Terawulf INC. 10-Q Filing

Ticker: WULF · Form: 10-Q · Filed: Nov 12, 2024 · CIK: 1083301

Sentiment: neutral

Filing Stats: 4,622 words · 18 min read · ~15 pages · Grade level 19 · Accepted 2024-11-12 16:10:48

Key Financial Figures

Filing Documents

Forward-Looking Statements

Forward-Looking Statements 3

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements (Unaudited)

ITEM 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 5 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 7 Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023 9 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 11 Notes to Condensed Consolidated Financial Statements 13

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 34

Quantitative and Qualitative Disclosures About Market Risk

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 50

Controls and Procedures

ITEM 4. Controls and Procedures 50

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

ITEM 1. Legal Proceedings 51

Risk Factors

ITEM 1A. Risk Factors 51

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds. 51

Defaults Upon Senior Securities

ITEM 3. Defaults Upon Senior Securities. 52

Mine Safety Disclosures

ITEM 4. Mine Safety Disclosures. 52

Other Information

ITEM 5. Other Information. 52

Exhibits

ITEM 6. Exhibits 53

SIGNATURES

SIGNATURES 56 2 Table of Contents

Forward-Looking Statements

Forward-Looking Statements This Quarterly Report contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management, and expected market growth are forward-looking statements. These forward- looking statements are contained principally in the sections entitled "Risk Factors" and "Management's Discussion and Analysis." Without limiting the generality of the preceding sentence, any time we use the words "expects," "intends," "will," "anticipates," "believes," "confident," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "goals," "objectives," "targets," "planned," "projects," and, in each case, their negative or other various or comparable terminology and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. For TeraWulf, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, without limitation: conditions in the cryptocurrency mining industry, including any prolonged substantial reduction in cryptocurrency prices, and specifically, the value of bitcoin, which could cause a decline in the demand for TeraWulf ' s services; the number and value of bitcoin rewards and transaction fees we earn from our bitcoin mining operations; future self-mining hash rate capacity; timing of receipt and deployment of miners; competition among the various providers of data mining services; the need to r

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements (Unaudited)

ITEM 1. Financial Statements (Unaudited) TERAWULF INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023 (In thousands, except number of shares and par value; unaudited) September 30, 2024 December 31, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 23,938 $ 54,439 Digital currency 297 1,801 Prepaid expenses 3,091 4,540 Other receivables 4,383 1,001 Other current assets 706 806 Total current assets 32,415 62,587 Equity in net assets of investee 79,494 98,613 Property, plant and equipment, net 283,098 205,284 Right-of-use asset 10,188 10,943 Other assets 710 679 TOTAL ASSETS $ 405,905 $ 378,106 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 19,770 $ 15,169 Accrued construction liabilities 5,040 1,526 Other accrued liabilities 7,080 9,179 Share based liabilities due to related party — 2,500 Other amounts due to related parties 472 972 Current portion of operating lease liability 53 48 Insurance premium financing payable — 1,803 Current portion of long-term debt — 123,465 Total current liabilities 32,415 154,662 Operating lease liability, net of current portion 859 899 Long-term debt — 56 TOTAL LIABILITIES 33,274 155,617 Commitments and Contingencies (See Note 12) STOCKHOLDERS' EQUITY: Preferred stock, $ 0.001 par value, 100,000,000 authorized at September 30, 2024 and December 31, 2023; 9,566 issued and outstanding at September 30, 2024 and December 31, 2023; aggregate liquidation preference of $ 12,302 and $ 11,423 at September 30, 2024 and December 31, 2023, respectively 9,273 9,273 5 Table of Contents Common stock, $ 0.001 par value, 600,000,000 and 400,000,000 authorized at September 30, 2024 and December 31, 2023, respectively; 382,632,083 and 276,733,329 issued and outstanding at September 30, 2024 and December 31, 2023, respectively 383 277 Additional paid-in capital 666,055 472,834 Accumulated deficit ( 303,080 ) ( 259,8

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