TeraWulf Inc.

Please stand by. We're about to begin. Good afternoon, ladies and gentlemen. Thank you for standing by. My name is Beau, and I will be your conference operator today. At this time, I would like to welcome you to the TerraWolf Q4 and calendar year 2022 results and business update call. At this time, all lines have been placed on mute to prevent any background noise. Should you require any assistance, please press star zero on your telephone keypad, and an operator will call on the line to assist you. Now, at this time, I'll turn things over to Mr. Sandy Harrison, Vice President, Investor Relations. Please go ahead, Mr. Harrison.

Thank you, Beau, and welcome to TerraWolf's Q4 and full year 2022 financial results and operational update call. I am Sandy Harrison, VP of IR, and joining me on today's call are Paul Prager, Co-Founder and Chief Executive Officer, Nazir Khan, Co-Founder and Chief Operating Officer, Patrick Fleury, Chief Financial Officer, Kerry Langlis, Chief Strategy Officer, and Stephanie Fleischman, General Counsel. I want to remind everyone that during today's call, we will be making forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, They are subject to inherent risks and uncertainties and changes in circumstances that are difficult to predict, many of which are outside of our control. The company's actual results and financial condition may differ significantly from those discussed during this call. Additional factors that could cause actual results that differ from forward-looking statements can be found today in our press release and on TerraWolf's SEC filings. Our comments are as of today, and Tara Wolf does not assume any obligation to publicly update any of these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law or regulation. With that, I would like to pass the call over to our CEO, Paul Prager, for his opening comments.

Paul? Thank you, Sandy. Good evening, everyone, and thank you for joining us in our fourth quarter and fiscal year 2022 earnings call. There is little doubt that 2022 was a transformational year for TerraWolf and for the crypto industry at whole. During what proved to be an increasingly volatile macro backdrop and resultant turbulent market, TerraWolf successfully transitioned from development and construction to Bitcoin generation by remaining steadfastly focused on achieving our goal of building a scalable, vertically integrated Bitcoin mining company that uses low cost, zero carbon energy. We've accomplished a lot since our last formal call, and I'd like to review a few key milestones achieved during our first full year as a public company. Operationally, we commenced mining in March 2022 at our wholly owned Lake Marana facility in New York. This source is 91% zero carbon power from the grid, primarily from locally produced and abundant hydro and nuclear power. With the completion of our building one, we exited the year with more than 60 megawatts and two hexahash of mining capacity at Lake Mariner. At our jointly owned Nautilus facility in Pennsylvania, which sources 100% nuclear energy from the co-located 2.5 gigawatt Susquehanna nuke, we completed construction of two buildings. The Nautilus facility is home to one of Carol's most valuable assets, 50 megawatts of mining capacity at a fixed power price of two cents per kilowatt hour for five years. Nautilus was recently energized in February, and we have since ramped Terawolf's self-mining capacity at Nautilus to approximately 29 megawatts and 1.2x ash today. Financially, we successfully leveraged key relationships to make efficient use of deployed capital, complete construction of our facilities, and fund the company to free cash flow positive operations. We restructured our miner purchase agreements with Bitmain, unlocking substantial deposits and enabling us to procure miners to fully utilize 160 megawatts of capacity for self-mining, which we expect to be completely deployed in the second quarter of this year. We reached a pivotal agreement with our cooperative lenders to eliminate near-term amortization and in doing so, optimized our financial flexibility through market cycles. Finally, we raised the final capital necessary to bridge TerraWolf to cash flow positive operations, including significant investment from management. Let me be very clear. We do not plan to raise additional capital to achieve 5.5 XS and 160 megawatts of power capacity in the second quarter this year. Now that I've highlighted some of our accomplishments in 2022, I would like to underscore what unquestionably sets Wolf apart from our peers. One, we have the best assets. Our two mining facilities are arguably the best in the industry. With excellent power costs, ideal climate, and meaningful immediate growth capacity, Lake Mariner and Nautilus are far ahead of the pack. In energy markets, Location is everything, and our sites are located in robust, well-developed markets where we can provide an incremental value for the services we provide to the grid. As a zero-carbon miner, we believe we are strategically positioned relative to our peers in what will be an increasingly stringent regulatory environment. Two, we have the energy advantage. Our team has been working together in the energy infrastructure sector for more than 25 years. That is what we have done and that is what we do. We know how to procure and contract low cost power both at term and scale. Just look at what we have. Our two cent power at Nautilus and abundantly low cost power in upstate New York translates into a power cost per Bitcoin produced of approximately $8,000, which is among the lowest in the sector. Three, we have accomplished unparalleled growth. Over the course of 12 months, TerraWolf has built two world-class mining facilities that are expected to achieve 5.5 exahash and 160 megawatts of power capacity in the matter of weeks. I encourage you to compare what we have built in a year relative to what it took any other Bitcoin miners in years to achieve. As a vertically integrated miner, we own our sites and control our destiny. Four, we can expand organically at existing sites. Galeability and adaptability are vital, and our Lake Mariner and Nautilus facilities have both. We have the shovel-ready ability to nearly double our hashing capacity at our existing sites. Everything from our power import capacity to the layout of our warehouses and racks was designed to expand. And while the best growth opportunities may exist within our portfolio, that doesn't preclude us from evaluating opportunities to take our experience and strategy to new projects or places. Regardless of how we do it, we will continue to expand in a financially responsible way. Five. We have prioritized infrastructure. So far, we have invested approximately $260 million to ensure our facilities and mining equipment will lead the pack today and in the future. The time and cost alone to replicate our business is so substantial and represent a significant barrier to entry. Six, we have industry-leading efficiency. As we have continued to scale, Our price per exahash and efficiency per exahash metrics continue to improve. In 2022, we started out with a quarterly average efficiency of more or less 31 joules per terahash. And by year end, we were operating at close to 26 joules per terahash, based on an optimized mix of the most efficient miners. What differentiates TerraWolf is that we own and operate our facilities control our power supply, and utilize 91 plus percent zero carbon energy sources. We believe the strength of these individual components has created a highly defensible moat with significant barriers to entry against new market entrants, as well as less efficient and poorly executing peers. Looking ahead, we have clear and established priorities. One, execution. Achieving our target of deploying 50,000 miners, 160 megawatts, or 5.5x hash, we are nearly there and expect to be fully energized in the second quarter of this year. Two, earnings power. Optimizing our earnings by ramping up our operations efficiently, executing our cost-cutting initiatives, and expanding the suite of grid services that we offer to the market. Three, expansion. When it comes to Bitcoin mining, size matters. We will remain laser focused on scaling mining operations at our existing sites while opportunistically pursuing strategic opportunities in a financially responsible manner. Four, evidence. Continuing to raise the bar on transparency and disclosure in an industry that we believe has a lot of work to do in this regard. Our CFO, Patrick, will touch on this shortly, but I encourage all of you, our investors, to review Terrible's presentations and monthly operating reports and compare the quality and level of disclosure that we provide relative to our peers. Five, education. As I said earlier, we believe mining with zero carbon energy will be a strategic advantage and clear differentiator when it comes to regulation. We will collaborate with regulators and legislators to explain and demonstrate the value that sustainable Bitcoin mining can have on the energy grids and communities where we operate. These priorities reflect the core values of our management team, which we believe is truly aligned with our shareholders. As I previewed earlier in my remarks, Terrell's leadership team is significantly invested in the company, more than any other public Bitcoin miner. We have no interest in pursuing a growth at any cost or huddle strategy like some of our peers at any cost. Our objective is simple, to create substantial and realizable value for our shareholders in the least dilutive way possible. In summary, 2022 was just the beginning. Our vertically integrated build, own, and operate business model had us a bit behind the more immediate gratification host programs followed by many other public miners. But we have now arrived. We are the zero carbon, low cost, right cap structure, sustainable miner we promised we would become. We are not vulnerable to the volatility or regulatory risk of fossil fuel based production. We own our facilities, enabling better and predictable outcomes in all elements of Bitcoin generation. Our team has boatloads of experience in developing, owning and operating both power plants and Bitcoin mining facilities. And most importantly, management is entirely aligned with our investors. with over 50% insider board and management shareholdings. As we move further into 2023, we are poised to play offense. Our commitment is to deliver best-in-class execution at full scale and position TerraWolf as the preeminent Bitcoin miner. I thank you for your continued interest and support. I will now turn the call over to our CFO, Patrick Fleury, for more detailed financial reviews.