On December 5, 2019, the Board of Directors (the “Board”) of CleanSpark, Inc., a Nevada corporation (the “Company”), approved a reverse stock split of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”) in connection with the final stages of a proposed Nasdaq listing.

Effects of the Reverse Stock Split

Effective Date; Symbol; CUSIP Number. The Reverse Stock Split will become effective on December 11, 2019 (the “Effective Date”), pursuant to approval from the Financial Industry Regulatory Authority (“FINRA”), whereupon the shares of the Company’s common stock will begin trading on a split adjusted basis. On the Effective Date, the Company’s trading symbol will change to “CLSKD” for a period of 20 business days, after which the “D” will be removed from the Company’s trading symbol, and thus, the Company’s trading symbol will revert to the original symbol of “CLSK”. In the event Nasdaq approves our listing during that period, Nasdaq may exercise discretion to remove the “D” before the end of that period.

Split Adjustment; No Fractional Shares. On the Effective Date, the total number of shares of the Company’s Common Stock held by each stockholder will be converted automatically into the number of whole shares of Common Stock equal to (i) the number of issued and outstanding shares of Common Stock held by such stockholder immediately prior to the Reverse Stock Split, divided by (ii) 10.

No fractional shares will be issued, and no cash or other consideration will be paid. Instead, the Company will issue one whole share of the post-Reverse Stock Split Common Stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split.

Non-Certificated Shares; Certificated Shares. Stockholders who are holding their shares in electronic form at brokerage firms do not have to take any action as the effect of the Reverse Stock Split will automatically be reflected in their brokerage accounts.

Stockholders holding paper certificates may (but are not required to) send the certificates to the Company’s transfer agent at the address given below. The transfer agent will issue a new share certificate reflecting the terms of the Reverse Stock Split to each requesting stockholder. Stockholders will be required to pay a transfer fee to exchange his, her, or its old certificates.

Action Stock Transfer Corporation
2469 E. Fort Union Blvd., Suite 214
Salt Lake City, UT 84121

Telephone: (801) 274-1088

Fax: (801) 274-1099

State Filing. Pursuant to Nevada Revised Statues (“NRS”) Section 78.209, the Company filed a Certificate of Change (the “Certificate”) with the Secretary of State of the State of Nevada on December 5, 2019 to effectuate the Reverse Stock Split. The Certificate is not effective until the Effective Date. Under Nevada law, no amendment to the Company’s Articles of Incorporation is required in connection with the Reverse Stock Split. A copy of the Certificate is attached hereto as Exhibit 3.1 and is incorporated by reference herein.

No Stockholder Approval Required. Under Nevada law, because the Reverse Stock Split was approved by the Board in accordance with NRS Section 78.207, no stockholder approval is required. NRS Section 78.207 provides that the Company may effect the Reverse Stock Split without stockholder approval if (x) the Reverse Stock Split does not adversely affect any other class of stock of the Company, and (y) the Company does not pay money or issue scrip to stockholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split. As described herein, the Company has complied with these requirements.

Capitalization. The Company is currently authorized to issue 200,000,000 shares of Common Stock. As a result of the Reverse Stock Split, the Company will be authorized to issue 20,000,000 shares of Common Stock. As of December 5, 2019, there were 47,710,176 shares of Common Stock outstanding. As a result of the Reverse Stock Split, there will be approximately 4,771,017 shares of Common Stock outstanding (subject to adjustment due to the effect of rounding fractional shares into whole shares). The Reverse Stock Split will not have any effect on the stated par value of the Common Stock.

The Reverse Stock Split does not affect the Company’s authorized preferred stock. As of the Effective Date, the Company will still be authorized to issue a total of 10,000,000 shares of preferred stock, of which, the Company has designated two classes of preferred stock, Series A Preferred Stock, and Series B Preferred Stock. The Company is authorized to issue 2,000,000 shares of Series A Preferred Stock, par value $0.001, of which, 1,750,000 shares of Series A Preferred Stock are issued and outstanding. The Company is also authorized to issue 100,000 shares of Series B Preferred Stock, par value $0.001, of which 0 shares of Series B Preferred Stock are issued and outstanding.

Immediately after the Reverse Stock Split, each stockholder’s percentage ownership interest in the Company and proportional voting power will remain virtually unchanged except for minor changes and adjustments that will result from rounding fractional shares into whole shares. The rights and privileges of the holders of shares of Common Stock will be substantially unaffected by the Reverse Stock Split.

All options, warrants, and convertible securities of the Company outstanding, if any, immediately prior to the Reverse Stock Split will be appropriately adjusted by dividing the number of shares of Common Stock into which the options, warrants and convertible securities are exercisable or convertible by 10 and multiplying the exercise or conversion price thereof by 10, as a result of the Reverse Stock Split.