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viewCleanspark, Inc.

CleanSpark software helping companies become more energy efficient

Snapshot

The company's services include intelligent energy monitoring and controls as well as micro-grid design and engineering, consulting and turn-key implementation services

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Quick facts: Cleanspark, Inc.

Price: 4.92 USD

OTCQB:CLSK
Market: OTCQB
Market Cap: $23.5 m
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  • Develops energy-control software and builds microgrids
  • Expanding into global markets and cannabis sector
  • Flushed with backlog under contract of $6 million

What CleanSpark does: 

CleanSpark Inc (OTCMKTS:CLSK), based in Bountiful, Utah, develops software to help companies become more energy efficient. 

The company also designs and builds microgrids while providing engineering, consulting and turn-key implementation services. It also offers software for energy monitoring and system controls. 

CleanSpark's software -- mPluse and mVSO (Microgrid Value Stream Optimizer) -- enables a microgrid to be scaled to the user's specific needs and can be used by agricultural, commercial, industrial enterprises as well as the military and municipal governments. Customers include not only energy consumers but independent power producers (renewable energy) and energy-storage vendors.

The company, founded in 1987, runs on a software-as-a-service (SaaS) distribution model. CleanSpark’s mPulse software and control suite operates on-site in real-time, providing economic dispatch controls to maximize performance and resiliency operations to back-up critical energy loads in the event of a utility disruption.

The company says its software is ideally suited for the rapidly expanding distributed energy resource (DER) market, which it has been targeting as a key revenue generator.  

The global energy infrastructure is ageing and unreliable due to increases in loads and lack of new large-scale generation facilities (nuclear and coal). Meanwhile, renewable energy resources like solar, batteries, fuel cells and clean-energy generators are connecting to the grid, sometimes intermittently, stressing it and making it more complex to manage.

But, at the same time, consumers such as defense installations, industrial complexes and campuses across the world are turning to virtual power plants and microgrids to decrease their reliance on the grid to tap directly into renewable energy providers and to strengthen their own energy security against blackouts. In a sense, these consumers become their very own utilities.  

As a result, CleanSpark’s mPluse and mVSO software and control solutions are designed to provide these consumers of all sizes with the mission-critical technologies that can help integrate and operate DERs as reliable energy generators on the grid. 

For those consumers who get energy off the main power grid, the company’s technology helps them modernize their own distribution microgrids while replacing fossil fuel generation with clean-energy suppliers. CleanSpark’s microgrids monitor energy rates continuously in 15-minute cycles, tapping the least expensive source.

How the company is doing:

For its latest sales success, in November CleanSpark struck a 10-year exclusive contract to supply San Diego-based International Land Alliance Inc (OTCMKTS:ILAL) with its energy software solutions.

The company will provide the firm with its mVSO software services and integrate its mPULSE software for energy projects at any of ILAL’s commercial, residential, agricultural and vacation properties. Depending on the size and scope of each deployment, the company expects revenue ranging from about $2,000 to more than $100,000 per property.

The company, in the meantime, has been targeting international markets.

Most recently, CleanSpark won a $627,000 contract to provide software control and energy storage to support an industrial manufacturing facility in San Jose, Costa Rica. The company will integrate battery storage with a photovoltaic system, all driven by the company’s mPulse software.

In Brazil, the company has formed a partnership with ESS Inc, which will use its mVSO software to developed electricity-generating iron-flow batteries and tailor them to local markets. In Mexico, CleanSpark is teaming up with a multinational utility provider interested in cross-border power-trading opportunities. 

The company is also taking advantage of opportunities in the cannabis space. Cultivation and production facilities in the US and Canada consume enormous loads of energy -- and CleanSpark believes its energy software and control solutions can help cannabis companies lower their energy costs significantly.  

Recently it was tasked with developing an independent power system for an indoor, controlled distribution facility in California. The company’s mVSO software was used to determine appropriate energy consumption. And the company has executed partner referral agreements with two strategic cannabis partners in Canada and Colorado. 

As for its finances, sales have been growing steadily since last year, with a backlog under contract of $5.95 million as of August.  

CleanSpark reported sales for the three months ended September 30 in excess of $2.1 million, compared with sales of $1.2 million during the prior three months. Sales were $990,000 as of March 31 and $260,000 for the three months ended December 31, 2018. 

In itsw latest move, the company’s board and federal regulators have approved a 1-for-10 reverse stock split. With the reverse split a success, the company believes it will meet the final requirements for listing its stock on the technology-laden Nasdaq. CleanSpark's stock trades around $0.65 a share in New York.

Inflection points:

  • Uplist to the Nasdaq
  • Expand further into international markets
  • Transitioning from sales development to execution and growth
  • Execute additional partnership referral agreements with cannabis partners

What the boss says:

“We have elected to effectuate a reverse stock split to allow CleanSpark to meet the listing requirements of The Nasdaq Capital Market,” said CEO Zach Bradford.

“Our plan to move to a national exchange reflects our recent success and momentum in growing our energy software and SaaS solutions for applications in the growing distributed energy generation market. We believe that listing on Nasdaq should help broaden our shareholder base, increase appeal to institutional investors and provide shareholders with better liquidity.”

What the broker says:

In October, HC Wainwright & Co repeated a Buy rating and a $4 price target on CleanSpark based on new management appointments and the company’s commitment to its business strategy.

Its analyst cheered the company just a day after Matt Schultz moved from the CEO post to become board chairman, as Zach Bradford stepped up from CFO to take over the chief executive mantle. Lori Love took over the CFO role, among other management changes. 

“In our opinion, the management team’s focus is likely to remain on achieving profitability and on continued commercialization of CleanSpark’s energy intelligence solutions,” analysts wrote.

“We continue to believe that the continued drop in renewable power generation prices and storage costs are providing a significant draw for the adoption of distributed power generation and microgrid solutions, which in turn are spurring demand for software and control solutions that manage local energy infrastructure, consumption, and costs. CleanSpark’s solutions are well-positioned to capitalize on this trend.” 

The Wainwright analysts said they estimate CleanSpark’s revenues from project development, project sale, and energy savings contracts will come in around $9.5 million in fiscal year 2020 and grow to over $90 million in FY2025. 

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CleanSpark helps clients keep the lights on with its energy integration tech

CleanSpark Inc (OTCQB:CLSK) CEO Matt Schultz talks with Proactive Investors' Steve Darling at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. CleanSpark develops software to help companies become more energy efficient. The company's services include intelligent...

on 06/05/2019

6 min read