![]() During due diligence, the company received another structured-debt offer from a ‘private funding partner’ where funding would be offered for projects and allow management to remain in control of the company. The first offer from Edison on Octowas just for the software, meaning that construction management wouldn’t be required to stay on at the business. In late 2015, the company received two offers – one from Edison, and another from an unnamed renewables funding partner. In 2015, the firm got itself into financial trouble. The team grew, and at one point was as big as ~20-30 people. The software was deployed in late 2014 and was a success – it got a lot of good press. They then hired software brains to help build the product - Art Villanueva and Jennifer Worral. įour guys from Harper Construction, who I understand to be Mike Firenze, Bryan Huber, Anthony Vastola and Kevin Pattee, started the business. Cleanspark was essentially born out of a grant given by the US Navy base to erect a microgrid at the Camp Pendleton base in California circa 2013 - see here. Cleanspark’s product was a SCADA-based energy management software that ran a micro-grid, and was supposedly reasonably sophisticated for its time. CleanSpark was subcontracted to provided design, development, integration, and installation services for the FractalGrid. ![]() According to the company’s first 10-k, in 2013, Harper Construction Services was awarded a contract to support a microgrid technology demonstration project. The details on the founding of the company are a little shaky. I soon realised that this ‘company’ had some. After I read the report, I went back and dug a little bit more. ![]() I conversed with one of the guys there once (I have no idea who they are), and they are a really smart bunch.Ĭulper did some really good work, but they didn’t have the smoking gun. They do great work and have a strong track-record. If you guys don’t know Culper, go check them out. Then Culper Research wrote-up a short-report on the company. It was expensive and loss-making, so I just decided to move on. I didn’t really know what a microgrid was or how the company made money, but whatever - it’s the military, maybe I’m not supposed to understand it. I couldn’t find out anything about it online other than a few old press articles stating that the company had won some contracts with the military, so I figured it was legit. It claimed to be a leading “MicroGrid” company but barely had any revenues and was burning cash. I don’t want to put my work behind a paywall, but if I can’t pay the bills, I might have to.Īt some point in late-2020, I stumbled across this company called Cleanspark. I have a couple of really great write-ups coming soon. If nothing, I hope that this is a lesson in the importance of doing proper due-diligence.Īlso, quickly, if you enjoy my work, please consider donating. In this new-age world of twitter hot-takes, newsletter stock write-ups (ironically, like this one), over-reliance on management conferences, expert calls, podcasts and technologies like factset which kick-out adjusted past-financials, I have come to the conclusion that most people really don’t read filings or accounts anymore. I actually hope for their retail shareholders’ sake that their bitcoin mining operations work out. This was an exhausting, multi-month long process of relentless digging. However, I wanted to release this work as I think some may find it interesting. I don’t really understand the Bitcoin Mining business and don’t think there is enough juice to warrant spending my time trying to understand it. It has already by-and-large collapsed and since I exited the position, the company has shifted towards Bitcoin Mining. ![]() Unlike other stocks I post about, I’m not short Cleanspark.
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