What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-05-06 compared with 2021-02-12 · 346 added, 220 removed, 109 unchanged (84% of the section changed)

Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

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Middleware used by Controls and IoT Product Companies to participate in load shifting programs

following our acquisition of Solar Watt Solutions, Inc.

(“Solar Watt”) in February 2021, we are in the process

of developing our mVoult platform, which we expect will be a proprietary platform that would enable integration and optimization

of solar, energy storage and back-up generators for residential applications.

The Platforms are designed to allow customers

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as opposed to expending significant efforts on the Gasifier side of the business.

Distributed Energy Management and Microgrid Industry

to our business is our Distributed Energy Management Business (the “DER Business”).

The main assets of our DER Business

include our propriety software systems (“Systems”) and also our engineering and methodology trade secrets.

The Distributed

Energy systems and microgrids that utilize our Systems are capable of providing secure, sustainable energy with significant cost

savings for its energy customers.

The Systems allows customers to design, engineer, and then efficiently communicate with and manage

Distributed Energy

Management and Microgrid Industry

to our business is our Distributed Energy Management (or “DER”) business.

The main assets of our DER business include

our proprietary software systems (“Systems”) and our engineering and methodology trade secrets.

The distributed energy

systems and microgrids that utilize our Systems are capable of providing secure, sustainable energy with significant cost savings

for energy customers.

Through the Systems, customers are able to design, engineer, and then efficiently communicate with and manage

renewable energy generation, storage and consumption.

1 unchanged sentence

storage, customers are able to reduce their dependency on utilities, thereby keeping energy costs relatively constant over time.

The overall aim is to transform energy consumers into intelligent energy producers by supplying and managing power in a manner

that anticipates their routine instead of interrupting it.

the world, the aging grid is becoming unstable and unreliable due to increases in loads and lack of new large-scale generation

This inherent instability is compounded by the push to integrate a growing number and variety of renewable but intermittent

energy generation assets and advanced technologies into outdated electrical grid systems.

Simultaneously, defense installations,

industrial complexes, communities, campuses and other aggregators across the world are turning to virtual power plants and microgrids

as a means to decrease their reliance from the grid, reduce utility costs, utilize cleaner power, and enhance energy security and

The convergence

of these factors is creating significant opportunities in the power supply optimization and energy management industry.

operating and managing the distributed energy management systems and microgrids of tomorrow, while maximizing the use of sustainable

energy to produce affordable, stable, predictable and reliable power on a large scale, is a significant opportunity that early-movers

can leverage to capture a large share of this emerging global industry.

is comprised of any number of energy generation, energy storage, and smart distribution assets that serve a single or multiple

loads, both connected to the utility grid and separate from the utility grid “islanded”.

In the past, distributed energy

management systems and microgrids have consisted of off-grid generators organized with controls to provide power where utility

lines cannot run.

Today, modern distributed energy management systems and microgrids integrate renewable energy generation systems

(REGS) with advanced energy storage devices and interoperate with the local utility grid.

Advanced autonomous cyber-secure microgrids

controls relay information between intelligent hardware and servers to make decisions in real-time that deliver optimum power where

it is needed, when it is needed.

software suite is an integrated distributed energy management control platform that seamlessly integrates and controls all forms

of energy generation with energy storage devices to provide energy security in real time free of cyber threats to service facility

DER systems are able to interoperate with the local utility grid and bring users the ability to choose when to buy or sell

power to and from the utility grid.

mPulse suite is an ideal DER system for commercial, industrial, defense, campus and residential

users and ranges in size from 4KW to 100MW and beyond.

mPulse Software Suite

is a modular platform that provides intelligent control of a microgrid based on a systems operational goals, energy assets, and

forecasted energy load and generation.

mPulse performs high-frequency calculations, threshold-based alarming, execution of domain-specific

business rules, internal and external health monitoring, historical data persistence, and system-to-operator notifications.

modular design increases system flexibility and extensibility.

In addition, the deployment of the mPulse system follows a security-conscious

posture by deploying hardware-based firewalls as well as encryption across communication channels.

mPulse allows configuration

for site-specific equipment and operation and provides a clean, informative user interface to allow customers to monitor and analyze

the data streams that describe how their microgrid is operating.

The overall aim is to transform energy consumers into intelligent energy producers that supply and manage power in a manner that

avoids interruptions.

the world, aging energy grids are becoming unstable and unreliable due to increases in loads and the widespread lack of new large-scale

generation facilities.

This inherent instability in existing energy grids is compounded by pressure to integrate a growing number

and variety of renewable but intermittent energy generation assets and advanced technologies into outdated electrical grid systems.

Simultaneously, defense installations, industrial complexes, communities, campuses and other aggregators across the world are turning

to virtual power plants and microgrids as a means to decrease their reliance on existing energy grid, reduce utility costs, utilize

cleaner power and enhance energy security and surety.

convergence of these factors has created, and is expected to continue to create significant opportunities in the power supply

optimization and energy management industry.

Efficiently operating and managing the distributed energy management systems and microgrids

of tomorrow, while maximizing the use of sustainable energy to produce affordable, stable, predictable and reliable power on a

large scale, is a significant opportunity that early-movers can leverage to capture a large share of this emerging global industry.

A microgrid is comprised of any number

of energy generation, energy storage, and smart distribution assets that serve a single or multiple load, both connected to the

utility grid and “islanded,” separate from the utility grid.

In the past, distributed energy management systems and

microgrids have consisted of off-grid generators organized with controls to provide power where utility lines cannot run.

modern distributed energy management systems and microgrids integrate renewable energy generation systems (REGS) with advanced

energy storage devices and interoperate with the local utility grid.

Advanced autonomous cyber-secure microgrid controls relay

information between intelligent hardware and servers to make decisions in real-time that deliver optimum power where it is needed,

when it is needed.

Software Suite

is a modular platform that provides intelligent control of a Microgrid based on a system’s operational goals, energy assets

and forecasted energy load and generation.

mPulse performs high-frequency calculations, threshold-based alarming, execution of

domain-specific business rules, internal and external health monitoring, historical data persistence, and system-to-operator notifications.

The modular design of mPulse increases system flexibility and extensibility.

In addition, the deployment of the mPulse system follows

a security-conscious posture by deploying hardware-based firewalls as well as encryption across communication channels.

allows configuration for site-specific equipment and operation and provides a clean, informative user interface to allow customers

to monitor and analyze the data streams that describe how their microgrid is operating.

mPulse software also serves as an integrated distributed energy management control platform that seamlessly integrates and controls

all forms of energy generation with energy storage devices to provide energy security in real time, free of cyber threats to service

facility loads.

As a DER system, mPulse is able to interoperate with the local utility grid and bring users the ability to choose

when to buy or sell power to and from the utility grid.

mPulse is designed and intended for commercial, industrial, defense, campus

and residential users and ranges in capacity from 4 kilowatts to 100 megawatts and beyond.

supports our innovative fractal approach to microgrid design, which enables multiple microgrids on a single site to interact in

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are only made when it is safe to do so.

mVoult — Residential

is a smart power system that is under development and is expected to provide a single solution for resilient, reliable and cost-effective

energy for residential properties of all sizes.

Our systems will be able to be configured to a homeowner’s needs upon installation,

with flexibility for future expansion.

mVoult software will direct microgrid system operations to manage solar, battery, and utility power.

It will be capable of providing

resilient, sustainable and low-cost energy for a residential microgrid, allowing a home to stay powered during utility outages

or during events, such as fires and natural disasters, when a utility may otherwise shut down or be unable to provide service.

Value Stream Optimizer (mVSO)

The Microgrid

Value Stream Optimizer (mVSO) software platform provides a robust distributed energy and microgrid system modeling solution.

takes utility rate data and load data for a customer site and helps automate the sizing and analysis of potential microgrid solutions

as well as providing a financial analysis around each grid configuration.

mVSO uses historical data to generate projected energy

performance of generation assets and models how storage responds to varying operational modes and command logics based upon predicted

generation and load curves.

mVSO analyzes multiple equipment combinations and operational situations to determine the optimal configuration

for a site based on the financial and economic results, equipment outlay, utility cost savings, etc., to arrive at payback and

This ultimately provides the user with data to design a distributed energy and/or microgrid system that will meet the

customers’ performance benchmarks.

The system also provides users with business development and proposal generation tools

to more efficiently present the results to end-customers.

Critical power switchgear and hardware solutions – CleanSpark

Critical Power Systems, Inc.

Through the Company’s wholly-owned subsidiary,

CleanSpark Critical Power Systems, Inc., we provide parallel switchgear, automatic transfer switches, and related control and circuit

protective equipment solutions for commercial, industrial, defense, campus, and residential

Microgrid Value Stream Optimizer (mVSO) software platform provides a robust distributed energy and microgrid system modeling solution.

mVSO takes utility rate data and load data for our customers’ sites and helps automate the sizing and analysis of potential

microgrid solutions, as well as providing a financial analysis around each grid configuration.

mVSO uses historical data to generate

projected energy performance of generation assets and models the way in which energy storage responds to varying operational modes

and command logics based upon predicted generation and load curves.

mVSO analyzes multiple equipment combinations and operational

situations to determine the optimal configuration for a customer’s site based on factors, including, among others, the financial

and economic results, equipment outlay and utility cost savings, to arrive at payback and internal rate of return values.

ultimately provides our customers with data to design a distributed energy and/or microgrid system that will meet the customers’

performance benchmarks.

The mVSO also provides users with business development and proposal generation tools to more efficiently

present the results to end-customers.

power switchgear and hardware solutions — CleanSpark Critical Power Systems

our wholly-owned subsidiary, CleanSpark Critical Power Systems, Inc., we provide parallel switchgear, automatic transfer switches

and related control and circuit protective equipment solutions for commercial, industrial, defense, campus and residential users.

We utilize Pioneer Power Solutions, Inc.

for contract manufacturing of our parallel switchgear, automatic transfer

switches, and related control and circuit protective equipment.

OpenADR and communication protocol software

solutions – GridFabric

Through the Company’s wholly-owned subsidiary,

GridFabric, LLC, we offer OpenADR solutions to commercial and utility customers.

GridFabric provides middleware software solutions

for utilities and IoT (Internet of Things) products that manage energy loads.

OpenADR 2.0b is now the basis for the standard

to be developed by the International Electrotechnical Commission.

GridFabric's core products are Canvas and Plaid.

Canvas is an OpenADR 2.0b Virtual

Top Node ('VTN') built for testing and managing Virtual End Nodes ('VENs') that are piloting and running load shifting programs.

Canvas is offered to customers in the Cloud as a SaaS solution or as a licensed software.

Plaid is a licensed software solution that

allows any internet connected product that uses energy (i.e.

Solar, Storage & Inverters, Demand Response, EV Charging, Lighting,

Industrial controls, Building Management Systems, etc.) to add load shifting capabilities by translating load shifting

protocols into their existing APIs.

Companies that implement Plaid through GridFabric get a Certified OpenADR 2.0b Virtual

End Node (VEN) upon completion of the implementation process.

Digital Agency Segment – p2kLabs

Through the Company’s wholly-owned subsidiary,

p2kLabs, Inc., we provide a suite of digital services from creative design to technical development for products and services through

the entire product/service lifecycle.

P2k is made up of “labs” whereas each lab contains its own unique offering including

design, marketing/digital content, engineering & SalesForce development, and strategy services.

Legacy Gasifier Business

Our Gasification technologies and prototype will need

to undergo further additional testing to further establish its commercial capability of producing large

volumes of clean, renewable energy from any carbon compound (Municipal Solid Waste (MSW), Coal, Sewage Sludge)

into clean Synthesis Gas(“SynGas”).

Our prototype Gasifier is still under development and a commercially

viable Gasifier is not expected to be sellable until we expend additional resources on its testing and development.

A third-party consulting

firm has independently tested the Gasifer's performance and certified the results of its performance.

Upon completion of the

testing, an initial white paper was published outlining the results and suggested improvements

for commercialization.

We anticipate that the investment to complete these improvements would be between approximately

Upon completion of the improvements, we would be required to conduct an extended test run with an independent

third party to verify the results needed to prove its commercial viability, at which time we could begin

to actively market our Gasifier units.

mining and Data Center business

Through its wholly-owned subsidiary,

ATL Data Centers LLC, CleanSpark owns and operates a data center that provides customers with traditional on-site and cloud-based

data center services.

The Company also owns and operates a fleet of Bitcoin miners producing over 200 PH/s.

Mining capacity is

expected to increase to over 300 PH/s in early 2021.

CleanSpark plans to apply its energy technologies to these divisions with

a goal of mining bitcoins at the lowest energy prices in the United States.

Results of operations for the three months ended December

31, 2020 and 2019

increased to $2,257,570 during the three months ended December 31, 2020, as compared with $976,824 in revenues for the same period

for contract manufacturing of our parallel switchgear, automatic transfer switches and

related control and circuit protective equipment.

and communication protocol software solutions — GridFabric

our wholly-owned subsidiary, GridFabric, LLC ,

(“GridFabric”) we offer Open Automated Demand Response (or OpenADR) solutions to commercial and utility customers.

We provide middleware software solutions for utilities and IoT products that manage energy loads.

OpenADR 2.0b is now the basis

for the standard to be developed by the International Electrotechnical Commission, which is an organization that prepares and

publishes international standards for all electrical, electronic and related technologies.

Our core products in this area of our

business are Canvas and Plaid.

is an OpenADR 2.0b Virtual Top Node (or VTN) built for testing and managing Virtual End Nodes (or VENs) that pilot and run load

shifting programs.

Canvas is offered to customers in the cloud as a software as a service (SaaS) solution or as a licensed software.

is a licensed software solution that allows any internet-connected product that uses energy (i.e., solar, storage & inverters,

demand response, electric vehicle charging, lighting, industrial controls and building management systems) to add load shifting

capabilities by translating load shifting protocols into their existing application programing interface (or API).

Companies that

implement Plaid receive a Certified OpenADR 2.0b Virtual End Node upon completion of the implementation process.

Mining — ATL Data Centers and CleanBlok

our wholly-owned subsidiaries, ATL Data Centers LLC (“ATL”) and our recently-formed subsidiary, CleanBlok, LLC, we

mine bitcoin.

was first introduced in 2008 with the goal of serving as a means of exchanging and storing value.

Bitcoin is a new form of digital

currency that depends upon a consensus-based network and a public ledger called a “blockchain,” which contains a record

of every bitcoin transaction ever processed.

The bitcoin network was the first decentralized peer-to-peer payment network powered

by those users participating in the consensus protocol, with no central authority or middlemen, that has wide network participation.

The authenticity of each bitcoin transaction is protected through digital signatures that correspond with addresses of users that

send and receive bitcoin.

Users have full control over remitting bitcoin from their own sending addresses.

All transactions on

the bitcoin blockchain are transparent, allowing those running the appropriate software to confirm the validity of each transaction.

In order to be recorded on the blockchain, each bitcoin transaction is validated through a proof-of-work consensus method, which

entails solving complex mathematical problems to validate transactions and post them on the blockchain, which is often called “mining.”

For successfully solving the problems and providing computing power to the network, the computer is rewarded with bitcoins, both

in the form of newly-created bitcoins and fees in bitcoin.

such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity)

and location play an important role in mining.

Our current facilities are capable of producing an over 300 PH/s in hash rate capacity.

In cryptocurrency mining, “hash rate” is a measure of the processing capacity and speed by a mining computer to mine

and process transactions on the bitcoin network.

Our activities in this area, in addition to generating revenue in the form of

bitcoin, creates an advantageous business opportunity for us to operate a full-scale, demonstration facility of our energy-related

products and solutions.

We plan to deploy our energy technologies and trade secrets in our bitcoin mining operations with the goal

of maximizing energy savings, expanding total power capacity, providing resilient electricity, and reducing greenhouse gas emissions.

We anticipate that implementing this strategy will involve the design and installation of multiple microgrids at the ATL Data Center

We are in the process of actively expanding this aspect of our business and are working toward expanding our hash rate

capacity, with the goal of exceeding 1.0 EH/s in hash rate capacity in fiscal year 2021.

a result of our mining operations, we acquire bitcoin, and, while we have to date retained a significant portion of the bitcoin

from our mining operations (typically maintaining the bitcoin at a digital asset exchange), we have sold, and may from time to

time sell, bitcoin from our inventory.

We do not currently plan to engage in regular trading of bitcoin (other than as necessary

to convert our bitcoin to U.S.

dollars) or to engage in hedging activities related to our holding of bitcoin;

however, our decisions

to hold or sell bitcoin at any given time may be impacted by the bitcoin market, which has been historically characterized by significant

Currently, we do not use a formula or specific methodology to determine whether or when we will sell bitcoin that we

hold, or the number of bitcoins we will sell.

Rather, decisions to hold or sell bitcoins in our inventory are currently determined

by individuals analyzing forecasts and monitoring the market in real time.

with many new and emerging technologies, our bitcoin mining activities present potentially significant risks to our business.

(including ours) that seek to develop, promote, adopt, transact or rely upon blockchain technologies and bitcoin may have a limited

track record and operate within novel and developing environments.

These risks are not only related to the businesses we are pursuing,

but also the industry as a whole and the concept behind blockchain and cryptocurrency as value creation.

In addition, our holding

and selling of bitcoin may subject us to additional risks, including the possibility that our activities may become subject to

additional regulation or regulatory scrutiny.

system integration and installation — Solar Watt Solutions

our acquisition of Solar Watt Solutions, Inc.

in February 2021, we provide solar and alternative energy solutions for homeowners

and commercial businesses in Southern California.

These energy solutions include implementation and installation services for solar

panels, energy storage and electric vehicle charging station systems.

Solar Watt has historically been focused on serving the communities

throughout California, and we intend to work to further expand those services to other regions outside of Southern California.

Through these efforts, we expect to leverage those services and capacities to further expand our residential and commercial initiatives,

including our mVoult product line for residential microgrids and our mPulse product line for commercial microgrids.

Agency Products and Services — p2kLabs

our wholly-owned subsidiary, p2kLabs, Inc., we provide a suite of digital services from creative design to technical development

for products and services through the entire product/service lifecycle.

Such services are provided through “labs,”

with each lab containing its own unique offering, including design, marketing/digital content, engineering and SalesForce development,

and strategy services.

Gasifier Business

own patented gasification technologies that convert any organic material into synthesis gas (“SynGas”).

protect our gasification technology and process for using feedstock comprising gaseous fuel.

Our patented process involves the

grinding, drying, separating, mixing, and then pelletizing of solid waste.

These pellets constitute the feedstock for the gasifier.

Gasifying feedstock using our technology converts waste and organic material into SynGas, which can then be converted into multiple

forms of fuel for power plants, motor vehicles, jets, duel-fuel diesel engines, gas turbines, and steam boilers and as feedstock

for the generation of DME (Di-Methyl Ether).

The SynGas produced is mostly hydrogen and carbon monoxide, which are primary building

blocks for many fuels and chemicals.

SynGas is sufficiently clean that, if processed directly, it generally does not require costly

hot-gas cleanup.

gasification technologies and prototype will require additional testing to further establish their commercial capability of producing

large volumes of clean, renewable energy from any carbon compound (municipal solid waste (MSW), coal, sewage sludge) into clean

Our prototype gasifier is still under development and a commercially viable gasifier is not expected to be viable for sale

until we expend additional resources on its testing and development.

A third-party consulting firm has independently tested the

gasifier’s performance and certified the results of its performance.

Upon completion of the testing, an initial white paper

was published outlining the results and suggested improvements for commercialization.

We anticipate that the investment to complete

these improvements would be approximately $500,000.

Upon completion of the improvements, we would be required to conduct an extended

test run with an independent third party to verify the results needed to prove its commercial viability, at which time we could

begin to actively market our gasifier units.

We do not anticipate deploying significant resources on the gasification business

at this time.

As opportunities arise, we may utilize the gasification assets and intellectual properties through licensing or sales

this time, we are not engaged in any negotiations to sell or license our gasifier products to any customers.

described above, following our acquisition of ATL Data Centers in December 2020, we are engaged in the business of mining

and selling bitcoin.

As a result, we may become subject to government regulation of blockchain and cryptocurrency, including bitcoin,

which has been developing rapidly in the United States federal government through a number of federal agencies and regulatory

bodies, as well as in other countries by similar entities.

State government regulations also may apply to our current operations

and activities as well as other activities in which we participate or may participate in the future.

Furthermore, transnational

organizations and semi-governmental agencies have shown an interest in regulating or investigating companies engaged in the blockchain

or cryptocurrency business.

We expect regulation in this space to continue to evolve.

and other regulations, including regulations that may become applicable to our business in the future, may substantially change

in the future, and it is presently not possible to know how or when any such regulations will apply to our businesses.

also become subject to new laws and further regulation by the SEC and other agencies.

Various bills have been proposed in Congress

related to the industries in which we operate, which, if adopted, may have a significant impact on us.

For additional discussion

regarding our beliefs about the potential risks existing and future regulation as well as other conditions pose to our business,

see the “Risk Factors” section below and in the documents incorporated by reference therein.

Results of operations for the three

months ended March 31, 2021 and 2020

increased to $8,119,688 during the three months ended March 31, 2021, as compared with $3,658,283 in revenues for the same period

ended 2020 primarily due to revenues from our digital agency and digital currency mining segments.

Our cost of revenues was $1,332,890 for the

three months ended December 31, 2020, resulting in gross profit of $924,680, as compared with cost of revenues of $882,721 for

the three months ended December 31, 2019, resulting in gross profit of $94,103.

The increase in our cost of revenues for the

three months ended December 31, 2020 was mainly the result of an increase in manufacturing and hardware expenses.

sale revenue costs increased to $1,014,931 for the three months ended December 31, 2020, from $784,574 for the same period ended

The increase in our product sale expense consisted mainly as a result of an increase in the cost of contract manufacturing

for our switchgear products and hardware costs.

cost of services increased

to 148,913 for the three months ended December 31, 2020, from $98,147 for the same period ended 2019.

The increase in our service,

software, and related revenues expenses for the three months ended December 31, 2020, and 2019 consisted mainly as a result of

an increase in the cost of allocated payroll costs of employees and consultants and subcontractors for services rendered through

our digital agency services and installation of solar panels and energy storage.

Our cost of mining and data center revenue

increased to $169,046 for the three months ended December 31, 2020 from $0 for the same period ended 2019.

The increase in these

costs consisted mainly as a result of an increase in the utility costs and labor for data center services rendered.

Operating Expenses

We had operating expenses of $7,094,778

for the three months ended December 31, 2020, as compared with $3,085,564 for the three months ended December 31, 2019.

Loss from Operation

Our cost and expenses were $10,616,660 for

the three months ended March 31, 2021, resulting in loss from operations of ($2,496,972), as compared with cost and expenses of

$5,930,335 for the three months ended March 31, 2020, resulting in loss from operations of $(2,272,052).

The decrease in our cost of revenues for the

three months ended March 31, 2021 was mainly the result of a decrease in manufacturing and hardware expenses.

Professional fees increased to $2,456,554 for

the three months ended December 31, 2020, from $1,516,587 for the same period ended December 31, 2019.

the three months ended March 31, 2021, from $1,005,991 for the same period ended March 31, 2020.

Our professional fees expenses

for the three months ended December 31, 2020 consisted mainly of legal fees of $1,230,362, consulting fees of $226,450, external

marketing fees of $120,838, and accounting, audit and review fees of $97,350.

Our professional fees expenses for the three months

ended December 31, 2019 consisted mainly of officers and directors’ consulting fees of $150,000, consulting fees of $62,818,

and accounting, audit and review fees of $71,655 and stock-based compensation of $586,181.

Professional fees increased in

2020 mainly as a result of increased legal fees.

Payroll expenses increased to $3,314,201

for the three months ended December 31, 2020, from $711,539 for the same period ended 2019.

Our payroll expenses for the three

months ended December 31, 2020 consisted mainly of salary and wages expense of $2,382,161 and employee stock-based compensation

The increase in our payroll expenses for the three months ended December 31, 2019 consisted mainly as a result of

an increase in salary and wages expense of $680,551 and employee stock-based compensation of $30,988.

General and administrative fees increased

to $950,139 for the three months ended December 31, 2020, from $230,661 for the same period ended 2019.

The increase in our general

and administrative expenses for the three months ended December 31, 2020 consisted mainly as a result of an increase in our marketing

expenses of 555,429, dues and subscriptions of $171,992, insurance expenses of $72,159, and rent expenses of $30,393.

and administrative expenses for the three months ended December 31, 2019 consisted mainly of travel expenses of $31,585, rent expenses

of $21,318, insurance expenses of $42,901, dues and subscriptions of $51,367 and office expense of $10,445.

development expense was $39,286 for the three months ended December 31, 2020, and $39,287 for the same period ended 2019.

development expenses for the three months ended December 31, 2020 and 2019 consisted mainly of amortization of capitalized software.

for the three months ended March 31, 2021 consisted mainly of legal fees of $1,625,715, consulting fees of $469,029, external marketing

fees of $206,923, and accounting, audit and review fees of $149,872.

Our professional fees expenses for the three months ended

March 31, 2020 consisted mainly of officers and directors’ consulting fees of $184,115, consulting fees of $286,903, and

accounting, audit and review fees of $77,684 and stock-based compensation of $245,231.

expenses increased to $3,262,097 for the three months ended March 31, 2021, from $984,380 for the same period ended 2020.

expenses for the three months ended March 31, 2021 consisted mainly of salary and wages expense of $2,428,083 and employee stock-based

compensation of $834,014.

Our payroll expenses for the three months ended March 31, 2020 consisted mainly of salary and wages expense

of $955,680 and employee stock-based compensation of $28,700.

General and administrative

fees increased to $1,243,154 for the three months ended March 31, 2021, from $311,131 for the same period ended 2020.

in our general and administrative expenses for the three months ended March 31, 2021 consisted mainly as a result of an increase

in our marketing expenses of $87,276, dues and subscriptions of $233,608, insurance expenses of $172,482, and rent expenses of

Our general and administrative expenses for the three months ended March 31, 2020 consisted mainly of travel expenses

of $48,378, rent expenses of $27,141, insurance expenses of $50,785, dues and subscriptions of $117,671 and office expense of $10,755.

Depreciation and amortization expense increased

to $1,078,429 for the three months ended December 31, 2020, from $587,490 for the same period ended 2019 mainly due to the depreciation

to $2,117,172 for the three months ended March 31, 2021, from $715,005 for the same period ended 2020 mainly due to the depreciation

expense related to the equipment used in the data center and digital currency miners.

We expect that our professional fees, payroll

expenses, and general and administrative fees will increase in future quarters as we further implement our business plan.

execute on customer contracts we may be required to hire and compensate additional personnel and support increased operational

Other income (expenses)

income/(expenses) increased to $9,897,012 for the three months ended March 31, 2021, from ($3,543,046) for the same period ended

March 31, 2020.

Our other income for the three months ended March 31, 2021 consisted mainly of income related to the forgiveness

of debt of $541,576, realized gain on sales of digital currency of $585,709, an unrealized gain on equity securities of $343,000,

derivative gain of $8,400,629, and net interest income of $26,098.

Our other (expenses) for the three months ended March 31, 2020

consisted mainly of an unrealized loss on equity securities of ($210,000), derivative loss of ($1,441,763) and

interest expense of ($1,891,283).

Net Income/(Loss)

We recorded net income of $7,400,040 for the

three months ended March 31, 2021, as compared with a net loss of ($5,815,098) for the same period ended March 31, 2020 mainly

due to an increase in revenues and unrealized gains on equity and derivative securities.

Results of operations for the six

months ended March 31, 2021 and 2020

increased to $10,377,258 during the six months ended March 31, 2020, as compared with $4,635,107 in revenues for the same period

ended 2020 primarily due to revenue from our Cryptocurrency mining.

Loss from Operation

Our cost and expenses were $19,044,328 for

the six months ended March 31, 2021, resulting in loss from operations of ($8,667,070), as compared with cost and expenses of $9,898,620

for the six months ended March 31, 2020, resulting in loss from operations of ($5,263,513).

The decrease in our cost of revenues for the

six months ended March 31, 2021 was mainly the result of a decrease in manufacturing and hardware expenses.

Professional fees increased to $4,169,277 for

the six months ended March 31, 2021, from $2,522,578 for the same period ended March 31, 2020.

Our professional fees expenses for

the six months ended March 31, 2021 consisted mainly of legal fees of $2,856,077, consulting fees of $620,063, external marketing

fees of $327,761, accounting, audit and review fees of $303,882.

Our professional fees expenses for the six months ended March

31, 2020 consisted mainly of officers and directors’ consulting fees of $466,154, consulting fees of $755,858, and accounting,

audit and review fees of $94,160 and stock-based compensation of $831,412.

Professional fees increased in 2021 mainly as a result

of increased legal fees.

Payroll expenses increased to $6,576,298 for

the six months ended March 31, 2021, from $1,695,919 for the same period ended 2020.

Our payroll expenses for the six months ended

March 31, 2021 consisted mainly of salary and wages expense of $4,810,244 and employee stock-based compensation of $1,766,054.

Our payroll expenses for the six months ended March 31, 2020 consisted mainly of salary and wages expense of $1,636,231 and employee

stock-based compensation of $59,688.

General and administrative fees increased to

$2,193,293 for the six months ended March 31, 2021, from $541,792 for the same period ended 2020.

The increase in our general

and administrative expenses for the six months ended March 31, 2021 consisted mainly as a result of an increase in our marketing

expenses of $688,662, dues and subscriptions of $405,600, insurance expenses of $244,641, rent expenses of $317,297, and bad debt

expenses of $231,932.

Our general and administrative expenses for the six months ended March 31, 2020 consisted mainly of travel

expenses of $79,963, rent expenses of $48,459, insurance expenses of $93,686, dues and subscriptions of $169,038 and office

expense of $21,200.

Depreciation and amortization expense increased

to $3,226,263 for the six months ended March 31, 2021, from $1,381,069 for the same period ended 2020.

We expect that our operating expenses will

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Other income (Expenses)

income/(expenses) decreased to ($997,432) for the three months ended December 31, 2020, from $1,075,207 for the same period ended

December 31, 2019.

Our other income/(expenses) for the three months ended December 31, 2020 consisted mainly of a realized gain

on sales of digital currency of $49,918, net interest income of $46,644, an unrealized loss on equity securities of ($73,500),

and derivative loss of ($1,020,494).

Our other income/(expenses) for the three months ended December 31, 2019 consisted mainly

of an unrealized gain on equity security of $368,868, derivative income of $2,266,654 and

Other income/(expenses)

increased to $8,899,580 for

the six months ended March 31, 2021, from ($2,467,839) for the same period ended March 31, 2020.

Our other income for the six months

ended March 31, 2021 consisted mainly of income related to the forgiveness of debt of $541,576, realized gain on sales of digital

currency of $635,627, an unrealized gain on equity securities of $269,500, derivative gain of $7,380,135, and net interest income

other (expenses) for the six months ended March 31, 2020 consisted mainly of an unrealized gain on equity securities of $158,868,

derivative gain of $824,891 and

interest expense of ($3,451,598).

We recorded a net loss of $7,167,530 for

the three months ended December 31, 2020, as compared with a net loss of $1,916,254 for the same period ended December 31, 2019

mainly due to increase in payroll expenses, general and administrative expenses, and depreciation and amortization expenses.

Net Income/(Loss)

We recorded net income of $232,510 for the

six months ended March 31, 2021, as compared with a net loss of ($7,731,352) for the same period ended March 31, 2020.

Liquidity and Capital Resources

As of December 31, 2020, we had total current

As of March 31, 2021, we had total current

assets of $178,459,063, consisting of cash, digital currency, accounts receivable, and prepaid expenses and other current assets,

and total assets in the amount of $292,612,596.

Our total current and total liabilities as of December 31, 2020 were $4,594,815

and $6,137,646 respectively.

We had working capital of $28,711,558 as of December 31, 2020.

Our total current and total liabilities as of March 31, 2021 were $7,340,445 and

$8,892,137 respectively.

We had working capital of $171,296,123 as of March 31, 2021.

Operating Activities

activities used $6,833,578 in cash for the three months ended December 31, 2020, as compared with $885,386 for the same period

ended December 31, 2019.

Our net loss of $7,167,530 was

the main component of our negative operating cash flow

for the three months ended December 31, 2020, offset mainly by stock based compensation of $4,350,643 unrealized loss on equity

security of $73,500, loss on derivative asset of $1,020,494, depreciation and amortization of $1,078,429, and amortization of capitalized

software of $39,286.

Other components of our negative operating cash flow are the changes in operating assets and liabilities including

prepaid expenses and other current assets of ($2,329,318), accounts payable of ($2,366,531), digital currency of ($733,410), accounts

receivable of ($463,199), and inventory of ($276,750).

Our net loss of $1,916,254 was the main component of our negative operating

cash flow for the three months ended December 31, 2019, offset mainly by unrealized gain on equity security of ($368,868), gain

on derivative asset of ($2,266,654), depreciation and amortization of $626,777, amortization of capitalized software of $39,286,

amortization of debt discounts of $1,512,174, and stock-based compensation of $636,269.

Operating activities used $11,686,460 in cash

for the six months ended March 31, 2021, as compared with $1,263,055 for the same period ended March 31, 2020.

Our use of net cash

in operating activities were primarily driven by gain on derivative asset of $7,380,135, realized gain on sale of digital currency

of $635,627, and PPA loan forgiveness of $531,169, offset mainly by stock based compensation of $5,199,658, depreciation and amortization

of $3,226,263, and bad debt provision of $231,932.

Other components of our negative operating cash flow are the changes in operating

assets and liabilities including increase in prepaid expenses and other current assets of $(1,130,741), decrease in accounts payable

of ($2,890,270), increase in digital currency of ($7,449,202), increase in contract liabilities of $487,779, decrease in accounts

receivable of $114,285, and increase in inventory of ($793,945).

Our net loss of $7,731,352 was the main component of our negative

operating cash flow for the six months ended March 31, 2020, offset mainly by unrealized gain on equity security of ($158,868),

gain on derivative asset of ($824,891), depreciation and amortization of $1,381,069, amortization of debt discounts of $3,000,959,

stock-based compensation of $910,200, and change in operating and assets and liabilities of $2,138,102.

Investing Activities

Investing activities used ($55,909,101) during

the three months ended December 31, 2020, as compared with ($509,447) for the same period ended December 31, 2019.

digital currencies of $375,887, acquisition of ATL Data Centers, LLC of $45,783, investment in infrastructure development of $(2,830,560),

and purchase of fixed assets of ($19,082) were the main components of our investing cash flow for the three months ended December

Our investment in International Land Alliance of $(500,000) and purchase of fixed assets of $(9,447) were the main components

of our negative investing cash flow for the three months ended December 31, 2019.

the six months ended March 31, 2021, as compared with ($2,001,825) for the same period ended March 31, 2020.

Our increase in deposits

on mining equipment of 45,488,258 was the main component of our negative investing cash flow for the six months ended March 31,

Our sale of digital currencies of $2,422,282, acquisition of ATL Data Centers, LLC of $45,783, acquisition of Solar Watt

Solutions, Inc.

of ($1,000,337), investment in infrastructure development of ($2,830,860), and purchase of property and equipment

of ($9,058,011) were the main components of our investing cash flow for the six months ended March 31, 2021.

Our acquisition of

p2K of ($1,141,990) and investment in debt and equity securities of $(750,000) were the main components of our negative investing

cash flow for the six months ended March 31, 2020.

Financing Activities

flows received/(used) in financing activities during the three months ended December 31, 2020 amounted to $31,767,261, as compared

with ($67,467) for the three months ended December 31, 2019.

Our cash flows from financing activities for the three months ended

December 31, 2020 consisted of repayments of ($5,475,000) on promissory notes, proceeds from exercise of warrants of $192,656,

and proceeds from underwritten offering of $37,049,605.

Our negative cash flows from financing activities for the three months

ended December 31, 2019 consisted of repayments of $(67,467) on promissory notes.

flows received from financing activities during the six months ended March 31, 2021 amounted to $221,743,901, as compared with

($67,467) for the six months ended March 31, 2020.

Our cash flows from financing activities for the six months ended March 31,

2021 consisted of repayments of ($5,865,476) on promissory notes, proceeds from exercise of warrants of $3,346,559, and proceeds

from underwritten offerings of $224,262,818.

Our negative cash flows from financing activities for the six months ended March 31,

2020 consisted of repayments of ($67,467) on promissory notes.

Our future capital requirements will depend

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Management believes that the Company has sufficient

liquidity to satisfy its anticipated cash requirements for the next twelve months.

However, there can be no assurance that our

operations will become profitable or that external sources of financing, including the issuance of debt and/or equity securities,

will be available at times and on terms acceptable to us, or at all.

The Company’s management prepares budgets

and monitors the financial results of the Company as a tool to align liquidity needs to the recurring business requirements.

We may be required to seek additional equity

or debt financing.

In the event that additional financing is required from outside sources, we may not be able to raise monies

on terms acceptable to us or at all.

If we are unable to raise additional capital when desired, our business, operating results

and financial condition would be adversely affected.

liquidity to satisfy its anticipated cash requirements for the next twelve months and beyond.

The Company’s management prepares

budgets and monitors the financial results of the Company as a tool to align liquidity needs to the recurring business requirements.

Off Balance Sheet Arrangements

As of December 31, 2020, there were no off-balance

As of March 31, 2021, there were no off-balance

sheet arrangements.

19 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis