SALT LAKE CITY, Dec. 17, 2020 /PRNewswire/ -- CleanSpark,
Inc. (Nasdaq: CLSK)("the "Company"), an advanced software and
controls technology solutions company, focused on solving modern
energy challenges, today reported results for its fiscal year ended
September 30, 2020.
Financial Highlights
- As the Company forecasted a year ago, CleanSpark more than
doubled our annual revenues, with fiscal 2020 revenue exceeding
$10.0 million, an increase of 122%
from $4.5 million for the prior year.
These results represent the third consecutive year in which
revenues more than doubled.
- Gross Margin increased 21.1% to $2.12
million compared 14.9% and $0.67
million to the prior year.
- Loss from operations improved by $1,470,729 compared to the prior year.
- Net loss improved by $2,770,780
compared to the prior year.
- Non-GAAP net loss for the fiscal year ended September 30, 2020 totaled $466,000 or $(0.03)
per basic and diluted share, compared to income of $106,000 or $0.01
per basic and diluted share in the same year-ago period.
- Operational successes resulted in raising $44 million in funding over the last 12 months.
These funding transactions are expected to provide long-term
financial stability for the foreseeable future as the company moves
towards profitability.
2020 Operational Highlights
- CleanSpark successfully uplisted to the Nasdaq Capital Market
in January 2020
- The Company improved corporate governance and oversight by
appointing two new independent board members and the creation of a
fully independent audit and compensation committee.
- CleanSpark further developed its reliable, talented and
goal-oriented management team, including the promotion of
Zach Bradford as its Chief Executive
Officer, the appointments of Lori
Love, as Chief Financial Officer, Amer Tadayon as Chief Revenue Officer, and
Marty Weishaar as VP of Marketing.
The Company's co-founder and former CEO, Matthew Schultz assumed new duties as the
Executive Chairman. Our team has now grown to 62 full-time staff
members as of December 16, 2020.
- During our fiscal year, we completed successful acquisitions of
GridFabric and p2klabs. Both acquired companies are
cashflow-positive and provide us with entirely new verticals for
growth.
- We implemented new sales and marketing initiatives resulting in
significant increases in overall revenues, contracted backlog, and
proposal pipeline.
- CleanSpark, Inc. and ReJoule were jointly awarded a
$2.9 Million grant from the
California Energy Commission with support from the Ford Motor
Company for second-life EV battery deployments. The first joint
deployment is expected to occur in the next quarter.
- The Company announced a microgrid development agreement with
International Land Alliance. According to the terms of the
contract, CleanSpark is expected to provide microgrid power
solutions to more than 400 unique residential resort
properties.
Financial Summary
Revenues
The Company recognized more than $10.0
million in revenues during the year ended September 30, 2020, as compared with $4.5 million in revenues for the year ended
September 30, 2019.
For the year ended September 30,
2020 and 2019 our revenue was derived from two business
segments:
Energy Segment – Consisting of our CleanSpark, LLC.,
CleanSpark Critical Power Systems, Inc. and GridFabric, LLC lines
of business, this segment provides services, equipment and software
to the energy industry. The income from our Energy Segment is the
result of contracts to sell switchgear equipment, perform
engineering and design services, and provide software for
distributed energy and microgrid systems.
Digital Agency Segment – The Company's wholly owned
subsidiary p2klabs, Inc. provides design, software development and
other technology-based consulting services.
Our Energy business segment contributed $9.0 million or 90% of consolidated revenue in
fiscal 2020, compared to $4.5 million
or 100% of consolidated revenue in the same year-ago period. The
Company's digital agency segment generated services revenue from
our p2klabs subsidiary, acquired in January
2020. This segment contributed $1.0
million or 10% of consolidated revenue in 2020.
Gross Profit
Our gross profit for the year ended September 30, 2020 was $2.12 million or 21.1% of revenue, as compared
with gross profits of $0.6 million or
14.9% of revenue for the year ended September 30, 2019. The increase in gross margin
was largely driven by increased high-margin revenues derived from
our software services and related revenue.
Operating Expenses
Our 2020 operating expenses were approximately the same as our
operating expenses for the same period in 2019. Operating expenses
as a percentage of revenue improved to 122% in 2020 versus 381% in
the prior year.
Other (expense)
The Company's total other expenses in the year ending
September 30, 2020 totaled
approximately $(8.2) million as
compared to $(9.5) million in 2019.
The Company experienced significant non-cash expenses related to
interest and capital expenses associated with prior financing
agreements. We do not anticipate experiencing the same type of
expenses in 2021.
For the year ending September 30,
2020, net loss attributable to common stockholders on a GAAP
basis totaled $23.3 million or
$(2.44) per share in 2020 compared to
a loss of $26.1 million or
$(6.25) per share in 2019.
Non-GAAP figures
Adjusted EBITDA, a non-GAAP term, resulted in negative
$4.91 million in 2020, as compared to
negative $4.35 million in 2019.
Non-GAAP net loss attributable to common stockholders totaled
$4.93 million or a loss of
$(0.52) per share in 2020, as
compared to $4.89 million or a loss
of $(1.17) per share in 2019.
Working capital
Cash and cash equivalents totaled $3.1
million as of September 30,
2020, as compared to $7.8
million on September 30, 2019.
Just after our fiscal year end, on October
9, 2020, the Company closed an underwritten offering and
received gross proceeds of $40
million, before deducting underwriting expenses and fees.
The company believes its current cash position and other available
funds provide it with sufficient liquidity to meet its cash
requirements for current operations and to continue to fund its
growth.
The Company's form 10-K and accompanying audited financial
statements are available at www.sec.gov and the Company website at
https://ir.cleanspark.com/sec-filings/
Management-Commentary
"This was an excellent year for CLSK, despite challenging
economic conditions resulting from the COVID-19 pandemic.
Fortunately, the impact of the COVID pandemic on CleanSpark has
been relatively minimal to date.
From an operations perspective, we successfully transitioned our
workforce to a remote model for the majority of the year.
Fortunately, prior to the start of 'stay at home' orders, we
already had more than 50% of our workforce working remotely
full-time or part-time. Additionally, all remote staff members were
equipped with the required equipment to make the transition from
office to home rather seamless. As a result, we experienced minimal
internal disruption to our business, while productivity continues
to remain high. Additionally, the Company successfully adapted our
software delivery model to support remote commissioning. These
strategic improvements will benefit us well beyond the end of the
pandemic by reducing global deployment expenses. In the short term,
the adaptation of these parameters significantly decreased the
impact of the virus on deployments.
Our focus has been on maintaining consistency in the timely
delivery of our products; increasing our sales efforts, enhancing
the features and functionality of our software products as well as
the completion of accretive acquisitions. The acquired companies
provide immediate profitable and scalable revenues; and lastly,
strengthening our balance sheet by raising more than $40 million in working capital.
Our reported backlog at the end of our prior fiscal year of
$6.4 million, consisting of
contracted revenue not yet delivered. Following the successful
execution of those contracts, the current contracted backlog
remains strong at approximately $6.5
million as of the date of this filing. Our current proposal
pipeline is approximately $25.0
million, an increase from roughly $10.0 million we had as recently as the close of
our fiscal year on September 30,
2020. This increase is directly attributable to our newly
expanded sales team. We expect our proposal closing rate to
accelerate as COVID-19 vaccines begin to be made available to the
public in the coming quarters. We believe our increase in backlog
demonstrates the pent-up demand for resilient, distributed energy
solutions as the pandemic nears a close," stated Zach Bradford, CleanSpark's CEO.
Outlook
The Company expects the somewhat cyclical nature of our business
to continue. As an example, approximately 10% of our fiscal 2020
revenue was realized in the quarter ending December 31, 2020. We anticipate this trend
will continue in fiscal 2021 and we forecast that our second and
third fiscal quarters will again be our strongest. We expect to
generate $20 million in revenue
related to our current business segments and we expect the recent
acquisition of ATL Data Center to contribute a minimum of
$8 million in additional
Bitcoin-based (BTC-USD) revenues for 2021. We are working
diligently to expand the data center capacity allowing us to
further increase these initial estimates, but the company's
guidance will remain somewhat conservative until the expansion has
been completed and we have sufficient data to forecast a firm
outlook. Finally, we have not measured the potential additional
value expected to be derived from the demonstration of our energy
technologies within the data center for additional microgrid
deployment and sales opportunities.
Parties interested in learning more about CleanSpark products
and services are encouraged to inquire by contacting the Company
directly at info@cleanspark.com or visiting the Company's website
at 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/
About CleanSpark:
CleanSpark 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.
Non-GAAP Financial Measures
Management believes that the use of adjusted earnings before
interest, taxes, depreciation and amortization, or adjusted EBITDA,
is helpful for an investor to assess the performance of the
company. The company defines adjusted EBITDA as income (loss)
attributable to common stockholders before interest, taxes,
depreciation, amortization, impairment of long-lived assets,
financing costs, stock-based compensation expense, other non-cash
expenses, and expenses related to discontinued operations.
Adjusted EBITDA is not a measurement of financial performance
under generally accepted accounting principles in the United States, or GAAP. Because of varying
available valuation methodologies, subjective assumptions and the
variety of equity instruments that can impact a company's non-cash
operating expenses, CLSK management believes that providing a
non-GAAP financial measure that excludes non-cash and non-recurring
expenses allows for meaningful comparisons between the company's
core business operating results and those of other companies, as
well as providing 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.
The company's
adjusted EBITDA measure may not provide information that is
directly comparable to that provided by other companies in its
industry, as other companies in its industry may calculate non-GAAP
financial results differently, particularly related to
non-recurring, unusual items. The company's adjusted EBITDA is not
a measurement of financial performance under GAAP, and should not
be considered as an alternative to operating income or as an
indication of operating performance or any other measure of
performance derived in accordance with GAAP. CLSK management does
not consider adjusted EBITDA to be a substitute for, or superior
to, the information provided by GAAP financial results.
|
|
|
September
30, 2020
|
|
September
30, 2019
|
Net loss (US
GAAP)
|
$
|
(23,346,143)
|
$
|
(26,116,932)
|
Less: Depreciation,
amortization and other non-cash items:
|
|
|
|
|
Depreciation and
amortization
|
|
2,672,331
|
|
1,902,981
|
Software
amortization
|
|
163,918
|
|
1,453,635
|
Stock based
compensation
|
|
2,053,232
|
|
1,993,043
|
Accrued employee
stock-based compensation
|
|
2,732,045
|
|
-
|
Impairment
expense
|
|
-
|
|
6,915,186
|
Interest, financing
charges, non-cash amortization of debt discounts
|
|
10,758,750
|
|
9,483,662
|
Non-cash amortization
of right of use assets
|
|
44,569
|
|
-
|
Loss on settlement of
debts and disposal of assets
|
|
5,218
|
|
19,425
|
Total:
|
$
|
18,430,063
|
$
|
21,767,932
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA (after elimination of stock based and other non-cash
expenses)
|
$
|
(4,916,080)
|
$
|
(4,349,000)
|
Adjusted EPS excludes the impact of certain items and,
therefore, has not been calculated in accordance with GAAP. CLSK
management believes that exclusion of certain selected items
assists in providing a more complete understanding of the company's
underlying results and trends and allows for comparability with its
peer company index and industry. CLSK management uses this measure
along with the corresponding GAAP financial measures to manage its
business and to evaluate the company's performance compared to
prior periods and the marketplace. The company defines Non-GAAP
(loss) income attributable to common stockholders as (loss) or
income before amortization, stock-based compensation, expenses
related to discontinued operations, impairment of long-lived assets
and non-cash financing and interest expense. Adjusted EPS expresses
adjusted (loss) income on a per share basis using weighted average
diluted shares outstanding.
Adjusted EPS is a non-GAAP financial measure and should not be
considered in isolation or as a substitute for financial
information provided in accordance with GAAP. These non-GAAP
financial measures may not be computed in the same manner as
similarly titled measures used by other companies. The company
expects to continue to incur expenses similar to the adjusted
income from continuing operations and adjusted EPS financial
adjustments described above, and investors should not infer from
the company's presentation of these non-GAAP financial measures
that these costs are unusual, infrequent or non-recurring.
The following table sets-forth non-GAAP net loss attributable to
common stockholders and basic and diluted earnings per share:
|
|
September
30, 2020
|
|
September
30, 2019
|
Net loss (US
GAAP)
|
$
|
(23,346,143)
|
$
|
(26,116,932)
|
Less: Depreciation,
amortization and other non-cash items:
|
|
|
|
|
Depreciation and
amortization
|
|
2,672,331
|
|
1,902,981
|
Software
amortization
|
|
163,918
|
|
1,453,635
|
Stock based
compensation
|
|
2,053,232
|
|
1,993,043
|
Accrued employee
stock-based compensation
|
|
2,732,045
|
|
-
|
Impairment
expense
|
|
-
|
|
6,915,186
|
Non-cash interest,
financing charges, non-cash amortization of debt
discounts
|
|
10,744,588
|
|
8,963,829
|
Non-cash amortization
of right of use assets
|
|
44,569
|
|
-
|
Total:
|
$
|
18,410,683
|
$
|
21,228,674
|
|
|
|
|
|
Non-GAAP Adjusted
Loss
|
$
|
(4,935,460)
|
$
|
(4,888,258)
|
|
|
|
|
|
Weighted average
common shares outstanding - basic and diluted
|
|
9,550,626
|
|
4,177,402
|
Loss per common share
- basic and diluted
|
$
|
(0.52)
|
$
|
(1.17)
|
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 revenue growth may not be
realized, timing of orders and deliveries, the successful and
continued integration of acquired businesses, ongoing demand for
its software products and related services, the impact of global
pandemics (including COVID-19) on the demand for its products and
services; 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
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SOURCE CleanSpark, Inc.