Company: CLSKW
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0000950170-25-015470
Chunk: 62

Company: CLEANSPARK, INC.
Filing Date: 2025-02-06
Form: 10-Q
Item: Item 1
Chunk 62
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 plant and equipment, and deposits on miners.   

•The Company did not design and maintain effective controls over payroll, including controls over the use of information from its third-party payroll service provider, maintaining appropriate segregation of duties and processing of payroll. 

•The Company did not design and maintain effective controls to safeguard cash that could result in the issuance of cashier's checks without any independent oversight.

These material weaknesses did not result in any identified material misstatements to the condensed consolidated financial statements, and there were no changes to previously released financial results. 

Remediation Efforts to Address the Material Weaknesses

The Company’s Board of Directors and management take internal control over financial reporting and the integrity of its condensed consolidated financial statements seriously. 

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include the following: 

Material weakness over design of information systems general controls 

The remediation actions include the following:  

•Removed users’ access within the general ledger system that allowed a user to create users and also perform accounting transactions;

•Implemented quarterly reviews of user access logs by individuals who do not perform accounting transactions in the general ledger;  

•Redesigned and implemented relevant complementary user entity controls identified in third-party service organization system organization and control reports; 

•Expanded the management and governance over IT system controls, including the hiring of a Systems Analyst and an IT Analyst; 

•Redesigned and implemented controls over the completeness and accuracy of information used in the operation of controls, including data used in the preparation of condensed consolidated financial statements; and

•Redesigned and implemented controls over logical access, including user access provisioning, termination, and periodic review for all financial reporting systems.

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Material weakness design of property plant and equipment and deposits on miners. 

The planned remediation actions include the following:  

•Redesign and implementation of controls related to the counting of received property, plant and equipment;  

•Design and implement controls over the completeness and accuracy of information used in the operation of controls, including data used in the preparation of condensed consolidation financial statements;

•Implement controls related to the miner receiving process to ensure adequate documentation is maintained to support the accounting for miners in transit and period-end balances; and 

•Conduct training related to documentation, policies and procedures for shipping, receiving and counting of property, plant and equipment.

Material weakness in the design of controls related to the Company’s use of