Blog: CLEANSPARK, 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, CleanSpark, Inc., a Nevada corporation (the “Company”),
entered into (i) a Purchase and Sale Agreement (the “Purchase Agreement”), by
and among the Company’s wholly owned subsidiary CSRE Properties Sandersville,
LLC, a Georgia limited liability company (the “Property Purchaser”), Luna
Squares, LLC, a Delaware limited liability company (the “Property Seller”), the
Company and Mawson Infrastructure Group, Inc. a Delaware corporation (“Mawson”
and, collectively with the Property Seller, “Seller”), 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 the Company’s wholly owned
subsidiary CleanSpark GLP, LLC, a Georgia limited liability company (the “Miner
Purchaser”), Cosmos Infrastructure, LLC, a Delaware limited liability company
(the “Miner Seller”) and Mawson.

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”), the Company 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 the Company (the “Company Common Stock”) (which have a value
of $6.5 million based upon the volume weighted average price of the 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 Company Common Stock (the “Earn-out Shares” and,
together with the Closing Shares, the “Company Shares”) (which have a value of
$4.5 million based upon the volume weighted average price of the 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, representing a cost of $17 per terahash.

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, the Company has agreed that, following the
Closing, it will register the Company 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.

The Company 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 shareholders of, or other
investors in, the Company 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 the Company. Shareholders should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of the
actual state of facts or condition of the Company. 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.

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, the Company 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 the Company
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 - the cover page XBRL tags are embedded
            within the Inline Instance XBRL document

_____________________________

† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule or Exhibit will be furnished
supplementally to the Securities and Exchange Commission upon request; provided,
however that the Company may request confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or
Exhibit so furnished.

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© Edgar Online, source Glimpses

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