Property and equipment consist of the following as of September 30, 2024 and September 30, 2023:


($ in thousands)	September 30, 2024			September 30, 2023
Land	$	32,190		$	4,144
Land improvements		5,449			1,564
Building and improvements		76,719			52,198
Leasehold improvements		1,995			672
Miners		1,035,128			527,868
Mining equipment		23,066			18,706
Infrastructure		155,191			45,612
Machinery and equipment		15,061			1,907
Furniture and fixtures		1,706			386
Construction in progress		19,455			81,875
Total	$	1,365,960		$	734,932
Less: accumulated depreciation		(496,267	)		(170,537	)
Property and equipment, net	$	869,693		$	564,395

Depreciation expense for the years ended September 30, 2024, 2023 and 2022 was $152,469, $118,615 and $47,082, respectively. During the year ended September 30, 2024, $6,903 of property and equipment, net was disposed of for a loss of $5,466, and during the year ended September 30, 2023 $1,966 of property and equipment, net was disposed of for a loss of $1,931.

In April 2024, a bitcoin halving event took place. A bitcoin halving event, which occurs approximately every four years, reduces the block reward for bitcoin miners by 50%. This directly impacts the Company’s revenue generation from mining activities. As a result of the bitcoin halving event and the execution of the 100,000 miner purchase option for new Bitmain Antminer S21 Pro models (see Note 18 - Commitments and Contingencies), the Company concluded that various miner models (S19J, S19 J Pro and S19 J Pro+) would be removed from service and replaced with newer, more efficient miner models. The planned replacement is expected to be completed by December 31, 2024. Accordingly, the Company performed an impairment test on the miners planned for replacement, resulting in an impairment charge of approximately $189,000. The fair value less residual value of the impaired miners will depreciated over the remaining period in which they are operating. Significant inputs in the fair value calculation was future bitcoin prices, forecasted global hashrate and estimated future power prices.

Effective May 1, 2024, as a result of new information about actual lives of its bitcoin miners based on historical experience and advancements in overall miner efficiency, the Company has reduced the useful lives of miners from five years to three years. The impact of the change in useful lives of miners from five to three years increased depreciation expense and loss before income tax expense by approximately $7,261 for the year ended September 30, 2024, and decreased basic and diluted earnings per share by $0.03 for the year ended September 30, 2024.

In the fourth quarter of fiscal 2024, the Company began to engage in transactions to sell off certain miners that had been removed from service. The Company noted that the prevailing re-sell market rates decreased between June 2024 to September 2024, and as a result, the Company further changed its estimated salvage value of all of its out of service miners and recorded an impairment charge of approximately $7,800 in the fourth quarter of fiscal year 2024. The combined impairment charges for the year ended September 30, 2024 totaled approximately $197,000, which is recorded in the Consolidated Statements of Operations and Comprehensive Loss as "Impairment expense - fixed assets".

The Company placed in service property and equipment of $570,931 during the year ended September 30, 2024, which included $7,190 in machinery and equipment acquired in equipment loan transactions. This increase in fixed assets primarily consisted of miners and mining equipment amounting to $472,670. Assets acquired through acquisition transactions (see Note 5 - Acquisitions) resulted in an additional $87,239 in total assets placed in service. Additionally, in January 2024, the Company purchased raw land next to the Sandersville, GA location for approximately $1,038.

On April 7, 2023, CleanSpark HQ, LLC (“HQLLC”), a single member limited liability company and subsidiary wholly owned by the Company, purchased certain real property located in Henderson, Nevada (the "Eastern Property") for $4,100. The property consists of office space. The Company utilizes this office space as its new corporate headquarters. The real property is recorded in building and building improvements and was placed in service in the first quarter of fiscal 2024.

On May 1, 2023, the Company entered into a Purchase and Sale agreement with the Development Authority of Washington County to purchase 16.35 acres of land that was previously leased by the Company and an additional 10 acres of parcels in Sandersville, GA for a purchase price of $1,300 (the agreement was subsequently amended in June 2023 to increase the purchase price to $1,400). The leased land had been subject to an operating lease which was acquired by the Company under the Mawson Transaction. In accordance with ASC 842-Leases, the Company reassessed the lease classification as a finance lease and recorded land at the present value of the lease term (net of the carrying amount of the operating lease at time of conversion) and the land was recorded at $1,167. The land was also reclassified from finance lease right of use asset to land upon final payment being made on June 30, 2023.

Construction in progress: The Company is expanding its facilities in Georgia, Wyoming and Mississippi, including infrastructure, building, and land improvements to expand its mining operations.

As of September 30, 2024 and September 30, 2023, the Company has outstanding deposits for miners and mining equipment totaling $359,862 and $75,959, respectively. Such deposits are recorded as long-term assets on the Consolidated Balance Sheets.