On June 21, 2023, the Company completed the acquisition of two bitcoin mining facilities in Dalton, GA for $9,389. Each of the facilities are located on separate one acre sites, each of which are under land leases. The combined facilities are able to currently utilize 20 megawatts of power and is expected to host a total of approximately 6,000 miners. The transaction was accounted for as an asset acquisition, whereby the total purchase price is allocated first to the fair value of the assets acquired and any excess purchase price is allocated to the acquired assets pro-rata. No goodwill is calculated in an asset acquisition.

The allocation of the purchase price of the assets acquired are summarized below:


($ in thousands)	Preliminary Allocation at Acquisition Date
Land lease - right of use asset	$	266
Operating lease liability		(266	)
Building		1,328
Infrastructure		8,061
Total purchase price	$	9,389

On October 8, 2022, the Company completed the acquisition of a lease for approximately 16.35 acres of real property located in Sandersville, Washington County, Georgia (the “Mawson Property”), all personal property located on the Mawson Property and 6,349 application-specific integrated circuit miners (the “ASICs”) from subsidiaries of Mawson Infrastructure Group, Inc. a Delaware corporation (“Mawson”), all pursuant to a Purchase and Sale Agreement dated September 8, 2022 and an Equipment Purchase and Sale Agreement dated September 8, 2022 (the "Mawson Transaction").

The Company paid the following consideration to Mawson for the Mawson Property: (i) $13,500 in cash; (ii) 1,590,175 shares (the “Closing Shares”) of the Company's common stock (which had a value of approximately

$4,800 based upon the closing price of the common stock on October 7, 2022), and (iii) $6,500 in seller financing in the form of a promissory note. The Company also agreed to pay up to $9,018 in cash within 15 days of the closing for the ASICs.

The following additional contingent consideration was included in the purchase price:

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up to 1,100,890 shares of the Company's common stock (the “Earn-out Shares”) (which have a value of approximately $3,325 based upon the closing price of the Company's common stock on October 7, 2022), based upon the number of modular data centers on the Mawson Property occupied by Mawson being emptied and made available for our use. These Earn-out Shares had been classified as a liability in the Consolidated Balance Sheets in accordance with ASC 480, and accordingly was reported at fair value at the end of each reporting period. As of December 31, 2022, the fair value of this contingent liability was reduced to $2,840 from $3,325, resulting in a change in fair value of contingent consideration of $485 in Other Income (expense) in the Consolidated Statements of Operations and Comprehensive Loss. The shares associated with the earn-out were issued to Mawson in January 2023 (see Note 9 - Stockholders' Equity).

The Company accounted for this transaction as an acquisition of a business. The fair value of the consideration given to Mawson and the other sellers in connection with the transaction and the allocation of the purchase price in accordance with ASC 820 were as follows:


($ in thousands)	Fair Value
Cash	$	22,518
Financing provided by seller		6,500
1,590,175 shares of CLSK common stock		4,803
Total purchase price	$	33,821

Contingent Consideration
Earn-out Shares of CLSK common stock		3,325
Megawatt earnout (up to $2,000 max)		2,000
Total contingent consideration	$	5,325

Total purchase sale agreement consideration-Combined	$	39,146


($ in thousands)	Preliminary Allocation at Acquisition Date
Right of use lease asset	$	5,010
Lease liability assumed		(5,100	)
Building		13,654
Infrastructure asset		4,465
Miners		12,914
Machinery and equipment		160
Goodwill		8,043
Total	$	39,146

On August 17, 2022, the Company, through its wholly owned subsidiary, CSRE Properties Washington, LLC, (“CSRE”), completed the purchase of real property, together with all improvements situated thereon and all rights, easements and appurtenances belonging thereto (collectively, the “SPRE Property”), from SPRE Commercial Group, Inc. f/k/a WAHA, Inc. (“SPRE”), pursuant to a Land Purchase and Sale Agreement dated as of August 5, 2022 and amended on August 17, 2022.

Additionally, on August 17, 2022, in connection with the Land Purchase and Sale Agreement, the Company completed the purchase of a mix of S19 and S19 J Pro bitcoin miners with a total processing power equal to approximately 341,985 terahash per second, pursuant to an Equipment Purchase and Sale Agreement (together with the Land Purchase and Sale Agreement, the “WAHA Transaction”), from Waha Technologies, Inc., (“WAHA”, and collectively with SPRE, "WAHA & SPRE"), an affiliate of the SPRE. Pursuant to the Land Purchase and Sale Agreement and the Equipment Purchase and Sale Agreement the Company acquired substantially all of WAHA & SPRE's assets. The transaction was accounted for as an acquisition of a business.

Total consideration for the SPRE Property and miners consisted of (i) $1,962 in financing provided by SPRE to the Company at an interest rate of 12% per annum, to be repaid in 12 monthly installments of $174, (ii) the Company’s assumption of a mortgage with a maximum principal amount of $2,158 and an interest rate of 13% and (iii) $19,772 of cash consideration paid by the Company to SPRE. Acquisition related costs of $118, consisting primarily of legal

The Company determined the fair value of the consideration given to WAHA & SPRE in connection with the transaction and the allocation of the purchase price in accordance with ASC 820 were as follows:


Consideration: ($ in thousands)	Fair Value
Cash	$	19,772
Financing provided by SPRE		1,962
Mortgage assumed		2,158
Total Consideration	$	23,892


Purchase Price Allocation: ($ in thousands)	Preliminary Allocation at Acquisition Date
Land	$	100
Building/Improvements		14,700
Miners		9,092
Total	$	23,892

The total purchase price was allocated to identifiable assets deemed acquired based on their estimated fair values. The fair values of the assets have been recorded and are reflected in property and equipment, net on the Company's Consolidated Balance Sheets. The useful life for the building and improvements is estimated to be 30 years consistent with the Company's policy. The useful life for miners was estimated to be 3 years consistent with the Company's policy for depreciating used miners. Land is not depreciated. Financing provided by SPRE and the mortgage assumed have been recorded as loans payable and are reflected in the Company's Consolidated Balance Sheets.

The following is the unaudited pro forma information assuming the consummation of each of the Mawson Transaction and WAHA Transaction occurred on October 1, 2021:


	For the Nine Months Ended
($ in thousands, except share and per share)		June 30, 2022
Net sales from continuing operations		$	151,354
Income from continuing operations		$	4,927
Income from continuing operations per common share - basic		$	0.11
Weighted average common shares outstanding – basic			43,701,891
Income from continuing operations per common share - diluted		$	0.11
Weighted average common shares outstanding – diluted			43,783,093

Pro forma results of operations for the Mawson Transaction for the nine months ended June 30, 2023 were not presented since the Mawson Transaction occurred on October 8, 2022 and the results for the 8-day period would be immaterial. The WAHA Transaction was included during the entire nine months ended June 30, 2023. The unaudited pro forma consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that would have actually resulted had the acquisitions occurred on the first day of the earliest period presented, or of future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. All transactions that would be considered inter-company transactions for pro forma purposes have been eliminated.