CLSK PPSI buy out?

CleanSpark receives contract to provide intelligent switchgear upgrades and support for a US Embassy located on the African continent

Under the agreement, the diversified software and services company will service the paralleling switchgear controls at the Embassy for a term of 5 years including upgrades to the equipment 

CleanSpark Inc -

CleanSpark’s CEO Zach Bradford said: “This is another exciting development for our intelligent switchgear business”

CleanSpark, Inc. (NASDAQ:CLSK) revealed Wednesday that it has received a contract to provide intelligent switchgear upgrades and support for a US Embassy located on the African continent.

Under the agreement, the diversified software and services company will service the paralleling switchgear controls at the Embassy for a term of 5 years including upgrades to the equipment. Additionally, the company will provide technical and online support to Embassy personnel.

READ: CleanSpark says software commissioned for new solar plus storage microgrid project in Central America featuring Tesla PowerPack 2 battery

Trained on systems utilizing a variety of operating modes, CleanSpark said its field service technicians and engineers are capable of servicing or upgrading switchgear installed by CleanSpark’s Critical Power Division, as well as all other paralleling switchgear brands. Maintenance and upgrades will be performed by the CleanSpark team, which is proficient in design and start-up, troubleshooting, training, and providing maintenance on switchgear, paralleling controls, and power distribution equipment it added.

In a statement, CleanSpark’s CEO Zach Bradford said: “This is another exciting development for our intelligent switchgear business. Our team has continued to experience strong sales of our hardware-based solutions, and recently we’ve seen an increase in the maintenance, upgrades, and technical support segments as well. We are excited to have prevailed on this competitive government contract. Aside from the overall economic value, our proposal leverages our prior expertise on secure government projects, as well as the knowledge base and aptitude of the professionals within our staff.”

The Embassy contract follows news on Monday that CleanSpark has commissioned its software on a new solar plus storage microgrid project in Central America.

The company said it is partnered with an energy developer to deploy this unique solution for Micro Technologies SA, a major international assembly and manufacturing company. The microgrid is for their new factory located in the San Jose, Alajuela Province of Costa Rica.

The local clean-energy developer focuses on distributed power generation, storage, and management. They have installed some of the first microgrids in Latin America.

CleanSpark offers software and intelligent controls for microgrid and distributed energy resource management systems and innovative strategy and design services. The company provides advanced energy software and control technology that allows energy users to obtain resiliency and economic optimization. Its software is uniquely capable of enabling a microgrid to be scaled to the user’s specific needs and can be widely implemented across commercial, industrial, military, agricultural and municipal deployment.

Clean Spark








From time to time, we may offer up to $200,000,000 aggregate dollar amount of shares of our common stock, preferred stock, debt securities, warrants to purchase our common stock, preferred stock, debt securities or other securities, subscription rights and/or units consisting of some or all of these securities, in any combination, together or separately, in one or more offerings, in amounts, at prices and on the terms that we will determine at the time of the offering and which will be set forth in a prospectus supplement and any related free writing prospectus.

This prospectus describes the general manner in which those securities may be offered using this prospectus. Each time we offer securities, we will specify in an accompanying prospectus supplement and any related free writing prospectus the terms of securities offered and the offering thereof and may also add, update or change information contained in this prospectus. 

You should read this prospectus, the information incorporated, or deemed to be incorporated, by reference in this prospectus, and any applicable prospectus supplement and related free writing prospectus carefully before you invest.

Our common stock is currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CLSK.” On September 18, 2020, the last reported sale price of our common stock was $11.55 per share. None of the other securities we may offer are currently quoted on any market or securities exchange.

An investment in our securities involves a high degree of risk. You should carefully consider the information under the heading “Risk Factors” beginning on page 5 of this prospectus and any applicable prospectus supplement, before investing in our securities.

The securities described in this prospectus may be sold to or through underwriters or dealers, directly to purchasers or through agents designated from time to time. For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in this prospectus. If any underwriters, dealers or agents are involved in the sale of any securities with respect to which this prospectus is being delivered, the names of such underwriters or agents and any applicable fees, discounts or commissions, details regarding over-allotment options, if any, will be set forth in a prospectus supplement. The price to the public of such securities and the net proceeds we expect to receive from such sale will also be set forth in a prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.The date of this prospectus is             , 2020

At June 30, 2020, the Company’s financial instruments included the right to receive (i) 175,000 shares of common stock, par value $0.001 per share, of CleanSpark Common Stock, (ii) a five-year warrant to purchase 50,000 shares of CleanSpark Common Stock at an exercise price of $16.00 per share, and (iii) a five-year warrant to purchase 50,000 shares of CleanSpark Common Stock at an exercise price of $20.00 per share. The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, receivables, inventories, accounts payable and accrued expenses and other current liabilities approximate their respective fair values because of the short-term nature of these accounts. The share quantities and exercise prices of warrants reflect the 10:1 reverse stock split which was completed by CleanSpark in December 2019.

The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets that are measured at fair value on a recurring basis:

 June 30, 2020
  Fair Value Measurements Using 
  Quoted prices in Significant other  Significant 
  active markets for observable  unobservable 
  identical assets inputs  inputs 
  (Level 1) (Level 2)  (Level 3) 
Common shares $453 $  $ 
Warrants       255 

Level 3 Valuation

The warrant asset (which relates to warrants to purchase shares of common stock) is marked-to-market each reporting period with the change in fair value recorded to other income (expense) in the accompanying statements of operations until the warrants are exercised. The fair value of the warrant asset is estimated using a Black-Scholes option-pricing model. The significant assumptions used in preparing the option pricing model for valuing the warrant asset as of June 30, 2020, include (i) volatility of 290%, (ii) risk free interest rate of 0.24%, (iii) strike price ($16.00 and $20.00), (iv) fair value of common stock ($2.59), and (v) expected life of 3.6 years.

General. As of June 30, 2020, we had $7.5 million of cash and cash equivalents on hand. We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings. Our cash requirements have been generally applied toward operating activities, debt repayment, capital improvements and acquisitions.



From time to time, we may become involved in lawsuits, investigations and claims that arise in the ordinary course of business.

On January 11, 2016, Myers Power Products, Inc., a specialty electrical products manufacturer, filed suit with the Superior Court of the State of California, County of Los Angeles, against us, PCEP and two PCEP employees who are former employees of Myers Power Products, Inc., Geo Murickan, the president of PCEP (“Murickan”), and Brett DeChellis (“DeChellis”), alleging, among other things, that Murickan wrongly used and retained confidential business information of Myers Power Products, Inc. for the benefit of us and PCEP, in breach of their confidentiality agreement and/or employment agreement entered into with Myers Power Products, Inc., and that we and PCEP knowingly received and used such confidential business information. Myers Power Products, Inc. is seeking injunctive relief enjoining us, PCEP and our employees from using its confidential business information and compensatory damages of an unspecified unlimited amount (exceeding $25,000); however, the Company has recognized approximately $1.2 million for expected costs related to this litigation. On March 18, 2016, we filed an answer to the complaint, denying generally each and every allegation and relief sought by Myers Power Products, Inc. and seeking dismissal based on, among other things, failure to state facts sufficient to constitute a cause of action. A pre-trial status conference is scheduled to be held on August 18, 2020. We intend to contest the matter vigorously. Due to the uncertainties of litigation, however, we can give no assurance that we, PCEP and our employees will prevail on any claims made against us, PCEP and our employees in any such lawsuit. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.

On October 4, 2019, the dividend that was payable by the Company was enjoined by court order of the Superior Court of California related to the foregoing case. The Company continues to contest the order. As of the date of this filing, this court order remains in place. On October 16, 2019, Myers Power Products, Inc. filed an ex parte application arguing the Company had violated, or intended to violate the modified preliminary injunction and sought order from the court for the Company to post a bond in an amount of $30,000 or more. The court continued the hearing, and ultimately ordered the companies to post a $12 million bond. The Company has cancelled the dividend in lieu of posting the bond.

There are also two appeals pending in the California Court of Appeal for the Second Appellate District (“Court of Appeal”) in connection with the litigation with Myers Power Products, Inc. Case no. B301494 is an appeal of the October 4, 2019 order modifying a previously issued preliminary injunction. Case no. B302943 is an appeal of the November 26, 2019 order enjoining Pioneer Power Solutions, Inc. and Pioneer Custom Electrical Products Corp. to obtain and post a $12 million bond. On April 10, 2020, the Court of Appeal granted our motion to combine the two appeals. The combined opening brief is due August 24, 2020. We currently do not expect these appeals to be scheduled to be heard until early 2021.

With respect to all such lawsuits, claims and proceedings, the Company records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. However, the outcomes of any currently pending lawsuits, claims and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case.

As of the date hereof, we are not aware of or a party to any legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such proceedings known to be contemplated by governmental authorities other than the forgoing suit filed by Myers Power Products, Inc. that we believe could have a material adverse effect on our business, financial condition or operating results. See Note 13 – Commitments and Contingencies included in the notes to our consolidated financial statements included in this Annual Report on Form 10-K.

We are not aware of any material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest.

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