As a result of the transaction Cleanspark
expects to add over 400 MW in Tennessee over the next 2 years
CleanSpark's total announced, planned, and
owned capacity now sits at over 1 GW of premium infrastructure in
support of America's rapidly advancing technological
environment
LAS
VEGAS, June 27, 2024 /PRNewswire/ -- CleanSpark
Inc. (Nasdaq: CLSK) ("CleanSpark") and GRIID Infrastructure Inc.
(Nasdaq: GRDI) ("GRIID") announced today that they have entered
into a definitive merger agreement pursuant to which CleanSpark
will acquire all the issued and outstanding common stock of GRIID
in an all-stock transaction. The total enterprise value, including
payment and assumption of debt, of the transaction is $155 million. Concurrent with the signing of the
merger agreement, the companies also entered into an exclusive
hosting agreement for all currently available power, of which 20 MW
will be allocated to CleanSpark effective immediately.
Under the terms of the merger agreement, GRIID stockholders will
receive shares of CleanSpark common stock based upon an exchange
ratio equal to the quotient obtained by dividing the aggregate
merger consideration by the total number of shares of GRIID common
stock issued and outstanding as of the closing date of the merger.
The aggregate merger consideration is equal to the quotient
obtained by dividing (x) the sum of (i) $155,000,000 minus (ii) the amount of GRIID's
outstanding liabilities as of the closing date of the merger (net
of cash on hand) by (y) $16.587
(which is the volume-weighted average price of CleanSpark's common
stock for the two consecutive trading days prior to the date of the
merger agreement).
CleanSpark will assume all outstanding debt and other
obligations of GRIID pursuant to the merger. CleanSpark also
provided GRIID with a $5 million
dollar working capital loan and a pay-down bridge loan of
approximately $50.9 million that was
used to satisfy certain obligations of GRIID at signing. The loan
is secured and is senior to all other outstanding debt
of GRIID.
"We are looking forward to welcoming the GRIID team into the
CleanSpark family and we are excited to apply the CleanSpark way,
carefully honed alongside the communities we operate in
Georgia and Mississippi, to GRIID's impressive pipeline in
Tennessee," said Zach Bradford, CleanSpark's CEO. "This
acquisition would give us a clear and steady path over the next
three years to accomplish in Tennessee what we proudly achieved
in Georgia over the past three years. That achievement was to
build out over 400 MW of infrastructure backed by valuable,
long-term power contracts."
"As we look at how the rest of this year is expected to unfold,"
Bradford continued, "after closing we expect to focus in on the
best opportunities in the GRIID pipeline. We anticipate that this
will allow us to exceed 100 megawatts in Tennessee by the end of this calendar year and
eventually grow that to 200 megawatts in 2025 before exceeding 400
megawatts in 2026. At every step of the way we will continue to
work together with local communities as we build infrastructure
capable of powering as much as one gigawatt of data center
operations in Tennessee."
"I am incredibly excited for the opportunity for GRIID to join
the CleanSpark team. Together, we will achieve rapid growth in the
Tennessee Valley" said Trey Kelly, GRIID's CEO. "I am so proud
of the business and team we have built at GRIID, so joining a
company with a shared vision and values, like CleanSpark, makes for
an ideal business combination.
"I have long admired CleanSpark's track record of disciplined
execution and I am looking forward to bringing that to our
tremendous Tennessee power
pipeline" said Harry Sudock, GRIID's
CSO. "Growing our portfolio of data centers in this attractive
region positions us to continue strengthening the resilience of the
power grid while delivering CleanSpark's leading mining
capabilities."
GRIID operates bitcoin mining data centers in
various cities and towns throughout Tennessee that are serviced by Tennessee
Valley Authority (TVA), the largest and one of the most important
public power companies in the United
States. Like CleanSpark, GRIID has taken a community-first
approach to building its data centers, embedding itself into the
towns and communities it operates in. In addition to GRIID's
corporate headquarters in Cincinnati,
Ohio, they operate a Research and Development Center in
Austin, Texas, and a Development,
Deployment, and Equipment Repair Center in Rutledge, Tennessee. Their four mining
facilities are in Watertown, New
York and Limestone,
Maynardville and Lenoir City, Tennessee.
The transaction has been unanimously approved by the Boards of
Directors of both companies and is expected to close in the third
quarter of 2024. The acquisition is subject to GRIID shareholder
approval and other customary closing conditions.
Advisors
Cozen O'Connor P.C. served as legal counsel for CleanSpark and
Troutman Pepper Hamilton Sanders LLP served as legal counsel for
GRIID in connection with the transaction.
About CleanSpark
CleanSpark (Nasdaq: CLSK) is
America's Bitcoin Miner™. We own and operate
data centers that primarily run on low-carbon power. Our
infrastructure responsibly supports Bitcoin, the
world's most important digital commodity and an essential tool for
financial independence and inclusion. We cultivate trust and
transparency among our employees and the communities we operate in.
Visit our website at www.cleanspark.com.
About GRIID Infrastructure Inc.
GRIID is a purpose-built bitcoin mining company,
founded in 2018, that has operated mining facilities since 2019.
GRIID has built long-term power relationships securing affordable,
reliable, environmentally responsible power, enabling a vertically
integrated self-mining business model with significant growth
opportunity. Headquartered in Cincinnati,
Ohio, GRIID operates a R&D center in Austin, Texas and a development, deployment
and equipment repair center in Rutledge,
Tennessee. GRIID currently maintains mining facilities in
Watertown, New York; Limestone, Maynardville and Lenoir City, Tennessee. To learn more, please
visit www.griid.com.
Forward-Looking Statements
This communication includes "forward-looking statements" as
defined under the federal securities laws. All statements other
than statements of historical fact included or incorporated by
reference in this communication, including, among other things,
statements regarding the proposed business combination transaction
between CleanSpark, Inc. ("CleanSpark") and GRIID Infrastructure
Inc. ("GRIID"), future events, plans and anticipated results of
operations, business strategies, the anticipated benefits of the
proposed transaction, the anticipated impact of the proposed
transaction on the combined company's business and future financial
and operating results, the expected amount and timing of synergies
from the proposed transaction, the anticipated closing date for the
proposed transaction and other aspects of CleanSpark's or GRIID's
operations or operating results are forward-looking statements.
Words and phrases such as "ambition," "anticipate," "estimate,"
"believe," "budget," "continue," "could," "intend," "may," "plan,"
"potential," "predict," "seek," "should," "will," "would,"
"expect," "objective," "projection," "forecast," "goal,"
"guidance," "outlook," "effort," "target" and other similar words
can be used to identify forward-looking statements. However, the
absence of these words does not mean that the statements are not
forward-looking. Where, in any forward-looking statement,
CleanSpark or GRIID expresses an expectation or belief as to future
results, such expectation or belief is expressed in good faith and
believed to be reasonable at the time such forward-looking
statement is made. However, these statements are not guarantees of
future performance and involve certain risks, uncertainties and
other factors beyond CleanSpark's or GRIID's control. Therefore,
actual outcomes and results may differ materially from what is
expressed or forecast in the forward-looking statements.
The following important factors and uncertainties, among others,
could cause actual results or events to differ materially from
those described in forward-looking statements: CleanSpark's ability
to successfully integrate GRIID's businesses and technologies,
which may result in the combined company not operating as
effectively and efficiently as expected; the risk that the expected
benefits and synergies of the proposed transaction may not be fully
achieved in a timely manner, or at all; the risk that CleanSpark or
GRIID will be unable to retain and hire key personnel; the risk
associated with GRIID's ability to obtain the approval of its
stockholders required to consummate the proposed transaction and
the timing of the closing of the proposed transaction, including
the risk that the conditions to the transaction are not satisfied
on a timely basis or at all or the failure of the transaction to
close for any other reason or to close on the anticipated terms,
including the anticipated tax treatment; the occurrence of any
event, change or other circumstance that could give rise to the
termination of the proposed transaction; unanticipated
difficulties, liabilities or expenditures relating to the
transaction; the effect of the announcement, pendency or completion
of the proposed transaction on the parties' business relationships
and business operations generally; the effect of the announcement
or pendency of the proposed transaction on the parties' common
stock prices and uncertainty as to the long-term value of
CleanSpark common stock or GRIID common stock; risks that the
proposed transaction disrupts current plans and operations of
CleanSpark or GRIID and their respective management teams and
potential difficulties in hiring or retaining employees as a result
of the proposed transaction; reliance on a limited number of key
employees; the availability of financing opportunities and risks
associated with economic conditions; dependency on continued growth
in blockchain and bitcoin usage; anticipated additions
to CleanSpark's hashrate and the timing thereof; the risk that the
electrical power available to CleanSpark's facilities does not
increase as expected; the success of CleanSpark's digital currency
mining activities; the volatile and unpredictable cycles in the
emerging and evolving industries in which CleanSpark and GRIID
operate; increasing difficulty rates for bitcoin
mining; bitcoin halving; changes in network and
infrastructure; new or additional governmental regulation; the
anticipated delivery dates of new miners; the ability to
successfully deploy new miners; the dependency on utility rate
structures and government incentive programs; dependency on
third-party power providers for expansion efforts; the expectations
of future revenue growth and ability to execute on business
strategy; CleanSpark's ability to remediate the material weakness
identified in the internal control over financial reporting
included in its Annual Report on Form 10-K for the fiscal year
ended September 30, 2023; global and
regional changes in the demand for the services of CleanSpark and
GRIID, including the conflicts in Ukraine and the Middle East, and the global response to such
conflict, security threats on facilities and infrastructure;
insufficient liquidity; unexpected cost increases, inflationary
pressures or technical difficulties in constructing, maintaining or
modifying company facilities; legislative and regulatory
initiatives addressing global climate change or other environmental
concerns; public health crises, including pandemics (such as
COVID-19) and epidemics and any impacts or related company or
government policies or actions; international monetary conditions
and exchange rate fluctuations; CleanSpark's ability to complete
any other announced or any other future dispositions or
acquisitions on time, if at all; security and cybersecurity threats
and hacks; dependency on third parties to maintain cold and hot
wallets that hold CleanSpark's bitcoin; and other
economic, business, competitive and/or regulatory factors affecting
CleanSpark's or GRIID's businesses generally as set forth in their
filings with the Securities and Exchange Commission (the "SEC").
The registration statement on Form S-4 and proxy
statement/prospectus that will be filed with the SEC will describe
additional risks in connection with the proposed transaction. While
the list of factors presented here is, and the list of factors to
be presented in the registration statement on Form S-4 and proxy
statement/prospectus are considered representative, no such list
should be considered to be a complete statement of all potential
risks and uncertainties. For additional information about other
factors that could cause actual results to differ materially from
those described in the forward-looking statements, please refer to
CleanSpark's and GRIID's respective periodic reports and other
filings with the SEC, including the risk factors contained in
CleanSpark's and GRIID's most recent Quarterly Reports on Form 10-Q
and Annual Reports on Form 10-K. Forward-looking statements
represent current expectations and are inherently uncertain and are
made only as of the date hereof (or, if applicable, the dates
indicated in such statement). Except as required by applicable law,
neither CleanSpark nor GRIID undertakes or assumes any obligation
to update any forward-looking statements, whether as a result of
new information or to reflect subsequent events or circumstances or
otherwise.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
Additional Information about the Merger and Where to Find
It
In connection with the proposed transaction, CleanSpark intends
to file with the SEC a registration statement on Form S-4, which
will include a proxy statement of GRIID that also constitutes a
prospectus of CleanSpark Common Stock to be offered in the proposed
transaction. Each of CleanSpark and GRIID may also file other
relevant documents with the SEC regarding the proposed transaction.
This communication is not a substitute for the proxy
statement/prospectus or registration statement or any other
document that CleanSpark or GRIID may file with the SEC. The
definitive proxy statement/prospectus (if and when available) will
be mailed to stockholders of GRIID. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain free copies of the registration
statement and proxy statement/prospectus (if and when available)
and other documents containing important information about
CleanSpark, GRIID and the proposed transaction, once such documents
are filed with the SEC through the website maintained by the SEC at
www.sec.gov. Copies of the documents filed with the SEC by
CleanSpark will be available free of charge on CleanSpark's website
at https://investors.cleanspark.com. Copies of the documents
filed with the SEC by GRIID will be available free of charge on
GRIID's website at https://www.griid.com.
Participants in the Solicitation
CleanSpark, GRIID and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of
CleanSpark is set forth in (i) CleanSpark's proxy statement for its
2024 annual meeting of stockholders under the headings "Executive
Compensation and Other Information", "Proposal 1: Election of
Directors", "Board Matters and Corporate Governance", "Certain
Relationships and Related Transactions, and Director Independence"
and "Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters", which was filed with the SEC on
January 26, 2024 and is available at
https://www.sec.gov/Archives/edgar/data/827876/000114036124004070/ny20013238x1_def14a.htm,
(ii) CleanSpark's Annual Report on Form 10-K for the fiscal
year ended September 30, 2023,
including under the headings "Item 10. Directors, Executive
Officers and Corporate Governance", "Item 11. Executive
Compensation", "Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters" and "Item
13. Certain Relationships and Related Transactions, and Director
Independence", which was filed with the SEC on December 1, 2023 and is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/827876/000095017023067339/clsk-20230930.htm
and (iii) to the extent holdings of CleanSpark's securities by its
directors or executive officers have changed since the amounts set
forth in CleanSpark's proxy statement for its 2024 annual meeting
of stockholders, such changes have been or will be reflected on
Initial Statement of Beneficial Ownership of Securities on Form 3,
Statement of Changes in Beneficial Ownership on Form 4 or Annual
Statement of Changes in Beneficial Ownership of Securities on Form
5, filed with the SEC (which are available at
https://www.sec.gov/edgar/browse/?CIK=827876&owner=exclude).
Information about the directors and executive officers of GRIID
is set forth in (i) GRIID's Annual Report on Form 10-K/A for the
fiscal year ended December 31, 2023,
including under the headings "Item 10. Directors, Executive
Officers and Corporate Governance", "Item 11. Executive
Compensation", "Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters" and "Item
13. Certain Relationships and Related Transactions, and Director
Independence", which was filed with the SEC on April 26, 2024 and is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/1830029/000095017024049275/grdi-20231231.htm
and (ii) to the extent holdings of GRIID's securities by its
directors or executive officers have changed since the amounts set
forth in GRIID's Annual Report on Form 10-K/A for the fiscal year
ended December 31, 2023, such changes
have been or will be reflected on Initial Statement of Beneficial
Ownership of Securities on Form 3, Statement of Changes in
Beneficial Ownership on Form 4 or Annual Statement of Changes in
Beneficial Ownership of Securities on Form 5, filed with the SEC
(which are available at
https://www.sec.gov/edgar/browse/?CIK=1830029&owner=exclude).
Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement/prospectus and other relevant materials to be
filed with the SEC regarding the proposed transaction when such
materials become available. Investors should read the proxy
statement/prospectus carefully when it becomes available before
making any voting or investment decisions. Copies of the documents
filed with the SEC by CleanSpark and GRIID will be available free
of charge through the website maintained by the SEC at
www.sec.gov. Additionally, copies of documents filed with
the SEC by CleanSpark will be available free of charge on
CleanSpark's website at https://investors.cleanspark.com and
those filed by GRIID will be available free of charge on GRIID's
website at https://www.griid.com.
Investor Relations Contact
Brittany Moore
702-989-7693
ir@cleanspark.com
Media Contact
Eleni Stylianou
702-989-7694
pr@cleanspark.com
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SOURCE CleanSpark, Inc.
