TeraWulf Announces Beneficial Debt Modifications and Approximately $32 Million of New Equity Proceeds
February 02 2023 - 8:42AM
Business Wire
Deal will Eliminate principal payments and
defer amortization to April 2024 with ability to extend to
maturity.
Company expects to be fully funded to positive
free cash flow from bitcoin mining operations in Q2 2023.
Advances industry leading growth rate to
achieve targeted 160 MW and 5.5 EH of capacity in Q2 2023.
TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”),
which owns and operates vertically integrated, domestic Bitcoin
mining facilities powered by more than 91% zero-carbon energy,
today announced that it has (i) reached a binding agreement in
principle with its existing lenders on certain debt modifications,
subject to the equity capital raise condition, and (ii) raised
approximately $32 million of equity proceeds, which together are
expected to bring the Company to positive free cash flow and enable
a timely path to achieving the Company’s operational objectives in
2023.
Recent Developments Greatly Enhance Financial Position and
Operating Leverage
- Beneficial Debt Restructuring: On January 27, 2023, the
Company entered into a binding term sheet with its existing lenders
that will, among other things, replace amortization of the term
loan with a free cash flow sweep mechanism through April 2024,
subject to the Company raising the requisite amount of equity
proceeds by March 15, 2023.
- Public Equity Offering: today, the Company announced the
pricing of an underwritten follow-on offering of common stock (the
“Offering”) for gross proceeds of $25 million, before deducting
underwriter discounts and commissions and offering expenses. The
Offering is expected to close on or about February 6, 2023, subject
to the satisfaction of customary closing conditions.
- Management Investment: today, TeraWulf also announced
that its co-founders, Paul Prager, Chief Executive Officer, and
Nazar Khan, Chief Operating Officer, purchased $2.5 million in a
private placement at a market price of $1.05 per share (the last
reported sale price of the Company’s common stock on the Nasdaq on
January 26, 2023). The Management Investment is in addition to the
more than $15 million of personal capital previously invested in
the Company by management.
- Other Equity Proceeds: the Company announced it has
received approximately $4.25 million in proceeds from the exercise
of certain private placement warrants issued in December 2022 and a
non-brokered private placement of equity securities on terms
substantially similar to the Offering.
The Company intends to use net equity proceeds to complete
buildout of the Lake Mariner and Nautilus facilities and for
general corporate purposes, which may include working capital. The
net equity proceeds, together with the expected proceeds from the
exercise of the underwriters’ option to purchase additional shares,
are expected to fulfill requirements of the beneficial debt
restructuring. Additionally, in order to facilitate the Offering,
management exchanged 12 million shares of common stock for warrants
that will be immediately exercised upon stockholder approval of the
increase in the Company’s authorized common stock.
JonesTrading Institutional Services LLC acted as the sole
book-running manager for the Public Offering. Additional
information regarding the transactions is provided in the Company’s
Current Report on Form 8-K filed on February 1, 2023 with the
Securities and Exchange Commission.
Management Commentary
"We reached two transformational milestones already in 2023 – an
agreement in principle for restructuring our debt to more
effectively align with our operational buildout and market
dynamics, and securing additional capital to achieve positive
operating cash flow and EBITDA,” said Paul Prager. “In reaching
these achievements, we believe more than ever that TeraWulf is
positioned to deliver profitable growth and compelling returns. We
are confident in our ability to raise additional funds needed to
obtain debt relief and committed to creating shareholder
value.”
Patrick Fleury, Chief Financial Officer of TeraWulf, added,
“Flexibility is a key attribute of any business, and we believe
these modified repayment terms should further differentiate
TeraWulf as the preeminent vertically integrated, lowest-cost, and
zero carbon bitcoin miner.”
About TeraWulf
TeraWulf (Nasdaq: WULF) owns and operates vertically integrated,
environmentally clean Bitcoin mining facilities in the United
States. Led by an experienced group of energy entrepreneurs, the
Company is currently operating and/or completing construction of
two mining facilities: Lake Mariner in New York, and Nautilus
Cryptomine in Pennsylvania. TeraWulf generates domestically
produced Bitcoin powered by 91% nuclear, hydro, and solar energy
with a goal of utilizing 100% zero-carbon energy. With a core focus
on ESG that ties directly to its business success, TeraWulf expects
to offer attractive mining economics at an industrial scale.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, as amended. Such
forward-looking statements include statements concerning
anticipated future events and expectations that are not historical
facts. All statements, other than statements of historical fact,
are statements that could be deemed forward-looking statements. In
addition, forward-looking statements are typically identified by
words such as “plan,” “believe,” “goal,” “target,” “aim,” “expect,”
“anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” “continue,” “could,” “may,” “might,” “possible,”
“potential,” “predict,” “should,” “would” and other similar words
and expressions, although the absence of these words or expressions
does not mean that a statement is not forward-looking.
Forward-looking statements are based on the current expectations
and beliefs of TeraWulf’s management and are inherently subject to
a number of factors, risks, uncertainties and assumptions and their
potential effects. There can be no assurance that future
developments will be those that have been anticipated. Actual
results may vary materially from those expressed or implied by
forward-looking statements based on a number of factors, risks,
uncertainties and assumptions, including, among others: (1)
conditions in the cryptocurrency mining industry, including
fluctuation in the market pricing of Bitcoin and other
cryptocurrencies, and the economics of cryptocurrency mining,
including as to variables or factors affecting the cost, efficiency
and profitability of cryptocurrency mining; (2) competition among
the various providers of cryptocurrency mining services; (3)
changes in applicable laws, regulations and/or permits affecting
TeraWulf’s operations or the industries in which it operates,
including regulation regarding power generation, cryptocurrency
usage and/or cryptocurrency mining; (4) the ability to implement
certain business objectives and to timely and cost-effectively
execute integrated projects; (5) failure to obtain adequate
financing on a timely basis and/or on acceptable terms with regard
to growth strategies or operations; (6) loss of public confidence
in Bitcoin or other cryptocurrencies and the potential for
cryptocurrency market manipulation; (7) the potential of
cybercrime, money-laundering, malware infections and phishing
and/or loss and interference as a result of equipment malfunction
or break-down, physical disaster, data security breach, computer
malfunction or sabotage (and the costs associated with any of the
foregoing); (8) the availability, delivery schedule and cost of
equipment necessary to maintain and grow the business and
operations of TeraWulf, including mining equipment and
infrastructure equipment meeting the technical or other
specifications required to achieve its growth strategy; (9)
employment workforce factors, including the loss of key employees;
(10) litigation relating to TeraWulf, RM 101 f/k/a IKONICS
Corporation and/or the business combination; (11) the ability to
recognize the anticipated objectives and benefits of the business
combination; and (12) other risks and uncertainties detailed from
time to time in the Company’s filings with the Securities and
Exchange Commission (“SEC”). Potential investors, stockholders and
other readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on
which they were made. TeraWulf does not assume any obligation to
publicly update any forward-looking statement after it was made,
whether as a result of new information, future events or otherwise,
except as required by law or regulation. Investors are referred to
the full discussion of risks and uncertainties associated with
forward-looking statements and the discussion of risk factors
contained in the Company’s filings with the SEC, which are
available at www.sec.gov.
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version on businesswire.com: https://www.businesswire.com/news/home/20230201006127/en/
Sandy Harrison harrison@terawulf.com (410) 770-9500
TeraWulf (NASDAQ:WULF)
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