CLSKCleanSpark

Please confirm your understanding that we will not be in a position to declare your Form S-4 effective until all outstanding comments regarding your Form 10-K for the fiscal year ended September 30, 2023 have been resolved.

On September 4, 2024, the Staff advised the Company that it has completed its review of the Company’s Form 10-K for the fiscal years ended September 30, 2022 and September 30, 2023. Concurrently with this letter, on September 10, 2024, the Company has filed Amendment

No. 1 to the Form S-4. The Company intends to seek effectiveness of the Form S-4 from the Staff shortly thereafter. Read in the reply ↗

In future filings, please provide disclosure regarding any significant crypto asset market developments material to understanding or assessing your business, financial condition and results of operations or share price. Consider each comment issued in our January 20, 2023 letter relating to your Post-Effective Amendment No.

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2 to your Registration Statement on Form S-3 filed on December 15, 2022, and make the relevant disclosures in future filings. For additional guidance, please see the Division of Corporation Finance’s Sample Letter to Companies Regarding Recent Developments in Crypto Asset Markets issued by the Staff in December 2022.

The Company acknowledges the Staff’s comment and respectfully submits that the impact of crypto asset market developments on the Company continues to be indirect, and such impacts were described in the following sections of the 10-K:

•

Part I Item 1. Business – Government Regulation

Part I Item 1A Risk Factors – Risks Related to Our Business – The digital asset exchange on which cryptocurrencies, including bitcoin, trade are relatively new and largely unregulated, and thus may be exposed to fraud and failure.

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Such failures may result in a reduction in the price of bitcoin and other cryptocurrencies and can adversely affect an investment in us.

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Part I Item 1A Risk Factor – Risks Related to Our Securities – The price of our common stock may be volatile and could fluctuate widely, which could result in substantial losses for investors.

The Company further notes that the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 filed on February 9, 2023 (the “Quarterly Report”) includes a new risk factor “We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our stock price, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets” that is responsive to the above comment. The Company further confirms that it will continue to monitor and assess significant crypto asset market developments and will include appropriate disclosure in future filings.

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In future filings, please include a comprehensive breakeven analysis for your bitcoin mining operations or any other crypto assets that you earn or mine that compares the cost to earn or mine one crypto asset with the value of the crypto asset.

The Company acknowledges the Staff’s comment and respectfully submits that it included an analysis of the profitability of its bitcoin mining operations under the heading “Bitcoin Mining Operations” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Quarterly Report. The Company further confirms that it will update such disclosure as appropriate in future filings. Read in the reply ↗

In future filings, please disclose the percentage of your energy usage that uses clean and renewable energy resources as well as the locations in which you use these resources. In addition, please identify the types of “clean and renewable” energy sources you use and explain how you plan to increase your usage.

The Company acknowledges the Staff’s comment and will disclose the information requested in its 2023 10-K and in other applicable future filings. Read in the reply ↗

In future filings, please disclose whether your data centers and campuses support only your miners or whether you host miners for other companies.

The Company acknowledges the Staff’s comment and will disclose the information requested in its 2023 10-K and in other applicable future filings. Notably, the Company does not currently host miners for any other companies. Read in the reply ↗

In future filings, to the extent that you plan to expand your mining business to mine crypto assets other than bitcoin, please identify the crypto assets you plan to mine, if known, and please disclose the procedures and policies related to selecting the crypto assets.

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In addition, disclose the stage of any material strategic acquisitions and an estimated time line, as well as the estimated costs, and the sources of capital for any such planned acquisitions.

The Company acknowledges the Staff’s comment and confirms, as disclosed under the heading “Lines of Business” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Quarterly Report, that it has no intention to mine or produce any other cryptocurrencies at this time. If such intent changes, it will include such disclosure in future filings. The Company further confirms that it will disclose the information requested regarding material strategic acquisitions in its 2023 10-K and in other applicable future filings. Read in the reply ↗

In future filings, please disclose here whether you intend to hold or monetize the mined bitcoin, and please disclose your policies related to the uses for the mined bitcoin. Disclose here how you monetize your bitcoin, including any exchanges you use, whether you have any agreements with any exchanges, and whether you store any of your crypto asset holdings on any exchanges’ platforms.

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In this regard, we note your disclosure on page 21 that you exchange your bitcoins directly for U.S. dollars on Coinbase. In addition, please disclose whether you hold any other types of crypto assets. If so, please identify the types and amount of such crypto assets, and discuss the purpose of holding the other types of crypto assets.

The Company acknowledges the Staff’s comment and will disclose the information requested in its 2023 10-K and in other applicable future filings. In addition to bitcoin, the Company does hold de minimis amounts of the following digital assets:

1.36 Sustainable Bitcoin Certificates (SBC) issued by the Sustainable Bitcoin Protocol, a startup organization that aims to encourage miners to utilize environmentally friendly energy sources.

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The Company was awarded 21.36 SBCs, 20.0 of which were exchanged for $10,000 value of USD Coin (USDC), a crypto asset, which the Company currently holds as disclosed under the heading “Lines of Business” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Quarterly Report as of December 31, 2022. The Company does not believe the 1.36 SBCs have an accounting value as there is no current liquid market for them.

0.1069 of Ethereum USD, a crypto asset, as a residual of a marketing campaign in which the Company used Ethereum to pay for gas fees. The current value of this crypto asset is approximately $200 and is immaterial.

It is not the Company’s strategy to hold or transact in these types of digital assets as the above activities are not directly related to the Company’s operating activities.

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In future filings, please disclose the range, mean and average age of your miners, the average downtime attributed to scheduled maintenance and non-scheduled maintenance as well as the average, mean and range of the energy efficiency of your miners.

The Company acknowledges the Staff’s comment and will disclose the information requested in its 2023 10-K and in other applicable future filings. Read in the reply ↗

We note your disclosure on page 7 that Coinmint has agreed to house and power the mining equipment in its facilities and that it has agreed to use commercially reasonable efforts to mine bitcoin on your behalf. In future filings, please disclose whether Coinmint contributes your computing power to a mining pool that it or another third-party operates, and please identify the mining pool operator or operators.

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In this regard, we note your disclosure regarding Foundry Digital on page 18. Also, please discuss how mining pools operate more generally, and disclose whether the mining pools you use provide services only for bitcoin mining or if they are multi-crypto asset mining pools. Also disclose the fees associated with participating in the mining pools and whether the payouts you receive from Coinmint, Foundry Digital and any other mining pools are limited to only bitcoin. In addition, please disclose the processing power you contribute to each mining pool you currently use.

The Company acknowledges the Staff’s comment and will disclose the information requested in its 2023 10-K and in other applicable future filings. Read in the reply ↗

In future filings, please disclose your custody procedures and arrangements by identifying all third-party custodians and the material terms of the agreements, including: • what portion of your bitcoin or other crypto assets, if any, are held in hot wallets and cold wallets; • the geographic location where crypto assets are held in cold wallets; • whether any persons (e.g., auditors, etc.) are responsible for

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verifying the existence for the crypto assets held by the third party custodian(s); • a description of your custodian’s insurance and the degree to which those policies provide coverage for the loss of your crypto assets; and • whether any insurance providers have inspection rights associated with the crypto assets held in storage.

The Company acknowledges the Staff’s comment and will disclose the information requested in its 2023 10-K and in other applicable future filings. Read in the reply ↗

In future filings, please describe the terms and provisions of any insurance policies covering your crypto assets in the event of loss or fraud and any insurance policies covering your miners, including the amount of coverage, term and termination provisions, renewal options and limitations on coverage.

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To the extent that you do not have insurance coverage for your crypto assets or miners, please add risk factor disclosure. The value of bitcoin has historically been subject to wide swings, page 17

The Company acknowledges the Staff’s comment and respectfully submits that the 10-K includes a risk factor “The properties included in our mining operation may experience damages, including damages that may not be covered by insurance,” which discloses insurance risk with respect to our miners. The Company further submits that the Quarterly Report includes a new risk factor “Our lack of insurance protection exposes us and our shareholders to the risk of loss of our bitcoin for which no person is liable,” which discloses insurance risk with respect to our bitcoin.

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The Company further submits that the above named risk factors include all material information regarding insurance risk.

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In future filings, please expand this risk factor to include quantitative information regarding the wide swings of bitcoin prices.

The Company acknowledges the Staff’s comment and respectfully submits that the risk factor has been updated in the Quarterly Report to include quantitative information regarding the wide swings of bitcoin prices. Read in the reply ↗

In future filings, please confirm whether you mine crypto assets other than bitcoin or have plans to mine crypto assets other than bitcoin. If so, please identify the relevant assets and expand this risk factor to briefly discuss the process and framework you have in place to determine whether any crypto assets that you may mine, hold or acquire are securities as defined under Section 2(a)(1) of the Securities Act.

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In this regard we note your references on page 28 and elsewhere to "bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account."

The Company acknowledges the Staff’s comment and confirms that, as disclosed under the heading “Lines of Business” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Quarterly Report, it has no intention to mine or produce any other cryptocurrencies at this time. If such intent changes, it will include the disclosure requested above in future filings. Read in the reply ↗

In future filings, please revise to include a discussion regarding your daily average GPUs and their average hashrate and difficulty for each of the periods presented. Refer to Item 303(a) of Regulation S-K and SEC Release No. 33-10751.

The Company acknowledges the Staff’s comment and respectfully submits that it included disclosure regarding number of bitcoin miners, hashrate, difficulty and other operational measures under the heading “Bitcoin Mining Operations” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Quarterly Report.

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The Company further submits that daily average GPUs is not a relevant measure to the Company’s operations because the Company does not utilize GPUs, but has provided similar such data pertaining to the equipment the Company does use with respect to hashrate and difficulty. The Company further confirms that it will update such disclosure as appropriate in future filings.

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In future filings, please revise your non-GAAP disclosure for the following: • Revise to clarify how the following adjustments for (a) other impairment loss (related to bitcoin), (b) realized gain on sale of bitcoin, and (c) legal fees meet the definitions in Item 10(e)(1)(ii)(B) of Regulation S-K, and Questions 100.01 and 102.03 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures.

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• We note your disclosure on page 39 that you have excluded non-cash items that you believe are not reflective of your general business performance and for which the accounting requires management judgment and the resulting expenses could vary significantly in comparison to other companies. In future filings, please revise to disclose in sufficient detail the nature and amounts for all material non-cash items that are excluded. Refer to Question 100.04 of the C&DI on Non-GAAP financial measures.

The Company acknowledges the Staff’s comment and submits that, taking into account guidance provided in Questions 100.01 and 102.03 of the Compliance and Disclosure Interpretations (as updated on December 13, 2022), it clarified in its non-GAAP measures disclosure in the Quarterly Report to state that some of the excluded items involve cash outlays and some of them recur on a regular basis but that management does not believe any such items are normal operating expenses necessary to generate bitcoin related revenues.

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The Company also notes that it removed any disclosure implying that all such adjustments were non-recurring. The Company further submits that the new disclosure specifically identifies each adjustment to Adjusted EBITDA, including each non-cash line item, and each such item is quantified in the reconciliation table. The Company further notes that similarly modified the non-GAAP disclosure in the Company’s earnings release for the quarter ended December 31, 2022.

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Please tell us the following regarding your revenue recognition: • Tell us the amount of revenue earned by each of your owned and operated facilities and your co-location and hosting revenues, for each of the periods presented.

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• Please tell us the amounts of your energy costs, by provider, and provide us with a summary of the significant terms of your utility power purchase agreements and your renewable energy credits, for the periods presented, if significant.

The Company acknowledges the Staff’s comments and respectfully submits that the Company’s revenue breakdown was as follows:

The Company’s energy costs by provider were as follows:

The Company purchases power from several cities who are part of an energy co-op referred to as the Municipal Electric Authority of Georgia (“MEAG”). The Company has power purchase agreements with each of these cities that in turn purchase power collectively from MEAG.

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The terms of the agreements are relatively similar, with total costs either being fixed or variable calculated as hourly wholesale power cost (as provided by MEAG) plus a margin and fees. For the periods presented, one MEAG contract was billed at a fixed rate of $0.0285 per kilowatt hour plus taxes and fees and the other was priced at wholesale rates plus a margin of $0.00741 per kilowatt hour consumed plus taxes and fees. Power purchased from Georgia Power is provided at hourly market wholesale rates, under a real time pricing tariff , which are variable.

With respect to renewable energy credits, in November 2021, the Company began participating in a program offered by Georgia Power known as the Simple Solar Program. The Company’s participation in that program resulted in us receiving and retiring 20,277-megawatt hours’ worth of renewable energy credits. The Company had no unretired renewable energy credits as of September 30, 2022 or 2021.

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Please provide us your analysis supporting your revenue recognition policy for your mining pool participation activities. In your response, where appropriate, reference for us the authoritative literature you relied upon to support your accounting: Step 1 of ASC 606 • Provide us a representative sample contract and cross reference your analysis to the specific provisions of that contract.

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• Tell us whether there are any penalties for contract termination by either party and explain when a contract begins and describe its term for accounting purposes. As it appears that you may cancel at any time, tell us what happens if you cancel midterm. Also explain whether you can withdraw computing power midterm and reinstitute it later that same day. Step 2 of ASC 606 • Substantiate how the provision of computing power to the mining pool is your sole performance obligation. Step 3 of ASC 606 • Identify the consideration specified in the contract, how the amount of consideration is determined and explain how you apply the variable consideration constraint in ASC 606-10-32-11 through 32-13. • Tell us the payment terms for cryptocurrencies earned from the mining pool operator and substantiate how valuing these assets upon receipt is not materially different than the fair value at contract inception. • Tell us the relevance of the fair value of cryptocurrencies on the date received being not materially different than the time you earned the award from the mining pool operator. • Tell us why it is appropriate to deduct transaction fees to the mining pool operator from revenue. Clarify whether the single amount (i.e., the net fees received) represents the transaction price paid to you in satisfaction of your performance obligation to the pool operator and if the amounts retained by the pool operator relate to the activities it must undertake to fulfill its contract with you. • Provide your analysis of the guidance for determining the transaction price beginning at ASC 606-10-32-2; that is, based on your contract with the pool operator, tell us the amount of consideration to which you are entitled for providing computing power to the pool operator.

The Company acknowledges the Staff’s comment and respectfully submits that the Company has analyzed the revenue requirements under ASC 606 as follows:

The Company noted the following requirements pursuant to ASC 606-10-25-1:

“An entity shall account for a contract with a customer that is within the scope of this Topic only when all of the following criteria are met:

a)

The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations.

b)

The entity can identify

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each party’s rights regarding the goods or services to be transferred.

c)

The entity can identify the payment terms for the goods or services to be transferred.

d)

The contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract).

e)

It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, an entity should consider only the customer’s ability and intention to pay that amount of consideration when it is due. The amount of consideration to which the entity will be entitled may be less than the price stated in the contract if the consideration is variable because the entity may offer the customer a price concession.”

The Company has concluded that the customer is the mining pool operator, such as Foundry Digital LLC. The Company currently only participates in one mining pool (Foundry) but has previously utilized up to three separate mining pools. The Company enters into contracts with these bitcoin mining pool operators to provide computing power to the mining pools. The delivery of computing power is governed by a written contract with the mining pool operator, executed electronically when the Company signs up on the mining pool operator’s portal. The Company, operating in the mining pool, attempts to solve the stated algorithm that identifies a verified block in exchange for bitcoins automatically awarded by the system. As each block is identified and verified a mining pool operator receives the specified bitcoin consideration. The services required by the customer and consideration payable are specified by the terms of the contract between the customer (the mining pool operator) and the service provider (the Company), and collectability of contract consideration is assured.

The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator. Based on the facts and circumstances of the Company’s relationships with the mining pool operators, the Company concluded that the contract arises at the point that the Company provides computing power to the mining pool (i.e., ‘contract inception’). While the Company has no obligation to perform and can exit the mining pool at any time, when it does provide computing power the Company has a right to consideration from the mining pool operator for the computing power that it has provided. The mining pool operator’s payment obligation arises upon the provision of computing power, but such payment is a function of the bitcoin received by the pool in a successful block verification and block addition to the blockchain. As a result, the pool operator is obligated to pay for the computing power it receives from the Company, in bitcoin, which the pool operator receives as a direct result of the collective efforts of the mining pool participants. Each participant receives bitcoin according to their contribution of computing power to the mining pool. The Company has concluded that it is probable that it will collect substantially all the consideration to which it is entitled in exchange for the Company’s computing power services upon transfer of such computing power to each mining pool based on the mining pool’s ability and intention to pay the contracted amount of consideration when it is due.

With respect to penalties for contract termination, there are none. The Company may cancel at any point and any revenues earned by the Company will be calculated based on the computing power contributed to the pool until such termination and/or disconnect from the mining pool. Furthermore, the Company can withdraw computing power midterm and reinstitute it later the same day as frequently happens with power outages or as a result of the Company managing its power consumption.

In conclusion, the Company’s contracts with customers meet all the criteria set forth in ASC 606-10-25-1 to be considered a contract under ASC 606. Refer to the ‘Foundry USA Pool Service Agreement’ for a contract example, which is short in length and self-explanatory. The Foundry USA Pool Service Agreement attached hereto as Exhibit A is being provided to the Staff on a supplemental basis pursuant to Rule 12b-4 under the Securities Exchange Act of 1934, as amended.

The Company noted the following requirements pursuant to ASC 606-10-25-14:

“At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer to the customer either:

A good or service (or a bundle of goods or services) that is distinct

A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer”

The Company also noted criteria to be distinct pursuant to ASC 606-10-25-19:

“A good or service that is promised to a customer is distinct if both of the following criteria are met:

The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct).

The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract).”

Additionally, the Company noted further relevant guidance pursuant to ASC 606-10-25-21 and ASC 606-10-25-22:

“ASC 606-10-25-21: In assessing whether an entity's promises to transfer goods or services to the customer are separately identifiable in accordance with paragraph 606-10-25-19(b), the objective is to determine whether the nature of the promise, within the context of the contract, is to transfer each of those goods or services individually or, instead, to transfer a combined item or items to which the promised goods or services are inputs. Factors that indicate that two or more promises to transfer goods or services to a customer are not separately identifiable include, but are not limited to, the following:

The entity provides a significant service of integrating goods or services with other goods or services promised in the contract into a bundle of goods or services that represent the combined output or outputs for which the customer has contracted. In other words, the entity is using the goods or services as inputs to produce or deliver the combined output or outputs specified by the customer. A combined output or outputs might include more than one phase, element, or unit.

One or more of the goods or services significantly modifies or customizes, or are significantly modified or customized by, one or more of the other goods or services promised in the contract.

The goods or services are highly interdependent or highly interrelated. In other words, each of the goods or services is significantly affected by one or more of the other goods or services in the contract. For example, in some cases, two or more goods or services are significantly affected by each other because the entity would not be able to fulfill its promise by transferring each of the goods or services independently.

ASC 606-10-25-22: If a promised good or service is not distinct, an entity shall combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct. In some cases, that would result in the entity accounting for all the goods or services promised in a contract as a single performance obligation.”

The delivery of computing power services as part of the mining pool operator’s block validation service is the only performance obligation of the Company. Mining pool participants are awarded by the mining pool operator a number of bitcoin for their effort based on the computing power it provides to the mining pool.

In conclusion, the Company has a single performance obligation to its customers to provide computing power services to the mining pool operator customer. The computing power is also known as the hashrate, which is a measure of the computational power and speed by which a computer server guesses the answer to an algorithmic hashvalue on the bitcoin network, also commonly known as bitcoin mining. The Company is then compensated daily based on what the Company is providing to the mining pool in terms of its hashrate. The Company accounts for each day as a separate transaction, which is settled the following day. As a result, there are no continued performance obligations with the customer after each daily settled performance occurs. In other words, the Company could operate one day, and cease operations the next day, thus being compensated on the first day and not for the days in which the operations ceased. There are no termination fees or other obligations that could be viewed as an additional performance obligation.

The Company noted the following requirements pursuant to ASC 606-10-32:

“ASC 606-10-32-2 An entity shall consider the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

ASC 606-10-32-3 The nature, timing, and amount of consideration promised by a customer affect the estimate of the transaction price. When determining the transaction price, an entity shall consider the effects of all of the following:

Variable consideration (see paragraphs 606-10-32-5 through 32-10: and 606-10-32-14)

Constraining estimates of variable consideration (see paragraphs 606-10-32-11 through 32-13)

The existence of a significant financing component in the contract (see paragraphs 606-10-32-15 through 32-20)

Noncash consideration (see paragraphs 606-10-32-21 through 32-24)

Consideration payable to a customer (see paragraphs 606-10-32-25 through 32-27)

ASC 606-10-32-4 For the purpose of determining the transaction price, an entity shall assume that the goods or services will be transferred to the customer as promised in accordance with the existing contract and that the contract will not be cancelled, renewed, or modified.”

The Company has concluded in its analysis that ASC 606-10-32-3a, b, d and e apply to the Company. The transaction consideration in the Company’s agreements with mining pool operators is all variable as the transaction consideration that the Company can receive is dependent on the daily computing power provided by the Company. The Company’s agreement with Foundry is “Full-Pay-Per-Share” (“FPPS”) for which the Company shares in the expected bitcoin rewards and a proportionate amount of the transaction rewards, based on what the pool mathematically should earn based on contributed hashrate as compared to the bitcoin networks algorithmic difficulty. The Company’s bitcoins earned through FPPS is not known until the Company’s computational hashrate contributed over the daily measurement period is confirmed by the pool operator and its proportionate amount of the pools transaction fees earned are calculated at the end of each transactional day. There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

Revenue is not recognized until the mining pool operator communicates the Company’s share of the bitcoin and transaction fee rewards and the confirmation of the Company’s share of the awarded bitcoins is received.

There is no significant financing component in these transactions, ASC 606-10-32-3c does not apply to the Company.

In exchange for providing computing power (i.e., the single performance obligation), the Company is entitled to a fixed bitcoin award from mining pool operator, plus a fractional share of the transaction fees received by the pool operator over the transactional day. The Company’s fixed bitcoin award is based on a calculation for a fixed amount of bitcoin for each hashrate per second in computing power submitted to the pool by the Company, which adjust only when network difficulty increases or decreases, which occurs approximately every 14 days.

The Company’s fractional share of the transaction fees is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants over the transactional period. The transaction consideration the Company receives is noncash consideration in the form of bitcoin, which the Company measures at fair value on the date received. The formula in which the Company is compensated remains consistent with the initial terms of the agreement, whereas only the value of the inputs used in the formula (i.e., the Company’s daily hashrate and bitcoin network difficulty) will change on a daily basis. It is the Company’s analysis that the bitcoin valued upon receipt is not materially different than the formula stated in the initial contract and fair value of the bitcoin award received is determined using the spot price of the related bitcoin on the date earned (i.e., “contract inception”) consistent with 606-10-32-21.

In certain contracts, there could be consideration payable to customers as a transaction fee to the mining pool operators, commonly referred to as a “mining pool operator fee”. The fee is withheld by the mining pool operator from the net proceeds received by the Company and is accounted for as consideration payable to the customer. The Company’s current contract with the mining pool operator is for zero (0%) fees on all mining activity. However, if there were to be fees charged by the mining pool operators, this consideration payable would not relate to a distinct good or service as described in paragraphs 606-10-25-18 through 10-25-22, but rather it would be recorded as a reduction to the transaction price. Accordingly, such fees payable to the mining pool operator for successful mining transactions would be recorded by the Company as contra-revenue.

In conclusion, the Company has considered all of the effects of 606-10-32-3 regarding the nature, timing, and amount of consideration promised by a customer. The Company is compensated based on the “Full-Pay-per-Share Base” basis, which calculates in bitcoin the amounts the Company is awarded and earned for its mining activity. The share the Company earns is not dependent on the value of the bitcoin on the date earned, but rather on the bitcoin amounts themselves. For example, if the Company earns one bitcoin based on its daily earnings, the Company receives one bitcoin regardless of the price of a bitcoin on that date.

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In future filings, please revise to disclose the following: • Whether your transaction fee revenue includes other than a digital reward and your consideration to disclose it separately. Refer to ASC 606-10-50-4. • The time frame of when the revenue is deposited into your wallet. • Whether the digital assets are received in whole or fractions.

The Company acknowledges the Staff’s comment and respectfully submits that the Company’s transaction fee revenue does not require any amounts other than bitcoin, and therefore, there is no additional considerations under ASC 606-10-50-4 for disclosure. Bitcoin rewards are typically deposited the next day after earning such rewards and such bitcoin received are rounded to four decimal places (ten-thousandths). Read in the reply ↗

In future filings, please reconsider the appropriateness of your statements in the filing that there is no definitive guidance under GAAP for the accounting for bitcoin recognized as revenue or held. We observe that the FASB codification is the source of authoritative generally accepted accounting principles and that there is codification guidance whose scope applies to your transactions.

The Company acknowledges the Staff’s comment and respectfully submits that the Company has removed any such statements from the Quarterly Report. Read in the reply ↗

In future filings, revise to correct the inconsistencies in your disclosures that the custodian's accounts for your bitcoin are not insured by the FDIC, and your disclosure that the fair market value of bitcoin held in accounts covered by FDIC limits was $11,147,478 and $23,603,210 for the periods ended September 30, 2022 and 2021.

The Company acknowledges the Staff’s comment and respectfully submits that the Company made the necessary change in the Quarterly Report. Read in the reply ↗

In future filings, please revise to describe the facts and circumstances leading to each individually material goodwill impairment. Refer to ASC 350-20-50-2(a). Bitcoin, page F-17

The Company acknowledges the Staff’s comment and respectfully submits that the Company will include further details about facts and circumstances leading to material goodwill impairments. Read in the reply ↗

Regarding your impairment testing for bitcoin, please tell us the following information and reference for us the authoritative literature you rely upon to support your accounting: • Tell us whether or not you evaluate multiple units (or fractional units) of bitcoin that have different carrying amounts for impairment as a group; • Tell us the market(s) you used to determine the quoted price used to assess impairment;

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• Tell us whether these market(s) are your principal market(s), and if not, explain why not, and how the markets are determined; • Tell us in detail how often you assess impairment and the timing of the quoted price used in your assessment; • Explain how you consider a qualitative assessment given the existence of a quoted price on apparently active markets.

The Company acknowledges the Staff’s comment and respectfully submits that the Company values each bitcoin (or fraction thereof) individually at the fair value on the date it was mined. Each of these individual bitcoins which are held at the quarter end are then evaluated for impairment based on their respective carrying basis. The impairment analysis on bitcoin, performed quarterly, compares the carrying amount of each bitcoin to the lowest daily closing bitcoin price during such quarter.

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The fair value of bitcoin pricing is derived daily from NASDAQ.com and the Company compares the quoted price from NASDAQ.com to other sources to ensure there is no material variance in quoted pricing. The Company selected NASDAQ.com due to its consistent daily activity, whereas other sources were not as reliable on a daily basis. The Company utilizes quotes from NASDAQ.com to impair its bitcoin balances on a daily basis, using bitcoin price as of midnight Greenwich Mean Time (GMT).

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Please tell us how your classification of bitcoin as current assets is consistent with the definition of current assets in ASC 201-10-20. In your response, at a minimum address each of the following: • Tell us how you reasonably expect to realize your Bitcoin in cash through sale or otherwise when it appears that you hold significant amounts of these assets on your balance sheet.

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• For Bitcoin held at September 30, 2022 and 2021, tell us the average length of time it has been held and how frequently it turns over, explaining how you calculated this turnover. • Tell us your consideration for carrying a portion of your holdings that are not expected to be sold for cash as long-term.

The Company acknowledges the Staff’s comment and respectfully submits that the Company believes the Staff was referring to ASC 210-10-20 and the Company’s response will reflect its analysis of that codification section. ASC 210-10-20 notes that current assets are defined as follows:

“Current assets is used to designate cash and other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.”

The Company converts bitcoin to USD to cover its various operating and capital

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expenditures on a frequent basis. Since bitcoins are delivered to the Company’s wallet within a day of earning the bitcoin, the Company has immediate access to convert the bitcoin to USD or send bitcoin to vendors as payment.

The Company held 595 bitcoin as of September 30, 2022, which approximately represented the last 42 days’ worth of bitcoin mining during the period ended September 30, 2022. The Company held 627 bitcoin as of September 30, 2021, which approximately represented the last 133 days’ worth of bitcoin mining during the period ended September 30, 2021. It is important to note that the Company saw tremendous growth in bitcoin mining operations in fiscal 2022 which resulted in the Company mining more bitcoin per day. However, the bitcoin price was decreasing throughout fiscal 2022 which caused the Company to spend more of the bitcoin it earned to pay for operational and capital expenditures. The average time the Company holds bitcoin will vary depending on a number of factors including the cash requirements for operational and capital expenditures as well as the bitcoin price at any given time.

The Company evaluates its bitcoin balance at every balance sheet date to determine what portion, if any, is expected to be held for a period of twelve months or longer. Since the Company has entered the business of bitcoin mining, the Company has disclosed that it plans to use the majority of its bitcoin produced to fund operational and capital expenditures. This is further reflected in the fact that its bitcoin balance fluctuates from period to period.

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We note your disclosure on page F-9 that you still own patented gasification energy technologies and are not currently planning to sell or market these technologies. In future filings, if significant, please revise your disclosures to quantify and explain how you are accounting for these technologies.

The Company acknowledges the Staff’s comment and respectfully submits that the Company has removed any such statements from the Quarterly Report, as they do not represent significant amounts. Read in the reply ↗

Refer to your response to comment 2. In future filings, please include a table that shows a comprehensive breakeven analysis that compares the cost to earn or mine one bitcoin with the value of one bitcoin. Show each cost in a separate row, and include footnotes to the table to explain any assumptions used in the analysis.

The Company acknowledges the Staff’s comment and confirms that a table showing a comprehensive breakeven analysis that compares the average cost to earn or mine one bitcoin with the average revenue earned per bitcoin in the period will be included in future filings, including the Company’s upcoming Quarterly Report on Form 10-Q for the period ended March 31, 2023 expected to be filed on or about May 10, 2023 (the “Second Quarter

DOCPROPERTY "CUS_DocIDChunk0" 157102389v2

10-Q”).

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The format of the table that we intend to include in the Second Quarter 10-Q is included below and will include both a 3-month and year-to-date comparable periods.

As depicted above in the table, the Company calculates the “Cost of Mining” based on the Cost of Revenues line item in the Consolidated Statements of Operations and Comprehensive Income (Loss), which includes energy costs as well as hosting fee expenses. The Company considers these costs as directly associated with the mining costs. We also are including statistics in this table, which we believe enhance investors’ understanding of our fleet and the key metrics that drive our energy usage.

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Refer to your responses to comments 3, 7 and 9. In your response letter, please provide the information requested in each comment.

No numbered answer found in the reply. Read the reply ↗

Refer to your response to comment 5. Please tell us whether or not you currently have any planned material strategic acquisitions, and, if so, the stage of such acquisitions, as well as the estimated time line, the estimated costs and the sources of capital for the acquisitions.

The Company acknowledges the Staff’s comment and will disclose the requested information in each future filing that is required to include information required by Item 101 (Business) of Regulation S-K, including the 2023 10-K. The Company notes that such information is not required to be included in the Second Quarter 10-Q or any other quarterly reports on Form 10-Q.

The Company derives energy from the electrical grid, and as a result the Company’s energy mix will vary from period to period based on a variety of factors including weather, temperature, demand, and how the grid operator

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ultimately procures and utilizes energy resources.

In March 2023, the Company published its first ESG and Corporate Responsibility Report (the “ESG Report”), which is available on the Company’s website. The ESG Report stated that, for the fiscal year ending 2022, based upon data published by the Company’s power providers, the Company’s energy mix was comprised of approximately 94.02% clean energy, 5.70% carbon-based energy, and 0.28% undisclosed energy sources. Clean energy includes hydroelectric, solar, nuclear and wind. Additionally, the Company participates in renewable energy programs, such as Georgia’s Simple Solar (or Flex RECs program), in order to increase access to clean energy sources.

The Company does not currently have location-based data on energy sources. We have engaged a third party, Cleartrace, to generate additional data on energy consumption, which the Company expects will be reported in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 10-K”).

Furthermore, the Company is currently engaged with NASDAQ as an ESG advisor to identify additional long-term target goals for clean energy in the coming years. Additionally, as we identify sites for expansion, the availability of clean and low-carbon energy is one important factor (of many) in evaluating such sites and the associated power providers.

Comment 7: In future filings, please disclose the range, mean and average age of your miners, the average downtime attributed to scheduled maintenance and non-scheduled maintenance as well as the average, mean and range of the energy efficiency of your miners.

Response:

The Company acknowledges the Staff’s comment and will provide in its future filings, including in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Second Quarter 10-Q, the following disclosure, as appropriately updated in such filing, in response to this request (even though such disclosure is responsive to Item 101 (Business) of Regulation S-K, which is not required in quarterly reports on Form 10-Q).

The Company owns approximately 71,300 miners as of March 31, 2023, which range in age from 1-34 months and have an average age of 12 months. The Company does not have scheduled downtime for its miners, however, it periodically performs unscheduled maintenance on its miners, but such downtime has not historically been significant. When performing unscheduled maintenance, the Company will typically replace the miner with a substitute miner to limit overall downtime. The miners owned as of March 31, 2023 have a range of energy efficiency (watts per terahash – “w/th”) of 21.5 to 38 w/th with an average energy efficiency of 31.0 w/th.

Comment 9: In future filings, please disclose your custody procedures and arrangements by identifying all third-party custodians and the material terms of the agreements, including:

• what portion of your bitcoin or other crypto assets, if any, are held in hot wallets and cold wallets;

the geographic location where crypto assets are held in cold wallets;

whether any persons (e.g., auditors, etc.) are responsible for verifying the existence for the crypto assets held by the third party custodian(s);

a description of your custodian’s insurance and the degree to which those policies provide coverage for the loss of your crypto assets; and whether any insurance providers have inspection rights associated with the crypto assets held in storage.

Response:

The Company acknowledges the Staff’s comment and will disclose the requested information in each future filing that is required to include information required by Item 101 (Business) of Regulation S-K, including the 2023 10-K. The Company notes that such information is not required to be included in the Second Quarter 10-Q or any other quarterly reports on Form 10-Q.

Specifically, the Company will disclose information consistent with the following:

The Company holds most of its bitcoin in hot wallets, which are maintained by Coinbase, as it frequently uses its bitcoin balances as a source of liquidity. To the extent the future value of the bitcoin produced exceeds the Company’s needs for operational and other liquidity needs, the Company expects it will store larger bitcoin balances in cold storage, for which the Company has a custody agreement with Coinbase.

For security reasons, Coinbase does not disclose the geographic location of its cold storage wallets to its customers.

The Company currently monetizes its bitcoin balances often, and the CFO or his delegate reconciles expected bitcoin balances to the Coinbase hot wallet on a daily basis. Additionally, cold wallets are reconciled monthly and are considered “on-chain.” In other words, the cold wallets have a unique blockchain address and activity is tracked through the blockchain by the Company if there are any reconciling issues.

Our custody agreement with Coinbase provides that Coinbase Custody will obtain and maintain, at its sole expense, insurance coverage in such types and amounts as are commercially reasonable for the Custodial Services provided under the custody agreement. We do not carry additional insurance coverage on our bitcoin holdings. Further, we are not aware of any insurance providers having inspection rights associated with the crypto assets held in storage.

Lines of Business, page 5

3. Refer to your response to comment 5. Please tell us whether or not you currently have any planned material strategic acquisitions, and, if so, the stage of such acquisitions, as well as the estimated time line, the estimated costs and the sources of capital for the acquisitions.

Response:

The Company acknowledges the Staff’s comments and advises the Staff that it has no specific material strategic acquisitions that are probable at this time, although we regularly review and explore potential targets. Specifically, the Company regularly enters into non-binding LOIs and performs due diligence on various acquisition targets as part of the Company’s strategy to expand its bitcoin mining operations. The Company currently has an executed, non-binding LOI with a potential target and is in the process of conducting due diligence on that target. While the Company has not yet conducted a significant analysis on that target, the Company does not believe it would be significant if the transaction were to proceed to closing.

At this time, there is no intention to engage in the mining or staking of any other crypto assets. The Company further respectfully submits that it will include the following disclosure in its Second Quarter 10-Q, and will continue to include such disclosure in future filings and update the disclosure as needed to reflect the Company’s latest activities and strategy, and will comply with its obligations (including with respect of financial information and pro forma financial information) in respect of material acquisitions that are completed or, to the extent applicable, are probable:

We regularly evaluate opportunities to expand our business, including through potential acquisitions of businesses or assets. We will evaluate a variety of sources of capital in connection with financing any future possible acquisitions, including the incurrence of debt, sales of stock or bitcoin, or using cash on hand. We may also use the Company’s stock as transaction consideration, as we have done in the past.

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Refer to your response to comment 6. Please tell us whether you have any agreements with Coinbase or any other exchanges.

The Company confirms it has a Custody Agreement with Coinbase. The Company also has a Custody Agreement with Genesis Custody Limited, which acts as its backup cold wallet option. However, the Company only has 0.01777 bitcoin with Genesis Custody Limited, which was the result of a test transfer. No further amounts were transferred to this account since the test was completed in mid-2022. Read in the reply ↗

Refer to your response to comment 8. Please tell us whether Coinmint, pursuant to the agreement to use commercially reasonable efforts to mine bitcoin on your behalf, contributes your computing power to a mining pool that it or another third-party operates, and please identify the mining pool operator or operators.

Rest of the question

Also, please tell us (i) whether the mining pools you use provide services only for bitcoin mining or if they are multicrypto asset mining pools, (ii) the fees associated with participating in the mining pool and (iii) the processing power you contribute to each mining pool you use.

Under the the agreement between the Company and Coinmint, Coinmint houses and provides power to CleanSpark’s mining servers located at Coinmint’s site. Additionally, Coinmint provides basic repair and IT services for CleanSpark’s machines. Those servers then connect directly to CleanSpark’s mining pool operated by Foundry.

Rest of the answer

The Company participates in a single mining pool operated by Foundry (“Foundry USA Pool”) and contributes all 6.7 EH/s of current processing power to this pool.

The Foundry USA Pool in which CleanSpark participates does not provide services to any other cryptocurrencies, but other Foundry pools may provide services for other cryptocurrencies. Prior to May 2023, Foundry did not charge the Company any fees for pool services. However, the Company was given notice in April 2023 that Foundry would begin implementing fees for its services, at a rate of 0.19% of total bitcoin earned. Once the Company reaches 10 EH/s of computing power for a quarter, the fee will decrease to 0.15% of total bitcoin earned. This new fee structure was implemented on May 2, 2023.

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Refer to your response to comment 10. In future filings, please disclose the terms and provisions of any insurance policies covering your miners, including the amount of coverage, term and termination provisions, renewal options and limitations on coverage. To the extent that you do not have insurance coverage for your miners, please disclose and add risk factor disclosure.

The Company acknowledges the Staff’s comment and will provide the requested information, as set forth below, in each future filing, as appropriately updated, that is required to include information required by Item 101 (Business) of Regulation S-K, including the 2023 10-K. The Company notes that such information is not required to be included in the Second Quarter 10-Q or any other quarterly reports on Form 10-Q.

We have property insurance coverage for our bitcoin miners under a multi-tiered insurance program with 18 different underwriters for a total of $100,000,000 in limits.

Rest of the answer

This insurance coverage covers all the Company’s bitcoin miners and includes Earthquake/Flood insurance with a $5,000,000 limit and Storm/Wind/Hail coverage with a limit of 3% Value at Risk of Time of Loss. We also maintain equipment breakdown coverage, with a property damage limit of $100,000,000. We do not maintain Business Interruption Coverage, which is currently not being provided by underwriters to any bitcoin mining companies. The policies also exclude coverage of our bitcoin holdings and cybersecurity coverage. We engage our insurance broker annually to solicit underwriters to provide proposals to renew our current coverage or update our policies to meet our needs, prior to the policies’ expiration on November 1st of each year.

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Refer to your response to comment 16 and the related agreement provided to us as Exhibit A. Please provide us with the mining pool operator’s payout methodology, including payment terms and calculation of amounts owed.

The Company acknowledges the Staff’s comment and has included a thorough explanation of the payout methodology as part of its response to comment number 8 in this correspondence. Read in the reply ↗

Refer to your response to comment 16 regarding Step 3 of ASC 606 in relation to your constraining estimates of variable consideration. Please tell us the following: • Explain to us if you are fully constraining all of your variable consideration, and if so, the support for that accounting under ASC 606-10-32-11 and 32-12.

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• Tell us the payout formula, including terms that cause variability, for your bitcoin awards and transaction fees. • Clarify why you are not able to estimate your hashrate or transactional fees as you perform your services. • With respect to the timing of revenue recognition whereby you recognize revenue when the mining pool operator communicates the company’s share of the bitcoin and transaction fee rewards and the confirmation of the company’s share of the awarded bitcoins is received, tell us the following:o why both communication and receipt are necessary; o ensure that your response explains how this accounting policy considered ASC 606-10-25-23 to 25-25 and ASC 606-10-32-11; and o discuss at what point the uncertainty associated with the variable consideration is resolved and why.

The Company acknowledges the Staff’s comment and will remove references to confirmation and receipt as required steps, as they are not required for revenue recognition nor do they affect the calculation of the Company’s revenue. Additionally, the Company respectfully submits that it is fully constraining all variable consideration as required by ASC 606-10-32-12a because the amount of consideration is highly susceptible to factors outside of the Company’s control as defined by the Company’s customer’s payout methodology.

Rest of the answer

ASC 606-10-32-11 requires that variable consideration not be included in the transaction price unless it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction consideration in the Company’s agreement with the mining pool operator is all variable since the amount of consideration is dependent on the daily computing power provided by the Company (i.e., hashrate). The Company then receives the expected pay-per-share base amount and a proportionate amount of the transaction fee rewards (as defined in the Foundry USA Pool’s payout methodology described below), based on what the pool mathematically should earn based on the Company’s contributed hashrate as compared to the bitcoin networks algorithmic difficulty. The variable amount is not resolved and determined until the daily earnings are calculated by the pool operator from midnight-to-midnight UTC time in accordance with the payout formula. Considering that contract inception occurs in tandem with daily earnings (i.e., when the computing power is provided to the mining pool), there is no practical manner to include any amount of variable consideration in the transaction price until the variable component is resolved and the consideration has been received.

The payout methodology for the Company’s agreement with Foundry Digital LLC is “Full-Pay-Per-Share” (“FPPS”) for which the Company is awarded daily earnings in the form of bitcoin (see Exhibit A entitled “What is Foundry USA Pool’s payout methodology”). As described in Exhibit A and summarized below, the daily earnings are based on the computing power (user hashrate) that the Company contributes to the mining pool, as a percentage of the global hashrate, as represented by network difficulty which is adjusted by the algorithm every 2,016 blocks (approximately every 14 days), over the daily earnings period. Daily Earnings are calculated from midnight-to-midnight UTC time, and the sub-account balance is credited one hour later at 1 AM UTC time. The Company utilizes Greenwich Mean Time (GMT), which is also the midnight of Coordinated Universal Time or Universal Time Coordinated (UTC), since this is consistent with the Company’s customer contract, in calculating its daily earnings from midnight-to-midnight UTC time

The italicized section below is excerpted from Exhibit A

Total Daily Earnings consists of two parts:

“Pay-per-Share Base Amount” (which accounts for the block subsidy component)

“Tx Fee Reward” (which accounts for the transaction fees).

The “Pay-Per-Share Base Amount” pays a flat amount of bitcoin for each share submitted to the pool. It calculates the expected value of hashrate based on the current network difficulty according to this formula:

“Tx Fee Reward” part of the daily reward starts with calculating the “FPPS Rate”. FPPS rate is always above 100% and represents the multiplier for the PPS Base Amount in order to derive the Full-Pay-Per-Share earnings. FPPS Rate is calculated using the sum of all block transaction fees and the sum of all block subsidies, in a given day (calculated midnight-to-midnight UTC).

There are no other terms beyond this formula that cause variability.

As indicated in the payout formula, the Company shares in the expected pay-per-share base amount (“fixed bitcoin rewards”) based on contributed hashrate as compared to the bitcoin networks algorithmic difficulty. The Company’s bitcoins earned through FPPS is determined at the end of the 24 hour “midnight-to-midnight" period once the Company’s computational hashrate contributed over such period has ended. The Company’s proportionate amount of the global network’s transaction fee rewards earned are calculated at the end of each transactional day, in the same manner as the fixed bitcoin rewards. It is important to note that under the pool agreement, the Company is not subject to the pool’s performance, rather, the Company is guaranteed fixed bitcoin rewards and transaction fee rewards based on the hashrate the Company contributes as a percentage of the total global hashrate, as represented by network difficulty.

For purposes of revenue recognition, calculating the transaction fee rewards earned on a real-time basis is not a cost-effective or practical practice. The transaction fee rewards fluctuate for each unique block mined by network participants throughout the daily measurement period, with an average of 144 unique blocks mined over such period, and during which time the Company’s real-time computing power can fluctuate. As a result, it is more practical to measure the Company’s total rewards at the close of each daily measurement period.

The Company has a single performance obligation to its customers to provide computing power services (i.e., hashrate) to the mining pool operator customer. The performance obligation of computing power services is fulfilled over time daily between midnight-to-midnight UTC time, as opposed to a point in time, since the Company provides computing power within the meaning of paragraphs 606-10-25-27 through 25-29. The Company has full control of the mining equipment utilized in providing hashrate to the mining pool and if the Company determines it will increase or decrease the processing power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) this will impact the computing power provided during the “Daily Earnings” period as calculated from midnight-to-midnight UTC time. However, at the end of each day, a full computation can be determined based on the FPPS calculation and the precise calculation of the quantity of bitcoin is determinable.

The Company’s performance is complete in transferring the hashrate service (that is, an asset) to the customer and the customer obtains control of that asset within the meaning of ASC 606-10-25-23 through the service provided. As such, the Company records its share of the bitcoins receivable by the mining pool operator upon the close of the reporting date at midnight UTC.

In exchange for providing computing power, the Company is entitled to a pro-rata share of the fixed bitcoin awards earned over the measurement period, plus a pro-rata fractional share of the global transaction fee rewards for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period. The Company’s bitcoin award is based on the proportion of computing power the Company contributed to the mining pool operator as compared to the bitcoin networks algorithmic difficulty. The proportionate share of the transaction fee rewards earned are based on the Company’s computing power as compared to the total computing power contributed to the global network. There are no deferred revenues or other liability obligations recorded by the Company since there are no payments in advance of the performance.

Please see the response to question 9 for an expansive discussion as to how the Company addresses valuation.

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Refer to your response to comment 16 regarding Step 3 of ASC 606 in relation to your non-cash consideration. Please tell us the following: • Per ASC 606-10-32-21, you should measure the estimated fair value of the noncash consideration at contract inception.

Rest of the question

Please clarify whether your contract inception is the beginning of each day (a separate transaction), or if contract inception begins when you provide computing power to the mining pool. Include how you considered the criteria in ASC 606-10-25-1 are met at that time, and reference your consideration of the termination provisions of the agreements. • You disclose on page F-11 that the non-cash transaction consideration received in the form of bitcoin is measured at fair value on the date received, which is not materially different than the fair value at contract inception. Please explain how you are able to determine that the fair value of the bitcoin on the date received is not materially different than the estimated fair value of the bitcoin required to be measured at contract inception under ASC 606-10-32-21. Include your consideration of the recent price volatility in the bitcoin market in your determination. • Also on page F-11, you disclose that the fair value of the bitcoin received is determined using the spot price of bitcoin on the date earned. Please provide the following in future filings:o Reconcile this disclosure of bitcoin fair value on the date "earned" with the prior disclosure of bitcoin fair value on the date "received." o Clarify why you refer to the date "earned" and do not discuss the time when "control is transferred" as specified under ASC 606-10-25-23 to 25-25. • In response to prior comment 21, you told us that you value each bitcoin (or fraction thereof) individually at the fair value on the date it was mined and the fair value is derived daily from NASDAQ.com using the bitcoin price as of midnight Greenwich Mean Time (GMT). Explain to us the significance of using midnight GMT and whether this is a stated time period in your contract.

to prior comment 21, you told us that you value each bitcoin (or fraction thereof) individually at the fair value on the date it was mined and the fair value is derived daily from NASDAQ.com using the bitcoin price as of midnight Greenwich Mean Time (GMT). Explain to us the significance of using midnight GMT and whether this is a stated time period in your contract.

Response:

Based on the facts and circumstances of the Company’s relationships with the mining pool operators, the Company has concluded that all criteria per ASC 606-10-25-1 are met at the point the Company provides computing

Rest of the answer

power to the mining pool, thus the point of “contract inception.”

Our responses to each aspect of ASC 606-10-25-1 are as follows:

An entity shall account for a contract with a customer that is within the scope of this Topic only when all of the following criteria are met:

a.

The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations.

The Company currently has a written contract with its mining pool operator (Foundry) and both parties have fulfilled their respective obligations since the contract has been in place (refer to Exhibit A to the Company’s prior response letter for the contract with Foundry).

b.

The entity can identify each party’s rights regarding the goods or services to be transferred.

The services required by the customer and consideration payable are specified by the terms of the contract between the customer (the mining pool operator) and the service provider (the Company) per the written contract.

c.

The entity can identify the payment terms for the goods or services to be transferred.

Payment terms for the computing power to the customer (i.e., services) are defined in the contract and accompanying payout formula.

d.

The contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract).

The Company has confirmed commercial substance as evidenced through the terms and conditions of the written contract. The contract is terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator.

e.

It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, an entity should consider only the customer’s ability and intention to pay that amount of consideration when it is due. The amount of consideration to which the entity will be entitled may be less than the price stated in the contract if the consideration is variable because the entity may offer the customer a price concession.

Collectability of contract consideration is probable as the customer has the ability and intention to pay that amount of consideration when it is due as evidenced by the Company historically receiving full consideration daily after the customer obtained control of the Company’s computing power services.

Based on the facts and circumstances of the Company’s relationships with its mining pool operator as discussed above, the Company concluded that the contract arises at the point that the Company provides computing power to the mining pool, which is “contract inception” (which occurs daily at midnight UTC). While the Company has no obligation to perform and can exit the mining pool at any time, when it does provide computing power, the Company has a right to consideration from the mining pool operator for the computing power that it has provided.

The mining pool operator’s payment obligation arises upon the provision of computing power. As a result, the pool operator is obligated to pay for the computing power it receives from the Company in bitcoin (i.e., a noncash consideration), which the pool operator may or may not receive as a direct result of the collective efforts of the mining pool participants. It is the Company’s analysis that the bitcoin valued upon receipt is not materially different than the formula stated in the initial contract and fair value of the bitcoin award received is determined using the closing price of the related bitcoin on the date earned (i.e., contract inception) consistent with 606-10-32-21.

As previously clarified in our response to question #8, daily earnings are calculated by Foundry from midnight-to-midnight UTC time, and the Company’s sub-account balance is credited one hour later at 1 AM UTC time with the bitcoin earned. While the Company recognizes the potential for material fluctuations in the fair value of bitcoin over a 24-hour period, because there is only a one-hour difference between date earned at midnight UTC and the received amount at 1 AM UTC time, there is a low risk of material fluctuations due to the limited time difference, hence why it is not viewed as material. As a result, the Company has determined that a reconciliation of the disclosure of bitcoin fair value on the date "earned" with the prior disclosure of bitcoin fair value on the date "received" of will not be meaningful to investors. For clarification, for purposes of revenue recognition, the Company uses the value at midnight UTC, not the time of receipt. The Company will eliminate the use of the word “received” in its disclosures, going forward.

As previously clarified in our response to question #8, the Company’s performance is complete in transferring the hashrate service (i.e., an asset) to the customer as this is when customer obtains control of that asset in accordance with ASC 606-10-25-23. More specifically, the Company has concluded at contract inception that this single performance obligation is satisfied over time in accordance with ASC 606-10-25-27a as the customer simultaneously receives and consumes the benefits provided by the Company’s hashrate services. During this time period, the customer utilizes the Company’s computing power to generate bitcoins (i.e., a digital currency asset) thus meeting ASC 606-10-25-25b, which is using one asset (i.e., our hashrate services) to enhance the value of other assets (i.e., bitcoin). The Company will clarify when “control is transferred” in future filings.

As discussed in response #8, the Company utilizes Greenwich Mean Time (GMT), which is also the midnight of Coordinated Universal Time or Universal Time Coordinated (UTC), since this is consistent with our customer contract in calculating its daily earnings from midnight-to-midnight UTC time.

Read in the reply ↗

Refer to your response to comment 16. In future filings, please disclose the following: • Disclose when you satisfy your performance obligations and the significant payment terms. Refer to ASC 606-10-50-12(a) and (b). • If material, disclose revenue recognized in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods (for example, changes in transaction price).

Rest of the question

Refer to ASC 606-10-50-12A. • Disclose the judgments, and changes in the judgments, made in applying ASC 606 that significantly affect the determination of the amount and timing of your revenue, including explaining the judgments, and changes in the judgments, used in determining the timing of satisfaction of the performance obligations and the transaction price. Refer to ASC 606-10-50-17 to 50-19. • Disclose information about the methods, inputs, and assumptions used for determining the transaction price (including estimating variable consideration and measuring noncash consideration) and assessing whether an estimate of variable consideration is constrained. Refer to ASC 606-10-50-20.

The Company acknowledges the Staff’s comments and will make these disclosures of qualitative and quantitative information consistent with ASC 606-10-50 as applicable in future filings of Form 10-Ks. Consistent with the disclosure objectives of ASC 606-10-50-1 for an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

Rest of the answer

A draft of such disclosure is as follows:

Revenue from Contracts with Customers

The Company recognizes revenue in accordance with ASC Topic 606 – Revenue from Contracts with Customers (ASC 606). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

Identify the contract with the customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the Company satisfies a performance obligation

Step 1: The Company enters into a contract with a bitcoin mining pool operator (i.e., the customer) to provide computing power to the mining pools. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator (which occurs daily at midnight UTC). In exchange for providing computing power, the Company is entitled to a pro-rata share of the fixed bitcoin awards earned over the measurement period, plus a pro-rata fractional share of the global transaction fee rewards for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period. The Company’s pro-rata share is based on the proportion of computing power the Company contributed to the mining pool operator as compared to the bitcoin network’s algorithmic difficulty. The proportionate share of the transaction fee rewards earned are based on the Company’s computing power as compared to the total computing power contributed to the global network. Applying the criteria per ASC 606-10-25-1, the contract arises at the point that the Company provides computing power to the mining pool operator, which is also contract inception, because customer consumption is in tandem with daily earnings of delivery of the computing power.

Step 2: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:

The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has a single performance obligation in providing computing power services (i.e., hashrate) to the mining pool operator (i.e., customer). The performance obligation of computing power services is fulfilled daily over-time, as opposed to a point in time, because the Company provides the hashrate throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin. The Company has full control of the mining equipment utilized in the mining pool, and if the Company determines it will increase or decrease the processing power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the computing power provided to the customer will be reduced.

Step 3: The transaction consideration the Company earns is non-cash digital consideration in the form of bitcoin, which the Company measures at fair value on the date earned and is the same at contract inception per Step 1. According to the customer contract, daily earnings are calculated from midnight-to-midnight UTC time, and the sub-account balance is credited one hour later at 1 AM UTC time. The Company utilizes Greenwich Mean Time (GMT), which is also the midnight of Universal Time Coordinated (UTC), since this is consistent with our customer contract in calculating our daily earnings from midnight-to-midnight UTC time.

The transaction consideration the Company earns is all variable since it is dependent on the daily computing power provided by the Company. The Company’s bitcoins earned through the contractual payout formula is not known until the Company’s computational hashrate contributed over the daily measurement period is fulfilled over time daily between midnight-to-midnight UTC time. The Company’s proportionate amount of the global network transaction fee rewards earned are calculated at the end of each transactional day. There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

The Company fully constrains all variable consideration as a result of ASC 606-10-32-12a because the amount of consideration is highly susceptible to factors outside of our control as defined by the Company’s customer’s payout methodology. The variable consideration is constrained until the Company can reasonably estimate the amount of mining rewards by the end of a given transactional day based on the actual amount of computing power provided to the mining pool operators. By then, the Company considers it is highly probable that a significant reversal in the amount of revenues will not occur and includes such variable consideration in the transaction price.

Step 4: The transaction price is allocated to the single performance obligation upon verification for the provision of computing power to the mining pool operator. There is a single performance obligation (i.e., computing power or hashrate) for the contract; and therefore, all consideration from the mining pool operator is allocated to this single performance obligation.

Step 5: The Company’s performance is complete in transferring the hashrate service over-time to the customer and the customer obtains control of that asset. As such, the Company records its share of the bitcoins earned from the customer within an hour of the close of the reporting date at midnight UTC per the payout formula of the customer contract.

In exchange for providing computing power, the Company is entitled to a pro-rata share of the fixed bitcoin awards earned over the measurement period, plus a pro-rata fractional share of the global transaction fee rewards for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period, as applicable. The transaction consideration the Company receives is non-cash consideration, in the form of bitcoin. The Company measures the bitcoin, which the Company measures at fair value on the date earned using the closing price of bitcoin on the date earned (midnight UTC).

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Refer to your response to comment 21, you told us that you perform your bitcoin impairment analysis quarterly by comparing the carrying amount of each bitcoin to the lowest daily closing bitcoin price (as of midnight Greenwich Mean Time) during such quarter.

Rest of the question

Please tell us the following: • You disclose on page 7 of your 10-Q that you account for your bitcoin as indefinitelived assets for which impairment loss exists when the carrying amount of the bitcoin exceeds its fair value. Please tell us the significance of using the bitcoin price as of midnight GMT to determine when impairment exists. • Explain to us why a bitcoin fair value that occurs during the day (other than midnight GMT) that is lower than the carrying value for any individual bitcoin would not result in impairment under ASC 350. • Your response to prior comment 21 was not fulsome and did not address all of our concerns. For that reason we reissue one of our prior questions in full. Please explain how you consider a qualitative assessment given the existence of a quoted price on apparently active markets.

to prior comment 21 was not fulsome and did not address all of our concerns. For that reason we reissue one of our prior questions in full. Please explain how you consider a qualitative assessment given the existence of a quoted price on apparently active markets.

Response:

The Company acknowledges the Staff’s comment and respectfully submits that as disclosed in our initial response that the “impairment analysis on bitcoin, performed quarterly, compares the carrying amount of each bitcoin to the lowest daily closing bitcoin price during such quarter.” The fair value of bitcoin pricing is

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derived daily from NASDAQ.com and the Company compares the quoted price from NASDAQ.com to other sources to ensure there is no material variance in quoted pricing. The Company selected

NASDAQ.com due to its consistent daily activity, whereas other sources were not as reliable on a daily basis. The Company utilizes quotes from NASDAQ.com to impair its bitcoin balances on a daily basis, using bitcoin price as of midnight Greenwich Mean Time (GMT).

However, the Company has subsequently determined that its method of calculating impairment of its bitcoin assets (which are combined into a single unit of accounting for purposes of testing impairment since they are operated as a single asset), on a daily basis using a daily closing price at a standard cutoff time, was not in compliance with the ASC 350-30-35-19 requirement to recognize impairment whenever carrying value exceeds fair value. Effectively, the Company determined that ASC 350-30-35-19 calls for the intraday low price of Bitcoin to be utilized in calculating impairment of the Company’s bitcoin held as that metric is the most accurate indicator of whether it is more likely than not that the asset is impaired. Accordingly, the Company did an analysis and concluded that the impact to the consolidated results of operations and consolidated balance sheet as of and for the fiscal years ended September 30, 2022, September 30, 2021 and the three-month period ended December 31, 2022 are immaterial. As indicated in the Company’s previous response to comment 22, the Company utilizes the sales of bitcoin to assist in funding operations and investing activities and accordingly typically holds minimal quantities of bitcoin at each period end (42 days’ and 19 days’ worth of bitcoin mining as of September 30, 2022 and December 31, 2022, respectively).

The Company further acknowledges the Staff’s comment “explain how you consider a qualitative assessment given the existence of a quoted price on apparently active markets,” and respectfully submits the Company does not perform a qualitative assessment for impairments of bitcoin as allowed under ASC 350-30-35-18A and therefore goes directly to the quantitative analysis for each reporting period. The Company will enhance disclosures in future filings regarding the application allowed in ASC 350-30-35-18A.

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Refer to your response to comment 21, you told us that you derive the fair value of bitcoin pricing from NASDAQ.com and you selected NASDAQ.com due to its consistent daily activity, whereas other sources were not as reliable on a daily basis. In your Bitcoin accounting policy, you disclose that you determine the fair value of the bitcoin using its quoted price from the principal market in accordance with ASC 820.

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Please respond to the following: • ASC 820 defines principal market as the market with the greatest volume and level of activity for the asset or liability. Explain to us how you applied ASC 820 in determining that NASDAQ.com is your principal market. Refer to ASC 820-10-35. • Tell us the market(s) in which you normally enter into transactions to sell bitcoin. Refer to ASC 820-10-35-5A. • Explain why the market in which you normally enter into transactions to sell bitcoin with the greatest market-based volume and level of activity for bitcoin is not your principal market. Provide us with the contrary evidence that exists.

The Company acknowledges the Staff’s comment and respectfully submits that the Company utilizes the Coinbase exchange to sell its bitcoin. In connection with ASC

820-10-35-5a, the Company considers Coinbase as the principal market. The Company utilizes Nasdaq.com for all of its other bitcoin transactions (revenue and impairment).

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The Company recognizes the inconsistency and in accordance with ASC 820, will adjust its measurement base for recognizing revenue and measuring impairment for all subsequent periods, beginning with the quarter ended March 31, 2023 to the same principal market quotes, from Coinbase. As a result of the above, the Company performed an analysis and concluded the impact/variance between the daily closing price and the intra-day low between Nasdaq.com and Coinbase are not significant and for similar reasons as described in the Company’s response in question #11, should not require adjustment to previously filed financial statements.

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Refer to your response to comment 22. In future filings, please enhance your disclosure to explain your accounting policy for classifying the digital assets as current.

The Company acknowledges the Staff’s comment and respectfully submits that in future filings the Company will enhance disclosure to explain its accounting policy for classifying bitcoin as a current asset. In the Company’s upcoming Second Quarter 10-Q, the disclosure below will be included in Note 2 – Significant Accounting Policies.

Bitcoin are included in current assets in the consolidated balance sheets due to the Company’s ability to sell it in a highly liquid marketplace and its intent to liquidate its Bitcoin to support operations when needed. Read in the reply ↗

We note from your response to prior comment 14 that management does not believe any such items are normal operating expenses necessary to generate bitcoin related revenue. However, the adjustments to your non-GAAP measure for impairment related to your digital assets and gains and losses on the sale of those assets appear to be part of your normal ongoing operations.

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Specifically, as a digital asset miner, you will continue to acquire, hold, and sell these digital assets as part of your mining operations. In future filings, please revise your non-GAAP presentation to exclude these adjustments, or explain to us why these amounts are not part of your normal ongoing operations. Refer to Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations.

The Company acknowledges the Staff’s comment and respectfully submits that it will revise its non-GAAP presentation in its future filings to exclude the adjustments for other impairment expense (related to bitcoin) and realized gains and loss on sale of bitcoin. Read in the reply ↗

We note in your response to prior comment 22 that you convert bitcoin to USD to cover your various operating and capital expenditures on a frequent basis, and that you have immediate access to convert the bitcoin to USD as the bitcoin is delivered to your wallet within a day of it being earned.

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Please tell us why you classify the Proceeds from Sale of Bitcoin as an operating activity and not as an investing activity. Reference for us the authoritative literature you rely upon to support your accounting. Provide us with the shortest and longest time you have held the bitcoin before sale and an estimate of how frequently it is converted to USD for each period presented.

The Company acknowledges the Staff’s comment and respectfully submits that, after evaluating guidance in ASC 230-Statement of Cash Flows, that the sales of the bitcoin are not specifically identified as cash inflow transactions that qualify as investing activities. Accordingly, cash inflows from operating activities include all items not described or included as an investing or financing cash inflow. Further, consideration of this classification is that the bitcoin generated is reported as revenues and the current average holding period of bitcoin is less than one (1) month.

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Consistent with ASC 230-10-20 Glossary, the proceeds from the sale of bitcoin are the result of the Company producing and delivering computing power services to its customer and thus represent operating activities. These are cash flows from transactions that enter into the determination of the Company’s net income (loss).

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In future filings, please revise your roll-forward of bitcoin to remove the proceeds from Sale of bitcoin and Realized loss (gain) on sale of bitcoin and replace them with the carrying value of the bitcoin sold. Provide sufficient supplementary disclosure below the reconciliation to relate the carrying value of the bitcoin sold to the Realized loss (gain) on sale of bitcoin on your statements of operations.

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In this regard, we note that the sale proceeds themselves do not impact the bitcoin account balance on your general ledger.

The Company acknowledges the Staff’s comment and respectfully submits that in future filings that roll-forward of bitcoin will remove the proceeds from Sale of bitcoin and Realized loss (gain) on sale of bitcoin and replace them with the carrying value of the bitcoin sold. Read in the reply ↗

In future filings, reconcile your disclosures to clarify whether your Realized loss (gain) on sale of bitcoin is included in other income (expense) in the consolidated statements of operations and comprehensive income (loss), as disclosed on pages F-15, or Realized loss (gain) on sale of bitcoin is included in total costs and expenses, as disclosed on page F-3.

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Please tell us the authoritative accounting literature that supports your determination.

The Company acknowledges the Staff’s comment and respectfully submits that the disclosure on page F-15 of the Company’s Quarterly Report on Form 10-Q for the Quarterly Period Ended December 31, 2022 was incorrect and that Realized loss (gain) on sale of bitcoin is included in Total Costs and Expenses on the consolidated Statements of

Operations and Comprehensive Income (Loss) as disclosed on page F-3. The disclosure will be presented in a manner consistent with the disclosure on page F-3 in all future filings. Read in the reply ↗

Refer to your response to comment 1. Please revise to include a footnote to your table to disclose how you calculated the weighted average cost of mining one bitcoin. In addition, in future filings, please revise the table to disclose the range of values of bitcoin during the periods covered by the table as well as the source or sources for determining the value of bitcoin.

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In this regard, we note your disclosure in your Form 10-Q for the quarterly period ended March 31, 2023 that the market price of one bitcoin in your principal market ranged from approximately $15,460 to $29,190 during the six months ended March 31, 2023.

The Company confirms that, in future filings, a footnote will be added to the table to disclose how the weighted average cost of mining one bitcoin is calculated and will also include a reference to the range of values of bitcoin during the periods presented. Specifically, the footnote to the table will state: "Weighted average cost of mining one bitcoin is calculated by dividing the sum of total energy expense and other direct costs of mining-non energy utilities (owned facilities) and total hosting fee expense (hosted facilities) by the total bitcoin mined during the respective periods.".

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We will also include, in future filings, a footnote to the table that describes how the average revenue of each bitcoin is calculated. The footnote will also reference the range of values of each bitcoin as determined by the Company's principal market (Coinbase) during the respective periods, which will be consistent with the table that is provided in Management's Discussion and Analysis of Financial Condition and Results of Operations in the table titled "Range of intraday bitcoin prices."

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Refer to your response to comment 2 that you do not currently have location-based data on energy sources. However, in your investor presentation filed as an exhibit to your February 16, 2023 8-K, it appears that you disclose energy sources by location.

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Please clarify your response and, in addition, in future filings, please identify the location of the facilities pursuant to your co-location agreement with Coinmint, LLC.

Location-based reporting methods reflect the average emissions intensity of grids on which energy consumption occurs, generally using grid-average emission factor data. The Company discloses its energy mix as reported to it by its power providers or hosting partner, which are Georgia Power, Municipal Energy Authority of Georgia (including MEAG's respective member cities, which function as the Company's utility providers in the cities in which it operates), Dalton Electric, and CoinMint, LLC. Reported power mixes are utility and site-specific for the city in which the power is consumed.

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These site-specific power providers have unique power purchase agreements which result in differing energy mix composition for each site. This data is reported to us and/or the general public on a voluntary basis. The Company is currently working with a third-party provider to determine the more specific, if less granular, location-based carbon emissions reporting metric, which may differ from that reported by our power providers or hosting partner.

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Refer to your response to comment 2 that Coinbase provides, obtains and maintains insurance coverage in such types and amounts as are commercially reasonable for the custodial services provided. In future filings, please disclose the degree to which the policy provides coverage for the loss of your crypto assets.

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In this regard, we note your disclosure in your Form 10-Q for the quarterly period ended March 31, 2023 that the bitcoin held in custody by Coinbase is not insured. Also, in future filings, identify the percentage of your crypto assets that are held in hot wallets. In this regard, we note your response that you hold "most" of your bitcoin in hot wallets.

In future filings, the Company will amend its disclosure regarding insurance covering its bitcoin holdings to state that, while Coinbase maintains insurance coverage of such types and amounts as Coinbase asserts to be commercially reasonable for its custodial services provided under the Company’s custody agreement with Coinbase, including certain commercial crime insurance of limited aggregate principal amount which covers losses stemming from fraud, security breach or hack, and asset theft, that insurance coverage may be insufficient to protect the Company against all losses of its bitcoin

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holdings held in custody with Coinbase, whether or not stemming from security breaches, cyberattacks and other types of unlawful activity, and to further state that the Company does not maintain its own insurance coverage of its bitcoin holdings.

In future filings, the Company will also disclose the percentage of its bitcoin that are held in hot wallets as of the last day of the recently completed fiscal quarter.

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Refer to your response to comment 4. Please disclose the material terms of your agreement with Genesis Custody Limited, including a description of Genesis Custody Limited's insurance and the degree to which those policies provide coverage for the loss of your crypto assets, and, if known, the geographic location where your crypto assets are held in cold wallets.

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In addition, we note that the risk factor on page 16 of your 10-Q for the quarterly period ended December 31, 2022 notes that Genesis Global Holdco LLC declared bankruptcy but that you have no exposure to Genesis Global Holdco. In future filings, please expand this risk factor to state that you have a custody agreement with Genesis Custody Limited.

The Company at no time had more than 0.01777 bitcoin held in custody with Genesis Custody Limited (“Genesis”), which was the result of one test transaction. In June 2023, Genesis notified the Company that it would no longer provide custody services as of August 6, 2023. The Company did not transfer any additional amounts after the initial test amount, and prior to August 6,2023, the Company transferred the 0.01777 bitcoin balance to its Coinbase account. Accordingly, the Company does not currently have any plan to further utilize other custodial services.

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If that changes, the Company will provide disclosure regarding the custodial agreement and applicable insurance coverage, consistent with the disclosure regarding Coinbase’s current custodial services. For security reasons, Genesis did not disclose the geographic location of its cold storage wallet to its customers and we expect that other custodians are likely to take a similar position.

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We acknowledge your responses to comments 7 and 8. Please respond to the following: • You told us that you record your share of the bitcoins receivable by the mining pool operator upon the close of the reporting date at midnight UTC. Clarify for us in what period you recognize revenue for each day's mining activity and how you perform your revenue cutoff for each quarterly reporting period.

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• You gave us Foundry USA Pool Service Agreements in your last two responses. Tell us where the promises and related performance obligations are described in the agreements. If these items are contained in another agreement, provide us a copy of those agreements/terms. • Substantiate for us why the contribution of hash rate is your performance obligation and how the Foundry USA Pool Service Agreement identifies your promises and related performance obligations. In your response, address the following:o Tell us what a "Share" is in the context of your poll payout structure (FPPS); o Tell us your consideration for treating each nonce you are assigned as a performance obligation or whether the range of all nonces for an individual block is a separate performance obligation; and o Tell us how and when you report your work performed to the pool operator. In this regard, explain whether you report each nonce completed or only report when all nonces assigned are completed or at some point in between. o As you determined that your single performance obligation to provide computing power services (hashrate) is recognized over time under ASC 606- 10-25-27a and 25-27b, please tell us how you considered if 25-27c was met. • Tell us how you have insight into whether the amount of bitcoin to be received from the pool operator is the appropriate amount given the variable nature of the computing power (and/or Shares) that you provide relative computing power (or Shares) related to the entire pool.

The Company recognizes revenue on each day, which includes each quarterly cutoff period, at midnight Coordinated Universal Time (UTC) for that day. As an example, the bitcoin revenue for June 30, 2023 (the quarterly cutoff for the Company's third fiscal quarter), had a cut-off time of 12:00 am UTC, which was 8:00 pm Eastern Standard Time. All processing provided to the Pool Operator after 8:00 pm Eastern Standard Time (12:00 am UTC), was included in bitcoin revenue for the next business day, July 1, 2023, which is the first day of the Company's fourth fiscal quarter.

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The revenue was therefore recognized in the Company's fourth fiscal quarter. The Company does not record the bitcoin earned during the 4-hour period between 8:00 pm and midnight Eastern Standard Time until the following period and in this example would be recorded on July 1, 2023. The 4-hour accrual amount is deemed immaterial when considering the approach consistently applied by the Company throughout all reporting periods.

You gave us Foundry USA Pool Service Agreements in your last two responses. Tell us where the promises and related performance obligations are described in the agreements. If these items are contained in another agreement, provide us a copy of those agreements/terms.

Response: The Company can confirm that the Foundry USA Pool Services Agreement previously provided to the Staff with our response letters includes the full agreement that the Company has with regards to the relationship with the pool operator. We can further inform the Staff that we have received updated Foundry USA Pool Terms and Conditions as of August 28, 2023 (see Exhibit A for updated Terms and Conditions and Foundry USA Pool's payout methodology). As described in the notification from Foundry, "these changes were mostly made to more accurately reflect our existing practices of managing and providing our Pool services to users". This agreement is provided as an Exhibit to this letter.

The promises and the performance obligation is implicit in the agreement with the calculation of the Full-Pay-Per Share (“FPPS”) payout. Foundry is a U.S.-based, institutional-grade mining pool that takes on the risks associated with mining and provides stable payouts to miners through their FPPS payout mode. The Company's interaction with the mining pool operator Foundry has been consistent throughout the relationship, in that the Company provides computing power to the mining pool operator and we are compensated for such performance. ASC 606-10-25-16 states that "a contract with a customer also may include promises that are implied by an entity’s customary business practices, published policies, or specific statements if, at the time of entering into the contract, those promises create a reasonable expectation of the customer that the entity will transfer a good or service to the customer."

Substantiate for us why the contribution of hash rate is your performance obligation and how the Foundry USA Pool Service Agreement identifies your promises and related performance obligations. In your response, address the following:

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Tell us what a "Share" is in the context of your poll payout structure (FPPS);

Response: The term "share" from the Foundry USA Pool's payout methodology was clarified in the updated Foundry USA Pool's Payout Methodology [attached as an Exhibit to this letter] to represent an Accepted Share. An Accepted Share is defined as "a share that has a difficulty that meets or exceeds the share difficulty and is neither stale nor rejected. These "Accepted Shares" are included as the numerator of the Pay-Per-Share ("PPS") calculation. Share Difficulty is defined in the agreement as "difficulty required for our pool to accept a share." This difficulty is set on a per worker basis, to ensure that the worker sends shares at a target rate. The Accepted Share can be expressed as computing power (in the form of hashrate) contributed by the Company and accepted by the pool operator. As described in the payout methodology, the Share Difficulty divided by the network difficulty is multiplied by the Block Subsidy, which is defined as “part of the BTC reward for mining a block coming from newly issued BTC; not including the block transaction fees.”

Tell us your consideration for treating each nonce you are assigned as a performance obligation or whether the range of all nonces for an individual block is a separate performance obligation;

Response: The Company has a single performance obligation to its customers to provide computing power services (in the form of hashrate) to the mining pool operator customer. The performance obligation of computing power services is fulfilled over time daily between midnight-to-midnight UTC, as opposed to a point in time, since the Company provides computing power within the meaning of ASC 606-10-25-27 through 25-29.

The nonce is the value that mining pool operators are trying to solve for and is used to validate the information contained within a block. The mining program performed through computing power generates a random number, appends it to the hash of the current header, rehashes the value, and compares this to the target hash. If the resulting hash value meets the requirements, the mining pool operator has created a solution and is awarded the block. If the value doesn't match the target, the nonce is increased by one, and the process starts again. This continues until the value matches the target and a block is awarded. Thus, a successful block is based on a series of nonces.

Tell us how and when you report your work performed to the pool operator. In this regard, explain whether you report each nonce completed or only report when all nonces assigned are completed or at some point in between.

Response: The computing power contributed by the Company is directed through the Pool Operator servers and is recorded directly by Foundry without requiring a separate communication from the Company.

As you determined that your single performance obligation to provide computing power services (hashrate) is recognized over time under ASC 606-10-25-27a and 25-27b, please tell us how you considered if 25-27c was met.

Response: The Company confirms that ASC 606-10-25-27c was considered and met. The revenue recognition guidance in 25-27c provides that revenue can be recognized over time (satisfying the performance obligation over time) if "the entity's performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date." Both parts of this criterion are met since the computing power contributed to the Pool Operator would not create an asset that the Company has control over as it is consumed simultaneously by Foundry. Even if the Company stopped providing service at 8:00 am UTC, it would still get paid based on computing power provided from midnight UTC to 8:00 am UTC of that day.

o

Tell us how you have insight into whether the amount of bitcoin to be received from the pool operator is the appropriate amount given the variable nature of the computing power (and/or Shares) that you provide relative computing power (or Shares) related to the entire pool.

Response: The Company clarifies that the Company is precisely aware of the computing power (measured in hashrate) contributed to the pool operator at any time during the contract period between midnight-to-midnight UTC. Accordingly, at any point in time during the contract period, the Company could calculate the daily pay-per-share earnings (step 1 of the Foundry USA Pool's Payout), but would not know the total contract period transaction fees earned by the pool operator until the end of the measurement period of each 24 hour period. It is important to clarify that the FPPS calculation is based on the network difficulty, which only changes every two weeks. The FPPS is only variable based on what the Company provides in terms of computing power (in the form of hashrate). The variability of computing power contributed by other pool participants does not impact the FPPS payout for the Company.

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In response to comment 9, you told us that you believe contract inception occurs daily at midnight UTC. We note that under ASC 606-10-32-21, you should measure the estimated fair value of the non-cash consideration at contract inception. But you also told us that the fair value of the bitcoin award received is determined using the closing price of the related bitcoin on the date earned as of midnight UTC.

Rest of the question

That is, your response tells us that contract inception is at the beginning of the contract period but you measure the fair value of the non-cash consideration based on the estimated fair value as of the end of the contract period, even though your response acknowledges the potential for material fluctuations in the fair value of bitcoin over a 24-hour period. Given that it appears that your contract can be terminated at any time without penalty and you likely have no minimum service period requirement, please tell us your consideration for the guidance in Examples 1 and 2 of Question 7 to the FASB Revenue Recognition Implementation Q&As and the impact on your determination of both contract inception and the impact of termination provisions as to contract duration, with reference to ASC 606-10-25 and 10- 32. Include the following in your response: • Please tell us the timing of when you measure the value of non-cash consideration, • Explain to us whether there are any penalties for contract termination by either party, • Clarify for us what happens if you cancel midterm, and • Tell us whether you can withdraw computing power midterm and reinstitute it later that same day.

As described in the Foundry USA Terms and Conditions, each 24-hour period is a contract day, which begins at 00:00:00 UTC and ends at 23:59:59 UTC. The Company has the intent to provide its computing power throughout each day and historically has done so. Accordingly, the fair value at contract inception is the bitcoin price at the beginning of the contract day. As described previously, and reiterated below, the Company can cease providing computing power to the mining pool operator at any time (or even several times) during the 24-hour period.

Rest of the answer

While this could be conceived to represent several contracts during the period, requiring the Company to recalculate the fair value of the bitcoin at intermittent times during the day, the Company has determined that the impact on fair market value is immaterial.

As previously stated, the Company had been recording revenue at the fair value at the end of the contract day, which is the closing bitcoin price from at midnight UTC from our principal market. for ease of calculation since that is when Foundry calculates the bitcoin owed to the Company. This method was not in strict compliance with guidance in ASC 606-10-32-21. The Company measured the impact of the recording revenue under both the average bitcoin price and opening bitcoin price and determined the impact to bitcoin mining revenue was less than 0.5% of total bitcoin mining revenue during each period and thus did not have an impact to net income for each period nor did it have any impact on the carrying amount of bitcoin at period end. This conclusion is based on the analysis performed and supported by the nature of the bitcoin accounting at period end, which provides for impairment recording of bitcoin to the lowest price during the holding period. Any fluctuation in bitcoin revenue during the period would be reflected in a corresponding change to gain or loss on bitcoin sales or impairment loss.

There are no penalties for contract termination by either party and accordingly the contract period ends when the Company ceases to provide computing power to the mining pool operator.

The Company reiterates that the Company can withdraw computing power midterm and resume later in the same day and the calculation of the FPPS would be prepared based on the full 24-hour contract period.

Management's Discussion and Analysis of Financial Conditionand Results of Operations Results of continuing operations for three months ended June 30, 2023 and 2022 Costs of Revenue (exclusive of depreciation and amortization expense), page 10

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We note your disclosure on page 10 that you incurred $5,291 of hosting fees and $1,334 of profit sharing fees for the three months ended June 30, 2023, where the 33% increase in hosting fees was partially offset by the 46% decrease in profit sharing fees compared to the comparable prior year's quarter.

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As the significant decrease in profit sharing fees was due to higher network difficulty and lower hashrate utilization at your largest co-location, please tell us the following: • Explain if you expect these trends to continue in future periods. • Tell us how this may impact your block reward variability. • Clarify what other accounts they may impact.

The hosting fees that are incurred relate primarily to energy costs that are charged to the Company by the host facility. These charges fluctuate based on how much energy is consumed by the Company as well as the cost of that energy. Accordingly, as energy costs for the hosting facility increase or decrease from time to time, the hosting fees also increase or decrease. The profit sharing fees are fixed at a rate of 23.5% and are calculated based on the revenues generated within the hosting facility (value of bitcoin) less the hosting fees.

Rest of the answer

Accordingly, as hosting fees increase, this decreases the basis of the profit sharing fee. Additionally, as network difficulty (hashrate utilization) increases, the number of bitcoin mined at the hosting facility declines, assuming that the Company's computing power at the facility remains unchanged.

The expectation of management is that network difficulty will continue to increase leading up to the next bitcoin halving event (expected in April 2024), and therefore expects profit sharing fees will continue to decrease. However, the value of bitcoin also plays a key role in the profit-sharing calculation. If the value of bitcoin increases at a higher rate than the increase in network difficulty, then profit sharing expense could increase. Based on these various factors, the Company cannot be certain whether the trend in decreasing profit share expense will continue.

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In response to comment 15, you told us that your current average holding period of bitcoin is less than one month. As previously requested, please tell us the shortest and longest time periods you have held bitcoin before sale and provide an estimate of how frequently it is converted to USD for each period presented.

Rest of the question

Then, considering the length of time bitcoin is held, tell us how management considered the guidance in ASC 230-10-45- 12(c) in determining that the proceeds from the sale of bitcoin should be reflected within operating activities and not investing activities.

The Company generates and earns bitcoin through its mining operations, which is our sole operating segment. The bitcoin earned is converted to USD and the proceeds of which are used to pay expenditures as they come due under our cash management strategy. The Company’s CFO analyzes forecasted production of bitcoin and anticipated monthly expenditures and confers with the CEO to determine how much mined bitcoin to sell to meet the Company’s cash management needs. The Company’s CFO is authorized to sell mined bitcoin in accordance with parameters agreed upon.

Rest of the answer

The Company periodically sells its bitcoin produced throughout the month based on the timing of its required expenditures.

Each month during the nine months ending June 30, 2023, the Company determined that forecasted bitcoin mined would exceed anticipated expenditures and therefore the Company would hold additional bitcoin at the end of each month. The Company confirms that for each day (except for 5), we had a prior 7-day production of bitcoin to cover the current daily bitcoin sales, therefore, all proceeds from sales of Bitcoin were determined to be operating activities in nature. Therefore all the bitcoin sold in 2023 was held for 7 days or less (except for the 5 days). Bitcoin sold during the nine months ending June 30, 2023 that exceeded our 7-day production was approximately 4% of total bitcoin sold and was classified as cash from operating activities.

Accounting guidance in ASC 230-10-45-12(c) describes cash inflows from investing activities as "receipts from sales of property, plant, and equipment and other productive assets". The Company considered the holding period of bitcoin when determining the classification of bitcoin sales in the statement of cash flows. As described in accounting interpretive guidance in the Deloitte Roadmap: Statement of Cash Flows (the "Roadmap"), there is no authoritative guidance on the presentation of digital assets in the statement of cash flows. Further, the Roadmap, states in section 7.15.1 that purchases and sales of crypto assets would be classified as investing activities. However, the Roadmap also states that, depending on the nature of activities associated with the purchase and sale of crypto assets, entities have classified the cash flows from such purchases and sales as operating activities. Additionally, BC43 of proposed ASU 350-60 states “The Board also considered whether current guidance is sufficient for presenting cash and noncash activities related to crypto assets in the statement of cash flows. That guidance does not prescribe a particular classification for the cash paid to acquire, or cash received to sell, intangible assets. Accordingly, management would continue to apply judgment in classifying cash flows associated with crypto assets on the basis of an entity’s facts and circumstances, focusing on the nature of the cash flows and the purpose of the activities that give rise to them.” Given the nature of the use of proceeds from sale of bitcoin to fund the Company's required expenditures, the Company has determined the sales to be classified as cash flows from operating activities.

As requested by the Staff in this comment, the Company can confirm that the shortest holding period for bitcoin for fiscal 2022 and the nine-months ended June 30, 2023, was 20 days and two days, respectively. The longest holding period for bitcoin for fiscal 2022 and nine-months ended June 30, 2023, was 93 days and 33 days, respectively.

Read in the reply ↗

You disclose that property and equipment is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. During the nine months ended June 30, 2023, you did not record an impairment expense on property and equipment, while you recorded $1,017 of impairment expense on bitcoin.

Rest of the question

Given the significant decline in the fair value of bitcoin in fiscal 2023 relative to historical prices, as you disclose "The value of bitcoin has historically been subject to wide swings..." on page 7, tell us how you considered this factor in determining whether or not to evaluate your mining equipment and related assets for impairment. Tell us the significant factors you consider that could trigger an impairment. Refer to ASC 350-10-35-21.

The Company acknowledges the Staff’s comment and acknowledges that the value of bitcoin is subject to wide swings on a daily basis. Since the Company accounts for impairment based on daily bitcoin prices and specifically utilizes the "low" daily price in measuring bitcoin impairment, there is expected to be an impairment charge recorded in the financial statements when bitcoin decrease even for a short period of time.

Rest of the answer

However, it is important to note that while there are price swings, often these are during periods of generally increasing prices or the decreases are not below an amount that would result in a loss for the Company's mining operations based on their operating margins. In fiscal 2023, bitcoin prices have generally increased, which is indicative in the "Cost of Revenues - Analysis of cost to mine one bitcoin" table included in the Management Discussion and Analysis of Financial Condition and Results of Operation in the quarterly reports for both March 31, 2023 and June 30, 2023, that describes the average revenue of each bitcoin mined as $22,706 and $27,982 per bitcoin for the three months ended March 31, 2023 and June 2023, respectively.

The Company assumes the Staff is referring to accounting guidance in ASC 360-10-35 regarding When to Test a Long-Lived Asset for Recoverability and in paragraph 21 states

A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The following are examples of such events or changes in circumstances:

a. A significant decrease in the market price of a long-lived asset (asset group) b. A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition c. A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator d. An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group) e. A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group) f. A current expectation that, more likely than not,a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.The term more likely than not refers to a level of likelihood that is more than 50 percent.

Consistent with ASC 360-10-35e above, when evaluating significant factors we consider for impairment, we evaluate overall revenue and gross profit (recorded and forecasted) to determine whether there are possible impairment indicators that would trigger an impairment analysis. As a consideration in this evaluation, the historical price of bitcoin, just as those used in the impairment expense for bitcoin, is a direct input into both revenue and gross profit recorded amounts. Although variability in bitcoin prices required impairment charges during the nine months ended June 30, 2023, to be recorded for bitcoin, at no point during the period did our mining revenue or mining operating margin decrease to a loss position, and therefore, no ASC 360 event or circumstance was identified which would indicate the carrying amount of our mining equipment would not be recoverable. Additionally, we did not identify any other impairment indicators that suggest the carrying amount of our mining equipment would not be recoverable.

Based on all these factors, the Company does not consider that an impairment of bitcoin (measured on a daily "low" price basis) is an indicator that the Company's long-lived asset group could be impaired at June 30, 2023 under ASC 360.

Read in the reply ↗

We acknowledge your response to comment 13 and your revised disclosure on page F-15 where you state that you included bitcoin in current assets due to your ability to sell bitcoin in a highly liquid marketplace and your intent to liquidate your bitcoin to support operations when needed.

Rest of the question

We also note your disclosure on page 7 that you sell bitcoin from time to time and do not currently plan to engage in regular trading of bitcoin. Please tell us how your classification of cryptocurrencies as current assets is consistent with the definition of current assets in ASC 210-10-20 and the FASB Master Glossary.

The Company considered the guidance in ASC 210-10-20 and the FASB Master Glossary when classifying the bitcoin on its classified consolidate balance sheets. The definition as presented in the master glossary states "Current assets is used to designate cash and other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business." The Company has determined that due to its intent, and ability to liquidate bitcoin in a timely manner, which historically has been between less than one month

Rest of the answer

and up to three months (see response to question 8) the Company's bitcoin is best classified as a current asset. The guidance in ASC 210-10-45-3 further describes that "a one-year time period should be used as a basis for the segregation of current assets in cases where there are several operating cycles occurring within a year. However, if the period of the operating cycle is more than 12 months, as in, for instance, the tobacco, distillery, and lumber businesses, the longer period should be used. If a particular entity has no clearly defined operating cycle, the one-year rule should govern". This guidance further clarifies the Company's conclusion that bitcoin is appropriately classified as a current asset.

Read in the reply ↗

We acknowledge your response to comment 11. Please respond to the following: • Confirm to us that you perform your digital asset impairment analysis each day and record any related impairment on that day and that you do not perform your impairment analysis as a look-back at the end of the quarter.

Rest of the question

• You told us that you determined your method of calculating impairment for your bitcoin on a daily basis using a daily closing price at a standard cutoff time was not in compliance with the ASC 350-30-35-19, but you did not correct the financial statements because the impact was not material. Please provide us with your analysis of the materiality of the correction to your financial statements. • You told us that you combine crypto assets into a single unit for purposes of calculating impairment. Tell us how you considered ASC 350-30-35-24 and why you do not account for each unit (or fractional unit) of your crypto assets as its own unit of account for assessing impairment since you can sell or otherwise dispose of each unit (fractional unit) separately.

The Company utilizes daily price ranges when performing its impairment analysis. However, the Company does not perform the impairment analysis daily and does not record any impairment on a daily basis. This process is performed at the end of each reporting period as a "look-back" based on the bitcoin held at each period end to determine the impairment based on bitcoin held at the reporting period. This approach to recording impairment allows for the bitcoin to be presented at period-end in accordance with ASC 350, Intangibles-Goodwill and Other.

Rest of the answer

Performing the impairment on a period end basis yields the same end of period balance sheet results as performing the impairment daily.

You told us that you determined your method of calculating impairment for your bitcoin on a daily basis using a daily closing price at a standard cutoff time was not in compliance with the ASC 350-30-35-19, but you did not correct the financial statements because the impact was not material. Please provide us with your analysis of the materiality of the correction to your financial statements.

Response: The Company analyzed the impact to the financial statements noting the following summarized results for the fiscal year ended September 30, 2022 and September 30, 2021 and for the quarter ended December 31, 2022 (periods after December 31, 2023, were accounted for under the lowest price in the daily range). The table also contemplates the impact to the financial statements utilizing Coinbase.com prices as our principal market and the daily low bitcoin value for impairment.

Fiscal Year Ended

Sept 2021

Sept 2022

Quarter ended

Dec 2022

Revenue - As Reported

38,846,633

130,999,686

27,746,182

Revenue - Coinbase Closing

38,828,332

131,191,473

27,741,015

(Overstated) / Understated

(18,301)

191,787

(5,167)

Impairment Charge - Recorded

(6,608,076)

(12,210,269)

(83,420)

Impairment Charge - Adj for Coinbase

(8,379,140)

(15,182,700)

(125,941)

Understatement

(1,771,064)

(2,972,431)

(42,521)

Gain (loss) on sale - Recorded

3,104,378

2,567,101

(516,530)

Gain (loss) on sale - Adj for Coinbase

3,934,034

6,051,504

(312,963)

829,656

3,484,403

203,567

Net impact (Overstated) / Understated

(959,709)

703,759

155,879

Net Income (as previously reported)

(21,812,010)

(57,326,354)

(29,002,000)

Impact as % of Net Income

4.40%

-1.23%

-0.54%

You told us that you combine crypto assets into a single unit for purposes of calculating impairment. Tell us how you considered ASC 350-30-35-24 and why you do not account for each unit (or fractional unit) of your crypto assets as its own unit of account for assessing impairment since you can sell or otherwise dispose of each unit (fractional unit) separately.

Response: In reviewing the five indicators per ASC 350-30-35-24 below, none of them apply to the Company's crypto assets (i.e., bitcoin) thus allowing the Company to account for them as a single unit of accounting for impairment testing purposes. The five indicators are as follows:

a)

Each intangible asset generates cash flows independent of any other intangible asset (as would be the case for an intangible asset licensed to another entity for its exclusive use).

b)

If sold, each intangible asset would likely be sold separately. A past practice of selling similar assets separately is evidence indicating that combining assets as a single unit of accounting may not be appropriate.

c)

The entity has adopted or is considering a plan to dispose of one or more intangible assets separately.

d)

The intangible assets are used exclusively by different asset groups (see the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10).

e)

The economic or other factors that might limit the useful economic life of one of the intangible assets would not similarly limit the useful economic lives of other intangible assets combined in the unit of accounting.

Read in the reply ↗

In response to prior comment 12, you told us that you used quotes from Nasdaq.com to value your bitcoin, even though your principal market is Coinbase.com. You told us that you will adjust your accounting to use your principal market in subsequent periods, beginning with the quarter ended March 31, 2023.

Rest of the question

Provide us with the impact/variance analysis you performed wherein you concluded that the impact of the error is not material to your historical financial statements.

The Company analyzed the impact to the financial statements had the Company utilized Coinbase.com rather than Nasdaq.com when performing its revenue recognition and impairment analysis noting the following summarized results for the fiscal year ended September 30, 2022 and for the quarter ended December 31, 2022. See table above in our response to question 11 that includes the impact of both using Coinbase.com as the principal market and the daily low bitcoin value for impairment. Read in the reply ↗

Refer to your response to comment 5 of our March 31, 2023 comment letter. In future filings, please disclose whether the mining pools provide services only for bitcoin mining or if they are multi-crypto asset mining pools. Please also disclose the fees associated with participating in the mining pool.

No reply letter found.

Refer to your response to comment 6 of our February 6, 2023 comment letter. In future filings, please disclose whether you hold any other types of crypto assets. If so, please identify the types and amount of such crypto assets, and discuss the purpose of holding the other types of crypto assets.

No reply letter found.

In future filings, in your breakeven analysis comparing the cost to earn or mine one bitcoin with the value of one bitcoin, please include equipment costs in a separate row to the table or tell us why this information is not relevant.

No reply letter found.

We acknowledge your response to comment 8. Please note that we are continuing to review your response.

No reply letter found.

In response to comment 5, you refer to Exhibit A and the updated Foundry USA Pool Terms and Conditions as of August 28, 2023. We note that this exhibit was not included with your response. Please file the exhibit on EDGAR as correspondence.

No reply letter found.

We acknowledge your responses to comments 5 and 6. Please respond to the following and revise your disclosure in future filings to specifically address the following concerning your mining revenue recognition under ASC 606: • In your response you told us that each 24-hour period is a contract day, which begins at 00:00:00 UTC and ends at 23:59:59 UTC.

Rest of the question

You also disclose that your contracts are terminable at any time by either party and you told us that there are no penalties for either party in case of termination. Tell us your consideration for the guidance in Examples 1 and 2 of Question 7 and of Question 8 to the FASB Revenue Recognition Implementation Q&As and whether the mining pool agreement is continuously renewed and the duration of your contracts is less than 24 hours. • Disclose, similar to your response, that the contracts are terminable at any time by either party without compensation or penalty to the other party for such termination. • Assuming you conclude that your contracts are continually renewed, tell us whether the rate of payment remains the same upon renewal and whether your customer’s option to renew represents a material right that results in a separate performance obligation as contemplated in ASC 606-10-55-42. • You told us that you are precisely aware of the computing power (measured in hashrate) contributed to the pool operator at any time during the contract period and at any point in time during the contract period you could calculate the daily pay-pershare earnings (step 1 of the Foundry USA Pool's Payout). As such, tell us why the block reward portion of the consideration cannot be reasonably estimated and is fully constrained. In this regard, it appears for FPPS contracts that the only variable at contract inception is the number of hashes you will perform, which is wholly in your control and would appear to be reasonably estimable. • You told us that your performance obligation is to provide computing power services (in the form of hashrate). Tell us your consideration of disclosing your one performance obligation as a service to perform hash computations for the mining pool operator, or something similar, to align with the promise under your agreement. • Disclose, similar to your response, that your agreement utilizes the Full Pay Per Share (FPPS) payout method and summarize the nature of each component of your consideration (i.e., network block subsidies, network transaction fees, and pool operating fees). It should be clear from the disclosure whether the amounts are calculated based on expected or actual amounts. For example, we note from the agreement that network block subsidies are based on the total amount of block subsidies that are expected to be generated on the bitcoin network as a whole during the 24-hour period beginning at midnight UTC daily (i.e., the measurement period), regardless of whether the mining pool operator successfully records a block to the blockchain, while network transaction fees are based on the total amount of transaction fees and block rewards that are actually generated on the blockchain network as a whole during the measurement period. • Tell us your consideration of clarifying in your disclosure, if true, that for each contract, you measure the noncash consideration using the end of the day bitcoin spot price on the date of contract inception and recognize the noncash consideration on the same day that control of the contracted service transfers to the mining pool operator (i.e., the customer), which is the same day as contract inception.

No reply letter found.

We acknowledge your response to comment 10 and your disclosure on page F-17. As noted in your response, the definition of a current asset in the FASB Master Glossary refers to a reasonable expectation of realization. Your response and disclosure refer to your intent.

Rest of the question

Please revise your disclosure in future filings to state, if true, that your bitcoin holdings are reasonably expected to be realized in cash or sold or consumed during the normal operation cycle of your business.

No reply letter found.

We acknowledge your response to comment 11. You told us that you perform the impairment analysis of bitcoin at the end of each reporting period through a "look-back" based on the bitcoin held at each reporting period end to determine any impairment based on the lowest intraday price during the reporting period. It appears that you adopted this policy after December 31, 2022.

Rest of the question

Prior to January 1, 2023, you based your quarterly impairment analysis on the lowest daily closing price. Please address the following: • We note that ASC 350-30-35-19 states that if the carrying amount exceeds fair value then the entity shall recognize an impairment loss equal to that excess. Also, per ASC 350-30-35-18, the test is annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Tell us why you believe that anytime the market price is below carrying value is not an event or circumstance that indicates it is more likely than not that the asset is impaired. • Further, ASC 350-30-35-18B requires assessment of all relevant events and circumstances that could affect the significant inputs to fair value. We note that a market price would be a significant input and a market price below carrying value would indicate more likely than not that an impairment exists. Per ASC 35050-35-20, a subsequent reversal of a previously recognized impairment loss is prohibited. Tell us how you considered whether your policy of only considering impairment on a quarterly basis is consistent with this guidance since you would be ignoring any impairments that occur during the quarter. • In your application of ASC 350-30-35-18B, tell us at what point impairment occurs, if not whenever the fair market value is below the carrying amount. • Tell us how timing only at quarter end is relevant to the analysis of determining whether or not impairment exists. • You told us that you account for your bitcoin as a single unit of accounting but you also disclose that you use the FIFO method to account for gains and losses on sales and exchanges. Explain to us how you determined the initial carrying value of your bitcoin (or fraction thereof), the steps you took when performing your quarter end impairment analysis as of June 30, 2023, how you calculated the total amount of the impairment charge of $1,017,000, how you determined the subsequent carrying value of each bitcoin (or fraction thereof), and how you then determine gains and losses on sales and exchanges of bitcoin. • In your response, you told us that in your review of the five indicators in ASC 35030-35-24, none of them apply to your bitcoin. Explain to us further how you considered ASC 350-30-35-24 (b) and (c) and determined that these do not apply since we note that you do sell your bitcoin separately.

No reply letter found.

With respect to the materiality analysis you provided in your response to comment 11 and your response to comment 12 that address your impairment calculation and your use of NASDAQ.com values, please address the following: • Tell us the nature and amount of each adjustment included in the analysis. Explain how you determined the adjusted amounts.

Rest of the question

• If applicable, tell us the dates when you made changes to your accounting policies. • Revise future filings to include adjustments for income taxes, if any, as a result of the adjustments. • Tell us how you determined that the adjustments, both individually and in the aggregate, were not material. Refer to SAB Topic 1.M.

No reply letter found.

We acknowledge your response to comment 9. Your response provided information for only the three months ended March 31 and June 30, 2023. Please update to tell us your response specifically addressing the quarter ended December 31, 2022 as we note that the price of bitcoin declined during that period to a low of approximately $15,460.

Rest of the question

Further, tell us whether the adverse changes in business climate during the quarter ended December 31, 2022, including decreases in the market price of miners, indicated that an impairment triggering event had occurred. Refer to ASC 360-10-35-21(a). Tell us the average revenue and cost of revenue for each bitcoin mined during the quarter ended December 31, 2022.

No reply letter found.

Refer to your response to comment 3. Please revise your breakeven analysis to reflect mining equipment costs, including any financing costs, as it appears that the cost of purchasing mining equipment is a substantial expense that will impact the success of your mining operations.

Rest of the question

For example, we note your disclosure in your January 8, 2024 Current Report on Form 8-K regarding your January 6, 2024 agreement with Bitmain Technologies Delaware Limited in which you purchased 160,000 miners for a net purchase price of $193 million as well as a $32 million option that allows you to purchase up to an additional 100,000 miners for $320 million. We also note your disclosure in your risk factors section on pages 26 and 27 regarding the substantial capital investment of acquiring miners and the risk to your business of the increase of mining equipment costs.

The Company acknowledges the Staff's comment. The Company will continue to disclose the "cost to mine one bitcoin" based on direct energy and direct hosting costs to ensure that investors can compare these costs to prior periodic filings. The Company will further disclose within Management's Discussion and Analysis the total miner depreciation expense on a "per bitcoin mined" basis. The Company will also disclose the financing costs incurred to acquire miners on a "per bitcoin mined" basis.

Form 10-Q for the Quarterly Period Ended December 31, 2023

Note 2.

Rest of the answer

Summary of Significant Accounting Policies Revenue from Contracts with Customers - Revenue from Bitcoin Mining, page F-11

Read in the reply ↗

We acknowledge your response to prior comment 6. Please respond to the following and revise your disclosure in future filings to specifically address the following concerning your mining revenue recognition under ASC 606: • You told us that as the contracts are terminable at any time without penalty, the contract term is shorter than a 24-hour period, is continuously renewed, and that you would revise your

Rest of the question

disclosure accordingly. We note that your disclosure continues to refer to a daily contract and the contract arises at the point that you provide computing power to the mining pool operator, which is the beginning of the contract day at midnight UTC (contract inception). The disclosure is not consistent with your response. Tell us your consideration of disclosing that your enforceable right to compensation only begins when, and continues as long as, you provide hash computation services to the mining pools, you have determined that the duration of the contract is less than 24 hours and the contract continuously renews throughout the day. • Tell us your consideration of disclosing that the services you provide are an output of your ordinary activities. • You told us that the option to renew does not represent a material right. Tell us your consideration of disclosing that you have determined that the mining pool operator’s (i.e., the customer's) renewal option is not a material right as the terms, conditions, and compensation amounts are at then market rates. • You disclose that you have a single performance obligation (i.e., computing power or hashrate) for the contract and you contribute hash computation computing power. You told us you believe your performance obligation is based on the speed at which you perform hash computations. Please address the following:o Clarify for us the nature of the services you provide and tell us whether or not you perform hash calculations for the pool operators. In this regard, we understand that you run software from the pool operator that constructs block header candidates and performs hash computations on behalf of the pool operator. o If you do perform hash calculations for the pool operators, tell us whether a more accurate description of your promise and single performance obligation is a service to perform hash calculations for the pool operator, and if so, make corresponding revision to your accounting policy and related disclosures throughout your filing. In this regard, although the payment formula under your contract may refer to speed (i.e., hashrate), payment is based on valid shares submitted which is a proxy for hashes performed over time. We further note that only hashes have value to your customer (either as the solution to the next block or that the individual hash is not the solution), that your contract has no minimum requirements and therefore that your customer effectively contracts for as many hashes as you elect to provide. • With respect to the variability associated with the block reward portion of the consideration receivable, address how the block reward portion of the consideration cannot be reasonably estimated (and should be fully constrained) if network difficulty changes about every two weeks, block rewards change about every four years, and contract duration is less than a day. In this regard, it appears for FPPS contracts that the only variable at contract inception for the block reward portion is the number of hashes you will perform, which is wholly in your control and would appear to be reasonably estimable. Tell us whether it is correct that the uncertainties in the FPPS variables no longer exist at 23:59:59 UTC irrespective of the timing of your receipt of confirmation of the bitcoin you will receive or your actual receipt of such bitcoin. • With respect to your disclosure regarding each component of your consideration, since it appears that the total transaction fee is based on only three components (network block subsidies, network transaction fees, and pool operating fees), tell us why you include network difficulty as a component. • Please revise the accounting policy statements that refer to the date "earned" to consider removing that phrase and placing it in a more appropriate context to describe when you measure the noncash consideration and how the measurement date relates to both the date of contract inception and the date you transfer control of the service under the contract. • In your response you indicate that you measure noncash consideration using the end of the day spot price based on the date where computing power was provided. Additionally, you state that your measurement price may differ from the contract inception price which would occur throughout the day. Please clarify for us whether the date where computing power is provided is the same as the date of contract inception for all contracts each day, noting your conclusion that contracts continuously renew and are less than 24 hours. To the extent these dates are in fact the same, please revise your disclosure to state, if true, that you measure noncash consideration using the end of day spot price on the date of contract inception.

The Company acknowledges the Staff's comment. The Company confirms that contracts are terminable at any time without penalty, the contract term is shorter than a 24-hour period, and is continuously renewed. The Company will revise our disclosure in our future filings to clarify this and remove any references to daily contracts or midnight contract inception.

• Tell us your consideration of disclosing that the services you provide are an output of your ordinary activities.

Response: The Company acknowledges the Staff's comment.

Rest of the answer

The Company's sole operation is the mining of bitcoin and has determined that contributing hash computation computing power to mining pool operators, who are our sole customer, is the output of our ordinary activities. We will explicitly disclose this in future filings.

• You told us that the option to renew does not represent a material right. Tell us your consideration of disclosing that you have determined that the mining pool operator’s (i.e., the customer's) renewal option is not a material right as the terms, conditions, and compensation amounts are at then market rates.

Response: The Company acknowledges the Staff's comment. The Company has considered that the renewal option is not a material right since there is no discount associated with renewing as each contract is renewed at the same rate, that is the market rate paid for any miner who enters into a mining contract with the pool operator. We will disclose in future filings that the terms, conditions, and compensation are at then market rates, and accordingly the renewal option is not a material right.

• You disclose that you have a single performance obligation (i.e., computing power or hashrate) for the contract and you contribute hash computation computing power. You told us you believe your performance obligation is based on the speed at which you perform hash computations. Please address the following:

o Clarify for us the nature of the services you provide and tell us whether or not you perform hash calculations for the pool operators. In this regard, we understand that you run software from the pool operator that constructs block header candidates and performs hash computations on behalf of the pool operator.

Response: The Company acknowledges the Staff's comment. We perform hash computations for our pool operator and under Full Pay-per-Share ("FPPS") the Company is compensated for accepted shares that are contributed. In the Company’s prior response letter dated January 24, 2024, the Company described our performance obligation based on the speed at which the hash computations were performed. This description was meant to refer to the "target rate" in which our miners send accepted shares to the mining pool. The FPPS payout calculation will compensate the Company based on accepted shares, and hence only hashrate sent at the target rate are accepted.

o If you do perform hash calculations for the pool operators, tell us whether a more accurate description of your promise and single performance obligation is a service to perform hash calculations for the pool operator, and if so, make corresponding revision to your accounting policy and related disclosures throughout your filing. In this regard, although the payment formula under your contract may refer to speed (i.e., hashrate), payment is based on valid shares submitted which is a proxy for hashes performed over time. We further note that only hashes have value to your customer (either as the solution to the next block or that the individual hash is not the solution), that your contract has no minimum requirements and therefore that your customer effectively contracts for as many hashes as you elect to provide.

Response: The Company acknowledges the Staff's comment. The Company agrees that a more accurate description of our promise and single performance obligation is a service to perform hash calculations (ie. hashrate computation computing power) for the pool operator and will make the appropriate revisions to our accounting policies and related disclosures in future filings.

• With respect to the variability associated with the block reward portion of the consideration receivable, address how the block reward portion of the consideration cannot be reasonably estimated (and should be fully constrained) if network difficulty changes about every two weeks, block rewards change about every four years, and contract duration is less than a day. In this regard, it appears for FPPS contracts that the only variable at contract inception for the block reward portion is the number of hashes you will perform, which is wholly in your control and would appear to be reasonably estimable. Tell us whether it is correct that the uncertainties in the FPPS variables no longer exist at 23:59:59 UTC irrespective of the timing of your receipt of confirmation of the bitcoin you will receive or your actual receipt of such bitcoin.

Response: The Company acknowledges the Staff’s comment and can confirm that it is correct that the uncertainties in the FPPS variables no longer exist at 23:59:59 UTC irrespective of the timing of our receipt of confirmation of the bitcoin we receive. The Company will revise future filings to clarify this fact pattern and remove reference to fully constraining estimates of variable consideration.

• With respect to your disclosure regarding each component of your consideration, since it appears that the total transaction fee is based on only three components (network block subsidies, network transaction fees, and pool operating fees), tell us why you include network difficulty as a component.

Response: The Company acknowledges the Staff’s comment. The network difficulty is a component in step one of our Pay-per-Share ("PPS") calculation in which the Company's accepted shares (hashrate) divided by the network difficulty is multiplied by the total block subsidies. The result of the PPS calculation is multiplied by the FPPS rate to calculate the FPPS payout. Accordingly, network difficulty will ultimately impact the total transaction fees earned, even though it does not impact the FPPS rate.

• Please revise the accounting policy statements that refer to the date "earned" to consider removing that phrase and placing it in a more appropriate context to describe when you measure the noncash consideration and how the measurement date relates to both the date of contract inception and the date you transfer control of the service under the contract.

Response: The Company acknowledges the Staff’s comment and will revise the disclosure in future filings to clarify that the measurement date for noncash consideration is determined at contract inception and the transfer of control of our hashrate to the pool operator.

• In your response you indicate that you measure noncash consideration using the end of the day spot price based on the date where computing power was provided. Additionally, you state that your measurement price may differ from the contract inception price which would occur throughout the day. Please clarify for us whether the date where computing power is provided is the same as the date of contract inception for all contracts each day, noting your conclusion that contracts continuously renew and are less than 24 hours. To the extent these dates are in fact the same, please revise your disclosure to state, if true, that you measure noncash consideration using the end of day spot price on the date of contract inception.

Response: The Company acknowledges the Staff’s comment. The Company can clarify that the date where computing power is provided is the same as the date of contract inception for all contracts each day. Accordingly, the Company will revise our disclosures in future filings, describing that we measure noncash consideration using the end of day spot price on the date of contract inception.

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Please respond to the following: • You disclose that the carrying basis represents the valuation of bitcoin at the time you earn the bitcoin through mining activities. To prevent confusion, please revise future filings to refer to the cost basis of the bitcoin since carrying amount is defined in the FASB Mater Glossary as the amount of an item as displayed in the financial statements. Refer to ASC 350-60-50-1.

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• In future filings, clarify, if true, that the line item Carrying basis - per bitcoin is an average value. • On page F-16, you disclose that the line item Gain on fair value of bitcoin, net includes both unrealized changes in the fair value of your bitcoin from remeasurement and realized gains and losses from sales of bitcoin which are measured as the difference between the cash proceeds and the carrying basis of bitcoin as determined on a FIFO basis. In this note, you disclose that the carrying basis represents the valuation of bitcoin at the time you earn the bitcoin through mining activities. Since your bitcoin are remeasured to fair value, tell us why you calculate realized gains and losses using the value of the bitcoin on the date mined and not the carrying value as included in your statement of financial position. • We note your adoption of ASC 350-60 as of October 1, 2023 and your disclosure of units, cost and fair value per ASC 350-60-50-1 on page F-20. As you adopted this guidance in an interim period, please update your future forms 10-Q in the year of adoption to also include the annual period crypto asset holding disclosures in ASC Topic 350-60-50.

The Company acknowledges the Staff’s comment and will adjust future filings when referring to the cost basis of bitcoin to clearly state "cost basis of bitcoin" rather than carrying amount.

• In future filings, clarify, if true, that the line item Carrying basis - per bitcoin is an average value.

Response: The Company acknowledges the Staff’s comment and can confirm that the line item referring to carrying basis - per bitcoin is the average value, which is the cost basis of all bitcoin divided by the number of bitcoin.

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The Company will clarify this in future filings.

• On page F-16, you disclose that the line item Gain on fair value of bitcoin, net includes both unrealized changes in the fair value of your bitcoin from remeasurement and realized gains and losses from sales of bitcoin which are measured as the difference between the cash proceeds and the carrying basis of bitcoin as determined on a FIFO basis. In this note, you disclose that the carrying basis represents the valuation of bitcoin at the time you earn the bitcoin through mining activities. Since your bitcoin are remeasured to fair value, tell us why you calculate realized gains and losses using the value of the bitcoin on the date mined and not the carrying value as included in your statement of financial position.

Response: The Company acknowledges the Staff’s comment. The Company will clarify in future filings that gains (and losses) from the remeasurement of bitcoin is included within the line item “Gain on Fair Value of Bitcoin, net”. Realized gains (and losses) from bitcoin sales are required only for disclosure and are calculated based on the difference between the cash proceeds and the cost basis of each bitcoin as determined on a FIFO basis. The FASB described the concept of classifying gains and losses from bitcoin in the basis of conclusions #49 included in the Accounting Standards Update No. 2023-08 ("ASC 2023-08") that states:

The total realized gain or loss from disposition is required to be disclosed under the amendments in this Update. Therefore, the Board observed that distinguishing whether gains and losses recognized in a given period are realized or unrealized is unnecessary and could be confusing.

The disclosure guidance within section 350-60-50-4 in ASU 2023-08 requires disclosure annually the "total amount of cumulative realized gains and cumulative realized losses from dispositions that occurred during the period." The Company will enhance its disclosure in its accounting policy in Note 2 Summary of Significant Accounting Policies to clarify that it tracks the cost basis in order to allow the Company to disclose the realized gains and losses on sales of bitcoin since disclosure will be made in the year-end annual financial statements as well as future interim reporting periods in fiscal 2024.

• We note your adoption of ASC 350-60 as of October 1, 2023 and your disclosure of units, cost and fair value per ASC 350-60-50-1 on page F-20. As you adopted this guidance in an interim period, please update your future forms 10-Q in the year of adoption to also include the annual period crypto asset holding disclosures in ASC Topic 350-60-50.

Response: The Company acknowledges the Staff's comment. The Company will disclose in our future Form 10-Q filings the annual bitcoin holding disclosures described in ASC Topic 350-60-50.

Management's Discussion and Analysis of Financial Condition and Results of Operations Company Overview, page 6

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You disclose on page 7 that the carrying value of each bitcoin you held at the end of December 31, 2023 and each subsequent reporting period reflects the price of one bitcoin quoted on the active exchange at the end of the reporting period.

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We note that there is more than one active exchange for bitcoin and you disclose on page F-16 that the fair value of bitcoin is measured using the period-end closing bitcoin price from your principal market, Coinbase. In future filings, please revise your disclosure to be consistent.

The Company acknowledges the Staff’s comment. The Company will clarify throughout future filings that any reference to "active exchange" specifically refers to the Company's principal market, Coinbase. Read in the reply ↗

You disclose that your operating activities from continuing operations for the three months ended December 31, 2023 included operating cash inflows for depreciation and amortization and stock based compensation and cash outflows for bitcoin mining.

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We note that depreciation and amortization, stock based compensation, and bitcoin mining are not cash inflows or outflows but noncash adjustments to reconcile net income to net cash used in operating activities. Please revise your disclosure in future filings to clarify.

The Company acknowledges the Staff’s comment and the Company will revise future disclosure of operating activities from continuing operations appropriately as noncash adjustments to reconcile net income to net cash used in operating activities, specifically for depreciation and amortization, stock based compensation, and bitcoin mining. Read in the reply ↗

You disclose that you account for your bitcoin holdings as indefinite lived intangible assets and record impairment charges whenever the carrying value of bitcoin holdings on the balance sheet exceeds their fair market value. It appears that you did not update the disclosure in this section to reflect your adoption of ASU 2023-08.

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As you adopted this adoption to also include the annual period crypto asset holding disclosures in ASC Topic 350-60-50.

The Company acknowledges the Staff’s comment and will revise Item 3 and elsewhere in future filings for the adoption of the ASU 2023-08 to ensure references to the prior accounting impairment guidance for intangible assets pertaining to crypto assets (within the scope of ASU 2023-08) are no longer applicable. Read in the reply ↗

Refer to your response to comment 1. In future filings, please disclose a breakeven analysis that, along with the energy and hosting costs, includes the mining equipment costs and related financing costs so that investors understand how the cost to mine one bitcoin compares to the value of bitcoin.

The Company will modify the “Analysis of costs to mine one bitcoin” table within Management’s Discussion & Analysis to includes separate line items for both mining equipment costs (miner depreciation) and related miner financing costs. The modifications to the table will be made in future Form 10-Q and Form 10-K filings commencing on the Company’s Quarterly Report on Form 10-Q Ended June 30, 2024. Read in the reply ↗

We acknowledge your response to prior comment 2. In your response, you indicated that you would make certain revisions to your disclosure in future periodic reports. We are unclear how disclosure in your Form 10-Q for the quarterly period ended March 31, 2024 incorporates those changes.

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Please specifically address the following concerning your mining revenue recognition under ASC 606: • Tell us your consideration of disclosing that the services you provide are an output of your ordinary activities. • Since you told us that the option to renew does not represent a material right, tell us your consideration of disclosing that you have determined that the mining pool operator’s (i.e., the customer's) renewal option is not a material right as the terms, conditions, and compensation amounts are at then market rates. • You told us that a more accurate description of your promise and single performance obligation is a service to perform hash calculations for the pool operator. Please revise your disclosure in future filings to describe your performance obligation as such (i.e. the provision of hash calculations). • In your response, you confirmed our understanding that contract duration is for a period of less than 24 hours. However, disclosure in your 10-Q continues to imply contract duration is for a period of one day. For example, on page F-12 of your 10-Q you state “the performance obligation of computing power services is fulfilled over time, as opposed to a point in time, because the Company provides the hash computation computing power throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin.” Additionally, you state on page F-12 “According to the customer contract, daily earnings are calculated from midnight-to-midnight UTC time.” Please advise or revise. • In your response, you confirmed that the company measures noncash consideration received on the date of contract inception. However, it appears based on your disclosure that you measure noncash consideration received at midnight UTC the day after contract inception. Please explain to us how your policy is consistent with the requirement to measure cash consideration on the date of inception, and how you concluded a time on the date of contract inception (e.g. 23:59:59) is not more appropriate. • Based on your response, it appears that network difficulty is a variable that impacts block rewards and transaction fees, and does not on it’s own seem to be a component of the revenue recorded for your bitcoin mining activities. Please revise your disclosure accordingly.

The Company will specifically describe in it the Summary of Significant Accounting Policies that the services we provide are an output of our ordinary activities. We have attached as an Exhibit A to this letter a current draft of our revised disclosure of our Revenue Recognition policy included within the Summary of Significant Accounting Policies, which we believe addresses the comments throughout this question #2.

• Since you told us that the option to renew does not represent a material right, tell us your consideration of disclosing that you have determined that the mining pool

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operator’s (i.e., the customer's) renewal option is not a material right as the terms, conditions, and compensation amounts are at then market rates.

Response: The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. The Company will enhance its disclosure to include reference to such. The proposed language is included in the Exhibit A to this correspondence for your reference.

• You told us that a more accurate description of your promise and single performance obligation is a service to perform hash calculations for the pool operator. Please revise your disclosure in future filings to describe your performance obligation as such (i.e. the provision of hash calculations).

Response: The Company will ensure that future filings are consistent and concise stating that our single performance obligation is a service to perform hash calculations for the pool operator.

• In your response, you confirmed our understanding that contract duration is for a period of less than 24 hours. However, disclosure in your 10-Q continues to imply contract duration is for a period of one day. For example, on page F-12 of your 10-Q you state “the performance obligation of computing power services is fulfilled over time, as opposed to a point in time, because the Company provides the hash computation computing power throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin.” Additionally, you state on page F-12 “According to the customer contract, daily earnings are calculated from midnight-to-midnight UTC time.” Please advise or revise.

Response: The Company will revise the disclosure in future filings to ensure consistent and concise references to contact duration as being a period of less than 24 hours. The proposed language is included in the Exhibit A to this correspondence for your reference.

• In your response, you confirmed that the company measures noncash consideration received on the date of contract inception. However, it appears based on your disclosure that you measure noncash consideration received at midnight UTC the day after contract inception. Please explain to us how your policy is consistent with the requirement to measure cash consideration on the date of inception, and how you concluded a time on the date of contract inception (e.g. 23:59:59) is not more appropriate.

Response: The Company receives non-cash consideration in the form of bitcoin, fair value of which the Company measures at 23:59:59 UTC on the date of contract inception using the Company's principal market for bitcoin. The proposed language clarifying this matter is included in the Exhibit A to this correspondence for your reference.

• Based on your response, it appears that network difficulty is a variable that impacts block rewards and transaction fees, and does not on its own seem to be a component of the revenue recorded for your bitcoin mining activities. Please revise your disclosure accordingly.

Response: The Company can confirm that network difficulty is a variable that impacts block rewards and transaction fees and is not on its own a component of revenue. The Company will revise the disclosure in future filings. The proposed language is included in the Exhibit A to this correspondence for your reference.

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Please tell us in detail how you determined the transaction value for the purchase of CleanSpark, LLC. For purposes of determining the fair value of the common stock and warrants issued as purchase consideration, it appears you may have used bid quotations as reported by the OTCQB.

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Please tell us how you concluded these bid quotations were a reliable indicator of fair value, considering that the quotations don’t necessarily represent actual transactions, the market illiquidity of your shares, the large number of shares issued in the exchange, the value at which you issued shares for cash during the same period and other factors. In addition, please tell us in detail how you determined the fair values of the various tangible and intangible assets acquired in the acquisition. Tell us the evidence that supports the valuations of these assets, including whether independent appraisals were obtained. Please be sure to address how the effect of uncertainty about the future cash flows associated with the assets was included in the fair value measurements. Please refer to ASC 805. Notwithstanding the preceding, please tell us the evidence you considered in concluding that the recorded amounts for the Flexpower system, goodwill and other intangible assets were recoverable and not impaired as of September 30, 2017. In this regard, given your recurring losses and the recurring net cash flows used in operating activities, we are interested to understand how you are nonetheless projecting future cash flows that support the recoverability of over $20 million in recorded assets.

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Please file a consent from your auditor for the use of their audit report. Such consent is required due to incorporation by reference of the Form 10-K into the previously filed Form S-8. Refer to Item 601 of Regulation S-K.

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We have reviewed your response to comment one. For each asset that is at risk of material impairment at the most recent balance sheet date (for example the Flexpower system, goodwill, and other intangibles), we believe MD&A should be revised to:  disclose the extent by which fair value or undiscounted cash flows, as applicable, exceeded carrying value as of the date of the most recent impairment test;  provide a

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description of the methods and key assumptions used to determine the fair value and expected cash flows of the assets and how those key assumptions were determined;  include a discussion of the degree of uncertainty associated with the key assumptions (for example, the valuation model assumes the following contract awards within a designated time frame and growth rates of over 20%); and  include a description of potential events and/or changes in circumstances that could reasonably be expected to negatively affect the key assumptions (for example, if contract discussions with Macerich do not materialize, further asset impairments of what magnitude and in what periods may be recorded). Please confirm you will endeavor to provide disclosures of this nature in future filings, where applicable.

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We note from the disclosure in the above-referenced Form 8-K that you are no longer a shell company and that you have begun conducting operations pursuant to your entry into the Asset and Intellectual Property Purchase Agreement, as disclosed under Item 1.01. Please amend your filing to provide the disclosure required by Item 2.01 of Form 8-K with respect to this transaction.

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We specifically highlight the disclosure required by Item 2.01(f) of Form 8-K, which requires disclosure of the information that would be required if you were filing a registration statement on Form 10.

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