Company: CLSKW
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0000950170-25-015470
Chunk: 39

Company: CLEANSPARK, INC.
Filing Date: 2025-02-06
Form: 10-Q
Item: Item 1
Chunk 39
---
gether, 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 ActionsBetween 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