CLSK CleanSpark Inc

As previously reported on a Current Report on Form 8-K filed by CleanSpark, Inc., a Nevada corporation (the “Company”) with the Securities and Exchange Commission (the “SEC”) on August 11, 2020, an Annual Report on Form 10-K filed by the Company with the SEC on December 17, 2020, a Quarterly Report on Form 10-Q filed by the Company with the SEC on February 12, 2021 and elsewhere in certain SEC filings, on August 5, 2020, the Company filed a verified complaint (the “Complaint”) in the Supreme Court of the State of New York against an investor (“Investor”). Among other things, the Complaint seeks: declaratory relief against Investor in response to Investor’s claim that a Form 8-K filed by the Company in relation to a July 20, 2020 securities purchase agreement (the “July 2020 SPA”) needed pre-approval by Investor prior to filing, and injunctive relief in response to conversion notices sent by Investor claiming trigger events and defaults arising out of the failure to obtain the Form 8-K pre-approval. The case was subsequently removed to the United States District Court for the Southern District of New York, which then determined that the parties’ agreements required a JAMS arbitrator (the “Arbitrator”) sitting in the U.S. Virgin Islands to resolve the parties’ dispute over which of their agreements’ competing forum selection clauses was controlling, and that therefore the Court’s personal jurisdiction over Investor had not been established. While the New York action was pending, Investor filed a demand for arbitration with JAMS in the U.S. Virgin Islands, alleging breach of the Securities Purchase Agreement dated December 31, 2018, and the Purchase Agreement dated April 17, 2019 (the “Prior SPAs”) between Investor and the Company (the “Arbitration”) and seeking issuance of additional shares of the Company. The Company then filed a response to Investor’s claims, denying Investor’s claims and asserting counterclaims against Investor, and also filed for emergency injunctive relief in the Arbitration seeking, among other things, an order enjoining Investor from continuing to pursue certain remedies based on the allegations in the Arbitration between Investor and the Company. On September 21, 2020, the Arbitrator granted the Company’s motion for emergency interim relief in the Arbitration.

On April 30, 2021, the Arbitrator granted in part the Company’s motion for partial summary judgment and denied the Investor’s motion for partial summary judgment, and ordered the following:

In so holding, the Arbitrator also denied, as a matter of law, the Investor’s claims for breach of contract (Counts 1 and 2) and its claim seeking specific performance of delivering additional shares (Count 4).

Certain claims remain for trial in the Arbitration and the ultimate outcome of this matter cannot be determined with certainty. As it has stated previously, the Company believes that claims raised by the Investor in and related to the Arbitration are without merit, and the Company intends to continue to both defend itself vigorously and to vigorously prosecute its counterclaims.

It is possible that actions related to this dispute with the Investor may yet be filed in the same or other forums. The Company does not intend to file further Current Reports on Form 8-K describing the additional lawsuits, or provide updates, except as required by law.