What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-11-25 compared with 2024-12-03 · 918 added, 742 removed, 980 unchanged (63% of the section changed)

9 unchanged sentences

Consolidated Balance Sheets as of September 30, 2025 and 2024

Consolidated Statements of Operations and Comprehensive Loss for the years ended September 30, 2024, 2023 and 2022

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended September 30, 2025, 2024 and 2023

Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2025, 2024 and 2023

6 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of CleanSpark, Inc.

(the “Company”) as of September 30, 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended September 30, 2024, and the related notes and financial statement schedule listed in the accompanying index.

(collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024, and the results of its operations and its cash flows for the year ended September 30, 2024 , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated December 3, 2024 expressed an adverse opinion thereon.

We have audited the accompanying consolidated balance sheets of CleanSpark, Inc.

(the “Company”) as of September 30, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the years then ended, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated November 25, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Bitcoin Mining Revenue

As described in Note 2 to the consolidated financial statements, the Company participates in a third-party operated mining pool (the “mining pool”) by providing hashrate to the mining pool operator.

The Company recognizes bitcoin mining revenue as it fulfills its performance obligation over time by providing hashrate.

Once the hashrate is provided, the Company earns non-cash consideration in the form of bitcoin based on the Full-Pay-Per-Share (“FPPS”) payout method set forth by the mining pool operator.

Bitcoin mining revenue is comprised of the block reward and transaction fees earned by the Company net of the mining pool fees charged by the mining pool operator.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue from Bitcoin Mining

As described in Note 2 to the consolidated financial statements, the Company is a participant in a third-party operated mining pool (the “mining pool”) and enters into contracts with the mining pool operator (the “Customer”) to provide hash calculations (or hashrate) to the mining pool.

The Company earns non-cash consideration based on the Full-Pay-Per-Share (“FPPS”) payout method set forth by the Customer in the form of bitcoin.

The amount of bitcoin the Company is entitled to for providing hash calculations to the Customer's mining pool under the FPPS payout method is made up of block rewards and transaction fees less mining pool fees.

The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network in accordance with a formula that includes the hash calculations that the Company provides to the Customer as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty.

The Company’s performance is completed over time as the Customer obtains control of the hash calculations, because the Company provides the hash calculations throughout the contract period and the Customer simultaneously obtains control of the service and uses it to produce bitcoin.

For the year ended September 30, 2025, bitcoin mining revenue, net (“mining revenue”) was approximately $766 million.

We identified the auditing of mining revenue as a critical audit matter due to the nature and extent of audit effort required to perform audit procedures over the Company’s hashrate provided to the mining pool operator and the associated contractual payouts based on the blockchain contractual inputs.

We identified certain revenue from bitcoin mining as a critical audit matter.

Evaluating (i) the completeness of the Company’s performance obligation to provide hash calculations throughout the contract period and (ii) the amount of non-cash consideration earned based on the FPPS payout method that is calculated as a block reward using the hash calculations that the Company provides to the Customer involved especially complex and challenging auditor judgment due to the nature and significant extent of audit effort required to address these matters.

The primary procedures we performed to address this critical audit matter included:

• With the assistance of our Information Technology (“IT”) professionals, we identified the key system used to monitor hashrate and tested the IT general controls over the system.

• We confirmed with the mining pool operator (i) the contractual terms used in the determination of mining revenue, (ii) hashrate provided to the mining pool operator by the Company, (iii) total mining revenue earned by the Company, and (iv) the Company’s digital asset wallet addresses in which the mining revenue is deposited.

• Using the Company’s digital asset wallet addresses confirmed by the mining pool operator, we reconciled the mining revenue earned from and paid by the mining pool operator against on-chain transactions independently obtained from the blockchain.

• Using data analytics, we recalculated the Company’s recorded mining revenue per the calculation prescribed in the FPPS payout method using independently obtained blockchain contractual inputs, the hashrate confirmed by the mining pool operator, and independent bitcoin prices.

• For the mining revenue generated through the Company’s owned facilities, we tested the completeness and accuracy of the hashrate provided to the mining pool operator by comparing it against the system used by the Company to monitor hashrate.

• For the mining revenue generated through colocation facilities, we performed analytical procedures to predict the hashrate provided to the mining pool operator and the mining revenue earned and recorded by the Company.

• With the assistance of our Information Technology (“IT”) professionals, identifying the key system used to monitor hashrate and testing the design and operating effectiveness of IT general controls over that system.

• Confirming with the mining pool operator (i) the contractual terms used in the determination of mining revenue, (ii) hashrate provided to the mining pool operator by the Company, (iii) total mining revenue earned by the Company, and (iv) the Company’s digital asset wallet addresses in which the mining revenue is deposited.

• Using the Company’s digital asset wallet addresses confirmed by the mining pool operator, reconciling the mining revenue earned from and paid by the mining pool operator against on-chain transactions independently obtained from the blockchain.

• Recalculating the Company’s recorded mining revenue per the calculation prescribed in the FPPS payout method using independently obtained blockchain contractual inputs, the hashrate confirmed by the mining pool operator, and independent bitcoin prices.

• For the mining revenue generated, testing the completeness and accuracy of the hashrate provided to the mining pool operator on a sample basis by comparing it against the system used by the Company to monitor hashrate.

Accounting for Convertible Notes and Capped Calls

As described in Notes 2 and 13 to the consolidated financial statements, in December 2024 the Company issued $650 million aggregate principal amount of convertible senior notes due 2030 (the “2030 Notes”).

In connection with the issuance of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the “2030 Capped Calls”) with certain financial institutions at an aggregate cost of approximately $90.4 million.

The embedded conversion and redemption features of the 2030 Notes do not meet the criteria for bifurcation and are not recognized as separate derivative instruments.

The 2030 Capped Calls meet the criteria for classification in equity, are not remeasured each reporting period, and are included as a reduction to additional-paid-in-capital within shareholders’ equity.

We identified the Company’s accounting for the 2030 Notes and 2030 Capped Calls as a critical audit matter.

Determining whether the embedded redemption and conversion features related to the 2030 Notes met the criteria for bifurcation to be recognized as separate derivative instruments and whether the 2030 Capped Calls met the criteria for equity classification involved the use of significant judgment in the application of complex accounting standards.

Auditing these elements involved especially challenging, subjective, and complex auditor judgment due to the nature and extent of the audit effort required to evaluate management’s application of complex accounting standards to these elements.

The primary procedures we performed to address this critical audit matter included:

• Reading and analyzing the relevant agreements to identify relevant terms and conditions that affect whether the embedded conversion and redemption features in the 2030 Notes met the criteria to be bifurcated and recognized as separate derivative instruments and whether the 2030 Capped Calls met the criteria for equity classification.

• With the assistance of professionals in our firm having expertise in the relevant technical accounting, evaluating the Company’s conclusions regarding whether the embedded conversion and redemption features in the 2030 Notes met the criteria to be bifurcated and recognized as separate derivative instruments and whether the 2030 Capped Calls met the criteria for equity classification.

Classification of Public and Private Warrants Issued for GRIID Acquisition

As described in Notes 2, 5, and 16 to the consolidated financial statements, the Company accounts for stock warrants as either equity instruments or liabilities.

In connection with the acquisition of GRIID Infrastructure, Inc.

(“GRIID”), the Company issued Public Warrants, Private Warrants, and GEM Warrants to former holders of GRIID warrants.

Management determined that the Public Warrants are subject to accounting treatment as equity, while the Private Warrants and GEM Warrants are subject to accounting treatment as liabilities.

We identified the classification of the Public Warrants and Private Warrants issued in connection with the GRIID acquisition as a critical audit matter.

Determining whether the Public Warrants and Private Warrants should be accounted for as equity instruments or liabilities involved the use of significant judgment in the application of complex accounting standards.

Auditing these elements involved especially challenging and complex auditor judgment due to the nature and extent of the audit effort required to evaluate management’s application of complex accounting standards to these elements.

The primary procedures we performed to address this critical audit matter included:

• Reading and analyzing the relevant agreements to identify relevant terms and conditions that affect whether the Public Warrants and Private Warrants should be accounted for as equity instruments or liabilities.

• With the assistance of professionals in our firm having expertise in the relevant technical accounting, evaluating the Company’s conclusions regarding whether the Public Warrants and Private Warrants should be accounted for as equity instruments or liabilities.

/s/ BDO USA, P.C.

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Las Vegas, Nevada

December 3, 2024

November 25, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We have audited CleanSpark, Inc.’s (the “Company’s”) internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of September 30, 2024, based on the COSO criteria.

We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of September 30, 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended September 30, 2024, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as “the financial statements”) and our report dated December 3, 2024 expressed an unqualified opinion thereon.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the years then ended, and the related notes and schedule and our report dated November 25, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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We believe that our audit provides a reasonable basis for our opinion.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Material weaknesses regarding management’s failure to design and maintain controls over (1) program change management, logical access and maintaining appropriate segregation of duties within the general ledger system, and as a result, the internal controls related to various assertions in certain financial statement line items were not effective, (2) the accounting for property plant and equipment, and deposits on miners, (3) controls over payroll, including controls over the use of information from its third-party payroll service provider, maintaining appropriate segregation of duties and processing of payroll, (4) the safeguarding of cash have been identified and described in management’s assessment.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated December 3, 2024 on those consolidated financial statements.

Definition and Limitations of Internal Control over Financial Reporting

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Las Vegas, Nevada

December 3, 2024

November 25, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of CleanSpark, Inc.

and its subsidiaries (collectively, the “Company”) as of September 30, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023, and the results of their operations and their cash flows for each of the two years in the period ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of operations and comprehensive (loss), stockholders’ equity, and cash flows of CleanSpark, Inc.

and its subsidiaries (collectively, the “Company”) for the year ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the results of their operations and their cash flows for the year ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ MaloneBailey, LLP

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Restricted cash

Receivable for equity offerings

Prepaid expense and other current assets

Bitcoin (See Note 2 and Note 6)

Receivable for bitcoin collateral (See Note 2 and Note 12)

Note receivable from GRIID (see Note 7)

Bitcoin - current

Receivable from bitcoin collateral

Note receivable from GRIID

Derivative investments

Investment in debt security, AFS, at fair value

Current assets held for sale

Total current assets

Bitcoin - noncurrent

Property and equipment, net

Operating lease right of use asset

Operating lease right of use assets

Intangible assets, net

Deposits on miners and mining equipment

Other long-term asset

Other long-term assets

LIABILITIES AND STOCKHOLDERS' EQUITY

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Other current liabilities

Current portion of loans payable

Current liabilities held for sale

Current portion of debt

Dividends payable

Total current liabilities

Long-term liabilities

Operating lease liability, net of current portion

Finance lease liability, net of current portion

Loans payable, net of current portion

Long-term debt, net of current portion, debt discount and debt issuance costs

Deferred income taxes

Other long-term liabilities

Total liabilities

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$ 0.001 par value;

300,000,000 shares authorized;

270,897,784 and 160,184,921 shares issued and outstanding, respectively

600,000,000 and 300,000,000 shares authorized;

296,087,533 and 270,897,784 shares issued;

284,327,598 and 270,897,784 shares outstanding, respectively

Additional paid-in capital

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Accumulated deficit

Treasury stock at cost;

11,759,935 and 0 shares held, respectively

Total stockholders' equity

2 unchanged sentences

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share and share amounts)

For the year ended

September 30,

For the year ended September 30,

Revenues, net

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Costs and expenses

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

Cost of revenues (exclusive of depreciation and amortization)

Professional fees

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General and administrative expenses

Loss on disposal of assets

Gain on fair value of bitcoin, net (see Note 2 and Note 6)

Other impairment expense (related to bitcoin)

(Gain) loss on disposal of assets

Gain on fair value of bitcoin, net

Depreciation and amortization

Indirect tax contingency expenses

Impairment expense - bitcoin

Impairment expense - fixed assets

Impairment expense - other

Impairment expense - goodwill

Realized gain on sale of bitcoin

Depreciation and amortization

Total costs and expenses

Loss from operations

Income (loss) from operations

Other income (expense)

Change in fair value of contingent consideration

Recognized gain on bitcoin collateral returned

Change in fair value of bitcoin collateral

Realized gain on sale of equity security

Unrealized loss on equity security

Unrealized loss on derivative security

Gain on fair value of contingent consideration

Gain on bitcoin collateral

Loss on derivative securities, net

Interest income

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Total other income (expense)

Loss before income tax expense

Income (loss) before income tax expense

Income tax expense

Loss from continuing operations

Income (loss) from operations

Discontinued operations

Loss from discontinued operations

Income tax expense

Loss on discontinued operations

Net income (loss)

Preferred stock dividends

Net loss attributable to common shareholders

Other comprehensive income, net of tax

Total comprehensive loss attributable to common shareholders

Net income (loss) attributable to common shareholders

Other comprehensive (loss) income, net of tax

Total comprehensive income (loss) attributable to common shareholders

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (continued)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (continued)

(in thousands, except per share and share amounts)

For the year ended

September 30,

Loss from continuing operations per common share - basic

For the year ended September 30,

Income (loss) from continuing operations per common share - basic

Weighted average common shares outstanding - basic

Loss from continuing operations per common share - diluted

Income (loss) from continuing operations per common share - diluted

Weighted average common shares outstanding - diluted

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Shares issued for settlement of contingent consideration related to business acquisition

Shares issued for business acquisition

Shares returned for settlement of contingent consideration and holdbacks related to business acquisition

Exercise of options

Shares issued under equity offering, net of offering costs

Preferred stock dividends

Other comprehensive income

Shares issued under equity offering,

net of offering costs

Other comprehensive income, net of tax

Balance, September 30, 2023

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Balance, September 30, 2023

Cumulative effect of change in accounting principle (See Note 2)

Options and restricted stock units issued for services

Shares withheld for net settlement of restricted stock units related to tax withholdings

Shares issued for settlement of contingent consideration related to business acquisition

Shares issued for business acquisition

Shares returned for settlement of contingent consideration and holdbacks related to business acquisition

Shares issued under equity offering,

net of offering costs

Other comprehensive income

Exercise of options and warrants

Shares issued under equity offering, net of offering costs

Preferred stock dividends

Preferred stock Series X Issuance

Other comprehensive income, net of tax

Balance, September 30, 2024

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Balance, September 30, 2024

Cumulative effect of change in accounting principle (See Note 2)

Options and restricted stock units issued for services

Shares issued for business acquisition

Warrants issued

Warrants reclassified as equity awards

Purchase of capped call

Shares withheld for net settlement of restricted stock units related to tax withholdings

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Preferred stock dividends

Preferred stock Series X Issuance

Other comprehensive income

Preferred stock series X redemption

Purchase of treasury stock

Other comprehensive income, net of tax

Balance, September 30, 2025

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(in thousands)

September 30,

For the year ended September 30,

Cash Flows from Operating Activities

Loss from discontinued operations

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Unrealized loss on equity security

Realized gain on sale of equity security

Impairment of bitcoin

Net income (loss)

Income from discontinued operations

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Bitcoin mining revenue, net

Gain on fair value of bitcoin, net (see Note 2 and Note 6)

Gain on fair value of bitcoin, net

Proceeds from sale of bitcoin

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Impairment expense - other

Impairment expense - goodwill

Unrealized loss on derivative asset

Impairment expense - bitcoin

Loss on derivative securities, net

Gain on fair value of contingent consideration

Non-cash lease expense

Recognized gain on bitcoin collateral returned

Change in fair value of bitcoin collateral

Gain on bitcoin collateral

Stock based compensation

Depreciation and amortization

Provision for bad debts

Amortization of debt discount

Loss (gain) on disposal of assets

Deferred income taxes, net

(Gain) loss on disposal of assets

Changes in operating assets and liabilities

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(Increase) decrease in prepaid expenses and other current assets

Increase in deferred income taxes

Long-term deposits paid

Net cash (used in) provided by operating activities of continuing operations

Net cash (used in) provided by operating activities of discontinued operations

Net cash (used in) provided by operating activities

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

September 30,

Increase in other long-term assets

Net cash used in operating activities - Continuing Operations

Net cash used in operating activities of Discontinued Operations

Net cash used in operating activities

Cash Flows from Investing Activities

Payments on miners and miner deposits

Payments on miners and mining equipment (including deposits)

Purchase of fixed assets

Proceeds from sale of bitcoin

Purchase of bitcoin

Proceeds from sale of bitcoin and option settlement

Proceeds from sale of miners

Proceeds from sale of derivative contracts

Acquisition of GRIID Infrastructure

Asset acquisition - LaFayette, GA Location

Asset acquisition - Twin City, GA Location

Asset acquisition - Tennessee Locations

Asset Acquisition - Clinton, MS Locations

Asset acquisition - Wyoming Locations

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Asset acquisition - Mississippi Locations

Asset Acquisition - Dalton 3

Asset Acquisition - Dalton 1 & 2

Asset acquisition - Dalton, GA Locations

Asset acquisition - Land in Sandersville, GA

Acquisition of Mawson

Acquisition of WAHA, net of cash received

Notes receivable from GRIID

Settlement of holdbacks related to contingent consideration

Proceeds from sale of miners

Proceeds from the sale of equity securities

Purchase of software

Net cash used in investing activities of continuing operations

Net cash provided by investing activities of discontinued operations

Note receivable from GRIID

Net cash used in investing activities - Continuing Operations

Net cash provided by investing activities - Discontinued Operations

Net cash used in investing activities

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

For the year ended September 30,

Cash Flows from Financing Activities

Proceeds from loans

Payments on loans

Purchase of treasury stock

Payments for capped call

Payments on debt

Payments of debt issuance costs

Payments on preferred dividends

Payments on finance leases

Payments on equipment backed loan

Refund of loan commitment fee

Proceeds from loan payable

Refund of debt commitment fee

Proceeds from debt, net of issuance fees

Payments of taxes on shares withheld for net settlement of restricted stock units

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Proceeds from equity offerings, net

Net cash provided by financing activities of continuing operations

Net cash provided by financing activities of discontinued operations

Net cash provided by financing activities

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash, beginning of period

Cash, cash equivalents, and restricted cash, end of period

CLEANSPARK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

September 30,

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of the year

Cash and cash equivalents, and restricted cash, end of the year

Supplemental disclosure of cash flow information

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Fixed assets purchased through finance transactions

Miners and derivatives purchased with bitcoin

Software purchased with bitcoin

Shares returned as part of settlement of seller agreements related to acquisition

Preferred shares dividends accrued

Unrealized gain on investment in available-for-sale debt security

Bitcoin transferred to collateral account

Bitcoin transferred from collateral account

Shares issued in connection with GRIID Acquisition

The accompanying notes are an integral part of these Consolidated Financial Statements.

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CleanSpark, Inc.

(the “Company”) is a bitcoin mining company.

The Company independently owns and operates nine data centers in Georgia, three data centers in Mississippi and two data centers in Tennessee as of September 30, 2024 .

The Company also own three additional data centers in Tennessee which started operations in October 2024.

The Company is currently developing data centers in Cheyenne, Wyoming and Clinton, Mississippi.

As of September 30, 2024, the Company had agreements in which the Company's bitcoin miners were hosted in New York and Tennessee.

(the “Company”) is a data center developer focused on bitcoin mining.

The Company independently owns, leases, and operates fifteen data centers in Georgia, eleven data centers in Tennessee, five data centers in Mississippi, and two data centers in Wyoming as of September 30, 2025.

The Company does not currently host miners for any other companies.

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Bitcoin Mining Business

Through CleanSpark, Inc., and the Company’s wholly owned subsidiaries, ATL Data Centers LLC (“ATL”), CleanBlok, Inc.

(“CleanBlok”), CleanSpark DW, LLC, CleanSpark GLP, LLC, and CleanSpark TN, LLC, the Company mines bitcoin.

The Company entered the bitcoin mining industry through its acquisition of ATL in December 2020.

It acquired a second data center in August 2021 and has had a co-location agreement with New York-based Coinmint, LLC in place since July 2021.

Bitcoin mining has now become the Company’s principal revenue generating business activity.

The Company currently intends to acquire additional facilities, equipment and infrastructure capacity to continue to expand our bitcoin mining operations.

Through the Company’s subsidiaries CSRE Properties, LLC, CSRE Property Management Company LLC, CSRE Properties Norcross, LLC, CSRE Properties Washington, LLC, CSRE Properties Sandersville, LLC, CSRE Properties Dalton, LLC, Dalton15, LLC, CleanSpark MS, LLC, CSRE Properties Mississippi, LLC, CSRE Properties Vicksburg, LLC, CSRE Properties Wyoming, LLC, CSRE Properties Tennessee, LLC and CleanSpark HQ, LLC, the Company maintains real property holdings.

Through CleanSpark, Inc., and its wholly owned subsidiaries, the Company engages in bitcoin mining operations.

The Company entered the bitcoin mining industry through its acquisition of ATL Data Centers LLC (“ATL”) in December 2020.

It acquired a second data center in August 2021.

Bitcoin mining has since become the Company’s principal revenue generating business activity.

Following the expiration of the Company’s co-location hosting arrangement in January 2025, all mining operations are conducted at facilities that the Company owns or leases and operates across Georgia, Tennessee, Mississippi, and Wyoming.

The Company continues to expand its operational footprint through the acquisition and development of additional data centers, miners, and supporting infrastructure designed to increase its total hash rate capacity and operational efficiency.

The Company is evaluating opportunities to expand its data-center platform to support high-performance computing (“HPC”) and artificial intelligence (“AI”) workloads.

This prospective expansion builds on the Company’s existing expertise in power procurement, infrastructure design, and facility operations developed through its Bitcoin mining activities.

During October 2025, the Company acquired land and power capacity in Texas to enable the potential development of a next-generation data-center campus.

Through its subsidiaries, the Company maintains real property holdings associated with its bitcoin mining activities.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying audited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (the “SEC”).

The accompanying audited Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the U.S.

Securities and Exchange Commission (the “SEC”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of CleanSpark, Inc.

and the Company’s wholly owned subsidiaries, ATL, CleanBlok, CleanSpark DW, LLC, CleanSpark GLP, LLC, CSRE Properties Norcross, LLC, CSRE Property Management Company, LLC, CSRE Properties, LLC, CSRE Properties Washington, LLC, CSRE Properties Sandersville, LLC, CSRE Properties Dalton, LLC, Dalton15, LLC, CleanSpark MS, LLC, CSRE Properties Mississippi, LLC, CSRE Properties Vicksburg, LLC, CSRE Properties Wyoming, LLC, CleanSpark TN, LLC, Tron Merger Sub, Inc., MS Data, LLC, and CleanSpark HQ, LLC.

and the Company’s wholly owned subsidiaries .

All intercompany transactions have been eliminated upon consolidation of these entities.

The Company has a sole reporting segment which is the bitcoin mining segment.

As of June 30, 2022, the Company deemed its energy operations to be discontinued operations due to its strategic shift to strictly focus on its bitcoin mining operations and divest of its energy assets.

The disposal groups related to the energy operations are part of the following entities:

CleanSpark LLC, CleanSpark Critical Power Systems, Inc., GridFabric, LLC, Solar Watt Solutions, Inc, and CleanSpark II, LLC.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include estimates used to review the Company’s goodwill impairment, intangible assets acquired, impairments and estimations of long-lived assets, valuation of derivative assets and liabilities, available-for-sale investments, and the valuations of share based awards.

Significant estimates include estimates used to review the Company’s goodwill impairment, impairments and estimations of long-lived assets, valuation of derivative assets and liabilities, available-for-sale investments, and the valuations of share based awards.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

Actual results may materially differ from these estimates under different assumptions or conditions.

Revenue from Contracts with Customers - Revenue from Bitcoin Mining

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The Company enters into a contract with the Customer to provide its hash calculations to the Customer's mining pool.

The contracts are terminable without penalty at any time by either party, and thus the contract term is shorter than a 24-hour period and the contracts are continuously renewed.

The contract is terminable without penalty at any time by either party, and thus the contract term is shorter than a 24-hour period and the contracts are continuously renewed.

Applying the criteria per ASC 606-10-25-1, the contract arises at the point that the Company provides hash calculations to the Customer's mining pool, which is considered contract inception, because Customer consumption is in tandem with delivery of the hash calculations.

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According to the Customer contract, daily settlements are made to the Company by the Customer based on the hash calculations provided over the contract periods occurring over a 24 hour period and the payout is made the following day.

There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

There are no other forms of variable consideration, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

The Company earns non-cash consideration based on the Full-Pay-Per-Share (“FPPS”) payout method set forth by the Customer in the form of bitcoin.

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The transaction price was the price agreed with the customer for the monthly services provided and the revenues are recognized monthly based on the services rendered for the month.

The total revenue recognized from data center services included as Other services revenue in the Consolidated Statement of Operations and Comprehensive Loss for the years ended September 30, 2024, 2023 and 2022 was $ 0 , $ 287 and $ 525 , respectively.

The total revenue recognized from data center services included as Other services revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended September 30, 2023 was $ 287 .

There was no revenue for data center services in the years ended September 30, 2024 and September 30, 2025.

Cost of revenues

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At times, such investments in U.S.

accounts may exceed Federal Deposit Insurance Corporation ("FDIC") insurance limits.

accounts may exceed FDIC insurance limits.

Restricted cash

The Company considers cash to be restricted when held in a separate bank account and withdrawal and general use is restricted legally or to restrict a portion cash as collateral for insurance carriers.

The Company had restricted cash of $ 3,056 and $ 0 as of September 30, 2024 and 2023, respectively, and held in a deposit account that accrues interest.

The Company classifies cash as restricted when it is held in a separate bank account and its withdrawal or general use is legally restricted, or when a portion of cash is designated as collateral for insurance carriers.

The Company had restricted cash of $ 3,490 and $ 3,056 for the years ended September 30, 2025 and 2024, respectively, and held in a deposit account that accrues interest.

Amounts included in restricted cash represent those required to be set aside by contractual agreements with insurance carriers in relation to utility bonds for various utility companies.

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Any costs expected to be incurred outside of one year would be considered other long-term assets.

Bitcoin are included in current assets in the Consolidated Balance Sheets due to the Company’s ability to sell bitcoin in a highly liquid marketplace, and such bitcoin holdings are expected to be realized in cash or sold or consumed during the normal operating cycle of the Company.

As a result of adopting ASC 350-60, Intangibles — Goodwill and Other , ("ASC 350-60") on October 1, 2023, bitcoin is measured at fair value as of each reporting period (see “Recently Issued Accounting Pronouncements below”).

In March 2025, the Company made a strategic decision to change its bitcoin treasury policy and determined that a portion of its bitcoin holdings would be held long-term.

As a result, the Company began to classify a certain portion of bitcoin as noncurrent.

Bitcoin holdings are presented on the Consolidated Balance Sheets within both current assets as Bitcoin - current and noncurrent assets as Bitcoin - noncurrent, respectively.

The current portion includes bitcoin retained from mining operations that may be sold periodically in a highly liquid marketplace, and such bitcoin holdings are expected to be realized in cash or sold or consumed during the Company's normal operating cycle, utilized in derivative trading activities or posted as collateral.

The noncurrent portion represents bitcoin that the Company intends to hold for the long-term as part of its strategic reserve and is not expected to be sold or otherwise monetized within the normal operating cycle.

As a result of adopting Accounting Standards Update 2023-08 (codified in ASC 350-60, Intangibles — Goodwill and Other — Crypto Assets (“ASC 350-60”)), on October 1, 2023, bitcoin is measured at fair value as of each reporting period (see “Recently Issued Accounting Pronouncements” below).

The fair value of bitcoin is measured using the period-end closing bitcoin price from its principal market, Coinbase, in accordance with ASC 820, Fair Value Measurement (“ASC 820”).

Since bitcoin is traded on a 24-hour period, the Company utilizes the price as of 23:59:59 UTC, which aligns with the Company's revenue recognition cut-off.

The changes in bitcoin valuation due to remeasurement in fair value within each reporting period are reflected on the Consolidated Statements of Operations and Comprehensive Loss as " Gain on fair value of bitcoin, net" .

The changes in bitcoin valuation due to remeasurement in fair value within each reporting period are reflected on the Consolidated Statements of Operations and Comprehensive Income (Loss) as Gain on fair value of bitcoin, net.

In accordance with ASC 350-60, the Company discloses realized gains and losses from the sale of bitcoin and such gains and losses are measured as the difference between the cash proceeds and the cost basis of bitcoin as determined on a First In-First Out basis.

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Subsequent reversal of impairment losses was not permitted as per ASC 350.

Bitcoin, which is non-cash consideration earned by the Company through its mining activities, is included as a reconciling item as a cash outflow within operating activities on the accompanying Consolidated Statements of Cash Flow.

The cash proceeds from the sales of bitcoin are classified based on the holding period in which the bitcoin is held.

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Upon adoption of ASC 350-60, the Company evaluates its sales of bitcoin and records bitcoin sold nearly immediately as operating cash flows and the remainder is recorded as investing activities.

During fiscal year 2024, all proceeds from bitcoin sales were classified as investing activities.

Receivable for bitcoin collateral

The Receivable for bitcoin collateral represents the bitcoin posted as collateral to lenders who have rights to sell, pledge and re-hypothecate such bitcoin at their sole discretion and for which the lenders have an obligation to return to the Company at the maturity of the loan.

The receivable is recorded at fair value and changes in fair value are recorded as “Change in fair value of bitcoin collateral”.

During the periods presented, all proceeds from bitcoin sales were classified as investing activities.

Receivable from bitcoin collateral

The Receivable from bitcoin collateral represents the bitcoin posted as collateral to lenders who have rights to sell, pledge and re-hypothecate such bitcoin at their sole discretion and for which the lenders have an obligation to return to the Company at the maturity of the loan.

The receivable is recorded at fair value and changes in fair value are recorded as Gain on bitcoin collateral.

The receivable for bitcoin collateral is classified as current.

Realized gains on fair value of bitcoin collateral represent the difference between the fair value on the date the bitcoin was posted as collateral and the fair value on the date the bitcoin is returned to the Company.

The value and activity involving this asset is discussed in detail alongside the Coinbase line of credit in Note 12 - Loans.

The value and activity involving this asset is discussed in detail alongside in Note 7 - Receivable from Bitcoin Collateral.

At commencement and throughout the term of the arrangement, the Company considers and accounts for the credit risk associated with the bitcoin receivable collateral in accordance with the principles outlined in ASC 326, Financial Instruments - Credit Losses (“ASC 326”).

The Receivable for bitcoin collateral is presented net of any allowance for credit losses.

In estimating the allowance for credit losses, the Company applies the current expected credit loss (“CECL”) model, which requires the measurement of lifetime expected credit losses on financial assets measured at amortized cost.

In estimating the allowance for credit losses, the Company applies the current expected credit loss model, which requires the measurement of lifetime expected credit losses on financial assets measured at amortized cost.

As the Company has no historical experience with similar assets, the allowance is determined using a combination of industry data, peer analysis, and forward-looking information about economic conditions and the creditworthiness of the counterparty.

The Company incorporates relevant qualitative factors, such as the nature of the receivable, the characteristics of the counterparty, and any observable market indicators, to assess the expected collectability of the Receivable for bitcoin collateral.

The estimation process also includes reasonable and supportable forecasts to account for future economic conditions and any anticipated impact on the receivable.

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The Company held investments in both publicly held and privately held equity securities.

However, as described in Note 1, the Company is primarily doing business of in the bitcoin mining sector, and not in the business of investing in securities.

However, as described in Note 1 - Organization and Line of Business, the Company is primarily doing business of in the bitcoin mining sector, and not in the business of investing in securities.

Privately held equity securities are recorded at cost and adjusted for observable transactions for same or similar investments of the issuer (referred to as the measurement alternative) or impairment.

All gains and losses on privately held equity securities, realized or unrealized, are recorded through gains or losses on equity securities on the Consolidated Statements of Operations and Comprehensive Loss.

Publicly held equity securities are based on fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our Consolidated Statements of Operations and Comprehensive Loss.

Accrued liabilities

The Company records accruals for expenses that have been incurred but not yet invoiced or paid as of each balance sheet date.

These accruals are included within current liabilities and represent estimates of obligations for which the timing or amount of payment is uncertain.

Accrued liabilities primarily consist of indirect tax exposures, payroll and related benefits, operating expenses, and other miscellaneous accruals arising in the ordinary course of business.

The following table summarizes the composition of the Company’s accrued liabilities on the Consolidated Balance Sheets indicated:

($ in thousands)

September 30,

Indirect tax contingencies

Accrued operating expenses

Accrued payroll expenses

Indirect tax accruals

Other accrued liabilities

Accrued liabilities

Concentration risk

At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits.

At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of Federal Deposit Insurance Corporation (“FDIC”) limits.

The cash balance in excess of the FDIC limits was $ 11,926 and $ 2,907 for the periods ended September 30, 2025 and September 30, 2024, respectively.

The accounts offered by the custodian of the Company’s bitcoin, which totaled $ 431,661 and $ 56,241 as of September 30, 2024 and September 30, 2023, respectively, are not insured by the FDIC.

Accounts held through bitcoin custodians, which totaled $ 1,189,443 and $ 431,661 as of September 30, 2025 and September 30, 2024, respectively, are not insured by the FDIC.

The Company has not experienced any losses in such accounts.

The Company has certain customers and vendors who individually represented 10 % or more of the Company’s revenue or capital expenditures.

In the fiscal year ended September 30, 2024, revenue is concentrated with one mining pool operator and all bitcoins reside with one custodian.

Refer to Note 17 - Major Customers and Vendors.

In the fiscal year ended September 30, 2025, revenue is concentrated with one mining pool operator and all bitcoin reside with one custodian.

Refer to Note 18 - Revenue and Vendor Concentrations .

In accordance with ASC 842, Leases , the Company assesses whether an arrangement contains a lease at contract inception.

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Finance leases are generally those leases that allow the Company to substantially utilize or pay for the entire asset over its estimated life.

Assets acquired under finance leases are recorded in “Fixed Assets, net.” All other leases are categorized as operating leases.

Assets acquired under finance leases are recorded in Property and equipment, net.

All other leases are categorized as operating leases.

The Company records right-of use (“ROU”) assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease.

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For all classes of underlying assets, the Company has elected to not separate lease from non-lease components.

Stock warrants

The Company accounts for stock warrants as either equity instruments or liabilities in accordance with FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and/or derivative liabilities in accordance with FASB ASC 815, Derivatives and Hedging (“ASC 815”), depending on the specific terms of the agreement.

Liability-classified warrants are recorded at their estimated fair values at each reporting period until they are exercised, terminated, reclassified or otherwise settled.

Changes in the estimated fair value of liability-classified warrants are included in Loss on derivative securities, net under other income in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) .

Convertible debt

The Company accounts for its convertible senior notes under FASB ASC 470-20, Debt with Conversion and Other Options and FASB ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity and/or ASC 815, depending on the specific terms of the debt agreement.

The Company records the convertible senior notes as a long-term liability at face value net of debt issuance costs.

If any of the conditions to the convertibility of the convertible senior notes are satisfied, or the convertible senior notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the carrying value of the convertible senior notes as a current, rather than a long-term liability.

Debt issuance costs related to the convertible senior notes were capitalized and recorded as a contra-liability and are presented net against the balance of the convertible senior notes on the Consolidated Balance Sheets .

Debt issuance costs consist of underwriting, legal and other direct costs related to the issuance of the convertible senior notes and are amortized to interest expense over the term of the convertible senior notes using the straight-line method which approximated the effective interest method.

Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the convertible senior notes.

The Company accounts for capped calls as either equity instruments or liabilities in accordance with ASC 480 and/or derivative liabilities in accordance ASC 815, depending on the specific terms of the agreement.

As of September 30, 2025, the Company has only entered into equity-classified capped calls which are not remeasured each reporting period and are recorded as a reduction to additional paid-in-capital within shareholders’ equity when purchased.

Stock-based compensation

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For discussion of accounting for restricted stock units (“RSUs”) and performance stock units (“PSUs”), please refer Note 17 - Stock-Based Compensation .

Loss per share

The Company reports loss per share in accordance with FASB ASC 260-10 “Earnings Per Share,” which provides for calculation of “basic” and “diluted” earnings per share.

Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding during the period.

Earnings (loss) per share

The Company reports Earnings (loss) per share in accordance with FASB ASC 260-10, Earnings Per Share , which provides for calculation of “basic” and “diluted” earnings per share.

Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average common shares outstanding during the period.

Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity.

The calculation of diluted net loss per share gives effect to common stock equivalents;

The calculation of diluted net income (loss) per share gives effect to common stock equivalents;

however, potential common shares are excluded if their effect is anti-dilutive.

Provided below is the loss per share calculation for the years ended September 30, 2024, 2023 and 2022:

Ended September 30,

Common stock issuable upon the exercise of outstanding stock options, vesting of restricted stock, and warrants are computed using the treasury stock method.

Potential shares of common stock issuable upon conversion of the convertible notes and Series A preferred stock are computed using the if-converted method.

Provided below is the Earnings (loss) per share calculation for the years ended September 30, 2025, 2024 and 2023:

For the year ended September 30,

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

Continuing Operations

Loss from continuing operations

Preferred stock dividends

Loss from continuing operations attributable to common shareholders

Weighted-average common shares outstanding, basic

Weighted-average common shares outstanding, diluted

Loss from continuing operations per common share attributable to common shareholders

Discontinued Operations

Loss income from discontinued operations

Net income (loss) attributable to common shareholders - Basic

Non-cash interest expense on convertible notes

Net income (loss) attributable to common shareholders - Dilutive

Weighted-average common shares outstanding - Basic

Dilutive impact of stock options and other share-based awards

Weighted-average common shares outstanding, diluted

Dilutive impact of convertible notes

Weighted-average common shares outstanding - Dilutive

Income (loss) per common share attributable to common shareholders

Discontinued Operations

Loss from discontinued operations

Weighted-average common shares outstanding - Dilutive

Loss on discontinued operations per common share attributable to common shareholders

Convertible senior notes are reflected in diluted earnings per share using the if-converted method when doing so is dilutive, meaning the additional shares and related interest add-back reduce earnings per share;

otherwise, they are excluded as antidilutive.

The number of shares that were not included in the calculation of net loss per diluted share because to do so would have been anti-dilutive, or for preferred stock, because the conversion contingency associated with the change in control had not occurred, and the contingency was not resolved for the years ended September 30, 2025, 2024 and 2023 are as follows:

Ended September 30,

Restricted stock awards

Stock options

Contingently issuable shares

For the year ended September 30,

Series A preferred stock conversion

Total anti-dilutive shares

Anti-dilutive warrants

Anti-dilutive stock options

Anti-dilutive restricted stock awards

Anti-dilutive contingently issuable shares

Total anti-dilutive securities

Property and equipment

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During the year ended September 30, 2024, the Company recorded an impairment expense of approximately $ 197,000 due to the reduction of the useful life of miners that were removed from service prior to the originally estimated life and due to the subsequent change in salvage value (see Note 10 - Property and Equipment ).

In connection with property and equipment in the Company’s discontinued operations, an impairment expense in the approximate amou nt of $ 32 wa s recognized in the fiscal year ended September 30, 2022 and included in loss from discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss.

Business Combinations, Intangible assets and Goodwill

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Strategic contract

During the years ended September 30, 2024, 2023 and 2022, the Company incurred the following impairment losses related to bitcoin and goodwill:

Years ended September 30,

($ in thousands)

Impairment of bitcoin

Impairment of goodwill

Total impairment loss

During the year ended September 30, 2023, the Company incurred an impairment loss related to bitcoin of $ 7,163 .

No similar impairment losses have been recognized during the years ended September 30, 2025 and 2024.

Goodwill impairment analysis

In accordance with ASC 350-30-35-18A, an entity may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test, and has the unconditional option to bypass the qualitative assessment in any period and proceed directly to performing the quantitative analysis.

In completing the 2024 annual goodwill impairment analysis, the Company elected to perform a qualitative assessment for its goodwill.

For the qualitative assessment, the Company considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal year 2023, including assumptions used, such as discount rates, indicated fair values, and the amounts by which those fair values exceeded their carrying amounts.

Further, the Company compared actual performance in fiscal year 2024 to the internal financial projections used in the prior quantitative analyses.

In completing the 2025 and 2024 annual goodwill impairment analyses, the Company elected to perform qualitative assessments for its goodwill.

For the qualitative assessments, the Company considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal year 2023, including assumptions used, such as discount rates, indicated fair values, and the amounts by which those fair values exceeded their carrying amounts.

Further, the Company compared actual performance in fiscal year 2025 and 2024 to the internal financial projections used in the prior quantitative analyses.

Additionally, the Company considered various other factors, including macroeconomic conditions, relevant industry and market trends, and factors specific to the Company that could indicate a potential change in the fair value of the reporting units.

Lastly, the Company evaluated whether any events have occurred or any circumstances have changed since that time that would indicate that goodwill may have become impaired since the last quantitative tests.

In completing the 2023 and 2022 annual goodwill impairment analysis, the Company elected to perform a quantitative assessment for its goodwill.

In completing the 2023 annual goodwill impairment analysis, the Company elected to perform a quantitative assessment for its goodwill.

The assessments involved comparing the carrying value of the entity, including goodwill, to its estimated fair value.

In accordance with ASU 2017-04:

Intangibles - Goodwill and Other:

In accordance with ASU 2017-04, Intangibles - Goodwill and Other:

Simplifying the test for Goodwill Impairment , a goodwill impairment charge is recorded for the amount by which the carrying value unit exceeds the fair value of the reporting unit.

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The market valuation approach evaluated the Company's market value as compared to the net asset balance.

The fiscal year 2024 and 2023 assessments indicated that no impairment of goodwill was necessary.

In completing the 2022 annual goodwill impairment analysis, there was a $ 12,048 impairment recognized.

In fiscal 2022, there was a sustained downturn in the price of bitcoin which caused the carrying value of the Company’s goodwill to exceed the fair value.

The fiscal year 2025, 2024, and 2023 asses sments indicated that no impairment of goodwill was necessary.

The following table reflects goodwill activity for the years ended September 30, 2025, 2024 and 2023, respectively:

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The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

Quoted prices in active markets for identical assets or liabilities.

These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

Quoted prices for identical assets or liabilities in active markets.

These are typically obtained from real-time quotes in active exchange markets involving identical assets or liabilities.

Quoted prices for similar assets and liabilities in active markets;

quoted prices included for identical or similar assets and liabilities that are not active;

quoted prices for identical or similar assets and liabilities in markets that are not active;

and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

These are typically obtained from readily-available pricing sources for comparable instruments.

These are typically obtained from readily available pricing sources for comparable assets or liabilities.

Unobservable inputs, where there is little or no market activity for the asset or liability.

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Due to the use of significant unobservable inputs, a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement.

The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s Consolidated Balance Sheets on a recurring basis, and their level within the fair value hierarchy as of September 30, 2024 and September 30, 2023:

The carrying value of cash, accounts payable, accrued expenses and short-term portion of loan payable are Level 1 and approximate their fair values because of the short-term nature of the instruments.

The carrying amount of the Company's long-term interest bearing portion of loan payable is also stated at fair value since the stated rate of interest approximates market rates available to the Company for a similar duration.

Given that the debt was issued, management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

The fair values of warrant liabilities were determined based on Black Scholes option-pricing model using Level 2 inputs.

The fair value of the Bitcoin derivative - Bitmain contracts were also determined based on Black Scholes option-pricing model but utilized historical volatility of bitcoin as an input which is deemed to be a Level 3 input.

The following table presents the Company’s assets and liabilities that are measured and recorded at fair value on the Company’s Consolidated Balance Sheets on a recurring basis, and their level within the fair value hierarchy as of September 30, 2025 and 2024:

September 30, 2025

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Receivable from bitcoin collateral (2)

ILAL derivative asset

Investment in debt security

Bitcoin derivative - Bitmain contracts

Interest rate swap derivative

(1) Represents money market funds.

(2) See Note 12 - Loans for more information.

Warrant liabilities

September 30, 2024

($ in thousands)

Cash equivalents (1)

Receivable from bitcoin collateral (2)

ILAL derivative asset

Investment in debt security

Interest rate swap derivative

(1) Represents money market funds .

(2) See Note 6 - Bitcoin for more information.

There were no transfers between Level 1, 2 or 3 during the years ended September 30, 2025 and 2024.

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Assets and liabilities not measured and recorded at fair value

The Company’s financial instruments, including certain cash and cash equivalents, restricted cash, accounts receivable, the GRIID note receivable, and loans payable are not measured at fair value.

The Company’s financial instruments, including certain cash and cash equivalents, restricted cash, accounts receivable, the GRIID note receivable, and indebtedness are not measured at fair value.

The car rying values of these instruments approximate their fair values due to their liquid or short term nature.

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The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required.

The Company had no uncertain tax positions as of September 30, 2024 and 2023.

As of September 30, 2025 the Company reported unrecognized tax benefits of $6,005 , however the Company had no uncertain tax positions as of September 30, 2024 and 2023.

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates.

Temporary differences arise from net operating losses, differences in depreciation methods of archived images and property and equipment, stock-based and other compensation, other accrued expenses, and the tax treatment of gains or losses on the value of digital currency.

Temporary differences arise from net operating losses, differences in depreciation methods of intangible assets and property and equipment, stock-based and other compensation, other accrued expenses, and the tax treatment of gains or losses on the value of digital currency.

A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized.

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Interest and penalties are included in tax expense.

The Company includes interest and penalties arising from the underpayment of income taxes in the Consolidated Statements of Operations and Comprehensive Loss in the provision for income taxes.

As of September 30, 2024 and 2023 , the Company had no accrued interest or penalties related to uncertain tax positions.

Income tax expense from operations for the years ended September 30, 2024, 2023 and 2022 was $ 3,344 , $ 2,416 and $ 0 , respectively, which resulted primarily from maintaining a full valuation allowance against the Company's deferred tax assets.

Income tax expense from operations for the years ended September 30, 2025, 2024 and 2023 was $ 39,111 , $ 3,344 and $ 2,416, respectively, which resulted primarily from changes in the valuation allowance against the Company's deferred tax assets.

Segment reporting

The Company determines its operating segments based on how the Chief Operating Decision Maker, the Chief Executive Officer, views and evaluates operations, performance and allocates resources.

Since June 30, 2022, the Company's only operating segment is the bitcoin mining business.

CleanSpark operates as a single operating and reportable segment focused on bitcoin mining.

The Company’s Chief Executive Officer serves as the chief operating decision maker (“CODM”) and uses consolidated net income (loss) as the measure of segment income (loss).

The CODM uses consolidated net income (loss), as presented on the Consolidated Statements of Operations and Comprehensive Income (Loss), to evaluate the Company’s overall profitability and performance, to determine the volume and timing of bitcoin mining to be performed, to allocate and reallocate resources, including miner purchases and expansion projects, and to focus investment where long-term profitability appears most viable.

The CODM is regularly provided with information on certain significant segment expenses, including Cost of revenues (exclusive of depreciation and amortization), Professional fees, Payroll expenses, General and administrative expenses, Depreciation and amortization, and Gain on fair value of bitcoin, net.

These significant segment expenses are consistent with those presented on the Consolidated Statements of Operations and Comprehensive Income (Loss), and depreciation expense attributable to miners is disclosed in Note 10 - Property and Equipment.

The measure of the Company’s segment assets is reported on the consolidated balance sheets as total assets.

Stock-based compensation is consistent with the amounts presented on the Consolidated Statements of Cash Flows.

All of the Company’s long-lived assets are in the United States.

Information about the Company’s revenue and vendor concentrations is included in Note 18 - Revenue and Vendor Concentrations .

Discontinued operations

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The Company regularly evaluates current information available with its external and internal counsel to determine whether an accrual is required, an accrual should be adjusted or a range of possible loss should be disclosed.

Reclassifications

Certain prior-year amounts have been reclassified to conform to the current-year presentation.

This includes the grouping of certain balance sheet and statement of cash flow items into new or revised categories to improve clarity and consistency with current-year classifications.

Indirect tax contingencies

The Company is subject to various indirect tax assessments, including sales and use taxes, that arise in the normal course of business.

Liabilities for indirect taxes are recognized when it is probable and reasonably estimable that a loss has been incurred, consistent with ASC 450, Contingencies.

Certain indirect tax exposures may include statutory interest and standard penalties.

When such costs relate to operating-period activity, they are recognized in current-period expense within “Indirect tax contingency expense” in the Consolidated Statements of Operations and Comprehensive Income.

Indirect tax amounts that are directly attributable to the acquisition or construction of property, plant, and equipment are capitalized and depreciated as part of the related asset’s cost, while statutory interest and penalties are expensed as incurred.

The Company evaluates these matters each reporting period and adjusts recorded amounts when new information becomes available or when the probability of loss changes.

Any reversals or abatements of previously recognized indirect tax liabilities are recorded as reductions to the same captions originally affected;

for amounts previously capitalized, reversals are recognized through derecognition of the related capitalized cost and accumulated depreciation.

As of September 30, 2025, the Company’s indirect tax accruals include $ 64,481 related to estimated sales and use tax exposures, inclusive of statutory interest and penalties.

This balance is reflected within Accrued liabilities in the Consolidated Balance Sheets .

Recently Issued and Adopted Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Scope Clarification and Accounting for Certain Contracts and Customer Share-Based Consideration (“ASU 2025-07”), which narrows the types of contracts subject to derivative accounting by excluding those whose payouts depend solely on an entity’s own operational metrics, rather than market-based variables, and clarifies that share-based or warrant consideration received from a customer is accounted for under Topic 606 until the right to retain the instrument is unconditional, after which the guidance in Topic 815 and 321 applies.

The amendments are effective for annual periods beginning after December 15, 2026 (the Company’s fiscal year beginning October 1, 2027), which early adoption permitted, and may be applied prospectively or on a modified retrospective basis with an option to elect or revoke the fair value option for certain instruments upon transition.

The Company is currently evaluating the impact of ASU 2025-07 and does not expect it to have a material effect on its Consolidated Financial Statements.

In July 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to Capitalization Guidance (“ASU 2025-06”).

The amendments clarify and refine the accounting for internal-use software development costs by (i) aligning the guidance more closely with the software development life cycle, (ii) addressing the treatment of certain preliminary project and post-implementation costs, and (iii) requiring additional disclosures about significant internal-use software projects.

The amendments in this update are effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

Early adoption is permitted.

Entities are required to apply the guidance prospectively to costs incurred after the date of adoption;

retrospective application is not permitted.

The Company is currently evaluating the impact of ASU 2025-06 on its Consolidated Financial Statements and related disclosures.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity , which amends existing guidance to allow entities to apply the same principles used in other business combinations when determining the accounting acquirer in a transaction involving a variable interest entity (VIE) that is a business and where consideration is primarily in the form of equity interests.

This update addresses comparability concerns and provides for more consistent application of acquisition accounting principles.

The amendments are effective for annual periods beginning after December 15, 2026, and interim periods within those years, with early adoption permitted.

The Company is currently assessing the potential impact of the standard but does not anticipate that it will have a material impact on its Consolidated Financial Statements.

In May 2025, the FASB also issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Clarifications to Share-Based Consideration Payable to a Customer , to address diversity in practice and improve the operability of accounting for share-based consideration granted to customers.

The amendments clarify how to distinguish between service and performance conditions for vesting, require entities to estimate forfeitures for all share-based consideration payable to customers, and specify that variable consideration guidance in ASC 606 does not apply when measuring such awards.

The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its financial statements and does not expect it to have a material impact on its Consolidated Financial Statements.

In March 2025, the FASB issued ASU 2025-02, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

122 (“ASU 2025-02”).

This update revises the SEC paragraphs in the Codification, primarily within Liabilities (Topic 405) , to align with the SEC staff’s issuance of SAB 122, which rescinds SAB 121 related to safeguarding obligations for crypto-asset platforms.

The update does not create new GAAP requirements but removes obsolete SEC guidance superseded by SAB 122.

ASU 2025-02 is effective for annual reporting periods beginning after December 15, 2024, with retrospective application required.

As the Company operates as a bitcoin mining entity and does not provide custodial services or safeguard crypto assets for others, this new guidance does not directly impact its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This ASU requires public business entities to provide additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions.

The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization related to oil-and-gas producing activities.

The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its financial statement disclosures.

In November 2024, the FASB also issued ASU 2024-04, Debt—Debt with Conversion and Other Options:

Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishments of convertible debt.

ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods.

Early adoption is permitted.

The Company is currently evaluating the impact of the standard on its Consolidated Financial Statements and related disclosures.

On March 21, 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2024-01, Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which clarifies how an entity determines whether a profits interest or similar award is (1) within the scope of ASC 718 - Compensation - Stock Compensation or (2) not a share-based payment arrangement and therefore within the scope of other guidance.

The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or nonemployees in exchange for goods or services.

The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non-employees in exchange for goods or services.

ASU 2024-01 is effective for public business entities for annual periods beginning after December 15, 2024, including interim periods within those periods.

The Company is currently evaluating the impact of the adoption of ASU 2024-01 on its consolidated financial statements.

The Company does not expect the adoption of ASU 2024-01 to have a material impact on its Consolidated Financial Statements.

In December 2023, the FASB issued ASC 350-60 which requires entities with certain crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income (loss) in each reporting period.

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In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The new guidance is effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption of ASU 2023-07 on its consolidated financial statements and expects to implement the provision for fiscal year ending September 30, 2025.

In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, as if it had originated the contracts.

Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date.

The Company adopted the provisions of the accounting pronouncement as of October 1, 2023 and t he new standard did not have a material impact on the Company's consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its financial statement disclosures.

The Company adopted ASU 2023-07 on the current fiscal year, which did not have a material impact on the Consolidated Financial Statements .

REVISIONS TO PREVIOUSLY ISSUED FINANCIAL STATEMENTS

1 unchanged sentence

The errors had an impact on net deferred tax liabilities and income tax expense for the fiscal year ended September 30, 2023.

The error did not impact total revenues or loss before income tax expense for any of the fiscal years ended September 30, 2024, 2023 and 2022.

The Company also reclassified transactions in the September 30, 2023 and 2022 consolidated statements of cash flows from cash used in operating activities to cash used in financing activities.

One of the transactions related to the impact of cash receipts from shares issued under equity offerings but for which the Company has recorded receivables, which resulted an understatement of cash flows from operating activities in the amounts of $ 7,576 and $ 2,014 , for the years ended September 30, 2023 and 2022, respectively, but should have been reflected as decreases in cash flows from financing activities.

The error did not impact total revenues or loss before income tax expense for any of the fiscal years ended September 30, 2024 or 2023.

The Company also reclassified transactions in the September 30, 2023 consolidated statements of cash flows from cash used in operating activities to cash used in financing activities.

One of the transactions related to the impact of cash receipts from shares issued under equity offerings but for which the Company has recorded receivables, which resulted an understatement of cash flows from operating activities in the amounts of $ 7,576 , for the year ended September 30, 2023, but should have been reflected as decreases in cash flows from financing activities.

The second transaction relates to $ 5,571 of taxes paid on behalf of employees on shares withheld for net settlement of restricted stock awards at vesting date and was incorrectly recorded as cash used in operating activities, when it represented cash used in financing activities.

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108 on Quantifying Financial Statement Errors, codified in Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections.

The Company concluded that these errors and the related impacts did not result in a material misstatement of our previously issued consolidated financial statements as of and for the years ended September 30, 2023 and 2022 and our previously issued unaudited consolidated interim financial statements as of and for the periods ended December 31, 2021, March 31, 2022, June 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024

The Company concluded that these errors and the related impacts did not result in a material misstatement of our previously issued consolidated financial statements as of and for the year ended September 30, 2023 and our previously issued unaudited consolidated interim financial statements as of and for the periods ended December 31, 2022, March 31, 2023, June 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024.

The Company has corrected the relevant prior periods of our consolidated financial statements and adjusted the disclosures included within Note 14 - Income Taxes, including our significant components of the Company’s deferred tax assets and liabilities.

A summary of the corrections to the impacted financial statement line items from our previously issued financial statements are presented below:

Consolidated Balance Sheet

As of September 30, 2023

($ in thousands)

As previously reported

Deferred income taxes

Total liabilities

Accumulated deficit

Total stockholders' equity

Consolidated Statement of Operations and Comprehensive Loss

7 unchanged sentences

Loss from continuing operations per common share

The consolidated statement of stockholders' equity for the year ended September 30, 2023 has been adjusted to reflect the impact to Net loss in both the accumulated deficit and total stockholders' equity columns as well as the corresponding totals in the row captioned Balance, September 30, 2023.

The Consolidated Statements of Stockholders' Equity for the year ended September 30, 2023 has been adjusted to reflect the impact to Net loss in both the accumulated deficit and total stockholders' equity columns as well as the corresponding totals in the row captioned Balance, September 30, 2023.

Consolidated Statements of Cash Flows

For the year ended September 30, 2023

For the year ended September 30, 2022

($ in thousands)

As previously reported

Increase in accounts payable and accrued liabilities

12 unchanged sentences

In June 2022, the Company determined to make available for sale the asset groups related to its energy segment due to its strategic shift to strictly focus on its bitcoin mining operations.

As a result, the energy segment's results of operations have been reclassified as discontinued operations on a retrospective basis for all periods presented.

Accordingly, the assets and liabilities of this segment are separately reported as “assets and liabilities held for sale” as of September 30, 2023 in the Consolidated Balance Sheets.

As a result, the energy segment's results of operations were reclassified as discontinued operations on a retrospective basis for all periods presented.

Through September 2023, the Company sold the majority of its software and intellectual property assets related to the energy segment and is in the process of winding-down the remaining assets and liabilities.

As of September 30, 2024, the Company has impaired the assets held for sale and reclassified the remaining warranty liability of $ 546 to continuing operations as it winds down the former energy segment, and such liabilities are recorded within accrued liabilities.

The results of operations of this segment, for all periods, are separately reported as “discontinued operations” in the Consolidated Statements of Operations and Comprehensive Loss.

The results of operations of this segment, for all periods, are separately reported as Discontinued operations in the Consolidated Statements of Operations and Comprehensive Income (Loss) .

Provided below are the key areas of the financials that constitute the discontinued operations:

($ in thousands)

September 30,

Current assets

Accounts receivable, net

Total current assets held for sale

Total assets held for sale

Total current liabilities held for sale

Total liabilities held for sale

For the twelve months ended

For the year ended

($ in thousands)

September 30, 2023

September 30,

Total revenues, net

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Interest expense

Total other income (expense)

Loss before income tax benefit (expense)

Income tax benefit (expense)

Total other income

Loss before income tax expense

Income tax expense

Net loss attributable to common shareholders

Pending Acquisitions

Business Combinations

GRIID Infrastructure Inc.

On June 26, 2024, the Company entered into an Agreement and Plan of Merger (the “GRIID Agreement”) with GRIID Infrastructure Inc., Nasdaq ticker “GRDI”, a Delaware corporation (“GRIID”), and Tron Merger Sub, Inc.

(“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of the Company.

The transaction closed on October 30, 2024 (the “Effective Time” of the merger).

Concurrent with the GRIID Agreement, the Company and GRIID entered into a senior secured term loan credit agreement (the “GRIID Credit Agreement”) and a co-location mining service agreement (the “Hosting Agreement”) on June 26, 2024.

On October 30, 2024 (the “Effective Time”), the Company completed the acquisition of GRIID Infrastructure Inc., a Delaware corporation (“GRIID”), and Tron Merger Sub, Inc.

(“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of the Company (the event collectively known as the “GRIID Acquisition” or the “Merger”).

The Agreement and Plan of Merger (the “GRIID Agreement”) entered into on June 26, 2024, provided that, among other things and subject to the terms and conditions of the GRIID Agreement, (1) the Merger Sub will be merged with and into GRIID (the “Sub Merger”), with GRIID surviving and continuing as the surviving corporation in the Sub Merger, and, (2) at the Effective Time of the Sub Merger, holders of each outstanding share of common stock, par value $ 0.0001 per share, of GRIID (“GRIID Common Stock”) would receive, in exchange for each share of GRIID Common Stock held immediately prior to the Merger (other than certain excluded shares), that number of shares of common stock, par value $ 0.001 per share, of the Company’s common stock (“Company Common Stock”) equal to the quotient obtained by dividing the Aggregate Merger Consideration (as defined in the GRIID Agreement) by the total number of shares of GRIID Common Stock issued and outstanding as of the closing date of the Merger (the “Exchange Ratio”).

Upon closing, the Company issued 5,031,221 shares of Company Common Stock on October 30, 2024 for a total value of $ 60,677 , based on a price of $ 12.06 per share of Company Common Stock.

Pursuant to the GRIID Agreement, the Exchange Ratio determined the total number of shares issued, which includes the conversion of most GRIID restricted stock units and GRIID options into Company Common Stock.

Options that had an exercise price per share of GRIID Common Stock that was equal to or greater than the Merger Consideration Value were canceled for no consideration.

GRIID warrants outstanding and unexercised immediately prior to the Effective Time were automatically converted into warrants to purchase an aggregate of 960,395 shares of Company Common Stock, at an exercise price of $ 165.24 per share of Company Common Stock (the “Public Warrants”), and GRIID ’s private warrants were converted or assumed by the Company.

Pursuant to the GRIID Agreement, three types of warrants were issued:

(1) Public Warrants, which were classified as equity warrants, (2) private warrants classified as liability warrants (the “Private Warrants”), and (3) warrants related to an agreement with GEM Yield Bahamas Limited (the “GEM Warrants” ), which agreement had been entered into in connection with a previous acquisition and also classified as liability warrants (both subject to quarterly assessment).

The private warrants and GEM Warrants were classified as liability warrants.

As a result of a transfer of ownership of the private warrants, pursuant to the terms of the underlying agreement, the private warrants were converted to public warrants in January 2025, upon which they became equity classified warrants.

The total number of warrants issued was 22,803,726 , with a fair value of $ 6,097 as part of consideration transferred.

Concurrently with the GRIID Agreement, on June 26, 2024, the Company and GRIID entered into a senior secured term loan credit agreement (the “GRIID Credit Agreement”) and a co-location mining service agreement (the “Hosting Agreement”).

See Note 8 - Note Receivable from GRIID for more information on the GRIID Credit Agreement.

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The Hosting Agreement had an initial service term of one year with seven additional renewal terms, each for six months.

The GRIID Agreement provided that, among other things and subject to the terms and conditions of the GRIID Agreement, (1) Merger Sub will be merged with and into GRIID (the “Merger”), with GRIID surviving and continuing as the surviving corporation in the Merger, and, (2) at the Effective Time of the Merger, holders of each outstanding share of common stock, par value $ 0.0001 per share, of GRIID (“GRIID Common Stock”) would receive, in exchange for each share of GRIID Common Stock held immediately prior to the Merger (other than certain excluded shares), that number of shares of common stock, par value $ 0.001 per share, of the Company’s common stock (“Company Common Stock”) equal to the quotient obtained by dividing the Aggregate Merger Consideration (as defined in the GRIID Agreement) by the total number of shares of GRIID Common Stock issued and outstanding as of the closing date of the Merger (the “Exchange Ratio”).

Pursuant to the Merger Agreement, at the Effective Time:

• each GRIID restricted stock unit award that was outstanding immediately prior to the Effective Time immediately vested with respect to 100 % of the shares of GRIID Common Stock subject to such GRIID restricted stock unit award, which shares of GRIID Common Stock were converted into the right to receive the merger consideration with respect to each share of GRIID Common Stock.

Further, each outstanding vested compensatory option to purchase shares of GRIID Common Stock was canceled and converted into the right to receive approximately 0.01 of a share of Company Common Stock, which is the number of shares equal to the quotient of (i) the product of (A) the excess, if any, of the Merger Consideration Value (as defined in the GRIID Agreement) over the per share exercise price of the applicable option, multiplied by (B) the number of shares of GRIID Common Stock subject to such option immediately prior to the Effective Time, divided by (ii) $ 16.587 , which represents the volume-weighted average price of Company Common Stock for the two consecutive trading days prior to the date of the GRIID Agreement.

Any GRIID options that had an exercise price per share of GRIID Common Stock that was equal to or greater than the Merger Consideration Value were canceled for no consideration;

• each outstanding and unexercised warrant (each, a “GRIID Warrant”) to purchase shares of GRIID Common Stock was converted into a warrant to purchase a number of shares of Company Common Stock (each, a “Company Warrant”), rounded down to the nearest whole share, that is equal to the product of (A) the number of shares of GRIID Common Stock subject to such GRIID Warrant as of immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio.

The exercise price per share of Company Common Stock underlying such converted Company Warrant is equal to the quotient obtained by dividing (x) the per share exercise price applicable to such warrant immediately prior to the Effective Time by (y) the Exchange Ratio, rounded up to the nearest whole cent.

Each such Company Warrant is on the same terms and conditions as were applicable under such GRIID Warrant immediately prior to the Effective Time, except for such terms rendered inoperative by reason of the Merger or as otherwise set forth in the GRIID Agreement.

Upon closing, the Company issued 5,031,254 shares of Company Common Stock on October 30, 2024 with a $ 12.06 per common share value for a total approximate value of $ 60,600 .

GRIID RSUs were converted, vested GRIID options were converted or cancelled, and the GRIID Warrants outstanding and unexercised immediately prior to the Effective Time were automatically converted into warrants to purchase 960,395 shares of the Company’s common stock (the “Common Stock”), at an exercise price of $ 165.24 per share of Common Stock (the “Company Public Warrants”), and the GRIID private warrants were converted or assumed.

Due to the timing of the transaction closing on October 30, 2024, the Company is evaluating the impact of this acquisition on its consolidated financial statements;

it is impracticable to disclose the preliminary purchase price allocation.

Therefore, disclosures related to the acquisition, including the pro forma consolidated results and adjustments, amounts of major assets acquired and liabilities assumed, valuation method used to determine the fair value of the consideration transferred, qualitative factors about the goodwill recognized, and goodwill expected to be deductible for tax purposes are not yet available.

Disclosures regarding the impact of the acquisition will be provided in subsequent filings as the evaluation is finalized.

The primary purpose of the acquisition is to expand its mining capacity geographically.

The acquisition will be accounted for as a business combination.

Completed Asset Acquisitions

Tennessee Acquisition

The GRIID Acquisition, completed in October 2024, enhanced the Company’s bitcoin mining capacity, particularly in Tennessee, where it plans to expand in the coming years.

The GRIID Merger also broadened the Company’s operational footprint within the Tennessee Valley Authority service territory, offering greater geographic and power supply diversification.

Goodwill recognized in connection with the preliminary purchase price allocation represents the future economic benefits arising from planned operational synergies, expanded geographic space, operational facilities and data centers, and a bitcoin mining workforce.

The results of GRIID have been included in the Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s sole reportable segment, which is the bitcoin mining segment.

As of the GRIID Merger closing date the Company had $ 48,321 of tax deductible goodwill.

Upon completion of the acquisition on October 30, 2024, the Company consolidated the activities of GRIID, including the GRIID Credit Agreement and balances of receivables and payables under the Hosting Agreement, which effectively settled and is considered as additional purchase consideration is eliminated on the Consolidated Balance Sheets .

On October 30, 2024, the Company completed the GRIID Acquisition for a total purchase consideration of $ 128,247 , which is comprised of the following:

($ in thousands, except price per share)

Shares of CleanSpark common stock issued

Closing price per share of CleanSpark common stock on October 30, 2024

Fair value of CleanSpark common share issued as a portion of purchase price

Fair value of CleanSpark warrants issued as a portion of purchase price

Fair value of equity portion of purchase price

Cash consideration

Settlement of amounts payable by Company to GRIID under Hosting Agreement

Settlement of the GRIID Credit Agreement as a portion of purchase price

Settlement of preexisting relationship, including interest, as a portion of purchase price

Purchase price

The amounts in the table below represent the allocation of the purchase price to the acquired assets and liabilities assumed based on their respective estimated fair values on the date of acquisition.

The excess purchase price over the net assets acquired has been recorded as goodwill.

The net assets acquired as of the acquisition date are presented as follows:

($ in thousands)

Adjusted Balance

Tangible assets

Cash and cash equivalents

Restricted cash

Accounts receivable

Prepaid expense and other current assets

Property and equipment

Other long-term assets

Operating lease right of use assets

Total tangible assets acquired

Intangible assets

Total assets acquired

Liabilities assumed

Accounts payable

Accrued liabilities

Finance lease obligations

Operating lease liabilities

Other liabilities

Total liabilities assumed

Net assets acquired

The purchase price for GRIID has been allocated to assets acquired and liabilities assumed based on the Company’s best estimates and assumptions using the information available as of the acquisition date and throughout measurement period (up to one year from the acquisition date).

The preliminary purchase price allocation was updated for measurement period adjustments primarily related to revised assessments of pre-acquisition amounts, including a deposit receivable adjustment decreasing our goodwill by $ 4,008 , accrued federal and state taxes which decreased goodwill by $ 870 , an accounts payable adjustment which increased goodwill by $ 1,726 , and other immaterial adjustments collectively decreasing goodwill by $ 442 .

In total, goodwill decreased by $ 3,594 .

The Company recognized merger costs of $ 502 related to the acquisition of GRIID, consisting primarily of legal fees, during the year ended September 30, 2025.

The Consolidated Financial Statements include these costs in professional fees account.

Consolidated revenues generated from the locations acquired from GRIID for the year ended September 30, 2025, since the acquisition date, are $ 102,773 .

It is impracticable to determine the earnings recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the same period as we completed the integration of a substantial portion of GRIID into our ongoing operations during the current period.

Unaudited supplemental pro forma financial information

The financial information in the table below summarizes the combined results of operations of the Company and GRIID, on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2023 or of results that may occur in the future.

The following unaudited pro forma information for the years ended September 30, 2025 and 2024 combines the historical results of the Company and GRIID, as converted to U.S.

GAAP, for the respective periods:

We based the foregoing pro forma results on estimates and assumptions that we believe are reasonable.

The pro forma results include adjustments primarily related to purchase accounting.

For the year ended September 30,

($ in thousands)

Pro forma revenue

Pro forma net income (loss) from continuing operations

Mawson Infrastructure Group - Sandersville, GA

On October 8, 2022, the Company completed the acquisition of a lease for approximately 16.35 acres of real property located in Sandersville, Washington County, Georgia (the “Mawson Property”), all personal property located on the Mawson Property, and 6,349 application-specific integrated circuit miners (the “ASICs”) from subsidiaries of Mawson Infrastructure Group, Inc., a Delaware corporation (“Mawson”), all pursuant to a Purchase and Sale Agreement dated September 8, 2022 and an Equipment Purchase and Sale Agreement dated September 8, 2022 (the “Mawson Transaction”).

The Company paid the following consideration to Mawson for the Mawson Property:

(i) $ 13,500 in cash;

(ii) 1,590,175 shares (the “Closing Shares”) of the Company's common stock (which had a value of $ 4,803 based upon the closing price of the common stock on October 7, 2022), and (iii) $ 6,500 in seller financing in the form of a promissory note.

The Company also paid $ 9,018 in cash within 15 days of the closing for the ASICs.

The following additional contingent consideration was included in the purchase price:

• up to 1,100,890 shares of the Company's common stock (the “Earn-out Shares”) (which have a value of approximately $ 3,325 based upon the closing price of the Company's common stock on October 7, 2022), based upon the number of modular data centers on the Mawson Property occupied by Mawson being emptied and made available for the Company’s use.

These Earn-out Shares had been classified as a liability in the Consolidated Balance Sheets in accordance with ASC 480, and accordingly, were reported at fair value at the end of each reporting period.

As of December 31, 2022, the fair value of this contingent liability was reduced to $ 2,840 from $ 3,325 , resulting in a change in fair value of contingent consideration of $ 484 in Other Income (expense) in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The shares associated with the earn-out were issued to Mawson in January 2023 (see Note 15 - Stockholders' Equity).

• up to an additional $ 2,000 in a seller-financed earn-out payable at least 60 days post-closing if the Company receives written confirmation that it will be able to utilize at least an additional 150 MW of power on the Mawson Property by the six-month anniversary of the closing, April 8, 2023.

Such written confirmation was not received by April 8, 2023, and accordingly, the Company determined this contingency criteria was not met by April 8, 2023 and has not paid the additional consideration.

The Company adjusted the contingency liability to $ 0 as of June 30, 2023 and recognized $ 2,000 gain in Change in Fair Value of Contingent Consideration on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company accounted for this transaction as an acquisition of a business.

The fair value of the consideration given to Mawson and the other sellers in connection with the transaction and the allocation of the purchase price in accordance with ASC 820 were as follows:

($ in thousands)

Financing provided by seller

1,590,175 shares of CLSK common stock

Total purchase price

Contingent Consideration

Earn-out Shares of CLSK common stock

Megawatt earnout (up to $ 2,000 max)

Total contingent consideration

Total purchase sale agreement consideration

($ in thousands)

Allocation at Acquisition Date

Right of use lease asset

Lease liability assumed

Infrastructure asset

Machinery and equipment

There were no subsequent adjustments to the allocation of the purchase price after the preliminary allocation.

Asset Acquisitions

Georgia acquisition - LaFayette, GA

On May 13, 2025, CSRE Properties, LLC, a Georgia limited liability company and wholly-owned subsidiary of the Company, entered into an asset purchase agreement with MGT Capital Investments, Inc., to acquire real estate and certain mining related infrastructures in LaFayette, Georgia.

The Company completed the acquisition for a combined purchase price of $ 1,413 , which included $ 1,350 in total cash considerations and $ 63 in transaction costs.

The transaction was accounted for as an asset acquisition, whereby the total purchase price was allocated first to the fair value of the assets acquired and any excess purchase price was allocated to the acquired assets pro-rata.

No goodwill is calculated in an asset acquisition.

($ in thousands)

Allocation at Acquisition Date

Infrastructure

Land improvements

Building improvements

Georgia acquisition - Twin City, GA

On January 21, 2025, CSRE Properties Sandersville, LLC, a Georgia limited liability company and wholly-owned subsidiary of the Company, entered into an asset purchase agreement with Apex Data Centers Inc., (“Apex Data”) to acquire a bitcoin mining facility and certain related infrastructures in Twin City, Georgia (the “Twin City Property”).

The Company completed the acquisition for a combined purchase price of $ 5,900 , which included $ 5,400 in total cash considerations, $ 90 in transaction costs, and $ 410 in lease liabilities assumed.

No goodwill is calculated in an asset acquisition.

($ in thousands)

Allocation at Acquisition Date

Infrastructure

Leasehold improvements

Finance lease liability

Tennessee acquisitions

On September 10, 2024, CleanSpark TN, LLC, a wholly-owned subsidiary of the Company (the “TN MIPA Buyer”), entered into three definitive Membership Interest Purchase Agreements (each, a “MIPA”, and collectively, the “TN MIPAs”) with Exponential Digital, LLC (the “TN MIPA Seller”) to acquire seven bitcoin mining facilities located in Tennessee for a total purchase price of $ 25,000 .

9 unchanged sentences

and Tazewell, TN.

The Company completed the acquisition of MIPA 1 and MIPA 3 on September 16, 2024 and September 25, 2024, respectively.

Meanwhile, the Company closed on MIPA 2 and the RE PSA in October 2024;

see Note 19 - Subsequent Events.

The Company completed the acquisition of MIPA 1 and MIPA 3 on September 16, 2024, September 25, 2024 and October 11, 2024, respectively.

The transaction was accounted for as an asset acquisition, whereby the total purchase price is allocated first to the fair value of the assets acquired and any excess purchase price is allocated to the acquired assets pro-rata.

No goodwill is calculated in an asset acquisition.

T he combined purchase price is $ 28,103 , which includes $ 27,500 in cash considerations payable to the TN MIPA Seller per the MIPAs and RE PSA, $ 231 incurred for direct acquisition costs, and $ 372 in assumed lease liabilities.

As of September 30, 2024 , the Company has paid or incurred $ 18,376 of the total purchase price and the difference between (1) the amount paid and incurred pursuant to direct transaction costs and (2) the amount allocated for completed components of the asset acquisition is recorded in Other long-term asset on the Consolidated Balance Sheets in the amount of $ 4,731 .

The expected total purchased assets and liabilities upon completion of all MIPAs and RE PSA is presented below as “ Expected Total Allocation Including Subsequent Periods ” and the allocation of the assets associated with MIPA 1 and MIPA 3 is included in “ Allocation as of September 30, 2024 ” in the table below:

T he combined purchase price is $ 29,854 , which includes $ 27,500 in cash considerations payable to the TN MIPA Seller per the MIPAs and RE PSA, transfer of mining data center containers worth $ 1,750 , $ 232 incu rred for direct acquisition costs and $ 372 in assumed lease liabilities.

The allocation of the purchase price of the assets acquired are summarized below:

($ in thousands)

Allocation as of September 30, 2024

Expected Incremental Acquisitions In Subsequent Periods

Expected Total Allocation Including Subsequent Periods

Allocation at Acquisition Date

Land improvements

2 unchanged sentences

Operating lease liability

The Company assumed lease liabilities as of September 30, 2024 of $ 344 .

Under the terms of the TN MIPAs, the TN MIPA Buyer will pay the TN MIPA Seller the respective consideration under each MIPA described above (less an aggregate holdback amount of $ 1,250 , subject to adjustment as set forth in the TN MIPAs) at the respective closing of each MIPA.

The holdback amount is payable 60 days following the close of each MIPA, the total holdback amount of $ 955 attributable to MIPA 1 and MIPA 3 is due in November 2024 (included in Accrued liabilities in the Consolidated Balance Sheets as of September 30, 2024).

Mississippi acquisition - Clinton, MS

6 unchanged sentences

($ in thousands)

Allocation at

Allocation at Acquisition Date

Construction in progress

4 unchanged sentences

On May 8, 2024, CSRE Properties Wyoming, LLC, a Wyoming limited liability company and wholly-owned subsidiary of the Company (the “Wyoming Buyer”) entered into a Purchase and Sale Agreement with MineOne Wyoming Data Center LLC (“MineOne”), pursuant to which the Wyoming Buyer agreed to purchase real property located in Wyoming.

On May 29, 2024, the Wyoming Buyer entered into new purchase and sale agreements with MineOne, collectively amending and restating the original agreement dated May 8, 2024 due to federal regulatory consent requirements

relating to Parcel 1.

As a result, the agreement was renegotiated and split into two agreements:

17 unchanged sentences

($ in thousands)

Allocation at

Allocation at Acquisition Date

Building/Improvements

2 unchanged sentences

Operating lease liability

Mississippi Locations Acquisition - Meridian, Vicksburg and Wiggins, MS

Mississippi acquisitions - Meridian, Vicksburg and Wiggins, MS

On February 26, 2024, the Company, through its wholly-owned subsidiary CSRE Properties Mississippi, LLC, closed on the Purchase and Sale Agreement entered into with Makerstar on February 5, 2024, pursuant to which the Company agreed to purch ase three bitcoin mining facilities in Mississippi for $ 19,771 (including direct acquisition costs of $ 148 ).

4 unchanged sentences

($ in thousands)

Allocation at

Allocation at Acquisition Date

Building/Improvements

8 unchanged sentences

The allocation of the purchase price of the assets acquired is summarized below:

Purchase Price Allocation:

($ in thousands)

Allocation at

Allocation at Acquisition Date

Building/Improvements

2 unchanged sentences

The construction was substantially completed, and the facility began bitcoin mining operations, on April 4, 2024.

Dalton 1 & 2 Acquisition - Dalton, GA

Dalton 1 & 2 acquisitions - Dalton, GA

On June 21, 2023, the Company completed the acquisition of two bitcoin mining facilities in Dalton, Georgia for $ 9,389 .

4 unchanged sentences

($ in thousands)

Allocation at

Allocation at Acquisition Date

Infrastructure

Land lease - right of use asset

Right of use land lease asset

Operating lease liability

Mawson Infrastructure Group - Sandersville, GA

The Company paid the following consideration to Mawson for the Mawson Property:

(i) $ 13,500 in cash;

The Company also paid $ 9,018 in cash within 15 days of the closing for the ASICs.

The following additional contingent consideration was included in the purchase price:

The shares associated with the earn-out were issued to Mawson in January 2023 (see Note 14 - Stockholders' Equity).

Such written confirmation was not received by April 8, 2023, and accordingly, the Company determined t his contingency criteria was not met by April 8, 2023 and has not paid the additional consideration.

The Company accounted for this transaction as an acquisition of a business.

The fair value of the consideration given to Mawson and the other sellers in connection with the transaction and the allocation of the purchase price in accordance with ASC 820 were as follows:

($ in thousands)

Financing provided by seller

1,590,175 shares of CLSK common stock

Total purchase price

Contingent Consideration

Earn-out Shares of CLSK common stock

Megawatt earnout (up to $ 2,000 max)

Total contingent consideration

Total purchase sale agreement consideration-Combined

($ in thousands)

Allocation at

Acquisition Date

Right of use lease asset

Lease liability assumed

Infrastructure asset

Machinery and equipment

There were no subsequent adjustments to the allocation of the purchase price after the preliminary allocation.

As of September 30, 2025 and 2024 , the Company held 10,428 and 6,819 bitcoin, respectively.

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The following table presents information based on the activity of bitcoin for the years ended September 30, 2025 and 2024:

For the year ended September 30,

($ in thousands)

Balance at beginning of the year

September 30, 2025

September 30, 2024

Beginning Balance - before cumulative effect change

Cumulative effect of the adoption of ASC 350-60

Adjusted beginning balance - at fair value

Adjusted beginning balance after cumulative effect change

Addition of bitcoin from mining activities (1)

Bitcoin sold & issued for services and purchase of software

Bitcoin purchased

Bitcoin issued for services and other non-cash consideration

Bitcoin transferred to collateral account

Bitcoin received from collateral account

Impairment loss

Gain on fair value of bitcoin, net

Balance at end of the year

Gain on fair value of bitcoin

Ending Balance (2)

(1) Net of mining pool fees as described in Note 2 - Summary of Significant Accounting Policies .

The Company's bitcoin holdings shown in this note, excluding the bitcoin posted as collateral to the Coinbase Line of Credit as described in Note 12 - Loans, are not subject to rehypothecation and do not serve as collateral for any existing loans or agreements.

(2) Includes Bitcoin - current of $ 966,829 and Bitcoin - noncurrent of $ 222,614 as presented within the Consolidated Balance Sheets as of September 30, 2025 .

The Company's bitcoin holdings shown in this note are not subject to rehypothecation and do not serve as collateral for any existing loans or agreements (see Note 7 - Receivable from Bitcoin Collateral).

As of September 30, 2025, the Company held approximately 98 % of its bitcoin in cold storage and 2 % in hot wallets.

The cumulative realized gains from dispositions of bitcoin during the year ended September 30, 2024 w as $ 63,878 .

There were no cumulative realized losses from dispositions of bitcoin during the year ended September 30, 2024 .

The Company recognized cumulative realized gains from dispositions of bitcoin of $ 385,177 and $ 63,878 during the years ended September 30, 2025 and 2024 , respectively.

There were no cumulative realized losses from dispositions of bitcoin during the years ended September 30, 2025 and 2024 .

RECEIVABLE FROM BITCOIN COLLATERAL

Under the terms of certain arrangements, the Company gives away the right to direct bitcoin it posted as collateral but retains the right to the economic benefits of those bitcoin.

In such cases, where control of the collateralized bitcoin has been transferred, the Company records a note receivable equivalent to the fair value of the posted bitcoin.

That receivable is reclassified into current bitcoin upon repayment or release of the collateral.

Not all bitcoin pledged as collateral results in derecognition.

The Company continues to report collateralized bitcoin within its bitcoin balance when it retains control, including the ability to substitute or otherwise direct its use.

For arrangements that involve transfer of control, as of September 30, 2025, posted bitcoin collateral related to bitcoin-backed lines of credit (see Note 13 - Indebtedness) and derivative trading relationships with certain counterparties.

Lenders and derivative counterparties serve as custodians of collateral posted under these arrangements.

The bitcoin collateral posted may fluctuate during the reporting period and in may be returned when positions are closed.

The Company expects to continue trading with its counterparties in the normal course of operations and may be required to post collateral in connection with such transactions (see Note 9 - Investments and Derivatives).

The portion of collateral subject to derecognition is presented on the Consolidated Balance Sheets as Receivable from bitcoin collateral.

At September 30, 2025, the Company reported Receivable from bitcoin collateral related to 2,583 bitcoin with a fair value of $ 294,648 , compared to 1,229 bitcoin with a fair value of $ 77,827 posted as of September 30, 2024.

At September 30, 2025, the Receivable from bitcoin collateral included 2,384 bitcoin with a fair value of $ 271,932 , held by Coinbase in connection with a line of credit, with the remaining balance posted to derivative trading counterparties.

The receivable is initially recognized and subsequently measured at fair value.

Changes in fair value are recorded in Gain on bitcoin collateral within Other income (expense) in the Consolidated Statements of Operations and Comprehensive Income (Loss).

For the year ended September 30, 2025, the Company recognized a gain of $ 92,190 related to bitcoin collateral, compared to a gain of $ 1,475 for the year ended September 30, 2024 .

NOTE RECEIVABLE FROM GRIID

On June 26, 2024, concurrent with the GRIID Agreement (see Note 5 - Acquisitions), the Company entered into the GRIID Credit Agreement, which is a senior secured term loan under which the Company provided a term loan of $ 55,919 to GRIID, which GRIID is permitted to use solely for certain purposes as set forth in the GRIID Credit Agreement.

On August 2, 2024, the Company and GRIID amended and restated the GRIID Credit Agreement (as amended and restated, the “A&R GRIID Credit Agreement”) to include, in addition to the term loan amount, a new delayed draw term loan facility of $ 40,000 , which amounts GRIID is permitted to request pursuant to the terms of the A&R GRIID Credit Agreement and use solely for certain purposes as set forth in the A&R GRIID Credit Agreement.

The Company may make one or more delayed draw term loans (each, a "Draw Loan") to GRIID from August 2, 2024 until the earlier of June 26, 2025 or the termination of the merger transaction defined in Note 5 - Acquisitions.

Each borrowing shall be in a principal amount of $ 250 or a whole multiple of $ 100 in excess thereof.

The outstanding amount of Draw Loans shall bear an interest of 8.5 % per annum from the date any such Draw Loan is made to the day it is paid in full.

Pursuant to the A&R GRIID Credit Agreement, any amounts borrowed and repaid prior to the maturity date cannot be reborrowed.

Nearing the end of fiscal year 2024, the Company continued to assess the credit risk associated with a note receivable from GRIID.

This note primarily financed infrastructure improvements expected to provide long-term utility and strategic benefit to the Company, which significantly reduces the likelihood of credit loss.

Based on this evaluation, the Company has determined that the risk of credit loss is immaterial and, accordingly, has not recognized a material allowance for credit losses related to this note.

The Company monitored this exposure, but has acquired GRIID prior to the report date as discussed in the Note 5 - Acquisitions and Note 19 - Subsequent Events.

The maturity date of the term loan is deemed to be the earlier of (i) June 26, 2025, or (ii) 90 days after the termination of the merger transaction between the Company and GRIID under the GRIID Agreement (other than a termination resulting solely from the breach of the Company).

On the maturity date, the principal and any accrued but unpaid interest will be due and payable.

The term loan bears interest at a rate of 8.5 % per annum.

This note matured as part of the acquisition of GRIID, subsequent to the balance sheet date, as noted above.

The GRIID Credit Agreement contains customary representations, warranties, covenants, and events of default for a term loan of this type.

As of September 30, 2024, the Note receivable from GRIID balance was $ 60,919 and interest receivable balance included in Prepaid expenses and other current assets was $ 1,286 , within the Consolidated Balance Sheet.

On June 26, 2024, concurrent with the GRIID Agreement (see Note 5 - Acquisitions ), the Company entered into the GRIID Credit Agreement, which is a senior secured term loan under which the Company provided a term loan of $ 55,919 to GRIID, which GRIID was permitted to use solely for certain purposes as set forth in the GRIID Credit Agreement.

On August 2, 2024, the Company and GRIID amended and restated the GRIID Credit Agreement (as amended and restated, the “A&R GRIID Credit Agreement”) to include, in addition to the term loan amount, an additional delayed draw term loan facility of $ 40,000 , which amounts GRIID was permitted to request pursuant to the terms of the A&R GRIID Credit Agreement and use solely for certain purposes as set forth in the A&R GRIID Credit Agreement.

The outstanding amounts of the draw loans bear interest of 8.5 % per annum.

On October 30, 2024, concurrent with the acquisition of GRIID, the term loans and the associated interest receivable in the amount of $ 62,636 were effectively settled and included as consideration for the acquisition of GRIID (see Note 5 - Acquisitions).

As of September 30, 2025 and 2024, the Note receivable from GRIID balance was $ 0 and $ 60,919 , respectively, and interest receivable balance included in Prepaid expenses and other current assets was $ 0 and $ 1,286 , respectively, within the Consolidated Balance Sheets .

INVESTMENTS AND DERIVATIVES

As of September 30, 2024 and September 30, 2023, the Company had total investments of $ 2,750 and $ 3,423 , respectively, comprised of the following:

Interest Rate Swap Derivative

In relation to the Company’s Western Alliance Bank Credit Agreement entered into in August 2024, the Company has an interest rate swap agreement (see Note 12 - Loans) for which the interest rate swap is not a designated hedge.

As of September 30, 2024, the Interest Rate Swap Derivative was fair valued at a $ 100 unrealized loss which is included in Other current liabilities on the Consolidated Balance Sheet.

International Land Alliance, Inc.

On November 5, 2019, the Company entered in a binding Memorandum of Understanding (the “MOU”) with International Land Alliance, Inc.

(“ILAL”), a Wyoming corporation, to lay a foundational framework where the Company will deploy its energy solutions products and services to ILAL, its energy projects, and its customers.

In connection with the MOU, and to support the power and energy needs of ILAL's development and construction of certain projects, the Company entered into a Securities Purchase Agreement (“SPA”), dated as of November 6, 2019, with ILAL.

ILAL Series B Preferred Stock (Investment in Debt Securities) and Embedded ILAL Derivative Asset

Pursuant to the terms of the SPA with ILAL, the Company purchased 1,000 shares of Series B Preferred Stock of ILAL (the “Series B Preferred Stock”) for an aggregate purchase price of $ 500 (the “Stock Transaction”), less certain expenses and fees.

The Series B Preferred Stock accrues cumulative dividends in-kind at a rate of 12% per annum and was redeemable on August 6, 2020.

The Series B Preferred Stock can be converted into common stock at a variable rate (refer the discussion on embedded derivative assets below).

This variable conversion ratio will increase by 10% with the occurrence of certain events.

Since the investments were not redeemed on August 6, 2020, they are now redeemable at the Company’s option in cash or into common stock, based on the conversion ratio.

The Series B Preferred Stock is recorded as an AFS debt security and is reported at its estimated fair value as of September 30, 2024 .

Any change in the fair values of AFS debt securities are reported net of income tax as an element of Other Comprehensive income.

The Company accrued no interest (net of allowance) on its available-for-sale debt securities, as of September 30, 2024 and 2023, respectively.

The fair value of the Company’s investment in the Series B Preferred Stock was $ 918 and $ 726 as of September 30, 2024 and 2023, respectively.

The Company has included gain on fair value of Series B Preferred Stock amounting to $ 192 and $ 116 for the years ended September 30, 2024 and 2023, respectively, as part of other comprehensive income in the Consolidated Statements of Operations and Comprehensive Loss.

The Company has deemed the variable conversion feature (the “ILAL Derivative Asset”) of Series B Preferred Stock an embedded derivative instrument in accordance with ASC 815, Derivatives and Hedging .

This topic requires the Company to account for the ILAL Derivative Asset on its balance sheet at fair value and account for changes in fair value as a derivative gain or loss.

Changes in fair value of the ILAL Derivative Asset are presented as Other income (expense) in the Consolidated Statements of Operations and Comprehensive Loss.

Total fair value of investment in ILAL Derivative Asset as of September 30, 2024 and 2023 was $ 1,832 and $ 2,697 , respectively and as included in Derivative assets on the Consolidated Balance Sheet.

The Company fair values the debt security as a straight debt instrument based on liquidation value, accrued interest to date , and an estimated 60 % recovery rate for first-lien debt, which is an unobservable input .

The fair value of the ILAL Derivative Asset is based on the difference in the fair value of the Series B Preferred Stock determined as a straight debt instrument and the fair value of the Series B Preferred Stock if converted as of the reporting date.

Commitment shares - Common stock of ILAL

Pursuant to the terms of the SPA with ILAL, the Company received 350,000 shares (commitment shares) of ILAL's common stock.

The commitment shares were fully earned at the time of execution of the agreement.

The Company sold 334,611 shares at various prices and fair valued the remaining 15,389 shares at the closing stock price of ILAL as of September 30, 2021.

During the year ended September 30, 2022, the Company sold 15,389 commitment shares, and recorded realized gain on sale of shares for $ 1 .

Investment in Equity Securities - LawClerk

In February 2020, the Company made a $ 250 strategic relationship investment in LawClerk for 200,000 Series A Preferred Shares of LawClerk.

This investment is recorded on a cost basis and adjusted for observable transactions for same or similar investments of the issuer (referred to as the measurement alternative) or impairment.

The Company annually performs impairment analysis on this investment and concluded that the investment was not recoverable and accordingly recorded an impairment of $ 250 for the year ended September 30, 2022.

Refer to the table below for a roll forward of assets carried at fair value on a recurring basis that utilize level 3 inputs to determine fair value:

As of September 30, 2025 and 2024, the Company had total investments of $ 233 and $ 2,750 , respectively.

The Company has no derivative instruments designated as hedging instruments.

The Company’s bitcoin-linked derivative activities undertaken as part of its broader bitcoin treasury management strategy are referred to collectively as “Digital Asset Management” (“DAM”).

The following table set forth the carrying value of all investments and derivative instruments, aside from the Company’s warrant liability, as of September 30, 2025:

Fair value measurements for derivative instruments

Consolidated Balance Sheet classification:

Investment in debt security, AFS, at fair value

Derivative investments

Other current liabilities

($ in thousands)

Interest Rate

Swap Derivative (1)(3)

ILAL Equity Securities

Balance as of September 30, 2021

Shares sold during the year

Realized gain on fair value recognized in other income (expense)

Unrealized loss recognized in other income (expense)

Impairment loss

Unrealized gain on fair value recognized in Other comprehensive income

Balance as of September 30, 2022

Unrealized loss recognized in other income (expense)

Unrealized gain on fair value recognized in Other comprehensive income

Balance as of September 30, 2023

Unrealized loss on derivative asset

Unrealized gain on fair value recognized in other comprehensive income

ILAL Derivative

Interest Rate Swap

Balance as of September 30, 2022

(1) The "Other current liabilities" caption in the Consolidated Balance Sheet includes the Interest Rate Swap Derivative.

(2) The "Derivative investments" caption in the Consolidated Balance Sheet consists of ILAL Derivative Asset.

(3) See Note 12 - Loans

Total gains or losses for the period

Loss on derivative securities

Other comprehensive (loss) income, net of tax

Balance as September 30, 2023

Total gains or losses for the period

Loss on derivative securities

Other comprehensive (loss) income, net of tax

Balance as September 30, 2024

Total gains or losses for the period

(Loss) gain on derivative securities

Other comprehensive (loss) income, net of tax

Purchases, sales, and settlements

Purchased and acquired options

Sales and written options

Settlements and expiries

Balance as September 30, 2025

Bitcoin treasury derivatives

During April 2025, as part of a broader bitcoin treasury management 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.

These contracts serve as a strategic alternative to selling bitcoin directly and are intended to monetize the Company’s bitcoin holdings while managing exposure to adverse price movements.

The types of derivatives utilized for this purpose may include bitcoin futures, options, and other structured instruments.

These contracts are typically short-term in nature and may be cash-settled or settled in-kind.

Derivative contracts are measured at fair value, with changes in fair value and settlements recognized in earnings in the period in which they occur.

The instruments are not designated as hedging instruments for accounting purposes under ASC 815, Derivatives and Hedging .

The Company evaluates all financing and service agreements for potential embedded derivative features that may require bifurcation.

All derivative instruments are recorded in the Consolidated Balance Sheets at fair value and are classified as current or noncurrent based on the expected timing of settlement.

Gains and losses related to a derivative executed as part of the Company’s bitcoin treasury management strategy, both realized and unrealized, are reported on the Consolidated Statements of Operations and Comprehensive Income (Loss) within Loss on derivative securities, net within Other income (expense).

Covered call contracts that were settled through physical delivery of bitcoin resulted in total cash proceeds of $ 134,209 during the year ended September 30, 2025.

These proceeds are included within the Proceeds from sale of bitcoin line item in the Consolidated Statements of Cash Flows.

The Company recognized a total gain, net, from covered call activity of $ 6,551 during the same period and are included in Loss on derivative securities, net in the Consolidated Statements of Operations and Comprehensive Income (Loss).

During the period, the Company entered into miner procurement arrangements with Bitmain that included a contractual option to repurchase an equivalent amount of bitcoin at a fixed U.S.

dollar price.

These repurchase rights are accounted for as derivatives and presented above as Bitmain Derivative and are recorded at fair value in the Consolidated Balance Sheets.

The Bitmain options are bitcoin-linked derivatives but were not entered into as part of the Company’s DAM strategy and are therefore excluded from DAM activity.

During the year ended September 30, 2025, the Company exercised one of its derivative contracts with Bitmain under the miner procurement arrangements.

Upon exercise, the derivative was settled and removed from the Consolidated Balance Sheets, resulting in a realized loss of $ 5,448 , which is included in Loss on derivative securities, net within the Consolidated Statements of Operations and Comprehensive Income (Loss).

The remaining Bitmain contract continues to be accounted for as a derivative and measured with a fair value of $ 233 .

The unrealized loss of $ 6,850 is included in Loss on derivative securities, net in the Consolidated Statements of Operations and Comprehensive Income (Loss) as of September 30, 2025.

As part of its bitcoin treasury management activities, the Company also executes derivative transactions with certain counterparties.

These arrangements are currently structured as short-term instruments and are used to provide liquidity and manage exposure to bitcoin price movements.

Aside from the Bitmain Derivative, no bitcoin-linked derivative contracts were outstanding as of September 30, 2025;

however, the Company continues to maintain trading relationships with these counterparties.

Net gain recognized from these activities totaled $ 6,551 during the year ended September 30, 2025 and are included in Loss on derivative securities, net within the Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company maintains a small amount of bitcoin collateral with these organizations in connection with such transactions (see Note 7 - Receivable from Bitcoin Collateral for further discussion).

Interest rate swap derivative

The Company is party to two interest rate swap agreements, neither of which is designated as a hedge for accounting purposes.

These derivatives are recorded at fair value on the Consolidated Balance Sheets with changes in fair value recognized in current earnings within Loss on derivative securities, net.

In relation to the Company’s Western Alliance Bank Credit Agreement entered into in August 2024, the Company holds an interest rate swap agreement (see Note 13 - Indebtedness).

As of September 30, 2025, this interest rate swap derivative was recorded as a fair value liability of $ 66 , reflecting a gain of $ 34 during the year ended September 30, 2025, respectively.

As of September 30, 2024, the derivative was recorded as a fair value liability of $ 100 .

In April 2025, the Company entered into a second interest rate swap agreement in connection with the refinancing of its corporate facility mortgage (see Note 13 - Indebtedness).

As of September 30, 2025, the swap derivative was recorded as a fair value liability of $ 27 , reflecting a loss of $ 27 during the year ended September 30, 2025.

As of September 30, 2025, the interest rate swap derivatives were recorded as a combined fair value liability of $ 93 .

Changes in the fair value of the swaps resulted in a net gain of $ 7 for the year ended September 30, 2025.

International Land Alliance, Inc.

The Company’s former investment in International Land Alliance, Inc.

(“ILAL”) consisted of ILAL Debt Securities, representing Series B Preferred Stock acquired in November 2019, and an associated ILAL Derivative Asset arising from an embedded conversion feature within that preferred stock.

The ILAL Debt Securities were classified as available-for-sale debt securities, with unrealized gains and losses recorded in Accumulated Other Comprehensive Income (Loss), and the ILAL Derivative Asset was measured at fair value with changes recognized in earnings.

These instruments had been remeasured at fair value each reporting period through the Company’s quarter ended June 30, 2025.

In August 2025, the Company and ILAL reached a settlement resolving all outstanding amounts and claims related to the investment.

Under the settlement terms, ILAL was obligated to pay total consideration of $ 1.5 million in two installments:

$ 1.2 million due by September 24, 2025 and $ 0.3 million due by November 24, 2025.

In connection with the settlement, the Company derecognized the ILAL Debt Securities and the ILAL Derivative Asset, reclassified the cumulative unrealized amounts previously recorded in Accumulated Other Comprehensive Income (Loss) into earnings, and recorded a settlement receivable for the stated consideration.

As of September 30, 2025, ILAL had not executed the settlement or made any payments due under its terms.

Because collectability of the settlement amount was not deemed probable, the Company recorded a full allowance for doubtful accounts against the settlement receivable, resulting in a net carrying amount of $ 0 as of the balance-sheet date.

The offsetting charge was recognized within Other income (expense) for the period.

The allowance will be maintained until such time as additional information indicates that collection is probable.

Following these actions, all ILAL-related balances were eliminated from the Company’s consolidated financial statements.

The settlement receivable, together with the related allowance, remains disclosed for completeness, although no further activity or income impact is expected absent recovery of amounts due.

The Company continues to monitor any subsequent developments that may affect its rights to enforce or recover the settlement consideration.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of September 30, 2024 and September 30, 2023:

Property and equipment consist of the following:

As of September 30,

($ in thousands)

September 30, 2024

September 30, 2023

Land improvements

6 unchanged sentences

Construction in progress

Property and equipment, gross

Accumulated depreciation

1 unchanged sentence

Depreciation expense for the years ended September 30, 2025, 2024 and 2023 was $ 344,135 , $ 152,469 and $ 118,615 , respectively.

During the year ended September 30, 2024 , $ 6,903 of property and equipment, net was disposed of for a loss of $ 5,466 , and during the year ended September 30, 2023 $ 1,966 of property and equipment, net was disposed of for a loss of $ 1,931 .

In April 2024, a bitcoin halving event took place.

A bitcoin halving event, which occurs approximately every four years, reduces the block reward for bitcoin miners by 50 %.

This directly impacts the Company’s revenue generation from mining activities.

As a result of the bitcoin halving event and the execution of the 100,000 miner purchase option for new Bitmain Antminer S21 Pro models (see Note 18 - Commitments and Contingencies), the Company concluded that various miner models (S19J, S19 J Pro and S19 J Pro+) would be removed from service and replaced with newer, more efficient miner models.

The planned replacement is expected to be completed by December 31, 2024.

Accordingly, the Company performed an impairment test on the miners planned for replacement, resulting in an impairment charge of approximately $ 189,000 .

The fair value less residual value of the impaired miners will depreciated over the remaining period in which they are operating.

Significant inputs in the fair value calculation was future bitcoin prices, forecasted global hashrate and estimated future power prices.

Effective May 1, 2024, as a result of new information about actual lives of its bitcoin miners based on historical experience and advancements in overall miner efficiency, the Company has reduced the useful lives of miners from five years to three years .

The impact of the change in useful lives of miners from five to three years increased depreciation expense and loss before income tax expense by approximately $ 7,261 for the year ended September 30, 2024 , and decreased basic and diluted earnings per share by $ 0.03 for the year ended September 30, 2024.

In the fourth quarter of fiscal 2024, the Company began to engage in transactions to sell off certain miners that had been removed from service.

The Company noted that the prevailing re-sell market rates decreased between June 2024 to September 2024, and as a result, the Company further changed its estimated salvage value of all of its out of service miners and recorded an impairment charge of approximately $ 7,800 in the fourth quarter of fiscal year 2024.

The combined impairment charges for the year ended September 30, 2024 totaled approximately $ 197,000 , which is recorded in the Consolidated Statements of Operations and Comprehensive Loss as "Impairment expense - fixed assets".

The Company placed in service property and equipment of $ 570,931 during the year ended September 30, 2024, which included $ 7,190 in machinery and equipment acquired in equipment loan transactions.

This increase in fixed assets primarily consisted of miners and mining equipment amounting to $ 472,670 .

Depreciation expense attributable to miners for the years ended September 30, 2025, 2024 and 2023 was $ 306,915 , $ 133,733 and $ 107,946 , respectively.

The Company had additions to property and equipment of $ 808,178 during the year ended September 30, 2025, which included $ 678,266 in miners acquired, which is the primary cause of the increase of fixed assets.

Assets acquired through acquisition transactions (see Note 5 - Acquisitions) resulted in an additional $ 39,298 in total assets placed in service.

Additionally, in January 2024, the Company purchased raw land next to the Sandersville, GA location for approximately $ 1,038 .

On April 7, 2023, CleanSpark HQ, LLC (“HQLLC”), a single member limited liability company and subsidiary wholly owned by the Company, purchased certain real property located in Henderson, Nevada (the "Eastern Property") for $ 4,100 .

The property consists of office space.

The Company utilizes this office space as its new corporate headquarters.

The real property is recorded in building and building improvements and was placed in service in the first quarter of fiscal 2024.

On May 1, 2023, the Company entered into a Purchase and Sale agreement with the Development Authority of Washington County to purchase 16.35 acres of land that was previously leased by the Company and an additional 10 acres of parcels in Sandersville, GA for a purchase price of $ 1,300 (the agreement was subsequently amended in June 2023 to increase the purchase price to $ 1,400 ).

The leased land had been subject to an operating lease which was acquired by the Company under the Mawson Transaction.

In accordance with ASC 842-Leases, the Company reassessed the lease classification as a finance lease and recorded land at the present value of the lease term (net of the carrying amount of the operating lease at time of conversion) and the land was recorded at $ 1,167 .

The land was also reclassified from finance lease right of use asset to land upon final payment being made on June 30, 2023.

During the year ended September 30, 2025, the Company had disposals of property with a net book value of $ 41,158 for approximately $ 41,494 , recognizing a gain on disposal of assets of $ 336 .

Construction in progress:

The Company is expanding its facilities in Georgia, Wyoming and Mississippi, including infrastructure, building, and land improvements to expand its mining operations.

The Company continues to expand its mining operations through investments in infrastructure, building, and land improvements.

Deposits on miners and mining equipment:

As of September 30, 2025 and September 30, 2024, the Company has outstanding deposits for miners and mining equipment totaling $ 112,037 and $ 359,862 , respectively.

Such deposits are recorded as long-term assets on the Consolidated Balance Sheets.

Impairment and depreciation:

In April 2024, a bitcoin halving event took place.

A bitcoin halving event, which occurs every four years, reduces the block reward for bitcoin miners by 50 % and directly impacts the Company’s revenue generation from mining activities.

In connection with the halving, the Company determined that certain miner models (S19J, S19 J Pro and S19 J Pro+) would be removed from service and replaced with newer, more efficient miner models.

An impairment test was performed on the miners identified for retirement, resulting in an impairment charge of approximately $ 189,000 .

The fair value less residual value of the impaired miners will depreciate over the remaining period in which they continue to operate.

Significant inputs in the fair value analysis included future bitcoin prices, forecasted global hashrate, and estimated future power prices.

Effective May 1, 2024, the Company reduced the useful lives of its miners from five years to three years .

The change in estimated useful lives increased Depreciation expense and Income (loss) before income tax expense by approximately $ 7,261 for the year ended September 30, 2024.

In the fourth quarter of fiscal 2024, the Company began to sell off certain miners that had been removed from service.

Prevailing re-sell market rates decreased between June 2024 to September 2024, leading the Company to revise its estimated salvage value of all out-of-service miners and record an additional impairment charge of approximately $ 7,800 .

INTANGIBLE ASSETS

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The strategic contract relates to the supply of a critical input to the Company’s bitcoin mining business at significantly lower prices compared to market.

Amortization expense for the years ended September 30, 2024, 2023 and 2022 was $ 2,140 , $ 2,113 and $ 1,963 , respectively.

Amortization expense for the years ended September 30, 2025, 2024 and 2023 was approximately $ 4,200 , $ 2,140 and $ 2,113 , respectively.

During the years ended September 30, 2025, 2024 and 2023 the Company did no t incur impairment losses related to the above intangible assets.

The following table presents the estimated amortization expense based on the Company’s amortizing intangible assets as of September 30, 2024:

The Company expects to record amortization expense of intangible assets over the future periods as follows:

($ in thousands)

September 30, 2024

As of September 30, 2024, the Company had operating leases primarily for the land leases of its mining facilities in Georgia and Tennessee and finance leases primarily related to equipment used at its data center.

Intangible Assets

2028 and thereafter

As of September 30, 2025, the Company had operating leases primarily for the land leases of its mining facilities in Georgia and Tennessee and finance leases primarily related to property and equipment used at its data center.

The mining facilities comprise the Company’s material underlying asset class under operating lease agreements.

The Company has no material finance leases.

In September 2024, the Company assumed two land leases and three short-term leases in connection with the acquisition of the locations in Tennessee.

The lease terms of the land leases range from 1.8 to 12 years.

As a result of the acquisition, the Company recognized operating lease liabilities of $ 344, and based upon acquisition cost allocation, recorded right of use assets, net unfavorable terms of $ 47 .

The short term leases are expiring in October 2024.

As such, the lease payments are recognized on a straight-line basis on the consolidated statements of operations and comprehensive loss.

In June 2024, the Company assumed four land leases in connection with the acquisition of the LN Energy locations in Georgia.

The lease terms of the LN Energy land leases range from 2.6 to 14.7 years.

As a result of the acquisition, the Company recognized operating lease liabilities of $ 243, and based upon acquisition cost allocation, recorded right of use assets of $ 2,550 .

In April 2024, the Company entered into a new operating land lease in Dalton, GA for the expansion of a fourth bitcoin mining location.

The lease is for a total of $ 18 per year with an initial lease term of five years and one renewal period of five years , for which the Company recorded a right of use asset and operating lease liability of $ 122 .

During the year ended September 30, 2025, the Company entered into and assumed several new lease arrangements in connection with business acquisitions and site expansions.

Finance leases were recognized primarily for properties obtained through the GRIID acquisition, including a ground lease and a property lease supporting bitcoin data center operations.

New operating leases included data center and warehouse sites in Tennessee and Georgia, an office lease in Maryland, and additional short-term property leases related to new data center developments in Georgia.

All leases were entered into to support the Company’s bitcoin mining and administrative activities.

During the year ended September 30, 2024, the Company assumed six land leases and three short-term leases through the acquisitions of bitcoin mining locations in Georgia and Tennessee and entered into one new operating land lease in Georgia.

The land lease terms range from approximately 1.8 to 14.7 years.

In connection with these transactions, the Company recognized total operating lease liabilities of $ 709 and corresponding right-of-use assets of $ 2,625 (based on acquisition-date allocations and new lease recognition).

The short-term leases, which expire in October 2024, are recognized on a straight-line basis within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).

Office Space Operating Lease and Sublease

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In the quarter ended March 31, 2024, the Company wrote down the right of use asset as it considered the asset to be impaired since the space was not utilized and the efforts to find a sub-lessee at the time were unsuccessful.

The Company impaired the right of use asset in the amount of $ 396 and has recorded this as "impairment expense - other" on the Consolidated Statements of Operations and Comprehensive Loss.

The Company impaired the right of use asset in the amount of $ 396 and has recorded this as Impairment expense - other on the Consolidated Statements of Operations and Comprehensive Income (Loss).

In July 2024, the Company entered into a sublease agreement in which it sublets the office space to the sublessee for the remainder of the original lease term expiring in April 2027.

Sublease income for the year ended September 30, 2024 was approximately $ 15 .

The sublease did not relieve the Company from its original lease obligation.

The Company's lease costs recognized in the Consolidated Statements of Operations and Comprehensive Loss consist of the following:

The sub lease did not relieve the Company from its original lease obligation.

The Company's lease costs recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) consist of the following:

For the year ended September 30,

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($ in thousands)

Cash paid for amounts included in measurement of lease obligations:

Cash paid for amounts included in

measurement of lease obligations:

Operating cash outflows from operating leases

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The following is a schedule of the Company's lease liabilities by contractual maturity as of September 30, 2025:

Fiscal Year ($ in thousands)

($ in thousands)

Gross lease liabilities

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Total lease liabilities, net of current portion

As of September 30, 2024, the Company had a gross balance of loans payable outstanding of $ 66,120 , netted against discount on the loans payable of $ 163 .

Total principal payments on loans during the years ended September 30, 2024 and 2023 was $ 7,283 and $ 14,466 , respectively.

The following table reflects our outstanding loans as of September 30, 2024 and September 30, 2023:

Loans Payable Balance, Net

As of September 30, 2025, the Company had a gross balance outstanding of $ 835,213 , netted against discount on the loans payable of $ 14,057 .

Total principal payments on debt during the years ended September 30, 2025 and 2024 was $ 135,941 and $ 7,283 , respectively.

The following table reflects our outstanding debt, net of debt discounts and debt issuance costs, as of September 30, 2025 and 2024:

As of September 30,

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Maturity Date

2030 Convertible notes

Coinbase line of credit

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Western Alliance Bank credit agreement

Trinity Master Equipment Financing Arrangement

Mortgage - Corporate Facility

Marquee Funding Partners

Aug-26 to Mar-27

Auto & Equipment Loans

Corporate facility mortgage

Auto & equipment loans and financing

Jun-26 to Dec-29

Total Loans Payable

current portion of loans payable

Loans payable, net of current portion

The following table reflects the principal amount of loan maturities due over the next five years and beyond as of September 30, 2024:

Marquee Funding Partners debt

Aug-26 to Mar-27

Trinity master equipment financing

Corporate facility mortgage (former)

Total debt outstanding, net of debt discounts and debt issuance costs

current portion of debt

Long-term debt, net of current portion, debt discount and debt issuance costs

The following table reflects the principal amount of loan maturities due over the next five years and thereafter as of September 30, 2025:

($ in thousands)

5-Year Loan Maturities

5-Year Loan Maturities Fiscal Year

Outstanding Loan

2030 Convertible notes

Coinbase line of credit

Western Alliance Bank credit agreement

Trinity Master Equipment Financing Arrangement

Mortgage - Corporate Facility

Marquee Funding Partners

Auto & Equipment Loans

Total principal amount of loan payments by fiscal year

Corporate facility mortgage

Auto & equipment loans and financing

Marquee Funding Partners debt

Total principal payments by fiscal year

Unamortized deferred financing costs and discounts

Total loan book value as of September 30, 2024

Description of Outstanding Loans

Total debt book value as of September 30, 2025

Description of outstanding debt

2030 Convertible notes

In December 2024, we issued $ 650,000 aggregate principal amount of 0 % convertible senior notes due 2030 (the “2030 Notes”), including the exercise in full by the initial purchasers of the 2030 Notes of their option to purchase up to an additional $ 100,000 principal amount of the 2030 Notes.

The 2030 Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The 2030 Notes will mature on June 15, 2030.

The net proceeds from the sales of the 2030 Notes were approximately $ 633,688 after deducting $ 16,312 of offering and issuance costs related to the 2030 Notes and before the capp ed call transactions, as described below.

The unamortized debt issuance costs as of September 30, 2025 was $ 13,964 .

The Company used $ 145,000 of the proceeds to repurchase its common stock, see Note 15 - Stockholders' Equity.

The fair value of the 2030 Notes was determined to be $ 802,659 as of September 30, 2025 based on q uoted prices in markets that are not active, which is considered a Level 2 valuation methodology.

While the 2030 Notes bear a 0 % stated interest rate, the effective interest rate for the notes as of September 30, 2025 was 0.46 %, primarily reflecting the accretion of debt issuance costs.

Holders of the 2030 Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2029 only under the following circumstances:

(i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2025 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

(ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per one thousand dollars ($ 1,000 ) of principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;

(iii) if we call such notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the applicable redemption date;

or (iv) upon the occurrence of specified corporate events.

On or after December 15, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances.

Holders of the 2030 Notes have a one-time noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100 % of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date on June 15, 2028.

As of September 30, 2025, none of the conditions permitting the holders of the 2030 Notes to convert their notes early had been met, and to require the Company to repurchase the 2030 Notes for cash.

The 2030 Notes are classified as long-term.

The initial conversion rate for the 2030 Notes is 67.5858 shares of common stock per one thousand dollars ($ 1,000 ) of principal amount of 2030 Notes, which represents an initial conversion price of approximately $ 14.80 per share of common stock.

The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events.

In addition, in connection with a make-whole fundamental change (as defined in the Indenture, dated as of December 17, 2024 (the “Indenture”), by and between the Company and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”)), which shall include among other things the Company's delivery of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or redemption, as the case may be.

Subsequent to June 20, 2028, we may redeem for cash all or part of the 2030 Notes, at our option, if the last reported sales price of common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related notice of the redemption.

However, we may not redeem less than all of the outstanding notes unless at least $ 75,000 aggregate principal amount of notes are outstanding and not called for redemption as of the time we send related redemption notices.

The redemption price of each note to be redeemed will be the principal amount of such note, plus accrued and unpaid special interest, if any.

Upon the occurrence of a fundamental change (as defined in the Indenture), subject to a limited exception described in the Indenture governing the notes, holders may require us to repurchase all or a portion of their notes for cash at a price equal to plus accrued and unpaid special interest to, but not including, the fundamental change repurchase date (as defined in the Indenture).

Upon conversion of the 2030 Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

We may not redeem the 2030 Notes prior to June 20, 2028.

We may redeem for cash all or any portion of the 2030 Notes, at our option, on or after June 20, 2028 if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for each of at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which such notice of redemption is provided, during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we send the notice of redemption, at a redemption price equal to 100 % of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The embedded conversion and redemption features of the 2030 Notes do not meet the criteria for bifurcation and are not recognized as separate derivative instruments.

The Indenture contains customary terms and covenants, including that upon certain events of default either the Trustee or the holders of at least 25 % in principal amount of the outstanding 2030 Notes may declare 100 % of the principal of, and accrued and unpaid special interest, if any, on, all the 2030 Notes to be due and payable.

The 2030 Capped Calls cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the 2030 Notes sold in the offering.

By entering into the 2030 Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event a conversion of the 2030 Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2030 Notes the trading price of the Company’s common stock price exceeds the conversion price of the 2030 Notes.

The cap price of the 2030 Capped Calls is initially $ 24.66 per share and is subject to certain adjustments under the terms of the 2030 Capped Calls.

The 2030 Capped Calls meet the criteria for classification in equity, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within shareholders’ equity.

Coinbase line of credit and receivable for bitcoin collateral

On August 7, 2024, the Company signed a Master Loan Agreement (the “2024 Master Loan”) with Coinbase Credit, Inc.

(the “Lender”) for a line of credit in which the Lender will lend the Company certain digital assets or cash.

The Master Loan provided has a credit limit of $ 50,000 .

(“Coinbase Credit” or the “Lender”) for a line of credit in which the Lender will lend the Company certain digital assets or cash.

The 2024 Master Loan has a credit limit of $ 50,000 .

On or prior to a drawdown, the Company is required to pledge collateral, and the Company has opted to pledge bitcoin to be held in a segregated custody account, such that the loan-to-value ratio of principal outstanding of the loan and the fair value of collateral is equal to or less than 64 %.

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As of the date of this report, no such termination has occurred.

The Company drew $ 50,000 from the line of credit in August 2024, and concurrently transferred bitcoin to the Lender as collateral at fair value of $ 78,130 .

The line of credit is used by the Company in the ordinary course of business to manage operating liquidity, and borrowings are drawn and repaid on a regular basis throughout the fiscal year.

Pursuant to the terms, the line of credit initially bore interest of 9 % per annum and has no defined maturity date but is terminable by either the Lender or the Company with notice.

During September 2024, the interest rate on the line of credit was adjusted to 8.5 % per annum.

As of September 30, 2024, the outstanding balance on the Coinbase line of credit was $ 50,000 at a rate of 8.5 % per annum.

During September 2024 and September 2025, the interest rate on the line of credit was adjusted to 8.5 % per annum and 8.25 % per annum, respectively.

The interest rate has not been subsequently amended.

Since the Lender has the rights to sell, pledge and rehypothecate the bitcoin during the term of the 2024 Master Loan, the Company derecognized the bitcoin transferred as collateral.

As the Company has the right to receive the bitcoin back from the Lender upon the repayment of the line of credit, the Company recorded a corresponding Receivable for bitcoin collateral.

The Receivable for bitcoin collateral is measured at fair value and changes in fair value are recorded as Change in fair value of bitcoin collateral under the Other Income category.

As of September 30, 2024, 1,229 bitcoin was posted as collateral for the line of credit at a total cost basis of $ 76,444 and a fair value of $ 77,827 .

The Receivable for bitcoin collateral is measured at fair value.

Changes in fair value as well as gains and losses from bitcoin transferred to and received from collateral are recorded as Gain on bitcoin collateral under the Other Income category in the Consolidated Statements of Operations and Comprehensive Income (Loss).

In April 2025, the Company amended the 2024 Master Loan agreement (the “2025 Amended Master Loan”) to expand the availability of borrowings to $ 200,000 , and in September 2025, the Company further amended the facility through a side letter with Coinbase Credit to increase the maximum indicative borrowing capacity to $ 300,000 .

All other material terms remained consistent with the prior agreements.

As of September 30, 2025, the Company had an outstanding balance of $ 174,500 under the facility and 2,384 bitcoin were posted as collateral for this line of credit at a fair value of $ 271,932 .

Two Prime line of credit and receivable for bitcoin collateral

On September 19, 2025, the Company entered into a Master Loan Agreement (the “Two Prime Master Loan”) with Two Prime Lending Limited, providing for a revolving line of credit of up to $ 100,000 .

Borrowings under the facility bear interest at a rate equal to the one-month Term SOFR plus 3.55 % per annum and mature on September 14, 2026.

Similar to the Coinbase facility, borrowings require the Company to pledge bitcoin as collateral.

The agreement establishes collateral requirements based on loan-to-value (LTV) ratios, including an initial maximum LTV ratio of approximately 62.5%, a margin call if the LTV exceeds 74%, and a liquidation trigger if the LTV exceeds 80%.

The Company is required to maintain collateral in a designated cold storage wallet with a third-party custodian and retains rights to any forked or airdropped tokens that may result from posted collateral.

Consistent with the Company’s accounting for the Coinbase facility, bitcoin posted as collateral is derecognized, with a corresponding receivable for bitcoin collateral recorded at fair value.

The receivable is subsequently remeasured at fair value, with changes recognized in Gain on bitcoin collateral within Other Income.

As of September 30, 2025 , the Company had not drawn against the Two Prime Master Loan and had no posted bitcoin collateral.

Western Alliance Bank credit agreement

On August 14, 2024, the Company entered into a credit agreement that provides for borrowings under a promissory note with Western Alliance Bank.

On August 14, 2024, the Company entered into a credit agreement that provides for borrowings under a promissory note with Western Alliance Bank (the “Western Alliance Bank Credit Agreement”).

Pursuant to this agreement, the Company executed a promissory note in the amount of $ 7,000 in order to finance the purchase of an aircraft for operational use.

2 unchanged sentences

The credit agreement contains financial covenants, including a minimum loan-to-value ratio, a minimum debt service coverage ratio, and a minimum average deposit balance.

As of September 30, 2024, the Company was in compliance with all covenants, and no events of default had occurred under the credit agreement.

Concurrently with the credit agreement, on August 14, 2024, the Company entered into a plain vanilla interest rate swap agreement with a counterparty in which the company will pay a fixed rate of 6.75 % and receive a variable rate equal to 30 day SOFR plus 3 % per annum on the initial notional value of $ 7,000 .

As of September 30, 2025, the Company has $ 6,122 principal balance outstanding for the Western Alliance Bank Credit Agreement.

The Company was in compliance with all covenants, and no events of default had occurred under the credit agreement.

Concurrently with the credit agreement, on August 14, 2024, the Company entered into a plain vanilla interest rate swap agreement with a counterparty in which the Company effectively pay a fixed rate of 6.75 % on the Western Alliance Bank Credit Agreement.

The interest rate swap has an initial notional value of $ 7,000 .

This interest rate swap has a maturity date of August 14, 2029 .

This interest rate swap was not designated as a hedge and is presented within Note 9 - Investments and Derivatives.

Trinity Master Equipment Financing Agreement

On April 22, 2022, the Company entered into a Master Equipment Financing Agreement with Trinity Capital Inc.

(the "Trinity").

The Master Equipment Financing Agreement provided for up to $ 35,000 of borrowings to finance the Company’s acquisition of blockchain computing equipment.

The Company received a loan of $ 20,000 at closing, with the remaining $ 15,000 fundable upon the Company's request, if requested no later than December 31, 2022, subject to certain customary conditions.

The Company did not request the funding and agreed with the Trinity that the related 1 % loan commitment fee for the unused portion would be refunded to the Company, which was received in December 2022.

The borrowings under the Master Equipment Financing Agreement are collateralized by 3,336 S19j Pro miners, which are located at the Company's College Park, GA and Norcross, GA sites.

The Company recorded an original loan discount of approximately $ 379 , of which $ 150 was refunded and $ 76 and $5 6 was amortized and recorded to interest expense during the years ended September 30, 2024 and 2023, respectively.

Mortgage - Corporate Office

On May 10, 2023, HQLLC completed a refinancing transaction whereby it borrowed a net $ 1,937 against the equity of the real property purchased in April 2023 that now serves as the Company’s Corporate Office (see Note 9 - Property and Equipment).

Corporate facility mortgage

On May 10, 2023, CleanSpark HQ, LLC, a single member limited liability company and subsidiary wholly owned by the Company, completed a refinancing transaction whereby it borrowed a net $ 1,937 against the equity of the real property purchased in April 2023 that is utilized as the Company’s corporate office (see Note 10 - Property and Equipment ).

The loan agreement has a two-year term, 10 % interest rate and monthly interest only payments until maturity.

Marquee Funding Partners

In connection with the acquisition of WAHA in August 2022, certain assets were encumbered with mortgages which the Company assumed.

The mortgages assumed have a current unpaid principal balance of $ 1,267 , remaining payment terms rang ing from 23 - 29 month s and an annual interest rate of 13 % .

In April 2025, the Company refinanced the outstanding balance with Western Alliance Bank through a new $ 2,000 promissory note through Bank of Nevada.

The new loan matures in April 2030, bears interest at a variable rate equal to the one-month Term SOFR plus a margin of 2.85 % (initially 7.17 % as of the loan date), and requires monthly principal and interest payments based on a five-year amortization schedule.

Trinity Master equipment financing agreement

On April 22, 2022, the Company entered into a master equipment financing agreement (the “Master Equipment Financing Agreement”) with Trinity Capital Inc.

that could provide $ 35,000 of borrowings to finance the Company’s acquisition of blockchain computing equipment.

The Company received a loan of $ 20,000 at closing with an interest rate of 13.80 %.

The borrowings under the Master Equipment Financing Agreement are collateralized by 3,336 S19j Pro miners, which are located at our College Park, GA and Norcross, GA sites.

The loan matured in the quarter ended June 30, 2025, the Company has no current unpaid principal payments in the current period.

Marquee Funding Partners debt

As of September 30, 2025 the unpaid balance on mortgages assumed from the acquisition in August 2022 of a bitcoin mining facility from WAHA Technologies Inc.

The remaining payment terms ranging from 11 - 17 month s with an annual interest rate of 13 % .

The last mortgage matures on March 1, 2027.

The Company has entered into various financing arrangements to purchase vehicles and non-miner equipment with combined principal amount of $ 699 as of September 30, 2024 .

Auto and equipment loans and financing

The Company has entered into various financing arrangements to purchase vehicles and non-miner equipment with combined principal outstanding at September 30, 2025 of $ 1,007 .

The loans vary in terms from 9 - 50 months with annual interest rates ranging from 0.0 - 11.3 % .

The loans are secured by the purchased vehicles and equipment.

During the year ended September 30, 2024, the Company entered into seven separate agreements for the purchase of machinery and equipment and mining equipment with a combined principal of $ 287 , with terms ranging from 12 - 72 months and interest rates ranging from 0.0 %- 11.3 %.

The last auto loan will mature on December 18, 2029.

Western Alliance Equipment Financing Agreement

On August 28, 2024, the Company entered into an equipment financing agreement with Western Alliance Bank for borrowings of up to $ 1,000 to finance new equipment for operational purposes.

Additionally, on August 28, 2024, the Company entered into an equipment financing agreement with Western Alliance Bank for borrowings of up to $ 1,000 to finance new equipment for operational purposes.

The Company can continue to secure equipment with this equipment financing agreement until February 28, 2025.

This instrument bears interest at the Floating Wall Street Journal Prime Rate plus 1.00 % per annum, calculated on the basis of a 360-day year consisting of twelve (12) consecutive thirty (30)-day months, and will be charged for each day there is an outstanding balance .

As of September 30, 2024, the financing agreement had no outstanding balance.

A s of September 30, 2025, the financing agreement had an outstanding balance of $ 871 .

The Floating Wall Street Journal Prime Rate was 7.25 % at the end of the period, resulting in an interest rate of 8.25 % per annum as of September 30, 2025.

1 unchanged sentence

As of September 30, 2025 , the Company was in compliance with all covenants, and no events of default had occurred under the financing agreement.

SPRE Commercial Group, Inc.

In connection with the acquisition of WAHA, the Company entered into a financing arrangement with the seller.

The loan had a term of 12 months with monthly payments of $ 174 and a stated interest rate of 12 %.

The loan matured in fiscal year 2023, and no amount is outstanding as of September 30, 2023.

As of September 30, 2024 , the weighted average interest rate on all short-term obligations outstanding was approximately 9.0 %, and the carrying values of all loans approximate fair values based on the borrowing rates currently available for loans with similar terms and average maturities.

The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes.

FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes.

Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.

FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset.

Accordingly, a valuation allowance has been recorded.

Due to the enactment of the Tax Reform Act of 2017, the Company has calculated its federal taxes using an estimated corporate tax rate of 21 %.

Tax codes and laws may be subject to further reform or adjustment which may have a material impact to the Company’s deferred tax assets and liabilities.

For the years ended September 30, 2024, 2023 and 2022 the Company's loss from continuing operations before provision for income taxes were as follows:

The Company recognizes deferred tax assets, net of applicable reserves, related to net operating losses (“NOLs”), tax credit carryforwards and certain temporary differences.

The Company recognizes future tax benefits to the extent that realization of such benefit is more likely than not.

Otherwise, a valuation allowance is applied.

For the years ended September 30, 2025, 2024 and 2023 the Company's income (loss) from continuing operations before provision for income taxes were as follows:

For the year ended September 30,

($ in thousands)

Loss before income taxes

Income (loss) before income taxes

The components of the provision for income taxes in the years ended September 30, 2025, 2024 and 2023 were as follows:

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Provision for income taxes

The effective income tax rate for the periods ended September 30, 2024, 2023 and 2022 as a percentage of pre-tax income is ( 2.3 %), ( 1.8 %) and 0 %, respectively.

The significant reconciling items between the effective tax rate and the statutory tax rate for the periods ended September 30, 2024, 2023 and 2022 consist of valuation allowance, adjustments to deferred taxes, state taxes, and permanent items.

The effective income tax rate for the years ended September 30, 2025, 2024 and 2023 as a percentage of pre-tax income is 9.7 % , ( 2.3 %) and ( 1.8 %) , respectively.

The significant reconciling items between the effective tax rate and the statutory tax rate for the years ended September 30, 2025, 2024 and 2023 cons ist of valuation allowance, adjustments to deferred taxes, state taxes, and permanent items.

A detailed breakout is provided below:

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($ in thousands)

Tax benefit at federal statutory rate

State taxes (net of federal benefit)

Tax expense (benefit) at federal statutory rate

State tax expense (benefit), net of federal effect

162(m) excess executive compensation

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Deferred only adjustments

Discontinued Operations

Change in valuation allowance

Deferred income taxes are the result of timing differences between GAAP accounting and tax basis of certain assets and liabilities, timing of income and expense recognition of certain items, and tax attributes such at net operating loss carry-forwards.

Total tax expense

These differences result in deferred tax assets and liabilities, which are recorded in the balance sheet, net of valuation allowance.

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Change in fair value of digital currency

Fixed Assets & Intangible Assets

Gross deferred tax liabilities

Net Deferred Tax Liabilities

For balance sheet presentation, the Company nets non-current deferred tax assets (net of valuation allowance) and liabilities.

The following table summarizes the presentation:

Net deferred tax liability

For balance sheet presentation, the Company nets deferred tax assets and liabilities within a given tax jurisdiction.

When the amounts relate to different jurisdictions, the Company presents net deferred tax assets (net of valuation allowance) and net deferred tax liabilities separately within noncurrent assets and noncurrent liabilities, respectively.

The following table summarizes this presentation:

September 30, 2025

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The Company considers the scheduled reversal of deferred tax liabilities.

To fully utilize the net operating loss (“NOL”) carryforward, the Company will need to generate sufficient future taxable income in each respective jurisdiction.

To fully utilize the NOL carryforward, the Company will need to generate sufficient future taxable income in each respective jurisdiction.

Due primarily to the Company’s history of losses, it is more likely than not that all or a portion of its deferred tax assets as of September 30, 2025 will not be realized.

The Company recorded a valuation allowance to offset the DTA that is not considered realizable for the tax year ended September 30, 2024 and September 30, 2023.

The Company recorded a valuation allowance to offset deferred tax assets that were not considered realizable for the tax years ended September 30, 2025 and September 30, 2024 .

The valuation allowance decreased from $ 54,926 as of September 30, 2024 to $ 3,389 as of September 30, 2025, primarily due to an increase in deferred tax liabilities related to the fair value appreciation of bitcoin during the current year, which resulted in an increased utilization of deferred tax assets.

As of September 30,

Valuation allowance

As of September 30, 2024 , the Company had $ 332,586 of federal and $ 146,973 of state net operating loss carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $ 325,943 have an indefinite life.

The federal net operating losses will begin to expire on September 30, 2025, while state net operating losses will begin to expire in the year ending September 30, 2036.

The Company's ability to utilize its federal and state net operating loss carryforwards and federal tax credit carryforwards to reduce future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that may have resulted in a change in ownership as defined by Internal Revenue Code Section 382 ("Section 382") or comparable provisions of state law.

As of September 30, 2025, the Company had $ 471,578 of federal and $ 154,423 of state NOL carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $ 464,997 and state net operating loss of $76,663 have an indefinite life.

The deferred tax asset for the state NOL is presented net of the uncertain tax position.

The federal NOL will begin to expire on September 30, 2027, while the state NOL will begin to expire in the year ending September 30, 2036.

The Company's ability to utilize its federal and state NOL carryforwards and federal tax credit carryforwards to reduce future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that may have resulted in a change in ownership as defined by Internal Revenue Code Section 382 (“Section 382”) or comparable provisions of state law.

Tax attributes that exceed the Section 382 limitation in any year continue to be allowed as carryforwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year.

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tax attributes, we continuously monitor potential ownership changes under Section 382.

During the year, the Company completed a detailed study and determined an ownership change (as defined under Section 382) occurred during the third quarter of 2020, fourth quarter of 2020, and second quarter of 2023, triggering the application of Section 382.

The Company completed a detailed study and determined an ownership change (as defined under Section 382) occurred during the third quarter of 2020, fourth quarter of 2020, and second quarter of 2023, triggering the application of Section 382.

We do not currently expect any resulting Section 382 limitations on the use of our tax attributes to have a significant impact on our financial statements.

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The Company records interest and penalties related to unrecognized tax benefits in income tax expense, if applicable.

The Company has no liability, interest or penalties for unrecognized tax benefits as of September 30, 2024.

The Company has no liability, interest or penalties for unrecognized tax benefits as of September 30, 2025 and 2024.

The Company does not anticipate the need to record a liability for unrecognized tax benefits within the coming year.

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federal and state jurisdictions.

The 2020-2023 tax years generally remain subject to examination by the IRS and various state taxing authorities, although the Company is not currently under examination in any jurisdiction.

As of September 30, 2025, the 2021-2023 tax years generally remain subject to examination by the IRS and 2020-2023 tax years generally remain subject to examination by various state taxing authorities, although the Company is not currently under examination in any jurisdiction.

However, as we utilize our net operating loss carryforwards, prior years can be subject to examination from 2007 forward.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, introducing significant amendments to U.S.

tax legislation with varying effective dates.

Key provisions that impact the Company include the expansion of bonus depreciation, accelerated expensing of research and development costs, and changes to Section 163(j).

The Company has incorporated these amendments into its September 30, 2025 tax provision as applicable, and there was no material impact to our income tax expense or effective tax rate.

The Company continues to evaluate the legislation.

The following table presents a reconciliation of our unrecognized tax benefits (“UTBs”), which are amounts recorded for tax positions that do not meet the more likely than not recognition threshold:

For the year ended September 30,

($ in thousands)

UTBs - October 1

Gross increases - tax positions in prior period

Gross decreases - tax positions in prior period

Gross increases - tax positions in current period

Gross decreases - disposal of business unit

Lapse of statute of limitations

UTBs - September 30

Included in the balance of UTBs as of September 30, 2025 and 2024, are no tax benefits that, if recognized, would affect the ETR.

Also included in the balance of UTBs as of September 30, 2025 and 2024 are $ 6,005 and $ 0, respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.

We recognize interest accrued related to UTBs and penalties as income tax expense.

STOCKHOLDERS’ EQUITY

As of September 30, 2025, the Company’s authorized capital stock consisted of 600,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share.

On October 25, 2024, the Company’s stockholders approved another amendment to the Company’s articles of incorporation to increase the number of shares of common stock authorized for issuance from 300,000,000 to 600,000,000 .

As of September 30, 2025, there were 296,087,533 shares of common stock issued, 284,327,598 shares of common stock outstanding, and 1,750,000 shares of Series A Preferred Stock issued and outstanding.

As of September 30, 2024, there were 270,897,784 shares of common stock issued and outstanding , 1,750,000 share s of Series A Preferred Stock issued and outstanding .

The 1,000,000 shares of Series X Preferred Stock outstanding as of September 30, 2024 were redeemed on October 29, 2024 and were automatically retired and restored to the status of authorized but unissued shares of the Company’s preferred stock upon such redemption.

The Company filed a certificate of withdrawal with the state of Nevada withdrawing its designation of Series X Preferred Stock on December 3, 2024.

Under the certificate of designation for the Series A Preferred Stock, holders of shares of the Company’s Series A Preferred Stock are entitled to quarterly dividends on 2 % of the Company’s earnings before interest, taxes and amortization.

The dividends are payable in cash or common stock.

The preferred stock dividend for the years ended September 30, 2024, 2023 and 2022 was $ 3,421 , $ 0 and $ 336 , respectively.

The preferred stock d ividend for the years ended September 30, 2025, 2024 and 2023 was $ 11,140 , $ 3,422 and $ 0 , respectively.

The holders of the Series A Preferred Stock will also have a liquidation preference on the stated value of $ 0.02 per share plus any accumulated but unpaid dividends.

The holders are further entitled to have the Company redeem each share of their Series A Preferred Stock for three shares of common stock in the event of a change of control, and they are entitled to vote together with the holders of our common stock on all matters submitted to stockholders at a rate of forty-five (45) votes for each share of Series A Preferred Stock held.

The Company’s Series X Preferred Stock is not entitled to receive any dividends or other distributions of any kind, has voting rights to cast 1,000 votes per share, and is required to vote together with the outstanding shares of common stock and Series A Preferred Stock, as a single class, exclusively with respect to any proposal to increase the number of shares of common stock that the Company is authorized to issue, together with any ancillary, administrative or related matters necessary or advisable in connection with the implementation of such increase.

The Series X Preferred Stock will be voted, without action by the holder, on any such proposal in the same proportion as the aggregate votes cast by holders of common stock and Series A Preferred Stock (excluding any shares of common stock and Series A Preferred Stock that are not voted “for” or “against” such proposal for any reason, including, without limitation, any abstentions or broker non-votes).

Upon completion of that vote, the Series X Preferred Stock will be redeemed for cash at the aggregate $ 1 par value.

As of September 30, 2024, a total of 1,000,000 Series X Preferred Stock was outstanding.

On October 25, 2024, the Company held a special meeting of stockholders at which its stockholders approved a proposal to amend the Company’s articles of incorporation to effectuate an increase in the number of shares of the Company’s common stock authorized for issuance from 300,000,000 shares to 600,000,000 shares.

Each outstanding share of the Company’s Series X Preferred Stock was redeemed for an aggregate of $ 1 following the announcement of the vote on the authorized stock increase.

See Note 19 - Subsequent Events.

Amendments to Articles of Incorporation

In March 2023, the Company's stockholders approved an amendment to the Company's articles of incorporation to increase the number of shares of common stock authorized for issuance from 100,000,000 shares to 300,000,000 shares.

At The Market Offering Agreement

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1 to the Original ATM Agreement with the Agent (the “ATM Agreement Amendment” and, together with the Original ATM Agreement, the “ATM Agreement”).

Under the ATM Agreement, the Company may, but has no obligation to, issue and sell up to the lesser number of shares (the “Shares”) of the Company’s common stock that does not exceed (a) $ 500,000 of shares of common stock, exclusive of any amounts previously sold under the Original ATM Agreement, (b) the number of authorized but unissued shares of common stock (less the number of shares of common stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock), or (c) if applicable, the maximum number or dollar amount of shares of common stock that can be sold without causing the Company or the offering of the Shares to fail to satisfy the eligibility and transaction requirements for use of Form S-3, including General Instruction I.B.6 of Registration Statement on Form S-3, from time to time through the Agent, or to them, as sales agent and/or principal.

On January 5, 2024 , the Company entered into a new At The Market Offering Agreement (the “Original 2024 ATM Agreement”) with the Agent to create an at-the-market equity program under which the Company may, but has no obligation to, issue and sell up to the lesser number of shares of the Company’s common stock that does not exceed (a) $ 500,000 of shares of common stock, or (b) the number of authorized but unissued shares of common stock (less the number of shares of common stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock).

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From the inception of the March 2024 ATM Amendment through September 30, 2024, the Company issued and sold 44,415,161 shares under the 2024 ATM Agreement for net proceeds of $ 593,200 .

As of September 30, 2024 , the Company had $ 191,605 of remaining capacity to issue shares under the March 2024 ATM Amendment.

The Company had issued all of the ATM’s remaining capacity through the date of these consolidated financial statements as noted in Note 19 - Subsequent Event.

The Company paid an average of 3 % in fees related to all gross proceeds received from the ATM agreements entered into since 2021, collectively, “the ATM offering facility”.

As of September 30, 2025, the Company had issued all of the ATM’s remaining capacity.

Common stock issuances for the year ended September 30, 2025

The Company issued 5,031,221 shares of common stock in connection with the GRIID Acquisition.

The Company issued 16,619,361 shares of common stock under the March 2024 ATM Amendment, resulting in gross proceeds of $ 191,603 and issuance costs of $ 4,795 .

The Company issued 158,039 shares of common stock in connection with the exercise of stock options and warrants.

Cash received from such issuance was $ 922 .

Common stock repurchased for the year ended September 30, 2025

In connection with the issuance of the 2030 Notes in December 2024 (see Note 13 - Indebtedness) , the Company repurchased 11,759,935 shares of its common stock from investors in privately negotiated transactions for an aggregate repurchase price of approximately $ 145,000 .

The shares were repurchased at fair value and the entire repurchase price was allocated to the repurchase of the shares.

Common stock issuances for the year ended September 30, 2024

The Company issued 106,969,819 shares of common stock through its ATM offering facility, with gross proceeds of $ 1,253,697 and offering costs of $ 31,454 , resulting in net proceeds of $ 1,222,243 .

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Common stock issuances for the year ended September 30, 2023

The Company issued 98,829,525 shares of common stock through its ATM offering facility, with gross proceeds of $ 395,977 and offering costs of $ 12,202 , resulting in net proceeds of $ 383,776 .

The Company issued 98,829,525 shares of common stock throu gh its ATM offering facility, with gross proceeds of $ 395,977 and offering costs of $ 12,202 , resulting in net proceeds of $ 383,776 .

The Company issued 4,483,669 shares of common stock in relation to the settlement of restricted stock awards and withheld 1,397,258 shares of common stock of $ 5,873 for net settlement.

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The Company issued 1,100,890 shares of common stock valued at $ 2,840 in settlement of the contingent purchase price in connection with the Mawson Transaction.

Common stock returned during the year ended September 30, 2023

Common stock returned during the September 30, 2023

The Company had 83,417 shares of common stock returned in connection with the ATL acquisition due to nonsatisfaction of certain milestones.

Common stock issuances for the year ended September 30, 2022

The Company issued 1,002,586 shares of common stock in relation to the settlement of restricted stock awards and stock options and withheld 358,681 shares of common stock of $ 1,638 for net settlement.

The Company issued 105,423 shares of common stock in relation to the exercise of stock options with proceeds received of $ 817 .

The Company issued 5,238 shares of common stock valued at $ 60 as compensation for Director services.

The Company issued 8,404 shares of common stock valued at $ 150 for settlement of contingent consideration related to business acquisition.

The Company issued 17,740,081 shares of common stock through its ATM offering facility, net of offering costs, for net proceeds of $ 125,048 .

Common stock returned during the year ended September 30, 2022

The Company had 232,518 shares of common stock returned to the Company as part of the settlement of contingent consideration and holdbacks related to business acquisitions.

STOCK WARRANTS

As part of the GRIID Acquisition on October 30, 2024, the Company issued several warrants to former holders of GRIID warrants.

Those issued warrants include 13,800,000 Public Warrants, 7,270,000 Private Warrants, and approximately 1,734,000 GEM Warrants, of which approximately every 14 warrants are exercisable for one share of the Company ’ s common stock at $ 165.25 , $ 165.25 , and $ 69.55 per share, respectively.

Management has determined that the Public Warrants are subject to accounting treatment as equity, while the Private Warrants and GEM Warrants are subject to accounting treatment as liabilities.

At the consummation of the GRIID Acquisition, all warrants were measured at their fair value using the Black-Scholes option pricing model and included in the purchase price calculation.

On January 3, 2025 all Private Warrants were converted to Public Warrants.

At September 30, 2025, the Company used the Black-Scholes option-pricing model to estimate the fair value of the GEM Warrants using Level 3 inputs.

The fair value of the GEM Warrants are included in the Other liabilities caption on the Consolidated Balance Sheets and the changes in fair value are included in Loss on derivative securities, net on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The following is a summary of stock warrant activity during the years ended September 30, 2025, 2024 and 2023:

Warrants Outstanding

Shares to be Issued Upon Exercise of Warrants

Price ($) (1)

Balance, September 30, 2022

Warrants expired

Warrants exercised

Balance, September 30, 2023

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Balance, September 30, 2024

Warrants expired

Warrants exercised

Warrants granted

Balance, September 30, 2025

As of September 30, 2024, there were warrants exercisable to purchase 17,560 shares of common stock in the Company and there were no w arrants that were unvested.

All outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices.

(1) Weighted average calculated weighting the exercise price versus the number of common shares that would be granted on exercise.

As of September 30, 2025 , there were warrants exercisable to purchase 1,604,559 shares of common stock in the Company and there were no unvested w arrants.

These warrants have a weighted average exercise price of $ 156.30 .

Most outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices.

As of September 30, 2025 , 22,813,726 of the outstanding warrants had a remaining term of 3.3 years and an intrinsic value of $ 65 .

The remaining 7,560 of the outstanding warrants do not have expiration dates and have an intrinsic value of $ 82 .

During the fiscal year ended September 30, 2024 , there were 65,000 warrants exercised on a cash-less basis, with 42,777 net shares issued.

There were no warrants issued for fiscal years ended September 30, 2023 or 2022 .

During the fiscal ye ar ended September 30, 2024, there were 65,000 warrants exercised on a cash-less basis, with 42,777 net shares issued.

STOCK-BASED COMPENSATION

The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan, as amended, (the “Plan”), with an evergreen provision that allows for the increase of the maximum number of shares of common stock available under the Plan to fifteen percent ( 15 %) of the Company's outstanding shares of common stock.

The Com pany sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan, as amended, (the “Plan”), with an evergreen provision that allows for the increase of the maximum number of shares of common stock available under the Plan to fifteen percent ( 15 %) of the Company's outstanding shares of common stock.

As of September 30, 2025 , prior to giving any effect to the evergreen provision that allows for the increase of shares on October 1, 2025, there were 11,482,312 shares available and authorized for issuance under the Plan.

Although the Board is authorized to increase the number of shares in the Plan up to 15 % of the Company’s outstanding common shares, as of September 30, 2024 it has not authorized any increased in Plan shares since the Company filed its latest Registration Form on Form S-8 on December 8, 2023.

The Company grant ed 174 , 24,482 and 89,445 n on-qualified options pursuant to the Plan during the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

Although the Board is authorized to increase the number of shares in the Plan up to 15 % of the Company’s outstanding common shares, as of September 30, 2025 it has not authorized any increased in Plan shares since the Company filed its latest Registration Form on Form S-8 on May 8, 2025.

The Company granted 5,813 , 174 and 24,482 non-qualified options pursuant to the Plan during the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

The Company recognized $ 45,335 , $ 29,555 and $ 24,142 for the fiscal years ended September 30, 2025, 2024 and 2023, respectively, in stock-based compensation.

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Options expired

Options canceled/forfeited

Options forfeited

Options exercised

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Options expired

Options canceled/forfeited

Options forfeited

Options exercised

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Option activity for the year ended September 30, 2024

During the year ended September 30, 2023 , no stock options were exercised.

During the year ended September 30, 2024 , 106,516 stock options were exercised for net cash proceeds to the Company of $ 752 .

For the year ended September 30, 2024 , the Company also granted 611,823 options to purchase shares of common stock to employees with a total fair value of $ 8,030 .

Option activity for the year ended September 30, 2023

During the year ended September 30, 2022 , a total of 105,423 shares of the Company’s common stock were issued in connection with the exercise of common stock options at exercise prices ranging from $ 4.65 to $ 15.10 , for net proceeds of $ 817 .

For the year ended September 30, 2022 , the Company also granted to employees 215,750 options with a total fair value of $ 3,121 to purchase shares of common stock.

During the year ended September 30, 2023, no stock options were exercised.

For the year ended September 30, 2023, the Company also gran ted 789,750 options to purchase shares of common stock to employees with a total fair value of $ 4,513 .

Fair value for stock options is determined using the Black-Scholes option model.

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Expected dividends

The Company recognized stock-based compensation expense related to stock options of $ 4,098 and $ 5,563 for the years ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the Company expects to recognize $ 5,639 of stock-based compensation for the non-vested outstanding options over a weighted-average period of 1.67 years.

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Intrinsic Value

Outstanding at October 1, 2021

Outstanding at September 30, 2022

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Outstanding at September 30, 2024

During the year ended September 30, 2024 , the Company granted 1,493,556 RSUs to employees, all of which were time-based RSUs.

During the year ended September 30, 2023 , the Company granted 3,880,552 RSUs, which consisted of 360,552 time-based RSUs and 60,000 performance-based RSUs (of which 40,000 market-based awards were exchanged and reflected in the table above as cancelled).

Outstanding at September 30, 2025

On October 1, 2024, the Company granted 136,520 time-based RSUs to its board members as part of their annual compensation.

These RSUs vest 25 % quarterly and have a combined grant-date fair value of $ 1,200 .

The 25 % quarterly vesting is scheduled to occur on February 13, 2025, May 13, 2025, August 13, 2025 and December 3, 2025.

As of September 30, 2025, the Company has settled and issued 102,390 of these time-based RSUs in accordance with the prescribed vesting schedule.

During August 2025, the Company entered into a severance agreement with its Chief Executive Officer.

In connection with the agreement, 717,665 previously granted restricted stock units were accelerated and vested immediately.

In addition, 864,344 new RSUs were granted and vested immediately upon execution of the agreement, and an additional 864,344 new RSUs were granted subject to a two-year vesting schedule tied to the CEO’s non-compete and other obligations pursuant to the severance agreement.

The total fair value of all RSUs granted under the severance agreement was fully recognized as stock-based compensation expense totaling $ 20,003 as of the severance date in the year ended September 30, 2025, as the remaining vesting conditions were determined to be non-substantive at the date of termination.

On September 4, 2025, the Company granted 6,278,000 time based restricted stock units to certain executives to compensate for performance during fiscal year 2025 and to promote retention of such executives, of which 784,750 were vested by the end of the fiscal year.

The remaining 5,493,250 RSUs will vest over the three years following the grant date.

On September 12, 2025, the Company granted an additional 58,824 time-based RSUs to its board members, representing a prorated portion of the fiscal 2026 annual equity award for directors, consistent with the Board’s decision to align director compensation with the Company’s annual meeting cycle (April through March).

The grant was valued at $ 10.20 per share, the closing price of the Company’s common stock on September 11, 2025, with a total grant-date fair value of approximately $ 609 .

The RSUs vest 50 % on December 31, 2025 and 50 % on March 31, 2026, subject to continued service.

As of September 30, 2025, the Company had 12,891,419 outstanding unvested time-based restricted stock awards, which will vest over the weighted average 2.8 years.

As of September 30, 2025, the unrecognized compensation costs related to all RSUs is $ 103,244 .

During the year ended September 30, 2023, 3,880,552 RSUs, which consisted of 360,552 time-based RSUs and 60,000 performance-based RSUs (of which 40,000 market-based awards were exchanged and reflected in the table above as cancelled).

Additionally, on September 29, 2023, the Compensation Committee granted 3,460,000 market-based restricted stock units to senior leadership of the Company.

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The total fair value of the award was approximately $ 13,160 and all the market-based awards were vested, expensed and issued through March 2024.

During the year ended September 30, 2022, the Company granted 7,306,250 restricted stock awards.

Certain of the awards were issued in the first quarter of fiscal year 2022 comprised of 120,000 service condition based awards, 146,250 that were performance condition-based awards, and 910,000 that were market condition-based awards.

The market condition based RSUs consisted of 60,000 units that were perpetual in nature, and therefore, were given a derived service period of 5 years.

The remaining 810,000 RSUs had a stated service period of 1 year.

In the fourth quarter of fiscal year 2022, on September 12, 2022, the Compensation Committee granted additional grants as follows:

(1) 2,565,000 service condition based RSUs which vest over a 3-year period beginning on the grant date;

(2) 2,565,000 performance based RSUs, of which, 2,381,781 vested in fiscal year 2023;

(3) 760,000 restricted stock units, which vested in March 2023 when approved by our stockholders.

The Compensation Committee also modified previously issued awards from the first quarter of fiscal year 2022 as follows:

(1) granted immediate vesting of the 810,000 market based awards;

(2) modified the market condition based 60,000 units that were perpetual in nature, and 10,000 unvested service condition RSUs, which were replaced with

(a) 120,000 service condition-based RSUs that vest over a 3-year period, and

(b) 120,000 performance-based RSUs, of which $ 111,429 vested in fiscal year 2023.

The Company recognized stock-based compensation expenses related to time-based RSUs, of $ 41,112 , $ 10,392 and $ 17,720 fo r the fiscal years ended 2025, 2024 and 2023, respectively.

PERFORMANCE STOCK UNITS

The following table summarizes the activity for all performance stock units (“PSUs”) during the year ended September 30, 2025:

Intrinsic Value

Outstanding at September 30, 2024

Outstanding at September 30, 2025

During the year ended September 30, 2025, the Company granted 40,000 performance-based RSUs to certain employees at a grant-date fair value of $ 424 .

The PSUs vest based on the achievement of certain milestones closely tied to the employees' job responsibilities.

The fair value of the market-based RSUs were determined using the Monte Carlo simulation and the inputs of market-based RSUs for each of the fiscal years in which market-based RSUs were issued were as follows:

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September 30, 2023

September 30, 2022

Risk free interest rate

0.14 % - 1.26 %

Expected term (years)

Expected volatility

111.37 % - 172.18 %

Cost of equity

20.00 % - 21.00 %

As of September 30, 2024 , the Company had approximately $ 12,412 in unrecognized compensation cost related to restricted stock unit awards that will be recognized over a weighted average period of 2.22 years.

The Company recognized stock-based compensation expenses related to restricted stock units, of $ 23,992 , $ 17,720 and $ 23,661 for the fiscal years ended 2024, 2023 and 2022 , respectively.

MAJOR CUSTOMERS AND VENDORS

As of September 30, 2025, the Company had 38,460 outstanding unvested performance-based restricted stock awards, which will vest over a weighted average of 2.1 years.

As of September 30, 2025, the unrecognized compensation costs related to all PSUs is $ 290 .

The Company recognized stock-based compensation expense relating to PSUs of $ 125 and $ 13,600 for the years ended September 30, 2025 and 2024, respectiv ely.

REVENUE AND VENDOR CONCENTRATIONS

The Company had one mining pool operator (Foundry Digital) during the fiscal years ended September 30, 2025, 2024 and 2023 .

The Company had the following significant suppliers of mining equipment, with the percentage based on purchase amounts.

Revenues from Foundry Digital represented 100 % of the Company’s total revenues for each of those years, as all bitcoin mining rewards are received through the Foundry mining pool.

The Company had the following significant suppliers of bitcoin miners, with the percentage based on purchase amounts:

For the Year Ended September 30,

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Purchase of modular immersion data centers

The Company entered into a $ 165,000 contract subject to certain discounts in June 2024 for the purchase and on-site construction and installation of modular immersion data centers.

The contract includes two phases for which only phase 1 is a firm commitment to the Company in the amount of $ 66,000 (before taxes and discounts), for which $ 30,000 of phase 1 was paid in July 2024 and is included in Deposits on miners and mining equipment in the Consolidated Balance Sheet as of September 30, 2024.

The remainder is expected to be paid before the end of the first quarter in the 2025 fiscal year.

In August 2024, the Company elected to undertake phase 2 for $99,000 (before taxes and discounts), an advanced payments of approximately 50 % are due in November 2024 and the remainder is expected to be paid in installments between December 2024 through April 2024.

Upon timely payment of the first installments due for both phase 1 and phase 2, discounts of $ 3,000 and $ 4,500 , respectively, are applied to the obligation.

Purchase of bitcoin miners

The Company had $ 115,299 in unrecorded open purchase commitments for miners or mining equipment as of September 30, 2024 .

These commitments pertain to the purchase transactions with Bitmain Technologies Delaware Limited ("Bitmain Technologies") signed in April 2024 and August 2024 for the purchase of 100,000 S21 Pro bitcoin mining machines for a total purchase price of $ 374,400 and 26,000 S21 XP Immersion bitcoin mining machines for a total purchase price of $ 167,700 .

The Company had made $ 376,883 in combined payments in relation to these miners.

As of September 30, 2024, the Company had $ 49,918 in Accounts payable in relation to these agreements on the Consolidated Balance Sheets.

The Company entered into a $ 165,000 contract, subject to certain discounts, in June 2024 for the purchase, on-site construction, and installation of modular immersion data centers.

As of September 30, 2025, t he $ 27,000 remaining balance of the contract is contractually obligated and expected to be paid in installments upon delivery and installation of the related data centers.

Commitments under open construction projects

The Company has open commitments relating to the construction and development of new mining locations and operational facilities of $ 15,261 , which includes $ 2,888 for the construction of the data center in Clinton, MS.

The Company has open commitments relating to the construction and development of new mining locations and operational facilities of $ 30,499 .

Contractual future payments

The contractual future payment related to the Company’s leases and loans payable are disclosed in Note 11 - Leases and Note 12 - Loans, respectively, to the Consolidated Financial Statements.

T he following table sets forth certain information concerning the Company’s unconditional obligations to make contractual future payments towards our agreements as of September 30, 2024 (these amounts are not recorded in the Consolidated Balance Sheets):

The contractual future payment related to the Company’s leases and indebtedness are disclosed in Note 12 - Leases and Note 13 - Indebtedness, respectively, to the Consolidated Financial Statements .

The following table sets forth certain information concerning the Compan y’s unconditional obligations to make contractual future payments towards our agreements as of September 30, 2025 (these amounts are not recorded in the Consolidated Balance Sheets):

($ in thousands)

Fiscal Year 2025

Fiscal Year 2026

Fiscal Year 2027

Fiscal Year 2028

Fiscal Year 2029

Contractual obligations:

Modular immersion data centers (net discounts)

Miners and mining equipment contracts

Construction in progress

Tennessee Real Estate (Note 5)

Obligation to return of power deposits

Upon receiving power bills pertaining to the month in which each MIPA (Note 5 - Acquisitions) closed, the Company has an obligation to pay the TN MIPA Seller an amount equal to the deposits the TN MIPA Seller had made to power providers for each location less the portion of power bill covering the power utilized by TN MIPA Seller and any other remedies identified within 10 days.

In aggregate, the power providers held $ 6,012 in power deposits from the TN MIPA Seller.

State Tax Incentives

When the Company enters new jurisdictions, it seeks incentives on taxes including;

sales and use taxes, property taxes, employment taxes and income taxes.

The Company has been previously successful obtaining such incentives and is currently seeking incentives, which if the Company is unsuccessful may result in a liability of approximately $ 6,300 .

Modular immersion data centers

Purchase of bitcoin miners

importation tariffs

On or about May 27, 2025, the Company began receiving invoices from the U.S.

Customs and Border Protection agency (“CBP”) asserting Chinese origin import tariffs on certain miners imported from April 2024 through June 2024.

In addition to the documentation received by the Company during importation that validates non-Chinese origin, the seller of the miners has consistently represented to the Company that the country of origin of the mining hardware was not China, as required by the applicable purchase agreements.

In the event that CBP were to successfully defend their allegations of Chinese origin and assert import duties for Chinese origin to all imported miners from April 2024 and forward, the Company’s total tariff liability in respect of previously purchased miners could rise to approximately $ 185,000 , not including statutory interest.

The Company believes the CBP allegation of Chinese origin on its imported miners to be without merit and intends to defend against these charges vigorously.

While the outcome of this matter is uncertain at this time, the Company has determined it is not probable that it will result in a future cash outflow and, as such, no provision was recorded as of September 30, 2025.

Legal contingencies

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CleanSpark, Inc.

On January 20, 2021, Scott Bishins (“Bishins”), individually, and on behalf of all others similarly situated (together, the “Class”), filed a class action complaint in the United States District Court for the Southern District of New York against the Company and certain of its officers, including the Company’s CEO and the Executive Chair (such action, the “Class Action”).

On January 20, 2021, Scott Bishins (“Bishins”), individually, and on behalf of all others similarly situated (together, the “Class” and the “Plaintiffs”), filed a class action complaint in the United States District Court for the Southern District of New York against the Company and certain of its officers, including the Company’s CEO and the Executive Chair.

On December 2, 2021, the Court appointed Bishins and Darshan Hasthantra as lead plaintiffs, and on February 1, 2024, the Court entered a voluntary dismissal on behalf of Bishins.

The plaintiffs filed an Amended Complaint on February 28, 2022 alleging that, between December 10, 2020 and August 16, 2021, defendants made material misstatements and omissions in relation to disclosures surrounding the Company’s acquisition of ATL and its anticipated expansion of bitcoin mining operations.

The plaintiffs seek certification of the Class, an award of compensatory damages and an award of reasonable costs and expenses incurred by the Class in the litigation.

To date, no class has been certified in the Class Action.

Discovery is currently proceeding.

On February 28, 2022, Plaintiffs filed an Amended Class Complaint alleging that, between December 10, 2020, and August 16, 2021, Defendants made material misstatements and omissions related to the Company’s acquisition of ATL Data Centers LLC and its anticipated expansion of bitcoin mining operations.

Plaintiffs seek certification of the Class, an award of compensatory damages, and reimbursement of costs and expenses.

On September 24, 2025, the Court granted Plaintiffs’ motion for class certification.

Expert discovery is ongoing, with depositions scheduled to conclude in late 2025.

The Company believes that the claims asserted are without merit and intends to defend against them vigorously.

At this time, the Company is unable to estimate potential losses, if any, that may arise.

Consolidated Ciceri Derivative Actions

On May 26, 2021, Andrea Ciceri (“Ciceri”) filed a shareholder derivative action in the United States District Court for the District of Nevada against officers and directors of the Company, including the Company’s Executive Chair, CEO, former CFO, and certain other members of the Board of Directors.

This and other related filings were consolidated by the Court on June 29, 2021 (the “Consolidated Ciceri Action”).

The claims asserted in the Consolidated Ciceri Action include breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets.

The plaintiffs seek declaratory relief, monetary damages and the imposition of additional corporate governance and internal controls.

On June 27, 2023, the Company’s Board of Directors appointed a Special Litigation Committee (“SLC”) comprised of independent directors to intervene in the case, investigate, evaluate and prosecute as appropriate any and all claims asserted in the Consolidated Ciceri Action as well as the Consolidated Smith Action (as defined below).

On October 23, 2023, the Consolidated Ciceri Action was stayed to allow the SLC to intervene, investigate and determine an appropriate course of action for the claims alleged, which stay was later extended up to November 30, 2024.

On October 16, 2024, the SLC filed a motion to defer to the SLC’s determination that the claims in the Consolidated Ciceri Action should be dismissed.

On October 28, 2024, the court ordered the parties’ stipulation wherein the parties agreed to submit a status update to the court by November 30, 2024 and meet and confer regarding a proposed briefing schedule.

The Company believes that the claims raised in the Consolidated Ciceri Action are without merit and intends to defend itself vigorously.

At this time, the Company is unable to estimate potential losses, if any, related to the Consolidated Ciceri Action.

Consolidated Smith Derivative Actions

Starting with a February 21, 2023 filing by Brandon Smith, and continuing through March 8, 2023, four shareholder derivative actions were filed in the Eighth Judicial District Court of the State of Nevada in Clark County against officers and directors of the Company, including the Company’s Executive Chair, CEO, former CFO, and certain other members of the Board of Directors.

Each of these actions was consolidated in the Eighth Judicial District Court of Nevada in Clark County (the “Consolidated Smith Action”).

The claims asserted in the Consolidated Smith Action include breach of fiduciary duties, unjust enrichment and corporate waste.

The plaintiffs seek monetary damages, restitution, declaratory relief, litigation costs and the imposition of adequate corporate governance and internal controls.

On December 1, 2023, the Court granted the SLC’s motion to intervene and stay the case pending the SLC’s investigation, staying the case through April 6, 2024, which was later extended to November 30, 2024.

On October 16, 2024, the SLC filed a motion to defer to the SLC’s determination that the claims in the Consolidated Smith Action should be dismissed.

On October 31, 2024, the court ordered the parties’ stipulation, wherein the parties agreed to submit a status update to the court by November 30, 2024, and meet and confer regarding a proposed briefing schedule.

Between February 21, 2023, and March 8, 2023, four shareholder derivative actions were filed in the Eighth Judicial District Court of the State of Nevada in Clark County against certain current and former officers and directors of the Company, including its Executive Chair, Chief Executive Officer, and former Chief Financial Officer.

Each action was consolidated in the Eighth Judicial District Court of Nevada (the “Consolidated Smith Action”).

The claims assert breach of fiduciary duty, unjust enrichment and corporate waste, with the plaintiffs seeking monetary damages, restitution, declaratory relief, litigation costs, and the imposition of additional corporate governance and internal controls.

The Company’s Board of Directors formed a Special Litigation Committee (“SLC”) to investigate and evaluate the claims.

On November 6, 2023, the court granted the SLC’s motion to intervene and stayed the case through November 30, 2024.

On November 5th, the Court concluded an evidentiary hearing to validate the SLC’s reported findings.

The case remains stayed pending the Court’s subsequent ruling on the SLC’s motion to dismiss.

The Company believes that the claims raised in the Consolidated Smith Action are without merit and intends to defend itself vigorously against them.

At this time, the Company is unable to estimate potential losses, if any, related to the Consolidated Smith Action.

The case remains stayed pending the Court’s evidentiary hearing and subsequent ruling on the SLC’s motion to dismiss.

At this time, the Company is unable to estimate potential losses, if any, related to this matter.

SUBSEQUENT EVENTS

At-the-Market Equity Issuances

From October 1, 2024 through December 3, 2024 , the Company issued 16,619,631 shares under its ATM offering facility resulting in gross proceeds of $ 191,603 and issuance costs of $ 4,795 .

GRIID Acquisition

On October 30, 2024, the Company completed its acquisition of GRIID pursuant to the GRIID Agreement;

see Note 5 - Acquisitions.

Long-Term Incentive Plan and Awards

On October 1, 2024, the Company’s Compensation Committee of Board of Directors (the “Committee”) approved the establishment of the Company’s Long-Term Incentive Program (the “LTIP”) under the Plan and the 2025 LTIP Awards which permits the issuance of RSUs to executive officers and other executives pursuant to the Plan.

Awards granted pursuant to the 2025 LTIP are in addition to cash annual bonus awards and annual time-based RSU awards, if any, and are a key element of the Company’s compensation program.

On October 2, 2024, the Committee granted 2025 LTIP Awards to the executive officers and other executives.

The value of these awards is based on the Company’s achievement of pre-determined performance metrics, including total growth, uptime, efficiency, and stockholder return.

The Company’s performance on these metrics will be evaluated relative to its peer group, expressed as a percentile.

This relative performance determines the percentage of granted RSUs that recipients will earn, ranging from 0 % to 200 % of the awarded amount.

If the Company achieves 100 % of the target performance, the total RSUs earned would be approximately 4,967,000 .

Increase in Authorized Shares of Common Stock

On October 25, 2024, the Company’s stockholders approved an amendment to the Company’s articles of incorporation, which amendment increased the number of shares of common stock authorized for issuance from 300,000,000 shares to 600,000,000 shares.

The 1,000,000 outstanding shares of the Company’s Series X Preferred Stock was redeemed for an aggregate of $ 1 following the announcement of the vote on the authorized stock increase.

Sale of Miners

In Octob er and November 2024, the Company entered into sale and purchase agreements with third party companies and completed sales of miners for approximately $ 29,000 .

Tennessee Acquisitions

On October 11, 2024, t he Company paid the TN MIPA Seller $ 5,605 to close on the acquisition of the final two sites out of the seven sites purchased.

On October 21, 2024, the Company closed on the acquisition of the four real estate properties in Tennessee for approximately $ 2,500 .

On October 29, 2024, the Company paid the TN MIPA Seller $ 5,484 in exchange for utility deposits with power providers of all seven Tennessee locations and such deposits are now held by the Company ;

see Note 5 - Acquisitions.

Coinmint Colocation Agreement Non-renewal

On October 1, 2024, the Company and Coinmint, LLC mutually agreed to the non-renewal of the Colocation Mining Services Agreement dated July 1, 2021, as amended on March 17, 2022 and May 25, 2023 (the "Agreement").

Under the Agreement, Coinmint, LLC provided colocation services for the Company's bitcoin mining equipment at Coinmint, LLC's facility in Massena, New York.

The Agreement is scheduled to expire on January 1, 2025.

Asset acquisition to build out HPC and AI infrastructure

On October 29, 2025, CleanSpark announced the acquisition of certain land in Texas and an option to acquire additional adjacent land in Austin County, Texas.

The Company also executed long-term power supply agreements providing for the progressive buildout of power capacity over an estimated eighteen-month development period.

The purchase consideration consisted of a combination of cash and shares of the Company’s common stock at closing, approximating $ 66,000 , with additional cash payable upon the occurrence of certain post-closing events.

The project, which marks CleanSpark’s entry into the Texas market, is expected to serve as a cornerstone of the Company’s expansion into HPC and AI infrastructure.

Issuance of convertible senior notes due 2032

On November 13, 2025, the Company completed a private offering of $ 1,150,000 aggregate principal amount of 0.00 % Convertible Senior Notes due 2032 (the “2032 Notes”).

The 2032 Notes were issued at par under an indenture dated November 13, 2025, between the Company and U.S.

Bank Trust Company, National Association, as trustee.

The 2032 Notes are senior unsecured obligations of the Company and are not guaranteed by any subsidiary.

Net proceeds were approximately $ 1,128,000 , after deducting debt issuance costs.

The Company used approximately $ 460,000 of the net proceeds to repurchase shares of its common stock from investors in the 2032 Notes and intends to use the remaining proceeds for the expansion of its power and land portfolio, development of data-center infrastructure, repayment of outstanding bitcoin-backed credit balances, and general corporate purposes.

The 2032 Notes will mature on February 15, 2032 , unless earlier converted, redeemed or repurchased.

They are convertible at an initial rate of 52.1832 shares per one thousand dollars ($ 1,000 ) principal amount, equivalent to an initial conversion price of approximately $ 19.16 per share of common stock, subject to customary adjustments.

Prior to August 15, 2031, conversion is permitted only upon the occurrence of specified events;

thereafter, the Notes are convertible at any time until two trading days preceding maturity.

The Company may not redeem the Notes before February 20, 2029, and may redeem them thereafter subject to conditions set forth in the Indenture.

Line of credit paydown

During November 2025 the Company repaid in full all outstanding balances under its revolving lines of credit, including the Coinbase and Two Prime credit facilities described in Note 13 - Indebtedness .

Following such repayments, the Company maintained aggregate borrowing capacity of approximately $ 400 million under its committed lines of credit, all of which remained undrawn as of the report date of November 25, 2025 .

CLEANSPARK, INC.

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Additions Charged to Costs and Expenses

Additions from Business Combination

Balance at End of Period

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data