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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 8, 2022

 

TERAWULF INC.
(Exact name of registrant as specified in its charter)

 

 

 

Delaware

001-41163

85-1909475

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

9 Federal Street

Easton, Maryland 21601

(Address of principal executive offices) (Zip Code)

 

(410) 770-9500

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.001 par value per share

 

WULF

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 1.01.

Entry into a Material Definitive Agreement.

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On December 8, 2022, Lake Mariner Data LLC (“Lake Mariner”), a subsidiary of TeraWulf Inc. (the “Company”) entered into a future sales and purchase agreement (the “Agreement”) with Bitmain Development PTE. Ltd. (“Bitmain”). The Agreement provides that Lake Mariner will receive 14,000 S19j Pro miners from Bitmain for delivery in Q1 2023 for a total purchase price of $22.4 million, which the Company will pay for using its remaining unused deposits with Bitmain at no additional cost to the Company. The Agreement contains customary representations, warranties, covenants and agreements of the Company and Bitmain and is subject to customary closing conditions and termination rights.

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Item 7.01.

Regulation FD Disclosure.

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A copy of the Company’s Investor Presentation is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

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The information contained in this Item 7.01 as well as in Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended or the Exchange Act.

  

Item 9.01.

Financial Statements and Exhibits.

 

(d) Exhibits.

Exhibit No.

Description

99.1

Investor Presentation, December 2022.

104.1

Cover Page Interactive Data File (embedded within the inline XBRL document).

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Forward Looking Statements

 

This Current Report on Form 8-K 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 data 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 data 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; (12) the timely transition of the CFO role; and (13) 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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SIGNATURES

  

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

 

TERAWULF INC.

 

 

 

 

By:

 

/s/ Patrick A. Fleury

 

Name:

 

Patrick A. Fleury

 

Title:

 

Chief Financial Officer

 

Dated: December 9, 2022

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Exhibit 99.1

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1 Investor PresentationDecember 2022An Infrastructure-Focused Mining Company

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SAFE HARBOR STATEMENT Thispresentationisforinformationalpurposesonlyandcontainsforward-lookingstatementswithinthemeaningofthe"safeharbor"provisionsofthePrivateSecuritiesLitigationReformActof1995,asamended.Suchforward-lookingstatementsincludestatementsconcerninganticipatedfutureeventsandexpectationsthatarenothistoricalfacts.Allstatements,otherthanstatementsofhistoricalfact,arestatementsthatcouldbedeemedforward-lookingstatements.Inaddition,forward-lookingstatementsaretypicallyidentifiedbywordssuchas"plan,""believe,""goal,""target,""aim,""expect,""anticipate,""intend,""outlook,""estimate,""forecast,""project,""continue,""could,""may,""might,""possible,""potential,""predict,""should,""would"andothersimilarwordsandexpressions,althoughtheabsenceofthesewordsorexpressionsdoesnotmeanthatastatementisnotforward-looking.Forward-lookingstatementsarebasedonthecurrentexpectationsandbeliefsofTeraWulf'smanagementandareinherentlysubjecttoanumberoffactors,risks,uncertaintiesandassumptionsandtheirpotentialeffects.Therecanbenoassurancethatfuturedevelopmentswillbethosethathavebeenanticipated.Actualresultsmayvarymateriallyfromthoseexpressedorimpliedbyforward-lookingstatementsbasedonanumberoffactors,risks,uncertaintiesandassumptions,including,amongothers:(1)conditionsinthecryptocurrencyminingindustry,includingfluctuationinthemarketpricingofbitcoinandothercryptocurrencies,andtheeconomicsofcryptocurrencymining,includingastovariablesorfactorsaffectingthecost,efficiencyandprofitabilityofcryptocurrencymining;(2)competitionamongthevariousprovidersofdataminingservices;(3)changesinapplicablelaws,regulationsand/orpermitsaffectingTeraWulf'soperationsortheindustriesinwhichitoperates,includingregulationregardingpowergeneration,cryptocurrencyusageand/orcryptocurrencymining;(4)theabilitytoimplementcertainbusinessobjectivesandtotimelyandcost-effectivelyexecuteintegratedprojects;(5)failuretoobtainadequatefinancingonatimelybasisand/oronacceptabletermswithregardtogrowthstrategiesoroperations;(6)lossofpublicconfidenceinbitcoinorothercryptocurrenciesandthepotentialforcryptocurrencymarketmanipulation;(7)thepotentialofcybercrime,money-laundering,malwareinfectionsandphishingand/orlossandinterferenceasaresultofequipmentmalfunctionorbreak-down,physicaldisaster,datasecuritybreach,computermalfunctionorsabotage(andthe costsassociatedwithanyoftheforegoing);(8)theavailability,deliveryscheduleandcostofequipmentnecessarytomaintainandgrowthebusinessandoperationsofTeraWulf,includingminingequipmentandequipmentmeetingthetechnicalorotherspecificationsrequiredtoachieveitsgrowthstrategy;(9)employmentworkforcefactors,includingthelossofkeyemployees;(10)litigationrelatingtoTeraWulf,RM101f/k/aIKONICSCorporationand/orthebusinesscombination;(11)theabilitytorecognizetheanticipatedobjectivesandbenefitsofthebusinesscombination;and(12)otherrisksanduncertaintiesdetailedfromtimetotimeintheCompany'sfilingswiththeSecuritiesandExchangeCommission("SEC").Potentialinvestors,stockholdersandotherreadersarecautionednottoplaceunduerelianceontheseforward-lookingstatements,whichspeakonlyasofthedateonwhichtheyweremade.TeraWulfdoesnotassumeanyobligationtopubliclyupdateanyforward-lookingstatementafteritwasmade,whetherasaresultofnewinformation,futureeventsorotherwise,exceptasrequiredbylaworregulation.Investorsarereferredtothefulldiscussionofrisksanduncertaintiesassociatedwithforward-lookingstatementsandthediscussionofriskfactorscontainedintheCompany'sfilingswiththeSEC,whichareavailableatwww.sec.gov.

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TeraWulf at a Glance 3•Current hash rate of 2.0 EH/s with ~17,500 miners deployed–~11,000 self miners (1.3 EH/s) and ~6,500 (0.7 EH/s) hosted miners–Short-term hosting leverages available plugs pending Q1 2023 miner deliveries•160 MW of mining infrastructure expected to be fully utilized in Q1 2023–Capacity of 49,000 miners (5.54 EH/s), including 44,000 self miners (5 EH/s)–All miners fully procured with no additional payment obligations–Recently added 8,200 S19j Pro miners at no additional cost to the Company•Industry leading power cost averaging $0.035/kWh across two sites–50 MW of fixed priced power at $0.020/kWh for five years at the Nautilus facility–Average market cost of $0.045/kWh at the Lake Mariner facility–Translates into an all-in power cost per coin mined of ~$6,000 / Bitcoin•Ability to expand by an incremental 130 MW at existing sites –Lake Mariner: 80 MW with new Building 3 (50 MW) and warehouse (30 MW)–Nautilus: 50 MW optional expansion retained by WULF Key MetricsQ3 ‘22Oct. ‘22Nov. ‘22Bitcoin (Self Mined)117119134Revenue (Self-Mined)$2.4 M$2.3 M$2.4 MRevenue per Bitcoin$20,657$19,646$17,617Power Cost per Bitcoin$20,732$11,060$6,151Self-mined Bitcoin produced in October and November 2022 was more than double amount self-mined in Q3 2022

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Why WULF Wins: The Four “P’s” Experienced Energy EntrepreneursPower & InfrastructureExpertsESG Principled and PracticedDriving the Future of Bitcoin Mining4 PeoplePrioritiesDigital Asset Infrastructure FirstFoundation to Scale Plugs Sustainable, Scalable FacilitiesKey Relationships & Site ControlPower

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Plugs: Sustainable and Scalable Sites130 MWAdditional capacity option in 2023> 91%Zero-carbon power supply today, with goal of achieving 100%3.5 ¢ Per kilowatt hour targeted average power cost5 91%+ Zero Carbon (1)110 MW Online in Q1 2023500+ MW Hydro, Solar 100% Zero Carbon50 MW Online in Q1 2023100+ MW (2)Nuclear (1)Source: NYISO Power Trends 2022 report (https://www.nyiso.com/power-trends).(2)Reflects TeraWulf’s current 50-MW interest in the Nautilus Cryptomine facility and option to expand by 50 MW. 160 MWAnticipated fully developed capacity in Q1 2023

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Power: Industry-Leading Cost ProfileNote: future estimates are based on current expectations and market conditions and are subject to change.* 2022 data includes January through September. $0.032 $0.025 $0.017 $0.031 $0.061 $0.076 $0.089 $0.045 $0.039 0.000.01 0.020.030.04 0.05 0.060.070.080.090.1020182019202020212022*2Q223Q222023E2024E Lake Mariner Power Cost $/kWh NYISO - Zone A LMD LMD Projected Power CostTargeted average power cost of 3.5 cents per kilowatt hour6 11050Capacity (MW) LMD Nautilus $0.045 $0.02 Power Cost ($/kWh) LMD Nautilus $0.035 per kWhBlended Power Cost •NYISO Zone A prices unusually high during Q2 and Q3 2022•Adversely impacted by elevated gas prices, regional transmission outages, weather events, and supply constraints due to pandemic and war in Ukraine•Lake Mariner transitioned to NYPA’s HLF-1tariff in August 2022, which includes a meaningful discount on transmission charges•Future power prices expected to be in line with historical averageLake Mariner Avg Power Cost = $0.045 per kWh

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People: Best-in-Class Management TeamLed by an accomplished, diverse management team with 30+ years of experience in developing and managing energy infrastructureand disruptive technology N A Z A R K H A NCo-Founder, Chief Operating Officer & Chief Technology Officer20+ years in energy infrastructure and cryptocurrency mining.​ Previously at Evercore. K E R R I L A N G L A I S Chief Strategy Officer20+ years of M&A, financing, strategy, and power sector experience​. Previously at Goldman Sachs.S E A N F A R RE L LVP, Operations12+ years of energy experience in renewables, grid optimization, digitalization, and storage solutions. Previously at Siemens Energy.P A U L P R A G E R​Co-Founder, Chairman & Chief Executive Officer​30+ year energy infrastructure entrepreneur. USNA Foundation Investment Committee Trustee.P A T R I C K F L E U R Y Chief Financial Officer20+ years of financial experience in the energy, power, and commodity sectors.​ Previously at Platinum Equity and Blackstone.S T E F A N I E F L E I S C H M A N NGeneral CounselGeneral Counsel for 15+ years overseeing all legal and compliance matters​. Previously at Paul, Weiss.7

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MissionTo be the premier U.S. based, large-scale, zero-carbonbitcoin miner,generating attractive investorreturnswhile providingsustainable benefits forourcommunities. Experienced Energy EntrepreneursInfrastructure First​Scalable and FlexibleTransparent Governance ​Business Integrity​Responsible Energy SourcingZero-Carbon Energy​Flexible Baseload​Environmental StewardshipCore ValuesESG is at the core of TeraWulf's corporate strategy and ties directly to its business success, risk mitigation, and reputational value.8 WULF’sPriorities:

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Total CapacitySelf-MiningOperationalSelf-MiningProcured (3)Short-TermHosting (4)OpenCapacityLake Mariner (1)(110 MW)34,000 miners11,000 miners1.3 EH/s18,000 miners2.0 EH/s5,000 miners0.5 EH/sN/ANautilus (2)(50 MW)15,000 minersN/A15,000 miners1.6 EH/sN/AN/A49,000 miners11,0001.3 EH/s33,000 miners3.7 EH/s5,000 miners0.5 EH/sN/A Efficiently Scaling Self-Mining Operations(1)Includes hashing capacity of Building 2 (50 MW) at the Lake Mariner Facility, which is expected to be energized in Q1 2023.(2)Reflects TeraWulf’s25% interest in the Nautilus Cryptominefacility, which is expected to be energized in Q1 2023.(3)Includes miners that have been delivered to site and those pending delivery in Q1 2023.(4)Includes 5,000-miner hosting agreement that terminates in Q4 2023. Excludes 1,500-miner hosting agreement which terminates in February 2023.9Fully utilizing 160 MW of mining infrastructure capacity available in Q1 2023

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Projected Hash GrowthNote: future estimates are based on current expectations and market conditions. (1)Includes1,500-miner hosting agreement which terminates in February 2023 and 5,000-miner hosting agreement that terminates in Q4 2023. (2)Optional Buildout reflects 130 MW expansion at current sites, which is subject to market conditions. Hash rate for Optional Buildout reflects a blend of 100 TH/s and 140 TH/s miners. Opportunity to expand hash rate capacity at existing sites to 10.5 EH/s 1.01.44.85.00.70.70.70.50.02.04.06.0 8.010.0 12.0 Q3 2022Q4 2022Q1 2023FY 2023 Hash Rate Capacity (EH/s) Self-Mining Hosting Optional Buildout101.7 EH/s2.1 EH/s5.5 EH/s10.5 EH/s Opportunity to add 5 EH/s in 2023 at existing sites Projecting 3x hash rate growth within 6 months(1)(2)

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Illustrative Annual Gross Margin(1)Period Ending Bitcoin Price calculated by linearly decreasing/increasing the starting Bitcoin price of $17,000 on December 31, 2022.(2)Period Ending Network Hash Rate calculated by linearly increasing the starting network hash rate of 250 EH/s on December 31, 2022. Low production cost provides downside protection, while maximizing upside Illustrative Annual Gross Margin ($ millions) Period Ending Bitcoin Price (1)$15,000 $25,000 $35,000 $45,000 $55,000 $65,000 $75,000 Period Ending Network Hash Rate (EH/s) (2) 200$76 $116 $155 $195 $235 $274 $314 225$70 $106 $143 $180 $216 $253 $290 250$64 $98 $132 $167 $201 $235 $269 275$59 $91 $123 $155 $187 $219 $251 300$54 $85 $115 $145 $175 $206 $236 325$51 $79 $108 $136 $165 $193 $222 350$47 $74 $101 $128 $155 $183 $210 $0-$100 M $100-$200 M >$200 MLegend Key AssumptionsStarting Network Hash Rate:250 EH/sStarting Bitcoin Price:$17,000Self-Mining Capacity:44,000 (5.0 EH/s)Hosted-Mining Capacity:5,000 (0.5 EH/s)Miner Availability:98.5%Avg. Realized Power Cost:$0.035 / kWhHost Economics:•Pass through of power cost•$5/MWh service fee•15% profit share

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Cost Saving Initiative UnderwayTargeting 25%+ in run-rate savings in the next 12 months Corporate OverheadSite CostsInsuranceThird Party Services(1)Targeted Savings Categories(1) Includes suspension of cash compensation to Chief Executive Officer and Chief Operating Officer. 12 Target Annual Fixed CostsOperating Expenses$14 -16 millionSG&A Expenses $21 -29 million

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Emerging Leader in Digital Asset Infrastructure•Best-in-class Bitcoin mining due to low-cost, sustainable, and domestic bitcoin mining at industrial scale targeting zero-carbon energy leveraging nuclear, hydro, and solar resources•Vertically integrated, infrastructure first strategy ensures ability to create and take advantage of digital asset infrastructure•Experienced team with decades of energy infrastructure experienceand a model for sustainable, large-scale bitcoin mining•Core ESG focusdifferentiates TeraWulf and contributes to the acceleration of the transition to a more resilient, stable energy grid•Peer leading power supply economics with a comprehensive and compelling business outlook13

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SITE UPDATES

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Lake Mariner Data (NY) 15 (1)Includes1,500-miner hosting agreement that terminates in February 2023 and 5,000-miner hosting agreement that terminates in Q4 2023. Location:Barker, NYOwnership:100%Site Control:Long-term leaseInfra. Capacity:500 MW site potentialPower Source:91%+ hydroDeployment:•60 MW operational•50 MW under construction, expected online Q1 2023•80 MW expansion potential in 2023Proprietary Miners:•20,000 BitmainS19 J-Pros•9,000 Bitmain S19 XPsHosted Miners (1):•6,500 BitmainS19 J-Pros

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Nautilus Cryptomine (PA) 16 Location:Berwick, PAOwnership:25% (JV with Talen)Site Control:Long-term leaseInfra. Capacity(1):•50 MW targeted online Q1 2023•50 MW optional expansionPower Source:Nuclear powerDeployment:Completing construction; anticipated online Q1 2023Proprietary Miners:•7,100 BitmainS19 J-Pros •3,400 Bitmain S19 XPs•4,500 Minerva MV7s (1)Reflects 25% net interest in Nautilus Cryptomine joint venture.

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NASDAQ: WULFContact:​ir@terawulf.com​www.TeraWulf.com/contact