CleanSpark, Inc. (OTCMKTS:CLSK) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 – ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On December 31, 2018, CleanSpark, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “SPA”) with an otherwise unaffiliated third-party institutional investor (the “Investor”), to which the Company issued to the Investor a Senior Secured Redeemable Convertible Debenture (the “Debenture”) in the aggregate face value of $5,250,000. The Debenture has a maturity date two years from the issuance date and the Company has agreed to pay compounded interest on the unpaid principal balance of the Debenture at the rate equal 7.5% per annum. Interest is payable on the date the applicable principal is converted or on maturity. The interest must be paid in cash and, in certain circumstances, may be paid in shares of common stock.
The transactions described above closed on December 31, 2018. In connection with the issuance of the Debenture and to the terms of the SPA, the Company issued to the Investor a Common Stock Purchase Warrant to acquire up to 3,083,333 shares of common stock for a term of three years (the “Warrant”) on a cash-only basis at an exercise price of $2.00 per share with respect to 1,250,000 Warrant Shares, $2.50 with respect to 1,000,000 Warrant Shares, $5.00 with respect to 500,000 Warrant Shares and $7.50 with respect to 333,333 Warrant Shares
to the terms of the SPA, the Investor agreed to tender to the Company the sum of $5,000,000, of which the Company received the full amount as of the closing. As of the closing, the number of warrant shares was 3,083,333.
to the Securities Purchase Agreement, the Company agreed to sell the Debenture, the shares of common stock issuable upon conversion of the Debenture, the Warrant and the shares of common stock issuable upon exercise of the Warrant to an effective shelf registration statement on Form S-3 (Registration No 333-228063), declared effective by the Securities and Exchange Commission on November 20, 2018, and a related prospectus supplement thereto.
Prior to the maturity date, provided that no trigger event has occurred, the Company will have the right at any time upon 30 trading days’ prior written notice, in its sole and absolute discretion, to redeem all or any portion of the Debenture then outstanding by paying to the Investor an amount equal to 140% of the of the portion of the Debenture being redeemed.
The Investor may convert the Debenture into shares of the Company’s common stock at a conversion price equal to 95% of the mathematical average of the 5 lowest individual daily volume weighted average prices of the common stock, less $.05 per share, during the period beginning on the issuance date and ending on the maturity date. There is a floor price of $0.12 per share. In the event certain equity conditions exist, the Company may require that the Investor convert the Debenture. In no event shall the Debenture be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Investor and its affiliates would exceed 4.9% of the outstanding shares of the common stock of the Company.
The foregoing description of the terms of the above transactions do not purport to be complete and are qualified in their entirety by reference to the provisions of such agreements, the forms of which are filed as exhibits to this Current Report on Form 8-K.
SECTION 2 – FINANCIAL INFORMATION
Item 2.03 – Creation of a Direct Financial Obligation
The information set forth in Items 1.01 is incorporated into this Item 2.03 by reference.
SECTION 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
CLEANSPARK, INC. Exhibit
EX-4.1 2 ex4_1.htm Debenture NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…
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About CleanSpark, Inc. (OTCMKTS:CLSK)
CleanSpark, Inc., formerly Stratean, Inc., is in the business of acquiring, licensing and marketing patents and technology to create sustainable energy for its energy customers. The Company is a microgrid company, which combines a stratified downdraft gasifier with engineering and software and controls for distributed energy resource management systems. Its software allows energy generated locally to be shared with other interconnected microgrids. The Company’s Flex Power System is an integrated microgrid control platform that integrates all forms of energy generation with energy storage devices and controls facility loads to provide energy security in real time free of cyber threats. The Flex Power System provides sustainable energy with cost savings for its energy customers. The Flex Power System allows customers to manage renewable energy generation, storage and consumption. Its FractalGrid topology enables multiple microgrids to work together or disassociate base on the system.