What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2020-12-17 compared with 2019-12-16 · 20 added, 353 removed, 8 unchanged (98% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities

Our common stock is quoted under the symbol “CLSK”

on the OTCQB operated by OTC Markets Group, Inc.

There is currently no active

trading market for our securities.

There is no assurance that a regular trading market will develop, or if developed, that it will

be sustained.

Therefore, a shareholder may be unable to resell his securities in our company.

The following table sets forth

the range of high and low bid quotations for our common stock for each of the periods indicated as reported by the OTCQB.

quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual

transactions.

Fiscal Year Ended September 30, 2019

Quarter Ended

September 30, 2019

June 30, 2019

March 31, 2019

December 31, 2018

Fiscal Year Ended September 30, 2018

Quarter Ended

September 30, 2018

June 30, 2018

March 31, 2018

December 31, 2017

The Securities Exchange

Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities

exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such

securities is provided by the exchange or system.

The penny stock rules require a broker-dealer, prior to a transaction in a penny

stock, to deliver a standardized risk disclosure document prepared by the Commission, that:

(a) contains a description of the nature

and level of risk in the market for penny stocks in both public offerings and secondary trading;(b) contains a description of the

broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation

to such duties or other requirements of Securities' laws;

including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;(d) contains a toll-free

telephone number for inquiries on disciplinary actions;(e) defines significant terms in the disclosure document or in the conduct

of trading in penny stocks;

and;(f) contains such other information and is in such form, including language, type, size and format,

as the Commission shall require by rule or regulation.

The broker-dealer also

must provide, prior to effecting any transaction in a penny stock, the customer with;

(a) bid and offer quotations for the penny

stock;(b) the compensation of the broker-dealer and its salesperson in the transaction;(c) the number of shares to which such bid

and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock;

a monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny

stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules;

the broker-dealer must

make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's

written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks,

and a signed and dated copy of a written suitability statement.

These disclosure requirements

may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny

Therefore, because our common stock is subject to the penny stock rules, stockholders may have difficulty selling

those securities.

Market for Registrant’s

Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock, par value $0.001

per share, is listed on The Nasdaq Capital Market under the symbol “CLSK.”

Holders of Our Common Stock

1 unchanged sentence

223 registered holders of record of our common stock, with others in street name.

The holders of common stock

are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

Holders of the common

stock have no preemptive rights and no right to convert their common stock into any other securities.

There are no redemption or

sinking fund provisions applicable to the common stock.

The holders of common stock are entitled

to one vote for each share held of record on all matters submitted to a vote of stockholders.

Holders of the common stock have

no preemptive rights and no right to convert their common stock into any other securities.

There are no redemption or sinking fund

provisions applicable to the common stock.

There are no restrictions in our articles

2 unchanged sentences

declaring dividends where after giving effect to the distribution of the dividend:

we would not be able to pay our

debts as they become due in the usual course of business, or;

our total assets would be less than the sum of our total liabilities

plus the amount that would be needed to satisfy the rights of shareholders who have

preferential rights superior to those receiving the distribution.

We have not declared any dividends and we

do not plan to declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

The information set forth below

relates to our issuances of securities without registration under the Securities Act of 1933 during the reporting period which

were not previously included in an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K.

On April 9, 2019, an investor

exercised warrants to purchase 900 shares of the Company’s $0.001 par value common stock at a purchase price equal to $36.60

for each share of Common stock.

The Company received $3,267 as a result of this exercise.

On June 12, 2019, the Company

entered into an agreement with SylvaCap Media for investor relations services.

Under this agreement the Company agreed to issue

25,000 shares of the Company’s common stock as compensation for services for a six-month period plus additional cash compensation.

On September 10, 2019, SylvaCap agreed to return the shares.

As of the date of this filing the shares have not been returned.

During the period commencing

from October 1, 2018 through September 30, 2019, the Company issued 36,000 shares of the Company’s $0.001 par value common

stock to Regal Consulting, LLC for investor relations services.

During the period commencing from

October 1, 2018 through September 30, 2019, the Company issued 49,321 options to purchase shares of common stock to employees,

the options were granted at exercise prices ranging from $8.50 to $59.00.

These securities were issued pursuant

to Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder.

The holders represented their intention to acquire

the securities for investment only and not with a view towards distribution.

The investors were given adequate information about

us to make an informed investment decision.

We did not engage in any general solicitation or advertising.

We directed our transfer

agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Securities Authorized for Issuance

under Equity Compensation Plans

In June of 2017, our

Board of Directors adopted the 2017 Equity Incentive Plan (the “Plan”).

The purpose of the Plan is to attract and retain

the best available personnel for positions of substantial responsibility with us, to provide additional incentive to employees,

directors and consultants, and to promote our success.

Under the initial Plan, we were able to issue up to an aggregate total of

300,000 incentive or non-qualified options to purchase our common stock, or stock awards.

Equity Compensation

Plans Not Approved by

the Shareholders

Number of Securities to

be issued upon exercise

of outstanding options

Weighted-average

exercise price of

outstanding options

Number of Securities

remaining available

for future issuance under

equity compensation plans

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

The Company has not made any repurchases of shares

or other units of any class of the Company’s equity securities during the fourth quarter of the fiscal year covered by this

Annual Report.

we would not be able to pay our debts as they become due in the usual course of business, or;

our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

We have not declared any dividends

and we do not plan to declare any dividends in the foreseeable future.

Sales of Unregistered Securities

The Company has not made any repurchases

of shares or other units of any class of the Company’s equity securities during the fourth quarter of the fiscal year covered

by this Annual Report.

Selected Financial Data

A smaller reporting company is not required to provide the

information required by this Item.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements,

other than purely historical information, including estimates, projections, statements relating to our business plans, objectives,

and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements”

within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section

21E of the Securities Exchange Act of 1934.

These forward-looking statements generally are identified by the words “believes,”

“project,”

“expects,”

“anticipates,”

“estimates,”

“intends,”

“strategy,”

“plan,”

“may,”

“will,”

“would,”

“will continue,”

likely result,”

and similar expressions.

We intend such forward-looking statements to be covered by the safe-harbor

provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including

this statement for purposes of complying with those safe-harbor provisions.

Forward-looking statements are based on current expectations

and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not

changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition,

and generally accepted accounting principles.

These risks and uncertainties should also be considered in evaluating forward-looking

statements and undue reliance should not be placed on such statements.

We undertake no obligation to update or revise publicly

any forward-looking statements, whether as a result of new information, future events or otherwise.

Further information concerning

our business, including additional factors that could materially affect our financial results, is included herein and in our other

filings with the SEC.

Results of Operations for the Year

Ended September 30, 2019 and 2018

We earned $4,532,782 in revenues during

the year ended September 30, 2019, as compared with $578,635 in revenues for the year ended September 30, 2018.

For the year ended September

30, 2019 and 2018 our revenue was derived from of the sale of equipment, design, engineering and construction revenue.

is the result of contracts to sell switchgear equipment, and perform engineering design and construction services for distributed

energy and microgrid systems.

We hope to generate more significant revenue from customers through the sale and licensing of our

Software platforms in the future.

We hope to have more news on these efforts in future reports.

are unable to estimate with any degree of certainty the amount of future revenues, if any, from existing or future software

Also, we do not anticipate earning significant revenues from our Gasifier

business until such time that we have fully developed our technology and are able

to market our products.

Our cost of revenues were $3,861,086 for the

year ended September 30, 2019 resulting in gross profit of $671,696, as compared with cost of revenues of $390,774 for the year

ended September 30, 2018 resulting in gross profits of $187,861.

Our cost of revenues in 2019 was

mainly the result of contract manufacturing expense, materials, subcontractors and direct labor expense.

Contract manufacturing expense

increased to $3,220,480 for the year ended September 30, 2019, from $0 for the year ended 2018.

Our manufacturing expense consisted

of the cost of contract manufacturing of switchgear equipment.

Material expenses decreased

to $125,782 for the year ended September 30, 2019, from $227,441 for the year ended 2018.

Our materials expense for the years ended

September 30, 2019 and 2018 consisted mainly of the cost of solar panels and energy storage.

Direct labor increased to

$86,125 for the year ended September 30, 2019, from $32,544 for the year ended 2018.

Our direct labor expenses for the year ended

September 30, 2019 consisted mainly of allocated payroll costs of employees and consultants.

Subcontractor expenses increased

to $366,523 for the year ended September 30, 2019, from $79,517 for the year ended 2018.

Our subcontractor expenses for the year

ended September 30, 2019 consisted mainly of fees charged by subcontractors for installation of solar panels and energy storage.

Operating Expenses

We had operating expenses

of $17,285,541 for the year ended September 30, 2019, as compared with $7,263,792 for the year ended September 30, 2018.

Professional fees

increased to $4,829,038 for the year ended September 30, 2019 from $1,271,005 for the same period ended September 30, 2018.

Our professional fees expenses for the year ended September 30, 2019 consisted mainly of consulting fees of $1,032,076 paid

to management of the Company, stock-based compensation for consulting of $1,735,693, sales consulting of $202,963, legal fees

of $220,163, investor relations consulting of $1,253,903, consulting for public relations of $52,740, consulting for software

and engineering of $15,680 and audit and review fees of $141,349.

Our professional fees expenses for the year ended September

30, 2018 was $1,271,005 which consisted mainly of consulting fees of $564,612 paid to management of the Company, stock based

compensation for consulting of $480,620, sales consulting of $50,019, legal fees of $28,910, investor relations consulting of

$16,500, consulting for software and engineering of $34,722 and audit and review fees of $45,639.

Payroll expenses decreased

to $1,267,403 for the year ended September 30, 2019 from $1,579,197 for the same period ended September 30, 2018.

Our payroll expenses

for the year ended September 30, 2019 consisted mainly of salary and wages expense of $1,010,054 and employee and officer stock-based

compensation of $257,349.

Our payroll expenses for the year ended September 30, 2018 consisted mainly of salary and wages expense

of $557,576 and employee and officer stock-based compensation of $1,021,621.

General and administrative fees

increased to $917,298 for the year ended September 30, 2019 from $279,679 for the same period ended September 30, 2018.

general and administrative expenses for the year ended September 30, 2019 consisted mainly of travel expenses of $95,151,

rent expenses of $76,220 insurance expenses of $123,499, dues and subscriptions of $184,402, marketing related expenses of

$95,690, and bad debt expense of $258,255.

Our general and administrative expenses for the year ended September 30, 2018

consisted mainly of travel expenses of $46,364, rent expenses of $54,559 insurance expenses of $37,514, dues and

subscriptions of $60,575, marketing related expenses of $13,582 and bad debt expense of $11,100.

Product development expense

increased to $1,453,635 for the year ended September 30, 2019 from $1,375,650 for the same period ended September 30, 2018.

product development expenses for the year ended September 30, 2019 consisted mainly of amortization of capitalized software of

Our product development expenses for the year ended September 30, 2018 consisted mainly of amortization of capitalized

software of $1,379,483.

Depreciation and amortization

expense increased to $1,902,981 for the year ended September 30, 2019 from $854,981 for the same period ended September 30, 2018.

Impairment expenses increased

to $6,915,186 for the year ended September 30, 2019 from $1,896,090 for the same period ended September 30, 2018.

Other Income/Expenses

We had other expenses of $9,503,087

for the year ended September 30, 2019, compared with other expenses of $39,930,234 for the year ended September 30, 2018.

expenses for the year ended September 30, 2019 consisted mainly of loss on settlement of debts of $19,425, and interest expense

of $9,483,662.

Our other expenses for the year ended September 30, 2018 consisted mainly of loss on settlement of debts of $41,092,

loss on derivative liability of $38,964,688, and interest expense of $924,454.

Net loss for the year

ended September 30, 2019 was $26,116,932 compared to net loss of $47,006,165 for the year ended September 30, 2018.

Liquidity and Capital Resources

For the year ended September

30, 2019, our primary sources of liquidity came from existing cash, related party and third-party term notes, and proceeds from

securities purchase agreements on convertible debts.

Based on our current plans and business conditions, we believe that existing

cash and cash generated from operations will be sufficient to satisfy our anticipated cash requirements for at least the next twelve

Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending

to support development efforts, the expansion of our sales and marketing, the timing of new product introductions and the continuing

market acceptance of our products and services.

If cash generated from operations is insufficient to satisfy our capital requirements,

we may open a revolving line of credit with a bank, or we may have to sell additional equity or debt securities or obtain credit

In the event such financing is needed in the future, there can be no assurance that such financing will be available

to us, or, if available, that it will be in amounts and on terms acceptable to us.

If cash flows from operations became insufficient

to continue operations at the current level, and if no additional financing was obtained, our business, operating results and financial

condition would be adversely affected.

As of September 30, 2019,

we had total current assets of $9,884,045, consisting of cash, accounts receivable, contract assets and prepaid expenses and other

current assets, and total assets in the amount of $23,434,252.

Our total current liabilities as of September 30, 2019 were $1,502,590.

We had a working capital surplus of $8,381,455 as of September 30, 2019.

activities used $5,697,989 in cash for the year ended September 30, 2019, as compared with $1,260,521 for the same period

ended September 30, 2018.

Our net loss of $26,116,932 was the main component of our negative operating cash flow for the year

ended September 30, 2019, offset mainly by impairment expense of $6,915,186, depreciation and amortization of $1,902,981,

amortization of capitalized software of $1,453,635 and stock-based compensation of $1,993,043.

Our net loss of $47,006,165

was the main component of our negative operating cash flow for the year ended September 30, 2018, offset mainly by impairment

expense of $1,896,090, depreciation and amortization of $854,981, loss on derivative liability of $38,964,688, amortization

of capitalized software of $1,379,483 and stock-based compensation of $1,502,343.

Cash flows used by investing

activities during the year ended September 30, 2019 was $673,953, as compared with $419,232 for the year ended September 30, 2018.

Our investment in the capitalized software of $569,042, purchase of fixed assets of $102,761 and the purchase of intangible assets

of $2,150 were the main components of our negative investing cash flow for the year ended September 30, 2019.

Our investment in

capitalized software of $396,090, purchase of fixed assets of $15,227, and the purchase of intangible assets of $7,915 were the

main components of our negative investing cash flow for the year ended September 30, 2018.

Cash flows provided by financing activities

during the year ended September 30, 2019 amounted to $13,798,022, as compared with $2,035,402 for the year ended September 30,

Our positive cash flows from financing activities for the year ended September 30, 2019 consisted of $361,800 in proceeds

from the sale of common stock, 14,995,000 in proceeds from convertible notes and $75,030 from related party debts off-set by repayments

of $625,344 on promissory notes repayments of $457,820 on related party debt, and repayments of $555,000 on convertible debts.

Our positive cash flows from financing activities for the year ended September 30, 2018 consisted of $271,900 in proceeds from

the sale of common stock, $672,500 in proceeds from promissory notes, $837,750 in proceeds from convertible notes and $382,790

from related party debts off-set by repayments of $101,143 on promissory notes and repayments of $73,333 on related party debts.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements

In June 2018, the FASB

issued ASU 2018-07, "Compensation-Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting,"

which modifies the accounting for share-based payment awards issued to nonemployees to largely align it with the accounting for

share-based payment awards issued to employees.

ASU 2018-07 is effective for us for annual periods beginning October 1, 2019.

are evaluating the potential impact to our financial position or results of operations.

In August 2018, the FASB

issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for

Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,"

which allows for the capitalization

of certain implementation costs incurred in a hosting arrangement that is a service contract.

ASU 2018-15 allows for either retrospective

adoption or prospective adoption to all implementation costs incurred after the date of adoption.

ASU 2018-15 is effective for

fiscal years beginning after December 15, 2019.

We are currently evaluating the impact the adoption of this new standard will have

on our financial position and results of operations.

In February 2016, the FASB

issued ASU 2016-02, “Leases”

(“ASC 842”).

The guidance requires lessees to recognize almost all leases

on their balance sheet as a right-of-use asset and a lease liability.

For income statement purposes, the FASB retained a dual model,

requiring leases to be classified as either operating or finance.

Lessor accounting is similar to the current model, but updated

to align with certain changes to the lessee model and the new revenue recognition standard.

Existing sale-leaseback guidance, including

guidance for real estate, is replaced with a new model applicable to both lessees and lessors.

ASC 842 is effective for fiscal

years beginning after December 15, 2018.

We are currently evaluating the impact the adoption of this new standard will have on

our financial position and results of operations.

The Company has evaluated

all other recent accounting pronouncements and believes that none of them will have a material effect on the Company's financial

position, results of operations or cash flows.

Critical Accounting Policies

In December 2001, the SEC

requested that all registrants list their most “critical accounting polices”

in the Management Discussion and Analysis.

The SEC indicated that a “critical accounting policy”

is one which is both important to the portrayal of a company’s

financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result

of the need to make estimates about the effect of matters that are inherently uncertain.

Our accounting policies

are discussed in detail in the footnotes to our financial statements included in this Annual Report on Form 10-K for the year ended

September 30, 2019, however we consider our critical accounting policies to be those related to revenue recognition, long-lived

assets, accounts receivable, fair value of financial instruments, cash and cash equivalents, accounts receivable, warranty liability

and stock-based compensation.

Off Balance Sheet Arrangements

As of September 30, 2019, there

were no off balance sheet arrangements.

Quantitative and Qualitative

Disclosures About Market Risk

A smaller reporting company is not

required to provide the information required by this Item.

As a smaller reporting company,

we are not required to provide the information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity