TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”), which
owns and operates vertically integrated, domestic bitcoin mining
facilities powered by 95% zero-carbon energy, today announced its
unaudited interim financial results for the first quarter of fiscal
year 2024 and provided an operational update.
First Quarter
2024 GAAP Operational and Financial
Highlights
- Self-mined 767 bitcoin at the Lake
Mariner Facility and realized another 6 bitcoin earned from profit
sharing associated with a hosting agreement.
- Revenue increased to $42.4 million in
Q1 2024 compared to $23.3 million in Q4 2023.
- Gross profit (exclusive of
depreciation) increased to $28.0 million in Q1 2024 compared to
$14.4 million in Q4 2023.
- Total installed hashrate capacity at
the Lake Mariner Facility of 6.1 EH/s as of March 31, 2024,
representing an increase of 205.0% relative to the same prior year
period.
- Announced new miner purchase and
option agreement with Bitmain, including 5,000 Antminer S21 bitcoin
miners for a total price of $17.5 million, which has been fully
paid. The miners are expected to be delivered to the Lake Mariner
Facility in the second quarter of 2024. The Company also made a
$9.6 million deposit on an additional 30,000 miners with secured
pricing of approximately $16.00 per terahash.
Key GAAP Metrics ($ in thousands) |
Three Months Ended Q1 2024 |
Three Months Ended Q4 2023 |
% Change |
Revenue |
$ |
42,433 |
|
$ |
23,285 |
|
82.2 |
% |
Gross profit (exclusive of depreciation) |
$ |
28,025 |
|
$ |
14,353 |
|
95.3 |
% |
Gross profit margin |
|
66.0 |
% |
|
61.6 |
% |
7.1 |
% |
First Quarter
2024 Non-GAAP Operational and Financial
Highlights
- Self-mined 1,057 bitcoin across the
Lake Mariner and Nautilus Cryptomine facilities, inclusive of 6
bitcoin earned from profit sharing associated with a hosting
agreement at the Lake Mariner Facility.
- Total value of bitcoin self-mined1 of
$56.8 million2 in Q1 2024 compared to $35.2 million3 in Q4
2023.
- Power cost per bitcoin self-mined
increased quarter-over-quarter, to $15,501 per bitcoin in Q1 2024
from $10,308 per bitcoin in Q4 2023 , due to the 15.5% increase in
network difficulty during the period and higher realized energy
prices at the Lake Mariner Facility in New York.
- Adjusted EBITDA increased 95.4% to
$32.0 million in Q1 2024 compared to $16.4 million in Q4 2023.
Key Non-GAAP Metrics4 |
Three Months Ended Q1 2024 |
Three Months Ended Q4 2023 |
% Change |
Bitcoin Self-Mined5 |
|
1,057 |
|
971 |
8.9 |
% |
Value per Bitcoin Self-Mined6 |
$ |
53,750 |
$ |
36,300 |
48.1 |
% |
Power Cost per Bitcoin Self-Mined7 |
$ |
15,501 |
$ |
10,308 |
50.4 |
% |
Avg. Operating Hash Rate (EH/s)8 |
|
6.8 |
|
5.1 |
33.3 |
% |
____________________1 Includes BTC
earned from profit sharing associated with a hosting agreement that
expired in February 2024 at the Lake Mariner Facility and
TeraWulf's net share of BTC produced at the Nautilus Cryptomine
Facility.2 Values profit share BTC at $53,750 per BTC as opposed to
$38,000 per BTC, which was the quoted price of bitcoin in the
Company’s principal market at the time of hosting contract
inception.3 Values profit share BTC at $36,300 per BTC as opposed
to $38,000 per BTC, which was the quoted price of bitcoin in the
Company’s principal market at the time of hosting contract
inception.4 The Company’s share of the earnings or losses of
operating results at the Nautilus Cryptomine Facility is reflected
within “Equity in net income (loss) of investee, net of tax” in the
consolidated statements of operations. Accordingly, operating
results of the Nautilus Cryptomine Facility are not reflected in
revenue, cost of revenue or cost of operations lines in TeraWulf’s
consolidated statements of operations. The Company uses these
metrics as indicators of operational progress and effectiveness and
believes they are useful to investors for the same purposes and to
provide comparisons to peer companies. All figures except Bitcoin
Self-Mined are estimates.5 Includes BTC earned from profit sharing
associated with a hosting agreement that expired in February 2024
at the Lake Mariner Facility and TeraWulf’s net share of BTC
produced at the Nautilus Cryptomine Facility.6 Computed as the
weighted-average opening price of BTC on each respective day the
Self-Mined Bitcoin is earned. Excludes value earned from hosting
contract, which expired in February 2024, for which the quoted
price of BTC in the Company’s principal market at the time of
contract inception was approximately $38,000.7 The Q1 2024 and Q4
2023 calculations exclude 6 and 13 bitcoin, respectively, earned
via hosting profit share.8 While nameplate inventory for TeraWulf’s
two facilities is 8.0 EH/s, inclusive of gross total hosted miners,
actual monthly hash rate performance depends on a variety of
factors, including (but not limited to) performance tuning to
increase efficiency and maximize margin, scheduled outages (scopes
to improve reliability or performance), unscheduled outages,
curtailment due to participation in various cash generating demand
response programs, derate of ASICS due to adverse weather and ASIC
maintenance and repair.
Management Commentary
"During the first quarter, TeraWulf delivered
outstanding results, setting a new benchmark for profitability
among publicly traded bitcoin miners," stated Paul Prager, CEO of
TeraWulf. "During this period, we also further solidified our
financial foundation by reducing debt and augmenting our cash
reserves."
"Capital efficiency remains central to our
strategic approach. Our focus on sustainable and prudent growth
underscores our commitment to maximizing returns on invested
capital," Prager emphasized. "We take pride in outperforming our
competitors in terms of profit generation per exahash while
minimizing shareholder dilution. This quarter's performance
underscores our dedication to delivering tangible value.”
"Our extensive 600 megawatts of owned and scalable
digital infrastructure capacity form the cornerstone of our
competitive edge. This infrastructure uniquely positions us,
enabling the leveraging of our industry-leading bitcoin mining as
the foundational element for developing an alternative compute
hosting business. This move is perfectly aligned with the
escalating demand for high-power data center capacity," continued
Prager.
"We're actively exploring opportunities with
various stakeholders, ranging from hyperscalers to enterprise-level
clients, to leverage our more than 300 megawatts of available
infrastructure capacity," Prager continued. "With access to
low-cost, zero-carbon power, we are well-positioned to meet the
escalating demand for sustainable computing solutions. As we near
the completion of Building 4 and begin construction on Building 5
at Lake Mariner, we are strategically expanding our bitcoin mining
hash rate while concurrently developing a robust high-performance
computing offering. This dual-pronged approach positions us
favorably to capitalize on emerging opportunities in both
markets.”
Production and Operations
Update
As of March 31, 2024, TeraWulf had an
operational miner fleet consisting of approximately 66,900 of the
latest generation miners. This fleet was divided between the
Company’s two locations: the wholly owned Lake Mariner Facility in
New York and the nuclear-powered Nautilus Cryptomine Facility in
Pennsylvania. The Lake Mariner Facility housed 51,100 miners, while
the Nautilus Cryptomine Facility had 15,800 self-miners. The total
installed hashrate across both sites was 8.0 EH/s, with a total
operational capacity of 210 MW.
TeraWulf is currently expanding mining operations
at its wholly owned Lake Mariner Facility in New York with the
addition of Building 4, which is expected to increase the
facility’s bitcoin mining infrastructure capacity from its current
160 MW to 195 MW by mid 2024, which is expected to further increase
TeraWulf’s total operational capacity to more than 10.0 EH/s. The
Company has also recently initiated construction activities for
Building 5 at the Lake Mariner Facility, which is expected to add
an incremental 50 MW of bitcoin mining capacity, bringing
TeraWulf’s total operational capacity to approximately 300 MW by
the first quarter of 2025.
In Pennsylvania, the Company currently has 50 MW of
operational mining capacity at the Nautilus Cryptomine Facility, a
joint venture with Cumulus Coin, LLC. TeraWulf’s additional 50 MW
of expansion capacity at the Nautilus Cryptomine Facility is
planned to come online in 2025, accommodating up to 2.5 EH/s of
additional operational mining capacity at the site.
As previously announced, the Company is finalizing
the design for a large-scale, high-performance computing (HPC) / AI
project at the Lake Mariner Facility and has committed an initial 2
MW block of power, capable of deploying thousands of the latest
generation graphics processing units (GPUs). The Company has
upgraded the internet interconnection at the Lake Mariner Facility
to align with bandwidth requirements of AI, designed closed loop
liquid cooling, and power supply for 100% redundancy in support of
the project.
Miner Purchase Agreements
During the first quarter of 2024, the Company
entered into a new miner purchase and option agreement with Bitmain
for the purchase of S21 miners. In connection with this agreement,
the Company has paid $17.5 million for 5,000 S21 miners, which are
expected to be delivered in the second quarter of 2024 and occupy
Building 4 at the Lake Mariner Facility. TeraWulf has also made a
deposit of $9.6 million towards an additional 30,000 miners with
secured pricing of approximately $16.00 per terahash.
First Quarter
2024 GAAP Financial Results
Revenue in the first quarter of 2024 increased
82.2% to $42.4 million as compared to $23.3 million in the fourth
quarter of 2023. This increase is attributable to a significant
growth in operating self-mining hashrate as well as a higher
average bitcoin price relative to the fourth 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 within equity in net income (loss) of investee, net of tax
in the consolidated statements of operations.
Gross profit in the first quarter of 2024 increased
95.3% to $28.0 million compared to $14.4 million in the fourth
quarter of 2023. Gross profit margin as a percentage of revenue
increased to 66.0% in the first quarter of 2024 compared to 61.6%
in the fourth quarter of 2023, primarily driven by a 33.3% increase
in average operating hashrate and 48.1% increase in average value
per bitcoin self-mined quarter-over-quarter.
During the first quarter of 2024, the Company
repaid $33.4 million of debt, followed by an additional $30.2
million repayment in April 2024, collectively reducing the debt
balance to $75.8 million. In total, the Company has reduced its
debt balance by $70.2 million since the start of the fourth quarter
of 2023, with $51.6 million of this repayment funded by cash flow
from operations and only $18.6 million from equity proceeds.
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 primarily by nuclear and hydro 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, and/or regulation regarding
safety, health, environmental and other matters, which could
require significant expenditures; (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) adverse geopolitical or
economic conditions, including a high inflationary environment; (8)
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); (9) 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; (10)
employment workforce factors, including the loss of key employees;
(11) litigation relating to TeraWulf and/or its business; and (12)
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 assad@terawulf.com(678)
570-6791
|
CONSOLIDATED BALANCE SHEETSAS OF
MARCH 31, 2024 AND
DECEMBER 31, 2023(In thousands,
except number of shares and par value) |
|
|
March 31, 2024 |
|
December 31, 2023 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
45,824 |
|
|
$ |
54,439 |
|
Digital currency |
|
2,018 |
|
|
|
1,801 |
|
Prepaid expenses |
|
3,973 |
|
|
|
4,540 |
|
Other receivables |
|
1,668 |
|
|
|
1,001 |
|
Other current assets |
|
873 |
|
|
|
806 |
|
Total current assets |
|
54,356 |
|
|
|
62,587 |
|
Equity in net assets of investee |
|
91,866 |
|
|
|
98,613 |
|
Property, plant and equipment, net |
|
237,889 |
|
|
|
205,284 |
|
Right-of-use asset |
|
10,691 |
|
|
|
10,943 |
|
Other assets |
|
586 |
|
|
|
679 |
|
TOTAL ASSETS |
$ |
395,388 |
|
|
$ |
378,106 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
14,313 |
|
|
$ |
15,169 |
|
Accrued construction liabilities |
|
938 |
|
|
|
1,526 |
|
Other accrued liabilities |
|
5,494 |
|
|
|
9,179 |
|
Share based liabilities due to related party |
|
— |
|
|
|
2,500 |
|
Other amounts due to related parties |
|
975 |
|
|
|
972 |
|
Current portion of operating lease liability |
|
49 |
|
|
|
48 |
|
Insurance premium financing payable |
|
983 |
|
|
|
1,803 |
|
Current portion of long-term debt |
|
99,360 |
|
|
|
123,465 |
|
Total current liabilities |
|
122,112 |
|
|
|
154,662 |
|
Operating lease liability, net of current portion |
|
886 |
|
|
|
899 |
|
Long-term debt |
|
47 |
|
|
|
56 |
|
TOTAL LIABILITIES |
|
123,045 |
|
|
|
155,617 |
|
|
|
|
|
Commitments and Contingencies (See Note 12) |
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
Preferred stock, $0.001 par value, 100,000,000 authorized at
March 31, 2024 and December 31, 2023; 9,566 issued and
outstanding at March 31, 2024 and December 31, 2023;
aggregate liquidation preference of $11,709 and $11,423 at
March 31, 2024 and December 31, 2023, respectively |
|
9,273 |
|
|
|
9,273 |
|
Common stock, $0.001 par value, 400,000,000 authorized at
March 31, 2024 and December 31, 2023; 302,921,785 and
276,733,329 issued and outstanding at March 31, 2024 and
December 31, 2023, respectively |
|
303 |
|
|
|
277 |
|
Additional paid-in capital |
|
532,238 |
|
|
|
472,834 |
|
Accumulated deficit |
|
(269,471 |
) |
|
|
(259,895 |
) |
Total stockholders' equity |
|
272,343 |
|
|
|
222,489 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
395,388 |
|
|
$ |
378,106 |
|
|
CONSOLIDATED STATEMENTS OF OPERATIONSFOR
THE THREE MONTHS ENDED
MARCH 31, 2024 AND
2023 (In thousands, except number of
shares and loss per common share; unaudited) |
|
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Revenue |
$ |
42,433 |
|
|
$ |
11,533 |
|
Cost of revenue (exclusive of depreciation shown below) |
|
14,408 |
|
|
|
5,002 |
|
Gross profit |
|
28,025 |
|
|
|
6,531 |
|
|
|
|
|
Cost of operations: |
|
|
|
Operating expenses |
|
785 |
|
|
|
308 |
|
Operating expenses – related party |
|
888 |
|
|
|
597 |
|
Selling, general and administrative expenses |
|
12,289 |
|
|
|
6,492 |
|
Selling, general and administrative expenses – related party |
|
2,620 |
|
|
|
2,898 |
|
Depreciation |
|
15,088 |
|
|
|
5,433 |
|
Gain on fair value of digital currency, net |
|
(1,329 |
) |
|
|
— |
|
Realized gain on sale of digital currency |
|
— |
|
|
|
(603 |
) |
Impairment of digital currency |
|
— |
|
|
|
627 |
|
Total cost of operations |
|
30,341 |
|
|
|
15,752 |
|
|
|
|
|
Operating loss |
|
(2,316 |
) |
|
|
(9,221 |
) |
Interest expense |
|
(11,045 |
) |
|
|
(6,834 |
) |
Loss on extinguishment of debt |
|
(2,027 |
) |
|
|
— |
|
Other income |
|
500 |
|
|
|
— |
|
Loss before income tax and equity in net income (loss) of
investee |
|
(14,888 |
) |
|
|
(16,055 |
) |
Income tax benefit |
|
— |
|
|
|
— |
|
Equity in net income (loss) of investee, net of tax |
|
5,275 |
|
|
|
(10,167 |
) |
Loss from continuing operations |
|
(9,613 |
) |
|
|
(26,222 |
) |
Loss from discontinued operations, net of tax |
|
— |
|
|
|
(35 |
) |
Net loss |
|
(9,613 |
) |
|
|
(26,257 |
) |
Preferred stock dividends |
|
(286 |
) |
|
|
(259 |
) |
Net loss attributable to common stockholders |
$ |
(9,899 |
) |
|
$ |
(26,516 |
) |
|
|
|
|
Loss per common share: |
|
|
|
Continuing operations |
$ |
(0.03 |
) |
|
$ |
(0.16 |
) |
Discontinued operations |
|
- |
|
|
|
— |
|
Basic and diluted |
$ |
(0.03 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
Basic and diluted |
|
290,602,725 |
|
|
|
165,015,228 |
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWSFOR
THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(In thousands; unaudited) |
|
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(9,613 |
) |
|
$ |
(26,257 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
Amortization of debt issuance costs, commitment fees and accretion
of debt discount |
|
7,593 |
|
|
|
3,549 |
|
Related party expense to be settled with respect to common
stock |
|
— |
|
|
|
313 |
|
Common stock issued for interest expense |
|
— |
|
|
|
26 |
|
Stock-based compensation expense |
|
6,931 |
|
|
|
876 |
|
Depreciation |
|
15,088 |
|
|
|
5,433 |
|
Amortization of right-of-use asset |
|
252 |
|
|
|
250 |
|
Increase in digital currency from mining and hosting services |
|
(41,537 |
) |
|
|
(9,940 |
) |
Gain on fair value of digital currency, net |
|
(1,329 |
) |
|
|
— |
|
Realized gain on sale of digital currency |
|
— |
|
|
|
(603 |
) |
Impairment of digital currency |
|
— |
|
|
|
627 |
|
Proceeds from sale of digital currency |
|
54,391 |
|
|
|
9,982 |
|
Loss on extinguishment of debt |
|
2,027 |
|
|
|
— |
|
Equity in net (income) loss of investee, net of tax |
|
(5,275 |
) |
|
|
10,167 |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
|
35 |
|
Changes in operating assets and liabilities: |
|
|
|
Decrease in prepaid expenses |
|
567 |
|
|
|
717 |
|
Increase in other receivables |
|
(667 |
) |
|
|
— |
|
Increase in other current assets |
|
(67 |
) |
|
|
(241 |
) |
Decrease (increase) in other assets |
|
22 |
|
|
|
(83 |
) |
Decrease in accounts payable |
|
(1,686 |
) |
|
|
(2,435 |
) |
Decrease in other accrued liabilities |
|
(3,906 |
) |
|
|
(1,354 |
) |
Increase in other amounts due to related parties |
|
67 |
|
|
|
325 |
|
Decrease in operating lease liability |
|
(12 |
) |
|
|
(10 |
) |
Net cash provided by (used in) operating activities from continuing
operations |
|
22,846 |
|
|
|
(8,623 |
) |
Net cash used in operating activities from discontinued
operations |
|
— |
|
|
|
(90 |
) |
Net cash provided by (used in) operating activities |
|
22,846 |
|
|
|
(8,713 |
) |
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Investments in joint venture, including direct payments made on
behalf of joint venture |
|
— |
|
|
|
(2,285 |
) |
Purchase of and deposits on plant and equipment |
|
(46,979 |
) |
|
|
(9,986 |
) |
Net cash used in investing activities |
|
(46,979 |
) |
|
|
(12,271 |
) |
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Principal payments on long-term debt |
|
(33,412 |
) |
|
|
— |
|
Payments of prepayment fees associated with early extinguishment of
long-term debt |
|
(314 |
) |
|
|
— |
|
Proceeds from insurance premium and property, plant and equipment
financing |
|
— |
|
|
|
295 |
|
Principal payments on insurance premium and property, plant and
equipment financing |
|
(827 |
) |
|
|
(1,451 |
) |
Proceeds from issuance of common stock, net of issuance costs paid
of $0 and $1,051 |
|
50,722 |
|
|
|
26,562 |
|
Proceeds from common stock to be issued, net of issuance costs of
$0 and $56 |
|
— |
|
|
|
4,390 |
|
Proceeds from warrant issuances |
|
— |
|
|
|
2,500 |
|
Payments of tax withholding related to net share settlements of
stock-based compensation awards |
|
(651 |
) |
|
|
— |
|
Proceeds from issuance of convertible promissory note |
|
— |
|
|
|
1,250 |
|
Payment of contingent value rights liability related to proceeds
from sale of net assets held for sale |
|
— |
|
|
|
(3,899 |
) |
Net cash provided by financing activities |
|
15,518 |
|
|
|
29,647 |
|
|
|
|
|
Net change in cash and cash equivalents |
|
(8,615 |
) |
|
|
8,663 |
|
Cash and cash equivalents at beginning of period |
|
54,439 |
|
|
|
8,323 |
|
Cash and cash equivalents at end of period |
$ |
45,824 |
|
|
$ |
16,986 |
|
|
|
|
|
Cash paid during the period for: |
|
|
|
Interest |
$ |
3,726 |
|
|
$ |
5,399 |
|
Income taxes |
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Non-GAAP Measure
To provide investors with additional information in
connection with our results as determined in accordance with
generally accepted accounting principles in the United States
(“GAAP”), we disclose Adjusted EBITDA as a non-GAAP measure. This
measure is not a financial measure calculated in accordance with
GAAP, and it should not be considered as a substitute for net
income, operating income, or any other measure calculated in
accordance with GAAP, and may not be comparable to similarly titled
measures reported by other companies.
We define Adjusted EBITDA as income (loss) from
continuing operations adjusted for (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
income (loss) of investee, net of tax, related to Nautilus; (iv)
other income which is related to interest income or income for
which management believes is not reflective of the Company’s
ongoing operating activities; (v) loss on extinguishment of debt,
which is not reflective of the Company’s general business
performance; and (vi) loss from discontinued operations, net of
tax, which is 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
income (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 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 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 table 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 EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
Net loss attributable to common stockholders |
$ |
(9,899 |
) |
|
$ |
(26,516 |
) |
Adjustments to reconcile net loss attributable to common
stockholders to non-GAAP Adjusted EBITDA: |
|
|
|
Preferred stock dividends |
|
286 |
|
|
|
259 |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
|
35 |
|
Equity in net (income) loss of investee, net of tax |
|
(5,275 |
) |
|
|
10,167 |
|
Distributions from investee, related to Nautilus |
|
12,022 |
|
|
|
— |
|
Income tax benefit |
|
— |
|
|
|
— |
|
Other income |
|
(500 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
2,027 |
|
|
|
— |
|
Interest expense |
|
11,045 |
|
|
|
6,834 |
|
Depreciation |
|
15,088 |
|
|
|
5,433 |
|
Amortization of right-of-use asset |
|
252 |
|
|
|
250 |
|
Stock-based compensation expense |
|
6,931 |
|
|
|
876 |
|
Related party expense to be settled with respect to common
stock |
|
— |
|
|
|
313 |
|
Non-GAAP Adjusted EBITDA |
$ |
31,977 |
|
|
$ |
(2,349 |
) |
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