Key Elements of the Transaction:
- $425 million 2.75% Convertible Senior Notes offering (32.50% conversion premium)
- Capped call transactions entered into in connection with the 2.75% Convertible Senior Notes due 2030 with an initial cap price of $12.80 per share of common stock, which represents a 100% premium to the closing sale price of TeraWulf's common stock on October 23, 2024
- Concurrent repurchase of approximately $115 million of common stock
TeraWulf has granted the initial purchasers of the Convertible Notes a 13-day option to purchase up to an additional $75 million aggregate principal amount of the Convertible Notes. The offering is expected to close on October 25, 2024, subject to satisfaction of customary closing conditions.
dditional Details of the Convertible Notes:
The Convertible Notes will be senior unsecured obligations of the Company and will accrue interest at a rate of 2.75% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2025. The Convertible Notes will mature on February 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms. Prior to November 1, 2029, the Convertible Notes will be convertible only upon satisfaction of certain conditions and during certain periods, and thereafter, the Convertible Notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
The Convertible Notes will be convertible into cash in respect of the aggregate principal amount of the Convertible Notes to be converted and cash, shares of the common stock or a combination of cash and shares of the common stock, at the Company's election, in respect of the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. The conversion rate will initially be 117.9245 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $8.48 per share of the common stock). The initial conversion price of the Convertible Notes represents a premium of approximately 32.50% to the $6.40 closing price per share of the common stock on The Nasdaq Capital Market on October 23, 2024. The conversion rate will be subject to adjustment in certain circumstances. In addition, upon conversion in connection with certain corporate events or a notice of redemption, the Company will increase the conversion rate.
