CleanSpark(US:CLSK)2025-11-25 21:46Operational Capacity and Performance - As of September 30, 2025, CleanSpark operates with a total contracted power capacity of approximately 1,027 megawatts (MW) across its data centers in Georgia, Tennessee, Mississippi, and Wyoming[26]. - The average computing power of operating mining units reached 45.6 exahash per second (EH/s), with a peak of 50 EH/s during the period[30]. - For the fiscal year ended September 30, 2025, CleanSpark mined approximately 7,873 bitcoins, a decrease of 11.0% compared to 7,092 bitcoins mined in fiscal year 2024, primarily due to the April 2024 bitcoin halving[34]. - CleanSpark owned approximately 336,544 miners, with 241,934 in service as of September 30, 2025, and an average operating energy efficiency of 16.7 watts per terahash (W/TH)[31]. - The company has executed long-term power supply agreements totaling 285 megawatts to support the development of a new data center campus in Austin County, Texas[38]. - CleanSpark's Georgia facilities support an operational hashrate of 27.02 EH/s backed by approximately 620 MW of data center infrastructure[44]. - The Mississippi facilities support an operational hashrate of 2.63 EH/s with a developed data center infrastructure of approximately 63 MW[45]. - The Tennessee facilities support an operational hashrate of 12.43 EH/s backed by 234 MW, including sites acquired through the acquisition of GRIID Infrastructure, Inc.[46]. Financial Management and Performance - The company has begun using a substantial portion of the bitcoin mined to fund operations and capital expenditures, integrating strategies for treasury management[33]. - The company has sustained $125,894 in cumulative net losses from inception through September 30, 2025, with a net income of $364,464 for the fiscal year ended September 30, 2025[117]. - The market price of bitcoin ranged from approximately $58,900 to $124,500 during the fiscal year ended September 30, 2025, indicating significant volatility[120]. - The company may require additional financing to sustain and expand operations, which may not be available on favorable terms, adversely affecting financial condition and results[109]. - The expansion into AI and HPC services is expected to increase capital intensity, potentially impacting liquidity and results of operations[112]. - The company maintains cash balances that often exceed federally insured limits, posing a risk of loss if banking institutions fail[114]. - The company produced bitcoin at a time when prices may be low, which could adversely affect investment value[157]. Regulatory and Compliance Risks - The company is monitoring evolving regulations that may impact its operations, particularly in the bitcoin mining and AI sectors[71]. - The company is exposed to regulatory risks, including potential changes in laws governing bitcoin mining and digital assets, which could increase compliance costs and impact operations[14]. - The company is subject to regulatory changes that may require registration as a money services business, potentially incurring substantial compliance costs[190]. - The CFTC may impose additional regulatory oversight on bitcoin transactions, potentially leading to extraordinary, non-recurring expenses for the company[195]. - Future SEC classification of bitcoin as a security could require significant compliance costs and registration, adversely affecting the company's financials[199]. - The company faces risks from potential future regulations in countries like China, India, and Russia, which could restrict cryptocurrency operations[201]. - Changes in environmental regulations could increase operational costs, impacting the company's profitability and expansion plans[202]. Market and Competitive Landscape - The company is subject to significant competition in the bitcoin mining and data center markets, with competitors having greater resources and capitalization, impacting its ability to acquire new miners and secure low-cost electricity[91]. - The company is focused on expanding into large-scale data centers for HPC and AI workloads, facing competition from established operators[62]. - The company faces potential liabilities from discontinued operations, which could adversely affect its financial results[179]. - The company’s ability to mine bitcoin profitably is threatened by rising power prices due to geopolitical events and inflation[161]. - The company must continue to grow its hashrate to remain competitive in the bitcoin mining industry, as the global network hashrate continues to increase[172]. Technological and Operational Risks - The company’s bitcoin mining operations are vulnerable to technological obsolescence and reliance on a global supply chain for hardware, which could increase costs and impact business[14]. - The company is exposed to risks related to technological obsolescence and supply chain disruptions, particularly concerning the import of mining equipment[183]. - The company’s operations are heavily dependent on third-party cloud service providers, and any failures could materially impact business operations and financial condition[153]. - Security threats, including hacking and malware, pose risks to the company's bitcoin holdings and could damage its reputation[146]. - The company may face challenges in liquidating or hedging bitcoin positions during periods of market stress, adversely affecting liquidity and financial condition[140]. Human Resources and Organizational Structure - The company has 314 staff members as of September 30, 2025, with 309 being full-time employees[76]. - The company’s future success is contingent on its ability to attract and retain skilled personnel in a competitive labor market, which may constrain growth and increase operational costs[105]. Strategic Initiatives and Future Outlook - The company is actively pursuing opportunities in AI and HPC hosting, leveraging its expertise in energy management and data center operations[36]. - The company has engaged in strategic acquisitions to expand its operations, including recent acquisitions in Georgia, Mississippi, Wyoming, Texas, and Tennessee, but these may dilute stockholder ownership and introduce integration challenges[100]. - The company launched a bitcoin treasury function in April 2025, exposing it to significant risks and uncertainties in trading activities[185]. - The company anticipates increased scrutiny and regulation surrounding AI and HPC hosting, which may affect its business operations[215].