CLEANSPARK, INC.

CleanSpark, Inc. is a data center developer, until recently focused exclusively on bitcoin mining, that independently owns, leases and operates a large portfolio of data centers and power assets across the United States with locations in Georgia, Tennessee, Mississippi and Wyoming for a total contracted power capacity of approximately 1,027 megawatts as of September 30, 2025 ¹. The company operates in the bitcoin mining sector since December 2020 and is now actively pursuing opportunities to develop portions of its sites and power pipeline for AI and HPC hosting and leasing, leveraging its power optimization, land acquisition, engineering, operations and construction expertise ². 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 intermediaries, and the mining process now represents the largest distributed computing network on Earth due to demand for bitcoin and the revenues associated with securing it ³. Factors such as access to specialized mining servers, energy, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining ⁴.

Within North America, the company's major competitors include MARA Holdings, Inc., Riot Platforms, Inc., Core Scientific, Inc., Bitfarms Ltd., IREN Limited, Cipher Mining Inc., and TeraWulf Inc. ⁵. As the company expands into the development and operation of large-scale data centers supporting HPC and AI workloads, it also faces competition from established data-center operators and infrastructure providers with significant capital resources and long-term power supply commitments, including Equinix, Inc., Digital Realty Trust, Inc., and CoreWeave, Inc., among others, as well as certain of its bitcoin mining competitors ⁶. The company believes its principal competitive advantages include its energy background, the efficiency of its mining fleet, and its operational expertise in managing uptime of its owned and operated facilities ⁷. The company strategically uses bitcoin it mines as a store of value, to fund operational growth, and the use of bitcoin as collateral for borrowing activities ⁸.

The company generates revenue by providing computing power to a single mining pool operator, who is currently its sole customer, in exchange for variable consideration in the form of bitcoin rewards, calculated using a predetermined formula agreed upon with the operator ⁹. Providing computing power is an output of the company's ordinary activities and represents the sole performance obligation in its arrangement with the pool ¹⁰. The company sells bitcoin from time to time to support operations and strategic growth and may also use bitcoin as collateral for lending arrangements ¹¹. In April 2025, the company launched its institutional-grade in-house trading function as it shifts to a balanced approach between monetizing new production and building long-term holdings, and it plans to continue to integrate these strategies into its regular treasury management activities ¹². As part of this 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 ¹³.

As of September 30, 2025, the company's Georgia facilities have a developed data center infrastructure backed by approximately 620 MW, which supports an operational hashrate of 27.02 EH/s, and its Georgia operations are geographically spread across ten cities ¹⁴. As of September 30, 2025, the company's Mississippi facilities have a developed data center infrastructure backed by approximately 63 MW, which supports an operational hashrate of 2.63 EH/s, and its Mississippi operations are located in four cities ¹⁵. As of September 30, 2025, the company's Tennessee facilities have a developed data center infrastructure backed by 234 MW, which supports an operational hashrate of 12.43 EH/s, and the company operates ten wholly owned mining locations in Tennessee, including three sites acquired through its October 2024 acquisition of GRIID Infrastructure, Inc. ¹⁶. As of September 30, 2025, the company operates two wholly owned mining facilities in Wyoming, both of which utilize immersion cooling technology to enhance efficiency and performance, and together these sites are backed by approximately 110 MW of data center infrastructure power, which supports an operational hashrate of 3.52 EH/s ¹⁷.

The company's bitcoin mining revenue is recorded net of bitcoin mining fees charged by its sole mining pool operator that equaled approximately 0.17% and 0.16% of gross bitcoin mining revenues for the years ended September 30, 2025 and 2024, respectively ¹⁸. For the fiscal year ended September 30, 2025, the company mined approximately 7,873 bitcoins, net of mining pool fees, representing a decrease of 11.0% compared to the 7,092 bitcoins mined in fiscal year 2024, with this reduction primarily due to the April 2024 bitcoin halving which cut the per-block reward by 50% ¹⁹. The company owned approximately 336,544 miners, of which approximately 241,934 were in service as of September 30, 2025, and the remainder primarily consists of new machines that are ready for installation at expansion sites, are under evaluation for relocation, or are awaiting repair ²⁰. The miners in service as of September 30, 2025 had a range of energy efficiency of 13.5 to 29.5 W/TH with an average operating energy efficiency of 16.7 W/TH ²¹. The company's operating mining units produced an average computing power of 45.6 EH/s, reaching a peak of 50 EH/s during the period ²².

In April and May 2025, the company executed agreements with Bitmain Technologies Delaware Limited to acquire new-generation miners under terms that allowed payment in bitcoin at negotiated premiums to prevailing market prices, and as part of these transactions, the company secured embedded options to repurchase the transferred bitcoin at the same premium prices ²³. In October 2025, the company announced that it is working with Submer, a global leader in sustainable, modular AI center design and construction, to evaluate opportunities for future collaboration under a non-binding framework ²⁴. At the end of October 2025, the company announced that it acquired rights to approximately 271 acres of land in Austin County, Texas and executed long-term power supply agreements totaling 285 megawatts to support the development of a next-generation data center campus ²⁵. In December 2024, the company issued $650,000,000 aggregate principal amount of its 2030 Notes, including the exercise in full by the initial purchasers of their option to purchase up to an additional $100,000,000 principal amount, and in connection with the issuance, the company entered into privately negotiated capped call transactions with certain financial institutions at an aggregate cost of approximately $90,350,000 ²⁶. In November 2025, the company issued $1,150,000,000 aggregate principal amount of its 0% convertible senior notes due 2032 ²⁷. In August 2024, the company entered into a Master Loan Agreement with Coinbase Credit, Inc., as the lender, which provides for a line of credit up to $300 million, and the company received $50,000 in financing under this agreement during the year ended September 30, 2025, and as of September 30, 2025, $174,500 in principal was outstanding and due to the lender, with borrowings collateralized by approximately $294,648 of bitcoin as of September 30, 2025 ²⁸. In September 2025, the company entered into a Master Loan Agreement with Two Prime Lending Limited, as the lender, which provides for a line of credit up to $100 million ²⁹.

For the fiscal year ended September 30, 2025, total revenues were $766,314, an increase of $387,346, or 102%, compared with $378,968 in revenues for the fiscal year ended September 30, 2024 ³⁰. Net income for the fiscal year ended September 30, 2025 was $364,464, an increase of $510,241 compared to a net loss of $145,777 for the fiscal year ended September 30, 2024 ³¹. Diluted earnings per share from continuing operations for the fiscal year ended September 30, 2025 was $1.12, compared to a diluted loss per share from continuing operations of $0.69 for the fiscal year ended September 30, 2024 ³². Gain on fair value of bitcoin, net for the fiscal year ended September 30, 2025 was $425,646 as compared to a gain on fair value of bitcoin of $113,423 for the fiscal year ended September 30, 2024 ³³. Non-GAAP Adjusted EBITDA for the fiscal year ended September 30, 2025 was $823,373, compared to $245,848 for the fiscal year ended September 30, 2024 ³⁴.

The company expects to continue increasing its computing power through calendar year 2025 and beyond as it expands infrastructure at its owned sites in Tennessee and across its portfolio of data centers in Georgia, Mississippi, and Wyoming, while also pursuing regional expansion opportunities and evaluating strategic acquisition targets ³⁵. The company is currently analyzing its portfolio and pipeline of potential new developments and expansions of existing sites to identify opportunities for the maximum return on investment, which may include bitcoin mining, AI and HPC hosting and leasing, or a combination of both ³⁶. The company is currently exploring other opportunities to expand some of its properties into HPC or AI data centers and to acquire properties for these purposes ³⁷. The company's existing 620 MW platform in Georgia provides a strong foundation for retrofit and dual-purpose compute deployment ³⁸.

The company's expansion into AI and HPC hosting is expected to enhance its long-term revenue potential but may also introduce operational complexity, require significant upfront investment, and subject the company to additional regulatory and operational risks ³⁹. The company is evaluating existing properties for potential conversion or dual-use development to support AI and HPC tenants and is advancing design and permitting activities for greenfield data-center sites ⁴⁰. On October 27, 2025, the company acquired property in Austin County, Texas and executed long-term power supply agreements totaling 285 megawatts to support the development of a next-generation data-center campus, which marked the company's entry into the Texas market and expanded its power portfolio for future AI and HPC development ⁴¹. The company believes this transaction positions it to deliver scalable, resilient, and energy-efficient capacity to meet accelerating demand from AI, cloud, and enterprise workloads ⁴².

The company's cost of revenues for the fiscal year ended September 30, 2025 were $343,101, an increase of $177,585, or 107%, as compared with cost of revenues of $165,516 for the fiscal year ended September 30, 2024, primarily related to energy costs to operate miners within owned facilities, which were $331,348 for the fiscal year ended September 30, 2025, an increase of $199,156 as compared to $132,192 for the fiscal year ended September 30, 2024 ⁴³. The average power prices the company paid in its owned facilities for the years ended September 30, 2025, 2024 and 2023 were $0.057, $0.046, and $0.048 per kWh, respectively ⁴⁴. Energy costs represented 43.9%, 39.7%, and 51.5% as expressed as a percentage of bitcoin mining revenues for the years ended September 30, 2025, 2024 and 2023, respectively ⁴⁵. The company's miners have an average age of approximately 15 months, and the company estimates the useful lives of its miners to be three years, reflecting a change made in fiscal year 2024 ⁴⁶.

The company's expansion into HPC, data center and AI infrastructure development is expected to increase capital intensity and shift the timing of cash inflows relative to capital outlays, as developing and constructing data center campuses requires substantial up-front capital expenditures for land, substations, interconnection and specialized cooling systems, which may temporarily reduce liquidity ⁴⁷. The company expects to fund a portion of these expenditures through the strategic use of bitcoin holdings and related Digital Asset Management activities, and may also supplement these sources with external financing depending on market conditions and project timing ⁴⁸. The company's Digital Asset Management treasury strategy, instituted during the year ended September 30, 2025, is designed to enhance liquidity and generate incremental income from the company's bitcoin holdings, and the company expects to continue its Spot+ and yield strategies at measured levels relative to its total bitcoin balance and operating requirements ⁴⁹.

The company's capital expenditure plans include payments on miner equipment purchase and deposits of $418,212, purchase of fixed assets of $144,661, the purchase of bitcoin of $160,184, and combined asset purchases of land and locations of $15,008 during the fiscal year ended September 30, 2025 ⁵⁰. The company generated $378,158 of cash flows from the sales of bitcoin and settlement of bitcoin linked derivatives during the year ended September 30, 2025 ⁵¹. Cash flows from financing activities for the year ended September 30, 2025 consisted primarily of proceeds from the company's convertible debt offering and line of credit draws totaling $889,195 and the remainder of its at-the-market offering facility of $186,808, partially offset by repayments of the line of credit and other debt of $135,980 as well as using funds from the convertible debt issuance for purchases of treasury stock totaling $145,000 and purchase of capped calls totaling $90,350 ⁵². The company has not paid any cash dividends with respect to its common stock and does not plan to do so in the immediate future ⁵³.

The company faces structural headwinds including the volatile and unpredictable cycles in the emerging and evolving industries in which it operates, and its ability to achieve profitability is currently dependent on the price of bitcoin, which has historically been volatile ⁵⁴. The market price of one bitcoin in the company's principal market ranged from approximately $58,900 to $124,500 during the fiscal year ended September 30, 2025, $26,500 to $73,800 during the fiscal year ended September 30, 2024, and from approximately $15,500 to $31,900 during the fiscal year ended September 30, 2023 ⁵⁵. The company faces the risk that it may not be able to timely complete its future strategic growth initiatives or within its anticipated cost estimates, if at all, as it is reliant on third parties for its expansion efforts, including construction contractors and providers of infrastructure equipment, who may be burdened by tariffs, delays in manufacturing, supply chain problems, limited access to capital due to macro-economic conditions, or inflation ⁵⁶. The company also faces the risk that its business expansion into AI and HPC services may be capital intensive and could affect its liquidity, results of operations and financial condition ⁵⁷.

The company faces constraints including the risk that it may not be able to obtain additional financing on acceptable terms, or at all, to sustain and expand its operations, which would have a material adverse effect on its business, financial condition, results of operations, cash flow and prospects ⁵⁸. The company has financed its strategic growth primarily by issuing new shares of its common stock and convertible debt in public offerings, which dilutes the ownership interests of current stockholders, and the company expects to need to raise additional capital through similar public offerings to finance the completion of its expansion initiatives ⁵⁹. The company's substantial indebtedness, including the $650,000,000 aggregate principal amount of 2030 Notes and the $1,150,000,000 aggregate principal amount of 2032 Notes, could increase its vulnerability to general adverse economic and industry conditions, require it to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, and limit its flexibility in planning for or reacting to changes in its business ⁶⁰.

The company's ability to achieve profitability is currently dependent on the price of bitcoin, which has historically been subject to wide swings, with the market price of one bitcoin ranging from approximately $58,900 to $124,500 during the fiscal year ended September 30, 2025 ⁶¹. The company faces the risk that it may not be able to timely complete its future strategic growth initiatives or within its anticipated cost estimates, as it is reliant on third parties for expansion efforts who may be burdened by tariffs, delays in manufacturing, supply chain problems, or inflation ⁶². The company is exposed to the risk that on or about May 27, 2025, it began receiving invoices from CBP asserting Chinese origin import tariffs on miner purchases made in early 2024, and in the event that CBP were to successfully defend these tariffs and apply them to all previously imported miners, the company's total tariff liability could rise to approximately $185 million, not including statutory interest ⁶³. The company's substantial indebtedness, including $650,000,000 aggregate principal amount of 2030 Notes and $1,150,000,000 aggregate principal amount of 2032 Notes, could increase its vulnerability to general adverse economic and industry conditions and limit its flexibility ⁶⁴. The company's reliance on a third-party mining pool service provider for its mining revenue payouts and on Coinbase for custody of its bitcoin holdings exposes it to risks of loss, theft, or restriction on access, and as of September 30, 2025, the company held approximately 98% of its bitcoin in cold storage and 2% in hot wallets ⁶⁵.

Management's message emphasizes the company's transformation into a data center developer focused on providing scalable, energy-efficient digital infrastructure across the United States, with a strategy to continue growth in existing regions and actively develop plans for additional capacity in these states and other domestic regions ⁶⁶. Management highlights that the company is currently analyzing its portfolio and pipeline of potential new developments and expansions of existing sites to identify opportunities for the maximum return on investment, which may include bitcoin mining, AI and HPC hosting and leasing, or a combination of both ⁶⁷. Management emphasizes that the company has no intention to mine, purchase or hold any crypto assets other than bitcoin at this time or in the foreseeable future, and that the company designs its infrastructure to responsibly secure and support both bitcoin mining and AI and HPC workloads ⁶⁸. Management notes that the company's expansion into AI and HPC hosting is expected to enhance its long-term revenue potential but may also introduce operational complexity, require significant upfront investment, and subject the company to additional regulatory and operational risks ⁶⁹. Management states that the company expects to continue increasing its computing power through calendar year 2025 and beyond as it expands infrastructure at its owned sites in Tennessee and across its portfolio of data centers in Georgia, Mississippi, and Wyoming, while also pursuing regional expansion opportunities and evaluating strategic acquisition targets ⁷⁰.