# EDGAR Filing Document

**Accession Number:** 0001083301
**File Stem:** 0001157523-23-000501
**Filing Date:** 2023-3
**Character Count:** 33950
**Document Hash:** b177eb1ac785a624fb671180c6d88c1a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001157523-23-000501.hdr.sgml**: 20230330

**ACCESSION NUMBER**: 0001157523-23-000501

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230330

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230330

**DATE AS OF CHANGE**: 20230330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TERAWULF INC.
- **CENTRAL INDEX KEY:** 0001083301
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
- **IRS NUMBER:** 871909475
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41163
- **FILM NUMBER:** 23781111

**BUSINESS ADDRESS:**
- **STREET 1:** 9 FEDERAL STREET
- **CITY:** EASTON
- **STATE:** MD
- **ZIP:** 21601
- **BUSINESS PHONE:** (410) 770-9500

**MAIL ADDRESS:**
- **STREET 1:** 9 FEDERAL STREET
- **CITY:** EASTON
- **STATE:** MD
- **ZIP:** 21601

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** IKONICS CORP
- **DATE OF NAME CHANGE:** 20021216

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHROMALINE CORP
- **DATE OF NAME CHANGE:** 19990405

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

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#### 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)**: **March 30, 2023**

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

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| | | |
|:---|:---|:---|
| **Delaware**<br>| **001-41163**<br>| **85-1909475**<br>|
| (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)

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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:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, $0.001 par value per share<br>| WULF<br>| The Nasdaq Stock Market LLC<br>|

---

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 2.02.** | **Results of Operations and Financial Condition.** |

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On March 30, 2023, TeraWulf Inc. (the "Company") issued a press release (the "Press Release") announcing its results for the fiscal quarter and fiscal year ended December 31, 2022 and an update to its productions and operations. The Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 2.02 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.

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| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits.** |

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| | |
|:---|:---|
| **<u>Exhibit No.</u>** | **<u>Description</u>** |
| [99.1](a53371388ex99_1.htm) | [Press Release, dated March 30, 2023.](a53371388ex99_1.htm) |
| 104.1 | Cover Page Interactive Data File (embedded within the inline XBRL document). |

---

#### 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; 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.

------

#### 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.** | **TERAWULF INC.** |
| By: | /s/ Patrick A. Fleury |
| Name: | Patrick A. Fleury |
| Title: | Chief Financial Officer |

---

Dated: March 30, 2023

## Exhibit 99.1

**Exhibit 99.1**<br>

**** 

<br> # **TeraWulf Reports Fourth Quarter and Full Year 2022 Results and Provides Operational Update** 
 ***Built 110 MW of mining infrastructure, with another 50 MW targeted in Q2 2023.*** 

 ***Exited 2022 with 18,000 deployed miners with 2.0 EH/s of hash rate capacity.*** 

 ***Self-mined 524 Bitcoin in 2022 and 810 Bitcoin since inception through February 2023.*** 

 ***Expects to nearly triple hash rate to 5.5 EH/s and 160 MW at existing sites in Q2 2023.*** 

 ***Reiterates targeted blended cost of power of $0.035 per kilowatt hour across its two sites.*** 

 **Full Year 2022 and Recent Operational and Financial Highlights**

* Generated revenue of $15.0 million and self-mined 524 Bitcoin in 2022. 

* Commenced mining at the Company's wholly owned Lake Mariner facility in March 2022, with operational capacity of 60 MW and a fleet of 18,000 miners, comprised of 13,000 self-miners and 5,000 hosted miners, as of February 28, 2023. 

 MW and a fleet of 8,000 self-miners as of February 28, 2023. 

* Achieved a total self-mining hash rate of 1.4 EH/s as of December 31, 2022 and 2.6 EH/s as of February 28, 2023, representing an increase of 86% in just two months. 

* Restructured miner purchase agreements with Bitmain, unlocking substantial deposits and completing the procurement of miners needed to fully utilize 160 MW of mining capacity. 

* Entered into a beneficial debt restructuring with existing lenders to eliminate principal payments and defer amortization to April 2024 with ability to extend cash flow sweep mechanism to maturity. 

* Raised the final amount of growth capital needed to achieve 160 MW and 5.5 EH/s of bitcoin mining capacity across its two facilities, which the Company expects to be fully energized in Q2 2023. 

 **Management Commentary**

"Despite the challenging macro backdrop, 2022 was a transformational year for TeraWulf and we made significant progress on our strategic plan to build the preeminent low-cost, zero-carbon bitcoin miner," stated Paul Prager, Founder and Chief Executive Officer of TeraWulf. "We commenced mining in March 2022, completed the construction and commissioning of 110 MW of world-class mining facilities in NY and PA, restructured our debt, and raised the last amount of external capital needed to achieve 160 MW and 5.5 EH/s of sustainable, low-cost bitcoin mining capacity."

------

Patrick Fleury, TeraWulf's Chief Financial Officer stated, "We are pleased with the financial performance of our first full year as a public company. While steadfastly focused on completing construction of our two bitcoin facilities, we remained financially nimble and reached a number of crucial financial milestones to improve the company's liquidity position and increase financial flexibility, with the goal of achieving positive free cash flow once we are fully ramped to 160 MW."

"Looking ahead, we plan to leverage our low-cost infrastructure to expand our self-mining hash rate at our existing sites, while also evaluating potential consolidation opportunities that enable us to grow our mining capacity in a financially responsible manner," added Kerri Langlais, Chief Strategy Officer of TeraWulf.

 **Production and Operations Update**

As of February 28, 2023, the Company had a self-mining hash rate of 2.6 EH/s with a total of approximately 26,000 miners deployed, comprised of 18,000 operational miners at the Lake Mariner facility (13,000 self-miners and 5,000 hosted miners) and approximately 8,000 self-miners at the Nautilus facility.

TeraWulf is currently expanding mining operations at its wholly owned Lake Mariner facility in New York with the addition of Building 2, which is expected to increase the facility's operational capacity from 60 MW currently to 110 MW in Q2 2023. The Company has the ability to expand mining capacity at Lake Mariner by an additional 80 MW, for a total of 190 MW, in the near term.

The Company expects its full share in phase one of the Nautilus facility – 50 MW and 1.9 EH/s – to also be online in Q2 2023. TeraWulf has the option to add an additional 50 MW of bitcoin mining capacity at the Nautilus facility, for a total of 100 MW, which TeraWulf plans to deploy in future phases.

Across its two sites, the Company expects to have a total operational capacity of 50,000 miners (5.5 EH/s) in Q2 2023, representing approximately 160 MW of net mining infrastructure.

 **Fourth Quarter and Calendar 2022 Financial Results**

Revenue in the fourth quarter of 2022 increased 146% to $9.6 million compared to $3.9 million in the third quarter of 2022. The increase is attributable to the significant increase in mining operations at the Lake Mariner facility following the August 2022 energization of Building 1 (50 MW), bringing online capacity at Lake Mariner from 10 MW to 60 MW and the introduction of a profit share component to short-term hosting agreements. Lake Mariner commenced mining operations in March 2022 and revenue for the full year 2022 was $15.0 million.

Cost of revenue as a percentage of revenue decreased to 55% in the fourth quarter of 2022 compared to 134% in the third quarter of 2022 primarily driven by improved miner fleet efficiency, and the normalization of unusually high NYISO Zone A energy prices. Cost of revenue for the full year 2022 was $11.1 million or 74% as a percentage of revenue.

Cost of Operations in the fourth quarter of 2022 increased by 46% to $17.7 million compared to $12.1 million in the third quarter of 2022. The increase in Cost of Operations was primarily driven by higher depreciation expenses, and higher Selling, General and Administrative expenses associated with scaling mining operations at the Lake Mariner facility in the fourth quarter of 2022. Cost of Operations was $47.7 million for the full year 2022. The Company continues to execute on its previously announced efforts to reduce operating expenses, with the target of decreasing cash operating costs by 25% over time.

------

 **Fourth Quarter and 2022 Financial Results Conference Call**

As previously announced, TeraWulf will host a conference call today, Thursday, March 30, 2023, at 5:00 p.m. Eastern Time to discuss its financial results for the fourth quarter and full year 2022 and provide a business and operational update. The conference call will be broadcast live and will be available for replay via "Events & Presentations" under the "Investors" section of the Company's website at https://investors.terawulf.com/events-and-presentations/.

 **About TeraWulf**

 **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; (12) potential differences between the unaudited results disclosed in this release and the Company's final results when disclosed in its Annual Report on Form 10-K as a result of the completion of the Company's final adjustments, annual audit by the Company's independent registered public accounting firm, and other developments arising between now and the disclosure of the final results; 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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| | | |
|:---|:---|:---|
| <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED BALANCE SHEETS** <br> **AS OF DECEMBER 31, 2022 AND 2021** <br> **(In thousands, except number of shares, per share amounts and par value)** <br> **(Unaudited)**  | <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED BALANCE SHEETS** <br> **AS OF DECEMBER 31, 2022 AND 2021** <br> **(In thousands, except number of shares, per share amounts and par value)** <br> **(Unaudited)**  | <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED BALANCE SHEETS** <br> **AS OF DECEMBER 31, 2022 AND 2021** <br> **(In thousands, except number of shares, per share amounts and par value)** <br> **(Unaudited)**  |
|  | **December 31, 2022**  | **December 31, 2021**  |
| **ASSETS**  |  |  |
| CURRENT ASSETS:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents  | $1279  | $43448  |
| &nbsp;&nbsp;&nbsp;&nbsp; Restricted cash  | 7044  | 3007  |
| &nbsp;&nbsp;&nbsp;&nbsp; Digital currency, net  | 183  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses  | 5095  | 1494  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amounts due from related parties  | —  | 647  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets  | 543  | 108  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current assets held for sale  | —  | 19348  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets  | 14144  | 68052  |
| Equity in net assets of investee  | 98741  | 104280  |
| Property, plant and equipment, net  | 191521  | 91446  |
| Right-of-use asset  | 11944  | 1024  |
| Other assets  | 1337  | 109  |
| TOTAL ASSETS  | $317687  | $264911  |
| **LIABILITIES AND STOCKHOLDERS' EQUITY**  |  |  |
| CURRENT LIABILITIES:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable  | $21862  | $11791  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued construction liabilities  | 2903  | 3892  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other accrued liabilities  | 14963  | 3771  |
| &nbsp;&nbsp;&nbsp;&nbsp; Share based liabilities due to related party  | 14583  | 12500  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other amounts due to related parties  | 3295  | 60  |
| &nbsp;&nbsp;&nbsp;&nbsp; Contingent value rights  | 10900  | 12000  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current portion of operating lease liability  | 42  | 88  |
| &nbsp;&nbsp;&nbsp;&nbsp; Insurance premium financing payable  | 2117  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Convertible promissory notes  | 3416  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current portion of long-term debt  | 51938  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current liabilities held for sale  | —  | 1755  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities  | 126019  | 45857  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease liability, net of current portion  | 947  | 992  |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax liabilities, net  | —  | 256  |
| &nbsp;&nbsp;&nbsp;&nbsp; Long-term debt  | 72967  | 94627  |
| TOTAL LIABILITIES  | 199933  | 141732  |
| Commitments and Contingencies (See Note 12)  |  |  |
| STOCKHOLDERS' EQUITY:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Preferred stock, $0.001 par value, 25,000,000 authorized at December 31, 2022 and 2021; 9,566 and 0 shares issued and outstanding at December 31, 2022 and 2021, respectively  | 10056  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.001 par value, 200,000,000 authorized at December 31, 2022 and 2021; 145,492,971 and 99,976,253 issued and outstanding at December 31, 2022 and 2021, respectively  | 145  | 100  |
| &nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital  | 294810  | 218762  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit  | (187257 )  | (95683 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity  | 117754  | 123179  |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  | $317687  | $264911  |

---

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| | | |
|:---|:---|:---|
| <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED STATEMENTS OF OPERATIONS** <br> **FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD** <br> **FEBRUARY 8, 2021 (DATE OF INCEPTION) TO DECEMBER 31, 2021** <br> **(In thousands, except number of shares and loss per common share)** <br> **(Unaudited)**  | <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED STATEMENTS OF OPERATIONS** <br> **FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD** <br> **FEBRUARY 8, 2021 (DATE OF INCEPTION) TO DECEMBER 31, 2021** <br> **(In thousands, except number of shares and loss per common share)** <br> **(Unaudited)**  | <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED STATEMENTS OF OPERATIONS** <br> **FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD** <br> **FEBRUARY 8, 2021 (DATE OF INCEPTION) TO DECEMBER 31, 2021** <br> **(In thousands, except number of shares and loss per common share)** <br> **(Unaudited)**  |
|  |  | **Period February <br> 8, 2021 (date of**  |
|  | **Year Ended**  | **inception) to**  |
|  | **December 31, 2022**  | **December 31, 2021**  |
| Revenue  | $15033  | $—  |
| Cost of revenue (exclusive of depreciation shown below)  | 11083  | —  |
| Gross profit  | 3950  | —  |
| Cost of operations:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating expenses  | 2038  | 104  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating expenses - related party  | 1248  | 960  |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling, general and administrative expenses  | 22770  | 23759  |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling, general and administrative expenses - related party  | 13280  | 18576  |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation  | 6667  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized gain on sale of digital currency  | (569 ) | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Impairment of digital currency  | 1457  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loss on nonmonetary miner exchange  | 804  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total cost of operations  | 47695  | 43399  |
| Operating loss  | (43745 ) | (43399 ) |
| Interest expense  | (24679 ) | (2255 ) |
| Loss on extinguishment of debt  | (2054 )  | —  |
| Loss before income tax and equity in net loss of investee  | (70478 ) | (45654 ) |
| Income tax benefit  | 256  | 615  |
| Equity in net loss of investee, net of tax  | (15712 )  | (1538 )  |
| Loss from continuing operations  | (85934 ) | (46577 ) |
| Loss from discontinued operations, net of tax  | (4857 )  | (49106 )  |
| Net loss  | (90791 ) | (95683 ) |
| Preferred stock dividends  | (783 )  | —  |
| Net loss attributable to common stockholders  | $(91574 )  | $(95683 )  |
| Loss per common share:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Continuing operations  | $(0.78 ) | $(0.55 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Discontinued operations  | (0.04 )  | (0.58 )  |
| &nbsp;&nbsp;&nbsp;&nbsp; Basic and diluted  | $(0.82 )  | $(1.13 )  |
| Weighted average common shares outstanding:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Basic and diluted  | 110638792  | 85200032  |

---

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| | | |
|:---|:---|:---|
| <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED STATEMENTS OF CASH FLOWS** <br> **FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD** <br> **FEBRUARY 8, 2021 (DATE OF INCEPTION) TO DECEMBER 31, 2021** <br> **(In thousands)** <br> **(Unaudited)**  | <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED STATEMENTS OF CASH FLOWS** <br> **FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD** <br> **FEBRUARY 8, 2021 (DATE OF INCEPTION) TO DECEMBER 31, 2021** <br> **(In thousands)** <br> **(Unaudited)**  | <br> **TERAWULF INC. AND SUBSIDIARIES** <br>**CONSOLIDATED STATEMENTS OF CASH FLOWS** <br> **FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD** <br> **FEBRUARY 8, 2021 (DATE OF INCEPTION) TO DECEMBER 31, 2021** <br> **(In thousands)** <br> **(Unaudited)**  |
|  | **Year Ended**  | **Period February <br> 8, 2021 (date of <br> inception) to**  |
|  | **December 31,**  | **December 31,**  |
|  | **2022**  | **2021**  |
| **CASH FLOWS FROM OPERATING ACTIVITIES:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net loss  | $(90791 ) | $(95683 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net loss to net cash used in operating activities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of debt issuance costs, commitment fees and accretion of debt discount  | 11676  | 921  |
| &nbsp;&nbsp;&nbsp;&nbsp; Related party expense to be settled with respect to common stock  | 2083  | 12500  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common stock issued for interest expense  | 82  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation expense  | 1568  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation  | 6667  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of right-of-use asset  | 303  | 52  |
| &nbsp;&nbsp;&nbsp;&nbsp; Increase in digital currency from mining  | (10810 ) | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Impairment of digital currency  | 1457  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized gain on sale of digital currency  | (569 ) | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sale of digital currency  | 9739  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loss on nonmonetary miner exchange  | 804  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loss on extinguishment of debt  | 2054  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax benefit  | (256 ) | (615 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity in net loss of investee, net of tax  | 15712  | 1538  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loss from discontinued operations, net of tax  | 4857  | 49106  |
| &nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in prepaid expenses  | (3601 ) | (1489 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease (increase) in amounts due from related parties  | 815  | (647 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other current assets  | (46 ) | (113 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other assets  | (994 ) | (109 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in accounts payable  | 10197  | 9729  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other accrued liabilities  | 5916  | 3605  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other amounts due to related parties  | 700  | 60  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in operating lease liability  | 175  | 4  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in operating activities from continuing operations  | (32262 ) | (21141 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in operating activities from discontinued operations  | (1804 )  | (2958 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in operating activities  | (34066 )  | (24099 )  |
| **CASH FLOWS FROM INVESTING ACTIVITIES:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Acquisition of a business, net of cash acquired  | —  | (10280 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments in joint venture, including direct payments made on behalf of joint venture  | (46172 ) | (93911 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Reimbursable payments for deposits on plant and equipment made on behalf of a joint venture or joint venture partner  | (11741 ) | (56057 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Reimbursement of payments for deposits on plant and equipment made on behalf of a joint venture or joint venture partner  | 11716  | 56057  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reimbursement from joint venture partner for deposits on plant and equipment contributed to the joint venture  | —  | 11850  |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchase of and deposits on plant and equipment  | (61116 ) | (109072 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sale of net assets held for sale  | 13266  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities  | (94047 )  | (201413 )  |
| **CASH FLOWS FROM FINANCING ACTIVITIES:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of long-term debt, net of issuance costs paid of $38 and $0  | 22462  | 118276  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from insurance premium financing  | 7041  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Principal payments on insurance premium financing  | (4924 ) | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of promissory notes to stockholders  | 3416  | 25000  |
| &nbsp;&nbsp;&nbsp;&nbsp; Repayment of promissory notes to stockholders  | —  | (25000 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of common stock, net of issuance costs paid of $142 and $0  | 47326  | 104376  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from warrant issuances in conjunction with equity offerings  | 5700  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of preferred stock  | 9566  | 49315  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of convertible promissory note  | 14700  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Principal payments on convertible promissory note  | (15306 )  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by financing activities  | 89981  | 271967  |
| Net change in cash and cash equivalents and restricted cash  | (38132 ) | 46455  |
| Cash and cash equivalents and restricted cash at beginning of period  | 46455  | —  |
| Cash and cash equivalents and restricted cash at end of period  | $8323  | $46455  |
| **Cash paid during the period for:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest  | $13989  | $252  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income taxes  | $—  | $—  |

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## Contacts
Sandy Harrison <br> harrison@terawulf.com<br> (410) 770-9500