☑ ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ ~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)~~

Indicate by check mark whether the ~~registrant:~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ ☒ No ☒ ☐

Indicate by check mark whether the registrant has submitted electronically ~~if any,~~ every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated ~~filer”,~~filer,” “accelerated ~~filer”,~~filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒☐ No ☐ ☒

~~The~~As of November 11, 2022, the registrant had ~~21,478,000~~247,518,966, shares of ~~common stock outstanding at December 1, 2020.~~Common Stock, $0.001 par value per share, outstanding.

~~(1) Includes 562,500 shares subject~~This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to ~~forfeiture if the over-allotment option is not exercised in full or in part~~be covered by the ~~underwriters (see Notes 4 and 6).~~

~~(1) Includes 562,500 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 4 and 6).~~

~~GOOD WORKS ACQUISITION CORP.~~
~~CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY~~

~~For the Three Months Ended September 30, 2020 (unaudited) and the~~
~~Period From June 24, 2020 (inception) ended September 30, 2020~~

~~(1) Includes 562,500 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 4 and 6).~~

~~Good Works Acquisition Corp. (the “Company”) was incorporated in Delaware on June 24, 2020. The Company is a blank check company formed~~safe harbor provisions for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).

~~The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.~~

As of September 30, 2020, the Company had not commenced any operations. All activity for the period from June 24, 2020 (inception) through September 30, 2020 relates to the Company’s formation and initial public offering (“Public Offering” of “IPO”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Public Offering and placed in the Trust Account (defined below). The Company has selected December 31 as its fiscal year end.

The Company completed the sale of 15,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit on October 22, 2020. Simultaneous with the closing of the Public Offering, the Company completed the sale of 228,000 Private Units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to certain funds and accounts managed by Magnetar Financial LLC, Mint Tower Capital Management B.V., Periscope Capital Inc., and Polar Asset Management Partners Inc. (collectively, the “Anchor Investors”).

In connection with the IPO, the underwriters were granted a 45-day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 2,250,000 additional units to cover over-allotments (the “Over-Allotment Units”), if any. On October 26, 2020, the underwriters purchased an additional 1,500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. On November 17, 2020, the underwriters purchased an additional 500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. The Over-Allotment Units were sold at an offering price of $10.00 per Over-Allotment Unit, generating aggregate additional gross proceeds of $20,000,000 to the Company. On November 17, 2020, the underwriters canceled the remainder of the Over-Allotment Option. In connection with the cancellation of the remainder of the Over-Allotment Option, on November 17, 2020, the Company cancelled an aggregate of 62,500 shares of common stock issued to I-B Good Works LLC, the Company’s sponsor (“Sponsor”).

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). Management agreed that an amount equal to at least $10.00 per Unit sold in the Public Offering will be held in a trust account (“Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forthforward-looking statements contained in Section ~~2(a)(16)~~27A of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. In the event of a complete liquidation of the Company, the Trust Account could be further reduced by up to $100,000 for expenses of the liquidation). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the Public Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 immediately before or after such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor, an affiliate of I-Bankers Securities, Inc.(“I-Bankers Securities”), the representative of the underwriters for the Company’s Public Offering, and the Company’s management and directors have agreed to vote their Founder Shares and any Public Shares purchased during or after the Public Offering (a) in favor of approving a Business Combination and (b) not to convert any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or don’t vote at all.

Sponsor and the Company’s management and Directors have agreed (a) to waive their redemption rights with respect to their Founder Shares and any Public Shares held by them in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to consummate a Business Combination and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until 21 months from the closing of the Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

In order to protect the amounts held in the Trust Account, Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed an agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). ~~Moreover,~~All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to statements regarding:

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that ~~an executed waiver is deemed~~we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be ~~unenforceable against~~materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2022 (the “2021 Form 10-K”), Part II, Item 1A, “Risk Factors” in this Quarterly Report and our future reports filed with the SEC. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a ~~third party, the Sponsor will~~reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be ~~responsible~~read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits to this Quarterly Report with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.

Our corporate website address is https://www.ciphermining.com/ (“Corporate Website”). The contents of, or information accessible through, our Corporate Website are not part of this Quarterly Report.

The company maintains a dedicated investor website at https://investors.ciphermining.com/investors (“Investors’ Website”) which is similarly not part of this Quarterly Report. We make our filings with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, available free of charge on our Investors’ Website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the ~~extent~~SEC.

We may use our Investors’ Website as a distribution channel of material information about the Company including through press releases, investor presentations, sustainability reports, and notices of upcoming events. We intend to utilize our Investors’ Website as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD.

Any reference to our Corporate Website or Investors’ Website addresses do not constitute incorporation by reference of the information contained on or available through those websites, and you should not consider such information to be a part of this Quarterly Report or any ~~liability~~other filings we make with the SEC.

(in thousands, except for ~~such third-party claims.~~share and per share amounts)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NOTE 1. ORGANIZATION AND BUSINESS

Organization

On August 27, 2021 (the “Closing Date”), Good Works Acquisition Corp. (“GWAC”), a special purpose acquisition company, consummated the Agreement and Plan of Merger dated as of March 4, 2021 (the “Merger Agreement”), by and among GWAC, Currency Merger Sub, Inc. (“Merger Sub”), a wholly owned direct subsidiary of GWAC, and Cipher Mining Technologies Inc. (“Cipher Mining Technologies”).

Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Cipher Mining Technologies, the separate corporate existence of Merger Sub ceasing and Cipher Mining Technologies being the surviving corporation and a wholly-owned subsidiary of GWAC (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). Following the Business Combination, the combined company was named Cipher Mining Inc. (“Cipher” or the “Company”). The Company ~~will seek to reduce~~comprises all of GWAC’s and Cipher Mining Technologies’ operations.

Business

The Company is an emerging technology company that operates in the ~~possibility that~~Bitcoin mining ecosystem in the ~~Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which~~United States. Specifically, the Company ~~does~~is developing and growing a cryptocurrency mining business ~~execute agreements with~~specializing in Bitcoin. As a stand-alone, U.S.-based cryptocurrency mining business, the Company ~~waiving any right, title, interest or claim~~has begun its buildout of ~~any kind in or to monies held~~cryptocurrency mining sites in the ~~Trust Account.~~ United States that will include both wholly-owned sites and partially-owned sites acquired through investments in joint ventures. The Company began deployment of capacity in the first quarter of 2022, with mining operations beginning in February 2022 at the partially-owned Alborz facility, located in Texas (the “Alborz Facility”). See additional information about the Alborz Facility in Note 8.

~~Liquidity~~Cipher Mining Technologies was established on January 7, 2021, in Delaware, by Bitfury Top Holdco B.V. and ~~Capital Resources~~

its subsidiaries (“Bitfury Top Holdco” and, with its subsidiaries, the “Bitfury Group”). As of September 30, ~~2020, we~~2022, Bitfury Top HoldCo (together with Bitfury Holding B.V., a subsidiary of Bitfury Top HoldCo, and referred to herein as “Bitfury Holding”) beneficially owned approximately 81.6% of the Company’s common stock, $0.001 par value per share (“Common Stock”), with sole voting and sole dispositive power over those shares and, as a result, the Bitfury Group has control of the Company as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”).

Risks and uncertainties

Liquidity and capital resources and limited business history

The Company used $8.9 million of cash for its operations during the nine months ended September 30, 2022. As of September 30, 2022, the Company had ~~$61,815~~approximate balances of cash and cash equivalents of $28.1 million, total stockholders’ equity of $383.1 million and ~~a working capital~~an accumulated deficit of ~~approximately $198,000.~~$59.6 million. To date, the Company has, in large part, relied on proceeds from the consummation of the Business Combination to fund its operations.

During the nine months ended September 30, 2022, the Company paid $184.1 million of deposits for miners and mining equipment. As of September 30, 2022, the Company had contributed equipment with a total cost of $93.2 million related to its contributions of 12,953 miners and other mining equipment to the Alborz Facility, which was reclassified from deposits on equipment to investment in equity investee on its consolidated balance sheet, with the exception of losses of $11.6 million and $7.2 million recognized by the Company related to miners contributed in June 2022 and July 2022, respectively. See additional information regarding these losses in Note 8.

~~We do~~As of September 30, 2022, the Company had $200.0 million of deposits on equipment on its unaudited condensed consolidated balance sheet, primarily for miners and, as of September 30, 2022, it had additional future commitments related to these deposits as detailed in Note 6. See Note 15 for additional information regarding a supplementary agreement entered into on November 4, 2022 related to one of the Company’s purchase agreements for miners. The Company’s management believes that the Company’s existing financial resources, combined with the ability to delay certain equipment orders, projected cash and cryptocurrencies inflows from its sites, the ability to sell cryptocurrency received or earned, as well as potential sales of Common Stock under the Company’s shelf

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

registration statement on Form S-3 (see additional information in Note 12), will be sufficient to meet its operating and capital requirements for at least 12 months from the date these unaudited condensed consolidated financial statements are issued.

There is limited historical financial information about the Company upon which to base an evaluation of its performance and the Company has not ~~believe we~~generated any revenues from its business to date. The business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in exploration and/or development, and possible cost overruns due to price and cost increases in services. The Company’s management has no current intention of entering into a merger or acquisition within the next 12 months. The Company is in the process of an active operational buildout and anticipates that additional capital will ~~need~~be required to ~~raise~~implement the buildout. The Company may also require additional capital to pursue certain business opportunities or respond to technological advancements, competitive dynamics or technologies, customer demands, challenges, acquisitions or unforeseen circumstances. Additionally, the Company has incurred and expects to continue to incur significant costs related to becoming a public company. Accordingly, the Company may engage in equity or debt financings or enter into credit facilities for the above-mentioned or other reasons; however, the Company may not be able to timely secure additional debt or equity financings on favorable terms, if at all. If the Company raises additional funds through equity financing, its existing stockholders could experience significant dilution. Furthermore, any debt financing obtained by the Company in ~~order~~the future could involve restrictive covenants relating to ~~meet~~ the ~~expenditures required~~Company’s capital raising activities and other financial and operational matters, which may make it more difficult for ~~operating our business. However, if our estimate of~~ the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may needCompany to obtain additional capital and to pursue business opportunities. If the Company is unable to obtain adequate financing ~~either~~on terms that are satisfactory to ~~complete our Business Combination~~the Company, when the Company requires it, the Company’s ability to continue to grow or ~~because we become obligated~~support the business and to ~~redeem~~respond to business challenges could be significantly limited and it may be required to delay or change its planned buildout, which may adversely affect the Company’s business plan.

As disclosed in Note 12, the Company entered into an at-the-market offering agreement with H.C. Wainwright & Co., LLC (the “Agent”) dated September 21, 2022 (the “Sales Agreement”), pursuant to which the Company may, from time to time, sell up to $250.0 million in shares of the Company’s Common Stock through the Agent. The Company has not sold any shares of its Common Stock under the Sales Agreement as of the issuance of these unaudited condensed consolidated financial statements.

COVID-19 and other economic, business and political conditions

Results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of the Company’s control, such as the outbreak and global spread of the coronavirus (“COVID-19”). The COVID-19 pandemic that was declared on March 11, 2020 has caused significant economic dislocation in the United States and globally as governments, including the United States, introduced measures aimed at preventing the spread of COVID-19. The spread of COVID-19 and the imposition of related public health measures have resulted in, and are expected to continue to result in, increased volatility and uncertainty in the cryptocurrency space. Any severe or prolonged economic downturn, as result of the COVID-19 pandemic or otherwise, could result in a ~~significant number~~variety of ~~our public shares upon consummation of our Business Combination,~~risks to the Company’s business and management cannot anticipate all the ways in which ~~case we~~the current economic climate and financial market conditions could adversely impact the Company’s business.

The Company may ~~issue additional securities~~experience disruptions to its business operations resulting from supply delays or ~~incur debt~~interruptions, quarantines, self-isolations, or other movement and restrictions on the ability of its employees or its counterparties to perform their jobs. The Company may also experience delays in ~~connection with such Business Combination. Subject~~construction and obtaining necessary equipment in a timely fashion. For example, in early January 2022, construction at the Alborz Facility was temporarily shut down in response to ~~compliance with applicable securities laws, we would only complete such financing simultaneously with~~employees being impacted by COVID-19. The temporary shutdown was less than a week, and construction resumed at the ~~completion of our Business Combination.~~site immediately after. If ~~we are~~the Company is unable to ~~complete our Business Combination because we do not have sufficient funds available~~effectively set up and service its miners, the Company’s ability to ~~us, we~~mine Bitcoin will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

~~Risks and Uncertainties~~

~~Management continues to evaluate the~~adversely affected. The future impact of the COVID-19 pandemic is still highly uncertain and ~~has concluded that while it~~there is ~~reasonably possible~~no assurance that the ~~virus could have a negative effect on~~COVID-19 pandemic or any other pandemic, or other unfavorable global economic, business or political conditions, will not materially and adversely affect the Company’s business, prospects, financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.condition and operating results.

~~Note 2 – Summary of Significant Accounting Policies~~NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Property and equipment, net

Property and equipment consists primarily of construction-in-progress at the Company’s wholly-owned Odessa facility in Texas (the “Odessa Facility”), as well as office and computer equipment and software that is being developed for internal use. Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, which is generally three years for office and computer-related assets and five years for miners. Construction-in-progress consists primarily of leasehold improvements which, when placed into service, will be depreciated in accordance with the lease term of five years.

Property and equipment, net consisted of the following (amounts in thousands):


	September 30, 2022			December 31, 2021
Office and computer equipment	$	88		$	60
Software		392			-
Furniture and fixtures		69			-
Miners and mining equipment		26			-
Construction-in-progress		40,192			5,069
Total cost of property and equipment		40,767			5,129
Less: accumulated depreciation		(16	)		(5	)
Property and equipment, net	$	40,751		$	5,124

Depreciation expense was immaterial during the three and nine months ended September 30, 2022 and also during the three and eight months ended September 30, 2021.

~~Net Loss Per Common Share~~

~~Net loss~~Income (loss) per share

Basic net income (loss) per share of Common Stock is computed by dividing net ~~loss~~income (loss) allocated to common shareholders by the weighted average number of ~~shares of~~ common ~~stock~~shares outstanding during the ~~period, excluding shares of~~period. Diluted net income (loss) per common ~~stock subject to forfeiture by~~share reflects the ~~Sponsor. Weighted average shares were reduced for the effect of an aggregate of 562,500 shares of common stock~~potential dilution that ~~are subject to forfeiture~~could occur if ~~the over-allotment option is not exercised by the underwriters.~~

~~At September 30, 2020, the Company did not have any dilutive~~ securities ~~and~~or other contracts ~~that could, potentially, be~~to issue Common Stock were exercised or converted into ~~shares~~Common Stock or resulted in the issuance of ~~common stock and~~Common Stock that then ~~share~~shared in the earnings of the ~~Company. As a result,~~entity. Dilutive potential common shares include the Company’s outstanding Public Warrants (as defined in Note 13) and Private Placement Warrants (as defined in Note 13) that were sold by GWAC in its initial public offering or concurrent with its initial public offering, respectively, and assumed by the Company as of the Effective Date of the Business Combination, as well as unvested restricted stock units (“RSUs”).

For the three and nine months ended September 30, 2022, the dilutive effect of RSUs was calculated using the treasury stock method. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability and adjusts the denominator to include the dilutive shares calculated using the treasury stock method.

The Company’s potential common shares have been excluded from the computation of diluted net loss per ~~share is the same as basic loss per~~common share for the three and eight months ended September 30, 2021, as the effect would be to reduce the net loss per common share. The following is a reconciliation of the numerator and denominator of the diluted net income (loss) per share computations for the periods ~~presented.~~indicated below:


	Three Months Ended September 30,					Nine Months Ended		Eight Months Ended
	2022		2021			September 30, 2022		September 30, 2021
Basic and diluted income (loss) per share:
Net income (loss)	$	59,292	$	(2,421	)	$	12,574	$	(3,082	)

Weighted average shares outstanding - basic		247,508,745		217,644,991			248,461,373		206,708,013
Add:
RSUs		833,455		-			321,292		-
Weighted average shares outstanding - diluted		248,342,200		217,644,991			248,782,665		206,708,013

Net income (loss) per share - basic	$	0.24	$	(0.01	)	$	0.05	$	(0.01	)
Net income (loss) per share - diluted	$	0.24	$	(0.01	)	$	0.05	$	(0.01	)

The following table presents the common shares that are excluded from the computation of diluted net income (loss) per common share at September 30, 2022 and September 30, 2021, because including them would have been antidilutive.


	September 30, 2022		September 30, 2021
Public Warrants		8,499,980		8,500,000
Private Placement Warrants		114,000		114,000
Unvested RSUs		15,364,457		-
		23,978,437		8,614,000

~~Concentration~~

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 3. FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of ~~credit risk consist~~inputs used for such measurements were as follows as of athe dates indicated (amounts in thousands):


	Fair Value Measured as of September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets included in:
Cash and cash equivalents
Money market securities	$	11,111	$	-	$	-	$	11,111
Derivative asset		-		-		78,880		78,880
	$	11,111	$	-	$	78,880	$	89,991
Liabilities included in:
Warrant liability	$	-	$	-	$	22	$	22
	$	-	$	-	$	22	$	22


	Fair Value Measured as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets included in:
Cash and cash equivalents
Money market securities	$	101,004	$	-	$	-	$	101,004
	$	101,004	$	-	$	-	$	101,004
Liabilities included in:
Warrant liability	$	-	$	-	$	137	$	137
	$	-	$	-	$	137	$	137

Fair values of cash ~~account in a~~and cash equivalents, accounts payable and accrued expenses approximate their recorded values due to the short-term nature of these items.

There were no transfers of financial ~~institution, which, at times, may exceed~~instruments between Level 1, Level 2 and Level 3 during the ~~Federal Depository Insurance Coverage of $250,000. At September 30, 2020,~~periods presented.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Level 3 asset

On July 1, 2022, the Company ~~has~~recorded a derivative asset, divided between current and noncurrent assets, on its condensed consolidated balance sheet related to the Luminant Power Agreement as this is when both the quantities of electricity demand were known and penalties for nonperformance under the Luminant Power Agreement became enforceable, with an offsetting amount recorded to change in the fair value of derivative asset in operating income (loss) on the accompanying condensed consolidated statements of operations. Subsequent changes in fair value are also recorded to change in fair value of derivative asset in operating income (loss). The Luminant Power Agreement was not ~~experienced losses on this account and management believes the~~designated as a hedging instrument. The Company isdoes not ~~exposed to significant risks on such account.~~

~~Fair Value of Financial Instruments~~

have any other derivative contracts. The estimated fair value of the Company’s derivative asset was derived from Level 2 and Level 3 inputs (i.e., unobservable inputs) due to a lack of quoted prices for similar type assets and ~~liabilities,~~as such, is classified in Level 3 of the fair value hierarchy. Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which ~~qualify~~is five years. The valuations performed by the third-party valuation firm engaged by the Company utilized discount rates of 7.19% and 7.39% as ~~financial instruments~~of the derivative effective date of July 1, 2022 and September 30, 2022, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors. Unrealized gains associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage rates and discount rate assumptions).

The following table presents the changes in the estimated fair value of the derivative asset measured using significant unobservable inputs (Level 3) for the nine months ended September 30, 2022 (amounts in thousands):


Balance, January 1, 2022	$	-
Fair value on derivative asset effective date		83,610
Proceeds from reduction of scheduled power		(5,056	)
Change in fair value		326
Balance, September 30, 2022	$	78,880

Under the August Amendment to the Luminant Power Agreement, the Company and Luminant agreed to reduce Luminant’s obligation to provide specific amounts of scheduled power over upcoming months and, in exchange for the reduction in scheduled power supply by Luminant and as consideration for the modification to the ramp up schedule under ~~ASC 820, “Fair Value Measurements~~the Luminant Power Agreement, Luminant paid the Company $5.1 million. The Company’s management determined that the August Amendment did not represent a freestanding instrument to be assessed separately from the Luminant Power Agreement and, ~~Disclosures,” approximates~~as such, the ~~carrying amounts represented~~Company reduced the derivative asset by the amount received from Luminant as shown in the table above. For the nine months ended September 30, 2022, there was a change of $0.3 million in Level 3 assets measured at fair value. Additionally, during the three months ended September 30, 2022, the Company, through Luminant, sold electricity in the ERCOT market, resulting in $1.7 million recorded to change in fair value of derivative asset in the accompanying condensed consolidated statements of operations for both the three and nine months ended September 30, 2022.

Level 3 liability

The Company’s Private Placement Warrants (as defined in Note 13) are its only liability classified within Level 3 of the fair value hierarchy because the fair value is based on significant inputs that are unobservable in the market. The valuation of the Private Placement Warrants uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company engaged a valuation firm to determine the fair value of the Private Placement Warrants using a Black-Scholes option-pricing model and the quoted price of the Company’s Common Stock. The following table presents significant assumptions utilized in the valuations of the Private Placement Warrants as of the dates indicated:


	September 30, 2022			December 31, 2021
Risk-free rate		4.08	%		1.20	%
Dividend yield rate		0.00	%		0.00	%
Volatility		78.2	%		58.8	%
Contractual term (in years)		3.9			4.7
Exercise price	$	11.50		$	11.50

The following table presents changes in the estimated fair value of the Private Placement Warrants for the nine months ended September 30, 2022 (amounts in thousands):


Balance, January 1, 2022	$	137
Change in fair value		(115	)
Balance, September 30, 2022	$	22

NOTE 6. DEPOSITS ON EQUIPMENT

As of September 30, 2022, the Company had outstanding executed purchase agreements for the purchase of (1) 27,000 Antminer S19j Pro (100 TH/s) miners from Bitmain Technologies Limited (“Bitmain”) and (2) 60,000 MicroBT M30S, M30S+ and M30S++ miners from SuperAcme Technology (Hong Kong) Limited (“SuperAcme”). The Company entered into an Amended and Restated Framework Agreement on Supply of Blockchain Servers with SuperAcme (the “Amended SuperAcme Agreement”) on May 6, 2022, which amended that certain Framework Agreement on Supply of Blockchain Servers with SuperAcme, dated September 2, 2021, to purchase 60,000 MicroBT M30S, M30S+ and M30S++ miners (the “Original SuperAcme Agreement”).

The Amended SuperAcme Agreement established a new delivery quantity ratio of miners, as well as new fixed subtotal pricing. In connection with the Original SuperAcme Agreement, the Company previously paid an initial deposit of $22.2 million. No additional initial deposit was required as a result of the execution of the Amended SuperAcme Agreement. The expected final purchase price under the Amended SuperAcme Agreement is subject to both the new fixed price terms and certain floating price terms, with payment due in advance of certain batches of miners being delivered. See additional information regarding a supplementary agreement with SuperAcme in Note 15.

The Company entered into two agreements with Bitfury USA Inc. (“Bitfury USA”), a subsidiary of Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement between the Company and Bitfury Top HoldCo dated August 26, 2021, to ~~their short-term nature.~~purchase a total of 240 units of BlockBox air-cooled containers (each a “BBAC”), the modular data centers that house mining machines. The delivery of those containers commenced in the first quarter of 2022 and is anticipated to be completed in 2022, as expected. See Note 9 for more information on the Master Services and Supply Agreement.

The Company previously had an agreement for the purchase of between 28,000 to 56,000 mining rigs from Bitfury Top HoldCo, also made under, and as a part of, the Master Services and Supply Agreement. Upon execution of the agreement, the Company paid a $10.0 million deposit to Bitfury Top HoldCo; however, the agreement for the purchase of mining rigs was a non-binding commitment unless and until confirmed by a mutually executed order confirmation. No order confirmations were executed under this agreement and, as further described in Note 9, shares of the Company’s Common Stock held by Bitfury Top HoldCo were returned to the Company as consideration for, or repayment of, the $10.0 million deposit.

The purchase agreement commitments, deposits paid and expected delivery timing (remaining balances are payable in advance of shipping) are summarized below as of September 30, 2022 (amounts in thousands):

~~Recent Accounting Pronouncements~~


Vendor	Agreement Dates	Original Maximum Purchase Commitment*		Open Purchase Commitment		Deposits Paid		Expected Shipping for Open Purchase Commitments
Bitmain Technologies Limited**	August 20, 2021 and August 30, 2021	$	171,135	$	55,500	$	55,500	October 2022 - December 2022
SuperAcme Technology (Hong Kong)/*	May 6, 2022		222,401		222,401		101,819	October 2022 - December 2022
Bitfury USA and other vendors (primarily for BBACs)****	Various				57,173		42,715
Total				$	335,074	$	200,033

__________

~~Management~~* Maximum purchase commitment does not ~~believe~~consider discounts that ~~any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on~~the Company may qualify for with the respective vendors, which could reduce the total cost.

** Pursuant to the Company’s ~~financial statements.~~agreements with Bitmain and SuperAcme, the Company is responsible for all logistics costs related to transportation, packaging for transportation and insurance related to the delivery of the miners.

*** See Note 15 for information regarding a supplementary agreement entered into on November 4, 2022 with SuperAcme.

~~Note 3 – Private Placement~~****See Notes 9 and 15 for additional information regarding payments for BBACs.

~~On October 22, 2020, simultaneously~~During the nine months ended September 30, 2022, the Company paid $184.1 million of deposits for miners and mining equipment. As of September 30, 2022, the Company had contributed equipment with a total cost of $93.2 million related to its contributions of 12,953 miners and other mining equipment to the Alborz Facility, which was reclassified from deposits on equipment to investment in equity investee on its consolidated balance sheet, with the ~~closing~~exception of losses of $11.6 million and $7.2 million recognized by the Company related to the batches of miners contributed in June 2022 and July 2022, respectively. See additional information in Note 8.

NOTE 8. INVESTMENT IN EQUITY INVESTEES

On June 10, 2021, the ~~Anchor Investors purchased an aggregate of 228,000 Private Units at~~Company and WindHQ LLC (“WindHQ”) signed a ~~price of $10.00 per Private Unit, for an aggregate purchase price of $2,280,000, in a private placement that occurred simultaneously~~binding definitive framework agreement with respect to the ~~closing of the Public Offering. Each Private Unit consists~~construction, buildout, deployment and operation of one ~~share~~or more data centers (“Data Centers”) in the United States (the “WindHQ Joint Venture Agreement”). The WindHQ Joint Venture Agreement provides that the parties shall collaborate to fund the construction and buildout of ~~common stock~~certain specified Data Centers at locations already identified by the parties (“~~Private Share”) and one-half of one warrant (“Private Warrant”~~Initial Data Centers”). Each ~~whole Private Warrant~~Initial Data Center will be owned by a separate limited liability company (each, an “Initial Data Center LLC”), and WindHQ and the Company will each own 51% and 49%, respectively, of the initial membership interests of each Initial Data Center LLC.

The WindHQ Joint Venture Agreement includes a development schedule for additional electrical power capacity through the joint identification, procurement, development and operation of additional Data Centers (“Future Data Centers”). Each Future Data Center will be owned by a separate limited liability company (each, a “Future Data Center LLC”, and collectively with the Initial Data Center LLCs, the “Data Center LLCs”), and the Company and WindHQ, or respective affiliates of the Company or WindHQ, shall become a member of each Data Center LLC by entering into a limited liability company agreement for each such Data Center LLC (“LLC Agreement”). WindHQ will own at least 51% of the initial membership interests of each Data Center LLC and the Company will own a maximum of 49% of the initial membership interests of each Data Center LLC. Furthermore, under the WindHQ Joint Venture Agreement, WindHQ is ~~exercisable~~required to ~~purchase one share~~procure energy for Future Data Centers at the most favorable pricing then available. Similarly, the Company is required to procure the applicable equipment needed for the Future Data Centers at the most favorable pricing then available.

Under the WindHQ Joint Venture Agreement, WindHQ agrees to provide a series of ~~common stock~~services to each of the Data Centers, including but not limited to: (i) the design and engineering of each of the Data Centers; (ii) the procurement of energy equipment and other related services such as logistics for each of the Data Centers; and (iii) the construction work for each of the Data Centers. Furthermore, the Company is required to support and monitor (remotely) the operations of the hardware at ~~an exercise price~~each Data Center (particularly the mining servers) as required under the WindHQ Joint Venture Agreement.

A development fee equal to 2% of ~~$11.50 per share, subject~~capital expenditures in respect of the initial development of each Data Center shall be paid 50% to ~~adjustment. The proceeds from the Private Units were added~~WindHQ and 50% to the ~~proceeds from~~Company. Furthermore, a fee equal to 2% of the ~~Public Offering~~gross revenues of each of the Data Center LLCs will be payable monthly, based on the immediately prior month gross revenue of such Data Center, 50% to ~~be held~~WindHQ and 50% to the Company.

For each Data Center, WindHQ and the Company will cooperate to prepare a financial model incorporating the relevant economic factors of such Data Center, and both WindHQ and the Company will provide the initial funding required for each Data Center on a pro rata basis in accordance with the parties’ respective ownership interests in the ~~Trust Account. If~~applicable Data Center LLC.

In the absence of any material breaches by either party, the WindHQ Joint Venture Agreement may only be terminated by mutual written consent of both parties.

Currently, it is not anticipated by the Company’s management that its investment in any of the individual Data Center LLCs will meet the definition of a variable interest entity in accordance with ASC 810, and the Company will not have a controlling voting interest in any of the Data Center LLCs. Based upon the Company's expectation that it will have significant influence over the operations and major decisions of the Data Center LLCs, the Company’s 49% ownership in each individual Data Center LLC will be separately accounted for under the equity method of accounting, as the Company does not ~~complete a Business Combination within~~expect to exercise control over the ~~Combination Period,~~Data Center LLCs.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

On January 28, 2022, in connection with the ~~proceeds from~~WindHQ Joint Venture Agreement, Cipher Mining Technologies and Alborz Interests DC LLC (a subsidiary of WindHQ), as members, entered into the ~~sale~~Amended and Restated Limited Liability Company Agreement of Alborz LLC (the “Alborz LLC Agreement”). On May 16, 2022, in connection with the WindHQ Joint Venture Agreement, Cipher Mining Technologies and Bear Interests DC LLC (a subsidiary of WindHQ), as members, entered into the Amended and Restated Limited Liability Company Agreement of Bear LLC (the “Bear LLC Agreement”). The Alborz and Bear LLC Agreements delineate the rights and obligations of the ~~Private Units will be used~~members related to ~~fund~~ the ~~redemption~~construction, operation and management, respectively, of the ~~Public Shares (subject~~Alborz Facility and the Bear facility (the “Bear Facility”) also located in Texas. The Company is required to support and monitor (remotely) the operations of the hardware at the Alborz Facility and the Bear Facility (particularly the mining servers) under the WindHQ Joint Venture Agreement.

The Company uses the equity method of accounting to account for its 49% equity interest in the LLCs. The Company recognized $1.9 million and $2.6 million as equity in the net loss of Alborz LLC in the accompanying unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2022, respectively. Cryptocurrency mining operations had not commenced at the Bear Facility as of September 30, 2022.

In June 2022 and July 2022, the Company contributed 6,629 miners and 2,375 miners, respectively, to the ~~requirements~~Alborz Facility, which are included in the 12,953 total of ~~applicable law).~~miners contributed to the Alborz Facility. At the time of these contributions, the contributed miners had a fair value that was lower than the cost paid by the Company to obtain them, and the Company recognized losses of $7.2 million and $18.8 million during the three and nine months ended September 30, 2022, respectively. These losses were recorded within equity in loss of equity investment on the unaudited condensed consolidated statements of operations and represent a basis difference related to the Company’s investment in Alborz LLC as Alborz LLC recorded the equipment at the historical cost paid by the Company to obtain the equipment. As Alborz LLC depreciates the historical cost of these batches of miners on its financial statements over the expected depreciation period of five years, the Company will accrete this basis difference over the same period and will record the accretion amount for each reporting period within equity in earnings (loss) of equity investment on its consolidated statements of income until the miners are fully depreciated and the corresponding basis difference is fully accreted. See accretion recorded during the nine months ended September 30, 2022 in the table below.

Activity in investment in equity investee during the nine months ended September 30, 2022 consisted of the following (amounts in thousands):


Balance, December 31, 2021	$	-
Cost of miners and mining equipment contributed, net of losses recognized upon contribution		74,384
Sales taxes to be paid by Cipher on behalf of equity investee		5,316
Accretion of basis difference		821
Legal costs related to formation of joint ventures reclassified from deferred investment costs		174
Capital distributions		(43,291	)
Cryptocurrencies received from equity investee		(3,139	)
Equity in net loss of equity investee		(2,574	)
Balance, September 30, 2022	$	31,690

~~Note 4 – Related Party Transactions~~NOTE 9. RELATED PARTY TRANSACTIONS

Waiver, Lock-up and Board Observer Agreements

~~Founder Shares~~

~~In July 2020, Sponsor, and our officers and directors (collectively,~~On April 8, 2022, the ~~“Founders”) purchased an aggregate of 4,312,500 shares~~Company entered into a waiver agreement with Bitfury Top HoldCo (the ~~“Founder Shares”~~“Waiver Agreement”), pursuant to which the Company waived certain restrictions on transfer of the Company’s ~~common stock~~Common Stock under (a) that certain Lock-up Agreement, dated as of August 26, 2021, by and between GWAC and Bitfury Top HoldCo and (b) those certain Lock-up Agreements, dated August 26, 2021, by and between GWAC and each of (i) I-B Goodworks, LLC, (ii) Magnetar Financial LLC, (iii) Mint Tower Capital Management B.V., (iv) Periscope Capital, Inc. and (v) Polar Asset Management Partners Inc., respectively (the stockholders contemplated by clauses (a)-(b), the “Stockholders”) imposing similar restrictions on the Stockholders (collectively, the “Lock-up Agreements” and each a “Lock-up Agreement”).

The Waiver Agreement was negotiated and approved by an independent committee of the Board. The Waiver Agreement (i) permits each Stockholder to pledge or otherwise hypothecate the Lock-up Shares (as defined in the Lock-up Agreements) held by such Stockholder as of the date of the Waiver Agreement (the shares that are actually pledged or otherwise hypothecated, the “Pledged Shares”) as collateral or security in connection with any loan meeting certain criteria set forth in the Waiver Agreement and

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(ii) transfer the Pledged Shares upon foreclosure by such pledgee in accordance with the terms of the applicable pledge or hypothecation; provided that such waiver will only apply and be effective if certain conditions specified in the Waiver Agreement are satisfied or waived. Additionally, effective as of the date of consummation of any pledge or hypothecation, and solely in regard to any pledged shares, the Lock-up Period, as defined in the applicable Lock-up Agreement, shall be extended an additional three months to November 26, 2023. Furthermore, the Waiver Agreement provided for ~~an aggregate price~~the cancellation of $25,000. In August 2020, certain of our initial stockholders forfeited 1,355,000 Founder Shares and the Anchor Investors purchased 1,355,000 Founder Shares for an aggregate purchase price of approximately $7,855, or approximately $0.006 per share. In October 2020, Sponsor forfeited an aggregate of 562,500 founder2,890,173 shares for no consideration, and GW Sponsor 2, LLC, an entity managed by Management, purchased from the Company 562,500 shares for a purchase price of $163,125. The Founder Shares include an aggregate of up to 562,500 shares subject to forfeiture by Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Founders and Anchor Investors will collectively own 20% of the Company’s ~~issued~~Common Stock held by Bitfury Top HoldCo and ~~outstanding shares after~~subject to the ~~Public Offering (assuming~~Lock-up Agreements as consideration for the ~~Founders or Anchor~~$10.0 million deposit paid by the Company for Bitfury Top HoldCo mining rigs under the agreement dated October 11, 2021, for which no order confirmation was made, as discussed in Note 6.

On April 8, 2022, the Company also entered into an observer agreement (the “Board Observer Agreement”) with Bitfury Holding and Bitfury Top HoldCo (together with Bitfury Holding, the “Investors”), which provides that the Investors ~~do not purchase~~have the right to designate a representative to serve as an observer of the Board and any ~~Public Shares~~committees thereof (subject to exceptions and limitations specified in the ~~Public Offering)~~Board Observer Agreement). ~~On November 17, 2020, the underwriters canceled the remainder~~The Board Observer Agreement was negotiated and approved by an independent committee of the ~~Over-Allotment Option.~~ Board.

Master Services and Supply Agreement

In connection with the ~~cancellation~~Business Combination, Bitfury Top HoldCo and Cipher entered into the Master Services and Supply Agreement on August 26, 2021. The initial term of the ~~remainder~~agreement is 84 months, with automatic 12-month renewals thereafter (unless either party provides sufficient notice of non-renewal). Pursuant to this agreement, Cipher can request and Bitfury Top HoldCo is required to use commercially reasonable efforts to provide, or procure the ~~Over-Allotment Option,~~provision of, certain equipment and/or services, such as construction, engineering and operations, in each case as may be required to launch and maintain Cipher’s mining centers in the ~~Company cancelled an aggregate~~United States. The Master Services and Supply Agreement is not exclusive to Bitfury Top HoldCo or any of ~~62,500 shares of common stock issued~~its affiliates, and Cipher may retain any other parties to ~~Sponsor.~~

~~Of the Founder Shares, several of the Founders are holding an aggregate of 750,000 shares which they have agreed to contribute to a not-for-profit organization that is mutually acceptable to them~~manufacture and ~~the Company’s board of directors within six months after the Public Offering~~deliver any equipment or ~~such shares will be forfeited and cancelled.~~

~~The Founders and Anchor Investor have agreed, subject to certain limited exceptions, not to transfer, assign or sell~~perform any of the ~~Founder Shares~~services required. Cipher is not obligated to order any equipment or services from the Bitfury Group under the Master Services and Supply Agreement.

In addition to the Master Services and Supply Agreement, Cipher and Bitfury Holding also entered into a fee side letter, which sets out the basic pricing framework applicable under the Master Services and Supply Agreement for any services. Under the fee side letter, monthly fees for any potential future services, if any, would be determined by reference to two groups of services, which may be provided under the Master Services and Supply Agreement: (i) Bitfury Top HoldCo’s “onsite” services fee would be calculated on a straight cost +5% basis (plus applicable duties and taxes); and (ii) Bitfury Top HoldCo’s “remote services” would be calculated on a ratchet basis applying a management fee of $1,000/MW up to 445MW (capped at $200,000/month) and $450USD/MW above 445MW (plus applicable duties and taxes).

Purchase commitments, deposits on equipment and related party payables

As discussed above in Note 6, the Company entered into two agreements with Bitfury USA made under, and as a part of, the Master Services and Supply Agreement to purchase a total of 240 units of BBACs, the modular data centers that house mining machines. During the nine months ended September 30, 2022, the Company paid a total of $21.7 million to Bitfury USA, which is recorded on the Company’s consolidated balance sheets as deposits on equipment until receipt and deployment of the ~~earlier~~equipment. As of ~~earlier~~September 30, 2022 and December 31, 2021, the Company had a total of ~~(1) one year after~~$21.9 million and $5.1 million, respectively, of deposits on equipment on its condensed consolidated balance sheets related to the Bitfury USA agreements. Additionally, as of September 30, 2022, the Company had a total of $2.7 million of construction-in-progress on its condensed consolidated balance sheet related to the Bitfury USA agreements.

Additionally, prior to the Business Combination, Bitfury USA contracted with third-party vendors for the purchase of equipment and the receipt of services related to Cipher’s future mining operations. Prior to December 31, 2021, Bitfury USA made payments under these arrangements totaling $2.4 million. The Company reimbursed Bitfury USA for these amounts plus a 7% service fee upon completion of the Business Combination and, ~~(2)~~as a result, recorded the ~~date~~amounts reimbursed to Bitfury (including the service fee) as follows: $2.5 million was recorded to deposits on ~~which~~equipment and $0.1 million was recorded to construction-in-progress on the Company’s consolidated balance sheet as of December 31, 2021. Pursuant to one of these arrangements between Bitfury USA and a third-party vendor, Paradigm Controls of Texas, LLC (“Paradigm”), the Company ~~consummates a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after~~made payments directly to Paradigm in place of Bitfury USA, in respect of manufacturing services for BBACs, totaling $11.0 million during the ~~Business Combination that results in all of~~three months ended September 30, 2022 and the Company’s ~~stockholders having~~obligations to Bitfury USA under the ~~right~~Master Services and Supply Agreement have been reduced by the same amount. Additionally, Cipher recorded additional invoices totaling $1.7 million, or $1.8 million including the 7% service fee owed to ~~exchange their shares of common stock for cash, securities or other property. Notwithstanding~~Bitfury USA, to accounts payable, related party during the ~~foregoing, if the last sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations~~three months ended September 30, 2022. These additional invoices related to mining equipment and ~~the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up.~~

~~Promissory Note — Related Party~~

~~On June 30, 2020,~~services received by the Company ~~issued an unsecured promissory note~~prior to ~~IBS Holding Corporation (the “Promissory Note”), an affiliate~~September 30, 2022 for which Bitfury USA had not yet paid

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Paradigm, and which Cipher intends to pay directly to the vendor in place of Bitfury USA. The total balance owed to Bitfury USA and recorded in accounts payable, related party on the ~~Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $432,500, of which $135,000~~condensed consolidated balance sheet was ~~outstanding under the Promissory Note~~$3.2 million as of September 30, ~~2020. The Promissory~~2022. See Note ~~was non-interest bearing and was payable on~~15 for additional information regarding the ~~earlier of (i) the consummation~~disposition of the ~~Public Offering~~additional $1.7 million in invoices after September 30, 2022.

The Company is in discussions with Bitfury USA to assign Cipher Mining Technologies certain service contracts related to the production of BBACs originally entered into between Bitfury USA and Paradigm. The Company will continue to work directly with Paradigm or ~~(ii)~~other vendors on any remaining BBACs that would have been purchased from Bitfury USA under the ~~date~~Master Services and Supply Agreement.

Related party receivables

The Company recorded a related party receivable of approximately $0.7 million as of September 30, 2022 related to expenses paid on behalf of the Data Center LLCs for which it expects to be reimbursed.

NOTE 10. LEASES

The Company entered into an operating lease for office space located in New York. The lease has an initial term of 64 months, commencing on February 1, 2022. The lease does not provide the Company ~~determined~~with renewal options.

Total rent expense was approximately $0.4 million and $1.0 million for the three and nine months ended September 30, 2022, respectively, which includes an immaterial amount of less than $0.1 million for short-term lease costs during both the three and nine months ended September 30, 2022. The Company did not incur any variable lease costs during the periods presented.

Supplemental information related to the lease was as follows (dollar amounts in thousands):


	Nine Months Ended
	September 30, 2022
Operating cash flows - operating leases	$	395
Right-of-use assets obtained in exchange for operating lease liabilities	$	5,859
Weighted-average remaining lease term – operating leases (in years)		4.7
Weighted-average discount rate – operating leases		10.9	%

As of September 30, 2022, future minimum operating lease payments during the next five years are as follows (amounts in thousands):


Remaining Period Ended December 31, 2022	$	395
Year Ended December 31, 2023		1,581
Year Ended December 31, 2024		1,581
Year Ended December 31, 2025		1,581
Year Ended December 31, 2026		1,581
Year Ended December 31, 2027		659
Total		7,378
Less present value discount		(1,614	)
Operating lease liabilities	$	5,764

NOTE 11. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is not a party to ~~proceed~~any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Commitments

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. The Company's maximum exposure under these arrangements, if any, is unknown as of September 30, 2022. The Company does not anticipate recognizing any significant losses relating to these arrangements.

Standard Power Hosting Agreement

Under the Standard Power Hosting Agreement entered into on February 3, 2021 by the Company and 500 N 4th Street LLC, doing business as Standard Power (“Standard Power”), the Company agrees to provide Standard Power with Bitcoin miners with a specified energy utilization capacity necessary to generate computational power at three Ohio facilities (the “Miners”). Standard Power, in turn, is obligated to (i) host the Miners in specialized containers and provide the electrical power and transmission and connection equipment necessary for the mining and (ii) host, operate and manage the Miners there, in each case in accordance with the ~~Public Offering. On October 22, 2020, the Company repaid the outstanding borrowings under the Promissory Note amounting to $135,000 from the proceeds~~terms and conditions of the ~~IPO not being placed~~Standard Power Hosting Agreement.

The Standard Power Hosting Agreement provides that Standard Power shall provide an electric power infrastructure, including containers, necessary to operate Miners with a specified energy utilization capacity at facility 1 in Ohio in accordance with the specifications and power availability date set out in the ~~Trust Account.~~availability schedule.

~~Related Party Loans~~

~~In addition,~~Thereafter, Standard Power shall provide the hosting capacity, housing and equipment for Miners with the specified energy utilization capacities that will be delivered to the facilities in ~~order to finance transaction costs in connection~~accordance with ~~a Business Combination, Sponsor and its designees may, but are not obligated to, loan~~ the ~~Company funds~~availability schedule, as may be ~~required (“Working Capital Loans”). If~~amended and supplemented. Standard Power also undertakes to be responsible for the proper installation and the costs of work for hosting the Miners in the specialized containers in each facility and for the proper care and maintenance of the Miners, the facilities and the containers in which the Miners are installed.

Under the Standard Power Hosting Agreement, the Company ~~completes~~is obligated to pay a ~~Business Combination,~~hosting fee and an operational service fee. The Company’s payment obligations under the ~~Company would repay the Working Capital Loans out of the proceeds of the Trust Account released~~Standard Power Hosting Agreement become effective on a pro rata basis according to the ~~Company. Otherwise, the Working Capital Loans would be repaid only out~~number of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds heldMiners in ~~the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing,~~operation in accordance with the terms of ~~such Working Capital Loans, if any, have not been determined~~this agreement. The Standard Power Hosting Agreement provides for a term of five years with automatic five-year renewal provisions. The associated fees paid under the Standard Power Hosting Agreement will be expensed as services are received.

Luminant Lease and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into Private Units of the post Business Combination entity at a price of $10.00 per Private Unit. The Private Units would be identical to the Private Units issued in the Private Placement. At September 30, 2020, no Working Capital Loans have been issued.Purchase and Sale Agreements

~~Administrative Support Agreement~~

The Company ~~has agreed, commencing~~entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 (as amended and restated, the ~~effective date~~“Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of the Public Offering through the earlier of the Company’s consummation of a Business Combination and the liquidation of the Trust Account, to pay an affiliate of one of the Company’s executive officers $5,000 per month for office space, utilities and secretarial and administrative support. At September 30, 2020, the Company has accrued no such expenses.

~~Note 5 – Commitments~~

~~Registration Rights~~

~~The holders of the Founder Shares, as well as the holders of the Private Units and any Private Warrants or Private Units that may be issued in payment of Working Capital Loans made~~land to the Company ~~(and all underlying securities)~~where the planned data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) will be set up for the Company’s Odessa Facility. The Company also entered into the Purchase and Sale Agreement dated June 28, 2021, ~~are entitled~~with amendment and restatement on July 9, 2021 (as amended and restated, the “Luminant Purchase and Sale Agreement”) with another Luminant affiliate. The Company entered into the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement to ~~registration rights pursuant~~build the infrastructure necessary to ~~an agreement~~support its planned operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842 (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values.

Under the Luminant Power Agreement (defined above in Note 2 under Derivative Accounting), the Company is required to provide Luminant with collateral of approximately $12.6 million (the “Independent Collateral Amount”). Half, or approximately $6.3 million, of the Independent Collateral Amount was ~~signed~~paid to Luminant on September 1, 2021 and is recorded in security deposits on the ~~effective date~~condensed consolidated balance sheets as of ~~Public Offering.~~September 30, 2022 and December 31, 2021. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founders Shares can elect to exercise these registration rights at any time commencing three monthsother half will be due 15 days prior to the date on which ~~these~~the Interconnection Electrical Facilities are completed and made operational. The Independent Collateral Amount will remain in place throughout the term of the Luminant Power Agreement. Details of the construction of the Interconnection Electrical Facilities, including collateral arrangements that are in addition to the Independent Collateral Amount, are set out in the Luminant Purchase and Sale Agreement. Under the Luminant Purchase and Sale Agreement, the Company provided approximately

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

$3.1 million as collateral separate from the Independent Collateral Amount, which is also recorded in security deposits as of September 30, 2022 and December 31, 2021.

The Combined Luminant Lease Agreement is effective from the date of the Company’s notification of the Effective Date of the Business Combination, which was August 27, 2021, and shall continue for five years following completion of the substation, subject to renewal provisions aligned with the Luminant Power Agreement; however, the Company’s management determined that the Combined Luminant Lease Agreement contains two lease components; and the components should be accounted for together as a single lease component, because the effect of accounting for the land lease separately would be insignificant. Financing for use of the land and substation is provided by Luminant affiliates, with monthly installments of principal and interest due over a five-year period starting upon transfer of legal title of the substation to the Company (estimated total undiscounted principal payments of $13.1 million). At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC at a price to be determined based upon bids obtained in the secondary market.

Once the Company has control over the applicable leased asset, the Company will record both a ROU asset and a corresponding lease liability in accordance with ASC 842 for the single lease component as applicable under the Combined Luminant Lease Agreement.

NOTE 12. STOCKHOLDERS’ EQUITY

As of September 30, 2022, 510,000,000 shares with a par value of $0.001 per share are authorized, of which, 500,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as preferred stock.

Common Stock

Holders of each share of Common Stock are entitled to dividends when, as and if declared by the Board. As of September 30, 2022, the Company had not declared any dividends. The holder of each share of Common Stock is entitled to one vote. The voting, dividend, liquidation and other rights and powers of the Common Stock are subject to and qualified by the rights, powers and preferences of any outstanding series of preferred stock.

The Company repurchased 13,193 shares and 672,424 shares of ~~common stock are~~its Common Stock related to ~~be released~~tax withholding settlements for RSUs that vested during the three and nine months ended September 30, 2022, respectively.

As disclosed above in Notes 6 and 9, on April 8, 2022, the Company accepted the return of 2,890,173 shares of its Common Stock held by Bitfury Top HoldCo as consideration for the $10.0 million deposit paid to Bitfury Top HoldCo for mining rigs under the agreement dated October 11, 2021. The returned shares were cancelled by the Company upon their return.

Shelf Registration and At-The-Market Offering Agreement

On September 21, 2022, the Company filed with the SEC a shelf registration statement on Form S-3, which was declared effective on October 6, 2022 (the “Registration Statement”). The Registration Statement covers: (i) the offer and sale by the Company, from ~~escrow. The holders~~time to time in one or more offering, securities having an aggregate public offering price of ~~a majority~~up to $500.0 million, (ii) the offer and sale from time to time by the selling securityholders identified therein of up to 23,265,565 shares of the ~~Founder Shares, Private Units~~Company’s Common Stock and ~~Private Warrants or Private Units issued in payment~~the offer and sale from time to time by the selling securityholders of ~~Working Capital Loans (or underlying securities) can elect~~up to ~~exercise these registration rights at any time after~~85,500 of the Company’s warrants and (iii) the offer and sale of (A) up to 8,499,978 shares of Common Stock that are issuable by the Company ~~consummates a Business Combination. In addition,~~upon the ~~holders have certain “piggy-back” registration rights with respect~~exercise of 8,499,978 public warrants that were previously registered and (B) up to ~~registration statements filed subsequent to~~114,000 shares of Common Stock that are issuable by the ~~consummation~~Company upon the exercise of ~~a Business Combination. The Company will bear the expenses incurred in~~114,000 private placement warrants.

In connection with the filing of ~~any such registration statements.~~

~~Underwriting~~the Registration Statement, the Company also entered into the Sales Agreement

~~The~~ with H.C. Wainwright & Co., LLC as the Agent, under which the Company ~~granted the underwriters a 45-day option~~may, from ~~the date~~time to time, sell shares of ~~Public Offering to purchase~~its Common Stock having an aggregate offering price of up to ~~2,250,000 additional Units to cover over-allotments, if any, at~~$250.0 million in “at-the-market” offerings through the ~~Public Offering price less~~Agent, which is included in the ~~underwriting discounts and commissions.~~

~~On October 26, 2020, the underwriters purchased an additional 1,500,000 Over-Allotment Units~~$500.0 million of securities that may be offered pursuant to the ~~partial exercise~~Registration Statement. Sales of the ~~Over-Allotment Option. On November 17, 2020,~~shares of Common Stock, if any, will be made at prevailing market prices at the ~~underwriters purchased an additional 500,000 Over-Allotment Units pursuant~~time of sale, or as otherwise agreed with the Agent. Pursuant to the ~~partial exercise of~~Sales Agreement, the Over-Allotment Option. The Over-Allotment Units were sold at an offering price of $10.00 per Over-Allotment Unit, generating aggregate additional gross proceeds of $20,000,000 to the Company. On November 17, 2020, the underwriters canceled the remainder of the Over-Allotment Option.

~~The Company paid a fixed underwriting discount of $450,000 to the underwriters at the closing of the Public Offering.~~

~~Business Combination Marketing Agreement~~

The Company engaged I-Bankers Securities, Inc. as an advisor in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay ~~I-Bankers Securities, Inc.~~the Agent a ~~cash fee for such services upon the consummation~~commission of ~~a Business Combination in an amount equal~~up to ~~4.5%~~3.0% of the gross proceeds ~~of Public Offering (exclusive~~from the sale of any ~~applicable finders’ fees which might become payable).~~

~~Note 6 – Stockholders’ Equity~~

shares of Common Stock — under the Sales Agreement. The Company is ~~authorized~~not obligated to ~~issue 100,000,000~~make any sales of shares of ~~common stock with a par value of $0.001 per share. At September 30, 2020, there were 4,312,500~~its Common Stock under the Sales Agreement. The Company has not sold any shares of ~~common stock~~its Common Stock under the Sales Agreement as of the issuance of these unaudited condensed consolidated financial statements.

NOTE 13. WARRANTS

Upon consummation of the Business Combination, the Company assumed Common Stock warrants that were originally issued in GWAC’s initial public offering (the “Public Warrants”), as well as warrants that were issued in a private placement that closed concurrently with GWAC’s initial public offering (the “Private Placement Warrants”). The Public and ~~outstanding,~~Private Placement Warrants entitle the holder to purchase one share of ~~which~~Common Stock at an ~~aggregate~~exercise price of ~~up to 562,500 shares are~~$11.50 per share, subject to ~~forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Founders~~adjustment. There were 8,500,000 Public Warrants and ~~Anchor Investors will collectively own 20%~~114,000 Private Placement Warrants outstanding as of the ~~Company’s issued and outstanding common stock after the Public Offering (assuming no purchases of any Public Shares in the Public Offering and excluding the Private Units).~~

~~Warrants~~ ~~— The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing~~Closing Date of the Public Offering. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

~~Once the warrants become exercisable, the Company may redeem the Public Warrants:~~

●

~~in whole and not in part;~~

●

~~at a price of $0.01 per warrant;~~

●

~~upon not less than 30 days’ prior written notice of redemption;~~

●

if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and

●

~~if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.~~

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The Private Warrants are identical to the Public Warrants underlying the Units sold in the Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Combination. The exercise price and number of shares of ~~common stock~~Common Stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or ~~our~~the Company’s recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of ~~common stock~~Common Stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants.

NOTE 14. SHARE-BASED COMPENSATION

Upon Closing of the Business Combination, the Board approved the Cipher Mining Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”). The Incentive Award Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, RSUs and other stock or cash-based awards to employees, consultants and directors. Upon vesting of an award, the Company may either issue new shares or reissue treasury shares.

Initially, up to 19,869,312 shares of Common Stock were available for issuance under awards granted pursuant to the Incentive Award Plan. In addition, the number of shares of Common Stock available for issuance under the Incentive Equity Plan will be increased on January 1 of each calendar year beginning in 2022 and ending in 2031 by an amount equal to the lesser of (a) three percent (3%) of the total number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares determined by the Board. On January 1, 2022, this resulted in an increase of 7,478,382 shares of Common Stock available for issuance under the Incentive Award Plan. As of September 30, 2022, 1,638,142 shares of Common Stock are available for issuance under the Incentive Award Plan.

The Company recognized total share-based compensation for the following categories of awards during the periods indicated (amounts in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Service-Based RSUs	$	7,078	$	19,936
Performance-Based RSUs		3,416		10,136
Total share-based compensation expense	$	10,494	$	30,072

Service-based RSUs

A summary of the Company's unvested Service-Based RSU activity for the nine months ended September 30, 2022 is shown below:


	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at January 1, 2022		6,798,238		$	8.04
Granted		9,108,086			1.90
Forfeited		(205,048	)		6.34
Vested		(1,802,123	)		7.55
Unvested at September 30, 2022		13,899,153		$	4.10

As of September 30, 2022, there was approximately $35.5 million of unrecognized compensation expense related to unvested Service-Based RSUs, which is expected to be recognized over a weighted-average vesting period of approximately 1.8 years.

If not fully vested upon grant, Service-Based RSUs awarded generally vest in equal installments on the first three or four anniversaries of the vesting commencement date as determined by the Board, which will generally coincide with the timing when the employee or consultant began to provide services to the Company, and which may precede the grant date. Vesting is subject to the award recipient's continuous service on the applicable vesting date; provided, that if the award recipient’s employment is terminated by the Company

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

without “cause”, due to award recipient’s death or permanent disability, or, for some award recipients, by the award recipient for “good reason” (if applicable, as such term or similar term may be defined in any employment, consulting or similar service agreement between award recipient and the Company), all unvested Service-Based RSUs will vest in full. In addition, in the event of a change in control, any unvested Service-Based RSUs will vest subject to the award recipient's continuous service to the Company through such change in control. In addition, if the $10 billion market capitalization milestone (described further below) is achieved and the Chief Executive Officer (“CEO”) remains in continuous service through such achievement, any then-unvested Service-Based RSUs awarded to the CEO will also vest.

Performance-based RSUs

There was no activity for unvested Performance-Based RSUs during the nine months ended September 30, 2022. There were 4,257,710 unvested Performance-Based RSUs at a weighted average grant date fair value of $7.76 as of both September 30, 2022 and December 31, 2021. There was approximately $21.2 million of unrecognized compensation expense related to unvested Performance-Based RSUs, which is expected to be recognized over a weighted-average derived service period of approximately 1.7 years.

One-third of the Performance-Based RSUs will vest upon the Company achieving a market capitalization equal to or exceeding $5 billion, $7.5 billion and $10 billion, in each case over a 30-day lookback period and subject to the CEO’s continuous service through the end of the applicable 30-day period. In the event of a change in control and CEO’s continuous service through such change in control, the per share price (plus the per share value of any other consideration) received by the Company’s stockholders in such change in control will be used to determine whether any of the market capitalization milestones are achieved (without regard to the 30-day lookback period). Any Performance-Based RSUs that do not vest prior to the CEO’s termination of service or, if earlier, in connection with a change in control will be forfeited for no consideration.

NOTE 15. SUBSEQUENT EVENTS

Chief LLC Agreement

Effective October 7, 2022, in connection with the WindHQ Joint Venture Agreement, Cipher Mining Technologies and Chief Interests DC LLC (a subsidiary of WindHQ), as members, entered into the Limited Liability Company Agreement of Chief Mountain LLC (the “Chief LLC Agreement”). The Chief LLC Agreement delineates the rights and obligations of the members related to the construction, operation and management of the Chief facility, located in Texas (the “Chief Facility”). Similar to the Alborz Facility and the Bear Facility, the Company is ~~unable~~also required to ~~complete~~support and monitor (remotely) the operations of the hardware at the Chief Facility (particularly the mining servers) under the WindHQ Joint Venture Agreement.

Miner contributions to Bear Facility and Chief Facility

In October 2022, the Company contributed approximately 6,500 miners to the Bear Facility and the Chief Facility. While the final quantities of miners going to each respective site, and therefore the relative pricing as between the two sites, is still being finalized, the estimated fair value of the relevant miners was lower than the cost paid by the Company to purchase them; therefore, the Company expects to record a ~~Business Combination within~~loss related to the ~~Combination Period~~contribution of these miners of approximately $15 million.

SuperAcme Supplementary Agreement

On November 4, 2022, through its subsidiary, Cipher Mining Technologies, the Company entered into a supplementary agreement of the Framework Agreement on Supply of Blockchain Servers (the “Supplementary Agreement”) with SuperAcme, which supplements the Amended SuperAcme Agreement dated May 6, 2022, and the Original SuperAcme Agreement. The Supplementary Agreement establishes new fixed and floating price terms for remaining purchases of M30S, M30S+ and M30S++ miners and the Company ~~liquidates~~will not be obligated to send any further money to SuperAcme. In connection with the ~~funds held~~Amended SuperAcme Agreement, SuperAcme has delivered 17,833 miners to date, at an aggregate value of approximately $53.6 million, and the Company has paid aggregate advance payments of $101.8 million. The remaining balance of $48.2 million will be applied to the purchase of miners under the new fixed and floating price terms set forth in the ~~Trust Account, holders~~Supplementary Agreement.

Payments on behalf of ~~warrants will not receive any~~Bitfury

After September 30, 2022, but before the issuance of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

~~8. Subsequent Events~~

~~The Company evaluated subsequent events and transactions that occurred after the balance sheet date up the date that the financial statements were issued. Other than as described below and in~~ these unaudited condensed consolidated financial statements, the Company made payments totaling approximately $2.1 million directly to Paradigm in ~~relation~~place of Bitfury USA, in respect of manufacturing services for

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

BBACs. The Company’s payment obligations to Bitfury USA under the Master Services and Supply Agreement were also reduced by $2.1 million related to these payments to Paradigm.

Luminant Power Agreement

On October 26, 2022, the Company received a letter from Luminant, disputing: (i) the payments of $1.7 million that Luminant had made to the ~~Public Offering (Note 1), Private Placement (Note 3),~~Company under the Luminant Power Agreement for the electricity sold in the ERCOT market during July 2022 and ~~forfeiture~~August 2022 and (ii) the payment of ~~founder shares (Notes 1 and 4) and related transactions,~~$5.1 million made to the Company ~~did not identify any subsequent events that would have required adjustment or disclosure~~by Luminant in September 2022 in consideration for the modification to the ramp up schedule pursuant to the August Amendment to the Luminant Power Agreement. The Company received and recorded $1.7 million as part of the change in fair value of derivative asset in the ~~financial statements.~~condensed consolidated statements of operations for the three and nine months ended September 30, 2022. The Company received and recorded $5.1 million as a reduction to the derivative asset on the condensed consolidated balance sheet during the three months ended September 30, 2022. The Company has not received payment from Luminant for electricity sold in the ERCOT market in September 2022 and October 2022.

The Company wholly disputes the claims made by Luminant and has been engaged in discussions with Luminant in an attempt to reach a mutually agreeable solution and resolve disagreements between the parties regarding these payments and whether the commencement of Luminant’s obligations under the Luminant Power Agreement should be tied to ERCOT’s interconnection approval. At this time the Company’s management does not know how or when this dispute will be resolved.

~~In October 2020, Sponsor forfeited an aggregate of 562,500 founder shares for no consideration, and GW Sponsor 2, LLC, an entity managed by Management, purchased from~~On November 8, 2022, the Company ~~562,500 shares for~~also received a ~~purchase price~~letter from Luminant requesting the Company deposit to Luminant the remaining half of ~~$163,125, which was payable on or~~the Independent Collateral Amount under the Luminant Power Agreement. The Company expects to deliver to Luminant the remaining half of the Independent Collateral Amount before the ~~closing~~end of ~~the Public Offering.~~November 2022.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~This~~You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report, onas well as our audited consolidated financial statements and related notes as disclosed in our 2021 Form ~~10-Q includes forward-looking statements. These~~10-K. This discussion contains forward-looking statements ~~are~~ based ~~on our~~upon current plans, expectations and beliefs ~~concerning future developments~~involving risks and ~~their potential effects on us. There can be no assurance that future developments affecting us will be~~uncertainties. Our actual results may differ materially from those ~~that we have anticipated. These~~anticipated in these forward-looking statements ~~involve~~as a ~~number~~result of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances,various factors, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in the ~~Risk Factors section~~“Risk Factors” sections of our 2021 Form 10-K and this Quarterly Report and other factors set forth in other parts of this Quarterly Report.

Unless the context otherwise requires, references in this Quarterly Report to the “Company,” “Cipher,” “we,” “us” or “our” refer to Cipher Mining Technologies Inc., prior to the consummation of the ~~Company’s registration statement~~Business Combination (the “Closing” and, ~~prospectus for~~such date of the ~~Company’s initial public offering filed~~consummation of the Business Combination, the “Closing Date”) and to Cipher Mining Inc. and its consolidated subsidiaries following the Business Combination. References to “GWAC” or “Good Works” refer to our predecessor company prior to the consummation of the Business Combination.

We are an emerging technology company that operates in the Bitcoin mining ecosystem in the United States. Specifically, we are developing and growing a cryptocurrency mining business specializing in Bitcoin. Our key mission is to become a leading Bitcoin mining company in the United States.

As a stand-alone, U.S.-based cryptocurrency mining business, we have begun our buildout of cryptocurrency mining sites in the United States that will include both wholly-owned sites and partially-owned sites acquired through investments in joint ventures. We began deployment of capacity in the first quarter of 2022, with mining operations beginning at the ~~SEC. The following discussion should be read~~partially-owned Alborz Facility in ~~conjunction~~February 2022.

In connection with our ~~financial statements~~planned buildout, we entered into the Standard Power Hosting Agreement, the WindHQ Joint Venture Agreement and ~~related notes thereto included elsewhere~~the Luminant Power Agreement, all of which, together, are expected to cover at least four sites where we expect to begin our buildout. Pursuant to these agreements, we expect to have access, for at least five years, to an average cost of electricity of approximately 2.7 c/kWh. We expect that this will help competitively position us to achieve our goal of becoming a leading Bitcoin mining operator in ~~this report.~~the United States.

In August 2022, we completed installation of the last mining rigs to be delivered to the Alborz Facility. With that the Alborz Facility is capable of generating approximately 1.3 EH/s, of which we own approximately 0.64 EH/s under the WindHQ Joint Venture Agreement. In October 2022, we also completed the Bear Facility and Chief Facility, which, combined, are expected to generate approximately 0.65 EH/s, of which we own approximately 0.32 EH/s.

~~Overview~~By early 2023, we plan to deploy approximately 267MW of electrical power capacity across four sites with a corresponding hashrate of approximately 8.0 EH/s, of which we expect to own approximately 7.0 EH/s.

We aim to deploy the computing power that we will create to mine Bitcoin and validate transactions on the Bitcoin network. We believe that Cipher will become an important player in the Bitcoin network due to our planned large-scale operations, best-in-class technology, market-leading power and hosting arrangements and a seasoned, dedicated senior management team.

As of September 30, 2022, Bitfury Top HoldCo B.V. (“Bitfury Top HoldCo”) (together with Bitfury Holding B.V., a subsidiary of Bitfury Top HoldCo, and referred to herein as “Bitfury Holding”) beneficially owns approximately 81.6% of our common stock, $0.001 par value per share (“Common Stock”), with sole voting and sole dispositive power over those shares and, as a result, Bitfury Top HoldCo has the power to elect all of our directors and we are a “controlled company” under Nasdaq corporate governance standards. For additional information, see “Risk Factors—Risks Related to our Common Stock and Warrants—We are a ~~blank check company incorporated~~“controlled company” within the meaning of Nasdaq listing rules and, as a result, can rely on ~~June 24, 2020~~exemptions from certain corporate governance requirements that provide protection to shareholders of other companies” in our 2021 Form 10-K.

On August 27, 2021, as contemplated by the Agreement and Plan of Merger dated as of March 4, 2021 (the “Merger Agreement”), by and among Good Works Acquisition Corp. (“GWAC”), a Delaware corporation, Currency Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and ~~formed for~~a wholly‑owned direct subsidiary of GWAC, and the ~~purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar~~Company, the parties entered into the business combination transaction pursuant to which Merger Sub merged with ~~one or more businesses (a~~and into the Company, the separate corporate existence of Merger Sub ceasing and the Company being the surviving corporation and a wholly‑owned subsidiary of GWAC (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). Following the Business

Combination, the combined company was named Cipher Mining Inc. (“Cipher Mining”). Cipher Mining comprises all of GWAC’s and Cipher Mining Technologies’ operations.

Upon the consummation of the Business Combination, all holders of Cipher Common Stock received shares of our Common Stock of $10.00 per share after giving effect to the Exchange Ratio, resulting in 200,000,000 shares of our Common Stock to be immediately issued and outstanding to Bitfury Top HoldCo (in addition to 8,146,119 shares of our Common Stock held by GWAC), 32,235,000 shares of our Common Stock held by the PIPE Investors and 6,000,000 shares of our Common Stock received by Bitfury Holding B.V., an affiliate of Bitfury Top HoldCo, under the Bitfury Private Placement, based on the following events contemplated by the Merger Agreement:

In connection with the execution of the Merger Agreement, GWAC entered into: (i) the PIPE Subscription Agreements to sell to certain investors (the “PIPE Investors”), an aggregate of 32,235,000 shares of GWAC Common Stock, immediately following the Closing, for a purchase price of $10.00 per share and at an aggregate gross proceeds of $322.4 million (the “PIPE Financing”) and (ii) the Bitfury Subscription Agreement to sell to Bitfury Top HoldCo (or an affiliate of Bitfury Top HoldCo), an aggregate of 6,000,000 shares of GWAC Common Stock, following the Closing, for a purchase price of $10.00 per share and Bitfury Top HoldCo’s payment in cash and/or forgiveness of outstanding indebtedness for aggregate gross proceeds of $60.0 million (the “Bitfury Private Placement”).

Upon the consummation of the Business Combination, GWAC Common Stock and GWAC Warrants ceased trading on the Nasdaq Stock Exchange (the “Nasdaq”), and our Common Stock and Public Warrants began trading on August 30, 2021 on the Nasdaq under the ticker symbols “CIFR” and “CIFRW,” respectively. The Business Combination resulted in cash proceeds, net of issuance costs, of approximately $384.9 million.

On April 8, 2022, we, as successor-in-interest to GWAC, and Cipher Mining Technologies, with respect to certain sections (collectively, the “Company”), entered into a Waiver Agreement, with Bitfury Top HoldCo (the “Waiver Agreement”), pursuant to which we waived certain restrictions on transfer of shares under (a) that certain Lock-up Agreement, dated as of August 26, 2021, by and between Good Works Acquisition Corp. and Bitfury and (b) those certain Lock-up Agreements, dated as of August 26, 2021, by and between Good Works Acquisition Corp. and each of (i) I-B Goodworks, LLC, (ii) Magnetar Financial LLC, (iii) Mint Tower Capital Management B.V., (iv) Periscope Capital, Inc. and (v) Polar Asset Management Partners Inc., respectively (the stockholders contemplated by clauses (a)-(b), the “Stockholders”) imposing similar restrictions on the Stockholders (collectively, the “Lock-up Agreements” and each a “Lock-up Agreement”). The Waiver Agreement was negotiated and approved by an independent committee of our Board of Directors (the “Board”). The Waiver Agreement permits each Stockholder to pledge or otherwise hypothecate up to one hundred percent (100%) of the Lock-up Shares (as defined in the Lock-Up Agreements) held by such Stockholder as of the date of the Waiver Agreement (the shares that are actually pledged or otherwise hypothecated, the “Pledged Shares”) as collateral or security in connection with any loan meeting certain criteria set forth in the Waiver Agreement and (ii) transfer the Pledged Shares upon foreclosure by such pledgee in accordance with the terms of the applicable pledge or hypothecation; provided that the Waiver will only apply and be effective if the following conditions are satisfied or waived: (i) any pledgee executes a joinder to the Lock-up Agreements and therefore be bound by the Transfer Restrictions as defined in the Lock-up Agreements, (ii) the pledgee in receipt of any pledged shares be in compliance with all Anti-Money Laundering and Know Your Customer laws and regulations in effect in the United States of America and be a nationally, internationally or regionally recognized bank or bona fide financial institution, private equity fund or other lender, (iii) any pledgee not be a competitor of the Company, and (iv) any loan for pledged shares be a bona fide loan containing customary market terms and have an initial 25% maximum loan-to-value ratio. Additionally, effective as of the date of consummation of any pledge or hypothecation, and solely in regard to any Pledged Shares, the Lock-Up Period, as defined in the applicable Lock-up Agreement, shall be extended an additional three months to November 26, 2023. Furthermore, the Waiver Agreement provides for a cancellation of 2,890,173 shares of our Common Stock held by Bitfury Top HoldCo and subject to the Lock-up Agreements (the “Cancelled Shares”) as consideration for the $10.0 million deposit paid by us for Bitfury mining rigs under our agreement dated October 11, 2021, for which no order confirmation was made. The Cancelled Shares were part of the tranche of Lock-Up Shares with a Lock-Up Period during the period beginning on the date that is eighteen months after the Closing Date and ending on the date that is two years after the Closing Date.

Also on April 8, 2022, we entered into an Observer Agreement (the “Board Observer Agreement”) with Bitfury Holding and Bitfury Top HoldCo (together with “Bitfury Holding,” the “Investors”), which provides that the Investors have the right to designate a representative to serve as an observer (the “Observer”) of our Board and any committees thereof (subject to exceptions specified therein). The Observer has the right to attend and observe meetings of the Board, including any meetings of the committees of the Board, and to participate in discussions of matters brought to the Board or any committee thereof, in each case, subject to certain exceptions specified in the Board Observer Agreement. The Investors’ rights under the Board Observer Agreement will terminate

upon the date that the Investors no longer beneficially own at least 10% of the outstanding shares of our Common Stock. As of the date of this Quarterly Report, the Investors have not designated an Observer pursuant to the Board Observer Agreement.

The Board Observer Agreement was negotiated and approved by an independent committee of the Board.

Effective October 7, 2022, in connection with the WindHQ Joint Venture Agreement, Cipher Mining Technologies and Chief Interests DC LLC, a subsidiary of WindHQ LLC (“WindHQ”), as members, entered into the Limited Liability Company Agreement of Chief Mountain LLC (the “Chief LLC Agreement”). The Chief LLC Agreement delineates the rights and obligations of the members related to the construction, operation and management of the Chief facility, located in Texas (the “Chief Facility”). Similar to the Alborz Facility and the Bear Facility, we are also required to support and monitor (remotely) the operations of the hardware at the Chief Facility (particularly the mining servers) under the WindHQ Joint Venture Agreement.

In October 2022, we contributed approximately 6,500 miners to the Bear Facility and the Chief Facility. While the final quantities of miners going to each respective site, and therefore the relative pricing as between the two sites, is still being finalized, the estimated fair value of the relevant miners was lower than the cost paid by us to purchase them; therefore, we expect to record a loss related to the contribution of these miners of approximately $15 million.

On November 4, 2022, through our subsidiary, Cipher Mining Technologies, we entered into a supplementary agreement of the Framework Agreement on Supply of Blockchain Servers (the “Supplementary Agreement”) with SuperAcme Technology (Hong Kong) Limited (“SuperAcme”), which supplements the Amended SuperAcme Agreement dated May 6, 2022, and the Original SuperAcme Agreement. The Supplementary Agreement establishes new fixed and floating price terms for remaining purchases of M30S, M30S+ and M30S++ miners and provides that we will not be obligated to send any further money to SuperAcme. In connection with the Amended SuperAcme Agreement, SuperAcme has delivered 17,833 miners to date, at an aggregate value of approximately $53.6 million, and we have paid aggregate advance payments of $101.8 million. The remaining balance of $48.2 million will be applied to the purchase of miners under the new fixed and floating price terms set forth in the Supplementary Agreement.

We ~~consummated~~are in discussions with Bitfury USA Inc. (“Bitfury USA”) to assign Cipher Mining Technologies certain service contracts related to the production of BlockBox air-cooled containers (each a “BBAC”) originally entered into between Bitfury USA and Paradigm Controls of Texas, LLC (“Paradigm”). Going forward, we will continue to work directly with Paradigm or other vendors on any remaining BBACs that would have been purchased from Bitfury USA under the Master Services and Supply Agreement. In connection with these discussions, as of November 11, 2022, we have paid a total of $13.1 million to Paradigm and our ~~Public Offering~~obligations to Bitfury USA under the Master Services and Supply Agreement were reduced by the same amount.

On October 26, 2022, we received a letter from Luminant ET Services Company LLC (“Luminant”), disputing: (i) the payments of $1.7 million that Luminant had made to us under the Luminant Power Agreement for the electricity sold in the ERCOT market during July 2022 and August 2022 and (ii) the payment of $5.1 million made to us by Luminant in September 2022 in consideration for the modification to the ramp up schedule pursuant to the August Amendment (as defined below) ~~on October 22, 2020~~to the Luminant Power Agreement. We received and ~~are currently~~recorded $1.7 million as part of the change in fair value of derivative asset in the ~~process~~condensed consolidated statements of ~~locating suitable targets~~operations for ~~our business combination.~~the three and nine months ended September 30, 2022. We ~~intend~~received and recorded $5.1 million as a reduction to ~~use~~ the ~~cash proceeds~~derivative asset on the condensed consolidated balance sheet during the three months ended September 30, 2022. We have not received payment from ~~our Public Offering~~Luminant for electricity sold in the ERCOT market in September 2022 and October 2022.

We wholly dispute the ~~Private Placement described below as well as additional issuances, if any,~~claims made by Luminant and have been engaged in discussions with Luminant in an attempt to reach a mutually agreeable solution and resolve disagreements between the parties regarding these payments and whether the commencement of ~~our capital stock, debt~~Luminant’s obligations under the Luminant Power Agreement should be tied to ERCOT’s interconnection approval. At this time we do not know how or when this dispute will be resolved.

On November 8, 2022, we also received a ~~combination~~letter from Luminant requesting we deposit to Luminant the remaining half of ~~cash, stock and debt to complete~~ the ~~Business Combination.~~

Independent Collateral Amount under the Luminant Power Agreement. We expect to ~~incur significant costs in~~deliver to Luminant the ~~pursuit~~remaining half of the Independent Collateral Amount before the end of November 2022.

For further information, see Note 15 to our ~~initial Business Combination. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.~~unaudited condensed consolidated financial statements.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control, such as the outbreak and global spread of COVID-19. The COVID-19 pandemic that was declared on March 11, 2020 has caused significant economic dislocation in the United States and globally as governments, including the United States, introduced measures aimed at preventing the spread of COVID-19. The spread of COVID-19 and the imposition of related public health measures have resulted in, and are expected to continue to result in, increased volatility and uncertainty in the cryptocurrency space. Any severe or prolonged economic downturn, as a result of the COVID-19 pandemic or otherwise, could result in a variety of risks to our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.

We ~~have neither engaged in any significant~~may experience disruptions to our business operations ~~nor generated~~resulting from supply interruptions, quarantines, self-isolations, or other movement and restrictions on the ability of our employees or our counterparties to perform their jobs. We may also experience delays in construction and obtaining necessary equipment in a timely fashion. For example, in early January 2022, we had to temporarily shut down construction at the Alborz Facility in response to employees being impacted by COVID-19. The temporary shutdown was less than a week, and we resumed the construction at the site immediately after. If we are unable to effectively set up and service our miners, our ability to mine Bitcoin will be adversely affected. The future impact of the COVID-19 pandemic is still highly uncertain and there is no assurance that the COVID-19 pandemic or any ~~revenues to date. All activities to date relate~~other pandemic, or other unfavorable global economic, business or political conditions, will not materially and adversely affect our business, prospects, financial condition and operating results.

Starting with the three and eight months ended September 30, 2021, we assumed GWAC’s financial calendar for our third fiscal quarter ending September 30 and our fiscal year ending December 31. This change to the ~~Company’s formation~~fiscal year end was approved by the Board on September 23, 2021. Cipher Mining Technologies’ fiscal year previously ended on January 31.

Since our inception on January 7, 2021 and until the ~~Public Offering. We expect~~time of the Business Combination, our activities were primarily organizational and those necessary to ~~generate non-operating income in~~prepare for the ~~form~~Business Combination. Following the Business Combination, our activities have been focused on the set-up of ~~interest income on cash, cash equivalents,~~cryptocurrency mining data centers as part of our planned buildout, including entry into agreements with Bitmain, SuperAcme and ~~marketable securities that are held in~~Bitfury Top HoldCo and its subsidiaries (together the ~~Trust Account (as defined below).~~“Bitfury Group”) for supply of miners and other equipment and services. For further details, see “—Contractual Obligations and Other Commitments.” We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance)~~, as well as~~. Our plan of operation for ~~due diligence expenses as we locate a suitable Business Combination.~~the next 12 months is to commence and maintain Bitcoin mining operations across our four sites and to continue developing our initial portfolio comprised of select sites in the United States.

~~For~~We generated no revenue during the three months ended September 30, ~~2020,~~2022 and 2021. We incurred general and administrative expenses of $17.8 million and $2.3 million during the three months ended September 30, 2022 and 2021, respectively. Share-based compensation costs of $10.5 million were recognized in total general and administrative expenses during the three months ended September 30, 2022, related to restricted stock units (“RSUs”), awarded to our employees. The remaining $7.3 million of general and administrative expenses incurred during the three months ended September 30, 2022 was recognized predominantly as follows: $2.4 million for business insurance, $1.4 million for payroll and payroll-related benefits for employees, $0.8 million for accounting and audit services, $0.5 million for each of consulting fees and legal expenses, $0.4 million for rent expense at the Company’s headquarters, $0.3 million for information technology (“IT”) and related IT security expenses, and $0.2 million each for the following: travel expenses, office supplies and software expenses mainly for licenses, board fees, and specific costs of operating as a public company. Certain costs such as accounting, legal and public company costs were higher during the three months ended September 30, 2022 as compared to the same period in 2021 due to our Registration Statement filed in September 2022. See additional information above in “—Recent Developments” or in “—Liquidity and Capital Resources” below.

Comparatively, general and administrative expenses recognized during the three months ended September 30, 2021 were mainly related to $1.6 million for business insurance, compensation and benefits of approximately $0.3 million, as well as approximately $0.1 million for each of the following: accounting and audit expenses, investor relations and specific costs of operating as a public company.

Change in the fair value of derivative asset increased operating income by $85.7 million during the three months ended September 30, 2022, which was primarily due to recording an $83.6 million derivative asset related to the Luminant Power Agreement on July 1, 2022.

Equity in loss of equity investment totaled $8.3 million for the three months ended September 30, 2022 and consisted of: a loss of $7.2 million related to our contribution of miners to Alborz LLC in July 2022 with fair values at the time of the contribution that were less than the costs we paid to acquire the miners; $1.9 million for our share of the loss of Alborz LLC for the three months ended September 30, 2022; and $0.8 million for accretion of the basis differences that resulted from our contributions of miners at a loss in both June and July 2022. Additionally, we recognized $0.3 million for impairment during the three months ended September 30, 2022 on Bitcoin that we received from Alborz LLC.

We paid $27.3 million for deposits on miners and mining equipment during the three months ended September 30, 2022, bringing total deposits on equipment on our unaudited condensed consolidated balance sheet to approximately $200.0 million as of September 30, 2022, after removing the miners and mining equipment contributed to Alborz LLC. Additionally, during the three months ended September 30, 2022, we paid approximately $15.9 million for purchases of property and equipment, which was principally related to construction-in-progress at our wholly-owned site in Odessa, Texas (the “Odessa Facility”), which is under development.

Comparative Results for the Nine Months Ended September 30, 2022 and the Eight Months Ended September 30, 2021

We generated no revenue during the nine months ended September 30, 2022 or during the eight months ended September 30, 2021. We incurred general and administrative expenses of $51.8 million and $2.9 million during the nine months ended September 30, 2022 and the eight months ended September 30, 2021, respectively. Share-based compensation costs of $30.1 million were recognized in total general and administrative expenses during the nine months ended September 30, 2022, related to RSUs awarded to our employees and directors. The remaining $21.7 million of general and administrative expenses incurred during the nine months ended September 30, 2022 was recognized predominantly as follows: $7.3 million for business insurance, $3.0 million for payroll and payroll-related benefits for employees, $2.0 million for taxes, $2.0 million for legal expenses, $1.8 million for accounting and audit services, $1.2 million for consulting expenses, $1.0 million for rent expense at the Company’s headquarters, $0.7 million for board fees, $0.5 million for specific costs of operating as a public company, and $0.5 million each for travel expenses and also for office supplies and software, as well as $0.4 million for recruiting fees. Certain costs such as accounting, legal and public company costs were higher during the nine months ended September 30, 2022 as compared to the eight months ended September 30, 2021 due to our Registration Statement filed in September 2022. See additional information above in “—Recent Developments” or in “—Liquidity and Capital Resources” below.

On March 15, 2022, we formed the Special Independent Committee to review, consider, deliberate, investigate, analyze, explore, evaluate, monitor and exercise general oversight of any and all activities of the Company directly or indirectly involving entry into the Waiver Agreement and the Observer Agreement. For more information about the Special Independent Committee, the Waiver and the Observer Agreements, see Note 9 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Our legal expenses during the nine months ended September 30, 2022 totaled over $2.0 million and the expenses related to the Special Independent Committee and legal and advisory expenses related to entry into the Waiver Agreement and the Observer Agreement are included in our total legal expenses during this period.

Comparatively, general and administrative expenses recognized during the eight months ended September 30, 2021 were mainly related to $1.6 million of business insurance costs, compensation and benefits of approximately $0.6 million, as well as $0.3 million for accounting and audit expenses, $0.2 million for investor relations and approximately $0.1 million for each of the following: consulting expenses and specific costs of operating as a public company.

Equity in loss of equity investment totaled $20.6 million for the nine months ended September 30, 2022 and consisted of: losses of $18.8 million related to our contribution of miners to Alborz LLC in June and July 2022 with fair values at the time of the contribution that were less than the costs we paid to acquire the miners; $2.6 million for our share of the loss of Alborz LLC for the nine months ended September 30, 2022; and $0.8 million for accretion of the basis differences that resulted from our contributions of miners at a loss in both June and July 2022. Additionally, we recognized $0.9 million of impairment during the nine months ended September 30, 2022 on Bitcoin that we received from Alborz LLC.

We paid $184.1 million for deposits on miners and mining equipment during the nine months ended September 30, 2022, increasing total deposits on equipment on our unaudited condensed consolidated balance sheet to approximately $200.0 million as of

September 30, 2022, after removing the miners and mining equipment contributed to Alborz LLC. Additionally, during this period we also paid $29.0 million for purchases of property and equipment, which was principally related to construction-in-progress at our Odessa Facility, which is under development.

There have been no material changes to the “Factors Expected to Affect Our Future Results” in the Management’s Discussion and Analysis section of our 2021 Form 10-K. Our financial position and results of operations depend to a significant extent on those factors.

We had negative cash flows from operations of $8.9 million for the nine months ended September 30, 2022. As of September 30, 2022, we had cash and cash equivalents of $28.1 million, total stockholders’ equity of $383.1 million and an accumulated deficit of $59.6 million. To date, we have relied in large part on proceeds from the consummation of the Business Combination to fund our operations. During the nine months ended September 30, 2022, we paid $184.1 million as deposits on equipment, primarily for miners, and had additional future commitments related to these deposits as detailed below under “—Contractual Obligations and Other Commitments.” See “—Recent Developments” for additional information regarding the Supplementary Agreement with SuperAcme. Our management believes that our existing financial resources, combined with the ability to delay certain equipment orders, projected cash and cryptocurrencies inflows from our sites, the ability to sell cryptocurrency received or earned, as well as potential sales of Common Stock under our shelf registration statement on Form S-3 (see additional information below), will be sufficient to meet its operating and capital requirements for at least 12 months from the date these unaudited condensed consolidated financial statements are issued.

On September 21, 2022, we filed with the Securities and Exchange Commission a shelf registration statement on Form S-3, which was declared effective on October 6, 2022 (the “Registration Statement”). The Registration Statement covers: (i) the offer and sale by us, from time to time in one or more offering, securities having an aggregate public offering price of up to $500.0 million, (ii) the offer and sale from time to time by the selling securityholders identified therein of up to 23,265,565 shares of our Common Stock and the offer and sale from time to time by the selling securityholders of up to 85,500 of our warrants and (iii) the offer and sale of (A) up to 8,499,978 shares of Common Stock that are issuable by us upon the exercise of 8,499,978 public warrants that were previously registered and (B) up to 114,000 shares of Common Stock that are issuable by us upon the exercise of 114,000 private placement warrants.

In connection with the filing of the Registration Statement, we also entered into an at-the-market offering agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), under which we may, from time to time, sell shares of our Common Stock having an aggregate offering price of up to $250.0 million in “at-the-market” offerings through the Agent, which is included in the $500.0 million of securities that may be offered pursuant to the Registration Statement. Sales of the shares of Common Stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. Pursuant to the Sales Agreement, we will pay the Agent a commission of up to 3.0% of the gross proceeds from the sale of any shares of Common Stock under the Sales Agreement. We are not obligated to make any sales of shares of its Common Stock under the Sales Agreement. We have not sold any shares of our Common Stock under the Sales Agreement as of the issuance of these unaudited condensed consolidated financial statements.

Net cash used in operating activities for the nine months ended September 30, 2022 was $8.9 million, resulting from net income of $12.6 million, less non-cash income items of $85.8 million, consisting primarily of change in the fair value of derivative asset of $85.7 million and change in the fair value of our warrant liability of $0.1 million; partially offset by non-cash expense items of $52.1 million, which includes share-based compensation expense of $30.1 million, equity in loss of equity investment of $20.6 million

(which is mainly comprised of the losses on our June and July 2022 contributions of equipment of $18.8 million), cryptocurrency impairment of $0.9 million and amortization of $0.5 million. The change in assets and liabilities of $12.2 million consisted primarily of a decrease in prepaid and other current assets of $5.4 million primarily for insurance costs, proceeds from reduction of scheduled power of $5.1 million, proceeds from electricity sales of $1.7 million, increases in accrued expenses of $1.4 million and increases in accounts payable of $0.4 million, partially offset by a $1.1 increase in security deposits mainly due to a bond covering the shipment of miners and a $0.7 million increase in related party receivables related to amounts that we will be reimbursed for by the Alborz LLC.

Net cash used in operating activities for the five months ended September 30, 2021 was approximately $27.1 million, resulting from a net loss of ~~$3,576 which consisted~~$3.1 million, an increase in prepaid expenses and other current assets of ~~formation~~$14.9 million that was primarily due to business insurance, increased security deposits of $9.4 million and ~~operating costs.~~a combined increase in accounts payable and accrued expenses totaling $0.2 million.

~~For~~Net cash used in investing activities during the ~~period from June 24, 2020 (Inception) to~~nine months ended September 30, ~~2020,~~2022 was $169.8 million, primarily related to $184.1 million for deposits for miners and mining equipment and $29.0 million for purchases of property and equipment primarily related to construction-in-progress at the Odessa Facility; partially offset by cash distributions of $43.3 million from the Alborz LLC.

Net cash used in investing activities during the eight months ended September 30, 2022 was $74.5 million and consisted mainly of $74.3 million for deposits on equipment.

Net cash used in financing activities for the nine months ended September 30, 2022 was $3.1 million, which was used to repurchase shares to cover the tax obligations of employees resulting from the vesting of RSUs.

Net cash provided by financing activities for the eight months ended September 30, 2021 was $383.9 million and represented the cash proceeds received in connection with the Business Combination, net of issuance costs.

There is limited historical financial information about the Company upon which to base an evaluation of our performance. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in exploration and/or development, and possible cost overruns due to price and cost increases in services. We have no current intention of entering into a merger or acquisition within the next 12 months and we ~~had~~have a ~~net loss~~specific business plan and timetable to complete our 12-month plan of ~~$3,576 which consisted~~operation. We are in the process of ~~formation~~an active operational buildout and ~~operating costs.~~

anticipate that additional capital will be required to implement the buildout. See also “—Liquidity and Capital ~~Resources~~

On October 22, 2020, we consummated a $150,000,000 initial public offering (the “Public Offering”) consisting of 15,000,000 units at a price of $10.00 per unit (“Unit”). Each Unit consists of one share of the Company’s common stock, $0.001 par value (the “Common Stock”), and one-half of one redeemable warrant (each, a “Public Warrant”). Simultaneously with the closing of the Public Offering, we consummated a $2,228,000 private placement (“Private Placement”) of an aggregate of 228,000 private placement units (the “Private Placement Units”). Upon closing of the Public Offering and the Private Placement on October 22, 2020, $150,000,000 in proceeds from the Public Offering and Private Placement was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”).

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding the business combination marketing fees payable to I-Bankers) to complete our initial Business Combination.Resources.” We may ~~withdraw interest~~also require additional capital to ~~pay our taxes~~pursue certain business opportunities or respond to technological advancements, competitive dynamics or technologies, customer demands, challenges, acquisitions or unforeseen circumstances. Additionally, we have incurred and ~~liquidation expenses if we are unsuccessful in completing~~expect to continue to incur significant costs related to becoming a ~~Business Combination. We estimate our annual franchise tax obligations to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which~~public company. Accordingly, we may ~~pay from funds from the Public Offering held outside of the trust account or from interest earned on the funds held~~engage in the trust account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account reduced by our operating expense and franchise taxes. We expect the interest earned on the amount in the trust account will be sufficient to pay our income taxes. To the extent that our equity or debt ~~is used, in whole~~financings or ~~in part, as consideration~~enter into credit facilities for the above-mentioned or other reasons; however, we may not be able to ~~complete~~timely secure additional debt or equity financings on favorable terms, if at all. If we raise additional funds through equity financing, our ~~initial Business Combination, the remaining proceeds held~~existing stockholders could experience significant dilution. Furthermore, any debt financing obtained by us in the ~~trust account will~~future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we are unable to obtain adequate financing on terms that are satisfactory to us, when we require it, our ability to continue to grow or support the business and to respond to business challenges could be ~~used as working capital to finance the operations of the target business or businesses, make other acquisitions~~significantly limited and ~~pursue our growth strategies.~~

~~Further, our Sponsor, officers and directors or their respective affiliates may, but are not obligated to, loan us funds as~~we may be required ~~(the “Working Capital Loans”). If we complete a~~to delay or change our planned buildout, which may adversely affect our business plan. For risks associated with this, see “Risks Factors—Risks Related to Our Business, Combination, we would repay the Working Capital Loans. In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, or converted upon consummation of a Business Combination into additional Private Placement Units at a price of $10.00 per Unit (the “Working Capital Units”). As of September 30, 2020, no Working Capital Loans have been issued.

Industry and Operations—We ~~do not believe we~~ will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, wecapital, which may ~~have insufficient funds~~not be available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds availableon terms acceptable to us, ~~we will be forced to cease operations~~or at all” in our 2021 Form 10-K.

Contractual Obligations and ~~liquidate the Trust Account. In addition, following our Business Combination, if cash~~Other Commitments

We have a lease agreement for executive office space, with an effective term that commenced on ~~hand~~February 1, 2022 and monthly rent payments of approximately $0.1 million commencing on June 1, 2022. The initial lease term is ~~insufficient, we may need to obtain additional financing in order to meet our obligations.~~for a period of five years and four months.

As of September 30, ~~2020,~~2022, we ~~did~~had the following contractual obligations and other commitments for miners and other mining equipment (amounts in thousands):

* Maximum purchase commitment does not consider discounts that we may qualify for with the respective vendors, which could reduce the total cost of the miners.

** Pursuant to our agreements with Bitmain and SuperAcme, we are responsible for all logistics costs related to transportation, packaging for transportation and insurance related to the delivery of the miners.

*** See “—Recent Developments” above and discussion below this table for additional information regarding the Supplementary Agreement with SuperAcme.

****See “—Recent Developments” for additional information regarding payments for BBACs.

On August 20, 2021 and on August 30, 2021, we and Bitmain Technologies Limited (“Bitmain”) entered into a Non-Fixed Price Sales and Purchase Agreement and a Supplemental Agreement to Non-Fixed Price Sales and Purchase Agreement, respectively, (together, the “Bitmain Agreement”) for us to purchase 27,000 Antminer S19j Pro (100 TH/s) miners, which were expected to be delivered in nine batches on a monthly basis between January 2022 and September 2022. As of September 30, 2022, 12,953 miners have been received. The original purchase price under the Bitmain Agreement was $171.1 million (the “Total Purchase Price”) with (i) 25% of the Total Purchase Price due paid within five days of execution of the Bitmain Agreement, (ii) 35% of the purchase price of each batch due five months prior to each delivery, and (iii) the remaining 40% of the purchase price of each batch due 15 days prior to each delivery. As of September 30, 2022, we had paid total deposits of $134.2 million for the miners (some of which are no longer reflected in the table above due to their receipt and deployment during the nine months ended September 30, 2022), and we do not expect to make any ~~long-term debt, capital or operating lease obligations.~~further payments to Bitmain to receive the rest of the miners.

On September 2, 2021, we entered into the Original SuperAcme Agreement to purchase 60,000 MicroBT M30S, M30S+ and M30S++ miners, which were expected to be delivered in six batches on a monthly basis between July 2022 and December 2022. On May 6, 2022, we entered into the Amended SuperAcme Agreement, which established a new delivery quantity ratio of miners as well as new fixed subtotal pricing. In connection with the Original SuperAcme Agreement, we previously paid an initial deposit of $22.2 million. No additional initial deposit was required as a result of the execution of the Amended SuperAcme Agreement. On November 4, 2022, through Cipher Mining Technologies we entered into the Supplementary Agreement with SuperAcme, which supplements the Amended SuperAcme Agreement and the Original SuperAcme Agreement. The Supplementary Agreement establishes new fixed and floating price terms for remaining purchases of M30S, M30S+ and M30S++ miners and provides that we will not be obligated to send any further money to SuperAcme. In connection with the Amended SuperAcme Agreement, SuperAcme has delivered 17,833 miners to date, at an aggregate value of approximately $53.6 million, and we have paid aggregate advance payments of $101.8 million. The remaining balance of $48.2 million will be applied to the purchase of miners under the new fixed and floating price terms set forth in the Supplementary Agreement. Each batch of miners is paid in full prior to delivery.

WeOn October 11, 2021, we entered into an ~~administrative services~~ agreement with Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement, to purchase a total of between 28,000 to 56,000 mining rigs, to be delivered in seven batches on a monthly basis between June 2022 and December 2022. Generally, under this agreement, we agreed to pay a maximum price of $6,250 per machine, with an advance payment of $10.0 million due on or before the third business day following the execution of the agreement, and advance payments for each monthly batch due thereafter in accordance with the terms of the agreement. The $10.0 million advance payment was paid by us prior to December 31, 2021. The agreement was a non-binding commitment unless and until confirmed by a mutually executed order confirmation. We did not enter into any such order confirmations and, as mentioned above, we executed the Waiver Agreement with Bitfury Top HoldCo in April 2022, which provided for the Cancelled Shares as consideration for the $10.0 million deposit.

We also entered into two agreements with Bitfury USA, a subsidiary of Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement, to purchase a total of 240 units of BBACs. The delivery of the first 20 containers was received in the first quarter of 2022 and the remainder is expected to be delivered in 2022.

We are also party to several power and hosting arrangements. We expect to deliver to Luminant the remaining half of the Independent Collateral Amount under the Luminant Power Agreement before the end of November 2022.

On May 2, 2022, Alborz LLC, as borrower, entered into a facility and security agreement with BlockFi Lending LLC (“BlockFi”), as lender. Pursuant to this agreement, BlockFi agreed to provide a secured credit facility in the amount of up to approximately $46.9 million, which is available in up to three tranches, maturing on May 2, 2024 (the “BlockFi Facility”) to finance the purchase, installation and operation of Bitmain miners (“Mining Equipment”) at the Alborz Facility. The proceeds from the BlockFi Facility will be used by Alborz LLC to purchase Mining Equipment from us pursuant to ~~which we will pay an affiliate~~that certain contribution agreement entered into between us and Alborz LLC on May 2, 2022 (the “Contribution Agreement”). Pursuant to the Contribution Agreement, Cipher Mining Technologies agreed to acknowledge and consent to the use of ~~one~~the Mining Equipment as well as any digital currency mined using the Mining Equipment as collateral in respect of ~~our directors for office space and secretarial and administrative services provided to members of our management team, in an amount not to exceed $5,000 per month.~~

~~We have engaged I-Bankers as an advisor in connection with our acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially~~the BlockFi Facility. Alborz LLC completed all of the three contemplated disbursements under the BlockFi Facility. The principal amount of the loan issued to Alborz LLC is approximately $26.8 million.

We are providing supplemental financial measures for (i) non-GAAP loss from operations that excludes the impact of depreciation of fixed assets, stock compensation expense and the non-cash change in fair value of ~~entering into contractual arrangements~~derivative asset and (ii) non-GAAP net loss and non-GAAP diluted loss per share that exclude the impact of depreciation of fixed assets, the non-cash change in fair value of derivative asset, the change in fair value of the warrant liability and stock compensation expense. These supplemental financial measures are not measurements of financial performance under accounting principles generally accepted in the United States (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate our business performance and to help make operating decisions.

We believe that these non-GAAP financial measures are also useful to investors in comparing our performance across reporting periods on a consistent basis. Non-GAAP loss from operations excludes non-cash operational expenses that we believe are not reflective of our general business performance such as (i) depreciation of fixed assets, (ii) the non-cash change in fair value of our derivative asset and (iii) stock compensation expense, which could vary significantly in comparison to other companies.

Non-GAAP net loss and non-GAAP diluted loss per share exclude the impact of (i) depreciation of fixed assets, (ii) change in fair value of warrant liability, (iii) non-cash change in fair value of our derivative asset and (iv) stock compensation expense. We believe the use of these non-GAAP financial measures can also facilitate comparison of our operating results to those of our competitors.

Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or ~~engaging~~a substitute for, measurements prepared in ~~any other similar Business Combination~~accordance with ~~one or more businesses or entities. We~~GAAP. For example, we expect that share-based compensation expense, which is excluded from the non-GAAP financial measures, will ~~pay I-Bankers for such services~~continue to be a ~~fee equal to 4.5%~~significant recurring expense over the coming years and is an important part of the ~~gross proceeds~~compensation provided to certain employees, officers and directors. Similarly, we expect that depreciation of fixed assets will continue to be a recurring expense over the term of the ~~Public Offering.~~

Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our unaudited financial information. We describe our significant accounting policies in Note 2 – Summary of Significant Accounting Policies,useful life of the ~~Notes~~assets. Our non-GAAP financial measures are not meant to ~~Financial Statements~~be considered in isolation and should be read only in conjunction with our consolidated financial statements included elsewhere in this ~~report. Our unaudited financial statements~~Quarterly Report, which have been prepared in accordance with ~~U.S.~~ GAAP. ~~Certain~~We rely primarily on such consolidated financial statements to understand, manage and evaluate our business performance and use the non-GAAP financial measures only supplementally.

The following is a reconciliation of our non-GAAP loss from operations, which excludes the impact of (i) depreciation of fixed assets, (ii) non-cash change in fair value of our derivative asset and (iii) stock compensation expense, to its most directly comparable GAAP measure for the periods indicated:

The following are reconciliations of our non-GAAP net loss and non-GAAP basic and diluted net loss per share, in each case excluding the impact of (i) depreciation of fixed assets (ii) non-cash change in fair value of derivative asset, (iii) change in fair value of warrant liability and (iv) stock compensation expense, to the most directly comparable GAAP measures for the periods indicated:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. A description of our significant accounting policies ~~require that management apply significant judgments~~ in ~~defining~~included in our 2021 Form 10-K. You should read the ~~appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our~~unaudited condensed consolidated financial statements in conjunction with our audited consolidated financial statements and accompanying notes in our 2021 Form 10-K. Except as disclosed below, there has been no material change in the information disclosed in the notes to our audited consolidated financial statements included in our 2021 Form 10-K.

Cryptocurrencies, including Bitcoin, are ~~presented fairly and~~included in current assets on the consolidated balance sheets. Cryptocurrencies received through our wholly-owned mining activities will be accounted for in connection with our revenue recognition policy. Cryptocurrencies awarded to us as distributions-in-kind from equity investees are accounted for in accordance with ~~U.S. GAAP. Judgments~~ASC 845, Nonmonetary Transactions, and recorded at fair value upon receipt.

Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. We determine the fair value of our cryptocurrencies on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on the lowest intra-day market price of the cryptocurrency at the single Bitcoin level (one Bitcoin). The excess, if any, represents a recognized impairment loss. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

Cryptocurrencies awarded to us through our mining activities will be included as an adjustment to reconcile net income to cash used in operating activities in the consolidated statements of cash flows. The proceeds from sales of cryptocurrencies are included within operating activities in the consolidated statements of cash flows and any realized gains or losses from such sales are included in operating income (loss), net in the consolidated statements of operations. The receipt of cryptocurrency as distributions-in-kind from equity investees are included within investing activities in the consolidated statements of cash flows. We account for sales of cryptocurrencies in accordance with the first in first out method of accounting.

We account for investments using the equity method of accounting if the investment provides us with the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of an investee of between 20 percent and 50 percent, or an ownership interest greater than three to five percent in certain partnerships, unincorporated joint ventures and limited liability companies, although other factors are considered in determining whether the equity method of accounting is appropriate. Under this method, an investment in the common stock of an investee (including a joint venture) shall be initially measured and recorded at cost.; however, an investor shall initially measure at fair value an investment in the common stock of an investee (including a joint venture) recognized upon the derecognition of a distinct nonfinancial asset at the time that control over the distinct nonfinancial asset is transferred to the equity investee, such as that which occurs upon the transfer of miners and mining equipment to a joint venture from us.

Our investment is subsequently adjusted to recognize our share of net income or losses as they occur. We also adjust our investment upon receipt of cryptocurrency from the equity investee, which is accounted for as a distribution-in-kind. Our share of investee earnings or losses is recorded, net of taxes, within equity in loss of equity investment in the consolidated statements of operations. Additionally, our interest in the net assets of our equity method investee is reflected in the consolidated balance sheets. If, upon the contribution of nonfinancial assets to a joint venture from us, there is any difference between the cost of the investment and the amount of the underlying equity in the net assets of an investee, the difference is required to be accounted for as if the investee were a consolidated subsidiary. If the difference is assigned to depreciable or amortizable assets or liabilities, then the difference should be amortized or accreted in connection with the equity earnings based on our proportionate share of the investee’s net income or loss. If we are unable to relate the difference to specific accounts of the investee, the difference should be considered goodwill.

We consider whether the fair value of our equity method investments have declined below their carrying values whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If we considered any such decline to be other than temporary (based on various factors, including historical ~~experience, terms~~financial results, success of ~~existing contracts, industry trends~~the mining operations and the overall health of the investee’s industry), then we would record a write-down of our investment to the estimated fair value.

We account for leases in accordance with ASC 842, Leases (“ASC 842”). Accordingly, we determine whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for our use by the lessor. Our assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which we are reasonably certain of not exercising, as well as periods covered by renewal options which we are reasonably certain of exercising. We also determine lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.

For leases with a term exceeding 12 months, a lease liability is recorded on the consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to the initial lease liability is also recorded, adjusted for any accrued or prepaid rents and/or unamortized initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, we generally use our incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. Our incremental borrowing rate reflects the rate we would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. ROU assets will be reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

For our operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed payments are recognized on a straight-line basis over the lease term and are not recognized on the consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception are insignificant. Variable lease costs are expensed as incurred and are not included in the measurement of ROU assets and lease liabilities.

ASC 842 provides practical expedients for an entity’s ongoing accounting. We have elected the practical expedient not to separate lease and non-lease components for all leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of our lease components for balance sheet purposes.

On June 23, 2021, we entered into a power purchase agreement with Luminant, which was subsequently amended and restated on July 9, 2021, and further amended on February 28, 2022 (the “February Amendment”) and August 26, 2022 (the “August Amendment”), for the supply of a fixed amount of electric power to the Odessa Facility at a fixed price for a term of five years with a subsequent automatic annual renewal provision (as amended, the “Luminant Power Agreement”). We are expecting to receive interconnection approval from ~~outside sources,~~the Electric Reliability Council of Texas (“ERCOT”) this year, which will allow us to commence mining Bitcoin at the Odessa Facility. Starting from July 1, 2022, under the take or pay framework of the Luminant Power Agreement and pursuant to the ramp-up schedule agreed to between Luminant and us as ~~appropriate. However, by their nature, judgments are subject~~part of the February Amendment and amended under the August Amendment, Luminant began sales of the scheduled energy in the ERCOT market.

Because ERCOT allows for net settlement, our management determined that, as of July 1, 2022, the Luminant Power Agreement meets the definition of a derivative under ASC 815, Derivatives and Hedging (“ASC 815”). Because we have the ability to ~~an inherent degree~~sell our electricity in the ERCOT market rather than take physical delivery, physical delivery is not probable through the entirety of ~~uncertainty,~~the contract and therefore, ~~actual results could differ from~~ our ~~estimates.~~

~~Our~~ management does not believe ~~that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect~~the normal purchases and normal sales scope exception applies to the Luminant Power Agreement. Accordingly, the Luminant Power Agreement (the non-hedging derivative contract) is recorded at an estimated fair value each reporting period with the change in the fair value recorded in change in fair value of derivative asset in the consolidated statements of operations. See additional information regarding valuation of the Luminant Power Agreement derivative in Note 3.

Depending on the spot market price of electricity, we may opportunistically sell electricity in the ERCOT market in exchange for cash payments, rather than utilizing the power to mine for cryptocurrency at the Odessa Facility during peak times in order to most efficiently manage our operating costs. We, through Luminant, sold $1.7 million in electricity during the three months ended September 30, 2022. These power sales were recorded as part of the change in fair value of derivative asset in the accompanying ~~financial statements.~~condensed consolidated statements of operations during the three and nine months ended September 30, 2022. Once we begin cryptocurrency mining at the Odessa Facility, costs under the Luminant Power Agreement will be recorded in cost of revenues in our consolidated statements of operations.

~~The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.~~ We ~~qualify as~~are an “emerging growth ~~company” under~~company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, ~~and are allowed~~emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting ~~pronouncements based on~~standards that have different effective dates for public and private companies until the ~~effective~~earlier of the date ~~for private (not publicly traded) companies. We~~we (i) are ~~electing to delay~~no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the ~~adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on~~extended transition period provided in the ~~relevant dates on which adoption of such standards is required for non-emerging growth companies.~~JOBS Act. As a result, our unaudited condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.

~~As of September 30, 2020, we were not subject to any material market or interest rate risk. Following the consummation of our Public Offering, the net proceeds~~Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the ~~Public Offering~~Exchange Act and are not required to provide the ~~Private Placement, including amounts in the Trust Account, were invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions~~information under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there was no associated material exposure to interest rate risk.this item.

~~We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.~~

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the ~~supervision~~desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, with the participation of our ~~management we conducted an evaluation~~principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures ~~as of the end of the fiscal quarter ended September 30, 2020, as such term is~~(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange ~~Act.~~Act). Based on ~~this~~that evaluation, our principal executive officer and principal financial ~~and accounting~~ officer ~~have~~ concluded that, as of ~~the evaluation date,~~September 30, 2022, our disclosure controls and procedures were ~~effective.~~effective at the reasonable assurance level.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

~~During the most recently completed fiscal quarter, there has been~~There were no ~~change~~changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2022 that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

~~None.~~We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business.

Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to ~~differ materially from those in this report include~~ the risk factors ~~described~~as previously disclosed in Part I, Item 1A, “Risk Factors” of our ~~final prospectus filed with~~2021 Form 10-K and as updated in Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the ~~SEC on October 20, 2020. As of the date of this report,~~first quarter 2022, which is incorporated herein by reference. Other than such updates and as noted below, there have been no material changes to the risk factors previously disclosed in our ~~final prospectus filed~~2021 Form 10-K.

We have ongoing discussions with Luminant related to the payments Luminant made to us under the Luminant Power Agreement

We and Luminant are in discussions with respect to payments Luminant made to us under the Luminant Power Agreement. Specifically, on October 26, 2022, we received a letter from Luminant, disputing: (i) the payments of $1.7 million that Luminant had made to us under the Luminant Power Agreement for the electricity sold in the ERCOT market during July 2022 and August 2022 and (ii) the payment of $5.1 million made to us by Luminant in September 2022 in consideration for the modification to the ramp up schedule pursuant to the August Amendment to the Luminant Power Agreement. We received and recorded $1.7 million as part of the change in fair value of derivative asset in the condensed consolidated statements of operations for the three and nine months ended September 30, 2022. We received and recorded $5.1 million as a reduction to the derivative asset on the condensed consolidated balance sheet during the three months ended September 30, 2022. We have not received payment from Luminant for electricity sold in the ERCOT market in September 2022 and October 2022.

We wholly dispute the claims made by Luminant and have been engaged in discussions with Luminant in an attempt to reach a mutually agreeable solution and resolve disagreements between the parties regarding these payments and whether the commencement of Luminant’s obligations under the Luminant Power Agreement should be tied to ERCOT’s interconnection approval. At this time we do not know how or when this dispute will be resolved. On November 8, 2022, we also received a letter from Luminant requesting we deposit to Luminant the remaining half of the Independent Collateral Amount under the Luminant Power Agreement. We expect to deliver to Luminant the remaining half of the Independent Collateral Amount before the end of November 2022.

Our management may devote significant time and resources to resolve these discussions, which may detract from time our management would otherwise devote to managing our operations, and could have a material adverse effect on our business, including potentially affecting the next quarterly valuation of the Luminant Power Agreement.

On October 22, 2020, GWAC completed its initial public offering (the “GWAC IPO”). All shares sold were registered pursuant to a registration statement on Form S-1 (File No. 333-248333), as amended (the “GWAC Registration Statement”), declared effective by the SEC on October 19, 2020. Simultaneous with the ~~SEC.~~consummation of the GWAC IPO, GWAC consummated a private placement of units to certain another investors.

There has been no material change in the expected use of the net proceeds from the GWAC IPO and private placement as described in our 2021 Form 10-K.

In July 2020, certain of our initial stockholders purchased 4,312,500 founder shares for an aggregate purchase price of $25,000 (up to 562,500 of which are subject to forfeiture). In August 2020, certain of our initial stockholders forfeited 1,355,000 founder shares and the Anchor Investors purchased 1,355,000 founder shares for an aggregate purchase price of approximately $7,855, or approximately $0.006 per share. In October 2020, our Sponsor forfeited an aggregate of 562,500 founder shares for no consideration, and GW Sponsor 2, LLC, an entity managed by our management, purchased from us 562,500 shares for a purchase price of $163,125. Simultaneously with the closing of the Public Offering, our Anchor Investors purchased an aggregate of 228,000 private placement units at a price of $10.00 per unit, for an aggregate purchase price of $2,280,000, in a private placement. The private placement units are identical to the units sold in the Public Offering except that the private placement warrants included in the private placement units: (i) will not be redeemable by us and (ii) may be exercised for cash or on a cashless basis, in each case so long as they are held by the initial purchasers or any of their permitted transferees. If the private placement warrants are held by holders other than the initial purchasers or any of their permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in the Public Offering. The proceeds from the private placement units were added to the proceeds from the Public Offering held in the Trust Account. No underwriting discounts or commissions were paid with respect to such sales. The issuance of the founder shares and the private placement units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.None.

On October 22, 2020, we consummated the Public Offering of 15,000,000 Units. The Units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $150,000,000. In connection with the IPO, the underwriters were granted a 45-day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 2,250,000 additional units to cover over-allotments (the “Over-Allotment Units”), if any. On October 26, 2020, the underwriters purchased an additional 1,500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. On November 17, 2020, the underwriters purchased an additional 500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. The Over-Allotment Units were sold at an offering price of $10.00 per Over-Allotment Unit, generating aggregate additional gross proceeds of $20,000,000 to the Company.Item 4. Mine Safety Disclosures.

I-Bankers was representative of the several underwriters. The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-248333). The SEC declared the registration statement effective on October 19, 2020.

We paid a total of $450,000 in underwriting discounts and commissions and $420,120 for other costs and expenses related to the Public Offering. I-Bankers, representative of the several underwriters in the Public Offering, received a portion of the underwriting discounts and commissions related to the Public Offering. We also repaid the promissory note to an affiliate of our Sponsor from the proceeds of the Public Offering. After deducting the underwriting discounts and commissions and incurred offering costs, the total net proceeds from our Public Offering (including the Units sold in the Over-Allotment Option) and the sale of the private placement units was $171,409,880, of which $170,000,000 (or $10.00 per unit sold in the Public Offering) was placed in the Trust Account. Other than as described above, no payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates.

† Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~

~~Delaware~~		~~85-1614529~~
Delaware	85-1614529
(State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~incorporation or ~~Organization)~~organization)		(I.R.S. Employer Identification No.)
1 Vanderbilt Avenue, Floor 54, Suite C New York, New York	10017
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading ~~Symbol (s)~~ Symbol(s)	Name of each exchange on which registered
~~Units, each consisting of one share of common stock, $0.001 par value and one-half of one redeemable warrant~~	~~GWACU~~	~~The NASDAQ Stock Market LLC~~
Common Stock, par value $0.001 per share	~~GWAC~~ CIFR	The ~~NASDAQ~~Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of ~~common stock~~Common Stock at an exercise price of $11.50 per whole share	~~GWACW~~ CIFRW	The ~~NASDAQ~~Nasdaq Stock Market LLC

~~Large Accelerated Filer ☐~~	~~Accelerated Filer ☐~~
~~Non-Accelerated Filer ☒~~ Large accelerated filer	~~Smaller Reporting Company ☒~~	☐	Accelerated filer	☐
Non-accelerated filer		☒	Smaller reporting company	☒
			Emerging ~~Growth Company~~ growth company	☒

		~~Page~~
~~PART I FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statements~~
	~~Condensed Balance Sheet as of September 30, 2020 (unaudited)~~	1 Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3
	Condensed ~~Statement~~Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations ~~for the three months ended September 30, 2020 (unaudited) and the period from June 24, 2020 (inception) to September 30, 2020 (unaudited)~~	2 4
	Condensed Consolidated Statement of Changes in ~~Stockholders’~~Stockholder's Equity ~~for the three months ended September 30, 2020 (unaudited) and the period from June 24, 2020 (inception) to September 30, 2020 (unaudited)~~(Deficit)	3 5
	Condensed Consolidated Statements of Cash Flows ~~for the three months ended September 30, 2020 (unaudited) and the period from June 24, 2020 (inception) to September 30, 2020 (unaudited)~~	4 7
	Notes to ~~the~~Unaudited Condensed Consolidated Financial Statements ~~(unaudited)~~	5 8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12 27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14 39
Item 4.	Controls and Procedures	14 39

PART II II.	OTHER INFORMATION

Item 1.	Legal Proceedings	15 40
Item 1A.	Risk Factors	15 40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15 40
Item 3.	Defaults Upon Senior Securities	16 40
Item 4.	Mine Safety Disclosures	16 41
Item 5.	Other Information	16 41
Item 6.	Exhibits	16 42
Signatures		17 43

Assets
Cash	$	61,815
Deferred offering costs		219,609
Total Assets	$	281,424

Liabilities and Stockholders’ Equity
Accrued expenses	$	125,000
Note payable - related party		135,000
Total current liabilities		260,000

Commitments

Stockholders’ Equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued and outstanding		-
Common stock, $0.001 par value; 100,000,000 shares authorized; 4,312,500 shares issued and outstanding at September 30, 2020		4,312
Additional paid-in capital		20,688
Accumulated deficit		(3,576	)
Total stockholders’ equity		21,424

Total Liabilities and Stockholders’ Equity	$	281,424


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Three Months Ended September 30, 2020			For the Period From June 24, 2020 (Inception) Through September 30, 2020

Formation and operating costs	$	3,576		$	3,576

Net loss	$	(3,576	)	$	(3,576	)

Basic and diluted weighted average shares outstanding		3,750,000			3,750,000
Basic and diluted net loss per share	$	(0.00	)	$	(0.00	)

					Additional					Total
	Common Stock				Paid-in		Accumulated			Shareholders’
	Shares (1)		Amount		Capital		Deficit			Equity

Balance as of June 24, 2020 (inception)		-	$	-	$	-	$	-		$	-
Net loss		-		-		-		-			-
Balance as of June 30, 2020		-		-		-		-			-
Issuance of common stock to founders (1)		4,312,500		4,312		20,688		-			25,000
Net loss		-		-		-		(3,576	)		(3,576	)
Balance as of September 30, 2020		4,312,500	$	4,312	$	20,688	$	(3,576	)	$	21,424

	For the Three Months Ended September 30, 2020			For the Period From June 24, 2020 (Inception) Through September 30, 2020
Cash flows from operating activities:
Net loss	$	(3,576	)	$	(3,576	)
Net cash used in operating activities		(3,576	)		(3,576	)

Cash flows from financing activities:
Proceeds from sale of common stock to initial stockholders					25,000
Proceeds from note payable-related party		85,000			135,000
Payments of offering costs		(44,609	)		(94,609	)
Net cash provided by financing activities		40,391			65,391

Net change in cash		36,815			61,815
Cash, beginning of the period		25,000			-
Cash, end of period	$	61,815		$	61,815
Supplemental disclosure of cash flow information:
Non-cash financing transactions:
Accrued deferred offering costs	$	125,000		$	125,000


	Common Stock				Additional			Treasury Stock						Accumulated			Total Stockholders’
	Shares		Amount		Paid-in Capital			Shares			Amount			Deficit			Equity
Balance as of June 30, 2022		251,001,072	$	251	$	431,966			(3,511,490	)	$	(4	)	$	(118,874	)	$	313,339
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement		42,577		-		(25	)		(13,193	)		-			-			(25	)
Share-based compensation		-		-		10,494			-			-			-			10,494
Net income		-		-		-			-			-			59,292			59,292
Balance as of September 30, 2022		251,043,649	$	251	$	442,435			(3,524,683	)	$	(4	)	$	(59,582	)	$	383,100


														Total
	Common Stock				Subscription			Additional			Accumulated			Stockholders'
	Shares		Amount		Receivable			Paid-in Capital			Deficit			Equity (Deficit)
Balance as of June 30, 2021		200,000,000	$	200	$	-		$	(200	)	$	(664	)	$	(664	)
Business Combination, net of redemptions and equity issuance costs of $41.0 million		46,381,119		46		(1,690	)		384,708			-			383,064
Net loss		-		-		-			-			(2,421	)		(2,421	)
Balance as of September 30, 2021		246,381,119	$	246	$	(1,690	)	$	384,508		$	(3,085	)	$	379,979


	September 30, 2022		December 31, 2021
Taxes (primarily sales tax)	$	9,895	$	-
Legal		389		100
Accounting and audit		238		153
Other		204		4
Total accrued expenses	$	10,726	$	257


Balance, December 31, 2021	$	-
Cryptocurrencies received from equity investees		3,139
Proceeds from sale of cryptocurrencies		(23	)
Realized gain on sale of cryptocurrencies		6
Impairment of cryptocurrencies		(859	)
Balance, September 30, 2022	$	2,263


	September 30, 2022		December 31, 2021
Luminant Power Purchase Agreement Independent Collateral Amount (see Note 9)	$	6,277	$	6,277
Luminant Purchase and Sale Agreement collateral (see Note 9)		3,063		3,063
Office lease security deposit		960		922
Other deposits		1,155		90
Total security deposits	$	11,455	$	10,352

~~Item 4.~~	~~Mine Safety Disclosures~~
		CIPHER MINING INC.

Date: November 14, 2022		By:	/s/ Tyler Page
			Tyler Page
			Chief Executive Officer
			(Principal Executive Officer)



Date: November 14, 2022		By:	/s/ Edward Farrell
			Edward Farrell
			Chief Financial Officer
			(Principal Financial Officer)

~~Exhibit~~ ~~Number~~		~~Description~~

31.1*		~~Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.~~
31.2*		~~Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.~~
~~32.1*(1)~~		~~Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
~~32.2*(1)~~		~~Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

101.INS*		~~XBRL Instance Document~~
101.SCH*		~~XBRL Taxonomy Extension Schema Document~~
101.CAL*		~~SXRL Taxonomy Extension Calculation Linkbase Document~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB*		~~XBRL Taxonomy Extension Label Linkbase Document~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

*	~~Filed herewith.~~
**	~~Management contract or compensatory plan, contract or arrangement.~~

~~SIGNATURE~~	~~TITLE~~	~~DATE~~

~~/s/ Fred Zeidman~~	~~Chief Executive Officer~~	~~December 3, 2020~~
~~Fred Zeidman~~	~~(principal executive officer)~~

~~/s/ Cary Grossman~~	~~President~~	~~December 3, 2020~~
~~Cary Grossman~~	~~(principal financial and accounting officer)~~