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 its unaudited financial results for the second quarter of
fiscal year 2023 and provided an operational update.
Second Quarter 2023 GAAP Operational and Financial
Highlights
- Revenue increased to $15.5 million in 2Q23 compared to $11.5
million in 1Q23.
- Gross profit increased to $10.3 million in 2Q23 compared to
$6.5 million in 1Q23, and gross profit margin expanded by 18% from
57% in 1Q23 to 67% in 2Q23.
- Achieved a total self-mining hashrate of 5.5 EH/s as of June
30, 2023, representing a quarterly increase of 67% relative to
March 31, 2023.
Key GAAP Metrics |
Three Months Ended Q1 2023 |
|
Three Months Ended Q2 2023 |
|
% Change |
|
Revenue |
$11,533 |
|
$15,456 |
|
34 |
% |
Gross profit |
$6,531 |
|
$10,343 |
|
58 |
% |
Gross profit margin |
57 |
% |
67 |
% |
18 |
% |
Second Quarter 2023 Non-GAAP Operational and Financial
Highlights
- Generated non-GAAP revenue equivalent of $25.3 million and
self-mined 908 Bitcoin in Q2 2023.
- Power cost per Bitcoin declined 15% quarter-over-quarter, from
$8,624 in 1Q23 to $7,197 in 2Q23
- Adjusted EBITDA increased to $7.6 million, compared to Adjusted
EBITDA of $(7.1) from the same prior year period.
Key Non-GAAP Metrics1 |
Three Months Ended Q1 2023 |
Three Months Ended Q2 2023 |
% Change |
|
Bitcoin Self-Mined2 |
533 |
908 |
70 |
% |
Revenue – Self-Mining Equivalent ($M)3 |
$12.3 |
$25.3 |
106 |
% |
Revenue – Hosting ($M)4 |
$1.2 |
$1.1 |
(15 |
)% |
Power Cost ($M)5 |
$5.7 |
$7.9 |
38 |
% |
Avg. Operating Hashrate (EH/s) – Self-Mining |
1.9 |
3.6 |
91 |
% |
Avg. Operating Hashrate (EH/s) – Hosted |
0.5 |
0.4 |
(9 |
%) |
Revenue Equivalent per Bitcoin |
$23,073 |
$27,913 |
21 |
% |
Power Cost per Bitcoin |
$8,624 |
$7,197 |
(17 |
%) |
Management Commentary
“We continue to execute our stated goals, delivering strong
results in Q2 2023. Based on the continued hard work and commitment
of our people, we achieved our target of 5.5 EH/s of capacity in
the second quarter,” stated Paul Prager, Chief Executive Officer of
TeraWulf.
“As we move into the third quarter, we are actively expanding
our Lake Mariner facility by 60% with the addition of 43 MW of
infrastructure and 18,500 of the latest generation S19j XPs. This
near term expansion will further establish TeraWulf as one of the
most efficient mining fleets in the sector with a realized average
cost of power of 3.5 cents per kilowatt hour and average
availability in excess of 98%,” added Prager. “We continue to
reiterate that not all exahash is created equal. With this
expansion, we are strategically adding efficient and profitable
hashing capacity thereby positioning the Company for increased
profit margins ahead of the next halving.”
Production and Operations Update
As of June 30, 2023, the Company had an operational miner fleet
of approximately 50,000 of the latest generation miners, comprised
of 34,000 miners at its wholly owned Lake Mariner facility in New
York (5,000 of which are hosted) and 16,000 self-miners at the
nuclear-powered Nautilus facility in Pennsylvania. The Company’s
total operational hash rate increased to 5.5 EH/s and 160 MW of
capacity across its two sites.
TeraWulf is currently expanding mining operations at its wholly
owned Lake Mariner facility in New York with the addition of
Building 3, which is expected to increase the facility’s
operational capacity from 110 MW currently to 153 MW by year-end
2023. In connection with the expansion, the Company purchased
and plans to deploy 18,500 Antminer S19j XP bitcoin mining
machines, which are the next generation unit offered by BITMAIN
with a power-efficiency rating of 21.5 joules per terahash (J/TH)
and a bitcoin mining hashrate of 151 terahash per second (TH/s)
each, for a combined total hashrate of 2.8 exahashes per second
(EH/s) for the 18,500 units.
As of June 30, 2023, the Company’s stake in phase one of the
Nautilus facility – 50 MW and 1.9 EH/s – was fully operational.
TeraWulf has the option to add an additional 50 MW of Bitcoin
mining capacity at Nautilus, for a total of 100 MW, which TeraWulf
plans to deploy in future phases pending capital availability.
With the addition of Building 3 at Lake Mariner, the Company
expects to increase its total self-mining hashrate by approximately
58% (from 5.0 EH6 to 7.9 EH/s). The planned expansion with
S19j XPs is expected to further establish TeraWulf as one of the
most efficient mining fleets in the sector with a fleet efficiency
of 25.7 J/TH.
Second Quarter 2023 GAAP Financial
Results
Revenue in the second quarter of 2023 increased
34% to $15.5 million compared to $11.5 million in the first quarter
of 2023. The increase is attributable to a significant increase in
operating self-mining hashrate as well as a higher average price of
Bitcoin relative to the first quarter of 2023. Notably, Revenue and
expenses reported in the TeraWulf GAAP income statement excludes
revenue and expenses from the Nautilus joint-venture; the net
financial impact of the Nautilus joint-venture is captured in the
“Equity in net less of investee, net of tax” line item
Cost of revenue in the second quarter increased
2% to $5,113 million compared to $5,002 million in the first
quarter of 2023. Cost of revenue as a percentage of revenue
decreased to 33% in the second quarter of 2023 compared to 43% in
the first quarter of 2023 primarily driven by decreased energy
costs at Lake Mariner Data.
Cost of Operations in the second quarter of 2023
increased by 3% to $16.2 million compared to $15.8 million in the
first quarter of 2023. Although total Operating Expenses and
SG&A fell 6% as part of the Company’s cost reduction strategy,
$1.0 million of additional depreciation expense offset operational
cost reductions.
About TeraWulf
TeraWulf (Nasdaq: WULF) owns and operates vertically integrated,
environmentally clean Bitcoin mining facilities in the United
States. Led by an experienced group of energy entrepreneurs, the
Company currently has two Bitcoin mining facilities: the wholly
owned Lake Mariner facility in New York, and Nautilus Cryptomine
facility in Pennsylvania, a joint venture with Cumulus Coin, LLC.
TeraWulf generates domestically produced Bitcoin powered by
nuclear, hydro, and solar energy with a goal of utilizing 100%
zero-carbon energy. With a core focus on ESG that ties directly to
its business success, TeraWulf expects to offer attractive mining
economics at an industrial scale.
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.
Company Contact:Jason AssadDirector of
Corporate Communications 678-570-6791assad@terawulf.com
____________________1 Unaudited monthly results
are based on estimates, which remain subject to standard month end
adjustments. The Company’s share of the earnings or losses of the
Nautilus facility is reflected in the caption “Equity in net loss
of investee, net of tax” in the consolidated statements of
operations. Operations at Nautilus do not impact the revenue or
cost of goods sold lines in TeraWulf’s consolidated statements of
operations.2 Includes BTC earned from profit sharing associated
with short-term hosting agreement at the Lake Mariner facility and
TeraWulf’s net share of BTC produced at the Nautilus facility.3
Includes TeraWulf’s net share of BTC revenue generated at the
Nautilus facility and profit sharing from hosting agreement.4
Excludes BTC earned from profit sharing associated with short-term
hosting agreement at the Lake Mariner facility.5 Includes
TeraWulf’s net share of power cost incurred at the Nautilus
facility.
TERAWULF INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETSAS OF JUNE 30, 2023 AND DECEMBER 31,
2022(In thousands, except number of shares and par
value) |
|
|
June 30, 2023 |
|
December 31, 2022 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
8,241 |
|
|
$ |
1,279 |
|
Restricted cash |
|
|
— |
|
|
|
7,044 |
|
Digital currency, net |
|
|
708 |
|
|
|
183 |
|
Prepaid expenses |
|
|
3,472 |
|
|
|
5,095 |
|
Other current assets |
|
|
1,938 |
|
|
|
543 |
|
Total current assets |
|
|
14,359 |
|
|
|
14,144 |
|
Equity in net assets of
investee |
|
|
111,446 |
|
|
|
98,741 |
|
Property, plant and equipment,
net |
|
|
161,776 |
|
|
|
191,521 |
|
Right-of-use asset |
|
|
11,443 |
|
|
|
11,944 |
|
Other assets |
|
|
798 |
|
|
|
1,337 |
|
TOTAL ASSETS |
|
$ |
299,822 |
|
|
$ |
317,687 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
Accounts payable |
|
$ |
17,303 |
|
|
$ |
21,862 |
|
Accrued construction liabilities |
|
|
95 |
|
|
|
2,903 |
|
Other accrued liabilities |
|
|
7,883 |
|
|
|
14,963 |
|
Share based liabilities due to related party |
|
|
15,000 |
|
|
|
14,583 |
|
Other amounts due to related parties |
|
|
3,172 |
|
|
|
3,295 |
|
Contingent value rights |
|
|
1,302 |
|
|
|
10,900 |
|
Current portion of operating lease liability |
|
|
45 |
|
|
|
42 |
|
Insurance premium financing payable |
|
|
352 |
|
|
|
2,117 |
|
Convertible promissory notes |
|
|
— |
|
|
|
3,416 |
|
Current portion of long-term debt |
|
|
36,532 |
|
|
|
51,938 |
|
Total current liabilities |
|
|
81,684 |
|
|
|
126,019 |
|
Operating lease liability, net of current portion |
|
|
924 |
|
|
|
947 |
|
Long-term debt |
|
|
82,396 |
|
|
|
72,967 |
|
TOTAL LIABILITIES |
|
|
165,004 |
|
|
|
199,933 |
|
|
|
|
|
|
|
|
Commitments and Contingencies
(See Note 12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
Preferred stock, $0.001 par value, 100,000,000 and 25,000,000
authorized at June 30, 2023 and December 31, 2022, respectively;
9,566 issued and outstanding at June 30, 2023 and December 31,
2022; aggregate liquidation preference of $10,873 and $10,349 at
June 30, 2023 and December 31, 2022, respectively |
|
|
9,273 |
|
|
|
9,273 |
|
Common stock, $0.001 par value, 400,000,000 and 200,000,000
authorized at June 30, 2023 and December 31, 2022, respectively;
216,055,887 and 145,492,971 issued and outstanding at June 30, 2023
and December 31, 2022, respectively |
|
|
216 |
|
|
|
145 |
|
Additional paid-in capital |
|
|
355,600 |
|
|
|
294,810 |
|
Accumulated deficit |
|
|
(230,271 |
) |
|
|
(186,474 |
) |
Total stockholders' equity |
|
|
134,818 |
|
|
|
117,754 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
299,822 |
|
|
$ |
317,687 |
|
CONSOLIDATED STATEMENTS OF OPERATIONSFOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND
2022(In thousands, except number of shares and
loss per common share; unaudited) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
15,456 |
|
|
$ |
1,385 |
|
|
$ |
26,989 |
|
|
$ |
1,602 |
|
|
Cost of revenue (exclusive of
depreciation shown below) |
|
|
5,113 |
|
|
|
591 |
|
|
|
10,115 |
|
|
|
623 |
|
|
Gross profit |
|
|
10,343 |
|
|
|
794 |
|
|
|
16,874 |
|
|
|
979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
468 |
|
|
|
948 |
|
|
|
776 |
|
|
|
1,428 |
|
|
Operating expenses – related party |
|
|
639 |
|
|
|
147 |
|
|
|
1,236 |
|
|
|
209 |
|
|
Selling, general and administrative expenses |
|
|
5,878 |
|
|
|
4,334 |
|
|
|
12,370 |
|
|
|
10,319 |
|
|
Selling, general and administrative expenses – related party |
|
|
2,676 |
|
|
|
2,423 |
|
|
|
5,574 |
|
|
|
5,239 |
|
|
Depreciation |
|
|
6,428 |
|
|
|
200 |
|
|
|
11,861 |
|
|
|
204 |
|
|
Realized gain on sale of digital currency |
|
|
(583 |
) |
|
|
— |
|
|
|
(1,186 |
) |
|
|
— |
|
|
Impairment of digital currency |
|
|
682 |
|
|
|
558 |
|
|
|
1,309 |
|
|
|
563 |
|
|
Total cost of operations |
|
|
16,188 |
|
|
|
8,610 |
|
|
|
31,940 |
|
|
|
17,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(5,845 |
) |
|
|
(7,816 |
) |
|
|
(15,066 |
) |
|
|
(16,983 |
) |
|
Interest expense |
|
|
(8,450 |
) |
|
|
(4,139 |
) |
|
|
(15,284 |
) |
|
|
(9,461 |
) |
|
Other income |
|
|
54 |
|
|
|
— |
|
|
|
54 |
|
|
|
— |
|
|
Loss before income tax and
equity in net loss of investee |
|
|
(14,241 |
) |
|
|
(11,955 |
) |
|
|
(30,296 |
) |
|
|
(26,444 |
) |
|
Income tax (expense)
benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Equity in net loss of
investee, net of tax |
|
|
(3,296 |
) |
|
|
(1,084 |
) |
|
|
(13,463 |
) |
|
|
(1,872 |
) |
|
Loss from continuing
operations |
|
|
(17,537 |
) |
|
|
(13,039 |
) |
|
|
(43,759 |
) |
|
|
(28,316 |
) |
|
Loss from discontinued
operations, net of tax |
|
|
(3 |
) |
|
|
(630 |
) |
|
|
(38 |
) |
|
|
(3,536 |
) |
|
Net loss |
|
|
(17,540 |
) |
|
|
(13,669 |
) |
|
|
(43,797 |
) |
|
|
(31,852 |
) |
|
Preferred stock dividends |
|
|
(265 |
) |
|
|
(239 |
) |
|
|
(524 |
) |
|
|
(284 |
) |
|
Net loss attributable to
common stockholders |
|
$ |
(17,805 |
) |
|
$ |
(13,908 |
) |
|
$ |
(44,321 |
) |
|
$ |
(32,136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.08 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.28 |
) |
|
Discontinued operations |
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.03 |
) |
|
Basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
210,421,237 |
|
|
|
104,119,328 |
|
|
|
187,843,663 |
|
|
|
102,131,393 |
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWSFOR
THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (In
thousands; unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net loss |
|
$ |
(43,797 |
) |
|
$ |
(31,852 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Amortization of debt issuance costs, commitment fees and accretion
of debt discount |
|
|
8,307 |
|
|
|
4,435 |
|
|
Related party expense to be settled with respect to common
stock |
|
|
417 |
|
|
|
— |
|
|
Common stock issued for interest expense |
|
|
26 |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
2,610 |
|
|
|
482 |
|
|
Depreciation |
|
|
11,861 |
|
|
|
204 |
|
|
Amortization of right-of-use asset |
|
|
501 |
|
|
|
41 |
|
|
Increase in digital currency from mining and hosting services |
|
|
(24,206 |
) |
|
|
(1,214 |
) |
|
Impairment of digital currency |
|
|
1,309 |
|
|
|
563 |
|
|
Realized gain on sale of digital currency |
|
|
(1,186 |
) |
|
|
— |
|
|
Proceeds from sale of digital currency |
|
|
28,501 |
|
|
|
— |
|
|
Equity in net loss of investee, net of tax |
|
|
13,463 |
|
|
|
1,872 |
|
|
Loss from discontinued operations, net of tax |
|
|
38 |
|
|
|
3,536 |
|
|
Changes in operating assets and liabilities: |
|
|
— |
|
|
|
— |
|
|
Decrease (increase) in prepaid expenses |
|
|
1,623 |
|
|
|
(2,864 |
) |
|
Decrease in amounts due from related parties |
|
|
— |
|
|
|
815 |
|
|
Increase in other current assets |
|
|
(1,347 |
) |
|
|
(344 |
) |
|
Decrease (increase) in other assets |
|
|
28 |
|
|
|
(951 |
) |
|
Decrease in accounts payable |
|
|
(3,812 |
) |
|
|
(398 |
) |
|
(Decrease) increase in other accrued liabilities |
|
|
(2,330 |
) |
|
|
1,876 |
|
|
(Decrease) increase in other amounts due to related parties |
|
|
(1,290 |
) |
|
|
351 |
|
|
Decrease in operating lease liability |
|
|
(20 |
) |
|
|
(42 |
) |
|
Net cash used in operating activities from continuing
operations |
|
|
(9,304 |
) |
|
|
(23,490 |
) |
|
Net cash provided by (used in) operating activities from
discontinued operations |
|
|
294 |
|
|
|
(45 |
) |
|
Net cash used in operating activities |
|
|
(9,010 |
) |
|
|
(23,535 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Investments in joint venture, including direct payments made on
behalf of joint venture |
|
|
(2,845 |
) |
|
|
(36,367 |
) |
|
Reimbursable payments for deposits on plant and equipment made on
behalf of a joint venture or joint venture partner |
|
|
— |
|
|
|
(11,622 |
) |
|
Reimbursement of payments for deposits on plant and equipment made
on behalf of a joint venture or joint venture partner |
|
|
— |
|
|
|
11,540 |
|
|
Purchase of and deposits on plant and equipment |
|
|
(15,990 |
) |
|
|
(45,469 |
) |
|
Payment
of contingent value rights liability |
|
|
(9,598 |
) |
|
|
— |
|
|
Net cash used in investing activities |
|
|
(28,433 |
) |
|
|
(81,918 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Proceeds from insurance premium and property, plant and equipment
financing |
|
|
790 |
|
|
|
4,706 |
|
|
Principal payments on insurance premium and property, plant and
equipment financing |
|
|
(2,450 |
) |
|
|
(3,127 |
) |
|
Proceeds from issuance of common stock, net of issuance costs paid
of $1,051 and $142 |
|
|
36,123 |
|
|
|
34,075 |
|
|
Proceeds from warrant issuances |
|
|
2,500 |
|
|
|
— |
|
|
Payments of tax withholding related to net share settlements of
stock-based compensation awards |
|
|
(852 |
) |
|
|
— |
|
|
Proceeds from issuance of preferred stock |
|
|
— |
|
|
|
9,566 |
|
|
Proceeds from issuance of convertible promissory note |
|
|
1,250 |
|
|
|
14,700 |
|
|
Net cash provided by financing activities |
|
|
37,361 |
|
|
|
59,920 |
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash
equivalents and restricted cash |
|
|
(82 |
) |
|
|
(45,533 |
) |
|
Cash and cash equivalents and
restricted cash at beginning of period |
|
|
8,323 |
|
|
|
46,455 |
|
|
Cash and cash equivalents and
restricted cash at end of period |
|
$ |
8,241 |
|
|
$ |
922 |
|
|
|
|
|
|
|
|
|
|
Cash paid during the
period for: |
|
|
|
|
|
|
|
Interest |
|
$ |
11,252 |
|
|
$ |
4,946 |
|
|
Income taxes |
|
$ |
— |
|
|
$ |
— |
|
|
Non-GAAP Measure
The Company presents adjusted EBITDA, which is not a measurement
of financial performance under generally accepted accounting
principles in the United States (“GAAP”). The Company’s non-GAAP
“Adjusted EBITDA” excludes (i) impacts of interest, taxes,
depreciation and amortization; (ii) preferred stock dividends,
stock-based compensation expense and related party expense to be
settled with respect to common stock, all of which are non-cash
items that the Company believes are not reflective of its general
business performance, and for which the accounting requires
management judgment, and the resulting expenses could vary
significantly in comparison to other companies; (iii) equity in net
loss of investee, net of tax, related to Nautilus; (iv) costs
related to non-routine regulatory activities, which costs
management does not believe are reflective of the Company’s ongoing
operating activities; (v) other income which is related to interest
income or income for which management believes is not reflective of
the Company’s ongoing operating activities; and (vi) gains and
losses related to discontinued operations that are not be
applicable to the Company’s future business activities. The
Company’s non-GAAP Adjusted EBITDA also includes the impact of
distributions from investee received in bitcoin related to a return
on the Nautilus investment, which management believes, in
conjunction with excluding the impact of equity in net loss of
investee, net of tax, is reflective of assets available for the
Company’s use in its ongoing operations as a result of its
investment in Nautilus.
Management believes that providing this non-GAAP financial
measure that excludes these items allows for meaningful comparisons
between the Company's core business operating results and those of
other companies, and provides the Company with an important tool
for financial and operational decision making and for evaluating
its own core business operating results over different periods of
time. In addition to management's internal use of non-GAAP adjusted
EBITDA, management believes that adjusted EBITDA is also useful to
investors and analysts in comparing the Company’s performance
across reporting periods on a consistent basis. Management believes
the foregoing to be the case even though some of the excluded items
involve cash outlays and some of them recur on a regular basis
(although management does not believe any of such items are normal
operating expenses necessary to generate the Company’s bitcoin
related revenues). For example, the Company expects that
share-based compensation expense, which is excluded from adjusted
EBITDA, will continue to be a significant recurring expense over
the coming years and is an important part of the compensation
provided to certain employees, officers, directors and consultants.
Additionally, management does not consider any of the excluded
items to be expenses necessary to generate the Company’s bitcoin
related revenue.
The Company's adjusted EBITDA measure may not be directly
comparable to similar measures provided by other companies in the
Company’s industry, as other companies in the Company’s industry
may calculate non-GAAP financial results differently. The Company's
adjusted EBITDA is not a measurement of financial performance under
GAAP and should not be considered as an alternative to operating
(loss) income or any other measure of performance derived in
accordance with GAAP. Although management utilizes internally and
presents adjusted EBITDA, the Company only utilizes that measure
supplementally and does not consider it to be a substitute for, or
superior to, the information provided by GAAP financial
results. Accordingly, adjusted EBITDA is not meant to
be considered in isolation of, and should be read in conjunction
with, the information contained in the Company’s consolidated
financial statements, which have been prepared in accordance with
GAAP.
The following is a reconciliation of the Company’s non-GAAP
adjusted EBITDA to its most directly comparable GAAP measure (i.e.,
net loss attributable to common stockholders) for the periods
indicated (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net loss attributable to common stockholders |
|
$ |
(17,805 |
) |
|
$ |
(13,908 |
) |
|
$ |
(44,321 |
) |
|
$ |
(32,136 |
) |
Adjustments to reconcile net
loss attributable to common stockholders to non-GAAP adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
265 |
|
|
|
239 |
|
|
|
524 |
|
|
|
284 |
|
Loss from discontinued operations, net of tax |
|
|
3 |
|
|
|
630 |
|
|
|
38 |
|
|
|
3,536 |
|
Equity in net loss of investee, net of tax, related to
Nautilus |
|
|
3,296 |
|
|
|
1,084 |
|
|
|
13,463 |
|
|
|
1,872 |
|
Distributions from investee, related to Nautilus |
|
|
4,943 |
|
|
|
— |
|
|
|
4,943 |
|
|
|
— |
|
Income tax expense (benefit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Interest expense |
|
|
8,450 |
|
|
|
4,139 |
|
|
|
15,284 |
|
|
|
9,461 |
|
Depreciation |
|
|
6,428 |
|
|
|
200 |
|
|
|
11,861 |
|
|
|
204 |
|
Amortization of right-of-use asset |
|
|
251 |
|
|
|
21 |
|
|
|
501 |
|
|
|
41 |
|
Stock-based compensation expense |
|
|
1,734 |
|
|
|
482 |
|
|
|
2,610 |
|
|
|
482 |
|
Related party expense to be settled with respect to common
stock |
|
|
104 |
|
|
|
— |
|
|
|
417 |
|
|
|
— |
|
Costs related to non-routine regulatory activities |
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
996 |
|
Other income |
|
|
(54 |
) |
|
|
— |
|
|
|
(54 |
) |
|
|
— |
|
Non-GAAP adjusted EBITDA |
|
$ |
7,615 |
|
|
$ |
(7,053 |
) |
|
$ |
5,266 |
|
|
$ |
(15,260 |
) |
TeraWulf (NASDAQ:WULF)
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