Blog: MAWSON INFRASTRUCTURE GROUP INC. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 1.01 Entry into a Material Definitive Agreement

On September 8, 2022, Mawson Infrastructure Group, Inc. (“Mawson”) entered into
(i) a Purchase and Sale Agreement (the “Purchase Agreement”), by and among
Mawson, Mawson’s wholly owned subsidiary Luna Squares, LLC (the “Property
Seller” and, collectively with Mawson, “Seller”), CleanSpark, Inc.
(“CleanSpark”) and CleanSpark’s wholly owned subsidiary, CSRE Properties
Sandersville, LLC (the “Property Purchaser”), and (ii) an Equipment Purchase and
Sale Agreement (the “Equipment Purchase Agreement” and, together with the
Purchase Agreement, the “Agreements” and, the transactions contemplated by the
Agreements, the “Transactions”) by and among Mawson, Mawson’s wholly owned
subsidiary, Cosmos Infrastructure, LLC (the “Miner Seller”), and CleanSpark’s
wholly owned subsidiary, CleanSpark GLP, LLC (the “Miner Purchaser”).

Pursuant to the Purchase Agreement, and subject to the terms and conditions
thereof, the Property Purchaser will assume from the Property Seller a lease for
approximately 16.35 acres of real property located in Sandersville, Washington
County, Georgia (the “Property”), and purchase from the Property Seller all
personal property situated on the Property. On the closing date of the
Transactions (the “Closing Date”), CleanSpark will pay the following
consideration to Seller pursuant to the Purchase Agreement: (i) $17.0 million in
cash; (ii) 1,590,175 shares (the “Closing Shares”) of common stock, par value
$0.001 per share of CleanSpark (the “CleanSpark Common Stock”) (which have a
value of $6.5 million based upon the volume weighted average price of the
CleanSpark Common Stock over the five trading days immediately preceding the
signing date of the Agreements), and (iii) $3.0 million in Seller financing in
the form of promissory notes.

The following additional consideration may be payable to Seller following the
Closing Date:

i. up to 1,100,890 shares of CleanSpark Common Stock (the “Earn-out Shares” and,
together with the Closing Shares, the “CleanSpark Shares”) (which have a value
of $4.5 million based upon the volume weighted average price of the CleanSpark
Common Stock over the five trading days immediately preceding the signing date
of the Agreements), based upon the number of modular data centers on the
Property occupied by the Property Seller (“Co-location MDCs”) being emptied and
made available for use by the Property Purchaser, with 100% of the Earn-Out
Shares being available with respect to Co-location MDCs that are emptied on or
before the 195th day after the Closing Date, and 84% of the Earn-out Shares
being available with respect to Co-location MDCs that are emptied on the 196th
day after the Closing Date, and such percentage being reduced by an additional 1
percentage point until 100 days following the 180th day after the Closing Date,
after which Earn-Out Shares can no longer be earned; and

ii. up to an additional $2.0 million in a Seller-financed earn-out payable at
least 60 days post-closing if the Property Purchaser is able to utilize at least
an additional 150 MW of power on the Property by the six month anniversary of
the Closing Date. In the event that the Property Purchaser is able to utilize
more than 80 MW but less than 230 MW of power on the Property by the six month
anniversary of the Closing Date, then the Property Seller will be entitled to a
pro rata portion of such earn-out.

Pursuant to the Equipment Purchase Agreement, the Miner Purchaser will purchase
from the Miner Seller, 6,468 application-specific integrated circuit miners
(“ASICs”) for $9.48 million in cash.

Pursuant to the Purchase Agreement, the Property Seller and its affiliates
(collectively, the “Selling Parties”) have granted to the Property Purchaser a
right of first refusal for a period of one year following the Closing Date with
respect to a Selling Party’s potential sale of certain cryptocurrency mining
facilities, mining assets and properties, including any U.S. facilities in which
the Selling Parties acquire an interest during the period of the right of first
refusal (individually, the “Other Mining Property”). The Selling Parties have
also granted to the Property Purchaser a right of first offer with respect to
the Other Mining Property for a period of 180 days after the Closing Date.

Pursuant to the Purchase Agreement, CleanSpark has agreed that, following the
Closing, it will register the CleanSpark Shares for resale by Seller.

The closing of the Transactions are subject to customary closing conditions, and
the Closing Date is expected to occur in early October.

CleanSpark is guaranteeing all of the Property Purchaser’s and Miner Purchaser’s
obligations pursuant to the Agreements.

The Agreements contain standard representations, warranties, covenants,
indemnification and other terms customary in similar transactions. The
representations, warranties, covenants, and agreements contained in the
Agreements were made solely for the benefit of the parties to the Agreements. In
addition, such representations, warranties, covenants, and agreements (i) are
intended as a way of allocating the risk between the parties and not as
statements of fact, (ii) may apply standards of materiality in a way that is
different from what may be viewed as material by stockholders of, or other
investors in, Mawson and (iii) may be subject to qualifications or limitations
agreed upon by the parties in connection with the negotiated terms of the
Transactions, including being qualified by schedules and other disclosures made
by each party. Accordingly, the Agreements are filed with this report only to
provide investors with information regarding the terms of the Transactions, and
not to provide investors with any other factual information regarding Mawson.
Stockholders should not rely on the representations, warranties and covenants or
any descriptions thereof as characterizations of the actual state of facts or
condition of Mawson. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Agreements,
which subsequent information may or may not be fully reflected in public
disclosures.



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The foregoing descriptions of the Agreements and the Transactions contemplated
thereby do not purport to be complete and are qualified in their entirety by
reference to the full text of the Agreements, copies of which are attached
hereto as Exhibit 10.1 and Exhibit 10.2, and are incorporated herein by
reference.

Item 7.01. Regulation FD Disclosure.

On September 9, 2022, Mawson issued a press release announcing the entry into
the Agreements and the Transactions contemplated thereby. A copy of this press
release is attached hereto as Exhibit 99.1 and is being furnished with this
Current Report on Form 8-K (“Current Report”).

The information set forth under Item 7.01 of this Current Report, including
Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed”
for purposes of Section 18 of the Exchange Act, or otherwise subject to the
liabilities of such section. The information in Item 7.01 of this Current
Report, including Exhibit 99.1, shall not be incorporated by reference into any
filing under the Securities Act or the Exchange Act, regardless of any
incorporation by reference language in any such filing, except as expressly set
forth by specific reference in such a filing. This Current Report will not be
deemed an admission as to the materiality of any information in this Current
Report that is required to be disclosed solely pursuant to this Item 7.01.

Item 9.01. Financial Statements and Exhibits.




(d) Exhibits.



Exhibit No.   Description
10.1†           Purchase and Sale Agreement, dated as of September 8, 2022, by and
              among CSRE Properties Sandersville, LLC, Luna Squares LLC, Mawson
              Infrastructure Group, Inc. and CleanSpark, Inc.
10.2†           Equipment Purchase and Sale Agreement, dated as of September 8, 2022,
              by and among CleanSpark GLP, LLC, Cosmos Infrastructure, LLC and Mawson
              Infrastructure Group, Inc.
99.1            Press Release, dated as of September 9, 2022 (furnished herewith).
104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Company cautions that statements in this report that are not a description
of historical fact are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements may
be identified by the use of words referencing future events or circumstances
such as “expect,” “intend,” “plan,” “anticipate,” “believe,” and “will,” among
others. Because such statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. These forward-looking statements are based upon the
Company’s current expectations and involve assumptions that may never
materialize or may prove to be incorrect. Actual results and the timing of
events could differ materially from those anticipated in such forward-looking
statements as a result of various risks and uncertainties, which include the
possibility that the Transactions do not close and are not consummated, Mawson’s
need and ability to raise additional capital, the development and acceptance of
digital asset networks and digital assets and their protocols and software, the
reduction in incentives to mine digital assets over time, the costs associated
with digital asset mining, the volatility in the value and prices of
cryptocurrencies and further or new regulation of digital assets. More detailed
information about the risks and uncertainties affecting the Company is contained
under the heading “Risk Factors” included in the Company’s Annual Report on Form
10-K filed with the SEC, and subsequently filed Quarterly Reports on Form 10-Q
filed with the SEC, and in other filings that the Company has made and may make
with the SEC in the future. One should not place undue reliance on these
forward-looking statements, which speak only as of the date on which they were
made. Because such statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. The Company undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist after the
date on which they were made, except as may be required by law.




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