Exhibit 99.3

graphic

Iris Energy Limited

Unaudited Interim Consolidated Financial Statements 31 December 2023


Iris Energy Limited
 graphic
Contents
31 December 2023

Unaudited interim consolidated statements of profit or loss and other comprehensive income
2
Unaudited interim consolidated statements of financial position
3
Unaudited interim consolidated statements of changes in equity
4
Unaudited interim consolidated statements of cash flows
5
Notes to the unaudited interim consolidated financial statements
6

1
Iris Energy Limited
 graphic
Unaudited interim consolidated statements of profit or loss and other comprehensive income
For the period ended 31 December 2023

     
Note
    
Three
months
ended 31
Dec 2023
    
Three
months
ended 31
Dec 2022
    
Six months
ended 31
Dec 2023
    
Six months
ended 31
Dec 2022
  
           
$'000
    
$'000
    
$'000
    
$'000
  

                               
Revenue
                                
Bitcoin mining revenue
            
42,047
      
13,755
      
76,444
      
29,967
  
Other income
     3      
527
       -
      
527
       -
  
                                         
Total revenue
             42,574       13,755       76,971       29,967  
                                         
Expenses
                                        
Depreciation
     10      
(7,558
)
    
(11,544
)
    
(15,177
)
    
(18,996
)
Electricity charges
            
(16,746
)
    
(7,362
)
    
(36,111
)
    
(13,937
)
Realized gain on financial asset
     7       101       -       3,119       -  
Employee benefits expense
            
(4,334
)
    
(4,064
)
    
(8,511
)
    
(8,662
)
Share-based payments expense
    
17
      
(5,966
)
    
(3,152
)
    
(11,805
)
    
(6,770
)
Impairment of assets
    

     
-
      
(105,172
)
    
-
      
(105,172
)
Reversal of impairment of assets
     10
       108       -
       108       -  
Professional fees
            
(2,322
)
    
(1,747
)
    
(3,932
)
    
(3,040
)
Other operating expenses
    
4
      
(7,825
)
    
(3,624
)
    
(14,056
)
    
(7,240
)
Gain/(loss) on sale of assets
             5       (5,137 )     16       (5,137 )
Unrealized loss on financial asset
     7       (258 )     -       (258 )     -  
                                         
Operating profit/(loss)
            
(2,221
)
    
(128,047
)
    
(9,636
)
    
(138,987
)
                                         
Finance expense
    

     
(30
)
    
(10,350
)
    
(64
)
    
(13,915
)
Interest income
            
665
      
257
      
1,378
      
214
  
Foreign exchange loss
            
(4,707
)
    
(6,225
)
    
(2,449
)
    
(7,176
)
                                         
Loss before income tax (expense)/benefit
            
(6,293
)
    
(144,365
)
    
(10,771
)
    
(159,864
)
                                         
Income tax (expense)/benefit
    

     
1,065


411
      
244
   
(2,030
)
                                         
Loss after income tax (expense)/benefit for the period
            
(5,228
)
    
(143,954
)
    
(10,527
)
    
(161,894
)
                                         
Other comprehensive income/(loss)
                                        
                                         
Items that may be reclassified subsequently to profit or loss
                                        
Foreign currency translation
            
7,584
      
14,112
      
2,002
      
(12,115
)
                                         
Other comprehensive income/(loss) for the period, net of tax
            
7,584
      
14,112
      
2,002
      
(12,115
)
                                         
Total comprehensive income/(loss) for the period
            
2,356


(129,842
)
    
(8,525
)
    
(174,009
)
                                         
           
Cents
    
Cents
    
Cents
    
Cents
  
                                         
Basic earnings per share
    
14
      
(7.20
)
    
(271.46
)
    
(15.02
)
    
(305.29
)
Diluted earnings per share
    
14
      
(7.20
)
    
(271.46
)
    
(15.02
)
    
(305.29
)

The above unaudited interim consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. Impairment expense for the periods ended 31 December 2022 includes $15,209,000 previously reported as loss on other receivables.

2
Iris Energy Limited
 graphic
Unaudited interim consolidated statements of financial position
As at 31 December 2023

   
Note
    
31 Dec 2023
    
30 June 2023
  
         
$'000
    
$'000
  
                   
Assets
                  
                   
Current assets
                  
Cash and cash equivalents
    
5
      
90,307
      
68,894
  
Other receivables
    
6
      
5,689
      
6,543
  
Financial assets at fair value through profit or loss
    7       1,280       -  
Prepayments and other assets
     9      
11,910
      
13,793
  
Total current assets
            
109,186
      
89,230
  
                         
Non-current assets
                        
Property, plant and equipment
    
10
      
264,182
      
241,102
  
Right-of-use assets
    

     
1,269
      
1,374
  
Deferred tax assets
            
1,240
      
8
  
Computer hardware prepayments
    
8
      
30,555
      
68
  
Other assets
            
370
      
292
  
Prepayments and other assets
     9       10,365
    -  
Total non-current assets
            
307,981
      
242,844
  
                         
Total assets
            
417,167
      
332,074
  
                         
Liabilities
                        
                         
Current liabilities
                        
Trade and other payables
            
17,503
      
16,644
  
Lease liabilities
     11       209       192  
Income tax
            
680
      
32
  
Employee benefits
            
3,561
      
961
  
Provisions
    
12
      
10,390
      
6,172
  
Total current liabilities
            
32,343
      
24,001
  
                         
Non-current liabilities
                        
Lease liabilities
     11       1,150       1,256  
Deferred tax liabilities
            
1,719
      
1,365
  
Employee benefits
            107       91  
Total non-current liabilities
            
2,976
      
2,712
  
                         
Total liabilities
            
35,319
      
26,713
  
                         
Net assets
            381,848       305,361  
                         
Equity
                        
Issued capital
      13      
1,038,846
      
965,857
  
Reserves
            
7,805
      
(6,220
)
Accumulated losses
            
(664,803
)
    
(654,276
)
                         
Total equity
            
381,848
      
305,361
  

The above unaudited interim consolidated statements of financial position should be read in conjunction with the accompanying notes

3
Iris Energy Limited
 graphic
Unaudited interim consolidated statements of changes in equity
For the period ended 31 December 2023


   
Issued
          
Accumulated
    
 
   
capital
    
Reserves
    
losses
    
Total equity
  
   
$'000
    
$'000
    
$'000
    
$'000
  
                         
Balance at 1 July 2022
    
926,581
      
(6,814
)
    
(482,405
)
    
437,362
  
                                 
Loss after income tax (expense)/benefit for the period
    
-
      
-
      
(161,894
)
    
(161,894
)
Other comprehensive loss for the period, net of tax
    
-
      
(12,115
)
    
-
      
(12,115
)
                                 
Total comprehensive loss for the period
    
-
      
(12,115
)
    
(161,894
)
    
(174,009
)
                                 
Transactions with owners in their capacity as owners:
                                
Share-based payments
    
-
      
6,770
      
-
      
6,770
  
                                 
Balance at 31 December 2022
    
926,581
      
(12,159
)
    
(644,299
)
    
270,123
  

   
Issued
           Accumulated        
   
capital
    
Reserves
    
losses
     Total equity  
   
$'000
    
$'000
    
$'000
    
$'000
  
                         
Balance at 1 July 2023
    
965,857
      
(6,220
)
    
(654,276
)
    
305,361
  
                                 
Loss after income tax expense for the period
    
-
      
-
      
(10,527
)
    
(10,527
)
Other comprehensive loss for the period, net of tax
    
-
      
2,002
      
-
      
2,002
  
                                 
Total comprehensive loss for the period
    
-
      
2,002
      
(10,527
)
    
(8,525
)
                                 
Transactions with owners in their capacity as owners:
                                
Issue of ordinary shares (note 13)     75,672       -       -       75,672  
Capital raise costs     (2,801 )     -       -       (2,801 )
Share-based payments
    
118

   
12,023
      
-
      
12,141

                                 
Balance at 31 December 2023
    
1,038,846
      
7,805
      
(664,803
)
    
381,848
  

The above unaudited interim consolidated statements of changes in equity should be read in conjunction with the accompanying notes

4
Iris Energy Limited
 graphic
Unaudited interim consolidated statements of cash flows
For the period ended 31 December 2023

      Note    
Six months
ended 31
Dec 2023
    
Six months
ended 31
Dec 2022
  
           
$'000
    
$'000
  
                     
Cash flows from operating activities
                    
Receipts from disposal of Bitcoin mined
            
75,680
      
29,945
  
Payments for electricity, suppliers and employees (inclusive of GST)
            
(55,906
)
    
(32,318
)
                         
             

     

Interest received
            
1,520
      
254
  
Interest paid
            
(48
)
    
(4,144
)
                         
Net cash from/(used in) operating activities
            
21,246
      
(6,263
)
                         
Cash flows from investing activities
                        
Payments for property, plant and equipment net of computer hardware prepayments
     10
      
(31,389
)
    
(54,653
)
Payments for computer hardware prepayments
     8
      
(32,626
)
    
(10,003
)
Repayments of loan proceeds
            
-
      
2,244
  
Prepayments and deposits
            
(10,243
)
    
(4,919
)
Proceeds from disposal of property, plant and equipment
            
-
      
16,616
  
                         
Net cash used in investing activities
            
(74,258
)
    
(50,715
)
                         
Cash flows from financing activities
                        
Capital raising costs
     13
      
(747
)
    
(214
)
Repayment of borrowings
            
-
      
(9,432
)
Capital raising receipts
             74,994       -  
Payment of borrowing transaction costs
            
-
      
(200
)
Repayment of lease liabilities
            
(133
)
    
(108
)
                         
Net cash from/(used in) financing activities
            
74,114
      
(9,954
)
                         
Net increase/(decrease) in cash and cash equivalents
            
21,102
      
(66,932
)
Cash and cash equivalents at the beginning of the period
            
68,894
      
109,970
  
Effects of exchange rate changes on cash and cash equivalents
            
311
      
(2,377
)
                         
Cash and cash equivalents at the end of the period
            
90,307
      
40,661
  

The above unaudited interim consolidated statements of cash flows should be read in conjunction with the accompanying notes

5
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 1. General information

These unaudited interim consolidated financial statements cover Iris Energy Limited as a Group consisting of Iris Energy Limited (“Company” or “Parent Entity”) and the entities it controlled at the end of, or during, the period (collectively the “Group”).

The Company’s shares trade on the NASDAQ under the ticker symbol “IREN”.

Iris Energy Limited is incorporated and domiciled in Australia. Its registered office and principal place of business are:

Registered office
Principal place of business
   
c/o Pitcher Partners
Level 12, 44 Market Street
Level 13, 664 Collins Street
Sydney NSW 2000
Docklands VIC 3008
Australia
Australia
  

The Group is an owner and operator of institutional-grade, highly efficient proprietary Bitcoin mining data centers powered by renewable energy.

The unaudited interim consolidated financial statements were authorized for issue, in accordance with a resolution of Directors, on 15 February 2024. The Directors have the power to amend and reissue the unaudited interim consolidated financial statements.

Note 2. Significant accounting policies

These unaudited interim consolidated financial statements for the periods ended 31 December 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting, and should be read in conjunction with the Group’s last annual consolidated financial statements as at and for the year ended 30 June 2023 (‘last annual financial statements’). They do not include all of the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements for the year ended 30 June 2023.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below.

6
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 2. Significant accounting policies (continued)
Revenue recognition
The Group records revenue from contracts with customers in accordance with IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) as follows:

●
Step 1: Identify the contract with a customer;
●
Step 2: Identify the performance obligations in the contract;
●
Step 3: Determine the transaction price, which is the total consideration provided by the customer;
● Step 4: Allocate the transaction price among the performance obligations in the contract based on their relative fair values; and
●
Step 5: Recognize revenue when (or as) the Group satisfies a performance obligation.

Bitcoin mining revenue
The Group operates data center infrastructure supporting the verification and validation of Bitcoin blockchain transactions in exchange for Bitcoin, referred to as “Bitcoin mining”. The Company has entered into arrangements with mining pools, whereby computing power is directed to the mining pools in exchange for non-cash consideration in the form of Bitcoin. The provision of computing power is the only performance obligation in the contract with the mining pool operators.

The Company has the right to decide the point in time and duration for which it will provide hash computation services to the mining pools. The contracts are terminable at any time by either party without substantive compensation to the other party for such termination. Upon termination, the mining pool operator (i.e., the customer) is required to pay the Company any amount due related to previously satisfied performance obligations. Therefore, the Company has determined that the duration of the contract is less than 24 hours and that the contract continuously renews throughout the day.

In the mining pools which the Company participated in during the periods, the Company is not directly exposed to the pool’s success in mining blocks. The Company is rewarded in Bitcoin for the hashrate it contributes to these mining pools. The reward for the hashrate contributed by the Company is based on the current network difficulty and global daily revenues from transaction fees, less mining pool fees.

The fair value of the non-cash consideration is determined using the quantity of Bitcoin received multiplied by the spot price of the Bitcoin price at the end of the day at the website of Kraken, the trading platform over which we exchange the Bitcoin we have mined (“Kraken”).

Management considers the prices quoted on Kraken to be a Level 1 input under IFRS 13 Fair Value Measurement. The Group did not hold any Bitcoin on hand as at 31 December 2023 (31 December 2022: Nil).

7
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 2. Significant accounting policies (continued)

Going concern
The Group has determined there is material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern but has concluded it is appropriate to prepare the consolidated financial statements on a going concern basis which contemplates continuity of normal business activities, the realization of assets and settlement of liabilities in the ordinary course of business. The operating cash flows generated by the Group are inherently linked to several key uncertainties and risks including, but not limited to, volatility associated with the economics of Bitcoin mining and the ability of the Group to execute its business plan.  

For the six months ended 31 December 2023, the Group incurred a loss after tax of $10,527,000 (31 December 2022: $161,894,000) and net operating cash inflows of $21,246,000 (31 December 2022: outflows of $6,263,000). As at 31 December 2023, the Group had net current assets of $76,843,000 (30 June 2023: net current assets of $65,229,000) and net assets of $381,848,000 (30 June 2023: net assets of $305,361,000). 

As further background, the Group’s miners are designed specifically to mine Bitcoin and its future success will depend in a large part upon the value of Bitcoin, and any sustained decline in its value could adversely affect the business and results of operations. Specifically, the revenues from Bitcoin mining operations are predominantly based upon two factors: (i) the number of Bitcoin rewards that are successfully mined and (ii) the value of Bitcoin. A decline in the market price of Bitcoin, increases in the difficulty of Bitcoin mining, changes in the regulatory environment, the halving event expected in Q4 FY2024 and/or adverse changes in other inherent risks would significantly negatively impact the Group’s operations. Due to the volatility of the Bitcoin price and the effects of the other aforementioned factors, there can be no guarantee that future mining operations will be profitable.

The strategy to mitigate these risks and uncertainties is to try execute a business plan aimed at operational efficiency, revenue growth, improving overall mining profit, managing operating expenses and working capital requirements, maintaining potential capital expenditure optionality, and securing additional financing, as needed, through one or more debt and/or equity capital raisings.

The continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are therefore significantly dependent upon several factors. These factors have been considered in preparing a cash flow forecast over the next 12 months to consider the going concern of the Group. The key assumptions include:

●
A base case scenario assuming recent Bitcoin prices and global hashrate, with a reduction in global hashrate following the halving event expected in Q4 FY2024;
●
Three operational sites in British Columbia, Canada with installed nameplate capacity of 160MW; 80MW Mackenzie (BC, Canada), 50MW Prince George (BC, Canada), and 30MW Canal Flats (BC, Canada).
●
A fourth operational site at Childress, Texas with initial installed nameplate capacity of 20MW incrementally increasing to 100 MW by 30 June 2024.

The key assumptions have been stress tested using a range of Bitcoin price and global hashrate scenarios including with respect to the halving event expected in Q4 FY2024. The Group aims to maintain a degree of flexibility in both operating and capital expenditure cash flow management where it practicably makes sense, including ongoing internal cash flow monitoring and projection analysis performed to identify potential liquidity risks arising and to try to respond accordingly. 

As a result, the Group has concluded there is material uncertainty related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. However, the Group considers that it will be successful in the above matters and will have adequate cash reserves to enable it to meet its obligations for at least one year from the date of approval of the consolidated financial statements, and, accordingly, has prepared the consolidated financial statements on a going concern basis.

New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended IFRS and Interpretations as issued by the International Accounting Standards Board (“IASB”) that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The Group believes that the impact of recently issued standards or amendments to existing standards that are not yet effective will not have a material impact on the Group’s unaudited interim consolidated financial statements.


8
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023


Note 3. Other income



   
Three
months
ended 31
Dec 2023
    
Three
months
ended 31
Dec 2022
    
Six months
ended 31
Dec 2023
    
Six months
ended 31
Dec 2022
  
   
$’000    
$’000    

$’000
    

$’000
  
                                 
Other income     527       -      
527
      
-
  

Other income comprises income generated from an Emergency Response Service (“ERS”) program entered into in Texas. This ERS program is a demand response program designed to help Electric Reliability Council of Texas (“ERCOT”) mitigate rolling blackouts. Other income is generated by the Group’s participation in this program at the site in Childress, Texas.

Note 4. Other operating expenses

   
Three
months
ended 31
Dec 2023
    
Three
months
ended 31
Dec 2022
    
Six months
ended 31
Dec 2023
    
Six months
ended 31
Dec 2022
  
   
$'000
    
$'000
    
$'000
    
$'000
  
                         
Insurance
    
1,447
      
1,437
      
3,099
      
3,392
  
Sponsorship and marketing
   
401
      
99
      
694
      
110
  
Short term office and equipment rental
    
92
      
54
      
203
      
155
  
Site expenses
    
1,511
      
889
      
3,068
      
1,377
  
Charitable donations
    
91
      
85
      
233
      
149
  
Filing fees
    
19
      
19
      
38
      
39
  
Site identification costs
    
-
      
-
      
-
      
15
  
Other expenses
    
787
      
506
      
1,336
      
976
  
Non-refundable sales tax (See Note 12)
    
1,372
      
535
      
2,966
      
1,027
  
Non-refundable provincial sales tax
     308       -       622       -  
Legal expenses
     1,797       -       1,797       -  
                                 
Total other operating expenses
    
7,825
      
3,624
      
14,056
      
7,240
  

Note 5. Cash and cash equivalents

   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Current assets
            
Cash at bank
    
90,307
      
38,657
  
Cash on deposit
     -       30,237  
                 
Total cash and cash equivalents
     90,307       68,894  

9
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 20223

Note 6. Other receivables

   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Current assets
            
Share issuance proceeds
    
-
      
1,581
  
Trade and other receivables
    
635
      
97
  
Provincial sales tax receivable
    
-
      
122
  
Goods and services tax receivable
    
5,054
      
4,743
  
                 
Total other receivables
   
5,689
      
6,543
  


Note 7. Financial asset at fair value through profit or loss

   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Current assets
            
Electricity financial asset
    
1,280
      
-
  
                 
Reconciliation
                
Reconciliation of the fair values at the beginning and end of the current and previous financial period are set out below:
                
                 
Opening fair value
    
-
      
-
  
Additions
    
1,538
      
-
  
Revaluation decrements (unrealized loss)
    
(258
)
    
-
  
                 
Closing fair value
    
1,280
      
-
  

Power Supply Agreement

A subsidiary of the Company entered into a Power Supply Agreement ("PSA") for the procurement of electricity at the Childress site.

Under the PSA, the subsidiary has the right to purchase a fixed quantity of electricity in advance at a fixed price however, the subsidiary has no obligation to take physical delivery of electricity purchased. For any unused electricity purchased, the subsidiary sells the unused electricity to the counterparty of the PSA at the prevailing spot price at the time of curtailment.

As the PSA meets the definition of a financial instrument under IAS 32, it is accounted for as a financial asset at fair value through Profit and Loss under IFRS 9.

Accordingly, the PSA is subsequently remeasured at an estimated fair value each reporting period with the change in the fair value recorded in change in fair value of financial asset in the consolidated statements of operations.

As at 31 December 2023, the financial asset comprises the fair value of unused electricity purchased for the forward period to 31 January 2024.

On settlement, a realized gain or loss on a financial asset is recognised in profit or loss. The gain or loss is calculated based on the unused quantity of electricity multiplied by prevailing spot price at the time of curtailment less the price paid upon prepayment (fixed costs). As at 31 December 2023, the realized gain for the six-months period is $3.1m (30 June 2023: nil) and the realized gain for the three-months period is $0.1m (30 June 2023: nil).

Note 8. Computer hardware prepayments

   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Non-current assets
            
Mining hardware prepayments
    
22,264
      
68
  
High-performance computing hardware prepayments
    
8,291


-
  
                 
Total computer hardware prepayments     30,555
      
68
  

Computer hardware prepayments represent payments made by the Group for the purchase of mining hardware and High-performance computing ("HPC") hardware, that are yet to be delivered as at 31 December 2023. These prepayments are in accordance with payment schedules set out in relevant purchase agreements with hardware manufacturers.

10
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 9. Prepayments and other assets

   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Current assets
            
Security deposits
    
2,905
      
2,420
  
Prepayments
    
9,005
      
11,373
  
                 
     
11,910
      
13,793
  
                 
Non-current assets
                
Security deposits
    
10,365
      
-
  
                 
Total prepayments and other assets
    
22,275
      
13,793
  

Non-current deposits include connection deposits paid for expansion projects in British Columbia, Canada and West Texas, USA.

Note 10. Property, plant and equipment
   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Non-current assets
            
Land - at cost
    
1,808
      
1,803
  
                 
Buildings - at cost
    
155,424
      
153,100
  
Less: Accumulated depreciation     (8,971 )     (5,042 )
     
146,453
      
148,058
  
                 
Plant and equipment - at cost
    
6,025
      
4,145
  
Less: Accumulated depreciation
    
(1,003
)
    
(712
)
     
5,022
      
3,433
  
                 
                 
HPC hardware – at cost
     1,389       -  
                 
Mining hardware - at cost
    
115,111
      
115,024
  
Less: Accumulated depreciation
    
(26,853
)
    
(15,709
)
Less: Accumulated impairment
    
(25,935
)
    
(25,934
)
     
62,323
      
73,381
  
                 
Development assets - at cost
    
47,187
      
14,427
  
                 
Total property, plant and equipment
    
264,182
      
241,102
  

Reconciliations
Reconciliations of the written down values at the beginning and end of the current period are set out below:

   
Land
    
Buildings
    
Plant and equipment
    
Mining
hardware
    
HPC
hardware
    
Development assets
    
Total
  
Consolidated
  
$'000
    
$'000
    
$'000
    
$'000
     $'000
   
$'000
    
$'000
  
                                           
Balance at 1 July 2023
    
1,803
      
148,058
      
3,433
      
73,381
       -      
14,427
      
241,102
  
Additions
    
-
      
880
      
1,880
      
80
       1,389      
33,987
      
38,217
  
Disposals
     -       -       (35 )     -       -       -       (35 )
Exchange differences
    
5
      
(26
)
    
(49
)
    
(113
)
     -      
45
      
(138
)
Reversal of impairment
     -       -       -       -       -       108       108  
Transfers in/(out)
    
-
      
1,380
      
-
      
-
       -      
(1,380
)
    
-
  
Depreciation expense
    
-
      
(3,839
)
    
(207
)
    
(11,025
)
     -      
-
      
(15,071
)
                                                         
Balance at 31 December 2023
    
1,808
      
146,453
      
5,022
      
62,323
       1,389      
47,187
      
264,182
  

Depreciation of mining hardware commences once units are installed onsite and available for use.

Development assets includes costs related to the development of data center infrastructure at Childress, Texas along with other early-stage development costs.

Depreciation will commence on the development assets at Childress as each phase of the underlying infrastructure becomes available for use.

11
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 11. Lease liabilities

   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Current liabilities
            
Lease liability
    
209
      
192
  
                 
Non-current liabilities
                
Lease liability
    
1,150
      
1,256
  
                 
Total lease liabilities
    
1,359
      
1,448
  

Lease liabilities
The Group's lease liability includes a 30-year lease of a site in Prince George, B.C., Canada, a three-year lease of a corporate office in Sydney, Australia and a five-year corporate office lease in Vancouver, B.C., Canada.

Note 12. Provisions

   
31 Dec 2023
    
30 Jun 2023
  
   
$‘000
    
$‘000
  
             
Current liabilities
            
Non-refundable sales tax and other provisions
    
10,390
      
6,172
  

Non-Refundable Sales Tax
The Canada Revenue Agency (“CRA”) is currently conducting an audit of input tax credits (“ITCs”) claimed by several of the Group’s Canadian subsidiaries. The CRA has issued an assessment in relation to one of the subsidiaries which, the Directors believe may be applied across the Group’s Canadian subsidiaries. Under the proposed decision, the CRA has noted that ITCs claimed by the Group would be allowed. However, the Canadian subsidiaries would also be required to remit an amount of 5% on services exported to the Australian parent under an intercompany service agreement. The export of services typically attract a 0% rate of GST in Canada. If GST were to apply to these services at a rate of 5%, the Australian parent may not be permitted to recover this tax.

The Group has submitted additional information to the CRA to further support the ITCs claimed and the 0% rate applied to the exported services and submitted a formal notice of objection to the CRA in November 2022. The CRA has acknowledged receipt of the appeal application however has not yet provided any further correspondence to the Group.

Recent amendments made to Canadian Tax legislation in June 2023 are being considered by the relevant subsidiaries and the CRA. To date, the CRA has not issued any interpretation guidance on the new legislation or proposed any potential changes to previous conclusions communicated to subsidiaries of the Group. Consequently, the affected subsidiaries continue to accrue a provision in line with the aforementioned methodology.

12
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023


Note 13. Issued capital


   
Consolidated
  
   
31 Dec 2023
    
30 Jun 2023
    
31 Dec 2023
    
30 Jun 2023
  
   
Shares
    
Shares
    
$'000
    
$'000
  
                         
Ordinary shares - fully paid and unrestricted
    
82,419,050
      
64,747,477
      
1,038,846
      
965,857
  



Movements in ordinary share capital


Details
Date
  
Shares
    
$'000
  
               
Opening balance as at
1 July 2023
    
64,747,477
      
965,857
  
Shares issued under Committed Equity Facility
      
12,887,814
      
51,417
  
Shares issued under the ATM Facility
      
4,679,200
      
24,254
  
Share based payment - vested shares
      
104,559
      
117
  
Capital raise costs
      
-
      
(2,801
)
 
                  
Closing balance as at
31 December 2023
    
82,419,050
      
1,038,846
  


At-the-market Facility
On 13 September 2023, Iris Energy Limited entered into an At-the-market Sales Agreement with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and Compass Point Research & Trading, LLC, pursuant to which Iris Energy Limited has the option, but not the obligation, to sell up to $300,000,000 of its ordinary shares through or to the Brokers, for a period of up to 36 months (“the ATM Facility”). During the period 4,679,200 ordinary shares were issued under the ATM Facility raising gross proceeds of approximately $24,253,962.


Committed Equity Facility
On 23 September 2022, Iris Energy Limited entered into a share purchase agreement with B. Riley Principal Capital II, LLC (“B. Riley”) to establish a committed equity facility (“ELOC”), pursuant to which Iris Energy Limited may, at its option, sell up to US$100 million of ordinary shares to B. Riley over a two-year period. A resale registration statement relating to shares sold to B. Riley under the ELOC was declared effective by the SEC on 26 January 2023. During the period 12,887,814 shares were issued under the facility raising gross proceeds of $51,417,000.



Loan-funded shares
As at 31 December 2023, there are 1,954,049 (30 June 2023: 1,954,049) restricted ordinary shares issued to management under the Employee Share Plan as well as certain non-employee founders of Podtech Innovation Inc. The total number of ordinary shares outstanding (including the loan funded shares) is 84,373,099 as at 31 December 2023 (30 June 2023: 66,701,526).

Note 14. Earnings per share

   
Three
months
ended 31
Dec 2023
    
Three
months
ended 31
Dec 2022
  
   
$'000
    
$'000
  
             
Loss after income tax
    
(5,228
)
    
(143,954
)

   
Number
    
Number
  
             
Weighted average number of ordinary shares used in calculating basic earnings per share
    
72,665,044
      
53,028,867
  
 
                
Weighted average number of ordinary shares used in calculating diluted earnings per share
    
72,665,044
      
53,028,867
  

   
Cents
    
Cents
  
             
Basic earnings per share
    
(7.20
)
    
(271.46
)
Diluted earnings per share
    
(7.20
)
    
(271.46
)

   
Six months
ended 31
Dec 2023
    
Six months
ended 31
Dec 2022
  
   
$'000
    
$'000
  
             
Loss after income tax
    
(10,527
)
    
(161,894
)

   
Number
    
Number
  
             
Weighted average number of ordinary shares used in calculating basic earnings per share
    
70,074,566
      
53,028,867
  
 
                
Weighted average number of ordinary shares used in calculating diluted earnings per share
    
70,074,566
      
53,028,867
  

   
Cents
    
Cents
  
             
Basic earnings per share
    
(15.02
)
    
(305.29
)
Diluted earnings per share
    
(15.02
)
    
(305.29
)

As the Group has recorded a loss after tax for all periods presented, any potential ordinary shares are antidilutive.

Note 15. Contingent liabilities

In addition to PwC continuing in their capacity as receiver in respect of the Non-Recourse SPVs, a hearing was held in June 2023 in The Supreme Court of British Columbia with respect to, among other things, claims brought by the lender, NYDIG ABL LLC, seeking remedies regarding the limited recourse equipment financing facilities entered into by the Non-Recourse SPVs. A judgement on these proceedings was delivered on 10 August 2023 which declared, among other things, that the transactions pursuant to hashpower services provided by the Non-Recourse SPVs to the Company to be void. On 21 August 2023, the Company filed a notice to appeal the judgement. On January 31,2024 NYDIG ABL LLC filed a notice of cross appeal with the Court of Appeal seeking an order that the substantive consolidation and oppression remedies be remitted to the Supreme Court for consideration and reasons. The Company’s appeal and NYDIG’s cross appeal will be heard by the Court of Appeal on March 12, 2024.

13
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 16. Commitments

As at 31 December 2023, the Group had commitments of $48,215,000 (30 June 2023: $7,481,000) which are payable in instalments from January 2024 to December 2024.

As at 31 December 2023, total Group commitments are set out in the table below (excludes shipping and taxes).


   
31 Dec 2023
    
30 Jun 2023
  
   
$'000
    
$'000
  
             
Amounts payable within 12 months of balance date
    
48,215
      
7,481
  
Amounts payable after 12 months of balance date
    
2,941
      
-
  
                 
Total Commitments
    
51,156
      
7,481
  

Note 17. Share-based payments

The Group has entered into a number of share-based compensation arrangements. Details of these arrangements, which are considered as options for accounting purposes, are described in Group’s Consolidated Financial Statements for the year ended 30 June 2023.

●
Employee Share Plan
●
2021 Executive Director Liquidity and Price Target Options
●
Employee Option Plan
●
Non-Executive Director Option Plan
●
$75 Exercise Price Options
●
2022 Long-Term Incentive Plan Restricted Stock Units
●
2023 Long-Term Incentive Plan Restricted Stock Units (see below for the grants made under this 2023 LTIP this period)

2023 Long-Term Incentive Plan Restricted Stock Units

On 1 July 2023, our Board approved a revised long term incentive plan under which participating employees have been granted RSUs in three tranches, the first two tranches being time-based vesting conditions and the third tranche being performance-based vesting conditions. RSUs issued under the revised long term incentive plan are subject to other terms and conditions contained in the plan.

Under the terms of the plan, the Board maintains sole discretion over the administration, eligibility and vesting criteria of instruments issued under the LTIP.

During the six months ended 31 December 2023, the following grants were made under the 2023 LTIP:

●
3,109,286 RSUs to certain employees and key management personnel (“KMP”) of the Group were issued RSUs of which:
- 33.3% of each individual’s RSU grant are subject to time-based vesting conditions and will vest after one years;
- 33.3% of each individual’s RSU grant are subject to time-based vesting conditions and will vest after two years
- 33.4% of each individual’s RSU grant are subject to performance-based vesting conditions and will vest after three years based on total shareholder return measured against the Nasdaq Small Cap Index (NQUSS) (and continued service over the vesting period).
●
120,303 RSUs to certain Non-Executive Directors. These RSUs will vest after one year.

14
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 17. Share-based payments (continued)
 
Reconciliation of outstanding share options
Set out below are summaries of options granted under all plans:

   
Number of
options
    
Weighted
average
exercise price
    
Number of
options
    
Weighted
average
exercise price
  
   
31 Dec 2023
    
31 Dec 2023
    
30 Jun 2023
     30 Jun 2023  
                         
Outstanding as at 1 July 2023
    
8,906,839
    
$
41.93
       9,010,547     $ 41.67  
Granted during the period
    
-
    
$
0.00
       -     $ 0.00  
Forfeited during the period
    
-
 
$
0.00
       (103,708 )   $ 20.03  
Vested during the period
    
-
     $ 0.00       -     $ 0.00  
                                 
Outstanding as at 31 December 2023
    
8,906,839
    
$
41.93
       8,906,839     $ 41.93  
                                 
Exercisable as at 31 December 2023
    
3,615,546
    
$
3.00
       3,485,302     $ 2.97  

As at 31 December 2023, the weighted average remaining contractual life of options outstanding is 6.88 years (30 June 2023: 7.57 years). As at 31 December 2023 the exercise prices associated with the options outstanding ranges from $1.53 to $75.00 (30 June 2023: $1.53 to $75.00).

Reconciliation of outstanding RSUs
Set out below are summaries of RSUs granted under all plans:

   
Number of
RSUs
  
   
31 Dec 2023
  
       
Outstanding as at 1 July
    
3,623,867
  
Granted during the period
    
3,229,589
  
Forfeited during the period
    
(177,772
)
Vested during the period
    
(104,559
)
 
        
Outstanding as at end of period
    
6,571,125
  
 
        
Exercisable as at end of period
    
-
  

As at 31 December 2023, the weighted average remaining contractual life of RSUs outstanding is 3.26 years (30 June 2023: 4.55 years). All RSUs have a nil weighted average exercise price.

Note 18. Related party transactions

Parent entity
Iris Energy Limited is the ultimate parent entity.

Changes in key management personnel
There have been no new appointments made to key management personnel during the period.

Transactions with related parties
There were no transactions with related parties during the current and previous period.

Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans from/to related parties
There were no loans to or from related parties at the current and previous reporting date.


Terms and conditions

The loan from related parties was interest free and has since been repaid.

15
Iris Energy Limited
 graphic
Notes to the unaudited interim consolidated financial statements
31 December 2023

Note 19. Events after the reporting period

Mining Hardware purchase contract and option
On 16 January, 2024, the Group announced it had entered into an agreement with Bitmain Technologies Delaware Limited (“Bitmain”) to purchase 5,000 Bitmain T21 miners (1.0 EH/s) which are scheduled for delivery in June 2024. The total contracted cost is $13,300,000.

The Group also paid a non-refundable deposit of $12,768,000 as an initial 10% option down payment in relation to a hardware purchase option to acquire up to 48,000 Bitmain T21 miners (9.1 EH/s) at a price of $14/TH.

Decisions with respect to exercising all, some or none of the miner purchase options will be made during 2024. If the entire option is exercised, the total contracted cost will be $127,680,000. If the option is exercised, the miners are scheduled for phased delivery in monthly batches from June 2024 to November 2024.

ATM Facility
Subsequent to 31 December 2023, the Company issued a further 19,660,120 Ordinary shares for total gross proceeds of $92,938,000.

Purchases NVIDIA H100 GPUs to target generative AI
On 14 February 2024, the Group announced the additional purchase of 568 of NVIDIA’s latest-generation artificial intelligence (“AI”) H100 GPUs for ~US$22 million.

No other matter or circumstance has arisen since 31 December 2023 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.