CleanSpark on the Rise After Announcing Acquisition

Cleanspark Inc. (NASDAQ: CLSK) made a significant announcement today, revealing a strategic agreement to acquire up to 160,000 Bitmain S21 miners, signifying a path to 50 exahashes per second (EH/s). This development comes as the company's stock experienced a notable 5.0% rise, with shares now trading at $10.72 each.

According to the agreement, Cleanspark has secured an initial batch of 60,000 units with delivery expected between April and June 2024. Additionally, the company has obtained a strategic call option to purchase an additional 100,000 machines at a fixed price of $16.00 per terahash until the end of the calendar year. If the full call option is exercised, Cleanspark's hashrate is anticipated to increase to approximately 50 EH/s, marking a substantial 400% surge from its current hashrate of 10 EH/s once all machines are deployed.

Zachary Bradford, CEO of Cleanspark, expressed enthusiasm about the strategic agreement, stating, "This strategic agreement enhances our operational efficiency, provides massive optionality, and positions us to maximize opportunities that we expect on the horizon. We are ready to expand into the next bull market without the need to worry about an increase in machine prices, since the call purchase option acts as a hedge to this risk."

Bradford further explained, "In the last bull market, machine prices increased by three to five times, and we expect the same to occur in future bull markets. This agreement allows us to manage our capital most efficiently by controlling as many variables as possible. It also provides us the flexibility to time our infrastructure growth with macro events, while providing certainty of cost on the miners."

The agreement also outlines that the purchase price for the first 60,000 units is $16.10 per terahash, totaling $193.2 million after discounts and coupons, with the potential to acquire an additional 100,000 units at a fixed price of $16.00 per terahash.

Cleanspark's decision to opt for Bitmain's S21 model over other options was attributed to the S21's impressive performance, with Bradford emphasizing, "Being best-in-class is the Cleanspark way and we expect this agreement to keep us positioned as one of the most energy efficient and highest uptime miners in the industry."

The company's full 8-K submission is available here.

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