CleanSpark_Inc

Not only is it 16 EH/s of processing power, but we have the most efficient fleets on the Bitcoin blockchain. If you look at the global average of all miners connected to the blockchain, the average fleet efficiency is in the high 30 watts per terahash of processing power. That means most machines consume about 38 to 40 watts of energy to process one terahahash of data. After completing our Sandersville build-out, our fleet efficiency will be between 24 and 25 watts per terahash, meaning we can mine 60% to 70% more Bitcoin with the same electricity as the average miner on the network.

Yes, we took advantage during the bear market. One of the things about the last bull cycle is that many mining companies got overaggressive in making miner purchases and overcommitted. Then, when the deliveries were available, they couldn't take possession of them because they didn't have the capital. So, the manufacturers of these machines gave them kind of an out. They gave them credit to use for future purchases, but they had to use it before a specific date and towards a larger purchase. So those credits or coupons kind of had value. But miners couldn't use the credits or coupons when they didn't have access to capital. Our executive team negotiated the acquisition of those coupons from other miners, and they bought them for pennies on the dollar. We would then make orders of new miners at drastically reduced prices and then apply these new coupons that we bought for pennies on the dollar to drive that pricing further down, ensuring that we paid less than any of the major miners for all the equipment we have deployed.

That comes down to the personnel that we have, the people who are operating our fleet and managing our energy stack, as well as the people who are in the field, making sure that the miners stay online. This is tied to our company culture because whether you're an entry-level miner, facility manager, or VP, everybody has the same interest - ensuring that our operations are safe and clean but that we're maximizing uptime and decreasing expenses. Additionally, we have repair facilities on site, meaning we do repair all the way down to the chip level, which historically requires taking the machines off the shelf, boxing them up, and shipping them to a repair facility. We can now do those repairs on-site, decreasing downtime. That's really a benefit, considering we'll have more than 100,000 ASICS operating. The value of scale is evident when it comes to repairs and maintenance.

As it stands today, there are 900 Bitcoins produced every day, rain or shine, 24/7. The more miners on the network, the more pieces the pie has to be cut into. When the halving occurs, that reward will drop in half. So, there will only be 450 new Bitcoins produced every day. Price tends to follow if supply is tight or reduced and demand remains the same or increases. In addition, the likelihood of acceptance of some Bitcoin ETFs is growing, meaning that there could be more broad adoption, leading to an increase in demand. This is certainly not financial advice, but we guess that there's likely to be an increase in the price of Bitcoin. There's likely to be a thinning of mining companies. The less efficient miners will likely curtail or only operate at sporadic intervals when energy prices are very low, or Bitcoin prices are incredibly high. So, we think CleanSpark's percentage of the Bitcoin reward pool will increase. We see it as a positive event, but we also understand that it takes time to be instantaneous if you look at past Bitcoin halving cycles. The price doesn't go up the day of the halving, but it generally tends to trend up fairly significantly following the halving event.

No serious delays have been reported for our 150 MW expansion in Sandersville and site construction remains on track for yearend completion. Meanwhile, the Municipal Energy Authority of Georgia (MEAG) has been constructing a 200MW substation and related infrastructure that will power the expansion. The utility expects to complete the substation in 2023, but the related power-line project that connects to the substation may possibly push into early 2024, after which time we'll promptly energize the miners to achieve our target of 16 EH/s of operational hashrate. Again, it could be earlier than 2024 but may also be in the early part of the year.