CleanSpark, Inc. (Nasdaq: CLSK) (the “Company”), a sustainable
bitcoin mining and energy technology company, today reported
financial results for the three months ended December 31,
2021.
“December 16th marked our one-year anniversary of
sustainable bitcoin mining and since then we have brought the
Company to record revenues and profit,” said Zach Bradford,
CleanSpark’s Chief Executive Officer. “As of the date of this
release, we have 20,900 machines in operation with a total hashrate
exceeding 2.1 EH/s and producing approximately 10 bitcoin per
day.
“Given our success with bitcoin mining,” Bradford continued,
“CleanSpark is considering strategic alternatives for our legacy
energy business. Focusing our efforts on our bitcoin
mining segment allows the Company to capitalize on the tremendous
opportunity bitcoin presents. We look forward to sharing
our corporate vision on our first quarter earnings call and
discussing the strategic pillars we believe are crucial to our
long-term success.”
“Our strong financial results are evidence of the operating
leverage of our business model,” said Gary A. Vecchiarelli, Chief
Financial Officer. “Gross margins remain high at almost 80%, and
much of that profitability translates to the bottom line as we saw
$14.5m of net income and $24.1m of Adjusted EBITDA[1], which
represents net margins of approximately 35% and 58%,
respectively. CleanSpark also has zero long-term debt,
and we will be looking to use our strong balance sheet and
operating cash flows as a springboard for future growth
expansion.”
Q1 Financial Highlights
Financial Results for the Three Months Ended December 31,
2021
- The Company increased its quarterly revenues to $41.2 million,
an increase of $38.9 million or 17x from $2.3 million for the same
prior year period.
- Net income for the three months ended December 31, 2021 was
$14.5m or $0.35 basic income per share compared to a loss of $(7.2)
million or $(0.32) loss per share for the same prior year
period.
- Adjusted EBITDA1 improved significantly to $24.1 million,
compared to Adjusted EBITDA1 of $(2.7) million from the same
prior year period.
- The Company also saw substantial sequential revenues growth in
the first quarter compared to the previous
quarter. Revenues increased $14.1 million or 52% from
the fourth quarter. Net income for the first quarter was
$14.5 million reversing a net loss of $(5.4) million in the fourth
quarter. Adjusted EBITDA1 was $24.1 million,
increasing almost 700% from $3.6 million in the fourth
quarter.
Balance Sheet Highlights as of December 31, 2021
Assets
- Cash: $5.2 million
- Digital Currency: $30.2 million
- Total Current assets: $58.7 million
- Total Mining assets (including prepaid deposits & deployed
miners): $286.9m
- Total Assets: $418.1 million
Liabilities and Stockholders’ equity
- Current Liabilities: $22.5 million
- Total Liabilities: $24.1 million
- Total Stockholders’ Equity: $394.1 million
The Company had working capital of $36.2 million and no
long-term debt as of December 31, 2021.
Investor Conference Call and Webcast
The Company will hold its first quarter 2022 earnings
presentation and business update for investors and analysts
today,February 9, 2022, at 2:00 p.m. PST/5:00 p.m.
EST. 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.
Participant Dial-in (Toll free): 1-877-270-2148.
A transcript of the call will be available on the Company’s
website following the call.
Forward-Looking Statements
This press release 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 press release 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 press release, but are not limited to
statements regarding our future results of operations and financial
position, industry and business trends, equity compensation,
business strategy, plans, market growth and our objectives for
future operations.
The forward-looking statements in this press release 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: the
success of its digital currency mining activities; the volatile and
unpredictable cycles in the emerging and evolving industries in
which we operate, 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; the successful
deployment of energy solutions for residential and commercial
applications; the expectations of future revenue growth may not be
realized; ongoing demand for the Company's software products and
related services; the impact of global pandemics (including
COVID-19) on logistics and shipping and the demand for our products
and services; 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 and any subsequent filings
with the SEC. The forward-looking statements in this press release
are based upon information available to us as of the date of this
press release, 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 press release 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 press
release. Except as required by applicable law, we do not plan to
publicly update or revise any forward-looking statements contained
in this press release, whether as a result of any new information,
future events or otherwise.
Non-GAAP Measures
Adjusted EBITDA is not a measurement of financial performance
under generally accepted accounting principles in the United States
(“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, CleanSpark
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. Our management does
not consider Adjusted EBITDA to be a substitute for, or superior
to, the information provided by GAAP financial results.
We are providing supplemental financial measures for (i)
non-GAAP adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”) that excludes the impact of
interest, taxes, depreciation, amortization, our share-based
compensation expense, and impairment of assets, unrealized
gains/losses on securities, certain financing costs, other non-cash
items, certain non-recurring expenses, and impacts related to
discontinued operations; and (ii) non-GAAP Adjusted EBITDA that
excludes the impact of interest, taxes, depreciation, amortization,
our share-based compensation expense, and impairment of assets,
unrealized gains/losses on securities, certain financing costs,
other non-cash items, and impacts related to discontinued
operations. These supplemental financial measures are not
measurements of financial performance under GAAP and, as a result,
these supplemental financial measures may not be comparable to
similarly titled measures of other companies. Management uses these
non-GAAP financial measures internally to help understand, manage,
and evaluate our business performance and to help make operating
decisions.
We believe that these non-GAAP financial measures are also
useful to investors and analysts in comparing our performance
across reporting periods on a consistent basis. Adjusted EBITDA
excludes (i) impacts of interest, taxes, and depreciation; (ii)
significant non-cash expenses such as our share-based compensation
expense, unrealized gains/losses on securities, certain financing
costs, other 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) significant
impairment losses related to long-lived and digital assets, which
include our bitcoin for which the accounting requires significant
estimates and judgment, and the resulting expenses could vary
significantly in comparison to other companies; and (iv) and
impacts related to discontinued operations that would not be
applicable to our future business activities.
Non-GAAP financial measures are subject to material limitations
as they are not in accordance with, or a substitute for,
measurements prepared in accordance with GAAP. 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.
We have also excluded impairment losses on assets, including
impairments of our digital currency our non-GAAP financial
measures, which may continue to occur in future periods as a result
of our continued holdings of significant amounts of bitcoin. Our
non-GAAP financial measures are not meant to be considered in
isolation and should be read only in conjunction with our
Consolidated Financial Statements, which have been prepared in
accordance with GAAP. We rely primarily on such Consolidated
Financial Statements to understand, manage, and evaluate our
business performance and use the non-GAAP financial measures only
supplementally.
About CleanSpark
CleanSpark, Inc., a Nevada corporation, is a sustainable bitcoin
mining and energy technology company that is solving modern energy
challenges. For more information about the Company, please visit
the Company's website
at https://www.cleanspark.com/investor-relations.
Investor Relations Contact Matt Schultz,
Executive Chairmanir@cleanspark.com
Media Contacts Isaac
Holyoak pr@cleanspark.com
BlocksBridge Consulting Nishant
Sharma cleanspark@blocksbridge.com
CLEANSPARK, INC.
CONSOLIDATED BALANCE SHEETS
|
|
December 31, 2021
(Unaudited) |
|
|
September 30,
2021 |
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents, including restricted cash |
|
$ |
5,212,414 |
|
|
$ |
18,040,327 |
|
Accounts receivable, net |
|
|
4,622,002 |
|
|
|
2,619,957 |
|
Inventory |
|
|
1,432,110 |
|
|
|
2,672,744 |
|
Prepaid expense and other current assets |
|
|
11,245,426 |
|
|
|
5,129,047 |
|
Digital currency |
|
|
30,203,387 |
|
|
|
23,603,210 |
|
Derivative investment asset |
|
|
5,204,505 |
|
|
|
4,905,656 |
|
Investment in equity security |
|
|
250,000 |
|
|
|
260,772 |
|
Investment in debt security, AFS, at fair value |
|
|
512,721 |
|
|
|
494,608 |
|
Total current assets |
|
$ |
58,682,565 |
|
|
$ |
57,726,321 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
$ |
198,490,355 |
|
|
$ |
137,674,739 |
|
Operating lease right of use asset |
|
|
1,421,252 |
|
|
|
1,488,240 |
|
Capitalized software, net |
|
|
477,191 |
|
|
|
503,685 |
|
Intangible assets, net |
|
|
10,996,442 |
|
|
|
12,195,492 |
|
Deposits on mining equipment |
|
|
125,700,523 |
|
|
|
87,959,910 |
|
Other long-term asset |
|
|
3,327,245 |
|
|
|
875,536 |
|
Goodwill |
|
|
19,049,198 |
|
|
|
19,049,198 |
|
Total assets |
|
$ |
418,144,771 |
|
|
$ |
317,473,121 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
20,237,550 |
|
|
$ |
7,975,263 |
|
Contract liabilities |
|
|
386,740 |
|
|
|
296,964 |
|
Operating lease liability |
|
|
261,101 |
|
|
|
256,195 |
|
Finance lease liability |
|
|
366,728 |
|
|
|
413,798 |
|
Acquisition liability |
|
|
300,000 |
|
|
|
300,000 |
|
Contingent consideration |
|
|
615,249 |
|
|
|
820,802 |
|
Dividends payable |
|
|
314,611 |
|
|
|
— |
|
Total current liabilities |
|
|
22,481,979 |
|
|
|
10,063,022 |
|
Long-term liabilities |
|
|
|
|
|
|
Operating lease liability, net of current portion |
|
|
1,167,779 |
|
|
|
1,235,325 |
|
Finance lease liability, net of current portion |
|
|
419,563 |
|
|
|
458,308 |
|
Total liabilities |
|
$ |
24,069,321 |
|
|
$ |
11,756,655 |
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
Common stock; $0.001 par value; 100,000,000 shares authorized;
41,474,062 and 37,395,945 shares issued and
outstanding as of December 31, 2021
and September 30, 2021,
respectively |
|
|
41,475 |
|
|
|
37,394 |
|
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 as
of December 31, 2021 and September 30, 2021, respectively |
|
|
1,750 |
|
|
|
1,750 |
|
Additional paid-in capital |
|
|
518,240,478 |
|
|
|
444,074,832 |
|
Accumulated other comprehensive income (loss) |
|
|
12,721 |
|
|
|
(5,392) |
|
Accumulated deficit |
|
|
(124,220,974) |
|
|
|
(138,392,118) |
|
Total stockholders' equity |
|
|
394,075,450 |
|
|
|
305,716,466 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
418,144,771 |
|
|
$ |
317,473,121 |
|
CLEANSPARK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
|
|
Three months
ended |
|
|
|
December
31,2021 |
|
|
December
31,2020 |
|
Revenues, net |
|
|
|
|
|
|
Digital currency mining revenue, net |
|
$ |
36,974,578 |
|
|
$ |
733,410 |
|
Energy hardware, software and services revenue |
|
|
3,970,210 |
|
|
|
1,213,870 |
|
Other services revenue |
|
|
297,181 |
|
|
|
310,290 |
|
Total revenues, net |
|
|
41,241,969 |
|
|
|
2,257,570 |
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
Cost of revenues (exclusive of depreciation and amortization
shown below) |
|
|
8,797,926 |
|
|
|
1,332,890 |
|
Professional fees |
|
|
3,317,819 |
|
|
|
1,712,723 |
|
Payroll expenses |
|
|
8,883,047 |
|
|
|
3,314,201 |
|
General and administrative expenses |
|
|
1,888,100 |
|
|
|
950,139 |
|
Other impairment expense (related to Digital Currency) |
|
|
6,222,346 |
|
|
|
— |
|
Depreciation and amortization |
|
|
7,697,568 |
|
|
|
1,117,715 |
|
Total costs and expenses |
|
|
36,806,806 |
|
|
|
8,427,668 |
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
4,435,163 |
|
|
|
(6,170,098) |
|
|
|
|
|
|
|
|
Other income/(expense) |
|
|
|
|
|
|
Change in fair value of contingent consideration |
|
|
55,542 |
|
|
|
— |
|
Realized gain on sale of digital currency |
|
|
9,994,791 |
|
|
|
49,918 |
|
Realized gain on sale of equity security |
|
|
665 |
|
|
|
— |
|
Unrealized loss on equity security |
|
|
(1,847) |
|
|
|
(73,500) |
|
Unrealized gain (loss) on derivative security |
|
|
298,849 |
|
|
|
(1,020,494) |
|
Interest income |
|
|
33,471 |
|
|
|
47,984 |
|
Interest expense |
|
|
(52,709) |
|
|
|
(1,340) |
|
Loss on write off and disposal of assets |
|
|
(278,170) |
|
|
|
— |
|
Total other income (expense) |
|
|
10,050,592 |
|
|
|
(997,432) |
|
|
|
|
|
|
|
|
Income (loss) before income tax (expense) or benefit |
|
|
14,485,755 |
|
|
|
(7,167,530) |
|
Income tax (expense) or benefit |
|
|
— |
|
|
|
— |
|
Net income (loss) |
|
$ |
14,485,755 |
|
|
$ |
(7,167,530) |
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
314,611 |
|
|
|
— |
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders |
|
$ |
14,171,144 |
|
|
$ |
(7,167,530) |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
18,113 |
|
|
|
— |
|
|
|
|
|
|
|
|
Total comprehensive income (loss) attributable to common
shareholders |
|
$ |
14,189,257 |
|
|
$ |
(7,167,530) |
|
|
|
|
|
|
|
|
Income (loss) per common share - basic |
|
$ |
0.35 |
|
|
$ |
(0.32) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic |
|
|
40,279,938 |
|
|
|
22,146,992 |
|
|
|
|
|
|
|
|
Income (loss) per common share - diluted |
|
$ |
0.35 |
|
|
$ |
(0.32) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - diluted |
|
|
40,485,761 |
|
|
|
22,146,992 |
|
|
|
|
|
|
|
|
CLEANSPARK, INC.
RECONCILIATION OF ADJUSTED EBITDA
(UNAUDITED)
|
|
Three months ended
December 31, |
|
|
|
2021 |
|
|
2020 |
|
Revenues, net |
|
|
|
|
|
|
Digital currency mining revenue, net |
|
$ |
36,974,578 |
|
|
$ |
733,410 |
|
Energy hardware, software and services revenue |
|
|
3,970,210 |
|
|
|
1,213,870 |
|
Other services revenue |
|
|
297,181 |
|
|
|
310,290 |
|
Total revenues, net |
|
$ |
41,241,969 |
|
|
$ |
2,257,570 |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
14,485,755 |
|
|
$ |
(7,167,530) |
|
Adjustments: |
|
|
|
|
|
|
|
|
Other impairment expense (related to Digital Currency) |
|
$ |
6,222,346 |
|
|
$ |
— |
|
Depreciation and amortization |
|
|
7,697,568 |
|
|
|
1,117,715 |
|
Stock based compensation |
|
|
5,749,107 |
|
|
|
4,350,643 |
|
Change in fair value of contingent consideration |
|
|
55,542 |
|
|
|
— |
|
Realized gain on sale of digital currency |
|
|
(9,994,791) |
|
|
|
(49,918) |
|
Realized gain on sale of equity security |
|
|
(665) |
|
|
|
— |
|
Unrealized loss on equity security |
|
|
1,847 |
|
|
|
73,500 |
|
Unrealized gain (loss) on derivative security |
|
|
(298,849) |
|
|
|
(1,020,494) |
|
Interest income |
|
(33,471) |
|
|
(47,984) |
|
Interest expense |
|
52,709 |
|
|
1,340 |
|
Loss on write off and disposal of assets |
|
278,170 |
|
|
— |
|
Total Adjusted EBITDA |
|
$ |
24,104,184 |
|
|
$ |
(2,742,728) |
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, 2021 |
|
|
Revenues, net |
|
|
|
|
Digital currency mining revenue, net |
|
$ |
22,747,990 |
|
|
Energy hardware, software and services revenue |
|
|
4,017,574 |
|
|
Other services revenue |
|
|
379,230 |
|
|
Total revenues, net |
|
$ |
27,144,794 |
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,367,391) |
|
|
Adjustments: |
|
|
|
|
|
Other impairment expense (related to Digital Currency) |
|
$ |
3,441,917 |
|
|
Depreciation and amortization |
|
|
5,361,348 |
|
|
Stock based compensation |
|
|
52,317 |
|
|
Change in fair value of contingent consideration |
|
|
(84,198) |
|
|
Realized gain on sale of digital currency |
|
|
(2,432,313) |
|
|
Realized gain on sale of equity security |
|
|
(73,138) |
|
|
Unrealized loss on equity security |
|
|
104,067 |
|
|
Unrealized loss on derivative security |
|
|
2,528,974 |
|
|
Interest expense, net |
|
33,958 |
|
|
Other income |
|
(1,761) |
|
|
Total Adjusted EBITDA |
|
$ |
3,563,780 |
|
|
|
|
|
|
|
[1] Non-GAAP financial metric; see “Non-GAAP Measures” and
“Reconciliation of Adjusted EBITDA” in this press release.
Isaac Holyoak
CleanSpark, Inc.
702-989-7694
pr@cleanspark.com
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