What changed in this filing

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Item 1. Legal Proceedings

2023-08-08 compared with 2023-05-10 · 40 added, 58 removed, 60 unchanged (62% of the section changed)

5 unchanged sentences

Compute North provided operating services to

the Company and hosted our mining rigs at multiple facilities.

We delivered miners to Compute North, which then installed the mining

rigs at those facilities, operated and maintained the mining rigs, and provided energy to keep the miners operating.

During the course

of the chapter 11 cases, Compute North sold substantially all of their assets in a series of 363 sale transactions, including Compute

North’s ownership interests in non-debtor entities that own or partially-own facilities that house our miners.

the Company and hosted its mining rigs at multiple facilities.

The Company delivered miners to Compute North, which then installed the

mining rigs at those facilities, operated and maintained the mining rigs, and provided energy to keep the miners operating.

course of the chapter 11 cases, Compute North sold substantially all of their assets in a series of 363 sale transactions, including

Compute North’s ownership interests in non-debtor entities that own or partially-own facilities that house the Company’s

November 23, 2022, the Company and certain of its affiliates timely filed proofs of claim asserting various claims against Compute North,

8 unchanged sentences

claim against Compute North LLC in the amount of $40,000 and its Preferred Equity Interests in Compute North Holdings, Inc.

amount of 39,597 shares of Series C Preferred Stock was confirmed.

in the amount

of 39,597 shares of Series C Preferred Stock was confirmed.

In exchange, the Company agreed to vote in favor of Compute North’s

9 unchanged sentences

any distributions under the Plan on account of its claims and interests.

February 18, 2022, a shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against

current and former members of the Company’s board of directors and senior management.

The complaint is based on allegations substantially

similar to the allegations in the December 2021 putative class action complaint, related to the Company’s disclosure of an SEC

investigation previously made by the Company on November 15, 2021.

On March 4, 2022, the complaint was served on the Company.

4, 2022, the defendants moved to dismiss the complaint.

May 5, 2022, a second shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against

current and former members of the Company’s board of directors and senior management.

The second shareholder derivative complaint

is based on allegations substantially similar to the allegations in the February 18, 2022 derivative complaint.

On May 11, 2022, the

defendants moved to dismiss the second shareholder derivative complaint.

June 1, 2022, the Court entered an order consolidating the two derivative actions.

A June 13, 2022 scheduling order provided for plaintiffs

to file a consolidated complaint and for renewed motions to dismiss the consolidated shareholder derivative complaint.

On November 22,

2022, before a consolidated complaint was due, plaintiffs voluntarily dismissed both actions without prejudice.

On November 23, 2022,

both actions were closed.

Class Action Complaint

December 17, 2021, a putative class action complaint was filed in the United States District Court for the District of Nevada, against

the Company and present and former senior management.

The complaint alleges securities fraud related to the disclosure of an SEC investigation

previously made by the Company on November 15, 2021.

Plaintiff Tad Schlatre served the complaint on the Company on March 1, 2022.

September 12, 2022, the court appointed Carlos Marina as lead plaintiff.

On October 21, 2022, lead plaintiff voluntarily dismissed the

complaint without prejudice.

On December 7, 2022, the action was closed.

March 30, 2023, a putative class action complaint was filed in the United States District Court for the District of Nevada, against the

Company and present and former senior management.

The complaint alleges securities fraud related to the Company’s announcement

of accounting restatements on February 28, 2023.

Plaintiff has not served the complaint on the Company.

March 30, 2023, a putative class action complaint was filed in the United States District Court for the District of Nevada, against

the Company and present and former senior management, alleging claims under Section 10(b) and 20(a) of the Securities Exchange Act

of 1934 (the “Exchange Act”) arising out of the Company’s announcement of accounting restatements on February 28,

The defendants’ time to respond has been extended until after the appointment of a lead plaintiff.

To date, no lead

plaintiff has been appointed.

June 22, 2023, a shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida,

against current members of the Company’s board of directors and senior management, alleging claims for breach of fiduciary duty

and unjust enrichment based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.

July 8, 2023, a second shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against

current and former members of the Company’s board of directors and senior management, alleging claims under Sections 14(a), 10(b), and 21D of the Exchange Act, and for breach of fiduciary duty, unjust enrichment,

and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.

July 12, 2023, a third shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against

current and former members of the Company’s board of directors and senior management, alleging claims under Section 14(a) of the Exchange Act and for breach of fiduciary duty, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.

July 13, 2023, a fourth shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County,

Florida, against current members of the Company’s board of directors and senior management, alleging claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.

October 6, 2020, the Company entered into a series of agreements with multiple parties to design and build a data center for up to 100-megawatts

in Hardin, MT.

in Hardin, Montana.

In conjunction therewith, the Company filed a Current Report on Form 8-K on October 13, 2020.

4 unchanged sentences

and certain of its executives received a subpoena to produce documents and communications concerning the Hardin, Montana data center

facility described in our Form 8-K dated October 13, 2020.

The Company received an additional subpoena from the SEC on April 10, 2023,

relating to, among other things, transactions with related parties.

We understand that the SEC may be investigating whether or not there

may have been any violations of the federal securities law.

We are cooperating with the SEC.

facility described in the Company’s Form 8-K dated October 13, 2020.

The Company received an additional subpoena from the SEC on

April 10, 2023, relating to, among other things, transactions with related parties.

The Company understands that the SEC may be investigating

whether or not there may have been any violations of the federal securities law.

The Company is cooperating with the SEC.

January 14, 2021, Plaintiff Michael Ho (“Plaintiff” or “Ho”) filed a Civil Complaint for Damages and Restitution

23 unchanged sentences

In its ruling on the summary judgment motion and at the pre-trial conference

on February 24, 2022, the Court noted that a jury is more likely to accept $150,000 as an appropriate damages amount if liability is

found, as opposed to the various theories espoused by Ho that result in multi-million-dollar recoveries.

Due to outstanding issues of

fact and law, it is impossible to predict the outcome at this time;

however, after consulting legal counsel, the Company is confident

that it will prevail in this litigation, since it did not have a contract with Mr.

Ho and he did not disclose any commercially-sensitive

information under any mutual nondisclosure agreement that was used to structure any joint venture with energy providers.

The trial has

been rescheduled for January 29, 2024, and is scheduled for four days, including jury selection.

on February 24, 2022, the Court noted that a jury is more likely to accept $150 as an appropriate damages amount if liability is found,

as opposed to the various theories espoused by Ho that result in multi-million-dollar recoveries.

Due to outstanding issues of fact and

law, it is impossible to predict the outcome at this time;

however, after consulting legal counsel, the Company is confident that it

will prevail in this litigation, since it did not have a contract with Mr.

Ho and he did not disclose any commercially-sensitive information

under any mutual nondisclosure agreement that was used to structure any joint venture with energy providers.

The trial has been rescheduled

for January 29, 2024, and is scheduled for four days, including jury selection.

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 1. Legal Proceedings