TeraWulf Announces Beneficial Debt Modifications and Approximately $32 Million of New Equity Proceeds

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.