EASTON, Md. and DULUTH, Minn., June 25,
2021 /PRNewswire/ -- TeraWulf Inc. ("TeraWulf"), poised
to become a best-in-class bitcoin mining company, announced today
it expects to become a Nasdaq-listed company through a business
combination with IKONICS Corporation (Nasdaq: IKNX), a Duluth, MN imaging technology company. The
companies have entered into a definitive merger agreement to
combine under a new holding company, which will change its name to
TeraWulf Inc. and is expected to be listed on The Nasdaq Stock
Market LLC under the trading symbol "WULF".
Environmental, Social, and Governance (ESG) Focused
Cryptocurrency Mining Company
TeraWulf is positioned to generate environmentally sustainable
bitcoin at an industrial scale in the U.S. using over 90%
zero-carbon energy. With 60,000 state-of-the-art miners on order,
TeraWulf expects to have 50 MW of mining capacity online this year,
and consistent with its buildout plan, expects to have 800 MW
mining capacity deployed by 2025, enabling over 23 EH/s of expected
hashrate.
TeraWulf is leveraging its management team's decades of
experience in energy supply optimization, operations and
engineering to create a premier platform for sustainable
cryptocurrency mining. In addition, TeraWulf plans to implement its
proven model for large cryptocurrency mine development and
operations, which will help ensure TeraWulf can scale efficiently.
With an institutional commitment to ESG principles and a target of
100% zero-carbon energy utilization, TeraWulf is positioned to be a
leading miner of sustainable bitcoin globally.
Paul Prager, Chairman & Chief
Executive Officer of TeraWulf, said, "TeraWulf represents an
exciting new paradigm for cryptocurrency mining, which is built on
a significant strategic advantage to utilize reliable, secure and
low-cost sustainable energy sources to support our bitcoin mining
activities. We have a talented management team with a proven track
record and we are ready to rapidly scale due to an established
supply chain and strong partner relationships. Site work is
underway at the Company's mining facilities in New York and Pennsylvania with competitive power supply
agreements already in place. As we prepare TeraWulf to trade on the
public market, we are confident that we have the in-house
technology, infrastructure and operations expertise to deliver
unparalleled value for shareholders."
Nazar Khan, Chief Operating
Officer, added, "Our team's unique access to energy assets and deep
sector expertise in the wholesale electricity markets allows us to
quickly develop a large-scale cryptocurrency mining platform that
can help facilitate and can expedite the electric grid's transition
to a zero-carbon future. Sited and managed appropriately, mining
operations provide resiliency to the electric grid while leading
the rapid development of the global fintech infrastructure."
Glenn Sandgren, Chief Executive
Officer of IKONICS, said, "We are pleased to have reached this
agreement with TeraWulf and look forward to partnering with them.
This transaction provides ideal outcomes for our shareholders,
customers and employees. It delivers our shareholders the
opportunity to realize a substantial upfront cash payment while
continuing to benefit from the value of our legacy imaging
business, and provides them with the opportunity to participate in
the potential upside of TeraWulf at an exciting time for the
cryptocurrency mining space. The agreement will be
instrumental in securing the long-term viability of IKONICS's
legacy business, allowing it to continue to meet the needs of our
customers with a secure supply of our high quality products in
addition to continued employment opportunities for our
workforce."
TeraWulf's Leading ESG Focus
TeraWulf's aim is to be the most environmentally sustainable
bitcoin mining company focused on ESG through its purpose-driven
business practices, determined clean energy goals, and support for
its communities. TeraWulf is committed to diversity, equity and
inclusion at all levels of the organization and is proud of its
highly qualified, diverse management team. As an industry leading
producer of bitcoin with a targeted path of zero-carbon energy
utilization, TeraWulf intends to maintain a high level of
transparency, reliability, and environmental stewardship across its
operations and throughout its supply chain.
Kerri Langlais, TeraWulf's Chief
Strategy Officer, said, "Our core focus on ESG sets us apart from
our competitors and ties directly to our business success. We are
confident that by integrating flexible baseload energy demand into
the electric grid, we will accelerate the transition to a more
resilient, stable and sustainable energy future while generating
attractive investor returns and tangible benefits, including job
creation, for our communities."
Transaction Overview
Under the terms of the agreement, which has been unanimously
approved by the Boards of Directors of both companies, each
outstanding share of IKONICS common stock will receive $5.00 in cash, one CVR, and one share of the
combined company's common stock. Through the CVRs, which will not
be publicly traded, the IKONICS shareholders will be entitled to
received 95% of the net proceeds from any sale of IKONICS's legacy
business completed during the 18 months following the closing of
the business combination, and will expire at the end of such 18
month period with respect to any portion of IKONICS's legacy
business which has not been sold. The shares of the combined
company's common stock to be received by the IKONICS shareholders
will collectively represent 2% of the combined company's pro forma
common equity ownership. As of March 31,
2021, IKONICS had a net book value of $11.6 million, cash of $4.4 million and working capital of $4.1 million.
Following consummation of the transaction, the legacy business
of IKONICS will be operated consistent with past practices but will
be positioned for sale on terms that are acceptable to the Board of
Directors of the combined company.
The transaction is expected to close in the second half of 2021,
subject to the receipt of regulatory approvals, the approval of
IKONICS and TeraWulf shareholders, and other customary closing
conditions.
Management and Board of Directors
The combined company will be led by Paul Prager as Chairman and Chief Executive
Officer. In addition, several members of the existing TeraWulf
leadership team are expected to serve on the combined
company's management team, including:
- Nazar Khan, Chief Operating
Officer;
- Kerri Langlais, Chief
Strategy Officer;
- Ken Deane, Chief Financial
Officer; and
- Stefanie Fleischmann, Chief
Legal Officer.
TeraWulf's executive team has worked together for nearly 15
years in the energy infrastructure space with a proven track record
of risk management and investment performance.
Upon completion of the transaction, all members of the IKONICS
Board of Directors will resign and be replaced by persons to
be designated by TeraWulf.
Transaction Materials
A presentation and additional materials regarding the
transaction are available on TeraWulf's website.
Advisors
Paul Weiss, Rifkind, Wharton
& Garrison LLP is serving as legal advisor and Moelis &
Company LLC is serving as financial advisor to TeraWulf. Faegre
Drinker Biddle & Reath LLP is serving as legal advisor and
Northland Capital Markets is serving as financial advisor to
IKONICS.
About TeraWulf
TeraWulf was formed to own and operate fully integrated
environmentally clean cryptocurrency mining facilities in
the United States. TeraWulf will
provide domestically produced bitcoin powered by more than 90%
zero-carbon energy with a goal of utilizing 100% zero-carbon
energy.
The Company's mining facility in New
York is expected to be operational in the fourth quarter of
2021 and the mining facility in Pennsylvania recently commenced site work with
targeted operation in the second quarter of 2022. For more
information on TeraWulf, please visit www.TeraWulf.com or follow
@TeraWulfInc on Twitter.
About IKONICS
IKONICS has served as an international leader in the development
of imaging technologies for over 65 years. IKONICS proudly
introduces products and process solutions for a diverse array of
imaging markets. For more information on IKONICS, please visit
www.Ikonics.com.
Additional Information and Where to Find It; Participants in
the Solicitation
In connection with the proposed transaction, IKONICS intends to
file relevant materials with the United States Securities and
Exchange Commission (the "SEC"), including a combined proxy
statement and registration statement on Form S-4. Following the
filing of the definitive proxy statement with the SEC, IKONICS will
mail the definitive proxy statement and a proxy card to each
shareholder entitled to vote at the special meeting relating to the
proposed transaction. The proxy statement, any other relevant
documents, and all other materials filed with the SEC concerning
IKONICS are (or, when filed, will be) available free of charge at
http://www.sec.gov and http:/www.ikonics.com/investor-relations.
Shareholders should read carefully the proxy statement and any
other relevant documents that IKONICS files with the SEC when they
become available before making any voting decision because they
will contain important information.
This communication does not constitute a solicitation of proxy,
an offer to purchase, or a solicitation of an offer to sell any
securities. IKONICS's directors and executive officers are deemed
to be participants in the solicitation of proxies from shareholders
in connection with the proposed transaction. Information regarding
the names of such persons and their respective interests in the
transaction, by securities holdings or otherwise, will be set forth
in the definitive proxy statement when it is filed with the SEC.
Additional information regarding these individuals is set forth in
its annual report on Form 10-K for the fiscal year ended
December 31, 2020, its definitive
proxy statement for the annual meeting held on April 29, 2021, and the revised definitive proxy
statement for the same meeting, which were filed with the SEC on
March 3, 2021, March 23, 2021, and April
6, 2021, respectively. To the extent IKONICS directors and
executive officers or their holdings of IKONICS securities have
changed from the amounts disclosed in those filings, to IKONICS's
knowledge, such changes have been reflected on initial statements
of beneficial ownership on Form 3 or statements of change in
ownership on Form 4 on file with the SEC. These materials are (or,
when filed, will be) available free of charge at
http://www.Ikonics.com/investor-relations.
Forward Looking Statements
This communication contains "forward-looking statements" within
the meaning of the U.S. federal securities laws. Such 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. Actual results may vary
materially from those expressed or implied by forward-looking
statements based on a number of factors, including, without
limitation: (1) risks related to the consummation of the mergers,
including the risks that (a) the mergers may not be consummated
within the anticipated time period, or at all, (b) the parties may
fail to obtain shareholder approval of the merger agreement, (c)
other conditions to the consummation of the mergers under the
merger agreement may not be satisfied, (d) all or part of
TeraWulf's contemplated financing in connection with the mergers
may not become available, and (e) the significant limitations on
remedies contained in the merger agreement may limit or entirely
prevent a party from specifically enforcing another party's
obligations under the merger agreement or recovering damages for
any breach; (2) approval of the combined company's application to
list its shares on Nasdaq; (3) no assurance that future
developments affecting TeraWulf will be those that it has
anticipated; TeraWulf's projected financial information is for
illustrative purposes only and should not be relied upon as
necessarily being indicative of future results since the
assumptions and estimates underlying such projected financial
information are inherently uncertain and are subject to a wide
variety of significant business, economic, competitive and other
risks and uncertainties that could cause actual results to
differ materially from those contained in the prospective financial
information; (4) the effects that any termination of the
merger agreement may have on a party or its business, including the
risks that (a) the price of IKONICS common stock may decline
significantly if the mergers are not completed, (b) the merger
agreement may be terminated in circumstances requiring IKONICS to
pay TeraWulf a termination fee of $1.2
million, or (c) the circumstances of the termination,
may have a chilling effect on alternatives to the mergers; (5) the
effects that the announcement or pendency of the mergers may have
on IKONICS and its business, including the risks that as a result
(a) the business, operating results or stock price of IKONICS may
suffer, (b) its current plans and operations may be disrupted, (c)
the ability of IKONICS to retain or recruit key employees may be
adversely affected, (d) its business relationships (including,
customers, franchisees and suppliers) may be adversely affected, or
(e) management and employee attention may be diverted from other
important matters; (6) the effect of limitations that the merger
agreement places on IKONICS's ability to operate its business,
return capital to shareholders or engage in alternative
transactions; (7) the nature, cost and outcome of pending and
future litigation and other legal proceedings, including any such
proceedings related to the transactions and instituted against
IKONICS and others; (8) the risk that the transaction may involve
unexpected costs, liabilities or delays; (9) other economic,
business, competitive, legal, regulatory, and/or tax factors; (10)
the possibility that less than all or none of the legacy IKONICS
business will be sold prior to the expiration of the CVRs; and (11)
other factors described under the heading "Risk Factors" in Part I,
Item 1A of IKONICS's annual report on Form 10-K for the fiscal year
ended December 31, 2020, as updated or supplemented by subsequent
reports that IKONICS has filed or files with the SEC. Potential
investors, shareholders 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 are made. Neither TeraWulf
nor IKONICS assumes any obligation to publicly update any
forward-looking statement after it is made, whether as a result of
new information, future events or otherwise, except as required by
law.
Contacts
TeraWulf
Michael
Freitag / Joseph Sala /
Lyle Weston
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
IKONICS
Glenn Sandgren
Chief Executive Officer
(218) 628-2217
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SOURCE TeraWulf Inc.