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                       Case 1:21-cv-06550-PGG Document 5\n                                                        4 Filed 11/15/21\n                                                                11/11/21 Page 1 of 1\n\n\n\n\nSeth D. Rigrodsky                                                                                     Herbert W. Mondros\nAdmitted in DE, NY                                                                                         Admitted in DE, PA\n\nTimothy J. MacFall                                                                                        Vincent A. Licata\nAdmitted in NY                                                                                                Admitted in NY\n\nGina M. Serra\nAdmitted in DE, NJ, NY, PA\n                                                              November 11, 2021\n\n          VIA ECF\n          The Honorable Paul G. Gardephe\n          Thurgood Marshall\n          United States Courthouse\n          40 Foley Square\n          New York, NY 10007\n\n                     Re:     Stein v. IKONICS Corp., Case No. 1:21-cv-6550 (S.D.N.Y.)\n                             Whitfield v. IKONICS Corp., Case No. 1:21-cv-07010 (S.D.N.Y.)\n\n          Dear Judge Gardephe:\n\n                  The undersigned represent plaintiffs in the cases captioned Stein v. IKONICS Corp., Case\n          No. 1:21-cv-6550, and Whitfield v. IKONICS Corp., Case No. 1:21-v-7010, which have been\n          assigned to Your Honor and marked as related cases. In both cases, the Court has scheduled a\n          status conference for November 18, 2021, at 10:45 a.m.\n\n                  We have conferred with counsel for the defendants, Mr. Jeff Justman\n          (Jeff.Justman@faegredrinker.com), who will be served with this letter by email. While defendants\n          have informed us that they reserve all Rule 12(b) defenses, all parties respectfully request that the\n          status conference currently set for November 18 be rescheduled to a future date. The reason for\n          the parties\u2019 joint request is that the definitive proxy statement for Ikonics Corp. is not yet on file,\n          and the date for the shareholder vote was just set yesterday, for December 10, 2021. The parties\n          propose that a status conference be rescheduled to approximately thirty (30) days after the\n          shareholder vote, on a date and at a time that are convenient for the Court. Should Your Honor\n          have any questions, we are available at the Court\u2019s convenience.\n\n                                                                                Respectfully submitted,\n    Memo Endorsed: The application is granted. The initial\n    pre-trial conference scheduled for November 18, 2021 is                     /s/ Gina M. Serra\n    adjourned to January 6, 2022 at 11:15 a.m. in Courtroom                     Gina M. Serra, Esq.\n    705 of the U.S. Courthouse, 40 Foley Square, New York,\n    New York.                                                                   /s/ Gloria Kui Melwani\n                                                                                Gloria Kui Melwani, Esq.\n\n\n\n\n                             Dated: November 15, 2021\n\f","ocr_status":2,"date_upload":"2021-11-17T20:28:09.620673-08:00","document_number":"5","attachment_number":null,"pacer_doc_id":"127030163002","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Order on Motion to Adjourn Conference","acms_document_guid":""}],"date_created":"2021-11-15T09:06:32.220272-08:00","date_modified":"2021-12-02T03:32:16.121791-08:00","date_filed":"2021-11-15","time_filed":null,"entry_number":5,"recap_sequence_number":"2021-11-15.001","pacer_sequence_number":30,"description":"ORDER granting 4 Letter Motion to Adjourn Conference. The application is granted. The initial pre-trial conference scheduled for November 18, 2021 is adjourned to January 6, 2022 at 11:15 a.m. in Courtroom 705 of the U.S. Courthouse, 40 Foley Square, New York, New York. SO ORDERED.. (Signed by Judge Paul G. Gardephe on 11/15/2021) Initial Conference set for 1/6/2022 at 11:15 AM in Courtroom 705, 40 Centre Street, New York, NY 10007 before Judge Paul G. Gardephe. (ks) (Entered: 11/15/2021)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/179991512/","id":179991512,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/60105933/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/185412234/","id":185412234,"tags":[],"absolute_url":"/docket/60105933/4/stein-v-ikonics-corporation/","date_created":"2021-11-11T09:13:41.060362-08:00","date_modified":"2021-12-02T03:32:16.114654-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"4","attachment_number":null,"pacer_doc_id":"127030145716","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Adjourn Conference","acms_document_guid":""}],"date_created":"2021-11-11T09:13:41.053584-08:00","date_modified":"2021-12-02T03:32:16.099837-08:00","date_filed":"2021-11-11","time_filed":null,"entry_number":4,"recap_sequence_number":"2021-11-11.001","pacer_sequence_number":25,"description":"LETTER MOTION to Adjourn Conference addressed to Judge Paul G. 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Gardephe. Please download and review the Individual Practices of the assigned District Judge, located at https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at https://nysd.uscourts.gov/rules/ecf-related-instructions..(vf)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/171654689/","id":171654689,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/60105933/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/176945539/","id":176945539,"tags":[],"absolute_url":"/docket/60105933/3/stein-v-ikonics-corporation/","date_created":"2021-08-05T08:09:11.385574-07:00","date_modified":"2021-12-02T03:32:16.091498-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"3","attachment_number":null,"pacer_doc_id":"127029572330","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order for Initial Pretrial Conference","acms_document_guid":""}],"date_created":"2021-08-05T08:09:11.380834-07:00","date_modified":"2021-12-02T03:32:16.079044-08:00","date_filed":"2021-08-05","time_filed":null,"entry_number":3,"recap_sequence_number":"2021-08-05.001","pacer_sequence_number":23,"description":"NOTICE OF PRETRIAL CONFERENCE: Counsel for all parties are directed to appear before the Court for an initial pretrial conference in accordance with Rule 16 of the Federal Rules of Civil Procedure on November 18, 2021 at 10:45 a.m. by telephone. The parties are directed to dial 888-363-4749 to participate, and to enter the access code 6212642. The press and public may obtain access to the telephone conference by dialing the same number and using the same access code. The Court is holding multiple telephone conferences on this date. The parties should call in at the scheduled time and wait on the line for their case to be called. At that time, the Court will un-mute the parties' lines. Seven days before the conference, the parties must email Michael_Ruocco@nysd.uscourts.gov and GardepheNYSDChambers@nysd.uscourts.gov with the phone numbers that the parties will be using to dial into the conference so that the Court knows which numbers to un-mute. The email should include the case name and case number in the subject line. SO ORDERED., Initial Conference set for 11/18/2021 at 10:45 AM before Judge Paul G. Gardephe. (Signed by Judge Paul G. Gardephe on 8/5/2021) (rj) (Entered: 08/05/2021)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/171538866/","id":171538866,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/60105933/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/176828285/","id":176828285,"tags":[],"absolute_url":"","date_created":"2021-08-04T08:10:06.666653-07:00","date_modified":"2021-08-04T08:10:06.668622-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Case Opening Initial Assignment Notice","acms_document_guid":""}],"date_created":"2021-08-04T08:10:06.662943-07:00","date_modified":"2021-08-04T08:10:06.662959-07:00","date_filed":"2021-08-04","time_filed":null,"entry_number":null,"recap_sequence_number":"2021-08-04T14:14:25+00:00.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/171449884/","id":171449884,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/60105933/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/176737746/","id":176737746,"tags":[],"absolute_url":"/docket/60105933/1/stein-v-ikonics-corporation/","date_created":"2021-08-03T10:09:34.540178-07:00","date_modified":"2021-12-02T03:32:15.982060-08:00","sha1":"7448454b1822f8d0dfd2bd22e09c0d31755551a9","page_count":17,"file_size":207882,"filepath_local":"recap/gov.uscourts.nysd.564342/gov.uscourts.nysd.564342.1.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.564342/gov.uscourts.nysd.564342.1.0.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.nysd.564342/176737746.thumb.1068.jpeg","thumbnail_status":1,"plain_text":"          Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 1 of 17\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n --------------------------------------------------------\n SHIVA STEIN,                                               :\n                                                            :\n                   Plaintiff,                               :   Civil Action No. 1:21-cv-6550\n                                                            :\n v.                                                         :   COMPLAINT FOR VIOLATIONS OF\n                                                            :   SECTIONS 14(a) AND 20(a) OF THE\n IKONICS CORPORATION, BILL ULLAND,                          :   SECURITIES EXCHANGE ACT OF\n GLENN SANDGREN, MARIANNE                                   :   1934\n BOHREN, LOCKWOOD CARLSON,                                  :\n JEFFREY D. ENGBRECHT, GREG W.                              :   JURY TRIAL DEMANDED\n JACKSON, ERNEST M. HARPER, and                             :\n DARRELL B. LEE,                                            :\n                                                            :\n                   Defendants.                              :\n --------------------------------------------------------   :\n                                                            :\n        Shiva Stein (\u201cPlaintiff\u201d), by and through her attorneys, alleges the following upon\n\ninformation and belief, including investigation of counsel and review of publicly-available\n\ninformation, except as to those allegations pertaining to Plaintiff, which are alleged upon personal\n\nknowledge:\n\n        1.       This is an action brought by Plaintiff against Ikonics Corporation (\u201cIkonics or the\n\n\u201cCompany\u201d) and the members Ikonics\u2019s board of directors (the \u201cBoard\u201d or the \u201cIndividual\n\nDefendants\u201d and collectively with the Company, the \u201cDefendants\u201d) for their violations of Sections\n\n14(a) and 20(a) of the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d), 15 U.S.C. \u00a7\u00a7 78n(a),\n\n78t(a), and SEC Rule 14a-9, 17 C.F.R. 240.14a-9 and 17 C.F.R. \u00a7 244.100, in connection with the\n\nproposed merger between Ikonics and TeraWulf Inc. and its affiliates (\u201cTeraWulf\u201d).\n\n        2.       Defendants have violated the above-referenced sections of the Exchange Act by\n\ncausing a materially incomplete and misleading Registration Statement on Form S-4 (the\n\n\u201cRegistration Statement\u201d) to be filed on July 30, 2021 with the United States Securities and\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 2 of 17\n\n\n\n\nExchange Commission (\u201cSEC\u201d) and disseminated to Company stockholders. The Registration\n\nStatement recommends that Company stockholders vote in favor of a proposed transaction\n\nwhereby Telluride Merger Sub I, Inc., a wholly owned subsidiary of TeraWulf, will merge with\n\nand into Ikonics with Ikonics surviving as a wholly owned subsidiary of Telluride Holdco, Inc.\n\n(\u201cHoldco\u201d), which is a wholly owned subsidiary of Ikonics, will merge with and into Ikonics with\n\nIkonics surviving the transaction (the \u201cFirst Merger\u201d); and Telluride Merger Sub II, Inc., a wholly\n\nowned subsidiary of Holdco, will merge with and into TeraWulf, with TeraWulf surviving the\n\ntransaction (the \u201cSecond Merger\u201d and together with the First Merger, the \u201cProposed Transaction\u201d).\n\nPursuant to the terms of the definitive agreement and plan of merger the companies entered into\n\n(the \u201cMerger Agreement\u201d), each Ikonics stockholder will receive: (i) one share of Holdco common\n\nstock; (ii) one contractual contingent value right to be issued by Holdco; and (iii) $5.00 in cash\n\n(the \u201cMerger Consideration\u201d).\n\n       3.      As discussed below, Defendants have asked Ikonics\u2019s stockholders to support the\n\nProposed Transaction based upon the materially incomplete and misleading representations and\n\ninformation contained in the Registration Statement, in violation of Sections 14(a) and 20(a) of\n\nthe Exchange Act. Specifically, the Registration Statement contains materially incomplete and\n\nmisleading information concerning the analyses performed by the Company\u2019s financial advisor,\n\nNorthland Securities, Inc. (\u201cNorthland\u201d) in support of its fairness opinion.\n\n       4.      It is imperative that the material information that has been omitted from the\n\nRegistration Statement is disclosed to the Company\u2019s stockholders prior to the forthcoming\n\nstockholder vote so that they can properly exercise their corporate suffrage rights.\n\n       5.      For these reasons and as set forth in detail herein, Plaintiff seeks to enjoin\n\nDefendants from taking any steps to consummate the Proposed Transaction unless and until the\n\n\n\n\n                                                 2\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 3 of 17\n\n\n\n\nmaterial information discussed below is disclosed to Ikonics\u2019s stockholders or, in the event the\n\nProposed Transaction is consummated, to recover damages resulting from the Defendants\u2019\n\nviolations of the Exchange Act.\n\n                                  JURISDICTION AND VENUE\n\n        6.      This Court has subject matter jurisdiction pursuant to Section 27 of the Exchange\n\nAct (15 U.S.C. \u00a7 78aa) and 28 U.S.C. \u00a7 1331 (federal question jurisdiction) as Plaintiff alleges\n\nviolations of Sections 14(a) and 20(a) of the Exchange Act and SEC Rule 14a-9.\n\n        7.      Personal jurisdiction exists over each Defendant either because the Defendant\n\nconducts business in or maintains operations in this District, or is an individual who is either\n\npresent in this District for jurisdictional purposes or has sufficient minimum contacts with this\n\nDistrict as to render the exercise of jurisdiction over Defendant by this Court permissible under\n\ntraditional notions of fair play and substantial justice.\n\n        8.      Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. \u00a7\n\n78aa, as well as under 28 U.S.C. \u00a7 1391, because TeraWulf maintains its principal corporate office\n\nin this District and because the Company trades its stock on the NASDAQ Stock Exchange,\n\nheadquartered in this District.\n\n                                              PARTIES\n\n        9.      Plaintiff is, and has been at all relevant times, the owner of Ikonics stocks and has\n\nheld such stocks since prior to the wrongs complained of herein.\n\n        10.     Individual Defendant Bill Ulland has served as a member of the Board since 1972\n\nand is the Chairman of the Board.\n\n        11.     Individual Defendant Glenn Sandgren has served as a member of the Board since\n\n2020 and is the Chief Executive Officer of the Company.\n\n\n\n\n                                                   3\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 4 of 17\n\n\n\n\n        12.     Individual Defendant Marianne Bohren has served as a member of the Board since\n\n2016.\n\n        13.     Individual Defendant Lockwood Carlson has served as a member of the Board since\n\n2009.\n\n        14.     Individual Defendant Jeffrey D. Engbrecht has served as a member of the Board\n\nsince 2016.\n\n        15.     Individual Defendant Greg W. Jackson has served as a member of the Board since\n\n2017.\n\n        16.     Individual Defendant Ernest M. Harper has served as a member of the Board since\n\n2012.\n\n        17.     Individual Defendant Darrell B. Lee has served as a member of the Board since\n\n2012.\n\n        18.     Defendant Ikonics a Minnesota corporation and maintains its principal offices at\n\n4832 Grand Avenue, Duluth, Minnesota 55807. The Company\u2019s stock trades on the NASDAQ\n\nStock Exchange under the symbol \u201cIKNX.\u201d\n\n        19.     The defendants identified in paragraphs 10-17 are collectively referred to as the\n\n\u201cIndividual Defendants\u201d or the \u201cBoard.\u201d\n\n        20.     The defendants identified in paragraphs 10-18 are collectively referred to as the\n\n\u201cDefendants.\u201d\n\n                               SUBSTANTIVE ALLEGATIONS\n\nA.      The Proposed Transaction\n\n        21.     Ikonics develops, manufactures, and sells photosensitive liquids and films for\n\nscreen printing, awards and recognition, and dye sublimation markets worldwide. It operates\n\nthrough four segments: Chromaline, IKONICS Imaging, Digital Texturing, and Advanced\n\n\n                                                4\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 5 of 17\n\n\n\n\nMaterial Solutions. The Company sells screen printing films, emulsions, and inkjet receptive films,\n\nphoto resistant films, art supplies, glass, and related abrasive etching equipment to end users and\n\ndistributors. It also provides sound deadening and weight reduction technology to the aerospace\n\nand electronics industries; products and services for etched composites, ceramics, glass, and silicon\n\nwafers; and digital texturing technology for putting patterns and textures into steel molds for the\n\nplastic injection molding and prototyping. Ikonics markets and sells its products directly, as well\n\nas through domestic and international distributors, magazine advertising, trade shows, and the\n\ninternet. The Company was formerly known as The Chromaline Corporation and changed its name\n\nto Ikonics Corporation in December 2002. Ikonics was founded in 1952 and is based in Duluth,\n\nMinnesota.\n\n       22.     On June 25, 2021, the Company and TeraWulf jointly announced the Proposed\n\nTransaction:\n\n               EASTON, Md. and DULUTH, Minn., June 25, 2021 /PRNewswire/\n               -- TeraWulf Inc. (\u201cTeraWulf\u201d), poised to become a best-in-class\n               bitcoin mining company, announced today it expects to become a\n               Nasdaq-listed company through a business combination with\n               IKONICS Corporation (Nasdaq: IKNX), a Duluth, MN imaging\n               technology company. The companies have entered into a definitive\n               merger agreement to combine under a new holding company, which\n               will change its name to TeraWulf Inc. and is expected to be listed\n               on The Nasdaq Stock Market LLC under the trading symbol\n               \u201cWULF\u201d.\n\n\n               Environmental, Social, and Governance (ESG) Focused\n               Cryptocurrency Mining Company\n\n\n               TeraWulf is positioned to generate environmentally sustainable\n               bitcoin at an industrial scale in the U.S. using over 90% zero-carbon\n               energy. With 60,000 state-of-the-art miners on order, TeraWulf\n               expects to have 50 MW of mining capacity online this year, and\n               consistent with its buildout plan, expects to have 800 MW mining\n               capacity deployed by 2025, enabling over 23 EH/s of expected\n               hashrate.\n\n\n                                                 5\n\fCase 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 6 of 17\n\n\n\n\n    TeraWulf is leveraging its management team\u2019s decades of\n    experience in energy supply optimization, operations and\n    engineering to create a premier platform for sustainable\n    cryptocurrency mining. In addition, TeraWulf plans to implement\n    its proven model for large cryptocurrency mine development and\n    operations, which will help ensure TeraWulf can scale efficiently.\n    With an institutional commitment to ESG principles and a target of\n    100% zero-carbon energy utilization, TeraWulf is positioned to be\n    a leading miner of sustainable bitcoin globally.\n\n\n    Paul Prager, Chairman & Chief Executive Officer of TeraWulf, said,\n    \u201cTeraWulf represents an exciting new paradigm for cryptocurrency\n    mining, which is built on a significant strategic advantage to utilize\n    reliable, secure and low-cost sustainable energy sources to support\n    our bitcoin mining activities. We have a talented management team\n    with a proven track record and we are ready to rapidly scale due to\n    an established supply chain and strong partner relationships. Site\n    work is underway at the Company\u2019s mining facilities in New\n    York and Pennsylvania with competitive power supply agreements\n    already in place. As we prepare TeraWulf to trade on the public\n    market, we are confident that we have the in-house technology,\n    infrastructure and operations expertise to deliver unparalleled value\n    for shareholders.\u201d\n\n\n    Nazar Khan, Chief Operating Officer, added, \u201cOur team\u2019s unique\n    access to energy assets and deep sector expertise in the wholesale\n    electricity markets allows us to quickly develop a large-scale\n    cryptocurrency mining platform that can help facilitate and can\n    expedite the electric grid\u2019s transition to a zero-carbon future. Sited\n    and managed appropriately, mining operations provide resiliency to\n    the electric grid while leading the rapid development of the global\n    fintech infrastructure.\u201d\n\n\n    Glenn Sandgren, Chief Executive Officer of IKONICS, said, \u201cWe\n    are pleased to have reached this agreement with TeraWulf and look\n    forward to partnering with them. This transaction provides ideal\n    outcomes for our shareholders, customers and employees. It delivers\n    our shareholders the opportunity to realize a substantial upfront cash\n    payment while continuing to benefit from the value of our legacy\n    imaging business, and provides them with the opportunity to\n    participate in the potential upside of TeraWulf at an exciting time\n    for the cryptocurrency mining space. The agreement will be\n    instrumental in securing the long-term viability of IKONICS\u2019s\n    legacy business, allowing it to continue to meet the needs of our\n\n\n                                      6\n\fCase 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 7 of 17\n\n\n\n\n    customers with a secure supply of our high quality products in\n    addition to continued employment opportunities for our workforce.\u201d\n\n\n    TeraWulf\u2019s Leading ESG Focus\n\n\n    TeraWulf\u2019s aim is to be the most environmentally sustainable\n    bitcoin mining company focused on ESG through its purpose-driven\n    business practices, determined clean energy goals, and support for\n    its communities. TeraWulf is committed to diversity, equity and\n    inclusion at all levels of the organization and is proud of its highly\n    qualified, diverse management team. As an industry leading\n    producer of bitcoin with a targeted path of zero-carbon energy\n    utilization, TeraWulf intends to maintain a high level of\n    transparency, reliability, and environmental stewardship across its\n    operations and throughout its supply chain.\n\n\n    Kerri Langlais, TeraWulf\u2019s Chief Strategy Officer, said, \u201cOur core\n    focus on ESG sets us apart from our competitors and ties directly to\n    our business success. We are confident that by integrating flexible\n    baseload energy demand into the electric grid, we will accelerate the\n    transition to a more resilient, stable and sustainable energy future\n    while generating attractive investor returns and tangible benefits,\n    including job creation, for our communities.\u201d\n\n\n    Transaction Overview\n\n\n    Under the terms of the agreement, which has been unanimously\n    approved by the Boards of Directors of both companies, each\n    outstanding share of IKONICS common stock will receive $5.00 in\n    cash, one CVR, and one share of the combined company\u2019s common\n    stock. Through the CVRs, which will not be publicly traded, the\n    IKONICS shareholders will be entitled to received 95% of the net\n    proceeds from any sale of IKONICS\u2019s legacy business completed\n    during the 18 months following the closing of the business\n    combination, and will expire at the end of such 18 month period with\n    respect to any portion of IKONICS\u2019s legacy business which has not\n    been sold. The shares of the combined company\u2019s common stock to\n    be received by the IKONICS shareholders will collectively\n    represent 2% of the combined company\u2019s pro forma common equity\n    ownership. As of March 31, 2021, IKONICS had a net book value\n    of $11.6 million, cash of $4.4 million and working capital of $4.1\n    million.\n\n\n                                      7\n\fCase 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 8 of 17\n\n\n\n\n     Following consummation of the transaction, the legacy business of\n     IKONICS will be operated consistent with past practices but will be\n     positioned for sale on terms that are acceptable to the Board of\n     Directors of the combined company.\n\n\n     The transaction is expected to close in the second half of 2021,\n     subject to the receipt of regulatory approvals, the approval of\n     IKONICS and TeraWulf shareholders, and other customary closing\n     conditions.\n\n\n     Management and Board of Directors\n\n\n     The combined company will be led by Paul Prager as Chairman\n     and Chief Executive Officer. In addition, several members of the\n     existing TeraWulf leadership team are expected to serve on the\n     combined company\u2019s management team, including:\n\n\n \u2022   Nazar Khan, Chief Operating Officer;\n \u2022   Kerri Langlais, Chief Strategy Officer;\n \u2022   Ken Deane, Chief Financial Officer; and\n \u2022   Stefanie Fleischmann, Chief Legal Officer.\n\n     TeraWulf\u2019s executive team has worked together for nearly 15 years\n     in the energy infrastructure space with a proven track record of risk\n     management and investment performance.\n\n\n     Upon completion of the transaction, all members of the IKONICS\n     Board of Directors will resign and be replaced by persons to be\n     designated by TeraWulf.\n\n\n     Transaction Materials\n\n\n     A presentation and additional materials regarding the transaction are\n     available on TeraWulf\u2019s website.\n\n\n     Advisors\n\n\n\n\n                                      8\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 9 of 17\n\n\n\n\n               Paul Weiss, Rifkind, Wharton & Garrison LLP is serving as legal\n               advisor and Moelis & Company LLC is serving as financial advisor\n               to TeraWulf. Faegre Drinker Biddle & Reath LLP is serving as legal\n               advisor and Northland Capital Markets is serving as financial\n               advisor to IKONICS.\n\n\n                                               ***\n\n       23.     The Board has unanimously agreed to the Proposed Transaction. It is therefore\n\nimperative that Ikonics\u2019s stockholders are provided with the material information that has been\n\nomitted from the Registration Statement, so that they can meaningfully assess whether or not the\n\nProposed Transaction is in their best interests prior to the forthcoming stockholder vote.\n\nB.     The Materially Incomplete and Misleading Registration Statement\n\n       24.     On July 30, 2021, Ikonics and Holdco jointly filed the Registration Statement with\n\nthe SEC in connection with the Proposed Transaction. The Registration Statement was furnished\n\nto the Company\u2019s stockholders and solicits the stockholders to vote in favor of the Proposed\n\nTransaction. The Individual Defendants were obligated to carefully review the Registration\n\nStatement before it was filed with the SEC and disseminated to the Company\u2019s stockholders to\n\nensure that it did not contain any material misrepresentations or omissions. However, the\n\nRegistration Statement misrepresents and/or omits material information that is necessary for the\n\nCompany\u2019s stockholders to make an informed decision concerning whether to vote in favor of the\n\nProposed Transaction, in violation of Sections 14(a) and 20(a) of the Exchange Act.\n\nOmissions and/or Material Misrepresentations Concerning Financial Projections\n\n       25.     The Registration Statement fails to provide material information concerning\n\nfinancial projections by management and relied upon by Northland in its analyses. The\n\nRegistration Statement discloses management-prepared financial projections for the Company\n\nwhich are materially misleading. The Registration Statement indicates that in connection with the\n\n\n\n                                                 9\n\f        Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 10 of 17\n\n\n\n\nrendering of its fairness opinion, that the management prepared certain non-public financial\n\nforecasts (the \u201cCompany Projections\u201d and \u201cTeraWulf Projections\u201d) and provided them to the\n\nBoard and the financial advisors by management of both Ikonics and TeraWulf with forming a\n\nview about the stand-alone and pro forma valuations. Accordingly, the Registration Statement\n\nshould have, but fails to provide, certain information in the projections that managements provided\n\nto the Board and their financial advisors. Courts have uniformly stated that \u201cprojections \u2026 are\n\nprobably among the most highly-prized disclosures by investors. Investors can come up with their\n\nown estimates of discount rates or [] market multiples. What they cannot hope to do is replicate\n\nmanagement\u2019s inside view of the company\u2019s prospects.\u201d In re Netsmart Techs., Inc. S\u2019holders\n\nLitig., 924 A.2d 171, 201-203 (Del. Ch. 2007).\n\n       26.     For the TeraWulf Projections, the Registration Statement provides values for non-\n\nGAAP (Generally Accepted Accounting Principles) financial metrics for fiscal years 2021 through\n\n2022: EBITDA as prepared by management, but fails to provide line items used to calculate the\n\nmetrics or a reconciliation of the non-GAAP metric to its most comparable GAAP measure, in\n\ndirect violation of Regulation G and consequently Section 14(a).\n\n       27.     The Registration Statement fails to include long term financial projections and\n\nestimates for the Company, including any satisfactory explanation on why there is an absence of\n\nthe projections for the Company. Registration Statement at 72.\n\n       28.     When a company discloses non-GAAP financial measures in a Registration\n\nStatement that were relied on by a board of directors to recommend that stockholders exercise their\n\ncorporate suffrage rights in a particular manner, the company must, pursuant to SEC regulatory\n\nmandates, also disclose all projections and information necessary to make the non-GAAP\n\nmeasures not misleading, and must provide a reconciliation (by schedule or other clearly\n\n\n\n\n                                                 10\n\f        Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 11 of 17\n\n\n\n\nunderstandable method) of the differences between the non-GAAP financial measure disclosed or\n\nreleased with the most comparable financial measure or measures calculated and presented in\n\naccordance with GAAP. 17 C.F.R. \u00a7 244.100.\n\n       29.     The SEC has noted that:\n\n               companies should be aware that this measure does not have a\n               uniform definition and its title does not describe how it is calculated.\n               Accordingly, a clear description of how this measure is calculated,\n               as well as the necessary reconciliation, should accompany the\n               measure where it is used. Companies should also avoid\n               inappropriate or potentially misleading inferences about its\n               usefulness. For example, \u201cfree cash flow\u201d should not be used in a\n               manner that inappropriately implies that the measure represents the\n               residual cash flow available for discretionary expenditures, since\n               many companies have mandatory debt service requirements or other\n               non-discretionary expenditures that are not deducted from the\n               measure.\n\n       30.     Thus, to cure the Registration Statement and the materially misleading nature of the\n\nforecasts under SEC Rule 14a-9 as a result of the omitted information in the Registration\n\nStatement, Defendants must provide a reconciliation table of the non-GAAP measure to the most\n\ncomparable GAAP measure to make the non-GAAP metrics included in the Registration Statement\n\nnot misleading.\n\nOmissions and/or Material Misrepresentations Concerning Financial Analyses\n\n       31.     With respect to Northland\u2019s IKONICS Selected Public Companies Analysis, the\n\nRegistration Statement fails to disclose the multiples and metrics for each company reviewed by\n\nNorthland for the analysis.\n\n       32.     With respect to Northland\u2019s IKONICS Selected Precedent Transactions Analysis\n\nfor the Company, the Registration Statement fails to disclose: (i) the merger values for each\n\ntransaction reviewed; (ii) the merger consideration paid to the shareholders of the target companies\n\n\n\n\n                                                 11\n\f           Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 12 of 17\n\n\n\n\nin the selected transactions; (iii) the revenue multiples observed for the selected precedent\n\ntransactions; and (iv) the closing dates of the selected transactions.\n\n          33.   With respect to Northland\u2019s TeraWulf Selected Public Companies Analysis, the\n\nRegistration Statement fails to disclose the multiples and metrics for each company reviewed by\n\nNorthland for the analysis.\n\n          34.   With respect to Northland\u2019s TeraWulf Discounted Cash Flow Analysis for the\n\nCompany, the Registration Statement fails to disclose: (i) the terminal values of TeraWulf; (ii) line\n\nitems used to calculate TeraWulf\u2019s projected unlevered, after-tax free cash flows for fiscal years\n\n2021 through 2027; (iii) the inputs and assumptions underlying the use of the range of perpetuity\n\ngrowth rates of 1.0% to 3.0%; and (iv) the inputs and assumptions underlying the discount rates\n\nranging from 11.1% to 17.5%.\n\n          35.   In sum, the omission of the above-referenced information renders statements in the\n\nRegistration Statement materially incomplete and misleading in contravention of the Exchange\n\nAct. Absent disclosure of the foregoing material information prior to the special stockholder\n\nmeeting to vote on the Proposed Transaction, Plaintiff will be unable to make a fully-informed\n\ndecision regarding whether to vote in favor of the Proposed Transaction, and she is thus threatened\n\nwith irreparable harm, warranting the injunctive relief sought herein.\n\n                                     CLAIMS FOR RELIEF\n\n                                             COUNT I\n\n                 On Behalf of Plaintiff Against All Defendants for Violations of\n           Section 14(a) of the Exchange Act and Rule 14a-9 and 17 C.F.R. \u00a7 244.100\n\n          36.   Plaintiff incorporates each and every allegation set forth above as if fully set forth\n\nherein.\n\n\n\n\n                                                 12\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 13 of 17\n\n\n\n\n       37.     Rule 14a-9, promulgated by the SEC pursuant to Section 14(a) of the Exchange\n\nAct, provides that proxy communications with stockholders shall not contain \u201cany statement\n\nwhich, at the time and in the light of the circumstances under which it is made, is false or\n\nmisleading with respect to any material fact, or which omits to state any material fact necessary in\n\norder to make the statements therein not false or misleading.\u201d 17 C.F.R. \u00a7 240.14a-9.\n\n       38.     Defendants have issued the Registration Statement with the intention of soliciting\n\nstockholder support for the Proposed Transaction.          Each of the Defendants reviewed and\n\nauthorized the dissemination of the Registration Statement and the use of their name in the\n\nRegistration Statement, which fails to provide critical information regarding, among other things,\n\nthe financial projections that were prepared by the Company and relied upon by the Board in\n\nrecommending the Company\u2019s stockholders vote in favor of the Proposed Transaction.\n\n       39.     In so doing, Defendants made untrue statements of fact and/or omitted material\n\nfacts necessary to make the statements made not misleading. Each of the Individual Defendants,\n\nby virtue of their roles as officers and/or directors, were aware of the omitted information but failed\n\nto disclose such information, in violation of Section 14(a). The Individual Defendants were\n\ntherefore negligent, as they had reasonable grounds to believe material facts existed that were\n\nmisstated or omitted from the Registration Statement, but nonetheless failed to obtain and disclose\n\nsuch information to stockholders although they could have done so without extraordinary effort.\n\n       40.     Defendants were, at the very least, negligent in preparing and reviewing the\n\nRegistration Statement.     The preparation of a Registration Statement by corporate insiders\n\ncontaining materially false or misleading statements or omitting a material fact constitutes\n\nnegligence.   Defendants were negligent in choosing to omit material information from the\n\nRegistration Statement or failing to notice the material omissions in the Registration Statement\n\n\n\n\n                                                  13\n\f           Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 14 of 17\n\n\n\n\nupon reviewing it, which they were required to do carefully. Indeed, Defendants were intricately\n\ninvolved in the process leading up to the signing of the Merger Agreement and the preparation and\n\nreview of strategic alternatives.\n\n          41.   The misrepresentations and omissions in the Registration Statement are material to\n\nPlaintiff, who will be deprived of her right to cast an informed vote if such misrepresentations and\n\nomissions are not corrected prior to the vote on the Proposed Transaction. Plaintiff has no adequate\n\nremedy at law. Only through the exercise of this Court\u2019s equitable powers can Plaintiff be fully\n\nprotected from the immediate and irreparable injury that Defendants\u2019 actions threaten to inflict.\n\n                                             COUNT II\n\n On Behalf of Plaintiff Against the Individual Defendants for Violations of Section 20(a) of\n                                      the Exchange Act\n\n          42.   Plaintiff incorporates each and every allegation set forth above as if fully set forth\n\nherein.\n\n          43.   The Individual Defendants acted as controlling persons of Ikonics within the\n\nmeaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as\n\ndirectors of Ikonics, and participation in and/or awareness of the Company\u2019s operations and/or\n\nintimate knowledge of the incomplete and misleading statements contained in the Registration\n\nStatement filed with the SEC, they had the power to influence and control and did influence and\n\ncontrol, directly or indirectly, the decision making of Ikonics, including the content and\n\ndissemination of the various statements that Plaintiff contends are materially incomplete and\n\nmisleading.\n\n          44.   Each of the Individual Defendants was provided with or had unlimited access to\n\ncopies of the Registration Statement and other statements alleged by Plaintiff to be misleading\n\n\n\n\n                                                 14\n\f         Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 15 of 17\n\n\n\n\nprior to and/or shortly after these statements were issued and had the ability to prevent the issuance\n\nof the statements or cause the statements to be corrected.\n\n       45.     In particular, each of the Individual Defendants had direct and supervisory\n\ninvolvement in the day-to-day operations of Ikonics, and, therefore, is presumed to have had the\n\npower to control or influence the particular transactions giving rise to the Exchange Act violations\n\nalleged herein, and exercised the same. The omitted information identified above was reviewed\n\nby the Board prior to voting on the Proposed Transaction. The Registration Statement at issue\n\ncontains the unanimous recommendation of the Board to approve the Proposed Transaction. The\n\nIndividual Defendants were thus directly involved in the making of the Registration Statement.\n\n       46.     In addition, as the Registration Statement sets forth at length, and as described\n\nherein, the Individual Defendants were involved in negotiating, reviewing, and approving the\n\nMerger Agreement. The Registration Statement purports to describe the various issues and\n\ninformation that the Individual Defendants reviewed and considered. The Individual Defendants\n\nparticipated in drafting and/or gave their input on the content of those descriptions.\n\n       47.     By virtue of the foregoing, the Individual Defendants have violated Section 20(a)\n\nof the Exchange Act.\n\n       48.     As set forth above, the Individual Defendants had the ability to exercise control\n\nover and did control a person or persons who have each violated Section 14(a) and Rule 14a-9, by\n\ntheir acts and omissions as alleged herein. By virtue of their positions as controlling persons, these\n\ndefendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate\n\nresult of Individual Defendants\u2019 conduct, Plaintiff will be irreparably harmed.\n\n\n\n\n                                                 15\n\f           Case 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 16 of 17\n\n\n\n\n          49.    Plaintiff has no adequate remedy at law. Only through the exercise of this Court\u2019s\n\nequitable powers can Plaintiff be fully protected from the immediate and irreparable injury that\n\nDefendants\u2019 actions threaten to inflict.\n\n                                       RELIEF REQUESTED\n\n          WHEREFORE, Plaintiff demands injunctive relief in her favor and against the Defendants\n\njointly and severally, as follows:\n\n          A.     Preliminarily and permanently enjoining Defendants and their counsel, agents,\n\nemployees and all persons acting under, in concert with, or for them, from proceeding with,\n\nconsummating, or closing the Proposed Transaction, unless and until Defendants disclose the\n\nmaterial information identified above which has been omitted from the Registration Statement;\n\n          B.     Rescinding, to the extent already implemented, the Merger Agreement or any of\n\nthe terms thereof, or granting Plaintiff rescissory damages;\n\n          C.     Directing the Defendants to account to Plaintiff for all damages suffered as a result\n\nof their wrongdoing;\n\n          D.     Awarding Plaintiff the costs and disbursements of this action, including reasonable\n\nattorneys\u2019 and expert fees and expenses; and\n\n          E.     Granting such other and further equitable relief as this Court may deem just and\n\nproper.\n\n                                           JURY DEMAND\n\n          Plaintiff demands a trial by jury.\n\n Dated: August 3, 2021                              MELWANI & CHAN LLP\n\n                                               By: /s/ Gloria Kui Melwani\n                                                   Gloria Kui Melwani\n                                                   1180 Avenue of the Americas, 8th Fl.\n                                                   New York, NY 10036\n                                                   Telephone: (212) 382-4620\n\n\n                                                  16\n\fCase 1:21-cv-06550-PGG Document 1 Filed 08/03/21 Page 17 of 17\n\n\n\n\n                               Email: gloria@melwanichan.com\n\n                               Attorneys for Plaintiff\n\n\n\n\n                              17\n\f","ocr_status":2,"date_upload":"2021-08-11T01:51:58.242965-07:00","document_number":"1","attachment_number":null,"pacer_doc_id":"127029560052","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Complaint","acms_document_guid":""}],"date_created":"2021-08-03T10:09:34.536102-07:00","date_modified":"2021-12-02T03:32:15.964715-08:00","date_filed":"2021-08-03","time_filed":null,"entry_number":1,"recap_sequence_number":"2021-08-03.001","pacer_sequence_number":11,"description":"COMPLAINT against Marianne Bohren, Lockwood Carlson, Jeffrey D. Engbrecht, Ernest M. Harper, Ikonics Corporation, Greg W. Jackson, Darrell B. Lee, Glenn Sandgren, Bill Ulland. (Filing Fee $ 402.00, Receipt Number ANYSDC-24880994)Document filed by Shiva Stein..(Melwani, Gloria) (Entered: 08/03/2021)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/171449882/","id":171449882,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/60105933/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/176737744/","id":176737744,"tags":[],"absolute_url":"/docket/60105933/2/stein-v-ikonics-corporation/","date_created":"2021-08-03T10:09:34.467001-07:00","date_modified":"2021-12-02T03:32:16.005956-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"2","attachment_number":null,"pacer_doc_id":"127029560060","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Civil Cover Sheet","acms_document_guid":""}],"date_created":"2021-08-03T10:09:34.459861-07:00","date_modified":"2021-12-02T03:32:15.995121-08:00","date_filed":"2021-08-03","time_filed":null,"entry_number":2,"recap_sequence_number":"2021-08-03.002","pacer_sequence_number":14,"description":"CIVIL COVER SHEET filed..(Melwani, Gloria) (Entered: 08/03/2021)","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=60105933&page_size=40"}