|
Delaware
(State or other jurisdiction of
Incorporation or Organization) |
| |
7374
(Primary Standard Industrial
Classification Code Number) |
| |
87-1909475
(I.R.S. Employer
Identification Number) |
|
|
W. Morgan Burns
Joshua L. Colburn W. Jason Deppen Faegre Drinker Biddle & Reath LLP 90 South Seventh Street 2200 Wells Fargo Center Minneapolis, Minnesota 55402 (612) 766-7000 |
| |
Paul Prager
Chief Executive Officer TeraWulf Inc. 9 Federal Street Easton, Maryland 21601 (410) 770-9500 |
| |
Ariel J. Deckelbaum
David S. Huntington Sarah Stasny Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019 (212) 373-3000 |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☒
|
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| | | |
Emerging growth company
☐
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Title of each class of securities to be registered
|
| | |
Amount to be
registered |
| | |
Proposed maximum
offering price per share |
| | |
Proposed maximum
aggregate offering price |
| | |
Amount of
registration fee |
| ||||||||||||
Common Stock, par value $0.001 per share
|
| | | | | 104,550,200(a) | | | | | | | N/A | | | | | | $ | 109,553,842(b) | | | | | | $ | 11,952.33(c) | | |
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| | | | | A-1 | | | |
| | | | | B-1 | | | |
| | | | | C-1 | | | |
| | | | | D-1 | | | |
| | | | | E-1 | | | |
| | | | | F-1 | | | |
| | | | | G-1 | | | |
| | | | | H-1 | | |
| | |
(1)TeraWulf
|
| |
(2)IKONICS
|
| |
Pro Forma
Adjustments |
| |
Note 3
|
| |
Pro Forma
Combined |
| |||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 6,300,000 | | | | | $ | 4,428,269 | | | | | $ | (10,407,990) | | | | | | (c) | | | | | $ | 320,279 | | |
Trade receivables, net
|
| | | | — | | | | | | 1,545,527 | | | | | | — | | | | | | | | | | | | 1,545,527 | | |
Inventories
|
| | | | — | | | | | | 1,961,916 | | | | | | — | | | | | | | | | | | | 1,961,916 | | |
Prepaid expenses and other assets
|
| | | | 5,000 | | | | | | 228,644 | | | | | | — | | | | | | | | | | | | 233,644 | | |
Total current assets
|
| | | | 6,305,000 | | | | | | 8,164,356 | | | | | | (10,407,990) | | | | | | | | | | | | 4,061,366 | | |
PROPERTY, PLANT, AND EQUIPMENT: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Property, plant and equipment
|
| | | | — | | | | | | 16,483,065 | | | | | | (9,255,263) | | | | | | (f) | | | | | | 7,227,802 | | |
Less accumulated depreciation
|
| | | | — | | | | | | (9,255,263) | | | | | | 9,225,263 | | | | | | (f) | | | | | | — | | |
Total property, plant and equipment at cost, net
|
| | | | — | | | | | | 7,227,802 | | | | | | — | | | | | | | | | | | | 7,227,802 | | |
Deposits
|
| | | | 23,700,000 | | | | | | — | | | | | | — | | | | | | | | | | | | 23,700,000 | | |
Intangible Assets, net
|
| | | | — | | | | | | 243,819 | | | | | | (243,819) | | | | | | (f) | | | | | | — | | |
Goodwill and acquired intangible assets
|
| | | | — | | | | | | — | | | | | | 62,917,908 | | | | | | (b) | | | | | | 62,917,908 | | |
Total assets
|
| | | $ | 30,005,000 | | | | | $ | 15,635,977 | | | | | $ | 52,266,099 | | | | | | | | | | | $ | 97,907,076 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current portion of long – term debt
|
| | | $ | — | | | | | $ | 2,654,019 | | | | | $ | — | | | | | | | | | | | $ | 2,654,019 | | |
Accounts payable and other accrued liabilities
|
| | | | 1,739,000 | | | | | | 1,420,373 | | | | | | 17,000,000 | | | | | | (e) | | | | | | 20,159,373 | | |
Contingent Value Rights
|
| | | | — | | | | | | — | | | | | | 10,142,967 | | | | | | (c) | | | | | | 10,142,967 | | |
Total current liabilities
|
| | | | 1,739,000 | | | | | | 4,074,392 | | | | | | 27,142,967 | | | | | | | | | | | | 32,956,359 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock, par value $0.001 per share
|
| | | | 50,000 | | | | | | — | | | | | | 2,082 | | | | | | (c) | | | | | | 104,691 | | |
| | | | | | | | | | | | | | | | | 51,998 | | | | | | (d) | | | | | | | | |
| | | | | | | | | | | | | | | | | 611 | | | | | | (g) | | | | | | | | |
Common stock, par value $0.10 per share
|
| | | | — | | | | | | 197,710 | | | | | | (197,710) | | | | | | (a) | | | | | | — | | |
Additional paid-in-capital
|
| | | | 29,892,000 | | | | | | 2,787,733 | | | | | | (2,787,733) | | | | | | (a) | | | | | | 96,022,026 | | |
| | | | | | | | | | | | | | | | | 53,682,635 | | | | | | (c) | | | | | | | | |
| | | | | | | | | | | | | | | | | (51,998) | | | | | | (d) | | | | | | | | |
| | | | | | | | | | | | | | | | | 12,499,389 | | | | | | (g) | | | | | | | | |
Retained earnings / (accumulated deficit)
|
| | | | (1,676,000) | | | | | | 8,576,142 | | | | | | (8,576,142) | | | | | | (a) | | | | | | (31,176,000) | | |
| | | | | | | | | | | | | | | | | (17,000,000) | | | | | | (e) | | | | | | | | |
| | | | | | | | | | | | | | | | | (12,500,000) | | | | | | (g) | | | | | | | | |
Total stockholders’ equity
|
| | | | 28,266,000 | | | | | | 11,561,585 | | | | | | 25,123,132 | | | | | | | | | | | | 64,950,717 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 30,005,000 | | | | | $ | 15,635,977 | | | | | $ | 52,266,099 | | | | | | | | | | | $ | 97,907,076 | | |
| | |
(1)TeraWulf
|
| |
(2)IKONICS
|
| |
Pro Forma
Adjustments |
| |
Note 3
|
| |
Pro Forma
Combined |
| |||||||||||||||
Net sales
|
| | | $ | — | | | | | $ | 3,073,408 | | | | | $ | — | | | | | | | | | | | $ | 3,073,408 | | |
Cost of goods sold
|
| | | | — | | | | | | 2,077,076 | | | | | | — | | | | | | | | | | | | 2,077,076 | | |
Gross profit
|
| | | | — | | | | | | 996,332 | | | | | | — | | | | | | | | | | | | 996,332 | | |
Cost of operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating expenses
|
| | | | 853,000 | | | | | | — | | | | | | — | | | | | | | | | | | | 853,000 | | |
Selling, general and administrative expenses
|
| | | | 823,000 | | | | | | 1,183,591 | | | | | | — | | | | | | | | | | | | 2,006,591 | | |
Research and development
expenses |
| | | | — | | | | | | 134,922 | | | | | | — | | | | | | | | | | | | 134,922 | | |
Total cost of operations
|
| | | | 1,676,000 | | | | | | 1,318,513 | | | | | | — | | | | | | | | | | | | 2,994,513 | | |
Loss from operations
|
| | | | (1,676,000) | | | | | | (322,181) | | | | | | — | | | | | | | | | | | | (1,998,181) | | |
Interest expense
|
| | | | — | | | | | | (19,842) | | | | | | — | | | | | | | | | | | | (19,842) | | |
Other income
|
| | | | — | | | | | | 37 | | | | | | — | | | | | | | | | | | | 37 | | |
Loss before income taxes
|
| | | | (1,676,000) | | | | | | (341,986) | | | | | | — | | | | | | | | | | | | (2,017,986) | | |
Income tax benefit
|
| | | | — | | | | | | (20,347) | | | | | | — | | | | | | | | | | | | (20,347) | | |
Net loss
|
| | | $ | (1,676,000) | | | | | $ | (321,639) | | | | | $ | — | | | | | | | | | | | $ | (1,997,639) | | |
Loss per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | | | | | | $ | (0.16) | | | | | | | | | | | | | | | | | $ | (0.02) | | |
Weighted average common shares outstanding:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | | | | | | | 1,976,354 | | | | | | 102,714,376 | | | | | | (h) | | | | | | 104,691,147 | | |
| | |
(1)TeraWulf
|
| |
(2)IKONICS
|
| |
Pro Forma
Adjustments |
| |
Note 3
|
| |
Pro Forma
Combined |
| |||||||||||||||
Net sales
|
| | | $ | — | | | | | $ | 13,432,220 | | | | | $ | — | | | | | | | | | | | $ | 13,432,220 | | |
Cost of goods sold
|
| | | | — | | | | | | 9,527,143 | | | | | | — | | | | | | | | | | | | 9,527,143 | | |
Gross profit
|
| | | | — | | | | | | 3,905,077 | | | | | | — | | | | | | | | | | | | 3,905,077 | | |
Cost of operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | — | | | | | | 5,019,604 | | | | | | 12,500,000 | | | | | | (g) | | | | | | 17,519,604 | | |
Research and development expenses
|
| | | | — | | | | | | 671,493 | | | | | | — | | | | | | | | | | | | 671,493 | | |
Total cost of operations
|
| | | | — | | | | | | 5,691,097 | | | | | | 12,500,000 | | | | | | | | | | | | 18,191,097 | | |
Loss from operations
|
| | | | — | | | | | | (1,786,020) | | | | | | (12,500,000) | | | | | | | | | | | | (14,286,020) | | |
Interest expense
|
| | | | — | | | | | | (86,561) | | | | | | — | | | | | | | | | | | | (86,561) | | |
Other income
|
| | | | — | | | | | | 1,223,261 | | | | | | — | | | | | | | | | | | | 1,223,261 | | |
Loss before income taxes
|
| | | | — | | | | | | (649,320) | | | | | | (12,500,000) | | | | | | | | | | | | (13,149,320) | | |
Income tax benefit
|
| | | | — | | | | | | (210,000) | | | | | | — | | | | | | | | | | | | (210,000) | | |
Net loss
|
| | | $ | — | | | | | $ | (439,320) | | | | | $ | (12,500,000) | | | | | | | | | | | $ | (12,939,320) | | |
Loss per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | | | | | | $ | (0.22) | | | | | | | | | | | | | | | | | $ | (0.12) | | |
Weighted average common shares outstanding:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | | | | | | | 1,976,771 | | | | | | 102,714,376 | | | | | | (h) | | | | | | 104,691,147 | | |
|
Estimated IKONICS shares outstanding(1)
|
| | | | 1,979,354 | | |
|
Estimated RSUs and stock options subject to accelerated vesting(2)
|
| | | | 102,244 | | |
|
Subtotal
|
| | | | 2,081,598 | | |
|
Cash consideration (per IKONICS share)
|
| | | $ | 5.00 | | |
|
Estimated share-based cash portion of purchase price
|
| | | $ | 10,407,990 | | |
|
Contingent Value Rights
|
| | | $ | 10,142,967 | | |
|
Estimated TeraWulf enterprise value
|
| | | $ | 2,700,000,000 | | |
|
Estimated shares at consummation of the mergers(3)
|
| | | $ | 104,691,147 | | |
|
Implied Holdco share price
|
| | | $ | 25.79 | | |
|
Estimated IKONICS shares outstanding(1)
|
| | | | 1,979,354 | | |
|
Estimated RSUs and stock options subject to accelerated vesting(2)
|
| | | | 102,244 | | |
|
Subtotal
|
| | | | 2,081,598 | | |
|
Equity portion of purchase price
|
| | | $ | 53,684,717 | | |
|
Total estimated consideration to be paid
|
| | | $ | 74,235,674 | | |
|
Shares issued to TeraWulf stockholders
|
| | | | 101,998,302 | | |
|
Shares issued to IKONICS stockholders
|
| | | | 2,081,598 | | |
|
Shares issued under awards to employees of Beowulf E&D
|
| | | | 611,247 | | |
| | | | | | 104,691,147 | | |
| | |
Implied Holdco
share price |
| |
Purchase Price
(equity portion) |
| ||||||
As presented
|
| | | $ | 25.79 | | | | | $ | 53,684,717 | | |
10% increase
|
| | | | 28.37 | | | | | | 59,054,935 | | |
10% decrease
|
| | | | 23.21 | | | | | | 48,313,890 | | |
20% increase
|
| | | | 30.95 | | | | | | 64,425,458 | | |
20% decrease
|
| | | | 20.63 | | | | | | 42,943,367 | | |
50% increase
|
| | | | 38.69 | | | | | | 80,537,027 | | |
50% decrease
|
| | | | 12.90 | | | | | | 26,852,614 | | |
|
Cash
|
| | | $ | 4,428,269 | | |
|
Trade receivables, net
|
| | | | 1,545,527 | | |
|
Inventories
|
| | | | 1,961,916 | | |
|
Prepaid expenses and other assets
|
| | | | 228,644 | | |
|
Property, plant and equipment, net
|
| | | | 7,227,802 | | |
|
Goodwill and acquired intangible assets
|
| | | | 62,917,908 | | |
|
Long-term debt
|
| | | | (2,654,019) | | |
|
Accounts payable and accrued liabilities
|
| | | | (1,420,373) | | |
|
Total estimated consideration
|
| | | $ | 74,235,674 | | |
|
Shares attributed to IKONICS common stock conversion
|
| | | | 2,081,598 | | |
|
Aggregate TeraWulf share amount – multiple of IKONICS attributed shares
|
| | | | 49 | | |
|
Aggregate TeraWulf share amount
|
| | | | 101,998,302 | | |
|
Less: number of outstanding TeraWulf shares
|
| | | | 50,000,000 | | |
|
Incremental TeraWulf shares
|
| | | | 51,998,302 | | |
|
Par value
|
| | | $ | 0.001 | | |
|
Incremental TeraWulf shares at par value
|
| | | $ | 51,998 | | |
|
Value of share awards due to Beowulf E&D employees
|
| | | $ | 12,500,000 | | |
|
IKONICS share price(1)
|
| | | $ | 20.45 | | |
|
Shares issued under awards to Beowulf E&D employees
|
| | | | 611,247 | | |
|
Par value
|
| | | $ | 0.001 | | |
|
Shares issued under awards to Beowulf E&D employees at par value
|
| | | $ | 611 | | |
|
Shares issued to TeraWulf stockholders
|
| | | | 101,998,302 | | |
|
Shares issued to IKONICS holders of RSUs or stock options
|
| | | | 104,827 | | |
|
Shares issued under awards to employees of Beowulf E&D
|
| | | | 611,247 | | |
| | | | | | 102,714,376 | | |
| | |
IKONICS
Common Stock |
| |||
June 24, 2021
|
| | | $ | 11.30 | | |
August 9, 2021
|
| | | $ | 22.49 | | |