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14. COMMITMENTS AND CONTINGENCIES | 3 Months Ended
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Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Purchase of modular immersion data centers The Company entered into a $165,000 contract subject to certain discounts in June 2024 for the purchase and on-site construction and installation of modular immersion data centers. The $49,500 remaining balance of the contract is expected to be paid in installments between January 2025 through April 2025. Purchase of bitcoin miners The Company had $1,290 in unrecorded open purchase commitments for miners or mining equipment as of December 31, 2024 in relation to the purchase transactions with Bitmain Technologies Delaware Limited. Commitments under open construction projects The Company has open commitments relating to the construction and development of new mining locations and operational facilities of $32,058. Contractual future payments The following table sets forth certain information concerning our obligations to make contractual future payments towards our agreements as of December 31, 2024 (Fiscal Year 2025 excludes three months ended December 31, 2024):
|  | Fiscal Year |
($ in thousands) |  | 2025 (Remainder) |
Contractual obligations: |  |  |
Modular immersion data centers |  | $ | 49,500 |
Construction in progress |  |  | 32,058 |
Purchcase of bitcoin miners |  |  | 1,290 |
Total |  | $ | 82,848 |
State Tax Incentives When the Company enters new jurisdictions, it seeks incentives on taxes including; sales and use taxes, property taxes, employment taxes and income taxes. The Company has been previously successful obtaining such incentives and is currently seeking additional incentives, which if the Company is unsuccessful in obtaining may result in a liability of approximately $18,290. Legal contingencies In addition to the legal matters disclosed below, the Company may from time to time be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected. Hasthantra v. CleanSpark, Inc. et al. On January 20, 2021, Scott Bishins (“Bishins”), individually, and on behalf of all others similarly situated (together, the “Class”), filed a class action complaint in the United States District Court for the Southern District of New York against the Company and certain of its officers, including the Company’s CEO and the Executive Chair (such action, the “Class Action”). On December 2, 2021, the court appointed Bishins and Darshan Hasthantra (“Hasthantra”) as lead plaintiffs, and on February 1, 2024, the Court entered a voluntary dismissal on behalf of Bishins, leaving Hasthantra as the sole lead plaintiff. On February 28, 2022, Plaintiff filed an Amended Class Complaint alleging that, between December 10, 2020 and August 16, 2021, Defendants made material misstatements and omissions related to the Company’s acquisition of ATL Data Centers LLC and its anticipated expansion of bitcoin mining operations. Plaintiff seeks certification of the Class, an award of compensatory damages, and reimbursement of costs and expenses. To date, no class has been certified in the Class Action. Discovery is currently proceeding. The Company believes that the claims asserted are without merit and intends to defend against them vigorously. At this time, the Company is unable to estimate potential losses, if any, that may arise. Consolidated Smith Derivative Actions Between February 21, 2023, and March 8, 2023, four shareholder derivative actions were filed in the Eighth Judicial District Court of the State of Nevada in Clark County against certain officers and directors of the Company, including its Executive Chair, Chief Executive Officer, and former Chief Financial Officer. Each of these actions was consolidated in the Eighth Judicial District Court of Nevada in Clark County (the “Consolidated Smith Action”). The claims asserted include breach of fiduciary duties, unjust enrichment and corporate waste, with the plaintiffs seeking monetary damages, restitution, declaratory relief, litigation costs, and the imposition of additional corporate governance and internal controls. The Company’s Board of Directors formed a Special Litigation Committee (“SLC”) to investigate and evaluate the claims. On November 6, 2023, the court granted the SLC’s motion to intervene and stayed the case through November 30, 2024. On October 16, 2024, the SLC filed a motion to defer to its determination that the claims should be dismissed. On December 2, 2024, the court approved a protective order governing the SLC’s report, and on December 6, 2024, the parties jointly informed the court that plaintiffs required additional time to review the report. The Company believes that the claims raised in the Consolidated Smith Action are without merit and intends to defend itself vigorously against them. At this time, the Company is unable to estimate potential losses, if any, related to the Consolidated Smith Action. Consolidated Ciceri Derivative Actions On May 26, 2021, Andrea Ciceri filed a shareholder derivative action in the United States District Court for the District of Nevada against officers and directors of the Company, including the Company’s Executive Chair, CEO, former CFO, and certain other members of the Board of Directors. This and other related filings were consolidated by the Court on June 29, 2021 (the “Consolidated Ciceri Action”). The claims asserted in the Consolidated Ciceri Action include breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. The plaintiffs seek declaratory relief, monetary damages and the imposition of additional corporate governance and internal controls. On December 12, 2024, the federal court dismissed the Consolidated Ciceri Action with prejudice.

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