UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
October 3, 2019
CLEANSPARK, INC.
(Exact name of Registrant as specified in
its charter)
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Nevada
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000-53498
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87-0449945
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(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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70 North Main Street, Ste. 105
Bountiful, Utah 84010
(801) 244-4405
(Address and Telephone Number of Registrant’s
Principal Executive Offices)
N/A
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to
Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange
on which registered
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N/A
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.02 Unregistered Sales of Equity Securities.
On October 4, 2019, CleanSpark, Inc., a
Nevada corporation (the “Company”), authorized the issuance of a total of seven hundred and fifty thousand
(750,000) shares of our designated Series A Preferred Stock to members of our board of directors for services rendered.
These securities were issued pursuant to Section
4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder. The investor represented his intention to acquire the securities
for investment only and not with a view towards distribution. The investor was given adequate information about us to make an
informed investment decision. We did not engage in any general solicitation or advertising. We have directed our transfer agent
to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
The Company has made several changes at both the officer and director
levels as part of a strategic shift in operating responsibilities and a focus on enhanced corporate governance.
Board Appointments and Resignations
Effective as of October 3, 2019, Bryan Huber resigned as a director
of the Company to allow independent directors to join the Board. Mr. Huber remains an officer of the Company.
On October 4, 2019, S. Matthew Schultz, a current director, was
appointed as Chairman of the Board. Larry McNeil, the former Chairman of the Board, remains on the board as an independent director
On October 7, 2019, two individuals were appointed as independent
members of the Board: Dr. Thomas L. Wood and Roger P. Beynon. As a result of these board changes, there are five (5) directors
with three (3) independents which now gives the Company a majority independent Board.
Mr. Roger P. Beynon 74, is an experienced CPA
and owner of Beynon & Associates, a public accounting firm that has been in operation for over 34 years. Mr. Beynon has provided
accounting and tax services to businesses since 1984. Mr. Beynon is a Certified Public Accountant (CPA) and Certified Fraud Examiner
(CFE) and is a past president of the Utah Association of CPA's. Mr. Beynon is currently the chairman of the board of directors
of Transwest Credit Union. Mr. Beynon is a graduate from Weber State College in 1972 with a bachelor degree in accounting and
a minor in banking and finance. Mr. Beynon will serve as a member of the Board until his successor is elected and qualified,
or until his earlier death, resignation, or removal.
There are no arrangements or understandings between Mr. Beynon and
any other person pursuant to which Mr. Beynon was appointed as a director of the Company. Mr. Beynon is not a participant in, nor
is he to be a participant in, any related-person transaction or proposed related-person transaction required to be disclosed by
Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended. There are no plans, contracts or arrangements
or amendments to any plans, contracts or arrangements entered into with Mr. Beynon, or any grants or awards made to Mr. Beynon,
in connection with his election to the Board.
Dr. Thomas L. Wood, 54, has over 33 years of highly
successful experience in positions of increasing responsibility in planning and operations, policy development/implementation,
construction management, defense acquisition, budgeting and programming, and managing large projects and programs. Dr. Wood previously
served in the U.S. Navy rising to the role of Deputy Operations for the Navy’s Pacific Engineering Command in which he was
responsible for ensuring the successful execution through nine field offices of nearly $1 billion annually in construction and
services contracts. After leaving the U.S. Navy, Dr. Wood served as a Subject Matter Expert (SME) supporting the U.S. Pacific Command
(USPACOM) Joint Interagency Coordination Group (JIACG) as a Sr. Military Analyst and continued as a civil servant in senior roles
thereafter. Dr. Wood graduated from Union College with a bachelor’s degree in Civil Engineering and master’s degree
in Civil Engineering from University of Maryland, College Park. Dr. Wood then obtained a Doctor of Business Administration degree
from Argosy University, Honolulu.. Dr. Wood will serve as a member of the Board until his successor is elected and qualified, or
until his earlier death, resignation, or removal.
There are no arrangements or understandings between Dr. Wood and
any other person pursuant to which Dr. Wood was appointed as a director of the Company. Dr. Wood is not a participant in, nor is
he to be a participant in, any related-person transaction or proposed related-person transaction required to be disclosed by Item
404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended. There are no plans, contracts or arrangements or
amendments to any plans, contracts or arrangements entered into with Dr. Wood, or any grants or awards made to Dr. Wood, in connection
with his election to the Board.
Officer Appointments and Resignations
On October 4, 2019, S. Matthew Schultz resigned as Chief Executive
Officer (CEO) of the Company. Mr. Schultz will continue to serve as Chairman of the Board as described above. Concurrently, Current
President and Chief Financial Officer (CFO), Zachary K. Bradford, was appointed CEO in Mr. Schultz’s place. Mr. Bradford
resigned from his position as CFO and retained his roles as President and a director of the Company.
In connection with his appointment to the role of CEO, Mr.
Bradford and the Company entered into an Employment Agreement, a copy of which is attached as Exhibit 10.1 hereto.
Mr. Bradford’s Employment Agreement provides for a
base salary of $335,000 per year and he is eligible to receive a discretionary annual bonus equal to a minimum of 0.5% of
gross revenues.
On October 7, 2019, the Board appointed Ms. Lori Love, CPA as CFO
in place of Mr. Bradford.
Ms. Lori Love, CPA, 34, is an experienced finance
professional serving in roles in accounting, finance and risk management. Since July 2015, Ms. Love served as CFO of P2K Lab, a
design, technology, and marketing agency based in Las Vegas, Nevada. Prior to 2015, Ms. Love served in the role of Senior Vice
President of Finance at Provident Trust Group for over two years and as Vice President of Finance and Operations at WorldDoc, Inc.
where she also served as a director. Ms. Love obtained her Bachelor of Business Administration (BBA) in Accounting from University
of Nevada, Las Vegas and carries the CPA designation.
Ms. Love’s employment offer letter provides for a base salary
of $200,000 per year. Within 6 weeks of the date of employment the Company has agreed that under the direction of the board of
directors and/or the compensation committee it will establish a bonus compensation structure that will be mutually agreeable but
such bonus will be no less than 20% of Ms. Love’s base compensation. Ms. Love was granted 250,000 options under the Company’s
2017 Equity Incentive Plan that vest in equal monthly installments over 36 months starting September 30, 2019.
A copy of Ms. Love’s employment offer letter is attached hereto
as Exhibit 10.2.
There are no arrangements or understandings between Ms. Love and
any other person pursuant to which Ms. Love was appointed as a director of the Company. Ms. Love is not a participant in, nor is
she to be a participant in, any related-person transaction or proposed related-person transaction required to be disclosed by Item
404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended.
Lastly, on October 7, 2019, Bryan Huber, current Chief
Operating Officer (COO) of the Company, was appointed Chief Innovation Officer (CIO), and Mr. Anthony Vastola, current Chief
Strategy Officer (CSO), was appointed as COO.
Item 5.03 Amendments to Articles of Incorporation or Bylaws
On October 4, 2019, pursuant to Article IV
of our Articles of Incorporation, our Board of Directors voted to increase the number of shares of preferred stock designated as
Series A Preferred Stock from one million (1,000,000) shares to two million (2,000,000) shares, par value $0.001.
Under the Certificate of Designation, holders
of Series A Preferred Stock will be entitled to quarterly dividends on 2% of our earnings before interest, taxes and amortization.
The dividends are payable in cash or common stock. The holders will also have a liquidation preference on the state value of $0.02
per share plus any accumulated but unpaid dividends. The holders are further entitled to have us redeem their Series A Preferred
Stock for three shares of common stock in the event of a change of control and they are entitled to vote together with the holders
of our common stock on all matters submitted to shareholders at a rate of forty-five (45) votes for each share held.
The rights of the holders of Series
A Preferred Stock are defined in the relevant Amendment to the Certificate of Designation filed with the Nevada Secretary of
State on October 9, 2019, attached hereto as Exhibit 3.1, and is incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
On
October 10, 2019, the Company issued a press release announcing the above changes to the board and management. A copy of this
press release is attached hereto as Exhibit 99.1 and is being furnished with this report.
Exhibit 99.1 contains forward-looking
statements. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions
that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to
be accurate. Actual outcomes and results may differ materially from what is expressed in these forward-looking statements.
The information set forth under
Item 7.01 of this Current Report on Form 8-K (“Current Report”), including Exhibit 99.1 attached
hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information
in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except
as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality
of any information in this Current Report that is required to be disclosed solely by Regulation FD.
Item 9.01 Financial Statements
and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CLEANSPARK,
INC.
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Dated: October 9, 2019
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By:
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/s/ Zachary
K. Bradford
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Zachary
K. Bradford
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Chief
Executive Officer and President
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BARBARA
K. CEGAVSKE
Secretary of State
202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684-5708
Website:
www.nvsos.gov
Certificate,
Amendment or Withdrawal of Designation
NRS
78.1955, 78.1955(6)
Certificate
of Designation
Certificate
of Amendment to Designation - Before Issuance of Class or Series
X
Certificate of Amendment to Designation - After Issuance of Class or Series
Certificate
of Withdrawal of Certificate of Designation
TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT
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1. Entity information:
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Name of entity:
CleanSpark, Inc.
Entity or Nevada Business
Identification Number (NVID): C7970-1987
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2. Effective date and time:
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For
Certificate of Designation or
Amendment
to Designation Only
(Optional):
Date: Time: (must not be later than 90 days after the certificate is filed)
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3. Class or series of
stock:
(Certificate of Designation only)
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The class or series of stock being designated within this filing:
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4. Information for amendment of class or series of stock:
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The original class or series of stock being amended
within this filing:
Series A Preferred Stock
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5. Amendment of class or series of stock:
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Certificate of Amendment to Designation- Before Issuance
of Class or Series
As of the date of this certificate no shares of the
class or series of stock have been issued.
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X
Certificate of Amendment to Designation- After Issuance of Class or Series
The amendment has been approved by the vote of stockholders
holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the
voting power as may be required by the articles of incorporation or the certificate of designation.
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6. Resolution: Certificate of Designation and Amendment to Designation only)
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By resolution of the board of directors pursuant
to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers,
designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.*
On
behalf of CleanSpark, Inc., a Nevada corporation (the “Corporation”), the undersigned hereby certifies that
the following resolution has been duly adopted by the board of directors (“Board”) of the Corporation:
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7. Withdrawal:
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Designation being Date of
Withdrawn: Designation:
No shares of the class or series of stock being withdrawn
are outstanding.
The resolution of the board of directors
authorizing the withdrawal of the certificate of designation establishing the class or series of stock: *
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8. Signature: (Required)
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X /s/
Zach Bradford, CEO Date: 10/9/19
Signature of Officer
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* Attach additional page(s)
if necessary Page 1 of 1
This
form must be accompanied by appropriate fees.
Revised: 1/1/2019
Attachment
RESOLVED,
that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation
(the “Articles of Incorporation”), there hereby is created, out of the ten million (10,000,000) shares of preferred
stock, par value $0.001 per share, of the Corporation authorized by Article IV of the Articles of Incorporation (“Preferred
Stock”), a series of Series A Preferred Stock, consisting of two million (2,000,000) shares, which series shall have
the following powers, designations, preferences and relative participating, optional and other special rights, and the following
qualifications, limitations and restrictions:
The specific powers, preferences, rights and limitations
of the Series A Preferred Stock are as follows:
1.
Designation; Rank. This series of Preferred Stock shall be designated and known as “Series A Preferred Stock.”
The number of shares constituting the Series A Preferred Stock shall be two million (2,000,000) shares. Except as otherwise provided
herein, the Series A Preferred Stock shall, with respect to rights on liquidation, winding up and dissolution, rank pari passu
to the common stock, par value $0.001 per share (the “Common Stock”).
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”)
is made effective as of the 7th day of October 2019, by and between CleanSpark Inc., a Nevada corporation (“Company”),
and Zachary Bradford, an individual (“Executive”), and is made with respect to the following facts:
R E C I T A L S
A. The Company and the
Executive wish to ensure that the Company will receive the benefit of Executive’s loyalty and service during Executive’s
tenure and that the Executive will be appropriately treated and compensated for services rendered.
B. The parties have entered
into this Agreement for the purpose of setting forth the terms of employment of the Executive by the Company.
NOW, THEREFORE,
in consideration of the premises and mutual covenants herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Employment
of Executive and Duties. The Company hereby hires Executive and Executive hereby accepts employment upon the terms
and conditions described in this Agreement. Executive shall be the Chief Executive Officer of the Company. Executive shall report
directly to the Company’s Board of Directors. In such position, the Executive
shall have such duties, authority, and responsibility as shall be determined from time to time by the Board of Directors which
duties, authority, and responsibility are consistent with the Executive’s position.
2. Time and
Effort. Executive agrees to devote his full working time and attention to the performance of the Executive’s duties
hereunder, including but not limited to, managing all aspects of the Company’s day to day operations and strategic direction.
3. The Company’s
Authority. Executive agrees to comply with the Company’s reasonable rules and regulations as adopted by the
Company’s Board of Directors regarding performance of his duties, and to carry out and perform those orders, directions and
policies established by the Company with respect to his engagement. Executive shall promptly notify the Company’s Board of
Directors of any objection he has to such officer’s directives and the reasons for such objection.
4. Obligations
with Former Employers. Executive confirms that he has not violated, nor will he violate, any confidentiality obligations
he may have with any former employer.
5. Term of Agreement.
This Agreement shall commence to be effective as of the date of this Agreement (the “Commencement Date”), and shall
be considered to be a contract for employment “at-will” as that term is defined under Nevada law. Either party may
terminate this Agreement at-will.
6. Confidential
Information: Nondisclosure Covenant.
6.1. Confidential
Information: As used herein the term “Confidential Information” shall mean all customer and contract lists,
records, financial data, trade secrets, business and marketing plans and studies, suppliers, investors, financing sources, manuals
for Executive and personnel policies, manufacturing and/or production manuals, computer programs and software, strategic plans,
formulas, manufacturing and production processes and techniques (including without limitation types of machinery and equipment
used together with improvements and modifications thereon), tools, applications for patents, designs, models, patterns, drawings,
tracings, sketches, blueprints, and all other similar information developed and/or used by Company in the course of its business
and which is not known by or readily available to the general public.
6.2 Nondisclosure
Covenant: Executive acknowledges that, in the course of performing services for and on behalf of Company, Executive
has had and will continue to have access to Confidential Information. Executive hereby covenants and agrees to maintain in strictest
confidence all Confidential Information in trust for Company, its successors and assigns, and to disclose such information only
on a “need-to-know” basis in furtherance and for the benefit of the Company’s business. During the period of
Executive’s employment with Company and at any and all times following Executive’s termination of employment for any
reason, including without limitation Executive’s voluntary resignation or involuntary termination with or without cause,
Executive agrees to not misappropriate, utilize for any purpose other than for the direct benefit of the Company, or disclose or
make available to anyone outside Company’s organization, any Confidential Information or anything relating thereof without
the prior written consent of Company, which consent may be withheld by Company for any reason or no reason at all.
6.3 Return
of Property: Upon Executive’s termination of his employment with Company for any reason, including without limitation
Executive’s voluntary resignation or involuntary termination with or without cause, Executive hereby agrees to immediately
return to Company’s possession all copies of any writings, computer discs or equipment, drawings or any other information
relating to Confidential Information which are in Executive’s possession or control. Executive further agrees that, upon
the request of Company at any time during Executive’s period of employment with Company, Executive shall promptly return
to Company all such copies of writings, computer discs or equipment, drawings or any other information relating to Confidential
Information which are in Executive’s possession or control.
6.4 Rights
to Inventions and Trade Secrets: Executive hereby assigns to Company all right, title and interest in and to any ideas,
inventions, original works or authorship, developments, improvements or trade secrets related to the entities business practices
which Executive solely or jointly has conceived or reduced to practice, or will conceive or reduce to practice, or cause to be
conceived or reduced to practice during his employment with Company. All original works of authorship which are made by Executive
(solely or jointly with others) within the scope of Executive’s services hereunder and which are protectable by copyright
are “works made for hire,” as that term is defined in the United States Copyright Act.
7. Non-interference
and Non-solicitation Covenants: In further reflection of the Company’s important interests in its proprietary
information and its trade, customer, vendor and Executive relationships, Executive agrees that, during the 12-month period following
the termination of Executive’s employment with Company for any reason, including without limitation Executive’s voluntary
resignation or involuntary termination with or without cause, Executive will not directly or indirectly, for or on behalf of any
person, firm, corporation or other entity, (a) interfere with any contractual or other business relationships that Company has
with any of its customers, clients, service providers or materials suppliers as of the date of Executive’s termination of
employment, or (b) solicit or induce any Executive of Company to terminate his/her employment relationship with Company.
8. Compensation.
During the term of this Agreement, the Company shall pay the following compensation to Executive:
8.1 Annual
Compensation. Executive shall be paid a base salary of three hundred and thirty-five thousand dollars ($335,000.00) payable
bi-monthly in 24-equal amounts. Executive’s position is a regular, fulltime position classified as “exempt” and
thus Executive is not eligible for overtime compensation.
8.2 Bonus:
For each fiscal year of Executive’s employment hereunder, the Executive shall be eligible to receive an annual bonus (the
“Annual Bonus”). However, the decision to provide any Annual
Bonus and the amount and terms of any Annual Bonus shall be in the sole and absolute discretion of the Compensation Committee.
Notwithstanding anything to the contrary herein, for the fiscal year ending September 30, 2020, the Executive, shall
be paid a minimum Annual Bonus equal to 0.5% of the Gross revenues as reported in the Company’s annual report on Form 10K
(GAAP basis); provided however the Annual Bonus shall not be lower than the highest bonus paid to other members of the Company’s
executive team (not including sales commissions).
8.3 Benefits. So
long as Executive is employed by the Company, the Executive shall have the option to participate in employee benefit plans provided
by the Company to its employees serving in similar employment capacities, as determined from time to time by the board of directors
of the Company or any compensation committee of the board of directors, if any, and on terms at least as favorable to Executive
as are offered to such other Executives.
8.4 Compensation
Review: At the end of the current fiscal year, Executive’s compensation package shall be subject to review and
adjustment.
9. Reimbursement
of Expenses: The Company shall reimburse Executive for the reasonable travel and other expenses incurred by Executive in
connection with the performance of Executive’s duties under this Agreement. Executive’s approved reimbursable expenses
shall be paid by the Company in cash within a reasonable time after presentment by Executive of an itemized list of invoices sufficiently
describing such expenses. All compensation provided in Sections 8 of this Agreement shall be subject to customary withholding tax
and other employment taxes, to the extent required by law. Expense reimbursements will not be subject to withholding.
10. Assignability
of Benefits: Except to the extent that this provision may be contrary to law, no assignment, pledge, collateralization
or attachment of any of the benefits under this Agreement shall be valid or recognized by the Company. Except as provided by law,
payment provided for by this Agreement shall not be subject to seizure for payment of any debts or judgments against the Executive,
nor shall the Executive have any right to transfer, modify, anticipate or encumber any rights or benefits hereunder.
11. Notice.
All notices and other communications required or permitted hereunder shall be in writing or in the form of email, facsimile or
letter to be given only during the recipient’s normal business hours unless arrangements have otherwise been made to receive
such notice outside of normal business hours, and can be mailed by registered or certified mail, postage prepaid, or otherwise
delivered by hand, messenger, email or facsimile (as provided above) addressed (a) if to the Executive, at the address for such
Executive set forth on the signature page hereto or at such other address as such Executive shall have furnished to the Company
in writing or (b) if to the Company, to its principal executive offices and addressed to the attention of the Chairman of the Board,
or at such other address as the Company shall have furnished in writing to the Executive.
In case of the Company:
CONFIDENTIAL
CleanSpark Inc.
70 N. Main Street, Suite
105
Bountiful UT 84010
Attn: President / CEO
In case of the Executive:
The address listed below
signature to this Agreement.
12. Attorneys’
Fees: In the event that either party resorts to legal action in order to enforce the provisions of this Agreement
or to defend such suit, the prevailing party shall be entitled to receive reimbursement from the non-prevailing party for all reasonable
attorneys’ fees and all other costs incurred in commencing or defending such suit.
13. Entire Agreement: This
Agreement embodies the entire understanding among the parties and merge all prior discussions or communications among them, and
no party shall be bound by any definitions, conditions, warranties, or representations other than as expressly stated in this Agreement
or as subsequently set forth in a writing signed by the duly authorized representatives of all of the parties to this Agreement.
14. No Verbal
Change/Amendment: This Agreement may only be changed or modified and any provision hereof may only be waived by a writing
signed by the party against whom enforcement of any waiver, change or modification is sought. This Agreement may be amended only
in writing by mutual consent of the parties.
15. Severability: In
the event that any provision of this Agreement shall be void or unenforceable for any reason whatsoever, then such provision shall
be stricken and of no force and effect. The remaining provisions of this Agreement shall, however, continue in full force and effect,
and to the extent required, shall be modified to preserve their validity.
16. Applicable
Law: This Agreement shall be construed as a whole and in accordance with its fair meaning. This Agreement shall be interpreted
in accordance with the laws of the State of Nevada.
17. Successors
and Assigns. Each covenant and condition of this Agreement shall inure to the benefit of and be binding upon the parties
hereto, their respective heirs, personal representatives, assigns and successors in interest. Without limiting the generality of
the foregoing sentence, this Agreement shall be binding upon any successor to the Company whether by merger, reorganization or
otherwise.
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement on the date first above written.
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COMPANY:
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CleanSpark Inc.
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a Nevada Corporation
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By:
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/s/ S. Matthew Schultz
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Chairman of the Board
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EXECUTIVE:
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/s/ Zachary Bradford
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Zachary Bradford
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Street Address
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City, State and Zip Code
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Telephone Number:
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Facsimile Number:
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Email Address:
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September 20, 2019
By email
Dear Lori Love:
CleanSpark, Inc, (the “Company”), is pleased
to offer you employment with the Company on terms described below.
1. Position. You are being offered the position of
Chief Financial Officer. Your start date as the CFO Clean Spark will be October 7, 2019.
2. I-9 Condition of Employment. As a condition of
employment, you will be required to complete online paperwork prior to the completion of your first day worked which will include
a signed and satisfactorily executed Form I-9 providing sufficient documentation establishing employment eligibility in the United
States, and provide satisfactory proof of your identity as required by United States law.
3. Duties. You will be responsible for such duties
as are normally associated with such position including but not limited to the duties identified in a job description below. You
will report directly to the Company’s CEO, President and Board of directors. CleanSpark’s regular work week is Monday
through Friday.
Chief Financial Officer:
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Create and Manage budgets for each operational segment
of the business.
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Manage cashflows to meet business objectives
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Manage the financial process and compliance with SEC
financial reporting
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4. Background Check. Your employment may be contingent
on the successful result of a background check.
5. Compensation.
Base Pay. Your starting base pay for this position
will be $200,000 per year, paid bi-monthly. All forms of compensation referred to in this letter are subject to applicable withholding
and payroll taxes.
Equity compensation: You were granted 250,000
options as the Senior Controller The options will continue to vest evenly over 36 months starting September 30, 2019. The options
contain a provision that if certain change of control events occur (such as a buy-out) vesting will accelerate.
Bonuses: Within 6 weeks of initial employment,
and annually thereafter the Company under the direction of the board of directors and/or the compensation committee will establish
a bonus compensation structure that will be mutually agreeable but will be no less than 20% of base compensation.
Your position, job description, base pay, duties and responsibilities
may be modified from time to time in the sole discretion of the company.
6. Employment Status. This position is considered
exempt status for federal wage and hour purposes and is not eligible for overtime pay for hours worked in excess of 8 in a given
workday or 40 hours per week. Your employment status in this position will be full-time – regularly scheduled to work 30
or more hours per week.
7. Benefits. In addition to your base pay compensation,
you will be eligible to receive the benefits which are offered to Clean Spark, Inc. employees. These include:
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Participation in a group health plan and Dental, Vision,
and Life products through Ataraxis.
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Graduated Paid Time Off per pay period based on length
of employment. Paid Holidays are available to employees regularly scheduled to work 30 hours or more per week and effective on
date of hire.
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You will receive more information regarding the company insurance
and benefits at the start of your employment. The Company reserves the right to add, amend, modify or terminate any employee benefit
plans or programs.
8. Confidentiality and/or Non-Compete. As an
employee of Clean Spark, LLC, you may be asked to sign a “Confidentiality” and/or a “Non-Compete”
agreement as a condition of your employment.
9. Dispute Resolution. In the event of any dispute
or claim relating to or arising out of our employment relationship, you and the Company agree that (i) any and all disputes between
you and the Company shall be fully and finally resolved by binding arbitration, (ii) you are waiving all rights to a jury trial
but all court remedies will be available in arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who shall
first issue a written opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the Company shall pay all but
the first $125 of the arbitration fees. Please note that we must receive your signed Agreement before your first day of employment.
10. Employment Relationship. Employment with the Company
is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time at the
will of either you or the Company. Terms and conditions of employment with the Company may be modified at the sole discretion of
the Company with or without cause and with or without notice. Other than the Company President, no one has the authority to make
any agreement for employment other than for employment at-will or to make any agreement limiting the Company's discretion to modify
the terms and conditions of employment. Only the Company President has the authority to make any such agreement and then only in
writing and signed by each of the Company President and the respective employee. No implied contract concerning any employment-related
decision or term or condition of employment can be established by any other statement, conduct, policy, or practice. As a new hire,
your performance will be reviewed after a ninety (90) day trial period, at which time your continued employment will be evaluated.
This trial period does not in any way modify the at-will status of your employment relationship with the Company.
11. Entire Agreement. If you accept this offer the
provisions of this employment offer letter contain the entire agreement of the parties relating to the subject matter and supersede
all prior oral and written employment agreements or arrangements between the parties. This Agreement cannot be amended or modified
except by a written agreement signed by you and the Company.
12. Representation. By signing below, you represent
that your performance of services to the Company will not violate any duty which you may have to any other person or entity (such
as a present or former employer), including obligations concerning providing services (whether or not competitive) to others, confidentiality
of proprietary information and assignment of inventions, ideas, patents or copyrights, and you agree that you will not do anything
gin the performance of services hereto that would violate any such duty.
13. Expiration. This offer of employment, if not previously
accepted by you, will expire two days from the date of this letter, although additional time for consideration of the offer can
be made available if you find it necessary.
Should you have any questions, please do not hesitate to
contact me at zach@cleanspark.com
If you wish to accept this offer, please sign and date this
letter and return it to the Company within seven days.
We look forward to your acceptance and to having you as part
of the CleanSpark team!
Sincerely,
Zachary Bradford, President and CFO
Accepted and Agreed:
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/s/
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9/20/19
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Name:
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Lori Love
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Date:
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CleanSpark
Announces Management Shift and Board Additions to Drive Profitability and Commercialization of its Microgrid Technology
SALT LAKE CITY, OCTOBER
10, 2019 -- CleanSpark, Inc. (CLSK), a microgrid company with advanced engineering, software and controls for innovative distributed
energy resource management systems, today announced that as part of its evolving business and drive to profitability, it has implemented
a key strategic shift in management and expanded and better aligned its Board of Directors.
Mr. Matthew Schultz will
be moving from his role as Chief Executive Officer (CEO) to Chairman of the Board and CleanSpark’s President and Chief Financial
Officer (CFO), Mr. Zach Bradford will assume the CEO position while retaining his title as President.
Mr. Larry McNeill, the
previous Chairman has stepped down from the Chairman role but will remain a key member of the Board. In addition, Bryan Huber a
Co-founder who has also served as the Company’s Chief Operating Officer (COO) since 2016 is stepping off the Board to allow
for a majority independent Board but will remain with the company as the new Chief Innovation Officer (CIO). Mr. Anthony Vastola,
who has been with the CleanSpark since 2014 and has been the Company’s CSO since August, is being appointed as the new COO.
Mr. Bradford’s CFO position is being filled by Ms. Lori Love. Ms. Love has extensive knowledge and experience in finance
and operation and has served in similar CFO roles since 2007. Ms. Love most recently served as the CFO for P2K Labs and prior to
that she was the Senior Vice president of Finance for Provident Trust Group and VP of Finance and Operations at WorldDoc, Inc.
In order to increase
corporate governance and transition to a majority independent board, the Board appointed two new members, Mr. Roger P. Beynon and
Dr. Thomas Wood. Mr. Beynon has a long career as an accountant with over 46 years of experience within the accounting field. Mr.
Beynon is a Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) and has most recently worked for his own firm
Beynon & Associates, focusing on accounting and tax services for businesses. He also served as the Chairman of the Board of
Directors of TransWest Credit Union for the past 25 years and formerly served as the President of the Utah Association of Certified
Public Accountants.
Dr. Thomas Wood
brings a wealth of experience, including most recently as a skilled Military Officer, directly responsible for leading and operating
large and often complex operations both domestically and overseas. Dr. Wood is a proven expert strategist with strong development,
performance assessment and measurement with a strong focus on performance and effectiveness.
“I have truly
enjoyed my tenure as the Chairman of the Board and watched the company grow and develop into a leading technology company,”
said Mr. Larry McNeill. “I believe these shifts are key to building a strong management structure and Board composition that
will take CleanSpark to the next level and I’m looking forward to participating in my new capacity.”
Mr. Schultz, CleanSpark’s
new Chairman stated, “As a co-founder and CEO of CleanSpark, I have been able to oversee the company’s evolution and
progress from concept to a fully functional military and commercial product. In parallel with our development as a company, the
microgrid megatrend has evolved together with the need for energy intelligence software
and hardware to manage multiple energy sources and maximize savings and security. The convergence of the industry towards our solution
is happening today and I am pleased with our success to date, but even more excited for our future. As part of that move forward,
I will be moving from my CEO position into the role of Chairman of the Board so that I can better serve the shareholders of the
company.”
“Zach Bradford,
who’s prior role was President and CFO, will be taking over the CEO position. I have worked with Mr. Bradford for over five
years and his background and experience position him extremely well to move the company ahead and achieve our next milestone of
profitability. We also welcome Ms. Lori Love, who will be taking over Mr. Bradford’s position as CFO. Ms. Love brings a wealth
of experience from her professional serving in roles in accounting, finance and risk management. Most recently, Ms. Love acted
as Senior Vice President of Finance for Provident Trust Group, which had over $4 Billion in assets under custody during her tenure.”
Mr. Schultz continued,
“We are also realigning our Board of Directors and expanding the Board to improve independence as part of our Environmental,
Social and Governance (ESG) effort. The addition of Mr. Beynon and Dr. Wood to the Board will bring additional transparency and
experience. Furthermore, Mr. McNeill will be stepping down from the Chairman’s role, which I will be filling. Mr. McNeill
has brought tremendous insight to the company and has been a critical driver in the progress we have made. I am glad to say that
Mr. McNeill will remain a key member of the board and will continue to provide his insight.
The energy intelligence
sector is dynamic and requires a constant effort to improve and refine solutions. As a company we are following the same initiatives.
I believe the management shifts along with the board additions and alignment will further enable CleanSpark to succeed and I am
excited to contribute in my new role,” concluded Mr. Schultz.
Mr. Bradford, CleanSpark’s
newly appointed CEO stated, “I am looking forward to engaging in my new role as CEO. I have served as the CFO since 2014
and CFO and President since 2017. We find ourselves at an inflection point and I am honored by the tremendous opportunity to expand
my role and I am looking forward to building on the foundation we have established. This is a very exciting time for the company
and our industry, as microgrids and nanogrids become even more prominent in the power production landscape. My priority as CEO
will be to achieve profitability and continue the commercialization of our energy intelligence solutions. I believe that we are
well on the path to profitability as our market share continues to grow through the superiority of our technology.”
About CleanSpark:
CleanSpark provides advanced energy software and control technology that enables a plug-and-play enterprise solution to modern
energy challenges. Our services consist of intelligent energy monitoring and controls, microgrid design and engineering, microgrid
consulting services, and turn-key microgrid implementation services. CleanSpark's software allows energy users to obtain resiliency
and economic optimization. Our software is uniquely capable of enabling a microgrid to be scaled to the user's specific needs and
can be widely implemented across commercial, industrial, military, agricultural and municipal, deployment.
Forward-Looking
Statements:
CleanSpark cautions
you that statements in this press release that are not a description of historical facts are forward-looking statements. These
statements are based on CleanSpark's current beliefs and expectations. These forward-looking statements include statements regarding
the potential future profitability and the performance standards of CleanSpark's software and enterprise solutions. The inclusion
of forward-looking statements should not be regarded as a representation by CleanSpark that any of our plans will be achieved.
Actual results may differ from those set forth in this press release due to the risk and uncertainties inherent in our business,
including, without limitation: risks associated with the performance of CleanSpark's technology, the number of items delivered
to customers and the timing of the shipments may not develop as we expect; and other risks described in our prior press releases
and in our filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in our
Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof, and we undertake no obligation to revise or update this press release to reflect
events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary
statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investor Relations
& Media Contact
Shawn M. Severson
Integra Investor Relations
(415) 233-7094
info@integra-ir.com