Item 1.01. Entry into a Material Definitive Agreement.
On August 5, 2021, IKONICS Corporation (the "Company") entered into an amendment
(the "Amendment") to the existing Agreement and Plan of Merger (the "Merger
Agreement") by and among the Company , Telluride Holdco, Inc., a Delaware
corporation and direct wholly owned subsidiary of the Company ("HoldCo"),
Telluride Merger Sub I, Inc., a Minnesota corporation and direct wholly owned
subsidiary of HoldCo ("Merger Sub I"), Telluride Merger Sub II, Inc., a Delaware
corporation and direct wholly owned subsidiary of HoldCo ("Merger Sub II"), and
TeraWulf Inc., a Delaware corporation ("TeraWulf," and together with Company,
Holdco, Merger Sub I and Merger Sub II, the "Parties").
The Amendment, among other things, (1) changed the timing of settlement of
outstanding IKONICS' RSUs to two business days in advance of closing, (2)
increased the fee and expense reimbursement of IKONICS' expenses in connection
with the mergers to $640,000, and (3) more specifically addresses potential
appraisal rights and dissenters' rights afforded to TeraWulf stockholders in
connection with the mergers.
The foregoing description of the Amendment does not purport to be complete and
is subject to, and qualified by, the full text of the Amendment, a copy of which
is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibit.
Exhibit Description
Number
2.1 Amendment to Agreement and Plan of Merger, dated August 5, 2021, by
and among IKONICS Corporation, Telluride Holdco, Inc., Telluride
Merger Sub I, Inc., Telluride Merger Sub II, Inc., and TeraWulf Inc.
Additional Information and Where to Find It; Participants in the Solicitation
In connection with the proposed business combination between the Company and
TeraWulf Inc. ("TeraWulf") as more fully described in the current report on Form
8-K filed by the Company with the United States Securities and Exchange
Commission (the "SEC") on June 25, 2021, the Company filed a combined
preliminary proxy statement and registration statement on Form S-4 with the with
the SEC on July 30, 2021, as amended on August 2, 2021. Following the filing of
the definitive proxy statement with the SEC, the Company 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 the Company 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 the Company files with the SEC when they become available before
making any voting decision because they will contain important information.
This current report on Form 8-K does not constitute a solicitation of proxy, an
offer to purchase, or a solicitation of an offer to sell any securities. The
Company and its 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 the Company's directors and executive officers or their holdings
of the Company's securities have changed from the amounts disclosed in those
filings, to the Company'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.
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Forward Looking Statements
This current report on Form 8-K 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 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 The Nasdaq Stock Market LLC, (3) 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 the Company's common stock may decline
significantly if the mergers are not completed, (b) the merger agreement may be
terminated in circumstances requiring the Company 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; (4) the effects that the
announcement or pendency of the mergers may have on the Company and its
business, including the risks that as a result (a) the business, operating
results or stock price of the Company's common stock may suffer, (b) its current
plans and operations may be disrupted, (c) the ability of the Company 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; (5) the effect of limitations that the merger agreement
places on the Company's ability to operate its business, return capital to
shareholders or engage in alternative transactions; (6) 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 the
Company and others; (7) the risk that the transaction may involve unexpected
costs, liabilities or delays; (8) other economic, business, competitive, legal,
regulatory, and/or tax factors; (9) the possibility that less than all or none
of the Company's historical business will be sold prior to the expiration of the
CVRs; and (10) other factors described under the heading "Risk Factors" in Part
I, Item 1A of the Company's annual report on Form 10-K for the fiscal year ended
December 31, 2020, as updated or supplemented by subsequent reports that the
Company 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 the Company 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.
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