CLEANSPARK, INC. 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements Audited Consolidated Financial Statements: F- 1 Reports of Independent Registered Public Accounting Firm (BDO USA, P.C.; Las Vegas, Nevada; PCAOB ID 243 ) F- 7 Report of Independent Registered Public Accounting Firm (MaloneBailey, LLP; Houston, Texas; PCAOB ID 206) F- 8 Consolidated Balance Sheets as of September 30, 2025 and 2024 F- 10 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended September 30, 2025, 2024 and 2023 F- 12 Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2025, 2024 and 2023 F- 15 Consolidated Statements of Cash Flows for the years ended September 30, 2025, 2024 and 2023 F- 17 Notes to Consolidated Financial Statements 66 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors CleanSpark, Inc. Las Vegas, Nevada Opinion on the Consolidated Financial Statements 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 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 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 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 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 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. F- 1 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 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, 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. F- 2 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. F- 3 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. We have served as the Company's auditor since 2024. Las Vegas, Nevada November 25, 2025 F- 4 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors CleanSpark, Inc. Las Vegas, Nevada Opinion on Internal Control over Financial Reporting 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 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 The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. F- 5 Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ BDO USA, P.C . Las Vegas, Nevada November 25, 2025 F- 6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of CleanSpark, Inc. Opinion on the Financial Statements 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 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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. 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. 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 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 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 www.malonebailey.com We have served as the Company's auditor since 2018. In 2024, we became the predecessor auditor. Houston, Texas December 1, 2023, except for the effects of the revision discussed in Note 3 to the consolidated financial statements, as to which the date is December 3, 2024 F- 7 CLEANSPARK, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share amounts) September 30, 2025 September 30, 2024 ASSETS Current assets Cash and cash equivalents $ 42,966 $ 121,222 Restricted cash 3,490 3,056 Prepaid expense and other current assets 11,875 7,995 Bitcoin - current 966,829 431,661 Receivable from bitcoin collateral 294,648 77,827 Note receivable from GRIID — 60,919 Derivative investments 233 1,832 Investment in debt security, AFS, at fair value — 918 Total current assets $ 1,320,041 $ 705,430 Bitcoin - noncurrent $ 222,614 $ — Property and equipment, net 1,363,681 869,693 Operating lease right of use assets 4,254 3,263 Intangible assets, net 5,849 3,040 Deposits on miners and mining equipment 112,037 359,862 Other long-term assets 23,497 13,331 Goodwill 131,658 8,043 Total assets $ 3,183,631 $ 1,962,662 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 15,159 $ 82,992 Accrued liabilities 117,544 43,874 Other current liabilities 6,096 2,240 Current portion of debt 176,570 58,781 Dividends payable 396 — Total current liabilities $ 315,765 $ 187,887 Long-term liabilities Long-term debt, net of current portion, debt discount and debt issuance costs 644,586 7,176 Deferred income taxes 44,872 5,761 Other long-term liabilities 3,281 997 Total liabilities $ 1,008,504 $ 201,821 Commitments and contingencies - Note 19 F- 8 CLEANSPARK, INC. CONSOLIDATED BALANCE SHEETS (continued) (in thousands, except par value and share amounts) September 30, 2025 September 30, 2024 Stockholders' equity Preferred stock; $ 0.001 par value; 10,000,000 shares authorized; Series A shares; 2,000,000 authorized; 1,750,000 issued and outstanding (liquidation preference $ 0.02 per share) Series X shares; 0 and 1,000,000 authorized, issued and outstanding, respectively 2 3 Common stock; $ 0.001 par value; 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 296 271 Additional paid-in capital 2,445,723 2,239,367 Accumulated other comprehensive income — 418 Accumulated deficit ( 125,894 ) ( 479,218 ) Treasury stock at cost; 11,759,935 and 0 shares held, respectively ( 145,000 ) — Total stockholders' equity 2,175,127 1,760,841 Total liabilities and stockholders' equity $ 3,183,631 $ 1,962,662 The accompanying notes are an integral part of these Consolidated Financial Statements. F- 9 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except per share and share amounts) For the year ended September 30, 2025 2024 2023 Revenues, net Bitcoin mining revenue, net $ 766,314 $ 378,968 $ 168,121 Other services revenue — — 287 Total revenues, net $ 766,314 $ 378,968 $ 168,408 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) 343,101 165,516 93,580 Professional fees 13,785 13,806 10,869 Payroll expenses 104,379 74,095 45,714 General and administrative expenses 52,625 30,185 20,823 (Gain) loss on disposal of assets ( 336 ) 5,466 1,931 Gain on fair value of bitcoin, net ( 425,646 ) ( 113,423 ) — Depreciation and amortization 348,335 154,609 120,728 Indirect tax contingency expenses 11,122 — — Impairment expense - bitcoin — — 7,163 Impairment expense - fixed assets — 197,041 — Impairment expense - other — 716 — Realized gain on sale of bitcoin — — ( 1,357 ) Total costs and expenses $ 447,365 $ 528,011 $ 299,451 Income (loss) from operations 318,949 ( 149,043 ) ( 131,043 ) Other income (expense) Gain on fair value of contingent consideration — — 2,484 Gain on bitcoin collateral 92,190 1,475 — Loss on derivative securities, net ( 1,546 ) ( 965 ) ( 259 ) Interest income 4,125 8,555 481 Interest expense ( 11,335 ) ( 2,455 ) ( 2,977 ) Other income 1,192 — 11 Total other income (expense) $ 84,626 $ 6,610 $ ( 260 ) Income (loss) before income tax expense 403,575 ( 142,433 ) ( 131,303 ) Income tax expense 39,111 3,344 2,416 Income (loss) from operations $ 364,464 $ ( 145,777 ) $ ( 133,719 ) Discontinued operations Loss from discontinued operations $ — $ — $ ( 4,429 ) Net income (loss) $ 364,464 $ ( 145,777 ) $ ( 138,148 ) Preferred stock dividends 11,140 3,422 — Net income (loss) attributable to common shareholders $ 353,324 $ ( 149,199 ) $ ( 138,148 ) Other comprehensive (loss) income, net of tax ( 418 ) 192 116 Total comprehensive income (loss) attributable to common shareholders $ 352,906 $ ( 149,007 ) $ ( 138,032 ) F- 10 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (continued) (in thousands, except per share and share amounts) For the year ended September 30, 2025 2024 2023 Income (loss) from continuing operations per common share - basic $ 1.25 $ ( 0.69 ) $ ( 1.30 ) Weighted average common shares outstanding - basic 282,182,800 216,860,819 102,707,509 Income (loss) from continuing operations per common share - diluted $ 1.12 $ ( 0.69 ) $ ( 1.30 ) Weighted average common shares outstanding - diluted 317,761,220 216,860,819 102,707,509 (Loss) on discontinued operations per common share - basic $ — $ — $ ( 0.04 ) Weighted average common shares outstanding - basic 282,182,800 216,860,819 102,707,509 (Loss) on discontinued operations per common share - diluted $ — $ — $ ( 0.04 ) Weighted average common shares outstanding - diluted 317,761,220 216,860,819 102,707,509 The accompanying notes are an integral part of these Consolidated Financial Statements. F- 11 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Preferred Stock Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders' Shares Amount Shares Amount Capital Income Deficit Equity Balance, September 30, 2022 1,750,000 $ 2 55,661,337 $ 56 $ 599,898 $ 110 $ ( 196,054 ) $ 404,012 Options and restricted stock units issued for services — — 4,483,669 4 24,138 — — 24,142 Shares withheld for net settlement of restricted stock units related to tax withholdings — — ( 1,397,258 ) ( 1 ) ( 5,871 ) — — ( 5,872 ) Shares issued for settlement of contingent consideration related to business acquisition — — 1,100,890 1 2,839 — — 2,840 Shares issued for business acquisition — — 1,590,175 1 4,801 — — 4,802 Shares returned for settlement of contingent consideration and holdbacks related to business acquisition — — ( 83,417 ) — — — — — Shares issued under equity offering, net of offering costs — — 98,829,525 99 383,677 — — 383,776 Net loss — — — — — — ( 138,148 ) ( 138,148 ) Other comprehensive income, net of tax — — — — — 116 — 116 Balance, September 30, 2023 1,750,000 $ 2 160,184,921 $ 160 $ 1,009,482 $ 226 $ ( 334,202 ) $ 675,668 F- 12 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued) (in thousands, except share amounts) Preferred Stock Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders' Shares Amount Shares Amount Capital Income Deficit Equity Balance, September 30, 2023 1,750,000 $ 2 160,184,921 $ 160 $ 1,009,482 $ 226 $ ( 334,202 ) $ 675,668 Cumulative effect of change in accounting principle (See Note 2) — — — — — — 4,183 4,183 Options and restricted stock units issued for services — — 5,357,166 6 29,549 — — 29,555 Shares withheld for net settlement of restricted stock units related to tax withholdings — — ( 1,763,415 ) ( 2 ) ( 22,553 ) — — ( 22,555 ) Exercise of options and warrants — — 149,293 — 752 — — 752 Shares issued under equity offering, net of offering costs — — 106,969,819 107 1,222,136 — — 1,222,243 Preferred stock dividends — — — — — — ( 3,422 ) ( 3,422 ) Preferred stock Series X Issuance 1,000,000 1 — — — — — 1 Net loss — — — — — — ( 145,777 ) ( 145,777 ) Other comprehensive income, net of tax — — — — — 192 — 192 Balance, September 30, 2024 2,750,000 $ 3 270,897,784 $ 271 $ 2,239,367 $ 418 $ ( 479,218 ) $ 1,760,841 F- 13 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued) (in thousands, except share amounts) Preferred Stock Common Stock Treasury Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders' Shares Amount Shares Amount Stock Capital Income Deficit Equity Balance, September 30, 2024 2,750,000 $ 3 270,897,784 $ 271 $ — $ 2,239,367 $ 418 $ ( 479,218 ) $ 1,760,841 Options and restricted stock units issued for services — — 3,603,208 3 — 45,332 — — 45,335 Shares issued for business acquisition — — 5,031,221 5 — 60,672 — — 60,677 Warrants issued — — — — — 3,798 — — 3,798 Warrants reclassified as equity awards — — — — — 1,607 — — 1,607 Purchase of capped call — — — — — ( 90,350 ) — — ( 90,350 ) Shares withheld for net settlement of restricted stock units related to tax withholdings — — ( 222,080 ) — — ( 2,416 ) — — ( 2,416 ) Exercise of options and warrants — — 158,039 — — 922 — — 922 Shares issued under equity offering, net of offering costs — — 16,619,361 17 — 186,791 — — 186,808 Preferred stock dividends — — — — — — — ( 11,140 ) ( 11,140 ) Preferred stock series X redemption ( 1,000,000 ) ( 1 ) — — — — — — ( 1 ) Purchase of treasury stock — — — — ( 145,000 ) — — — ( 145,000 ) Net income — — — — — — — 364,464 364,464 Other comprehensive income, net of tax — — — — — — ( 418 ) — ( 418 ) Balance, September 30, 2025 1,750,000 $ 2 296,087,533 $ 296 $ ( 145,000 ) $ 2,445,723 $ — $ ( 125,894 ) $ 2,175,127 The accompanying notes are an integral part of these Consolidated Financial Statements. F- 14 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the year ended September 30, 2025 2024 2023 Cash Flows from Operating Activities Net income (loss) $ 364,464 $ ( 145,777 ) $ ( 138,148 ) Less: Income from discontinued operations — — 4,429 Adjustments to reconcile net income (loss) to net cash used in operating activities: Bitcoin mining revenue, net ( 766,314 ) ( 378,968 ) ( 168,121 ) Gain on fair value of bitcoin, net ( 425,646 ) ( 113,423 ) — Proceeds from sale of bitcoin — — 116,271 Realized gain on sale of bitcoin — — ( 1,357 ) Bitcoin issued for services 1,932 1,134 720 Impairment expense - fixed assets — 197,041 — Impairment expense - other — 716 — Impairment expense - bitcoin — — 7,163 Loss on derivative securities, net 1,546 965 259 Gain on fair value of contingent consideration — — ( 2,484 ) Gain on bitcoin collateral ( 92,190 ) ( 1,475 ) — Stock based compensation 45,335 29,555 24,142 Depreciation and amortization 348,335 154,609 120,728 Deferred income taxes, net 39,111 3,344 2,416 (Gain) loss on disposal of assets ( 336 ) 5,466 1,931 Other 3,228 474 662 Changes in operating assets and liabilities Decrease in operating lease liabilities ( 1,072 ) ( 287 ) ( 70 ) Increase in accounts payable and accrued liabilities 32,794 19,721 13,244 (Increase) decrease in prepaid expenses and other current assets ( 5,057 ) ( 3,367 ) 2,555 Increase in other long-term assets ( 7,162 ) ( 2,882 ) ( 2,913 ) Net cash used in operating activities - Continuing Operations $ ( 461,032 ) $ ( 233,154 ) $ ( 18,573 ) Net cash used in operating activities of Discontinued Operations — ( 508 ) 1,326 Net cash used in operating activities $ ( 461,032 ) $ ( 233,662 ) $ ( 17,247 ) Cash Flows from Investing Activities Payments on miners and mining equipment (including deposits) $ ( 418,212 ) $ ( 740,296 ) $ ( 239,416 ) Purchase of fixed assets ( 144,661 ) ( 66,100 ) ( 61,460 ) Purchase of bitcoin ( 160,184 ) — — Proceeds from sale of bitcoin and option settlement 378,158 43,126 — Proceeds from sale of miners 41,662 1,438 34 Proceeds from sale of derivative contracts 9,653 — — Acquisition of GRIID Infrastructure 1,411 — — Asset acquisition - LaFayette, GA Location ( 1,413 ) — — Asset acquisition - Twin City, GA Location ( 5,490 ) — — Asset acquisition - Tennessee Locations ( 8,105 ) ( 18,376 ) — Asset acquisition - Wyoming Locations — ( 25,940 ) — Asset acquisition - LN Energy — ( 25,933 ) — Asset acquisition - Mississippi Locations — ( 22,791 ) — Asset acquisition - Dalton, GA Locations — ( 3,569 ) ( 9,389 ) Asset acquisition - Land in Sandersville, GA — ( 1,038 ) ( 1,430 ) Acquisition of Mawson — — ( 22,518 ) Note receivable from GRIID — ( 60,919 ) — Other 1,525 — — Net cash used in investing activities - Continuing Operations $ ( 305,656 ) $ ( 920,398 ) $ ( 334,179 ) Net cash provided by investing activities - Discontinued Operations — — 2,250 Net cash used in investing activities $ ( 305,656 ) $ ( 920,398 ) $ ( 331,929 ) F- 15 CLEANSPARK, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) For the year ended September 30, 2025 2024 2023 Cash Flows from Financing Activities Purchase of treasury stock $ ( 145,000 ) $ — $ — Payments for capped call ( 90,350 ) — — Payments on debt ( 135,980 ) ( 7,265 ) ( 14,466 ) Payments of debt issuance costs ( 2,007 ) — — Payments on preferred dividends ( 10,744 ) ( 3,421 ) ( 21 ) Payments on finance leases ( 25 ) ( 93 ) ( 301 ) Refund of debt commitment fee — — 150 Proceeds from debt, net of issuance fees 889,195 50,000 1,937 Payments of taxes on shares withheld for net settlement of restricted stock units ( 3,953 ) ( 22,685 ) ( 5,571 ) Proceeds from exercise of options and warrants 922 753 — Proceeds from equity offerings, net 186,808 1,231,834 376,200 Net cash provided by financing activities $ 688,866 $ 1,249,123 $ 357,928 Net (decrease) increase in cash, cash equivalents and restricted cash $ ( 77,822 ) $ 95,063 $ 8,752 Cash, cash equivalents and restricted cash, beginning of the year $ 124,278 $ 29,215 $ 20,463 Cash and cash equivalents, and restricted cash, end of the year $ 46,456 $ 124,278 $ 29,215 Supplemental disclosure of cash flow information Cash paid for interest $ 8,879 $ 2,126 $ 2,907 Non-cash investing and financing transactions Shares issued for settlement of contingent consideration related to business acquisition $ — $ — $ 2,840 Receivable for equity proceeds $ — $ — $ 9,590 Fixed asset and miner purchases accrued not paid $ 1,140 $ 67,572 $ 27,369 Shares withheld for net settlement of restricted stock units related to tax withholdings $ 2,415 $ 22,555 $ 5,873 Fixed assets purchased through finance transactions $ 1,535 $ 7,190 $ 493 Miners and derivatives purchased with bitcoin $ 80,880 $ — $ — Software purchased with bitcoin $ 7,000 $ 541 $ 229 Preferred shares dividends accrued $ 396 $ — $ — Unrealized gain on investment in available-for-sale debt security $ — $ — $ 116 Shares issued in connection with GRIID Acquisition $ 60,677 $ — $ — The accompanying notes are an integral part of these Consolidated Financial Statements. F- 16 CLEANSPARK, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($ in thousands, except per share and bitcoin amounts) 1. ORGANIZATION AND LINE OF BUSINESS Organization CleanSpark, Inc. (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. The Company designs its infrastructure to responsibly secure and support the bitcoin network, the world’s most recognized digital commodity. Lines of Business Bitcoin Mining Business 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. 2. 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 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 . All intercompany transactions have been eliminated upon consolidation of these entities. The Company has a sole reporting segment which is the bitcoin mining segment. 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, 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 materially differ from these estimates under different assumptions or conditions. F- 17 Revenue from Contracts with Customers - Revenue from Bitcoin Mining The Company participates in a third-party operated mining pool. As a participant in the third-party operated mining pool, the Company provides a service to perform hash calculations for the third-party operated mining pool, which is an output of our ordinary activities. The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1. Identify the contract with the customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when the company satisfies a performance obligation Step 1 : The Company has identified the third-party mining pool operator as its customer (the “Customer”). The Company enters into a contract with the Customer to provide its hash calculations to the Customer's mining pool. 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. Step 2 : In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: • The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and • t he entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). Based on these criteria, the Company has identified a single performance obligation of providing hash calculations for the mining pool operator. The continuous renewal options do not represent material rights because they do not provide the Customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no up front or incremental fees in the initial contract. The Company has full control of the mining equipment used in the mining pool, and if the Company determines it will increase or decrease the hashrate calculations of its machines and/or fleet (i.e., for repairs or when power costs are excessive), the hashrate provided to the Customer will correspondingly increase or decrease. Step 3 : The Company receives non-cash consideration in the form of bitcoin, fair value of which the Company measures at 23:59:59 UTC on the date of contract inception using the Company's principal market for bitcoin, Coinbase. The contract renews continuously throughout the day, and thus the value of the consideration should be assessed continuously throughout the day, and the Company has concluded to use the 23:59:59 UTC bitcoin price each day. 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 consideration, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items. F- 18 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 determined as follows: • 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 for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: 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, multiplied by the total Bitcoin Network block rewards expected to be generated for the same period. • The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the contract period as a percent of total block rewards the Bitcoin Network actually generated during the same period, multiplied by the block rewards the Company earned for the same period noted above. • The sum of the block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the Customer for operating the mining pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent the Company performs hash calculations and generates revenue in accordance with the Customer’s payout formula during the continuously renewed contract periods beginning mid-night UTC and ending 23:59:59 UTC daily. The Customer provides services solely for bitcoin mining and the fees charged during the most recent fiscal year end were 0.16% of the total daily bitcoin mined. This amount represents consideration paid to the Customer and is thus reported as a reduction in revenue as the Company does not receive a distinct good or service from the mining pool operator in exchange. Step 4 : There is a single performance obligation (i.e., to provide hash calculations or hashrate to the customer) for the contract; therefore, all consideration from the Customer is allocated to this single performance obligation. Step 5 : The Company’s performance is completed over time as the customer obtains control of the contributed hashrate. The performance obligation of hash calculations is fulfilled over time, as opposed to a point in time, 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. There are no deferred revenues or other liability obligations recorded by the Company since there are no payments in advance of the performance, and there are no remaining performance obligations after providing hash calculations. Revenues from Data Center Services Effective as of September 30, 2023, data center services are no longer provided to external customers. The Company formerly provided data services, such as providing its customers with rack space, power and equipment, and cloud services, such as virtual services, virtual storage and data backup services, generally based on monthly services provided at a defined price included in the contracts. The performance obligations were the services provided to a customer for the month based on the contract. 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 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 The Company includes energy costs and external co-location mining hosting fees in cost of revenues. Cash and cash equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. These investments may include money market funds, certificates of deposit, and other short-term instruments. Temporary cash investments are made with high credit quality financial institutions. At times, such investments in U.S. accounts may exceed FDIC insurance limits. F- 19 Restricted cash 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. Prepaid expense and other current assets The Company records a prepaid expense for costs paid but not yet incurred. Those expected to be incurred within one year are recognized and shown as a short-term pre-paid expense. Any costs expected to be incurred outside of one year would be considered other long-term assets. Bitcoin 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 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. Prior to the adoption of ASC 350-60, bitcoin was recorded at cost less impairment and was classified as indefinite-lived intangible assets in accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”). Bitcoin was accounted for in connection with the Company’s revenue recognition policy detailed above. An intangible asset with an indefinite useful life was not amortized but was assessed for impairment annually, or more frequently, when events or changes in circumstances occurred indicating that it was more likely than not that the indefinite-lived asset was impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment for periods under the prior accounting guidance, the Company had the option to first perform a qualitative assessment to determine whether it was more likely than not that an impairment exists. If it was determined that it was not more likely than not that an impairment exists, a quantitative impairment test was not necessary. If the Company concluded otherwise, it was required to perform a quantitative impairment test. The Company elected to perform the quantitative impairment test each period rather than first performing the qualitative assessment. Quantitative impairment was measured using the intraday low bitcoin price from its principal market for bitcoin in accordance with ASC 820. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. 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 Flows. The cash proceeds from the sales of bitcoin are classified based on the holding period in which the bitcoin is held. ASC 350-60 provides guidance on classifying proceeds from bitcoin and concludes that bitcoin converted nearly immediately into cash would qualify as cash flows from operating activities. All other sales would qualify as investing activities. The Company did not hold its bitcoin for extended periods of time, and such sales proceeds prior to the adoption of ASC 350-60 were reported as cash flows from operating activities. 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 the periods presented, all proceeds from bitcoin sales were classified as investing activities. F- 20 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 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 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 from bitcoin collateral. The estimation process also includes reasonable and supportable forecasts to account for future economic conditions and any anticipated impact on the receivable. For the years ended September 30, 2025 and September 30, 2024 , no amount of allowances for credit losses was deemed necessary. Investment securities Investment securities include debt securities and equity securities. Debt securities are classified as available for sale (“AFS”) and are reported as an asset in the Consolidated Balance Sheets at their estimated fair value. As the fair values of AFS debt securities change, the changes are reported net of income tax as an element of Other comprehensive income (“OCI”). When AFS debt securities are sold, the unrealized gains or losses are reclassified from OCI to non-interest income. Securities classified as AFS are securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security. For individual debt securities where the Company either intends to sell the security or more likely than not will not recover all of its amortized cost basis, a credit loss allowance is established, with the credit portion of the impairment recognized in earnings. The allowance is measured as the difference between the security's amortized cost and the present value of expected cash flows, limited to the difference between the amortized cost basis and fair value at the balance sheet date. Interest accruals, as well as amortization and accretion of premiums and discounts, are suspended if it becomes unlikely that the full amount due will be collected Interest received after accruals have been suspended is recognized in income on a cash basis. The Company held investments in both publicly held and privately held equity 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 Income (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 Income (Loss) . F- 21 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, 2025 September 30, 2024 Indirect tax contingencies $ 64,481 $ 2,797 Accrued operating expenses 30,562 12,560 Accrued payroll expenses 15,530 10,794 Indirect tax accruals 6,017 3,761 Other accrued liabilities 954 13,962 Accrued liabilities $ 117,544 $ 43,874 Concentration risk 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. 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, 2025, revenue is concentrated with one mining pool operator and all bitcoin reside with one custodian. Refer to Note 18 - Revenue and Vendor Concentrations . Leases In accordance with ASC 842, Leases , the Company assesses whether an arrangement contains a lease at contract inception. When an arrangement contains a lease, the Company categorizes leases with contractual terms longer than twelve months as either operating or finance. 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 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. As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments. Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less. Some leases include multiple year renewal options. The Company’s decision to exercise these renewal options is based on an assessment of its current business needs and market factors at the time of the renewal. Currently, the Company has certain leases for which the option to renew is reasonably certain, and therefore, options to renew were factored into the calculation of its right of use asset and lease liability as of September 30, 2025. 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) . F- 22 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 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 The Company follows the guidelines in FASB Codification Topic ASC 718-10, Compensation-Stock Compensation , which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. For equity awards granted by the Company that are contingent upon market-based conditions, the Company fair values these awards using the Monte Carlo simulation model. For discussion of accounting for restricted stock units (“RSUs”) and performance stock units (“PSUs”), please refer Note 17 - Stock-Based Compensation . 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 income (loss) per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. 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. F- 23 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) 2025 2024 2023 Continuing Operations Numerator Net income (loss) attributable to common shareholders - Basic $ 353,324 $ ( 149,199 ) $ ( 133,719 ) Non-cash interest expense on convertible notes 2,120 — — Net income (loss) attributable to common shareholders - Dilutive 355,444 ( 149,199 ) ( 133,719 ) Denominator Weighted-average common shares outstanding - Basic 282,182,800 216,860,819 102,707,509 Dilutive impact of stock options and other share-based awards 1,035,578 — — Dilutive impact of convertible notes 34,542,842 — — Weighted-average common shares outstanding - Dilutive 317,761,220 216,860,819 102,707,509 Income (loss) per common share attributable to common shareholders Basic $ 1.25 $ ( 0.69 ) $ ( 1.30 ) Diluted $ 1.12 $ ( 0.69 ) $ ( 1.30 ) Discontinued Operations Numerator Loss from discontinued operations $ — $ — $ ( 4,429 ) Denominator Weighted-average common shares outstanding - Dilutive 317,761,220 216,860,819 102,707,509 Loss on discontinued operations per common share attributable to common shareholders Basic $ — $ — $ ( 0.04 ) Diluted $ — $ — $ ( 0.04 ) 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: For the year ended September 30, 2025 2024 2023 Series A preferred stock conversion 5,250,000 5,250,000 5,250,000 Anti-dilutive warrants 1,586,999 12,419 62 Anti-dilutive stock options 1,336,498 169,636 11,087 Anti-dilutive restricted stock awards - 1,383,425 - Anti-dilutive contingently issuable shares - - 289,549 Total anti-dilutive securities 8,173,497 6,815,480 5,550,698 Property and equipment Property and equipment are stated at cost less accumulated depreciation. Construction in progress is the construction or development of assets that have not yet been placed in service for their intended use. Depreciation for machinery and equipment, mining equipment, buildings, furniture and fixtures and leasehold improvements commences once they are ready for their intended use. Leasehold improvements are depreciated on a straight-line basis over the shorter of their estimated useful lives or the terms of the related leases. Land is not depreciated. F- 24 Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Useful life (years) Land improvements 5 - 15 Building and building improvements Shorter of lease term or 30 years Leasehold improvements Shorter of lease term or 15 years Miners 3 (1) Mining equipment 3 - 15 Infrastructure asset Shorter of lease term or 15 years Machinery and equipment 3 - 10 Furniture and fixtures 1 - 5 (1) Effective May 1, 2024, the Company reduced the useful life for miners from five years to three years In accordance with the FASB ASC 360-10, Property, Plant and Equipment , the carrying value of property and equipment, and other long-lived assets, is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. 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 ). Business Combinations, Intangible assets and Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations , where the total purchase price is allocated to the identified assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The difference between the purchase price, including any contingent consideration, and the fair value of net assets acquired is recorded as goodwill. Contingent consideration transferred is initially recognized at fair value. Contingent consideration classified as a liability or an asset is remeasured to fair value each period until settlement, with changes recognized in profit or loss. Contingent consideration classified as equity is not remeasured. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. The Company reviews its indefinite lived intangibles and goodwill for impairment annually or whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed an assessment of indefinite lived intangibles and goodwill for the year end September 30, 2025. The Company amortizes intangible assets with finite lives over their estimated useful lives as follows: Useful life (years) Websites 3 Software 4 - 7 Strategic contract 5 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 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. F- 25 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 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: 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. In determining the fair value for which the quantitative assessment was performed, the Company engaged a valuation specialist to perform the quantitative impairment analysis. The valuation report included a combination of the market and income approach to test for goodwill impairment. The income approach is a valuation technique under which the Company estimates future cash flows using the financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, revenue is projected and applied to fixed and variable cost experience rates to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate the estimated fair value. The discount rate used was the value-weighted average of the Company’s estimated cost of capital derived using both known and estimated customary market metrics. In determining the estimated fair value, several factors were estimated, including projected operating results, growth rates, economic conditions, anticipated future cash flows and the discount rate. The market valuation approach evaluated the Company's market value as compared to the net asset balance. 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: For the year ended September 30, ($ in thousands) 2025 2024 2023 Beginning of year balance $ 8,043 $ 8,043 $ — Acquisitions 123,615 — 8,043 End of year balance $ 131,658 $ 8,043 $ 8,043 Fair value measurement of financial instruments, derivative asset and liability, and contingent consideration Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. 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. Level 1 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. Level 2 Quoted prices for similar assets and liabilities in active markets; 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 assets or liabilities. Level 3 Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. 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 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. F- 26 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 ($ in thousands) Amount Level 1 Level 2 Level 3 Assets: Cash equivalents (1) $ 32,992 $ 32,992 $ — $ — Receivable from bitcoin collateral (2) 294,648 — 294,648 — Bitcoin 1,189,443 1,189,443 — — Bitcoin derivative - Bitmain contracts 233 — — 233 Liabilities: Interest rate swap derivative 93 — 93 — Warrant liabilities 115 — 115 — September 30, 2024 ($ in thousands) Amount Level 1 Level 2 Level 3 Assets: Cash equivalents (1) $ 120,638 $ 120,638 $ — $ — Receivable from bitcoin collateral (2) 77,827 — 77,827 — Bitcoin 431,661 431,661 — — ILAL derivative asset 1,832 — — 1,832 Investment in debt security 918 — — 918 Liabilities: Interest rate swap derivative 100 — 100 — (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. The activities of the financial instruments that are measured and recorded at fair value on the Company's balance sheets on a recurring basis during years ended September 30, 2025 and 2024 are included in Note 9 - Investments and Derivatives. Assets and liabilities measured and recorded at fair value on a non-recurring basis The Company’s non-financial assets, such as goodwill, intangible assets, and property and equipment are adjusted to fair value when an impairment charge is recognized. The Company’s impairment related to its miners held in property and equipment in the year ended September 30, 2024 utilized Level 3 inputs including future bitcoin prices, transaction fees, and the future global hashrate. The Company’s strategic investments are also measured at fair value on a non-recurring basis. Such fair value measurements are based predominantly on Level 3 inputs. The carrying value of the Company’s strategic investments is predominantly adjusted based on internal discounted cash flow models that use available market data of comparable companies and other unobservable inputs including expected volatility, expected time to liquidity, and adjustments for other company-specific developments. 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 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. The fair value of these financial instruments are based on Level 1 inputs, except for short-term borrowings and loans receivable which would be based on Level 2 and Level 3 inputs, respectively. F- 27 Income taxes The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. 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. 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 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. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from managements estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense. 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 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 The Company deemed its energy operations to be discontinued operations due to its strategic decision to strictly focus on its bitcoin mining operations and divest of the majority of its energy assets. Through its discontinued operations segment, the Company previously provided energy solutions through its wholly-owned subsidiaries CleanSpark LLC, CleanSpark II, LLC, CleanSpark Critical Power Systems, Inc., GridFabric, LLC, and Solar Watt Solutions, Inc. These solutions consisted of engineering, design and software solutions, custom hardware solutions, Open Automated Demand response, solar, energy storage for microgrid and distributed energy systems. The Company has since sold the majority of its assets related to the energy segment, which included software and intellectual property, and inventory. See Note 4 - Discontinued Operations . Commitments and contingencies The Company is subject to the possibility of various loss contingencies and loss recoveries, such as legal proceedings and claims arising out of its business. The Company considers the likelihood of loss or impairment of an asset, or the incurrence of a liability, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. 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. F- 28 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. F- 29 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 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 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. Crypto assets that meet all the following criteria are within the scope of ASC 350-60: (1) meet the definition of intangible assets as defined in the Codification; (2) do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets; (3) are created or reside on a distributed ledger based on blockchain or similar technology; (4) are secured through cryptography; (5) are fungible; and (6) are not created or issued by the reporting entity or its related parties. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. Bitcoin, which is the sole crypto asset mined by the Company, meets each of these criteria. For all entities, the ASC 350-60 amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual consolidated financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company has elected to early adopt the new guidance effective October 1, 2023, resulting in a $ 4,183 cumulative-effect change to adjust the Company's bitcoin held on October 1, 2023 with the corresponding entry to accumulated deficit as of October 1, 2023. The tax effect of the adjustment to record the adoption of ASU 2023-08 was to both decrease the deferred tax asset related to cumulative losses from the fair value adjustments of bitcoin held by the company and decrease the valuation allowance for gross deferred tax assets by the same amount as the adjustment to record the adoption of the ASU. F- 30 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which established a new income tax disclosure requirement in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. Companies must also further disaggregate income taxes paid. Companies are required to apply the guidance to annual periods beginning after December 15, 2024. The Company does not intend to early adopt this standard. The Company is currently evaluating the impact of the adoption of ASU 2023-09 on its Consolidated Financial Statements. In November 2023, the FASB issued ASU 2023-07, Improvements to Disclosures About Reportable Segments (“ASU 2023-07”), which requires enhanced disclosures about significant segment expenses. 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 Company adopted ASU 2023-07 on the current fiscal year, which did not have a material impact on the Consolidated Financial Statements . F- 31 3. REVISIONS TO PREVIOUSLY ISSUED FINANCIAL STATEMENTS In connection with the preparation of the Company’s Consolidated Financial Statements as of and for the period ended September 30, 2024, the Company identified errors in relation to the accounting for income taxes, primarily due to the application of Internal Revenue Service (“IRS”) section 162(m) excess executive compensation and the ability to utilize federal and state net operating loss carryforwards under the provisions of Internal Revenue Code Section 382. 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 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. The Company assessed the materiality of the errors, including the presentation on prior periods consolidated financial statements, on a qualitative and quantitative basis in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 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 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 Statement of Operations and Comprehensive Loss For the year ended September 30, 2023 ($ in thousands) As previously reported As revised Income tax expense $ 857 $ 2,416 Loss from continuing operations ( 132,160 ) ( 133,719 ) Net loss ( 136,589 ) ( 138,148 ) Net loss attributable to common shareholders ( 136,589 ) ( 138,148 ) Total comprehensive loss attributable to common shareholders ( 136,473 ) ( 138,032 ) Loss from continuing operations per common share Basic $ ( 1.29 ) $ ( 1.30 ) Diluted $ ( 1.29 ) $ ( 1.30 ) 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. F- 32 Consolidated Statements of Cash Flows For the year ended September 30, 2023 ($ in thousands) As previously reported As revised Net loss $ ( 136,589 ) $ ( 138,148 ) Increase in accounts payable and accrued liabilities 7,673 13,244 (Increase) decrease in prepaid expenses and other current assets ( 5,021 ) 2,555 Increase in deferred income taxes 857 2,416 Net cash (used in) provided by operating activities of continuing operations ( 31,720 ) ( 18,573 ) Net cash (used in) provided by operating activities ( 30,394 ) ( 17,247 ) Payments of taxes on shares withheld for net settlement of restricted stock units — ( 5,571 ) Proceeds from equity offerings, net 383,776 376,200 Net cash provided by financing activities of continuing operations 371,075 357,928 Net cash provided by financing activities 371,075 357,928 For any rows left blank in the tables above, no changes were identified from that prior period. All referenced amounts for prior periods in these financial statements and the notes herein reflect the balances and amounts as revised. The footnote under Note 14 - Income Taxes has been revised to incorporate the changes discussed above and is presented herein as updated. 4. DISCONTINUED OPERATIONS 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 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. 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: For the year ended ($ in thousands) September 30, 2023 Total revenues, net $ 158 Total costs and expenses 6,071 Loss from operations $ ( 5,913 ) Other income (expense) Gain on disposal of assets 1,508 Interest expense ( 24 ) Total other income $ 1,484 Loss before income tax expense $ ( 4,429 ) Income tax expense — Net loss attributable to common shareholders $ ( 4,429 ) F- 33 5. ACQUISITIONS Business Combinations GRIID Infrastructure Inc. 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. Pursuant to the Hosting Agreement, GRIID hosted certain of the Company’s bitcoin mining equipment at GRIID facilities for a fee defined in the Hosting Agreement. The Hosting Agreement had an initial service term of one year with seven additional renewal terms, each for six months. 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. F- 34 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) GRIID Shares of CleanSpark common stock issued 5,031,221 Closing price per share of CleanSpark common stock on October 30, 2024 $ 12.06 Fair value of CleanSpark common share issued as a portion of purchase price $ 60,677 Fair value of CleanSpark warrants issued as a portion of purchase price 6,097 Fair value of equity portion of purchase price 66,774 Cash consideration 1 Settlement of amounts payable by Company to GRIID under Hosting Agreement ( 1,164 ) Settlement of the GRIID Credit Agreement as a portion of purchase price 62,636 Settlement of preexisting relationship, including interest, as a portion of purchase price 61,472 Purchase price $ 128,247 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 $ 1,089 Restricted cash 323 Accounts receivable 172 Prepaid expense and other current assets 193 Property and equipment 18,839 Other long-term assets 9,601 Operating lease right of use assets 1,100 Total tangible assets acquired 31,317 Intangible assets Goodwill 123,615 Total assets acquired 154,932 Liabilities assumed Accounts payable 3,479 Accrued liabilities 17,918 Finance lease obligations 2 Operating lease liabilities 2,458 Other liabilities 2,828 Total liabilities assumed 26,685 Net assets acquired $ 128,247 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 . F- 35 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) 2025 2024 Pro forma revenue $ 766,314 $ 400,695 Pro forma net income (loss) from continuing operations 354,937 ( 112,275 ) 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). F- 36 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) Fair Value Cash $ 22,518 Financing provided by seller 6,500 1,590,175 shares of CLSK common stock 4,803 Total purchase price $ 33,821 Contingent Consideration Earn-out Shares of CLSK common stock 3,325 Megawatt earnout (up to $ 2,000 max) 2,000 Total contingent consideration $ 5,325 Total purchase sale agreement consideration $ 39,146 ($ in thousands) Allocation at Acquisition Date Right of use lease asset $ 5,010 Lease liability assumed ( 5,100 ) Building 13,654 Infrastructure asset 4,465 Miners 12,914 Machinery and equipment 160 Goodwill 8,043 Total $ 39,146 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 $ 752 Land 264 Land improvements 211 Building 159 Building improvements 27 Total $ 1,413 F- 37 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. 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 $ 5,051 Leasehold improvements 849 Finance lease liability ( 410 ) Total $ 5,490 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 . Also on September 10, 2024, CSRE Properties Tennessee, LLC, a wholly-owned subsidiary of the Company, entered into a Real Estate Purchase and Sale Agreement (the “RE PSA”) with US Farms & Mining, Inc. to purchase real property that was leased by the TN MIPA Seller for purposes of conducting operations of four of the mining locations. Under the terms of the RE PSA, CSRE Properties Tennessee, LLC will pay US Farms & Mining, Inc. an aggregate consideration of $ 2,500 . The total consideration set forth to be paid per the agreements is $ 27,500 . The cities of the bitcoin mining facilities for each MIPA are as follows: MIPA 1: Jellico, TN and West Crossville, TN; MIPA 2: Campbell Junction, TN and Decatur, TN; and MIPA 3: Winfield, TN; Oneida, TN; and Tazewell, TN. 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 $ 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 at Acquisition Date Land $ 6,187 Land improvements 648 Building 805 Infrastructure 22,153 Right of use assets 61 Operating lease liability ( 372 ) Total $ 29,482 F- 38 Mississippi acquisition - Clinton, MS On September 16, 2024, CSRE Properties Mississippi, LLC, a Mississippi limited liability company and wholly-owned subsidiary of the Company, entered into definitive agreements with Eyas Investment Group and Makerstar Capital, Inc. (“Makerstar”) to acquire bitcoin mining facilities in Clinton, Mississippi (the “Clinton Property”). The combined purchase price (including direct acquisition costs of $ 129 ) for the real property, construction in progress and personal property was approximatel y $ 3,020 . The transaction was consummated in September 2024 and 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. The allocation of the purchase price of the assets acquired are summarized below: ($ in thousands) Allocation at Acquisition Date Land $ 734 Construction in progress 2,286 Total $ 3,020 In connection with the acquisition of the Clinton Property, CSRE Properties Mississippi, LLC entered into a Construction Management Services Agreement dated September 16, 2024 with Beast Power, Inc. (“Beast Power”), pursuant to which Beast Power was engaged to manage the completion of the con struction of a data center facility on the Clinton Property for aggregate consideration of $ 2,888 . The construction is expected to be substantially complete by December 2024. Wyoming acquisition - Cheyenne, WY 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: the first agreement for Parcel 1, with a purchase price of $ 11,250 , and the second agreement for Parcel 2, with a purchase price of $ 11,250 , with no contingent payment requirements for either parcel. In order for the federal agency to approve the transaction and for the Company to complete the acquisition of the land from MineOne, the assets on-site had to be demolished and the personal property had to be removed. On August 2, 2024, the Company and MineOne entered into an Asset Purchase Agreement (“APA”) with a purchase price of $ 1,500 , subsequently amended to $ 1,300 , to acquire infrastructure assets. The Company closed on the purchase of Parcel 2 on July 11, 2024 with a combined purchase price (including direct acquisition costs of $ 147 ) of $ 11,397 . The Company closed on the purchase of Parcel 1 on September 11, 2024 with a combined purchase price (including direct acquisition costs of $ 470 ) of $ 11,720 . The direct acquisition costs for Parcel 1 included the cost of demolition. In addition, the Company purchased a parcel of raw land adjacent to Parcel 2 from Campstool Land Company, LLC on August 7, 2024 for a purchase price (including direct acquisition costs of $ 23 ) $ 1,523 . The Wyoming transactions were accounted for as asset acquisitions, 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. As a result, the total cost of the Wyoming land purchased was $ 24,640 , 100 % of which was allocated to land. F- 39 LN Energy LLC acquisition - Georgia On June 17, 2024, CleanSpark, Inc., through its wholly-owned subsidiary, CSRE Properties Sandersville, LLC (the “LN Energy Buyer”), entered into six (6) definitive agreements to acquire bitcoin mining facilities located in Georgia from, respectively, LN Energy 1 LLC, LN Energy 3 LLC, LN Energy 4 LLC, LN Energy 5 LLC, LN Energy 6 LLC and LN Energy 7 LLC (collectively, the “LN Energy Seller”) . The definitive agreements include the purchase of mining data centers, the assumption of the underlying real property leases and one power agreement. The combined purchase price was $ 26,177 , which included $ 25,800 paid to the LN Energy Seller, $ 132 incurred for direct acquisition costs, and $ 244 in assumed lease liabilities. T he transaction is 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. The allocation of the purchase price of the assets acquired and liabilities assumed are summarized below: ($ in thousands) Allocation at Acquisition Date Building/Improvements $ 1,809 Infrastructure 21,818 Right of use assets 2,550 Operating lease liability ( 244 ) Total $ 25,933 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 ). The three facilities are located in Meridian, Vicksburg, and Wiggins, 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. The allocation of the purchase price of the assets acquired is summarized below: ($ in thousands) Allocation at Acquisition Date Land $ 1,304 Building/Improvements 7,525 Infrastructure 10,942 Total $ 19,771 Dalton 3 acquisition - Dalton, GA On February 2, 2024, the Company, through its wholly-owned subsidiary CSRE Properties Dalton, LLC, entered into two purchase agreements with Makerstar. and its wholly-owned subsidiary, Eyas Investment Group, respectively, for approximately two acres of real property (the “Dalton Property”) located in Dalton, Whitfield County, Georgia and all improvements, fixtures and personal property situated on the Dalton Property. The Dalton Property was in the early stages of construction and included a concrete foundation and in-process electrical infrastructure at the time of entry into the respective agreements . The combined purchase price (including direct acquisition costs of $ 132 ) for the real property and improvements, fixtures and personal property was approximatel y $ 3,569 . The transaction was consummated in February 2024 and 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. The allocation of the purchase price of the assets acquired is summarized below: ($ in thousands) Allocation at Acquisition Date Land $ 327 Building/Improvements 702 Infrastructure 2,540 Total $ 3,569 F- 40 In connection with the acquisition of the Dalton Property, the Company entered into a Construction Management Services Agreement dated February 1, 2024 with Makerstar, pursuant to which the Company engaged Makerstar to manage the completion of the con struction of a data center facility on the Dalton Property for aggregate consideration of $ 3,435 . The construction was substantially completed, and the facility began bitcoin mining operations, on April 4, 2024. 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 . Each of the facilities are located on separate one acre sites, each of which are under land leases. 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. The allocation of the purchase price of the assets acquired and liabilities assumed are summarized below: ($ in thousands) Allocation at Acquisition Date Building $ 1,328 Infrastructure 8,061 Right of use land lease asset 266 Operating lease liability ( 266 ) Total $ 9,389 F- 41 6. BITCOIN As of September 30, 2025 and 2024 , the Company held 10,428 and 6,819 bitcoin, respectively. The following table presents a description of the Company's bitcoin holdings as of September 30, 2025 and 2024: As of Bitcoin holdings September 30, 2025 September 30, 2024 Number of bitcoin held 10,428 6,819 Cost basis - per bitcoin $ 105,025 $ 55,408 Fair value - per bitcoin $ 114,068 $ 63,301 Cost basis of bitcoin (in '000s) $ 1,095,151 $ 377,839 Fair value of bitcoin (in '000s) $ 1,189,443 $ 431,661 The cost basis represents the valuation of bitcoin at the time the Company earns the bitcoin through mining activities. The cost basis for 2,243 bitcoin held as of the date prior to the adoption of ASC 350-60 was determined on the “cost less impairment” basis. The following table presents information based on the activity of bitcoin for the years ended September 30, 2025 and 2024: Year ended ($ in thousands) September 30, 2025 September 30, 2024 Beginning Balance - before cumulative effect change $ 431,661 $ 56,241 Cumulative effect of the adoption of ASC 350-60 — 4,183 Adjusted beginning balance after cumulative effect change $ 431,661 $ 60,424 Addition of bitcoin from mining activities (1) 766,314 378,968 Bitcoin purchased 160,184 — Bitcoin sold ( 311,586 ) ( 43,105 ) Bitcoin issued for services and other non-cash consideration ( 89,922 ) ( 1,696 ) Bitcoin transferred to collateral account ( 605,830 ) ( 87,895 ) Bitcoin received from collateral account 412,976 11,542 Gain on fair value of bitcoin 425,646 113,423 Ending Balance (2) $ 1,189,443 $ 431,661 (1) Net of mining pool fees as described in Note 2 - Summary of Significant Accounting Policies . (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 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 . F- 42 7. 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 . 8. 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 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 . F- 43 9. INVESTMENTS AND DERIVATIVES 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) ILAL Debt Securities ILAL Derivative Asset Bitmain Derivative DAM Derivatives Interest Rate Swap Balance as of September 30, 2022 $ 610 $ 2,956 $ — $ — $ — Total gains or losses for the period Loss on derivative securities — ( 259 ) — — — Other comprehensive (loss) income, net of tax 116 — — — — Balance as September 30, 2023 $ 726 $ 2,697 $ — $ — $ — Total gains or losses for the period Loss on derivative securities — ( 865 ) — — ( 100 ) Other comprehensive (loss) income, net of tax 192 — — — — Balance as September 30, 2024 $ 918 $ 1,832 $ — $ — $ ( 100 ) Total gains or losses for the period (Loss) gain on derivative securities — ( 1,832 ) ( 6,850 ) 6,551 7 Other comprehensive (loss) income, net of tax ( 418 ) — — — — Purchases, sales, and settlements Purchased and acquired options — — 8,323 — — Sales and written options — — — ( 9,755 ) — Settlements and expiries ( 500 ) — ( 1,240 ) 3,204 — Balance as September 30, 2025 $ — $ — $ 233 $ — $ ( 93 ) 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). F- 44 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. F- 45 10. PROPERTY AND EQUIPMENT Property and equipment consist of the following: As of September 30, ($ in thousands) 2025 2024 Land $ 39,299 $ 32,190 Land improvements 9,937 5,449 Building and improvements 96,400 76,719 Leasehold improvements 2,941 1,995 Miners 1,422,011 1,035,128 Mining equipment 24,807 23,066 Infrastructure 295,837 155,191 Machinery and equipment 16,978 15,061 Furniture and fixtures 2,626 1,706 Construction in progress 12,788 19,455 Property and equipment, gross $ 1,923,624 $ 1,365,960 Less: Accumulated depreciation ( 559,943 ) ( 496,267 ) Property and equipment, net $ 1,363,681 $ 869,693 Depreciation expense for the years ended September 30, 2025, 2024 and 2023 was $ 344,135 , $ 152,469 and $ 118,615 , respectively. 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. 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 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 . 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 Income (Loss) as Impairment expense - fixed assets. F- 46 11. INTANGIBLE ASSETS Intangible assets consisted of the following as of September 30, 2025 and 2024: September 30, 2025 September 30, 2024 ($ in thousands) Intangible assets Accumulated amortization Net intangible assets Intangible assets Accumulated amortization Net intangible assets Software $ 7,981 $ ( 2,458 ) $ 5,523 $ 981 $ ( 230 ) $ 751 Websites 15 ( 15 ) — 15 ( 13 ) 2 Strategic contract 9,800 ( 9,474 ) 326 9,800 ( 7,513 ) 2,287 Total $ 17,796 $ ( 11,947 ) $ 5,849 $ 10,796 $ ( 7,756 ) $ 3,040 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, 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 Company expects to record amortization expense of intangible assets over the future periods as follows: Fiscal Year ($ in thousands) Intangible Assets 2026 $ 2,790 2027 2,420 2028 and thereafter 639 Total $ 5,849 12. LEASES 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. 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 The Company also has an operating lease for office space which was previously utilized as its corporate headquarters. In January 2024, the Company ceased usage of the office space. 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 Income (Loss). F- 47 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 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, ($ in thousands) 2025 2024 2023 Operating lease cost (1) $ 1,524 $ 293 $ 267 Finance lease cost: Depreciation expense of financed assets $ 73 $ 123 $ 197 Interest on lease obligations $ 26 $ 10 $ 33 Short-term rent expense $ 294 $ 7 $ — (1) Included in general and administrative expenses. Other lease information is as follows: For the year ended September 30, ($ in thousands) 2025 2024 2023 Cash paid for amounts included in measurement of lease obligations: Operating cash outflows from operating leases $ 1,411 $ 316 $ 274 Operating cash outflows from finance leases $ 26 $ 10 $ 33 Financing cash outflows from finance leases $ 50 $ 151 $ 301 September 30, 2025 September 30, 2024 Weighted-average remaining lease term - operating leases 2.0 years 4.7 years Weighted-average remaining lease term - finance leases 8.9 years 0.3 years Weighted-average discount rate - operating leases 8.90 % 8.28 % Weighted-average discount rate - finance leases 8.81 % 9.10 % The following is a schedule of the Company's lease liabilities by contractual maturity as of September 30, 2025: ($ in thousands) Fiscal Year Operating Leases Finance Leases 2026 $ 1,579 $ 60 2027 2,405 60 2028 134 60 2029 86 60 2030 61 75 Thereafter 323 300 Gross lease liabilities 4,588 615 Less: imputed interest ( 531 ) ( 181 ) Present value of lease liabilities $ 4,057 $ 434 Less: current portion of lease liabilities ( 1,299 ) ( 26 ) Total lease liabilities, net of current portion $ 2,758 $ 408 F- 48 13. INDEBTEDNESS 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, ($ in thousands) Maturity Date Rate 2025 2024 2030 Convertible notes Jun-30 0.46 % $ 636,036 $ — Coinbase line of credit Not specified 8.25 % 174,500 50,000 Western Alliance Bank credit agreement Aug-29 7.13 % 6,052 6,839 Corporate facility mortgage Apr-30 6.98 % 1,943 — Auto & equipment loans and financing Jun-26 to Dec-29 0.0 - 11.3 % 1,879 699 Marquee Funding Partners debt Aug-26 to Mar-27 13.00 % 746 1,267 Trinity master equipment financing Apr-25 13.80 % — 5,171 Corporate facility mortgage (former) Apr-25 10.00 % — 1,981 Total debt outstanding, net of debt discounts and debt issuance costs $ 821,156 $ 65,957 Less: current portion of debt ( 176,570 ) ( 58,781 ) Long-term debt, net of current portion, debt discount and debt issuance costs $ 644,586 $ 7,176 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 Fiscal Year Outstanding Loan 2026 2027 2028 2029 2030 Total 2030 Convertible notes $ — $ — $ — $ — $ 650,000 $ 650,000 Coinbase line of credit 174,500 — — — — 174,500 Western Alliance Bank credit agreement 868 930 996 3,327 — 6,121 Corporate facility mortgage 82 87 93 100 1,605 1,967 Auto & equipment loans and financing 515 455 440 397 72 1,879 Marquee Funding Partners debt 592 154 — — — 746 Total principal payments by fiscal year $ 176,557 $ 1,626 $ 1,529 $ 3,824 $ 651,677 $ 835,213 Unamortized deferred financing costs and discounts ( 14,057 ) Total debt book value as of September 30, 2025 $ 821,156 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. F- 49 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. F- 50 Capped calls 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 $ 90,350 . 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. (“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 %. If the value of the collateral under the credit facility decreases past a specified margin, the Company may be required to post additional bitcoin as collateral. The 2024 Master Loan includes embedded redemption features, which allows the lender to redeem the security before its maturity date (“redemption feature”). The 2024 Master Loan also includes a contingent interest feature that requires additional interest to be paid only if certain conditions are met. One such redemption feature and contingent interest feature is in the event of default, including failure to maintain sufficient collateral, the Lender may liquidate the collateral to satisfy the outstanding loan balance or charge incremental interest at the federal funds rate upon the under-collateralized portion of the loan. The Company assessed the embedded redemption features and the contingent interest feature and determined the features are clearly and closely related to the line of credit and do not require bifurcation. Upon transfer of the bitcoin, the Lender has the exclusive right to sell, pledge and rehypothecate the bitcoin without notice to the Company. Either party can terminate a loan with two days’ notice to the other party. As of the date of this report, no such termination has occurred. 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 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. 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%. F- 51 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 (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. The aircraft is pledged as collateral for the note. The notes bears a variable interest rate equal to the 30 day Secured Overnight Financing Rate (“SOFR”) plus 3 % per annum, payable monthly , and matures on August 14, 2029 . 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, 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. 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. 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. is $ 814 . 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. F- 52 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. 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 . 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. The financing 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, 2025 , the Company was in compliance with all covenants, and no events of default had occurred under the financing agreement. F- 53 14. INCOME TAXES 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) 2025 2024 2023 Domestic $ 403,575 $ ( 142,433 ) $ ( 131,303 ) Foreign — — — Income (loss) before income taxes $ 403,575 $ ( 142,433 ) $ ( 131,303 ) The components of the provision for income taxes in the years ended September 30, 2025, 2024 and 2023 were as follows: For the year ended September 30, ($ in thousands) 2025 2024 2023 Current: Federal $ — $ — $ — State — — — Deferred: Federal 33,972 3,344 2,416 State 5,139 — — Provision for income taxes $ 39,111 $ 3,344 $ 2,416 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: For the year ended September 30, ($ in thousands) 2025 2024 2023 Tax expense (benefit) at federal statutory rate $ 84,750 $ ( 29,911 ) $ ( 27,574 ) State tax expense (benefit), net of federal effect 3,251 ( 3,075 ) 5,820 162(m) excess executive compensation 11,146 9,806 6,823 Stock option (windfall) shortfall ( 228 ) ( 2,314 ) — Return to provision adjustments 82 2,301 29 Deferred only adjustments ( 8,498 ) 15,445 745 Change in valuation allowance ( 53,214 ) 10,299 15,871 Other 1,822 793 702 Total tax expense $ 39,111 $ 3,344 $ 2,416 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 as net operating loss carry-forwards. These differences result in deferred tax assets and liabilities, which are recorded in the balance sheet, net of valuation allowance. The Company evaluates the realizability of its deferred tax assets and assesses the need for a valuation allowance on an ongoing basis. In evaluating its deferred tax assets, the Company considers whether it is more likely than not that the deferred income tax assets will be realized. The ultimate realization of deferred tax assets depends upon generating sufficient future taxable income prior to the expiration of the tax attributes. This assessment requires significant judgment. F- 54 The significant components of the Company's deferred tax assets and liabilities as of September 30, 2025 and 2024 were as follows: ($ in thousands) September 30, 2025 September 30, 2024 Deferred tax assets: Right of use - lease liability $ 979 $ 340 Charitable contributions 170 98 Tax credits 200 200 Stock based compensation 647 113 Interest expense carryforwards 1,037 — Intangible assets 2,687 2,926 Net operating loss carryforwards 102,142 77,788 Accruals 13,750 1,086 Other 613 48 Gross deferred tax assets $ 122,225 $ 82,599 Valuation allowance ( 3,389 ) ( 54,926 ) Total deferred tax assets, net of valuation allowance $ 118,836 $ 27,673 Deferred tax liabilities Right of use - lease asset $ ( 1,006 ) $ ( 691 ) Prepaid expenses ( 1,868 ) ( 927 ) Change in fair value of digital currency ( 133,639 ) ( 22,706 ) Other ( 1,008 ) ( 1,070 ) Fixed assets ( 26,187 ) ( 8,040 ) Gross deferred tax liabilities $ ( 163,708 ) $ ( 33,434 ) Net deferred tax liability $ ( 44,872 ) $ ( 5,761 ) 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 September 30, 2024 Net non-current deferred tax liabilities $ ( 44,872 ) $ ( 5,761 ) In accordance with ASC 740, Accounting for Income Taxes , the Company evaluates its deferred income taxes to determine if valuation allowances are required. Pursuant to U.S. income tax accounting standards, companies assess whether valuation allowances should be established against their deferred tax assets based on the consideration of all available evidence using a “more-likely-than-not” standard. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. The Company considers the scheduled reversal of deferred tax liabilities. 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 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, 2025 2024 Valuation allowance $ ( 3,389 ) $ ( 54,926 ) F- 55 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. Given the Company’s significant U.S. tax attributes, we continuously monitor potential ownership changes under 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. The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than a 50 % likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. 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, 2025 and 2024. The Company does not anticipate the need to record a liability for unrecognized tax benefits within the coming year. The Company files income tax returns in the U.S. federal and state jurisdictions. 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) 2025 UTBs - October 1 $ — Gross increases - tax positions in prior period 6,270 Gross decreases - tax positions in prior period — Gross increases - tax positions in current period — Gross decreases - disposal of business unit (265 ) Settlement — Lapse of statute of limitations — UTBs - September 30 $ 6,005 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. F- 56 15. STOCKHOLDERS’ EQUITY Overview 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 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. At The Market Offering Agreement On June 3, 2021, the Company entered into an At The Market Offering Agreement (the “Original ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”) to create an at-the-market equity program under which the Company may, from time to time, offer and sell shares of its common stock, having an aggregate gross offering price of up to $ 500,000, to or through the Agent. On December 14, 2022, the Company entered into Amendment No. 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 the terms set forth therein. 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). In connection with the Company’s entry into the 2024 ATM Agreement, the ATM Agreement was terminated. From the inception of the Original 2024 ATM Agreement through March 31, 2024, the Company issued and sold 34,075,408 shares under the 2024 ATM Agreement for net proceeds of $ 487,500 . F- 57 On March 28, 2024, the Company entered into Amendment No. 1 to the At the Market Offering Agreement with the Agent (the “March 2024 ATM Amendment”). Under the March 2024 ATM Amendment, 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) $ 800,000 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). 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, 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 . The Company issued 5,357,166 shares of common stock in relation to the settlement of restricted stock awards and withheld 1,763,415 shares of common stock of $ 22,555 for net settlement. The Company issued 149,293 shares of common stock in connection with the exercise of stock options and warrants. Cash received from such issuance was $ 752 . Common stock issuances for the year ended September 30, 2023 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. The Company issued 1,590,175 shares of common stock valued at $ 4,802 as consideration in connection with business acquisitions. 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 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. 16. 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. F- 58 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: Number of Warrants Outstanding Number of Shares to be Issued Upon Exercise of Warrants Weighted Average Exercise Price ($) (1) Balance, September 30, 2022 202,220 202,220 $ 13.03 Warrants expired ( 16,660 ) ( 16,660 ) $ 8.00 Balance, September 30, 2023 185,560 185,560 $ 13.49 Warrants expired ( 103,000 ) ( 103,000 ) $ 18.20 Warrants exercised ( 65,000 ) ( 65,000 ) $ 8.00 Balance, September 30, 2024 17,560 17,560 $ 6.12 Warrants granted 22,803,726 1,586,999 $ 157.96 Balance, September 30, 2025 22,821,286 1,604,559 $ 156.30 (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 ye ar ended September 30, 2024, there were 65,000 warrants exercised on a cash-less basis, with 42,777 net shares issued. 17. STOCK-BASED COMPENSATION 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, 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. F- 59 STOCK OPTIONS The following is a summary of stock option activity during the fiscal years ended September 30, 2025, 2024 and 2023: Number of Option Shares Weighted Average Exercise Price ($) Balance, September 30, 2022 1,418,938 $ 19.11 Options granted 789,750 $ 5.72 Options expired ( 44,600 ) $ 6.05 Options forfeited ( 193,630 ) $ 10.77 Options exercised - $ - Balance, September 30, 2023 1,970,458 $ 14.86 Options granted 611,823 $ 14.70 Options expired ( 93,057 ) $ 9.38 Options forfeited ( 97,246 ) $ 8.71 Options exercised ( 106,516 ) $ 7.07 Balance, September 30, 2024 2,285,462 $ 15.58 Options granted 309,330 $ 9.61 Options expired ( 140,722 ) $ 14.59 Options forfeited ( 133,845 ) $ 12.81 Options exercised ( 158,039 ) $ 5.84 Balance, September 30, 2025 2,162,186 $ 15.66 As of September 30, 2025, there were options exercisable to purchase 1,536,194 shares of common stock in the Company and 625,992 unvested options outstanding that cannot be exercised until vesting conditions are met. As of September 30, 2025, the outstanding options have a weighted average remaining term of 7 years and an aggregate intrinsic value of $ 5,936 . Forfeitures of options are recognized as they occur. Option activity for the year ended September 30, 2025 During the year ended September 30, 2025, 158,039 stock options were exercised for net cash proceeds to the Company of $ 922 . For the year ended September 30, 2025, the Company also granted 309,330 options to purchase shares of common stock to employees with a total fair value of $ 2,635 . Option activity for the year ended September 30, 2024 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, 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. The Black-Scholes model utilized the following inputs to value the options granted during years ended September 30, 2025, 2024 and 2023: For the year ended September 30, Fair value assumptions Options: 2025 2024 2023 Risk free interest rate 3.56 % - 4.65 % 3.46 % - 4.82 % 2.65 % - 4.44 % Expected term (years) 1.00 - 6.32 5.77 - 6.16 5.06 - 5.85 Expected volatility 121.0 % - 122.9 % 122.1 % - 176.0 % 157.1 % - 194.9 % Expected dividends 0 % 0 % 0 % F- 60 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. RESTRICTED STOCK UNITS The Company grants RSUs that contain either a) service conditions, b) performance conditions, or c) market performance conditions. RSUs containing service conditions vest monthly, quarterly or annually. RSUs containing performance conditions generally vest over 1 year, and the number of shares earned depends on the achievement of predetermined Company metrics and may also include a service condition. RSUs that contain market conditions will vest based on the terms of the agreement and generally are either 1 year or over the employee's term of employment. The Company recognizes the expense equal to the total fair value of the RSUs on the grant date. The time-based RSUs granted were valued equal to the stock price on the grant date and the value of market-based and performance based RSUs were valued utilizing the Monte-Carlo valuation model. The expense is recognized ratably over the requisite service period and forfeitures are recognized as they occur. The following table summarizes the activity for all RSUs during the fiscal years ended September 30, 2025, 2024 and 2023: Number of Shares Weighted Average Fair Value Per Share Aggregate Intrinsic Value Outstanding at September 30, 2022 5,448,548 $ 4.93 $ 17,326 Granted 3,880,552 $ 3.65 Vested ( 3,813,617 ) $ 4.58 Cancelled ( 40,000 ) $ - Forfeited ( 4,048 ) $ 29.34 Outstanding at September 30, 2023 5,471,435 $ 4.18 $ 20,846 Granted 1,493,556 $ 9.67 Vested ( 5,268,276 ) $ 4.66 Forfeited ( 22,504 ) $ 5.81 Outstanding at September 30, 2024 1,674,211 $ 7.56 $ 12,649 Granted 15,009,311 $ 9.11 Vested ( 3,602,080 ) $ 8.27 Forfeited ( 190,023 ) $ 7.98 Outstanding at September 30, 2025 12,891,419 $ 9.16 $ 186,926 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. F- 61 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. The market-based awards vest 33% each tranche based upon the Company's stock price reaching 200%, 300% and 400% of the stock price on the date of grant. Each tranche vested upon the target stock price being met for at least 10 of 20 consecutive trading days and the awards were not dependent on a defined service period. 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. 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: Number of Shares Weighted Average Fair Value Per Share Aggregate Intrinsic Value Outstanding at September 30, 2024 — $ — $ — Granted 40,000 $ 10.61 Vested ( 1,540 ) $ 10.61 Outstanding at September 30, 2025 38,460 $ 10.61 $ 558 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: Fair value assumptions - Market-based RSUs granted: September 30, 2023 Risk free interest rate 4.59 % Expected term (years) 10.00 Expected volatility 129.70 % Cost of equity 21.55 % 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. F- 62 18. REVENUE AND VENDOR CONCENTRATIONS The Company had one mining pool operator (Foundry Digital) during the fiscal years ended September 30, 2025, 2024 and 2023 . 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, 2025 2024 2023 Bitmain Technologies 96 % 100 % 75 % Canaan U.S. Inc 4 % 0 % 0 % Cryptech Solutions 0 % 0 % 25 % 19. COMMITMENTS AND CONTINGENCIES Purchase of modular immersion data centers 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 $ 30,499 . Contractual future payments 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): Fiscal Year ($ in thousands) 2026 Contractual obligations: Construction in progress $ 30,499 Modular immersion data centers 27,000 Purchase of bitcoin miners 289 Total $ 57,788 U.S. 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. F- 63 Legal contingencies In addition to the legal matters disclosed below, the Company may from time to time be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected. Hasthantra v. CleanSpark, Inc. et al. 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. 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 Smith Derivative Actions 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. 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. F- 64 20. SUBSEQUENT EVENTS 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 . F- 65 CLEANSPARK, INC. Schedule II - Valuation and Qualifying Accounts (in thousands) Balance at Beginning of Period Additions Charged to Costs and Expenses Additions from Business Combination Deductions Balance at End of Period Year ended September 30, 2025 Deferred tax valuation allowance $ 54,926 $ — $ 1,677 $ 53,214 $ 3,389 Year ended September 30, 2024 Deferred tax valuation allowance $ 44,627 $ 10,299 $ — $ — $ 54,926 Year ended September 30, 2023 Deferred tax valuation allowance $ 28,756 $ 15,871 $ — $ — $ 44,627 62 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.