Company: CLSKW
Filing Date: 2025-11-25
Form Type: 10-K
Source: 0001193125-25-297510
Chunk: 43

Company: CLEANSPARK, INC.
Filing Date: 2025-11-25
Form: 10-K
Item: Item 6
Chunk 43
---
 Full-Pay-Per-Share (“FPPS”) payout method set forth by the Customer in the form of bitcoin. The amount of bitcoin the Company is entitled to for providing hash calculations to the Customer's mining pool under the FPPS payout method is made up of block rewards and transaction fees less mining pool fees. The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network in accordance with a formula that includes the hash calculations that the Company provides to the Customer as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty. The Company’s performance is completed over time as the Customer obtains control of the hash calculations, because the Company provides the hash calculations throughout the contract period and the Customer simultaneously obtains control of the service and uses it to produce bitcoin. For the year ended September 30, 2025, bitcoin mining revenue, net (“mining revenue”) was approximately $766 million. We identified certain revenue from bitcoin mining as a critical audit matter. Evaluating (i) the completeness of the Company’s performance obligation to provide hash calculations throughout the contract period and (ii) the amount of non-cash consideration earned based on the FPPS payout method that is calculated as a block reward using the hash calculations that the Company provides to the Customer involved especially complex and challenging auditor judgment due to the nature and significant extent of audit effort required to address these matters. The primary procedures we performed to address this critical audit matter included: •With the assistance of our Information Technology (“IT”) professionals, identifying the key system used to monitor hashrate and testing the design and operating effectiveness of IT general controls over that system. •Confirming with the mining pool operator (i) the contractual terms used in the determination of mining revenue, (ii) hashrate provided to the mining pool operator by the Company, (iii) total mining revenue earned by the Company, and (iv) the Company’s digital asset wallet addresses in which the mining revenue is deposited. •Using the Company’s digital asset wallet addresses confirmed by the mining pool operator, reconciling the mining revenue earned from and paid by the mining pool operator against on-chain transactions independently obtained from the blockchain. •Recalculating the Company’s recorded mining revenue per the calculation prescribed in the FPPS payout method using independently obtained blockchain contractual inputs, the hashrate confirmed by the mining pool operator, and independent bitcoin prices. •For the mining revenue generated, testing the completeness