for net settlement of restricted stock units related to tax withholdings |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Exercise of options and warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares issued under equity offering, net of offering costs |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-6
CLEANSPARK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited, in thousands)
|
|
Nine Months Ended |
|
|||||
|
|
June 30, |
|
|
June 30, |
|
||
Cash Flows from Operating Activities |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
||
Bitcoin mining revenue, net |
|
|
( |
) |
|
|
( |
) |
Gain on fair value of bitcoin (see Note 2 and Note 4) |
|
|
( |
) |
|
|
( |
) |
Bitcoin issued for services |
|
|
|
|
|
|
||
Impairment of fixed assets |
|
|
|
|
|
|
||
Impairment - other |
|
|
|
|
|
|
||
Loss on derivative securities |
|
|
|
|
|
|
||
Gain on bitcoin collateral |
|
|
( |
) |
|
|
|
|
Stock based compensation |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Deferred income taxes, net |
|
|
|
|
|
|
||
(Gain) loss on disposal of assets |
|
|
( |
) |
|
|
|
|
Other |
|
|
|
|
|
|
||
Changes in operating assets and liabilities |
|
|
|
|
|
|
||
Decrease in operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Decrease in accounts payable and accrued liabilities |
|
|
|
|
|
|
||
Increase in prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Increase in other long-term assets |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities - Continuing Operations |
|
$ |
( |
) |
|
$ |
( |
) |
Net cash used in operating activities of Discontinued Operations |
|
|
|
|
|
( |
) |
|
Net cash used in operating activities |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Cash Flows from Investing Activities |
|
|
|
|
|
|
||
Payments on miners and mining equipment (including deposits) |
|
$ |
( |
) |
|
$ |
( |
) |
Purchase of fixed assets |
|
|
( |
) |
|
|
( |
) |
Purchase of bitcoin |
|
|
( |
) |
|
|
|
|
Proceeds from sale of bitcoin |
|
|
|
|
|
|
||
Proceeds from sale of miners |
|
|
|
|
|
|
||
Proceeds from sale of derivative contracts |
|
|
|
|
|
|
||
Acquisition of GRIID Infrastructure |
|
|
|
|
|
|
||
Asset acquisition - LaFayette, GA Location |
|
|
( |
) |
|
|
|
|
Asset acquisition - Twin City, GA Location |
|
|
( |
) |
|
|
|
|
Asset acquisition - Tennessee Locations |
|
|
( |
) |
|
|
|
|
Asset acquisition - LN Energy |
|
|
|
|
|
( |
) |
|
Asset acquisition - Mississippi Locations |
|
|
|
|
|
( |
) |
|
Asset acquisition - Dalton, GA Location |
|
|
|
|
|
( |
) |
|
Asset acquisition - land in Sandersville, GA |
|
|
|
|
|
( |
) |
|
Note receivable from GRIID |
|
|
|
|
|
( |
) |
|
Net cash used in investing activities - Continuing Operations |
|
$ |
( |
) |
|
$ |
( |
) |
Net cash used in investing activities |
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-7
CLEANSPARK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Continued)
(Unaudited, in thousands)
|
|
Nine Months Ended |
|
|||||
|
|
June 30, |
|
|
June 30, |
|
||
Cash Flows from Financing Activities |
|
|
|
|
|
|
||
Purchase of treasury stock |
|
$ |
( |
) |
|
$ |
|
|
Payments for capped call |
|
|
( |
) |
|
|
|
|
Payments on loans |
|
|
( |
) |
|
|
( |
) |
Payments of loan issuance costs |
|
|
( |
) |
|
|
|
|
Payments on preferred dividends |
|
|
( |
) |
|
|
( |
) |
Payments on finance leases |
|
|
( |
) |
|
|
( |
) |
Proceeds from loans payable, net of issuance fees |
|
|
|
|
|
|
||
Payments of taxes on shares withheld for net settlement of restricted stock units |
|
|
( |
) |
|
|
( |
) |
Proceeds from exercise of options and warrants |
|
|
|
|
|
|
||
Proceeds from equity offerings, net |
|
|
|
|
|
|
||
Net cash provided by financing activities - Continuing Operations |
|
$ |
|
|
$ |
|
||
Net cash provided by financing activities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Cash and cash equivalents, and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Non-cash investing and financing transactions |
|
|
|
|
|
|
||
Receivable for equity proceeds |
|
$ |
|
|
$ |
|
||
Fixed asset and miner purchases accrued not paid |
|
$ |
|
|
$ |
|
||
Fixed assets purchased through finance transactions |
|
$ |
|
|
$ |
|
||
Miners and derivatives purchased with bitcoin |
|
$ |
|
|
$ |
|
||
Software purchased with bitcoin |
|
$ |
|
|
$ |
|
||
Preferred shares dividends accrued |
|
$ |
|
|
$ |
|
||
Unrealized gain on investment in available-for-sale debt security |
|
$ |
|
|
$ |
|
||
Bitcoin transferred to collateral account |
|
$ |
|
|
$ |
|
||
Bitcoin transferred from collateral account |
|
$ |
|
|
$ |
|
||
Shares issued in connection with GRIID Acquisition |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Reconciliation of cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-8
CLEANSPARK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, $ in thousands, except share, per share and per bitcoin amounts)
1. ORGANIZATION
CleanSpark, Inc. (the “Company”) is a bitcoin mining company. The Company independently owns, leases, and operates
The Company does not currently host miners for any other companies. The Company designs its infrastructure to responsibly secure and support the bitcoin network, the world’s most recognized digital commodity.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on December 3, 2024 (the “Form 10-K”).
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented in this Quarterly Report on Form 10-Q have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full fiscal year.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, and the Company’s wholly owned subsidiaries. All intercompany transactions have been eliminated upon consolidation of these entities. The Company has a sole reportable segment which is the bitcoin mining segment.
There were no changes to the Company’s most significant estimates and assumptions, significant accounting policies, or recent accounting pronouncements that were disclosed in Note 2 - Summary of Significant Accounting Policies included in the Form 10-K other than as discussed below.
Reclassifications
Certain prior-year amounts have been reclassified to conform to the current-year presentation. This includes the grouping of certain balance sheet and statement of cash flow items into new or revised categories to improve clarity and consistency with current-year classifications.
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Codification (“ASC”) 350-60 which requires entities with certain crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income (loss) in each reporting period. Crypto assets that meet all the following criteria are within the scope of ASC 350-60:
F-9
Bitcoin, which is the sole crypto asset mined by the Company, meets each of these criteria. For all entities, the ASC 350-60 amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual consolidated financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company has elected to early adopt the new guidance effective October 1, 2023, resulting in a $
In May 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which amends existing guidance to allow entities to apply the same principles used in other business combinations when determining the accounting acquirer in a transaction involving a variable interest entity (VIE) that is a business and where consideration is primarily in the form of equity interests. This update addresses comparability concerns and provides for more consistent application of acquisition accounting principles. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods within those years, with early adoption permitted. The Company is currently assessing the potential impact of the standard but does not anticipate that it will have a material impact on its consolidated financial statements.
In May 2025, the FASB also issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, to address diversity in practice and improve the operability of accounting for share-based consideration granted to customers. The amendments clarify how to distinguish between service and performance conditions for vesting, require entities to estimate forfeitures for all share-based consideration payable to customers, and specify that variable consideration guidance in ASC 606 does not apply when measuring such awards. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial statements and does not expect it to have a material impact on its financial position, results of operations or cash flows.
In March 2024, the FASB issued ASU 2024-01, Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which clarifies how an entity determines whether a profits interest or similar award is (1) within the scope of ASC 718 - Compensation - Stock Compensation or (2) not a share-based payment arrangement and therefore within the scope of other guidance. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or nonemployees in exchange for goods or services. ASU 2024-01 is effective for public business entities for annual periods beginning after December 15, 2024, including interim periods within those periods. The Company evaluated and concluded that there is no impact this new guidance will have on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), as later updated by ASU 2025-01 in January 2025, which requires public business entities to provide additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization related to oil-and-gas producing activities. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its financial statement disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishments of convertible debt. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements and related disclosures.
In March 2025, the FASB issued ASU 2025-02, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 ("ASU 2025-02") which amends Topic 405 (Liabilities) to address obligations related to safeguarding crypto assets for platform users. Under the new guidance, entities are required to recognize a liability for safeguarding obligations measured at the fair value of the crypto assets held. Concurrently, an indemnification-like asset must be recognized at the same fair value to reflect the entity's expected recovery mechanisms for safeguarding obligations. ASU 2025-02 is effective for annual reporting periods beginning after December 15, 2024, with retrospective application required. Earlier adoption is permitted. The Company has evaluated the applicability of this amendment to its business operations. As the Company operates as a bitcoin mining entity and does not provide custodial services or safeguard crypto assets for others, this new guidance does not directly impact its financial statements.
F-10
Bitcoin
During period ending March 31, 2025, the Company made a strategic decision to change its bitcoin treasury policy and determined that a portion of its bitcoin holdings would be held long-term. As a result, the Company began to classify a certain portion of bitcoin as noncurrent. Bitcoin holdings are presented on the condensed consolidated balance sheets within both current assets as Bitcoin - current and noncurrent assets as Bitcoin - noncurrent, respectively. The current portion includes bitcoin retained from mining operations that may be sold periodically in a highly liquid marketplace, and such bitcoin holdings are expected to be realized in cash or sold or consumed during the Company's normal operating cycle, or posted as collateral. The noncurrent portion represents bitcoin that the Company intends to hold for the long-term as part of its strategic reserve and is not expected to be sold or otherwise monetized within the normal operating cycle.
Stock Warrants
The Company accounts for stock warrants as either equity instruments or liabilities in accordance with FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and/or derivative liabilities in accordance with FASB ASC 815, Derivatives and Hedging (“ASC 815”), depending on the specific terms of the agreement. Liability-classified warrants are recorded at their estimated fair values at each reporting period until they are exercised, terminated, reclassified or otherwise settled. Changes in the estimated fair value of liability-classified warrants are included in Loss on derivative securities under other income in the Company’s condensed consolidated statement of operations.
Convertible Debt
The Company accounts for its convertible senior notes under FASB ASC 470-20, Debt with Conversion and Other Options and FASB ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity and/or ASC 815, depending on the specific terms of the debt agreement. The Company records the convertible senior notes as a long-term liability at face value net of debt issuance costs. If any of the conditions to the convertibility of the convertible senior notes are satisfied, or the convertible senior notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the carrying value of the convertible senior notes as a current, rather than a long-term liability.
Debt issuance costs related to the convertible senior notes were capitalized and recorded as a contra-liability and are presented net against the balance of the convertible senior notes on the condensed consolidated balance sheets. Debt issuance costs consist of underwriting, legal and other direct costs related to the issuance of the convertible senior notes and are amortized to interest expense over the term of the convertible senior notes using the straight-line method which approximated the effective interest method.
Capped Call
Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the convertible senior notes. The Company accounts for capped calls as either equity instruments or liabilities in accordance with ASC 480 and/or derivative liabilities in accordance ASC 815, depending on the specific terms of the agreement. As of June 30, 2025, the company has only entered into equity-classified capped calls which are not remeasured each reporting period and are recorded as a reduction to additional paid-in-capital within shareholders’ equity when purchased.
Stock Compensation
The Company measures the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company established the 2025 Long Term Incentive Plan in October 2024 (see Note 13 - Stock-Based Compensation). In accordance with ASC 718, Compensation - Stock Compensation, no stock-based compensation expense has been recognized for awards under the 2025 Long Term Incentive Plan because a mutual understanding of the awards’ key terms and conditions has not been determined and communicated to the grantees.
Earnings per share
Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net income per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.
Common stock issuable upon the exercises of outstanding stock options, vesting of restricted stock and warrants are computed using the treasury method. Potential shares of common stock issuable upon conversion of the convertible notes and Series A preferred stock are computed using the if-converted method.
F-11
Provided below is the income per share calculation for the three and nine months ended June 30, 2025 and 2024:
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
($ in thousands, except share and per share amounts) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Continuing Operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common shareholders - Basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Non-cash interest expense on convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common shareholders - Dilutive |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive impact of stock options and other share-based awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive impact of convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - Dilutive |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) per common share attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Diluted |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
The securities excluded from the computation of diluted earnings per share because to do so would have been anti-dilutive are as follows:
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Series A preferred stock conversion |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive stock options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive restricted stock awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive warrants |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total anti-dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair Value Measurement of Financial Instruments, Derivative Assets and Contingent Consideration
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable:
Level 1 |
Quoted prices for identical assets or liabilities in active markets. These are typically obtained from real-time quotes in active exchange markets involving identical assets or liabilities. |
Level 2 |
Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily available pricing sources for comparable assets or liabilities. |
Level 3 |
Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Due to the use of significant unobservable inputs, a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement. |
F-12
The carrying value of cash, accounts payable, accrued expenses and short-term portion of loan payable are Level 1 and approximate their fair values because of the short-term nature of the instruments. The carrying amount of the Company's long-term interest bearing portion of loan payable is also stated at fair value since the stated rate of interest approximates market rates available to the Company for a similar duration. Given that the debt was issued, Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair values of warrant liabilities were determined based on Black Scholes option-pricing model using Level 2 inputs. The fair value of the Bitcoin derivative - Bitmain contracts were also determined based on Black Scholes option-pricing model but utilized historical volatility of bitcoin as an input which is deemed to be a Level 3 input.
The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of June 30, 2025 and September 30, 2024:
June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
($ in thousands) |
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Receivable from bitcoin collateral(2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin derivative - Bitmain contracts |
|
|
|
|
|
|
|
|
|
|
|
|
||||
ILAL derivative asset |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in debt security |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap derivative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
($ in thousands) |
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Receivable from bitcoin collateral(2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin |
|
|
|
|
|
|
|
|
|
|
|
|
||||
ILAL derivative asset |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in debt security |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap derivative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1)
(2)
There were no transfers between Level 1, 2 or 3 during the nine months ended June 30, 2025.
The activities of the financial instruments that were measured and recorded at fair value on the Company's balance sheets on a recurring basis during the nine months ended June 30, 2025 and year ended September 30, 2024 are described in Note 6 - Investments and Derivatives.
F-13
3. ACQUISITIONS
Business Combination
GRIID Infrastructure Inc.
On October 30, 2024 (the “Effective Time”), the Company completed the acquisition of GRIID Infrastructure Inc., a Delaware corporation (“GRIID”), and Tron Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of the Company (the event collectively known as the “GRIID Acquisition” or the “Merger”). The Agreement and Plan of Merger (the “GRIID Agreement”) entered into on June 26, 2024, provided that, among other things and subject to the terms and conditions of the GRIID Agreement, (1) the Merger Sub will be merged with and into GRIID (the “Sub Merger”), with GRIID surviving and continuing as the surviving corporation in the Sub Merger, and, (2) at the Effective Time of the Sub Merger, holders of each outstanding share of common stock, par value $
Upon closing, the Company issued
GRIID warrants outstanding and unexercised immediately prior to the Effective Time were automatically converted into warrants to purchase an aggregate of
Concurrent with the GRIID Agreement, the Company and GRIID entered into a senior secured term loan credit agreement (the “GRIID Credit Agreement”) and a co-location mining service agreement (the “Hosting Agreement”) on June 26, 2024. See Note 5 - Note Receivable from GRIID for more information on the GRIID Credit Agreement. Pursuant to the Hosting Agreement, GRIID hosted certain of the Company’s bitcoin mining equipment at GRIID facilities for a fee defined in the Hosting Agreement. The Hosting Agreement had an initial service term of one year with seven additional renewal terms, each for six months.
As of October 30, 2024, the Company consolidated the activities of GRIID, including the GRIID Credit Agreement and balances of receivables and payables under the Hosting Agreement, which effectively settled and is considered as additional purchase consideration is eliminated on the condensed consolidated balance sheets.
The GRIID Acquisition enhances the Company’s bitcoin mining capacity, particularly in Tennessee, where it plans to expand in the coming years. The GRIID Merger also broadens the Company’s operational footprint within the Tennessee Valley Authority service territory, offering greater geographic and power supply diversification. Goodwill recognized related to the preliminary purchase price represents the future economic benefits arising from planned operational synergies, expanded geographic space, operational facilities and data centers, and a bitcoin mining workforce. The results of GRIID have been included in the condensed consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s sole reportable segment, which is the bitcoin mining segment. Goodwill is not deductible for income tax purposes and, accordingly, no deferred tax assets or liabilities are expected in relation to goodwill.
F-14
On October 30, 2024, the Company completed the GRIID Acquisition for a total preliminary purchase consideration of $
|
|
GRIID |
|
|
Shares of CleanSpark common stock issued |
|
|
|
|
Closing price per share of CleanSpark common stock on October 30, 2024 |
|
$ |
|
|
Fair value of CleanSpark common share issued as a portion of purchase price |
|
$ |
|
|
Fair value of CleanSpark warrants issued as a portion of purchase price |
|
|
|
|
Fair value of equity portion of purchase price |
|
|
|
|
Cash consideration |
|
|
|
|
Settlement of amounts payable by Company to GRIID under Hosting Agreement |
|
|
( |
) |
Settlement of the GRIID Credit Agreement as a portion of purchase price |
|
|
|
|
Settlement of preexisting relationship, including interest, as a portion of purchase price |
|
|
|
|
Preliminary purchase price |
|
$ |
|
|
The amounts in the table below represent the preliminary allocation of the purchase price to the acquired assets and liabilities assumed based on their preliminary respective estimated fair values on the date of acquisition. Certain amounts are subject to revision during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date.
Adjustments to the provisional values, which may include other long-term assets, deferred taxes, income tax payables, and other estimates, during the measurement period will be recorded in the reporting period in which the adjustment amounts are determined. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill.
The excess purchase price over the net assets acquired has been recorded as goodwill.
|
|
Adjusted Balance |
|
|
Tangible assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
Restricted cash |
|
|
|
|
Accounts receivable |
|
|
|
|
Prepaid expense and other current assets |
|
|
|
|
Property and equipment |
|
|
|
|
Other long-term assets |
|
|
|
|
Operating lease right of use assets |
|
|
|
|
Total tangible assets acquired |
|
|
|
|
Intangible assets |
|
|
|
|
Goodwill |
|
|
|
|
Total assets acquired |
|
|
|
|
Liabilities assumed |
|
|
|
|
Accounts payable |
|
|
|
|
Accrued liabilities |
|
|
|
|
Finance lease obligations |
|
|
|
|
Operating lease liabilities |
|
|
|
|
Other liabilities |
|
|
|
|
Total liabilities assumed |
|
|
|
|
Net assets acquired |
|
$ |
|
|
F-15
The preliminary purchase price for GRIID has been allocated to assets acquired and liabilities assumed based on the Company’s best estimates and assumptions using the information available as of the acquisition date and throughout measurement period (up to one year from the acquisition date). The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to the acquisition are subject to adjustments in subsequent periods as the Company finalizes its purchase price allocation, including the third-party valuation. This includes finalizing the review and valuation of deferred income taxes. Actual values may differ (possibly materially) when final information becomes available that differs from current estimates. The Company believes that information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. The Company expects to finalize the valuation as soon as practicable, but no later than one year from the acquisition date.
The preliminary purchase price allocation has been updated for measurement period adjustments primarily related to revised assessments of pre-acquisition amounts, including a deposit receivable adjustment decreasing our goodwill by $
The Company recognized merger costs of $
Consolidated revenues generated from the locations acquired from GRIID for the three and nine months ended June 30, 2025, since the acquisition date, are $
Unaudited supplemental pro forma financial information
The financial information in the table below summarizes the combined results of operations of the Company and GRIID, on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2023 or of results that may occur in the future.
The following unaudited pro forma information for the three months ended June 30, 2024 and three and nine months ended June 30, 2025 combines the historical results of the Company and GRIID, as converted to U.S. GAAP, for the respective periods: We based the foregoing pro forma results on estimates and assumptions that we believe are reasonable.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||
|
|
June 30, 2025 |
|
June 30, 2024 |
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
|||
Pro forma revenue |
|
N/A |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Pro forma net income (loss) from continuing operations |
|
N/A |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
F-16
Asset Acquisitions
Georgia Acquisition - LaFayette, GA
On May 13, 2025, CSRE Properties, LLC, a Georgia limited liability company and wholly-owned subsidiary of the Company, entered into an asset purchase agreement with MGT Capital Investments, Inc., to acquire real estate and certain mining related infrastructures in LaFayette, Georgia.
The Company completed the acquisition for a combined purchase price of $
The allocation of the purchase price of the assets acquired are summarized below:
($ in thousands) |
|
Allocation at |
|
|
Infrastructure |
|
$ |
|
|
Land |
|
|
|
|
Land improvements |
|
|
|
|
Building |
|
|
|
|
Building improvements |
|
|
|
|
Total |
|
$ |
|
|
Georgia Acquisition - Twin City, GA
On January 21, 2025, CSRE Properties Sandersville, LLC, a Georgia limited liability company and wholly-owned subsidiary of the Company, entered into an asset purchase agreement with Apex Data Centers Inc., (“Apex Data”) to acquire a bitcoin mining facility and certain related infrastructures in Twin City, Georgia (the “Twin City Property”).
The Company completed the acquisition for a combined purchase price of $
The allocation of the purchase price of the assets acquired are summarized below:
($ in thousands) |
|
Allocation at |
|
|
Infrastructure |
|
$ |
|
|
Leasehold improvements |
|
|
|
|
Finance lease liability |
|
|
( |
) |
Total |
|
$ |
|
|
Tennessee Acquisitions
On September 10, 2024, CleanSpark TN, LLC, a wholly-owned subsidiary of the Company (the “TN MIPA Buyer”), entered into three definitive Membership Interest Purchase Agreements (each, a “MIPA”, and collectively, the “TN MIPAs”) with Exponential Digital, LLC (the “TN MIPA Seller”) to acquire seven bitcoin mining facilities located in Tennessee for a total purchase price of $
F-17
The cities of the bitcoin mining facilities for each MIPA are as follows:
MIPA 1: Jellico, TN and West Crossville, TN;
MIPA 2: Campbell Junction, TN and Decatur, TN; and
MIPA 3: Winfield, TN; Oneida, TN; and Tazewell, TN.
The Company completed the acquisition of MIPA 1, MIPA 3 and MIPA 2 on September 16, September 25, and October 11, 2024, respectively. The transaction was accounted for as an asset acquisition, whereby the total purchase price is allocated first to the fair value of the assets acquired and any excess purchase price is allocated to the acquired assets pro-rata. No goodwill is calculated in an asset acquisition.
The combined purchase price is $
The allocation of the purchase price of the assets acquired are summarized below:
($ in thousands) |
|
Allocation at |
|
|
Land |
|
$ |
|
|
Land improvements |
|
|
|
|
Building |
|
|
|
|
Infrastructure |
|
|
|
|
Right of use assets |
|
|
|
|
Operating lease liability |
|
|
( |
) |
Total |
|
$ |
|
|
Mississippi Acquisition - Clinton, MS
On September 16, 2024, CSRE Properties Mississippi, LLC, a Mississippi limited liability company and wholly-owned subsidiary of the Company, entered into definitive agreements with Eyas Investment Group and Makerstar Capital, Inc. to acquire bitcoin mining facilities in Clinton, Mississippi (the “Clinton Property”).
The combined purchase price (including direct acquisition costs of $
The allocation of the purchase price of the assets acquired are summarized below:
|
|
Allocation at |
|
|
Land |
|
$ |
|
|
Construction in progress |
|
|
|
|
Total |
|
$ |
|
|
In connection with the acquisition of the Clinton Property, CSRE Properties Mississippi, LLC entered into a Construction Management Services Agreement dated September 16, 2024 with Beast Power, Inc. (“Beast Power”), pursuant to which Beast Power was engaged to manage the completion of the construction of a data center facility on the Clinton Property for aggregate consideration of $
F-18
4. BITCOIN
The following table presents the Company's bitcoin holdings as of June 30, 2025 and September 30, 2024:
|
|
As of |
|
|||||
Bitcoin holdings |
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Number of bitcoin held |
|
|
|
|
|
|
||
Cost basis - per bitcoin |
|
$ |
|
|
$ |
|
||
Fair value - per bitcoin |
|
$ |
|
|
$ |
|
||
Cost basis of bitcoin (in '000s) |
|
$ |
|
|
$ |
|
||
Fair value of bitcoin (in '000s) |
|
$ |
|
|
$ |
|
||
The cost basis represents the valuation of bitcoin at the time the Company earns the bitcoin through mining activities.
The following table presents information based on the activity of bitcoin for the three and nine months ended June 30, 2025 and 2024:
|
|
Three months ended |
|
|
Nine months ended |
|
|
||||||||||
($ in thousands) |
|
June 30, 2025 |
|
|
June 30, 2024 |
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
|
||||
Beginning Balance - before cumulative effect change |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Cumulative effect of the adoption of ASC 350-60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted beginning balance after cumulative effect change |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Addition of bitcoin from mining activities(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin purchased |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin sold |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
||
Bitcoin issued for services and other non-cash consideration |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Bitcoin transferred to collateral account |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
||
Bitcoin received from collateral account |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Gain) loss on fair value of bitcoin |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|||
Ending Balance(2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
(1)
(2)
The Company's bitcoin holdings shown in this note, excluding the bitcoin posted as collateral to the Coinbase Line of Credit as described in Note 9 - Loans, are not subject to rehypothecation and do not serve as collateral for any existing loans or agreements. As of June 30, 2025, the Company held no other crypto assets; approximately
The Company recognized cumulative realized gains from dispositions of bitcoin of $
As of June 30, 2025, the Company has a receivable from bitcoin collateral of $
F-19
5. NOTE RECEIVABLE FROM GRIID
On June 26, 2024, concurrent with the GRIID Agreement (see Note 3 - Acquisitions), the Company entered into the GRIID Credit Agreement, which is a senior secured term loan under which the Company provided a term loan of $
On August 2, 2024, the Company and GRIID amended and restated the GRIID Credit Agreement (as amended and restated, the “A&R GRIID Credit Agreement”) to include, in addition to the term loan amount, an additional delayed draw term loan facility of $
On October 30, 2024, concurrent with the acquisition of GRIID, the term loans and the associated interest receivable in the amount of $
As of June 30, 2025 and September 30, 2024, the Note receivable from GRIID balance was $
F-20
6. INVESTMENTS AND DERIVATIVES
As of June 30, 2025 and September 30, 2024, the Company had total investment assets of $
The following tables set forth the carrying value of all investments and derivative instruments as of June 30, 2025:
|
Asset Derivatives |
|
|
Liability Derivatives |
|
||||||
|
Balance Sheet Location |
|
Fair Value |
|
|
Balance Sheet Location |
|
Fair Value |
|
||
Derivative instruments not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
||
Bitcoin derivative - Bitmain contracts |
Derivative instruments |
|
$ |
|
|
Other current liabilities |
|
$ |
|
||
Warrant liabilities |
———— |
|
|
|
|
Other current liabilities |
|
|
|
||
Interest rate swap contracts |
Derivative instruments |
|
|
|
|
Other current liabilities |
|
|
|
||
ILAL derivative asset |
Derivative instruments |
|
|
|
|
———— |
|
|
|
||
ILAL debt securities |
Accumulated other comprehensive income |
|
|
|
|
———— |
|
|
|
||
Total derivative instruments |
|
|
$ |
|
|
|
|
$ |
|
||
The following tables set forth the carrying value of all investments and derivative instruments as of September 30, 2024:
|
Asset Derivatives |
|
|
Liability Derivatives |
|
||||||
|
Balance Sheet Location |
|
Fair Value |
|
|
Balance Sheet Location |
|
Fair Value |
|
||
Derivative instruments not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
||
Interest rate swap contracts |
Derivative instruments |
|
$ |
|
|
Other current liabilities |
|
$ |
|
||
ILAL derivative asset |
Derivative instruments |
|
|
|
|
———— |
|
|
|
||
ILAL debt securities |
Accumulated other comprehensive income |
|
|
|
|
———— |
|
|
|
||
Total derivative instruments |
|
|
$ |
|
|
|
|
$ |
|
||
Bitcoin Treasury Derivatives
During April 2025, as part of a broader bitcoin treasury management strategy, the Company began entering into bitcoin-linked derivative contracts to economically hedge the volatility of bitcoin prices and to generate liquidity in support of core operating activities. These contracts serve as a strategic alternative to selling bitcoin directly and are intended to monetize the Company’s bitcoin holdings while managing exposure to adverse price movements. The types of derivatives utilized for this purpose may include bitcoin futures, options, and other structured instruments. These contracts are typically short-term in nature and may be cash-settled or settled in-kind.
Derivative contracts are measured at fair value, with changes in fair value and settlements recognized in earnings in the period in which they occur. The instruments are not designated as hedging instruments for accounting purposes under ASC 815, Derivatives and Hedging. The Company evaluates all financing and service agreements for potential embedded derivative features that may require bifurcation.
All derivative instruments are recorded in the Condensed Consolidated Balance Sheets at fair value and are classified as current or noncurrent based on the expected timing of settlement. Gains and losses related to a derivative executed as part of the Company’s bitcoin treasury management strategy, both realized and unrealized, are reported on the Condensed Consolidated Statements of Operations within other income. The Company has not designated any derivatives for hedge accounting treatment under ASC 815.
Covered call contracts that were settled through physical delivery of bitcoin resulted in total cash proceeds of $
F-21
During the quarter, the Company entered into a miner procurement arrangement with Bitmain that included a contractual option to repurchase an equivalent amount of bitcoin at a fixed U.S. dollar price. These repurchase rights are accounted for as derivatives and presented above as Bitcoin derivative - Bitmain contracts and are recorded at fair value in the Condensed Consolidated Balance Sheets. The loss on fair value of $
Other Derivatives
Interest Rate Swap Derivative
The Company is party to two interest rate swap agreements, neither of which is designated as a hedge for accounting purposes. These derivatives are recorded at fair value on the balance sheet with changes in fair value recognized in current earnings within “(Loss) gain on derivative securities.”
In relation to the Company’s Western Alliance Bank Credit Agreement entered into in August 2024, the Company holds an interest rate swap agreement (see Note 9 - Loans). As of June 30, 2025, this interest rate swap derivative was recorded as a fair value liability of $
In April 2025, the Company entered into a second interest rate swap agreement in connection with the refinancing of its corporate headquarters mortgage (see Note 9 - Loans). As of June 30, 2025, the swap derivative was recorded as a fair value liability of $
As of June 30, 2025, the interest rate swap derivatives were recorded as a combined fair value liability of $
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 Asset
Pursuant to the terms of the SPA with ILAL, the Company purchased
During March 2025, the Company sent ILAL a notice to convert a portion of its Series B Preferred Stock into shares of common stock of ILAL. ILAL did not issue the shares in accordance with its obligations under the Series B Preferred Stock. On April 8, 2025, the Company filed a case in the U.S. District Court for the Southern District of California. Among other claims, the Company has alleged ILAL’s breach of contract and has demanded $
The Company accrued no interest (net of allowance) on its available-for-sale debt securities as of June 30, 2025 and September 30, 2024, respectively. The fair value of the Company’s investment in the Series B Preferred Stock was $
F-22
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 ILAL Derivative Asset on its balance sheet at fair value and account for changes in fair value as a derivative gain or loss. Changes in fair value of the ILAL Derivative Asset are presented as Other income (expense) in the condensed consolidated statement of operations and comprehensive income.
Total fair value of investment in ILAL Derivative Asset as of June 30, 2025 and September 30, 2024 was $
F-23
7. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
($ in thousands) |
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Land |
|
$ |
|
|
$ |
|
||
Land improvements |
|
|
|
|
|
|
||
Building and improvements |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Miners |
|
|
|
|
|
|
||
Mining equipment |
|
|
|
|
|
|
||
Infrastructure |
|
|
|
|
|
|
||
Machinery and equipment |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Total depreciation expense for the nine months ended June 30, 2025 and 2024 was $
The Company had additions to property and equipment of $
During the nine months ended June 30, 2025, the Company had disposals of miners with a net book value of $
Construction in progress: The Company is expanding its mining facilities, including infrastructure, building, and land improvements to grow its mining operations.
Deposits on miners and mining equipment: In April 2025, the Company exercised an option to purchase
In May 2025, the Company exercised an option to purchase
The options to purchase bitcoin under these arrangements are presented in the consolidated balance sheets as $
As of June 30, 2025 and September 30, 2024, the Company had outstanding deposits for miners and mining equipment totaling $
F-24
8. INTANGIBLE ASSETS
Intangible assets consist of the following as of June 30, 2025 and September 30, 2024:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||||||||||||||||||
($ in thousands) |
|
Intangible assets |
|
|
Accumulated amortization |
|
|
Net intangible assets |
|
|
Intangible assets |
|
|
Accumulated amortization |
|
|
Net intangible assets |
|
||||||
Software |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Websites |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Strategic Contract |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Amortization expense for the nine months ended June 30, 2025 and 2024 was $
The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows:
Fiscal Year |
|
|
|
|
($ in thousands) |
|
June 30, 2025 |
|
|
2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 and thereafter |
|
|
|
|
Total |
|
$ |
|
|
F-25
9. LOANS
As of June 30, 2025, the Company had a gross balance outstanding of $
The following is a schedule of the Company’s loan balance, net of debt discount and future loan payments, as of June 30, 2025:
|
|
|
|
|
|
As of |
|
|||||
($ in thousands) |
|
Maturity Date |
|
Rate |
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Convertible Note |
|
|
|
$ |
|
|
$ |
|
||||
Coinbase Line of Credit |
|
|
|
|
|
|
|
|
||||
Western Alliance Bank Credit Agreement |
|
|
|
|
|
|
|
|
||||
Trinity Master Equipment Financing Arrangement |
|
|
|
|
|
|
|
|
||||
Mortgage - Corporate Facility |
|
|
|
|
|
|
|
|
||||
Mortgage - Corporate (New) |
|
|
|
|
|
|
|
|
||||
Marquee Funding Partners |
|
|
|
|
|
|
|
|
||||
Auto & Equipment Loans and Financing |
|
|
|
|
|
|
|
|
||||
Total Loans Outstanding |
|
|
|
|
|
$ |
|
|
$ |
|
||
Less: current portion of long-term loans |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Loans payable, net of current portion, debt discount and debt issuance costs |
|
|
|
|
|
$ |
|
|
$ |
|
||
($ in thousands) |
|
5-Year Loan Maturities |
|
|||||||||||||||||||||||||
Outstanding Loan |
|
2025 (Remainder) |
|
|
|
2026 |
|
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
Total |
|
||
Total principal amount of loan payments by fiscal year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Unamortized deferred financing costs and discounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
Total loan book value as of June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||||
2030 Convertible Note
In December 2024, we issued $
F-26
Holders of the 2030 Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2029 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2025 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to
Holders of the 2030 Notes have a one-time noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to
As of June 30, 2025, none of the conditions permitting the holders of the 2030 Notes to convert their notes early had been met, and to require the Company to repurchase the 2030 Notes for cash. Therefore, the 2030 Notes are classified as long-term.
The initial conversion rate for the 2030 Notes is
Subsequent to June 20, 2028, we may redeem for cash all or part of the 2030 Notes, at our option, if the last reported sales price of common stock has been at least
Upon conversion of the 2030 Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. We may not redeem the 2030 Notes prior to June 20, 2028. We may redeem for cash all or any portion of the 2030 Notes, at our option, on or after June 20, 2028 if the last reported sale price of our common stock has been at least
The Indenture contains customary terms and covenants, including that upon certain events of default either the Trustee or the holders of at least
F-27
Capped Calls
In connection with the issuance of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the “2030 Capped Calls”) with certain financial institutions at an aggregate cost of approximately $
The 2030 Capped Calls meet the criteria for classification in equity, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within shareholders’ equity.
Coinbase Line of Credit and Receivable for Bitcoin Collateral
On August 7, 2024, the Company signed a Master Loan Agreement (the “2024 Master Loan”) with Coinbase Credit, Inc. (“Coinbase Credit” or the “Lender”) for a line of credit in which the Lender will lend the Company certain digital assets or cash. The 2024 Master Loan has a credit limit of $
The 2024 Master Loan includes embedded redemption features, which allows the lender to redeem the security before its maturity date (“redemption feature”). The 2024 Master Loan also includes a contingent interest feature that requires additional interest to be paid only if certain conditions are met. One such redemption feature and contingent interest feature is in the event of default, including failure to maintain sufficient collateral, the Lender may liquidate the collateral to satisfy the outstanding loan balance or charge incremental interest at the federal funds rate upon the under-collateralized portion of the loan. The Company assessed the embedded redemption features and the contingent interest feature and determined the features are clearly and closely related to the line of credit and do not require bifurcation. Upon transfer of the bitcoin, the Lender has the exclusive right to sell, pledge and rehypothecate the bitcoin without notice to the Company. Either party can terminate a loan with two days’ notice to the other party. As of the date of this report, no such termination has occurred.
The Company drew $
Since the Lender has the rights to sell, pledge and rehypothecate the bitcoin during the term of the 2024 Master Loan, the Company derecognized the bitcoin transferred as collateral. As the Company has the right to receive the bitcoin back from the Lender upon the repayment of the line of credit, the Company recorded a corresponding Receivable for bitcoin collateral. The Receivable for bitcoin collateral is measured at fair value. Changes in fair value as well as gains and losses from bitcoin transferred to and received from collateral are recorded as Gain on bitcoin collateral under the Other Income category in the condensed consolidated statement of operations and comprehensive income.
In December 2024, the Company repaid the $
Western Alliance Bank Credit Agreement
On August 14, 2024, the Company entered into a credit agreement that provides for borrowings under a promissory note with Western Alliance Bank (the “Western Alliance Bank Credit Agreement”). Pursuant to this agreement, the Company executed a promissory note in the amount of $
F-28
The credit agreement contains financial covenants, including a minimum loan-to-value ratio, a minimum debt service coverage ratio, and a minimum average deposit balance. As of June 30, 2025, the Company has $
Concurrently with the credit agreement, on August 14, 2024, the Company entered into a plain vanilla interest rate swap agreement with a counterparty in which the Company effectively pay a fixed rate of
Mortgage - Corporate Facility
On May 10, 2023, CleanSpark HQ, LLC, a single member limited liability company and subsidiary wholly owned by the Company, completed a refinancing transaction whereby it borrowed a net $
Trinity Master Equipment Financing Agreement
On April 22, 2022, the Company entered into a Master Equipment Financing Agreement (the “Master Equipment Financing Agreement”) with Trinity Capital Inc. that could provide $
Marquee Funding Partners
As of June 30, 2025, the unpaid balance on the mortgages assumed from the acquisition in August 2022 of a bitcoin mining facility from WAHA Technologies Inc. is $
Auto and Equipment Loans and Western Alliance Equipment Financing Agreement
The Company has entered into various financing arrangements to purchase vehicles and non-miner equipment with combined principal outstanding at June 30, 2025 of $
Additionally, on August 28, 2024, the Company entered into an equipment financing agreement with Western Alliance Bank for borrowings of up to $
F-29
10. INCOME TAXES
The Company has calculated the tax provision based on the year-to-date actual effective tax rate, adjusted for discrete items in the quarter. The approach is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The Company believes, at this time, the use of this cutoff approach is more appropriate than the annual effective tax rate method due to the high degree of uncertainty in estimating annual pre-tax income. The quarterly tax provision is subject to fluctuation due to factors including certain book and tax differences, valuation allowances against deferred tax assets, or changes in or interpretation of tax laws. We consider new evidence (both positive and negative) at each reporting date that could affect our view of the future realization of deferred tax assets. We evaluate information such as historical financial results, historical taxable income, projected future taxable income, expected timing of the reversals of existing temporary differences and available prudent and feasible tax planning strategies in our analysis.
The Company had income tax expense (including discrete items) of $
The Company's effective income tax rate (including discrete items) was
The Company currently maintains a partial valuation allowance on its U.S. deferred tax assets. Based on recent financial performance and improved forecasts, it is reasonably possible that sufficient positive evidence may become available within the next 12 months to support the release of all or additional portions of this valuation allowance. Any such release would result in a non-cash income tax benefit in the period recorded. The timing and amount of any release will depend on the level of sustained profitability and other relevant factors.
11. STOCKHOLDERS’ EQUITY
Overview
The Company’s authorized capital stock consists of
For the three and nine months ended June 30, 2025, the Company recorded $
On June 3, 2021, the Company entered into an At The Market Offering Agreement (the “Original ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”) to create an at-the-market equity program under which the Company may, from time to time, offer and sell shares of its common stock, having an aggregate gross offering price of up to $
F-30
On December 14, 2022, the Company entered into Amendment No. 1 to the At the Market Offering Agreement with the Agent (the “ATM Agreement Amendment” and, together with the Original ATM Agreement, the “ATM Agreement”). Under the ATM Agreement, the Company may, but has no obligation to, issue and sell up to the lesser number of shares (the “Shares”) of the Company’s common stock that does not exceed (a) $
On January 5, 2024, the Company entered into a new At The Market Offering Agreement (the “2024 ATM Agreement”) with the Agent, to create an at-the-market equity program under which the Company may, but has no obligation to, issue and sell up to the lesser number of shares of the Company’s common stock that does not exceed (a) $
On March 28, 2024, the Company entered into Amendment No. 1 to the At the Market Offering Agreement with the Agent (the “March 2024 ATM Amendment”). Under the March 2024 ATM Amendment, the Company may, but has no obligation to issue and sell up to the lesser number of shares of the Company’s common stock that does not exceed (a) $
Common stock issuances during the nine months ended June 30, 2025
The Company issued
The Company issued
The Company issued
Common stock repurchased during the nine months ended June 30, 2025
In connection with the issuance of the 2030 Notes in December 2024 (see Note 9 - Loans), the Company repurchased
Common stock issuances during the nine months ended June 30, 2024
The Company issued
The Company issued
The Company issued
F-31
12. STOCK WARRANTS
As part of the GRIID Acquisition on October 30, 2024, the Company issued several warrants to former holders of GRIID warrants. Those issued warrants include
Management has determined that the Public Warrants are subject to accounting treatment as equity, while the Private Warrants and GEM Warrants are subject to accounting treatment as liabilities. At the consummation of the GRIID Acquisition, all warrants were measured at their fair value using the Black-Scholes option pricing model and included in the purchase price calculation.
On January 3, 2025 all Private Warrants were converted to Public Warrants. At June 30, 2025, the Company used the Black-Scholes option-pricing model to estimate the fair value of the GEM Warrants using Level 3 inputs. The fair value of the GEM Warrants are included in the Other liabilities caption on the condensed consolidated balance sheets and the changes in fair value are included in Gain (loss) on derivative securities on the condensed consolidated statement of operations.
The following is a summary of stock warrant activity during the nine months ended June 30, 2025.
|
|
Number of |
|
|
Number of |
|
|
Weighted |
|
|||
Balance, September 30, 2024 |
|
|
|
|
|
|
|
$ |
|
|||
Warrants granted |
|
|
|
|
|
|
|
$ |
|
|||
Warrants expired |
|
|
|
|
|
|
|
$ |
|
|||
Warrants canceled |
|
|
|
|
|
|
|
$ |
|
|||
Warrants exercised |
|
|
|
|
|
|
|
$ |
|
|||
Balance, June 30, 2025 |
|
|
|
|
|
|
|
$ |
|
|||
(1)
As of June 30, 2025, there were warrants exercisable to purchase
As of June 30, 2025,
13. STOCK-BASED COMPENSATION
The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan, as amended, (the “Plan”). As of June 30, 2025, there were
STOCK OPTIONS
The following is a summary of stock option activity during the nine months ended June 30, 2025:
|
|
Number of |
|
|
Weighted Average |
|
||
Balance, September 30, 2024 |
|
|
|
|
$ |
|
||
Options granted |
|
|
|
|
$ |
|
||
Options expired |
|
|
( |
) |
|
$ |
|
|
Options forfeited |
|
|
( |
) |
|
$ |
|
|
Options exercised |
|
|
( |
) |
|
$ |
|
|
Balance, June 30, 2025 |
|
|
|
|
$ |
|
||
F-32
As of June 30, 2025, there were options exercisable to purchase
For the nine months ended June 30, 2025, the Company also granted
The Black-Scholes model utilized the following inputs to value the options granted during the nine months ended June 30, 2025:
Fair value assumptions Options: |
|
June 30, 2025 |
Risk free interest rate |
|
|
Expected term (years) |
|
|
Expected volatility |
|
|
Expected dividends |
|
The Company recognized stock-based compensation expense relating to stock options of $
RESTRICTED STOCK UNITS
The following table summarizes the activity for all restricted stock units (“RSUs”) during the nine months ended June 30, 2025:
|
|
Number of |
|
|
Weighted |
|
|
Aggregate |
|
|||
Outstanding at September 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|||
Granted |
|
|
|
|
$ |
|
|
|
|
|||
Vested |
|
|
( |
) |
|
$ |
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
|
||
Outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
On October 1, 2024, the Company granted
As of June 30, 2025, the Company had
The Company recognized stock-based compensation expense relating to RSUs of $
PERFORMANCE STOCK UNITS
The following table summarizes the activity for all performance stock units (“PSUs”) during the nine months ended June 30, 2025:
|
|
Number of |
|
|
Weighted |
|
|
Aggregate |
|
|||
Outstanding at September 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|||
Granted |
|
|
|
|
$ |
|
|
|
|
|||
Vested |
|
|
( |
) |
|
$ |
|
|
|
|
||
Outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
F-33
During the nine months ended June 30, 2025, the Company granted
As of June 30, 2025, the Company had
The Company recognized stock-based compensation expense relating to PSUs of $
2025 Long-Term Incentive Plan
On October 1, 2024, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved the establishment of the Company’s Long-Term Incentive Program (the “2025 LTIP”), which permits the issuance of RSUs to executive officers and other executives. Awards granted pursuant to the 2025 LTIP are in addition to cash annual bonus awards and annual time-based RSU awards, if any, and are a key element of the Company’s compensation program.
On October 2, 2024, the Compensation Committee, with the consultation of independent compensation firm, performed an analysis to evaluate the structure of the 2025 LTIP with the combined goal of retention and performance of the senior leadership team. The number of awards will vary based on a year-end evaluation of the Compensation Committee against a currently undetermined group of metrics and the range of the awards can be between
The awards will vest over a
14. COMMITMENTS AND CONTINGENCIES
Contractual future payments
The following table sets forth certain information concerning our obligations to make unconditional obligations to make contractual future payments towards our agreements as of June 30, 2025 (these amounts are not recorded in the Consolidated Balance Sheets):
|
|
Fiscal Year |
|
|
($ in thousands) |
|
2025 (Remainder) |
|
|
Contractual obligations: |
|
|
|
|
Construction in progress |
|
$ |
|
|
Modular immersion data centers |
|
|
|
|
Total |
|
$ |
|
|
Purchase of modular immersion data centers
The Company entered into a $
Commitments under open construction projects
The Company has open commitments relating to the construction and development of new mining locations and operational facilities of $
F-34
State tax incentives
When the Company enters new jurisdictions, it seeks incentives on taxes including; sales and use taxes, property taxes, employment taxes and income taxes. The Company has been previously successful obtaining such incentives and is currently seeking additional incentives, which if the Company is unsuccessful in obtaining may result in a liability of approximately $
U.S. importation tariffs
On or about May 27, 2025, the Company began receiving invoices from the U.S. Customs and Border Protection agency (“CBP”) asserting Chinese origin import tariffs on certain miners imported from April 2024 through June 2024. In addition to the documentation received by the Company during importation that validates non-Chinese origin, the seller of the miners has consistently represented to the Company that the country of origin of the mining hardware was not China, as required by the applicable purchase agreements. In the event that CBP were to successfully defend their allegations of Chinese origin and assert import duties for Chinese origin to all imported miners from April 2024 and forward, the Company’s total tariff liability in respect of previously purchased miners could rise to approximately $
While the outcome of this matter is uncertain at this time, the Company has determined it is not probable that it will result in a future cash outflow and, as such, no provision was recorded as of June 30, 2025.
Legal contingencies
In addition to the legal matters disclosed below, the Company may from time to time be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
Hasthantra v. CleanSpark, Inc. et al.
On January 20, 2021, Scott Bishins (“Bishins”), individually, and on behalf of all others similarly situated (together, the “Class”), filed a class action complaint in the United States District Court for the Southern District of New York against the Company and certain of its officers, including the Company’s CEO and the Executive Chair (such action, the “Class Action”).
On December 2, 2021, the court appointed Bishins and Darshan Hasthantra (“Hasthantra”) as lead plaintiffs, and on February 1, 2024, the Court entered a voluntary dismissal on behalf of Bishins, leaving Hasthantra as the sole lead plaintiff.
On February 28, 2022, Plaintiff filed an Amended Class Complaint alleging that, between December 10, 2020, and August 16, 2021, Defendants made material misstatements and omissions related to the Company’s acquisition of ATL Data Centers LLC and its anticipated expansion of bitcoin mining operations. Plaintiff seeks certification of the Class, an award of compensatory damages, and reimbursement of costs and expenses. On March 14, 2025, the Company filed its opposition to Plaintiff's motion for class certification. To date, no class has been certified. Discovery is currently proceeding.
The Company believes that the claims asserted are without merit and intends to defend against them vigorously. At this time, the Company is unable to estimate potential losses, if any, that may arise.
Consolidated Smith Derivative Actions
Between February 21, 2023, and March 8, 2023, four shareholder derivative actions were filed in the Eighth Judicial District Court of the State of Nevada in Clark County against certain officers and directors of the Company, including its Executive Chair, Chief Executive Officer, and former Chief Financial Officer. Each of these actions was consolidated in the Eighth Judicial District Court of Nevada in Clark County (the “Consolidated Smith Action”). The claims asserted include breach of fiduciary duties, unjust enrichment and corporate waste, with the plaintiffs seeking monetary damages, restitution, declaratory relief, litigation costs, and the imposition of additional corporate governance and internal controls.
F-35
The Company’s Board of Directors formed a Special Litigation Committee (“SLC”) to investigate and evaluate the claims. On November 6, 2023, the court granted the SLC’s motion to intervene and stayed the case through November 30, 2024. On October 16, 2024, the SLC filed a motion to dismiss, which was opposed by plaintiffs. Following a hearing on July 17, 2025, the Court issued a minute order to set a 2-day evidentiary hearing. The case remains stayed, pending the results of the evidentiary hearing.
The Company believes that the claims raised in the Consolidated Smith Action are without merit and intends to defend itself vigorously against them. At this time, the Company is unable to estimate potential losses, if any, related to the Consolidated Smith Action.
15. MAJOR CUSTOMERS AND VENDORS
The Company has
For the nine months ended June 30, 2025 and 2024, the Company had the following significant suppliers of miners:
|
Nine Months Ended |
|
||||||
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
||
Bitmain Technologies |
|
|
% |
|
|
% |
||
Canaan U.S. Inc |
|
|
% |
|
|
% |
||
16. SUBSEQUENT EVENTS
On July 26, 2025, the call option granted to the Company under the Future Sales and Purchase Agreement dated August 7, 2024, to acquire additional bitcoin mining equipment reached its original expiry date. Prior to that date, the Company and the manufacturer agreed to extend the option period. The option remains exercisable while the parties finalize terms for a potential notice of exercise or until the Company elects to allow the option to expire.
F-36
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
($ presented in 000's, except for bitcoin price)
The following discussion and analysis of our financial condition and results of operations should be read together with the interim condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (the “Form 10-K”). This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in other parts of this Quarterly Report on Form 10-Q, as well as those identified in the “Risk Factors” section of our Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. See “Forward-Looking Statements.”
Company Overview
We are a bitcoin mining company. We independently own, lease and operate a large portfolio of data centers across the United States with locations in Georgia, Mississippi, Tennessee and Wyoming for a total contracted power capacity of approximately 987 megawatts (“MW”) as of June 30, 2025. We intend to continue our growth in these regions and are actively developing plans for additional capacity in Tennessee. We had an independent data center operation in Massena, NY subject to a hosting agreement that operated 50 MW, which expired on December 31, 2024. The parties commenced wind-down procedures upon expiration. All MW allocated to the Company have been vacated as of June 30, 2025. We have no intention to mine, purchase or hold any other crypto assets at this time or in the foreseeable future, and we did not hold any other crypto asset as of June 30, 2025.
We design our infrastructure to efficiently, profitably, and responsibly secure and support bitcoin, the world’s most recognized digital commodity. We cultivate trust and transparency among our employees, the communities where we operate, our public market stakeholders, and the people around the world who depend on bitcoin.
Bitcoin Mining
Bitcoin was introduced in 2008 with the goal of serving as a digital means of exchanging and storing value. Bitcoin is a form of digital currency that depends upon a consensus-based network and a public ledger called a “blockchain”, which contains a record of every bitcoin transaction ever processed. The bitcoin network is the first decentralized peer-to-peer payment network, powered by users participating in the consensus protocol, with no central authority or middlemen, that has wide network participation. The authenticity of each bitcoin transaction is protected through digital signatures that correspond with addresses of users that send and receive bitcoin. Users have full control over remitting bitcoin from their own sending addresses. All transactions on the bitcoin blockchain are transparent, allowing those running the appropriate software to confirm the validity of each and every transaction. To be recorded on the blockchain, each bitcoin transaction is validated through a proof-of-work consensus method, which entails demonstrating sufficient computation through the “proof of work” process to validate transactions and post them on the blockchain. This process is called mining. Miners are rewarded with bitcoins, both in the form of newly created bitcoins and transaction fees paid in bitcoin, for successfully constructing a block with the required network difficulty and disseminating that block to the global network of nodes. The mining process now represents the largest distributed computing network on Earth due to demand for bitcoin, the commodity, and the revenues associated with securing it.
Factors such as access to specialized mining servers, energy, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining. As of June 30, 2025, our operating mining units produced an average computing power of 45.3 exahash per second (“EH/s”), reaching a peak of 50 EH/s during the period. In bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a mining computer mines and processes transactions on the bitcoin network. We expect to continue increasing our computing power through 2025 and beyond as we expand our infrastructure at our owned sites in Tennessee, seek regional expansion opportunities, and evaluate strategic acquisition targets. A company’s computing power measured in hashrate is a significant factor in its bitcoin mining revenue.
6
We owned approximately 329,001 miners as of June 30, 2025, of which approximately 241,227 were in service as of June 30, 2025 and the remainder pertain to new machines ready to install in expansion opportunities, are being evaluated for relocation or are pending repair. Our miners range in age from 1-54 months and have an average age of approximately 13 months. Effective May 2024, we estimate the useful lives of our miners to be three years. We do not have scheduled downtime for our miners, however, we periodically perform unscheduled maintenance and curtailments on our miners, but such downtime has not historically been significant. When performing unscheduled maintenance, we will typically replace the miner with a substitute miner to limit overall downtime. The miners in service as of June 30, 2025 had a range of energy efficiency (watts per terahash – “w/th”) of 13.5 to 29.5 w/th with an average operating energy efficiency of 16.2 w/th.
We obtain bitcoin as a result of our mining operations, and we sell bitcoin from time to time to support our operations and strategic growth. We also will utilize our bitcoin as collateral for lending arrangements. Prior to April 2025, we did not engage in regular trading of bitcoin (other than as necessary to convert our bitcoin into U.S. dollars) or engage in hedging activities related to our holding of bitcoin. In April 2025, we launched our institutional grade in-house trading function as we shift to a balanced approach between monetizing new production and building long-term holdings which may include various derivative strategies to generate yield from our bitcoin holdings balance, and we plan to continue to integrate these strategies into our regular treasury management activities. Treasury management activities may serve cash management, strategic growth, or bitcoin balance hedging, incremental other income or other general corporate purposes. Currently, we do not use a formula or specific methodology to determine whether or when we will sell bitcoin that we hold, or the number of bitcoins we will sell. Rather, decisions to hold or sell bitcoins are currently determined by management by analyzing the need for working capital, forecasts and monitoring the market in real time.
The value of bitcoin has historically been subject to wide swings. The following table provides a range of intraday low and intraday high bitcoin prices between October 1, 2023 through June 30, 2025.
Range of intraday bitcoin prices |
|
|
|
|
|
|
||
Quarterly Reporting Periods Ended |
|
Minimum Price |
|
|
Maximum Price |
|
||
December 31, 2023 |
|
$ |
26,521 |
|
|
$ |
45,000 |
|
March 31, 2024 |
|
$ |
38,501 |
|
|
$ |
73,836 |
|
June 30, 2024 |
|
$ |
56,500 |
|
|
$ |
72,777 |
|
September 30, 2024 |
|
$ |
49,050 |
|
|
$ |
70,000 |
|
December 31, 2024 |
|
$ |
58,864 |
|
|
$ |
108,389 |
|
March 31, 2025 |
|
$ |
76,555 |
|
|
$ |
109,358 |
|
June 30, 2025 |
|
$ |
74,421 |
|
|
$ |
112,000 |
|
As of June 30, 2025, we held 10,075 bitcoins of which, we held 99% in cold storage and 1% in hot wallets. The fair value of our bitcoin as of June 30, 2025 was $1,079,754 on our condensed consolidated balance sheets. Our bitcoin is classified on our balance sheet as either current or noncurrent. We also have 2,533 bitcoin that are held as collateral for our borrowings under our Coinbase Line of credit, which are classified in our balance sheet as Receivable from bitcoin collateral. Effective October 1, 2023, we adopted ASC 350-60, which requires bitcoin to be measured at fair value; as a result, the carrying value of each bitcoin we held at October 1, 2023 and each subsequent reporting period reflects the price of one bitcoin quoted on the active exchange, Coinbase, at the end of the reporting period. Therefore, decreases in the market price of bitcoin could have a material impact on our earnings and on the carrying value of our bitcoin. See Note 2 - Summary of Significant Accounting Policies for more details on the impact of implementation in the Form 10-K.
As of June 30, 2025 and September 30, 2024, the Company did not hold any digital currency other than bitcoin.
We maintain real property holdings through our wholly owned and consolidated subsidiaries.
7
Results of continuing operations for the three and nine months ended June 30, 2025 and 2024
($ presented in 000's, except for bitcoin price and information set forth under the heading “Bitcoin Mining Operations”)
Bitcoin Mining Operations
Overview
We operate a fleet of servers commonly known as miners or ASICs (Application-Specific Integrated Circuits), which are computer chips customized for a specific use. In the case of bitcoin mining, ASICs calculate the SHA-256 algorithm as efficiently and quickly as possible in order to compete with other miners to solve blocks. Each calculation is a hash, and each machine’s computational power is measured in terahash processed per second (“th/s”). One terahash is equal to 1 trillion hashes. The more terahash we produce and contribute into the mining pool, the higher our percentage of the blockchain reward.
There are a variety of factors that influence our ability to mine bitcoin profitability. Our ability to mine profitability is dependent on successfully navigating these fluctuating variables, which include bitcoin’s value in USD (the volatility of which is described above), mining difficulty, block rewards and halving, global hashrate, power prices, fleet energy efficiency, data center energy efficiency and other factors.
The energy efficiency of a mining fleet helps drive profitability, because the most significant direct expense for bitcoin mining is power. We measure efficiency by the watts (or joules) of energy required to produce each terahash of processing power. We believe we operate a highly efficient fleet of miners.
The table below describes our fleet as of June 30, 2025 and 2024 and our miner efficiency and computing power as compared to the global computing power.
|
|
As of |
|
|||||
Combined facilities |
|
June 30, |
|
|
June 30, |
|
||
Global hashrate (in terms of EH/s) (1) |
|
|
881.0 |
|
|
|
558.0 |
|
Miner efficiency (w/th) (2) |
|
|
16.2 |
|
|
|
22.3 |
|
CleanSpark average hashrate (in terms of EH/s) (3) |
|
|
45.3 |
|
|
|
20.4 |
|
CleanSpark percentage of total global hashrate |
|
|
5.14 |
% |
|
|
3.66 |
% |
|
|
|
|
|
|
|
||
(1) Total global hashrate obtained as of June 30, 2025 and 2024 were from Hashrate index (https://data.hashrateindex.com/network-data/network) using SMA 7 days and YCHARTS (https://ycharts.com/indicators/bitcoin_network_hash_rate), respectively. |
|
|
|
|
|
|
||
(2) Watts of energy required to produce each terahash of processing power. Based on miner fleet operating at period end. |
|
|
|
|
|
|
||
(3) The average hashrate obtained as of June 30, 2025, and 2024 were calculated from operating activity for the final month of the reporting period. |
|
|
|
|
|
|
||
As of June 30, 2025, our operating hashrate was approximately 5.14% of the total global hashrate, and we received approximately the same percentage of the global blockchain rewards, which as of that date equaled approximately 23-24 bitcoin per day, excluding the bitcoin earned from network transaction fees. Ultimately, in order to mine profitably, we work to ensure that these mining rewards cover our direct operating costs.
8
The table below describes the average cost of mining each bitcoin for the three and nine months ended June 30, 2025 and 2024 and the total energy usage and cost per each kilowatt hour (“kWh”) utilized within our owned facilities.
|
|
For the three months ended |
|
|
For the nine months ended |
|
||||||||||
Cost of Revenues - Analysis of costs to mine one bitcoin (per bitcoin amounts are actual) |
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
||||
Cost of Mining - Owned Facilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of energy per bitcoin mined |
|
$ |
44,690 |
|
|
$ |
26,857 |
|
|
$ |
40,616 |
|
|
$ |
17,569 |
|
Other direct costs of mining - non energy utilities per bitcoin mined |
|
|
116 |
|
|
|
88 |
|
|
|
67 |
|
|
|
36 |
|
Cost to mine one bitcoin - Direct Energy Cost - Owned facilities |
|
$ |
44,806 |
|
|
$ |
26,945 |
|
|
$ |
40,683 |
|
|
$ |
17,605 |
|
Miner depreciation per bitcoin mined |
|
|
41,601 |
|
|
|
16,753 |
|
|
|
36,358 |
|
|
|
13,067 |
|
Financing costs per bitcoin mined |
|
|
21 |
|
|
|
208 |
|
|
|
58 |
|
|
|
214 |
|
Direct cost to mine including non-cash depreciation and financing costs - Owned facilities |
|
$ |
86,428 |
|
|
$ |
43,906 |
|
|
$ |
77,099 |
|
|
$ |
30,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average revenue of each bitcoin mined (1) |
|
$ |
98,753 |
|
|
$ |
66,048 |
|
|
$ |
92,090 |
|
|
$ |
51,479 |
|
Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including direct energy cost only |
|
|
45.4 |
% |
|
|
40.8 |
% |
|
|
44.2 |
% |
|
|
34.2 |
% |
Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including miner depreciation expense |
|
|
87.5 |
% |
|
|
66.5 |
% |
|
|
83.7 |
% |
|
|
60.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Owned Facilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total bitcoin mined at owned facilities (2) |
|
|
2,012 |
|
|
|
1,435 |
|
|
|
5,767 |
|
|
|
4,931 |
|
Bitcoin mining revenue - Owned facilities - ($ in thousands) |
|
$ |
198,644 |
|
|
$ |
94,737 |
|
|
$ |
531,038 |
|
|
$ |
255,921 |
|
Total miners in service in owned facilities - as of the periods ended |
|
|
241,227 |
|
|
|
138,493 |
|
|
|
241,227 |
|
|
|
138,493 |
|
Total kWh utilized |
|
|
1,598,500,700 |
|
|
|
808,479,474 |
|
|
|
4,218,655,894 |
|
|
|
1,937,737,124 |
|
Total energy expense - ($ in thousands) |
|
$ |
89,895 |
|
|
$ |
38,545 |
|
|
$ |
234,212 |
|
|
$ |
86,644 |
|
Cost per kWh |
|
$ |
0.056 |
|
|
$ |
0.048 |
|
|
$ |
0.056 |
|
|
$ |
0.045 |
|
Energy expense as percentage of bitcoin mining revenue, net |
|
|
45.3 |
% |
|
|
40.7 |
% |
|
|
44.1 |
% |
|
|
33.9 |
% |
Other direct costs of mining - non energy utilities - ($ in thousands) |
|
$ |
233 |
|
|
$ |
126 |
|
|
$ |
389 |
|
|
$ |
170 |
|
Depreciation Expense - Miners Only - ($ in thousands) |
|
$ |
83,682 |
|
|
$ |
24,043 |
|
|
$ |
209,659 |
|
|
$ |
64,436 |
|
Accelerated Depreciation Expense - Miners Only - ($ in thousands) |
|
$ |
— |
|
|
$ |
7,261 |
|
|
$ |
— |
|
|
$ |
7,261 |
|
Direct miner financing costs - ($ in thousands) |
|
$ |
42 |
|
|
$ |
299 |
|
|
$ |
337 |
|
|
$ |
1,055 |
|
(1) Average revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for our owned facilities by the total number of bitcoin mined by our owned facilities during the respective periods. We have determined that Coinbase is the principal market for valuing bitcoin transactions and use the closing price of bitcoin at 23:59:59 UTC as the source of recording revenue. See the table “Range of intraday bitcoin prices” for information on the range of intraday bitcoin prices for quarterly periods since September 30, 2023.
(2) Includes mining rewards and transaction fees but excludes the reduction for pool operator fees.
Power prices are the most significant cost driver for our wholly owned locations, and energy expense represented 45.3% and 40.7% as expressed as a percentage of bitcoin mining revenues during the three months ended June 30, 2025 and 2024, respectively, and 44.1% and 33.9% as expressed as a percentage of bitcoin mining revenues during the nine months ended June 30, 2025 and 2024, respectively.
9
Energy prices can be highly volatile and global events can impact energy rates. We have a diverse portfolio of power contracts across our sites in the State of Georgia, Mississippi, Tennessee and Wyoming. The majority of these contracts are currently subject to variable prices and market rate fluctuations with respect to wholesale power costs. Such prices are governed by power purchase agreements which vary by location, and said prices can change hour to hour. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms and polar vortices, which periodically increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates, at the request of grid operators in cases of emergencies or to support utility grid resiliency efforts. The average power prices we paid under our power contracts at our owned facilities were $0.056 and $0.048 per kWh for the three months ended June 30, 2025 and 2024, respectively, and were $0.056 and $0.045 per kWh, for the nine months ended June 30, 2025 and 2024 respectively.
The management and operations teams make real-time determinations on the need and timing during which we should curtail our operations. We curtail when power prices exceed the value we would receive for the corresponding fixed bitcoin reward in response to utility programs. This means if bitcoin’s value decreases or energy prices increase, our curtailment may increase; likewise, when bitcoin’s value increases and energy prices decrease, our curtailment may decrease. The management and operations teams manage these decisions on an hour-by-hour basis across all our sites. The Company did not have significant curtailment and maintained an average uptime greater than 90% during the nine months ended June 30, 2025. A large portion of the curtailment during the first quarter related to Hurricane Helene which affected our Georgia sites at the end of September 2024 to the beginning of October 2024. The southeast Georgia sites were shut down as the hurricane began impacting the region, thus at the beginning of the October 2024, these sites were operating on approximately 200 MW which gradually increased during the same week to its the full 365 MW capacity when utilities was restored to the communities.
The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners' expected useful life. Such non-cash depreciation amounts are recorded within the condensed consolidated statement of operations and comprehensive income as “Depreciation and Amortization”. Although the Company recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is economical to operate its mining equipment since depreciation expense is not an avoidable operating cost, such as energy costs. The table above presents the non-cash miner depreciation expense on a “per bitcoin” basis, calculated by dividing miner depreciation expense in our owned facilities by the number of bitcoin mined in the owned facilities. On a “cost per bitcoin” ratio, miner depreciation expense was 41,601 and 16,753 for the three months ended June 30, 2025 and 2024, respectively, and $36,358 and $13,067 for the nine months ended June 30, 2025 and 2024, respectively. The number of bitcoin received by all the miners, including the Company, was reduced by 50% effective April 19, 2024 when the bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block increasing depreciation expense on a comparable per bitcoin basis as it takes more miners to produce the same number of bitcoin.
We have financing costs for a limited number of miners in our miner fleet and such costs are recorded within Interest Expense in our condensed consolidated statement of operations and comprehensive income. The table above presents financing costs per bitcoin calculated by dividing direct interest expense on our miner financing agreement by the number of bitcoin mined in our owned facilities. On a cost per bitcoin ratio, financing costs were $21 and $208 for the three months ended June 30, 2025 and 2024, respectively and were $58 and $214 for the nine months ended June 30, 2025 and 2024, respectively.
10
The table below describes the average cost of mining each bitcoin for the three and nine months ended June 30, 2025 and 2024 and the total energy usage and cost per each kWh utilized within our hosted facilities. As of March 31, 2025, we no longer operated mining at hosted facilities. Accordingly, the there were no bitcoin operations in hosted facilities in the three months ended June 30, 2025 and is therefore is not presented in the table below.
|
For the three months ended |
|
|
For the nine months ended |
|
|||||||
Cost of Revenues - Analysis of costs to mine one bitcoin (per bitcoin amounts are actual) |
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|||
Cost of Mining - Hosted Facilities |
|
|
|
|
|
|
|
|
|
|||
Direct hosting fees expense per one bitcoin |
|
$ |
46,138 |
|
|
$ |
76,269 |
|
|
$ |
30,971 |
|
Miner depreciation per bitcoin mined |
|
|
28,328 |
|
|
|
4 |
|
|
|
23,091 |
|
Direct cost to mine including non-cash depreciation - Hosted facilities |
|
$ |
74,466 |
|
|
$ |
76,273 |
|
|
$ |
54,062 |
|
|
|
|
|
|
|
|
|
|
|
|||
Average revenue of each bitcoin mined (1) |
|
$ |
66,048 |
|
|
$ |
78,856 |
|
|
$ |
51,479 |
|
Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Direct Hosting fees only |
|
|
69.9 |
% |
|
|
96.7 |
% |
|
|
60.2 |
% |
Direct cost to mine one bitcoin as % of average bitcoin mining revenue - Including miner depreciation expense |
|
|
112.7 |
% |
|
|
96.7 |
% |
|
|
105.0 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Statistics |
|
|
|
|
|
|
|
|
|
|||
Hosted Facilities |
|
|
|
|
|
|
|
|
|
|||
Total bitcoin mined at owned facilities (2) |
|
|
141 |
|
|
|
147 |
|
|
|
696 |
|
Bitcoin mining revenue - Hosted facilities - ($ in thousands) |
|
$ |
9,371 |
|
|
$ |
11,623 |
|
|
$ |
33,772 |
|
Total miners in service in hosted facilities - as of the periods ended |
|
|
14,012 |
|
|
|
- |
|
|
|
14,012 |
|
Total kWh utilized |
|
|
103,089,261 |
|
|
|
144,786,545 |
|
|
|
315,113,352 |
|
Total hosting fee expense - ($ in thousands) |
|
$ |
6,509 |
|
|
$ |
11,242 |
|
|
$ |
21,560 |
|
Hosting fee per kWh |
|
$ |
0.063 |
|
|
$ |
0.078 |
|
|
$ |
0.068 |
|
Hosting fee expense as percentage of bitcoin mining revenue, net |
|
|
69.5 |
% |
|
|
96.7 |
% |
|
|
63.8 |
% |
Depreciation Expense - Miners Only - ($ in thousands) |
|
$ |
3,997 |
|
|
$ |
1 |
|
|
$ |
16,075 |
|
(1) Average revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for hosted facilities by the total number of bitcoin mined within the hosted facilities during the respective periods. We have determined that Coinbase is the principal market for valuing bitcoin transactions and use the closing prices as of 23:59:59 UTC as the source of recording revenue. See the table “Range of intraday bitcoin prices” for information on the range of intraday bitcoin prices for quarterly periods since September 30, 2023.
(2) Includes mining rewards and transaction fees but excludes the reduction for pool operator fees.
For our co-locations, hosting fees (which comprise direct operating costs of the third-party operator with energy as the largest cost) and profit sharing were a combined 69.9% as a percentage of bitcoin mining revenues during the three months ended June 30, 2024 (as there was no fees or profit sharing for the three months ended June 30, 2025), and 96.7% and 60.2% as a percentage of bitcoin mining revenues during the six months ended June 30, 2025 and 2024, respectively. In connection with our decision to terminate our hosting arrangements, we incurred $665 of non-recurring fees for the transition and vacating the location, included in the hosting fees.
At our hosted facilities, the hosting fee as compared to kWh utilized in the hosted facilities was $0.063 per kWh for the three months ended June 30, 2024 (as there was no fees for the three months ended June 30, 2025), and was $0.078 and $0.068 per kWh for the nine months ended June 30, 2025 and 2024, respectively. The Company did not have significant curtailment greater than 20% of total operating time during the nine months ended June 30, 2025.
On a “cost per bitcoin” ratio, miner depreciation expense was $4 and $23,091 for the nine months ended June 30, 2025 and 2024, respectively. The decrease presented was mainly due to the miners being nearly fully depreciated as of September 30, 2024.
11
Results of continuing operations for the three months ended June 30, 2025 and 2024
($ presented in 000's, except for average bitcoin price)
Bitcoin mining revenue
We earned $198,644 in bitcoin mining revenue during the three months ended June 30, 2025, which was an increase of $94,536, or 91%, as compared with $104,108 for the three months ended June 30, 2024. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator (Foundry) that equaled approximately 0.25% of gross bitcoin mining revenues for the three months ended June 30, 2025, and are determined by two main drivers: quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined. During the three months ended June 30, 2025, we mined 2,012 bitcoin (gross of Foundry fees) with an average bitcoin price of $98,736 as compared to 1,580 bitcoin with an average bitcoin price of $65,891 during the three months ended June 30, 2024. The increase in bitcoin mining revenue for the three months ended June 30, 2025 was attributable to the increase in the average bitcoin price and total bitcoin mined during the period as compared to the three months ended June 30, 2024. This occurred as we increased the number of our miners in operation, which rose to 241,227 compared to 152,505, an expansion of 88,722 or 58% between June 30, 2024 and June 30, 2025. The increase in our miners in operation increases our hashrate, which is our total computational power, and which when understood in the context of global hashrate, determines how much bitcoin we are able to mine.
Cost of revenues (exclusive of depreciation and amortization expense)
Our cost of revenues was $90,128 for the three months ended June 30, 2025, an increase of $44,948, or 99%, as compared with $45,180 for the three months ended June 30, 2024. These costs were primarily related to energy costs to operate the miners within our owned facilities, which were $89,895 for the three months ended June 30, 2025, an increase of $51,350, or 133%, as compared to $38,545 for the three months ended June 30, 2024. The increase in energy costs was due to the expansion of our operations since June 30, 2024 and the increase in the volume of miners operating in our owned locations. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.
We also incurred no hosting and profit-sharing fees for the three months ended June 30, 2025, a complete decrease of $5,598 for hosting fees, and $911 for profit-sharing fees as compared to the three months ended June 30, 2024. The hosting fees and profit-sharing fees were primarily the result of our co-location agreement with Coinmint. The hosting fees decreased period over period due to the expiration of the hosting agreement, subsequent wind-down procedures and removal of miners during the three months ended March 31, 2025.
Professional fees
Professional fees, which consisted primarily of legal, accounting and consulting fees, were $3,004 for the three months ended June 30, 2025, a decrease of $1,364, or 31%, from $4,368 for the three months ended June 30, 2024. This decrease was primarily attributable to legal and other professional consulting fees during the three months ended June 30, 2025. Legal expenses were $996 for the three months ended June 30, 2025, as compared to $2,493 for the three months ended June 30, 2024. Other professional fees, namely accounting and consulting, were $2,008 for the three months ended June 30, 2025, as compared to $1,875 for the three months ended June 30, 2024, representing an increase of $133. The increase in accounting fees was primarily related to tax services and consulting.
Payroll expenses
Payroll expenses were $16,398 for the three months ended June 30, 2025, a decrease of $752, or 4%, from $17,150 for the three months ended June 30, 2024. Our payroll expenses include all compensation related expenses for our employees and mainly include salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation. Payroll expenses, excluding non-cash stock-based compensation, were $11,911 for the three months ended June 30, 2025, representing a decrease of 16% from $14,204 for the three months ended June 30, 2024, mainly attributed to the reduction in bonus accruals in the three months ended June 30, 2025, partially offset by increased headcount due to expansion of operational locations.
Stock-based awards granted to certain employees are a significant portion of our payroll-related costs. Stock-based compensation, which is a non-cash expense, was $4,488 for the three months ended June 30, 2025, an increase of $1,542, or
12
52%, from $2,946 for the three months ended June 30, 2024. The increase in stock-based compensation was mainly attributed to the granting of 2,212,486 restricted stock units in April 2025.
General and administrative expenses
General and administrative expenses increased to $16,566 for the three months ended June 30, 2025 from $8,235 for the three months ended June 30, 2024, representing an increase of $8,331 or 101%. This increase was primarily attributable to increases in corporate overhead, including, but not limited to, property taxes and insurance premiums (primarily due to the substantial increase in owned assets), rent, maintenance, and marketing expenses as we focused on increasing visibility in the current period.
(Gain) loss on fair value of bitcoin
Gain on fair value of bitcoin for the three months ended June 30, 2025 was $268,651 as compared to a loss on fair value of bitcoin of $48,338 for the three months ended June 30, 2024, a change of $316,989 or 656%. We measured crypto assets within the scope of ASC Topic 350-60 - Intangibles - Goodwill and Other - Crypto Assets at fair value in accordance with ASC Topic 820 - Fair Value Measurement and included the gains and losses from remeasurement in net income. The gain for the three months ended June 30, 2025 pertains to the change in bitcoin's fair value from approximately $82,500 per bitcoin on March 31, 2025 to approximately $107,200 per bitcoin on June 30, 2025. Meanwhile the loss for the three months ended June 30, 2024 pertains to the change in bitcoin's fair value from approximately $71,300 per bitcoin on March 31, 2024 to $62,700 per bitcoin on June 30, 2024.
Depreciation and amortization
Depreciation and amortization expense increased to $94,880 for the three months ended June 30, 2025, from $40,727 for the three months ended June 30, 2024, an increase of $54,153, or 133%. Depreciation expense increased by $53,659, or 133%, during the three months ended June 30, 2025, to $93,858 from $40,199, mainly due to an increase in miners and mining-related equipment being placed in service during the comparative period. Additionally, effective May 1, 2024, all miners would be adjusted to a useful life of 3 years, a reduction from 5 years.
Amortization expense for the three months ended June 30, 2025 was $1,023, an increase of $495, or 94%, from $528 for the three months ended June 30, 2024. The increase in amortization expense is primarily due to the Company's acquisition of software in the amount of $7,000 throughout the current year.
Other income (expenses)
Other income was $29,334 for the three months ended June 30, 2025, compared with other income, net of $3,341 for the three months ended June 30, 2024, which is a change of $25,993 or 778%.
Gain on bitcoin collateral was the primary reason for the increase in other income (expense) since in the prior year there was no collateral held by Coinbase. The gain in the fair value of collateral of $31,354 for the three months ended June 30, 2025 pertains to the change in the underlying collateral due to bitcoin's fair value from approximately $82,500 per bitcoin on March 31, 2025 to approximately $107,200 per bitcoin on June 30, 2025.
Interest income in the three months ended June 30, 2025 decreased by $2,283 to $355 from $2,638 for the three months ended June 30, 2024 due to lower balance of cash retained in short term interest bearing accounts and the interest earned on the note receivable from GRIID (See Note 5 - Note Receivable from GRIID).
Interest expense in the three months ended June 30, 2025 increased by $2,969 to $3,454 from $485 for the three months ended June 30, 2024 due to the amortization of deferred insurance costs from the Convertible Note, the promissory note, and equipment line of credit, which the Company did not have as of June 30, 2024.
Net income (loss)
Net income for the three months ended June 30, 2025 was $257,390, as compared to net loss of $236,242 for the three months ended June 30, 2024, for the reasons stated above.
13
Results of continuing operations for the nine months ended June 30, 2025 and 2024
($ presented in 000's, except for average bitcoin price)
Bitcoin mining revenue
We earned $542,662 in bitcoin mining revenue during the nine months ended June 30, 2025, which was an increase of $252,969, or 87%, as compared with $289,693 for the nine months ended June 30, 2024. Bitcoin mining revenues are recorded net of bitcoin mining fees charged by our sole mining pool operator that equaled approximately 0.19% of gross bitcoin mining revenues for the nine months ended June 30, 2025 and are determined by two main drivers: quantity of bitcoin mined and the price of bitcoin on the date the bitcoin is mined. During the nine months ended June 30, 2025, we mined 5,914 bitcoin with an average bitcoin price of $91,765 as compared to 5,628 bitcoin with an average bitcoin price of $51,472 during the nine months ended June 30, 2024. The increase in bitcoin mining revenue for the nine months ended June 30, 2025 was attributable to the increase in the quantity of bitcoin mined and the average bitcoin price as compared to the nine months ended June 30, 2024. The quantity increase was attributable to the 88,722 miners in operation between June 30, 2024 and June 30, 2025, representing a 58% increase period over period. The increase in miners in operation increases our hashrate, which is our total computational power, and which when understood in the context of global hashrate, determines how much bitcoin we are able to mine.
Cost of revenues (exclusive of depreciation and amortization expense)
Our cost of revenues was $245,842 for the nine months ended June 30, 2025, an increase of $137,468, or 127%, as compared with $108,374 for the nine months ended June 30, 2024. These costs were primarily related to energy costs to operate the miners within our owned facilities, which were $235,638 for the nine months ended June 30, 2025, an increase of $148,994 or 172% as compared to $86,644 for the nine months ended June 30, 2024. The increase in energy costs was due to the rise in the volume of miners operating in our owned locations as well as the increase in average cost per kWh, which approximated $0.056/kWh for the nine months ended June 30, 2025 as compared to an average cost of $0.045/kWh for the nine months ended June 30, 2024. We continually evaluate energy and bitcoin prices and periodically will curtail our mining operations when it is advantageous to do so.
We also incurred hosting fees of $9,087 and profit-sharing fees of $698 for the nine months ended June 30, 2025, a decrease of $8,650, or 49%, and decrease of $3,125, or 82%, as compared to $17,737 and $3,823, respectively, for the nine months ended June 30, 2024. The hosting fees and profit-sharing fees were primarily the result of our co-location agreement with Coinmint. The hosting fees decreased period over period due to the expiration of the hosting agreement, subsequent wind-down procedures and removal of miners during the nine months ended June 30, 2025.
Professional fees
Professional fees, which consisted primarily of legal, accounting and consulting fees, were $9,872 for the nine months ended June 30, 2025, a increase of $1,723, or 21%, from $8,149 for the nine months ended June 30, 2024. Legal expenses were $3,482 for the nine months ended June 30, 2025, as compared to $3,438 for the nine months ended June 30, 2024. This increase was attributable to other professional fees due to increased fees of external accounting services engaged to assist with increased complexities in areas such as auditing, tax, and Sarbanes-Oxley compliance (among other accounting related services). These fees increased to $6,389 by approximately $1,679 during the nine months ended June 30, 2025, as compared to $4,710 of during the nine months ended June 30, 2024.
Payroll expenses
Payroll expenses were $52,522 for the nine months ended June 30, 2025, an increase of $3,231, or 7%, from $49,291 for the nine months ended June 30, 2024. Our payroll expenses include all compensation related expenses for our employees and mainly include salaries, wages, payroll-related taxes and benefits and non-cash stock-based compensation. Payroll expenses, excluding non-cash stock-based compensation, were $41,913 for the nine months ended June 30, 2025, representing an increase of 58% from $26,595 for the nine months ended June 30, 2024, mainly attributed to an increase in employee headcount.
14
Stock-based awards granted to certain employees are a significant portion of our payroll-related costs. Stock-based compensation, which is a non-cash expense, was $10,609 for the nine months ended June 30, 2025, a decrease of $12,087, or 53%, from $22,696 for the nine months ended June 30, 2024. The decrease in stock-based compensation was mainly attributed vesting of a market-based restricted stock awards during the nine months ended June 30, 2024. Additionally, there is no grant date or service inception date for the 2025 LTIP and accordingly there is no expense recognized in the nine months ended June 30, 2025.
General and administrative expenses
General and administrative expenses increase to $38,356 for the nine months ended June 30, 2025 from $20,058 for the nine months ended June 30, 2024, representing an increase of $18,298 or 91%. This increase was primarily attributable to increases in corporate overhead, including, but not limited to, property taxes and insurance premiums (primarily due to the substantial increase in owned assets), rent, and marketing expenses as we focused on increasing visibility in the current period.
Gain on fair value of bitcoin, net
Gain on fair value of bitcoin, net for the nine months ended June 30, 2025 was $359,190 as compared to $107,406 for the nine months ended June 30, 2024, an increase of $251,784 or 234%. The gain for the nine months ended June 30, 2025 pertains to the change in bitcoin's fair value from approximately $63,300 per bitcoin on September 30, 2024 to approximately $107,200 per bitcoin on June 30, 2025. Meanwhile the gain for the nine months ended June 30, 2024 pertains to the change in bitcoin's fair value from approximately $29,960 per bitcoin on September 30, 2023 to $62,700 per bitcoin on June 30, 2024.
Depreciation and amortization
Depreciation and amortization expense increase to $240,010 for the nine months ended June 30, 2025, from $102,761 for the nine months ended June 30, 2024, an increase of $137,249 or 134%. Depreciation expense increased by $135,718, or 134%, during the nine months ended June 30, 2025, from $101,198 to $236,916, due to mainly due to an increase in miners and mining-related equipment being placed in service during the comparative period. Additionally, effective May 1, 2024, all miners would be adjusted to a useful life of 3 years, a reduction from 5 years.
Amortization expense for the nine months ended June 30, 2025 was $3,094, an increase of $1,531, or 98%, from $1,563 for the nine months ended June 30, 2024. In the nine months ended June 30, 2025, the Company acquired software in the total amount of $7,000, which was the primary cause for the increase in amortization expense.
Other income (expenses)
Other income, net was $71,555 for the nine months ended June 30, 2025, compared with other income, net of $3,347 for the nine months ended June 30, 2024, which is an increase of $68,208 or 2,038%. Other income for the nine months ended June 30, 2025 consisted primarily of gain on bitcoin collateral returned of $73,847. The Company did not have any bitcoin collateral in the nine months ended June 30, 2024.
Interest income in the nine months ended June 30, 2025 decreased to $3,845 from $5,909 for the nine months ended June 30, 2024, an increase of $2,064 due to decrease in interest rates.
Interest expense in the nine months ended June 30, 2025 increased by $4,723 to $6,280 from $1,557 for the nine months ended June 30, 2024 due to the amortization of deferred insurance costs from the Convertible Note, the promissory note, and equipment line of credit, which the Company did not have as of June 30, 2024.
Income tax expense (benefit)
Income tax expense for the nine months ended June 30, 2025 was $24,281 as compared to an income tax expense for the nine months ended June 30, 2024 of $3,499. The effective tax rate for the nine months ended June 30, 2025 was 6.2% and was an -4.4% for the same period in the prior year.
15
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, the Company will evaluate all deferred tax balances under the newly enacted tax law in periods subsequent to June 30, 2025 and identify any other future changes required to its financial statements as a result of the OBBBA. We are currently assessing its impact on our consolidated financial statements.
Net income (loss)
Net income for the nine months ended June 30, 2025 was $365,389, as compared to net loss of $83,598 for the nine months ended June 30, 2024, for the reasons stated above.
Non-GAAP Measure
We present Adjusted EBITDA, which is not a measurement of financial performance under GAAP. Our non-GAAP “Adjusted EBITDA” excludes (i) impacts of interest, taxes, and depreciation; (ii) our 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 we believe are not reflective of our 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; (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 our 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 our future business activities; and (viii) severance expenses.
We previously excluded non-cash impairment losses related to bitcoin and realized gains and losses on sales of bitcoin from our calculation of Adjusted EBITDA but have determined such items are part of our 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 our 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, we expect 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 our 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 our 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, we only utilize that measure supplementally and do 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 our condensed consolidated financial statements, which have been prepared in accordance with GAAP.
16
The following is a reconciliation of our non-GAAP Adjusted EBITDA to its most directly comparable GAAP measure (i.e., net income (loss)) for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
($ in thousands) |
|
For the Three Months Ended June 30, |
|
|
For the Nine Months Ended June 30, |
|
||||||||||
Reconciliation of non-GAAP Adjusted EBITDA |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income (loss) |
|
$ |
257,390 |
|
|
$ |
(236,242 |
) |
|
$ |
365,389 |
|
|
$ |
(83,598 |
) |
Impairment expense - other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
396 |
|
Impairment expense - fixed assets |
|
|
— |
|
|
|
189,235 |
|
|
|
— |
|
|
|
189,235 |
|
Depreciation and amortization |
|
|
94,880 |
|
|
|
40,727 |
|
|
|
240,010 |
|
|
|
102,761 |
|
Share-based compensation expense |
|
|
4,488 |
|
|
|
2,946 |
|
|
|
10,609 |
|
|
|
22,696 |
|
Loss (gain) on derivative securities |
|
|
430 |
|
|
|
(1,188 |
) |
|
|
1,549 |
|
|
|
1,005 |
|
Interest income |
|
|
(355 |
) |
|
|
(2,638 |
) |
|
|
(3,845 |
) |
|
|
(5,909 |
) |
Interest expense |
|
|
3,454 |
|
|
|
485 |
|
|
|
6,280 |
|
|
|
1,557 |
|
Other income |
|
|
(1,509 |
) |
|
|
— |
|
|
|
(1,692 |
) |
|
|
— |
|
Loss (gain) on disposal of assets |
|
|
156 |
|
|
|
(47 |
) |
|
|
(2,865 |
) |
|
|
2,281 |
|
Income tax expense (benefit) |
|
|
18,107 |
|
|
|
(9,495 |
) |
|
|
24,281 |
|
|
|
3,499 |
|
Fees related to financing & business development transactions |
|
|
22 |
|
|
|
2,862 |
|
|
|
653 |
|
|
|
3,038 |
|
Litigation & settlement related expenses |
|
|
638 |
|
|
|
686 |
|
|
|
1,179 |
|
|
|
1,186 |
|
Severance and other expenses |
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
102 |
|
Non-GAAP Adjusted EBITDA* |
|
$ |
377,701 |
|
|
$ |
(12,669 |
) |
|
$ |
641,560 |
|
|
$ |
238,249 |
|
* We have not excluded our net gain on fair value of bitcoin $268,651 and net loss of $48,338 in the three months ended June 30, 2025 and 2024, respectively, and net gain $359,190 and $107,406 in the nine months ended June 30, 2025 and 2024, respectively, which we now record in our condensed consolidated statement of operations and comprehensive income as provided in ASC 350-60, as discussed in the Form 10-K.
Liquidity and Capital Resources
($ presented in 000's)
Our primary requirements for liquidity and capital are working capital, capital expenditures, loan payments, public company costs and general corporate needs. We expect these needs to continue as we further develop and grow our business. Our principal sources of liquidity have been and are expected to be our cash and cash equivalents, bitcoin inventory, proceeds from our convertible note and line of credit.
As of June 30, 2025, we had total current assets of $1,210,140, consisting of cash and cash equivalents, prepaid expenses and other current assets, bitcoin, investment in debt security and related derivative asset, and total assets in the amount of $3,101,817. Our total current liabilities and total liabilities as of June 30, 2025 were $276,819 and $954,929, respectively. We had working capital of $933,321 as of June 30, 2025. With the recent launch of our bitcoin treasury function in April 2025, we have begun to use a portion of the bitcoin we mine to fund operations and to fund capital expenditures. In addition, we have $635,295 zero-coupon convertible notes outstanding and a $200,000 line of credit with Coinbase as discussed in Note 9 - Loans and Note 16 - Subsequent Events.
Based on our current plans and business conditions, we believe that existing cash and cash equivalents and bitcoin, together with cash generated from operations and our future investing activities, will be sufficient to satisfy our anticipated cash requirements for the next 12 months and for the reasonably foreseeable future until we reach consistent profitability, and we are not aware of any trends or demands, commitments, events or uncertainties that are reasonably likely to result in a decrease in the liquidity of our assets. We are likely to require additional capital to respond to technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. In particular, the ongoing impacts of inflation and fluctuations in interest rates, global conflicts including increases in tariffs, have resulted in, and may continue to result in, significant disruption and volatility in the global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.
17
Material Cash Requirements
We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the condensed consolidated balance sheets as of June 30, 2025, while others are considered future commitments. Our contractual obligations primarily consist of cancelable purchase commitments with various parties to purchase goods or services, primarily miners and equipment, entered into in the normal course of business and operating leases. For information regarding our other contractual obligations, refer to Note 14 - Commitments and Contingencies in this Quarterly Report on Form 10-Q for the period ended June 30, 2025, and Note 18 - Commitments and Contingencies included in our Annual Report on Form 10-K as filed with the SEC on December 3, 2024.
We regularly evaluate opportunities to expand our business, including through potential acquisitions of businesses or assets. We will evaluate a variety of sources of capital in connection with financing any future possible acquisitions, including the incurrence of debt, sales of stock or bitcoin, or using cash on hand. We may also use the Company’s stock as transaction consideration, as we have done in the past.
Operating Activities
The Company generates non-cash revenue through mining bitcoin, which it retains the majority based on its long-term value strategy, while funding all operating expenses with cash. As a result, net cash used in operating activities for the nine months ended June 30, 2025 was $341,623 primarily due to cost of revenues of $245,842, payroll expenses of $52,522 and general and administrative expenses of $38,356, in spite of a net income of $365,389, due to the increase of the non-cash gains in the held bitcoin balance. Changes in operating assets and liabilities used a net total of $8,833 of cash.
Operating activities from continuing operations for the nine months ended June 30, 2024, resulted in a net cash outflow of $150,539. This was primarily driven by net income of $83,598, which included significant non-cash revenue and gains, in the form of bitcoin. The non-cash adjustments to reconcile net income to net cash included $102,761 for depreciation and amortization and $22,696 for stock-based compensation, offset by $289,693 of non-cash bitcoin mining revenues. Additionally, changes in operating assets and liabilities resulted in a net cash outflow of $6,835.
Investing Activities
Investing activities from operations used $441,154 during the nine months ended June 30, 2025, as compared with using $503,698 for the nine months ended June 30, 2024. Our payments on miners (including miner deposits) of $382,285, purchase of fixed assets of $133,986, and payment for the asset acquisition of the LaFayette, Tennessee, and Twin Cities locations of $1,413, $8,105, and $5,490, respectively were the main components of our investing cash outflow for the nine months ended June 30, 2025. This was partly offset by cash received from proceeds from the sales of bitcoin of $127,625, the acquisition of GRIID of $1,411 and by cash proceeds received from the sale of miners of $42,832.
Financing Activities
Cash flows generated from financing activities of continuing operations during the nine months ended June 30, 2025 amounted to $696,514 compared to $754,624 for the nine months ended June 30, 2024. Our cash flows from financing activities for the nine months ended June 30, 2025 consisted primarily of proceeds from the convertible note and line of credit totaling $812,195 and proceeds from underwritten offerings of $186,808, partially offset by the repurchase of common stock of $145,000, aggregate payments for capped call transactions of $90,350, and payments on loans in the amount of $58,513. Our cash flows from financing activities for the nine months ended June 30, 2024 mainly consisted of proceeds from underwritten offerings of $780,043.
18
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We evaluate our estimates and assumptions on an ongoing basis and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for the judgments we make about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position and statement of cash flows.
There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 other than as described in Note 2 - Summary of Significant Accounting Policies in our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Recent Accounting Pronouncements
Please refer to Note 2 - Summary of Significant Accounting Policies in our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The following discussion about the Company’s market risk exposures involves forward-looking statements. Actual results could differ materially from those discussed in the forward-looking statements.
Market Price Risk of Bitcoin. The Company holds a significant amount of bitcoin; therefore, we are exposed to the impact of market price changes in bitcoin on its bitcoin holdings. This exposure would generally manifest itself in the following areas:
At June 30, 2025, the Company held approximately 10,075 bitcoin on hand and the equivalent of 2,533 bitcoins receivable as a result of collateral held by third parties. As of June 30, 2025, the fair value of a single bitcoin was approximately $107,173, causing the fair value of the Company's bitcoin holdings and receivable from collateral on that date to approximate $1,080 and $271 million, respectively. A 10% increase or decrease in the fair value of bitcoin as of June 30, 2025, would have increased or decreased the total cash value that could be realized if the Company were to sell its bitcoin and related receivables by approximately $135 million in total.
Market Price Risk of Bitcoin-Linked Derivative Instruments.
As of June 30, 2025, we held bitcoin-linked derivative assets with a combined fair value of approximately $7.7 million. A 10% change in the fair value of these derivative instruments, holding all other variables constant, would result in an approximate $0.8 million increase or decrease in the total fair value of the derivatives and a corresponding impact to net income.
19
Item 4. Controls and Procedures
Limitation on Effectiveness of Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).
On October 30, 2024, the Company completed its acquisition of GRIID. The Company is currently integrating GRIID into our overall internal control over financial reporting process and, consistent with interpretive guidance issued by the Staff of the SEC, is excluding the business from our evaluation of disclosure controls and procedures as of June 30, 2025. In accordance with such guidance, an assessment of recent business combinations may be omitted from management’s assessment of internal control over financial reporting for one year following the acquisition. This acquisition constituted approximately 5% of the Company’s total consolidated assets and approximately 12% of the Company’s consolidated revenues are generated from the locations acquired from GRIID as of and for the nine months ended June 30, 2025, respectively.
Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below.
Material Weakness in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses that have been previously reported have been identified and included in management's assessment:
These material weaknesses did not result in any identified material misstatements to the condensed consolidated financial statements, and there were no changes to previously released financial results.
20
Remediation Efforts to Address the Material Weaknesses
The Company’s Board of Directors and management take internal control over financial reporting and the integrity of its condensed consolidated financial statements seriously.
Changes to internal controls over financial reporting require operation for a sufficient period of time in order for management to evaluate and test the operating effectiveness. Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the following material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include the following:
Material weakness over design of information systems general controls over our general ledger
The remediation actions taken include the following:
The Company is currently in the process of testing the design, implementation and operating effectiveness of internal controls related to the various assertions in certain financial statement line items that were affected by the material weakness related to information systems general controls to determine whether internal controls are effective for cash and cash equivalents, bitcoin, receivable from bitcoin collateral, note receivable from GRIID, property and equipment, deposits on miners, accounts payable, accrued liabilities, loans payable, deferred income taxes, stockholders' equity, bitcoin mining revenue, cost and expenses, share-based payments, and income tax expense.
Material weakness design of property plant and equipment and deposits on miners
The planned remediation actions include the following:
While these remedial actions are designed and implemented to correct the unremediated material weaknesses, changes to internal controls over financial reporting require operation for a sufficient period of time in order for management to evaluate and test the operating effectiveness. Management will continue to monitor and evaluate the effectiveness of these changes for a sufficient period of time prior to concluding that these controls are designed and operating effectively, and the material weakness regarding the design of property plant and equipment and deposits on miners can be considered remediated.
21
Changes in Internal Control over Financial Reporting
The Company is integrating GRIID into our overall internal control over financial reporting process. At this time, we anticipate that the scope of our assessment of our internal control over financial reporting for our fiscal year ending September 30, 2025 will include GRIID’s internal control over financial reporting. Except for the remedial measures described above, and the GRIID Acquisition, there have been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
22
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are from time to time subject to various claims, lawsuits, and other legal and administrative proceedings arising in the ordinary course of business. See Note 14 - Commitments and Contingencies to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in the “Risk Factors” section contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024, together with the cautionary statement under the caption “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q. These described risks are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
The capped call transactions may affect the value of the 2030 Notes and the market price of our common stock.
In connection with the issuance of our $650,000,000 aggregate principal amount of 0% convertible senior notes due 2030 (the “2030 Notes”), we entered into privately negotiated capped call transactions with certain financial institutions (collectively, the “option counterparties”). The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the 2030 Notes or offset any cash payments we are required to make in excess of the principal amount of converted 2030 Notes, with such reduction or offset subject to a cap.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties entered into various derivative transactions with respect to our common stock and/or purchased shares of our common stock concurrently with, or shortly after, the pricing of the 2030 Notes. They may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling shares of our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2030 Notes, and they are likely to do so during any “observation period” related to a conversion of 2030 Notes or, to the extent we exercise the relevant election under the capped call transactions, following any repurchase or redemption of the 2030 Notes, in each case as described in the Indenture, dated as of December 17, 2024, by and between the Company and U.S. Bank Trust Company, National Association, as trustee. This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2030 Notes.
We are subject to counterparty risk with respect to the capped call transactions.
The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions and could adversely affect the option counterparties’ performance under the capped call transactions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer more dilution, the effect of which would not be compensated for, than we currently anticipate with respect to our common stock. We can provide no assurance as to the financial stability or viability of the option counterparties.
The accounting treatment for convertible debt securities that may be settled in cash and/or shares, such as the 2030 Notes, may have a material effect on our reported financial results.
The accounting method for reflecting the 2030 Notes on our balance sheet, accruing interest expense for the 2030 Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
23
In accordance with ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), we expect that the 2030 Notes will be reflected as a liability on our balance sheet, with the initial carrying amount equal to the principal amount of the 2030 Notes, net of issuance costs. The issuance costs are amortized into interest expense over the term of the 2030 Notes. As a result of this amortization, the interest expense recognized for the 2030 Notes for accounting purposes will be greater than the cash interest payments paid on the 2030 Notes, which will result in lower reported income.
In addition, we expect that the shares underlying the 2030 Notes are reflected in our diluted earnings per share using the “if converted” method, in accordance with ASU 2020-06. Under that method, diluted earnings per share would generally be calculated assuming that all the 2030 Notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.
Furthermore, if any of the conditions to the convertibility of the 2030 Notes are satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2030 Notes as a current, rather than a long-term, liability. This reclassification could be required even if no holders convert their 2030 Notes and could materially reduce our reported working capital.
There are risks related to technological obsolescence, the vulnerability of the global supply chain for cryptocurrency hardware disruption, potential trade restrictions and difficulty in obtaining new hardware which may have a negative effect on our business.
As our mining facilities operate, our miners experience ordinary wear and tear and may face more significant malfunctions caused by a number of extraneous factors beyond our control. The degradation of our miners will also require us, over time, to repair or replace miners which are no longer functional. Additionally, as technology evolves, we may be required to acquire newer models of miners to remain competitive in the market. This upgrading process requires substantial capital investment, and we may face challenges in doing so on a timely and cost-effective basis.
Further, we have faced complications related to the import of our miners and other mining equipment in the past and may again in the future. The global supply of miners is unpredictable and presently heavily dependent on manufacturers headquartered in China, with manufacturing in Asia, which was severely affected by the emergence of the COVID-19 pandemic. We currently utilize several types of ASIC miners as part of our mining operation, including Bitmain Antminers, Canaan Avalon miners and MicroBT WhatsMiners, all of which are produced in China, Malaysia, Indonesia or Thailand. Geopolitical matters, including the relationship of the U.S. with other countries, trade restrictions and tariffs, or the threat of trade restrictions or tariffs, may impact our ability to import miners or other equipment necessary for our operations. In addition, officials of CBP have broad discretion regarding products imported into the United States, and the CBP has on occasion, and may again in the future, detained and/or seized imported miners and other equipment necessary to the operation of our miners, which has resulted in significant costs to us. Further, on or about May 27, 2025, we began receiving invoices from CBP asserting Chinese origin import tariffs on miner purchases made in early 2024. In the event that CBP were to successfully defend these tariffs and apply them to all previously imported miners, our total tariff liability could rise to approximately $185 million, not including statutory interest. Refer to Note 14 - Commitments and Contingencies for more information on the Company’s assessment of its potential liability in connection with this matter. If any of our mining equipment is detained and/or seized again in the future, we may not be able to obtain adequate replacement parts for our existing miners and other equipment or obtain additional miners and other equipment from manufacturers on a timely basis, or at all. Further, if we are unable to adequately resolve the allegations regarding the country of origin of our mining equipment, the tariffs imposed on our mining equipment could significantly increase, thereby increasing the cost of our miner purchases. Such events could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin we mine or otherwise acquire or hold for our own account, and harm investors.
24
The U.S. political and economic environment could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory and policy changes by the new U.S. presidential administration may directly affect us and the global economy.
The political and economic environment in the U.S. and elsewhere has resulted in, and may continue to result in, uncertainty. Changing regulatory policies because of the evolving political environment or otherwise could pose challenges to our business model and materially and adversely affect our business, financial condition and results of operations. For example, in March 2025, the U.S. federal government established a strategic bitcoin reserve, which could significantly affect bitcoin prices through large-scale purchasing programs, potentially creating increased price volatility or artificial price suppression that could make our mining operations less profitable or unprofitable.
Furthermore, the government might exercise greater influence over the bitcoin network, which could affect mining difficulty rates, transaction processing, or other technical aspects of the network in ways that could adversely impact our operations. These changes could affect market sentiment and institutional adoption of bitcoin in unpredictable ways that could impact bitcoin’s value.
Our ability to conduct business can also be significantly impacted by changes in tariffs, customs policies, changes in or repeals of trade agreements and the imposition of other trade restrictions or retaliatory actions imposed by various governments. For example, during the first quarter of 2025, the United States introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, including from certain jurisdictions from which we import mining equipment, or from which components of our mining equipment are manufactured. Such tariffs, if continued, will affect shipments from such jurisdictions.
The timeline, structure, and scope of any potential regulatory policies are uncertain, making it difficult for us to plan for or mitigate these risks effectively. In addition, we cannot predict what further action may be taken with respect to tariffs or trade relations between the U.S. and other governments. Any such changes could fundamentally alter the competitive and regulatory landscape in which we operate, and political tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets, all of which could potentially having a material adverse effect on our business, financial condition, and results of operation. The price of bitcoin has historically been volatile and is impacted by a variety of factors, including political, economic, regulatory or other conditions.
We are exposed to risks relating to our bitcoin treasury function.
In April 2025, we launched the treasury function and we plan to continue to integrate them into our regular treasury management activities. Our expansion into such treasury management activities for our bitcoin holdings subjects us to unforeseen risks, challenges and uncertainties, and there is no guarantee that we will generate revenue from such activities or realize any of the other anticipated benefits of such activities. The transactions in which the bitcoin treasury function may engage in could involve significant risks. Trading in bitcoin and bitcoin related financial products is a speculative activity. The price of bitcoin has been subject to significant historical volatility and may be subject to influence from malicious actors, real or perceived scarcity, political, economic, and regulatory conditions, and speculation, making its price more volatile.
We established relationships to engage in derivative transactions that permit our bitcoin treasury function to trade in bitcoin and bitcoin related financial products; however, there can be no assurance that we will be able to maintain such relationships or establish such relationships. An inability to establish or maintain such relationships could limit our treasury activities, create losses, preclude us from engaging in certain transactions, financing, derivative intermediation and counterparty services and prevent us from trading at optimal rates and terms. Moreover, a disruption in the financing, derivative intermediation and counterparty services provided by any such relationships before we establish additional relationships could have a significant impact on our business due to our reliance on such counterparties.
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Some of the markets in which we may effect transactions in bitcoin will not be “exchanged-based”, including “over-the-counter” or “interdealer” markets (i.e., principal-to-principal contracts between us and third parties entered into privately, rather than on an exchange). As a result, we are not afforded the regulatory and financial protections of an exchange or its clearinghouse (or of the government regulator that oversees such exchange and clearinghouse), and in privately negotiated transactions, the risk of the negotiated price deviating materially from fair value is substantial. This exposes us to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing us to suffer a loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where we have concentrated our transactions with a single or small group of counterparties. Furthermore, there is a risk that any of our counterparties could become insolvent and/or the subject of insolvency proceedings. If one or more of our counterparties were to become insolvent or the subject of insolvency proceedings, there exists the risk that the recovery of bitcoin from our counterparties, including but not limited to, broker-dealers, will be delayed or be of a value less than the value of the bitcoin originally entrusted to such counterparty.
We may use counterparties located in jurisdictions outside the United States. Such counterparties are subject to the laws and regulations in non-US jurisdictions that are designed to protect their customers in the event of their insolvency. However, the practical effect of these laws and their application to our assets are subject to substantial limitations and uncertainties. Because of the large number of entities and jurisdictions involved and the range of possible factual scenarios involving the insolvency of a counterparty, it is impossible to generalize about the effect of their insolvency on us and our assets.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Plans
For the nine months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
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Item 6. Exhibits
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Incorporated by Reference |
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Filed/ |
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Exhibit Number |
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Exhibit Description |
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Form |
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File No. |
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Exhibit |
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Filing Date |
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Furnished Herewith |
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3.1 |
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Conformed Copy of First Amended and Restated Articles of Incorporation of CleanSpark, Inc., as amended through October 28, 2024 |
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10-Q |
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001-39187 |
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3.1 |
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02/06/2025 |
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3.2 |
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First Amended and Restated Bylaws of CleanSpark, Inc., dated September 17, 2021 |
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8-K |
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001-39187 |
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3.2 |
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09/17/2021 |
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3.3 |
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First Amendment to First Amended and Restated Bylaws of CleanSpark, Inc., dated August 28, 2024 |
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8-K |
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001-39187 |
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3.2 |
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08/30/2024 |
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4.1 |
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Amended and Restated Warrant Agreement, dated November 8, 2024, by and between CleanSpark, Inc. and Securities Transfer Corporation |
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8-A/A |
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001-39187 |
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4.1 |
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11/08/2024 |
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4.2 |
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Form of Warrant Certificate (included in Exhibit 4.1) |
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8-A/A |
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001-39187 |
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4.2 |
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11/08/2024 |
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4.3 |
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Indenture, dated as of December 17, 2024, by and between CleanSpark, Inc. and U.S. Bank Trust Company, National Association, as trustee, relating to the 0.00% Convertible Senior Notes due 2030 |
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8-K |
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001-39187 |
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4.1 |
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12/17/2024 |
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4.4 |
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Form of Note Representing the 0.00% Convertible Senior Notes due 2030 (included as Exhibit A to Exhibit 4.3) |
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8-K |
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001-39187 |
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4.2 |
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12/17/2024 |
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10.1 |
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Form of Capped Call Confirmations. |
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8-K |
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001-39187 |
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10.1 |
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12/17/2024 |
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10.2 |
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Master Loan Agreement, dated April 14, 2025, by and among Coinbase Credit, Inc., Coinbase, Inc. and CleanSpark, Inc. |
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8-K |
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001-39187 |
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10.1 |
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4/16/2025 |
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31.1 |
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Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) |
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* |
31.2 |
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) |
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* |
32.1 |
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 |
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** |
32.2 |
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 |
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** |
101 INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101 SCH |
Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Documents |
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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Filed herewith. |
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Furnished herewith. |
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Certain schedules and other similar attachments to this exhibit have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. The registrant will provide a copy of such omitted documents to the SEC upon request. |
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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.
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CleanSpark, Inc. |
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Date: August 7, 2025 |
By: /s/ Zachary K. Bradford Zachary K. Bradford Title: Chief Executive Officer (Principal Executive Officer and Director) |
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Date: August 7, 2025 |
By: /s/ Gary A. Vecchiarelli Gary A. Vecchiarelli Title: Chief Financial Officer (Principal Financial Officer) |
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Date: August 7, 2025 |
By: /s/ Brian Carson Brian Carson Title: Chief Accounting Officer (Principal Accounting Officer) |
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FAQ
How much bitcoin does CleanSpark (CLSK) hold as of June 30 2025?
What were CleanSpark’s Q3-25 earnings per share?
How has CleanSpark’s debt position changed?
What is the impact of ASC 350-60 adoption on bitcoin accounting?
What strategic acquisitions were completed during the period?
