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

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

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

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

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

“We have fully funded our growth to 16 EH/s,” said Zach Bradford, CEO.

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

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

Q3 Financial Highlights

Financial Results for the Three Months Ended June 30, 2023

  • Revenues for the quarter were $45.5 million, an increase of $14.5 million, or 47%, from $31.0 million for the same prior year period.
  • The Company recognized a net loss for the three months ended June 30, 2023, of $(14.2) million, compared to a net loss of $(29.3) million for the same prior year period.
  • Adjusted EBITDA* increased to $13.3 million, compared to Adjusted EBITDA of $5.1 million from the same prior year period.
  • The Company saw sequential revenues increase in the third quarter of fiscal 2023 compared to the fiscal quarter ended March 31, 2022. Revenues increased $3 million, or 7%, from the preceding second quarter. The net loss of $14.2 million for the third quarter represented a $4.3 million improvement over the second quarter net loss of $18.5 million. The Adjusted EBITDA of $13.3 million in the third quarter represented an increase of $600 thousand or 5% compared to $12.7 million in the preceding second quarter.

Balance Sheet Highlights as of June 30, 2023

Assets

  • Cash: $21.8 million
  • Bitcoin: $13.9 million
  • Total Current Assets: $52.7 million
  • Total Mining Assets (including prepaid deposits & miners, net of accumulated depreciation): $441.8 million
  • Total Assets: $652.8 million

Liabilities and Stockholders’ Equity

  • Current Liabilities: $37.4 million
  • Total Liabilities: $49.2 million
  • Total Stockholders’ Equity: $603.6 million

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

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

Investor Conference Call and Webcast

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

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

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

About CleanSpark

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

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expectations for growth in the Company’s bitcoin holdings and other statements regarding the Company’s expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as “expect,” “anticipate,” “believe,” “could,” “should,” “estimate,” “intend,” “may,” “will,” “plan,” “goal” and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. We have based these forward-looking statements largely on the Company’s current expectations and projections about future events and financial trends that we believe may affect the Company’s business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: the success of the Company’s bitcoin mining activities; the volatility of bitcoin value and energy prices; disruptions in the crypto asset markets; market perception of the Company’s business and the crypto asset markets generally; increasing difficulty rates for bitcoin mining; bitcoin halving; new or additional governmental regulation; the anticipated delivery dates of new miners; the ability to successfully deploy new miners; the dependency on utility rate structures and government incentive programs; dependency on third-party power providers for expansion efforts and power rates; the ability to successfully integrate newly acquired operations; the risk that future revenue growth may not be realized; the impact of global pandemics (including COVID-19) and inflation on logistics and shipping; security and cybersecurity threats and hacks; and other risks described in the Company’s prior press releases and in its filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for its fiscal year ended September 30, 2022 and any subsequent filings with the SEC. The forward-looking statements in this release are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. We undertake no obligation to revise or update these forward-looking statements or any of the foregoing factors, except as expressly required by applicable law.

Non-GAAP Measure

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

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

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

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

 

CLEANSPARK, INC.

CONSOLIDATED BALANCE SHEETS

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






June 30,

2023



September 30,

2022




(Unaudited)





ASSETS







Current assets







Cash and cash equivalents


$

21,833



$

20,463


Accounts receivable, net



100




27


Inventory



1,037




216


Prepaid expense and other current assets



8,343




7,931


Bitcoin



13,925




11,147


Derivative investment asset



1,846




2,956


Investment in debt security, AFS, at fair value



696




610


Current assets held for sale



4,919




7,426


Total current assets


$

52,699



$

50,776









Property and equipment, net


$

482,428



$

376,781


Operating lease right of use asset



731




551


Intangible assets, net



5,116




6,485


Deposits on mining equipment



98,594




12,497


Other long-term asset



4,640




3,990


Goodwill



8,043





Long-term assets held for sale



552




1,545


Total assets


$

652,803



$

452,625









LIABILITIES AND STOCKHOLDERS’ EQUITY







Current liabilities







Accounts payable and accrued liabilities


$

29,634



$

24,662


Operating lease liability



194




113


Finance lease liability



168




260


Current portion of long-term loans payable



7,076




7,786


Dividends payable






21


Current liabilities held for sale



348




1,199


Total current liabilities


$

37,420



$

34,041


Long-term liabilities







Operating lease liability, net of current portion



558




447


Finance lease liability, net of current portion



23




180


Loans payable, net of current portion



10,772




13,433


Long-term liabilities held for sale



382




512


Total liabilities


$

49,155



$

48,613









Stockholders’ equity







Common stock; $0.001 par value; 300,000,000 shares authorized; 131,776,484 and

   55,661,337 shares issued and outstanding, respectively



132




56


Preferred stock; $0.001 par value; 10,000,000 shares authorized; Series A

   shares; 2,000,000 authorized; 1,750,000 and 1,750,000 issued and outstanding, respectively



2




2


Additional paid-in capital



861,082




599,898


Accumulated other comprehensive income



196




110


Accumulated deficit



(257,764)




(196,054)


Total stockholders’ equity



603,648




404,012









Total liabilities and stockholders’ equity


$

652,803



$

452,625


 

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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






For the three months ended



For the nine months ended




June 30,

2023



June 30,

2022



June 30,

2023



June 30,

2022


Revenues, net













Bitcoin mining revenue, net


$

45,427



$

30,942



$

115,661



$

104,882


Other services revenue



96




87




227




470


Total revenues, net


$

45,523



$

31,029



$

115,888



$

105,352















Costs and expenses













Cost of revenues (exclusive of depreciation and amortization shown below)



20,681




10,288




63,179




24,608


Professional fees



2,225




1,428




8,806




5,589


Payroll expenses



10,405




8,076




29,957




24,210


General and administrative expenses



5,064




2,119




13,117




6,708


Loss (gain) on disposal of assets









3




(643)


Other impairment expense (related to bitcoin)



740




4,418




1,017




11,452


Realized (gain) loss on sale of bitcoin



143




5,235




(762)




(2,026)


Depreciation and amortization



21,850




14,781




62,525




32,660


Total costs and expenses


$

61,108



$

46,345



$

177,842



$

102,558















(Loss) Income from operations



(15,585)




(15,316)




(61,954)




2,794















Other income (expense)













Other income









11




308


Change in fair value of contingent consideration



2,000







2,485




346


Realized gain on sale of equity security












1


Unrealized loss on equity security












(2)


Unrealized (loss) gain on derivative security



105




(1,033)




(1,110)




(2,144)


Interest income



52




52




174




137


Interest expense



(689)




(314)




(2,377)




(375)


Total other (expense) income



1,468




(1,295)




(817)




(1,729)















(Loss) Income before income tax (expense) or benefit



(14,117)




(16,611)




(62,771)




1,065


Income tax expense













(Loss) income from continuing operations


$

(14,117)



$

(16,611)



$

(62,771)



$

1,065















Discontinued operations













Income (loss) from discontinued operations


$

(102)



$

(12,729)



$

1,061



$

(16,090)


Income tax (expense) or benefit













Income (loss) on discontinued operations


$

(102)



$

(12,729)



$

1,061



$

(16,090)















Net loss


$

(14,219)



$

(29,340)



$

(61,710)



$

(15,025)















Preferred stock dividends












335















Net loss attributable to common shareholders


$

(14,219)



$

(29,340)



$

(61,710)



$

(15,360)















Other comprehensive income



28




29




86




75















Total comprehensive loss attributable to common shareholders


$

(14,191)



$

(29,311)



$

(61,624)



$

(15,285)


(Loss) income from continuing operations per common share – basic


$

(0.12)



$

(0.40)



$

(0.72)



$

0.02















Weighted average common shares outstanding – basic



114,844,402




41,277,090




87,248,719




41,010,826















(Loss) income from continuing operations per common share – diluted



(0.12)




(0.40)




(0.72)




0.02















Weighted average common shares outstanding – diluted



114,844,402




41,277,090




87,638,134




41,092,028















(Loss) income on discontinued operations per common share – basic


$

(0.00)



$

(0.31)



$

0.01



$

(0.39)















Weighted average common shares outstanding – basic



114,844,402




41,277,090




87,248,719




41,010,826















(Loss) income on discontinued operations per common share – diluted


$

(0.00)



$

(0.31)



$

0.01



$

(0.39)















Weighted average common shares outstanding – diluted



114,844,402




41,277,090




87,638,134




41,092,028


 

CLEANSPARK, INC.

RECONCILIATION OF ADJUSTED EBITDA

(UNAUDITED)






Three months ended June 30,




2023



2022


Revenues, net







Digital currency mining revenue, net


$

45,427



$

30,942


Other services revenue



96




87


Total revenues, net


$

45,523



$

31,029









Net loss


$

(14,219)



$

(29,340)


Adjustments:









Loss on discontinued operations


$

102



$

12,729


Other impairment expense (related to Digital Currency)







Depreciation and amortization



21,850




14,781


Stock based compensation



5,947




5,213


Other income







Change in fair value of contingent consideration



(2,000)





Realized gain on sale of equity security







Unrealized gain on equity security







  Unrealized loss on derivative security



(105)




1,033


  Interest income


(52)



(52)


  Interest expense


689



314


  One-time legal fees related to litigation


1,036



143


  One-time legal fees related to financing & business development transactions


85



189


  Severance expenses




102


Total Adjusted EBITDA*


$

13,333



$

(5,112









 



Three months ended

March 31, 2023



Revenues, net





Digital currency mining revenue, net


$

42,488



Other services revenue



58



Total revenues, net


$

42,546








Net loss


$

(18,460)



Adjustments:






Gain on discontinued operations


$

294



Other impairment expense (related to Digital Currency)





Depreciation and amortization



21,346



Stock based compensation



5,743



Other income





Change in fair value of contingent consideration





Realized gain on sale of equity security





Unrealized loss on equity security





  Unrealized gain on derivative security



(56)



  Interest income


(52)



  Interest expense


799



  Gain on disposal of assets


3



  One-time legal fees related to litigation


3,056



  One-time legal fees related to financing & business development transactions


48



  Severance expenses




Total Adjusted EBITDA


$

12,721








 

Investor Relations Contact 

Matt Schultz, Executive Chairman

[email protected] 

Media Contacts 

Isaac Holyoak 

[email protected] 

BlocksBridge Consulting 

Nishant Sharma 

[email protected] 

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SOURCE CleanSpark, Inc.

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