UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported): August 4, 2020

 

 

 

CLEANSPARK, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Nevada   001-39187   87-0449945

(State or Other Jurisdiction

of Incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

 

1185 S. 1800 West, Suite 3

Woods Cross, Utah 84087

(Address of Principal Executive Offices)

 

(702) 941-8047 

(Registrant’s Telephone Number, Including Area Code) 

 

N/A 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

         
Title of each class  

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.001 per share   CLSK   The Nasdaq Stock Market LLC

 

 

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

 

Emerging growth company

 

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

 

  
 

 

Item 2.02 Results of Operations and Financial Condition

On August 4, 2020, CleanSpark, Inc. issued a statement to shareholders discussing its financial results for the third quarter ended June 30, 2020. A copy of this press release is attached hereto as Exhibit 99.1 and is being furnished with this report.

In accordance with General Instructions B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits.

     

Exhibit

   No.   

  Description
   
99.1   Press Release, dated August 4, 2020.

 

 2 
 

 

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 hereunto duly authorized.

 

    CLEANSPARK, INC.  
         
 Dated: August 4, 2020   By: /s/ Zachary K. Bradford  
      Zachary K. Bradford  

 

 

   

Chief Executive Officer and President 

 

 

 

 3 
 

 

CleanSpark Announces Quarterly Results and 283% Increase in Revenues in a Statement to Shareholders

CleanSpark Inc. Delivers Record Year-Over-Year Revenue Improvement for the nine months ended June 30, 2020.

SALT LAKE CITY, August 4, 2020 -- CleanSpark, Inc. (Nasdaq: CLSK), a diversified software and services company, is pleased to update its shareholders and comment on the Company’s financial results presented in its most recent Form 10-Q. The Company recommends that readers also review the Company’s 10-Q in its entirety, a free copy of which is available to all interested parties on the Company’s website or on www.sec.gov.

Dear Fellow Shareholders,

As the planet begins to emerge from the catastrophic effects of the global pandemic, we consider ourselves blessed to have had the ability to continue the operations of our business largely unscathed. The massive disruption of our daily lives and the tragic health issues and loss of life around the world are clearly unprecedented. According to recent reports, the US economy contracted a record 32.9% during the second quarter of 2020. In spite of all of this uncertainty, CleanSpark continues to execute on its strategy and is pleased to report our eighth consecutive record-breaking quarter, significantly increasing year over year revenues. We remain optimistic that the Company will continue to see record-setting growth across our software and services segments.

Our sales in fiscal 2020 are again led by our custom electric switchgear hardware with more than $6.4 Million in products delivered during the nine months ending June 30, 2020. We continue to see a sizable percentage of repeat customers in this segment and we anticipate this trend will continue. As a result of our strong growth we have increased our targeted revenue from $7.0 to $7.5 million in delivered custom switchgear sales prior to the end of our 2020 fiscal year.

The Company’s increased focus on its mPulse software and controls platform, and mVSO, (microgrid Value Stream Optimizer) has continued to pay dividends with more than $1.0 million in related sales and nearly $1.0 million in additional contracted backlog coupled with a current proposal pipeline of approximately $10.0 million. During the nine months ended June 30, 2020, we delivered in excess of $1.0 million in software, energy storage and associated hardware. As a result of our strong growth we have increased our targeted revenue from $1.0 million to $1.3 million in delivered revenue related to this category prior to the end of our 2020 fiscal year.

The acquisition of p2klabs has enabled CleanSpark to accelerate the development and deployment of new features to its software platforms and expanded the overall sales and marketing capabilities. p2klabs generates high-margin service revenue and has contributed nearly $600,000 in revenues between February 1, 2020 and June 30, 2020. Since closing the acquisition, we have increased our investment in marketing and staff for the p2klabs business and expect the quarterly revenue contribution to increase significantly over the coming quarters. We continue to target $2.0 million in p2klabs revenue prior to the first anniversary of the acquisition, January 31, 2021.

We are sincerely grateful for the continued support from our shareholders. The most recent count exceeds 17,000 investors, including more than 10,000 shareholders on the Robinhood trading platform alone. We believe this significant increase indicates that the incoming generation of investors understand the magnitude CleanSpark’s disruptive approach brings to the rapidly evolving global energy markets. We continue to put our efforts towards, increasing shareholder value, achieving profitability, and improving our margin profile through increased software and service revenues.

Again, we appreciate your continued interest in, and passionate support of CleanSpark.

Heartfelt thanks from your fellow shareholders,

Zach and Matt

Zachary Bradford, CEO and S. Matthew Schultz, Chairman

  
 

Three months ended June 30, 2020 US GAAP Financial and Operating Highlights:

 

All amounts below are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) unless otherwise indicated.

 

·Three-months ended June 30, 2020 Revenue of $3,438,674, up 181% from $1,222,736 in 2019.

·Three-months ended June 30, 2020 Gross profit increased 152% to $544,735, up from $216,592 in 2019.

·Three-months ended June 30, 2020 Net loss per share improved by $0.13 per share to $(0.77) from $(0.90) in 2019.

Nine months ended June 30, 2020 US GAAP Financial and Operating Highlights:

 

All amounts below are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) unless otherwise indicated.

 

·Nine-months ended June 30, 2020 Revenue of $8,073,781, up 283% from $2,109,542 in 2019.

·Nine-months ended June 30, 2020 Gross profit increased 246% to $1,342,875, up from $388,054 in 2019.

·Nine-months ended June 30, 2020 Net loss per share improved by $1.13 per share to $(2.32) from $(3.45) in 2019.

 

Certain Non-U.S. GAAP Financial measures:

 

The Company assesses its results of operations using certain non-U.S. GAAP financial measures, in addition to U.S. GAAP financial measures. The Company believes these non-U.S. GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating performance in the same manner as management does.

 

The non-U.S. GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, any financial measures prepared in accordance with U.S. GAAP. The Company’s non-U.S. GAAP financial measures may be defined differently from time to time and may be defined differently than similar terms used by other companies, and accordingly, care should be exercised in understanding how the Company defines its non-U.S. GAAP financial measures.

 

Reconciliation of non-GAAP Adjusted EBITDA (after elimination of stock based and other non-cash expenses)

 

   For the Three months Ended
   June 30, 2020  June 30, 2019
Net loss (US GAAP)  $(8,551,301)  $(3,971,911)
Less: Depreciation, Amortization and other non-cash items:         
Depreciation and amortization   703,367    618,130
Software amortization   41,877    344,871
Stock based compensation   172,931    432,971
Non-cash interest charges, amortization of debt discounts and other   7,066,496    1,495,213
Non-cash amortization of right of use assets   11,274    —  
Unrealized gains on investments   (638,794)   —  
Total Depreciation, Amortization and other non-cash items:   7,357,151    2,891,185
          
Non-GAAP Adjusted EBITDA (after elimination of stock based and other non-cash expenses)  $(1,194,150)  $(1,080,726)

 

 2 
 

   For the Nine months Ended
   June 30, 2020  June 30, 2019
Net loss (US GAAP)  $(16,282,653)  $(14,020,002)
Less: Depreciation, Amortization and other non-cash items:         
Depreciation and amortization   2,004,731    1,275,249
Software amortization   121,582    1,034,612
Stock based compensation   1,171,632    1,716,753
Non-cash interest charges, amortization of debt discounts and other   10,518,094    7,196,287
Non-cash amortization of right of use assets   33,000    —  
Unrealized gains on investments   (1,622,553)   —  
Loss on settlement of debts   —      19,425
Total Depreciation, Amortization and other non-cash items:   12,226,486    11,222,901
          
Non-GAAP Adjusted EBITDA (after elimination of stock based and other non-cash expenses)  $(4,056,167)  $(2,797,101)

 

Parties interested in learning more about CleanSpark’s services are encouraged to inquire by contacting the Company directly at info@cleanspark.com or visiting the Company’s website at https://www.cleanspark.com.

 

Investors are encouraged to contact the Company at ir@cleanspark.com, or visiting the Company’s website at https://ir.cleanspark.com/ where recent presentations and case studies are available to view.

 

About CleanSpark:

CleanSpark is a software and services company which offers software and intelligent controls for microgrid and distributed energy resource management systems and innovative strategy and design services.  The Company provides advanced energy software and control technology that allows energy users to obtain resiliency and economic optimization. Our software is uniquely capable of enabling a microgrid to be scaled to the user's specific needs and can be widely implemented across commercial, industrial, military, agricultural and municipal deployment. Our product and services consist of intelligent energy controls, microgrid modeling software, and innovation consulting services in design, technology, and business process methodologies to help transform and grow businesses.

Forward-Looking Statements:

CleanSpark cautions you that statements in this press release that are not a description of historical facts are forward-looking statements. These statements are based on CleanSpark's current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by CleanSpark that any of our plans will be achieved. Actual results may differ from those set forth in this press release due to the risk and uncertainties inherent in our business, including, without limitation: the fitness of the product for a particular application or market, the expectations of future growth may not be realized, timing of deliveries of orders under contract, the successful integration of p2klabs, demand for our software products, the effect of COVID-19 on the economy and markets, generally, and other risks described in our prior press releases and in our filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in our Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and we undertake no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact - Investor Relations:

CleanSpark Inc.

Investor Relations

(801)-244-4405

 

 3