TeraWulf ( NASDAQ: WULF ) stock sank 28% in Thursday afternoon trading after the bitcoin ( BTC-USD ) miner said it's restructuring its debt obligations in an effort steer clear of negative free cash flow. The company said it struck a deal with its existing lenders on certain debt modifications, in addition to raising around $32M of equity proceeds, which together are expected to bring WULF to positive free cash flow in the second quarter. The binding term sheet with its existing lenders, signed on Jan. 27, is set to replace amortization of the term loan with a free cash flow sweep mechanism through April 2024, subject to WULF raising the requisite amount of equity proceeds by March 15, the company said. The New York-based miner said it also raised a total of $6.75M in recent months. Specifically, WULF co-founders, CEO Paul Prager and Chief Operating Officer Nazar Khan, acquired $2.5M in a private placement at a market price of $1.05 per share. That's in addition to the over $15M of personal capital they previously invested in the company. Furthermore, WULF noted it received ~$4.25M in proceeds "from the exercise of certain private placement warrants issued in December 2022 and a non-brokered private placement of equity securities on terms substantially similar to the Offering." WULF intends to use the net equity proceeds to complete the construction of the Lake Mariner and Nautilus facilities and for general corporate purposes, which may include working capital, it said. It's been a rough environment for bitcoin ( BTC-USD ) miners amid depressed token prices alongside high electricity prices, driving some miners such as Greenidge Generation Holdings ( GREE ) to restructure debt, and others like Core Scientific ( OTCPK:CORZQ ) to file for bankruptcy protection. The intraday slump in WULF shares comes a day after the company announced an underwritten public stock offering .
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