UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~Washington, D.C.~~

WASHINGTON, DC 20549

FORM

~~10-Q/A~~

(

~~Amendment No. 1~~

)

10-Q

(Mark One)

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

For the quarterly period ended ~~June~~September 30, ~~2021~~

2022

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

For the transition period from

Commission ~~file number:~~

~~001-39625~~

File Number: 001-396251

CIPHER MINING INC.

(Exact Name of Registrant as Specified in ~~Its~~its Charter)


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
~~222 Purchase Street, Suite #290 Rye, New York~~		~~10580~~
(Address of ~~Principal Executive Offices)~~ principal executive offices)		(Zip Code)

~~(713)~~

~~468-2717~~

(

Registrant’s ~~Telephone Number, Including Area Code)~~

telephone number, including area code: (~~Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)~~

332) 262-2300

Securities registered pursuant to Section 12(b) of the ~~Exchange~~ Act:


Title of each class	Trading ~~Symbol (s)~~ Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	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	CIFRW	The ~~NASDAQ~~Nasdaq Stock Market LLC

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.


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

		~~Emerging Growth Company~~	☒

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 ~~250,174,253~~

247,518,966, shares of ~~common stock outstanding at January 13, 2022.~~

~~EXPLANATORY~~

CAUTIONARY NOTE

~~References throughout this Amendment No. 1 to the~~

REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form

10-Q

(the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to ~~“we,” “us,” “Cipher Mining,” “Company” or “our company” are to Cipher Mining Inc. (formerly known as Good Works Acquisition Corp.), unless~~be covered by the ~~context otherwise indicates.~~

~~This Amendment No. 1 (“Amendment No. 1”) to the Quarterly Report on Form~~

~~10-Q~~

~~amends the Quarterly Report on Form~~

~~10-Q/A~~

~~of Cipher Mining Inc. (formerly known as Good Works Acquisition Corp.)~~safe harbor provisions for ~~the three and six months ended June 30, 2021 (the “Affected Period”), as filed with~~forward-looking statements contained in Section 27A of the Securities ~~and Exchange Commission (“SEC”) on August 10, 2021~~Act of 1933, as amended (the ~~“Original Filing”).~~

~~The Company has~~

~~re-evaluated~~

~~the Company’s application of ASC~~

~~480-10-S99-3A~~

~~to its accounting classification of the redeemable common stock, par value $0.001 per share (the “Public Shares”~~“Securities Act”), ~~issued as part~~and Section 21E of the units sold in the Company’s initial public offering (the “IPO”) on October 22, 2020. Historically, a portion of the Public Shares was classified as permanent equity to maintain stockholders’ equity greater than $5 million on the basis that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the Company’s amended and restated certificate of incorporation (the “Charter”). Pursuant to such

~~re-evaluation,~~

the Company’s management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Charter. While there were no changes to the Company’s balance sheet for the period ended June 30, 2021, in connection with the change in presentation for the Public Shares, the Company determined it should restate (i) its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares (redeemable and non-redeemable) and (ii) its supplementary cash flow disclosure. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company.

Therefore, on December 17, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued unaudited interim financial statements included in the Company’s Quarterly Report on Form

~~10-Q,~~

for the quarterly period ended June 30, 2021, filed with the SEC on August 10, 2021, should be restated to report all Public Shares as temporary equity and should no longer be relied upon. As such, the Company will restate its financial statements, related footnotes, and other financial data as of and for the period ended June 30, 2021 included in the Original Filling, as a result of this

~~error.~~

~~The restatement does not have an impact on its cash position and cash held in the trust account established in connection with the IPO (the “Trust Account”).~~

~~This Amendment No. 1 consists solely of the preceding cover page, this explanatory note, and the information required by Item 1 and Item 2 of Form~~

~~10-Q,~~

~~a signature page and the certifications required to be filed as exhibits.~~

~~In accordance with Rule~~

~~12b-15~~

~~under~~ the Securities Exchange Act of 1934, as amended (the “Exchange Act”)~~, new certifications~~. 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:

•

our planned buildout of cryptocurrency mining sites;

•

future milestones, conditions and payments under a series of agreements with Luminant ET Services Company LLC and its affiliates, as well as our discussions with Luminant related to such agreements;

•

our ability to raise financing in the future;

•

our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations;

•

our commercial partnerships and supply agreements;

•

the ability to maintain the listing of our common stock and warrants on Nasdaq, and the potential liquidity and trading of such securities;

•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

•

the effects of competition and regulation on our business;

•

the effects of price fluctuations in the wholesale and retail power markets;

•

the effects of global economic, business or political conditions, such as the global coronavirus (“COVID-19”) pandemic and the disruption caused by various countermeasures to reduce its spread;

•

the value and volatility of Bitcoin and other cryptocurrencies; and

•

other factors discussed in other sections of this Quarterly Report, including the section titled “Risk Factors.”

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 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 materially different from any future results, performance or achievements expressed or implied by the ~~Company’s principal executive officer~~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 ~~principal financial officer~~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 reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be 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 ~~(in Exhibits 31.1 to 32.2)~~ to this ~~Amendment No. 1 under Item 6~~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 ~~Part II hereof.~~

our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as ~~described above, this Amendment No. 1 does~~required by applicable law, we do not ~~amend,~~plan to publicly update or ~~change~~revise any ~~other items or disclosures~~forward-looking statements contained in ~~the Original Filing, and accordingly,~~ this ~~Amendment No.~~ Quarterly Report, whether as a result of any new information, future events or otherwise.

1 ~~does~~

WHERE YOU CAN FIND MORE INFORMATION

Our corporate website address is https://www.ciphermining.com/ (“Corporate Website”). The contents of, or information accessible through, our Corporate Website are not ~~reflect or purport to reflect any information or events occurring after the original filing date or modify or update those disclosures affected by subsequent events. Accordingly,~~part of this ~~Amendment No. 1 should be read in conjunction with the Original Filing and the Company’s other~~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 SEC. ~~Capitalized terms used but~~

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 ~~defined herein shall have~~constitute incorporation by reference of the ~~meanings ascribed~~information contained on or available through those websites, and you should not consider such information to ~~such terms in~~be a part of this Quarterly Report or any other filings we make with the Original Filing. Unless the context otherwise requires, references to “warrants” in this Amendment No. 1 refers to both the Company’s Public Warrants and the Company’s Private Placement Warrants (as defined herein).

PART ~~I -~~ I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CIPHER MINING INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

2021

December 31,

2020


(Restated)
(Unaudited)

Assets

Cash    $ 127,722 $ 1,276,364
Prepaid expenses    247,593 297,371

Total current assets
   375,315 1,573,735
Cash and securities held in Trust Accoun
t
   170,032,591 170,027,342

Total Assets
   $ 170,407,906 $ 171,601,077

Liabilities and Stockholders’ Equity

Accounts payable and accrued expenses    $ 918,867 $ 129,388

Total current liabilities
   918,867 129,388

Warrant liability
   199,402 123,070

Total Liabilities
   1,118,269 252,458

Commitments
   0 0
Common stock subject to possible redemption, $0.001 par value, 17,000,000 and 17,000,000 shares at June 30,2021 and December 31, 2020, respectively, at redemption value    170,000,000 170,000,000
Stockholders’ Equity:

Preferred stock, $0.001 par value; 1,000,000 shares authorized; NaN issued and outstanding    0—   0—
Common stock, $0.001 par value; 100,000,000 shares authorized; 4,478,000 and 4,478,000 shares of common stock issued and outstanding at June 30, 2021 and December 31, 2020, excluding 17,000,000 and 17,000,000 shares, respectively, subject to possible redemption    4,478 4,478
Additional
paid-in
capital
   1,451,172 1,451,172
Accumulated Deficit    (2,166,013 ) (107,031 )

Total stockholders’ equity
   (710,363 ) 1,348,619

Total Liabilities and Stockholders’ Equity
   $ 170,407,906 $ 171,601,077

~~See~~

(in thousands, except for share and per share amounts)


	September 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	28,111		$	209,841
Receivables, related party		731			-
Prepaid expenses and other current assets		8,276			13,819
Cryptocurrencies		2,263			-
Derivative asset		30,393			-
Total current assets		69,774			223,660
Deposits on equipment		200,033			114,857
Property and equipment, net		40,751			5,124
Security deposits		11,455			10,352
Investment in equity investee		31,690			-
Right-of-use asset		5,303			-
Derivative asset		48,487			-
Deferred investment costs		-			174
Total assets	$	407,493		$	354,167
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,665		$	242
Accounts payable, related party		3,216			-
Operating lease liability, current portion		1,002			-
Accrued expenses		10,726			257
Total current liabilities		19,609			499
Operating lease liability, net of current portion		4,762			-
Warrant liability		22			137
Total liabilities		24,393			636
Commitments and contingencies (Note 11)
Stockholders’ equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding as of September 30, 2022 and December 31, 2021		-			-
Common stock, $0.001 par value, 500,000,000 shares authorized, 251,043,649 and 252,131,679 shares issued as of September 30, 2022 and December 31, 2021, respectively, and 247,518,966 and 249,279,420 shares outstanding as of September 30, 2022 and December 31, 2021, respectively		251			252
Additional paid-in capital		442,435			425,438
Treasury stock, at par, 3,524,683 and 2,852,259 shares at September 30, 2022 and December 31, 2021, respectively		(4	)		(3	)
Accumulated deficit		(59,582	)		(72,156	)
Total stockholders’ equity		383,100			353,531
Total liabilities and stockholders’ equity	$	407,493		$	354,167

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

~~Table of Contents~~

CIPHER MINING INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF OPERATIONS

~~For the Three~~

(in thousands, except for share and ~~Six Months Ended June 30, 2021~~

~~(Unaudited)~~

For the three months ended

June 30,

For the six months ended

June 30,


2021

2020

2021

2020


(As Restated)

(As Restated)

Operating expenses    $ 230,534 $ 2,000 $ 462,987 $ 2,000
Business combination expenses
   859,590 0—   1,569,432 0—

Loss from operations    (1,090,124 ) (2,000 ) (2,032,419 ) (2,000 )

Other income (expense)
Interest income    12,113 0—   49,769 0—
Change in warrant liability    34,540 0—   (76,332 ) 0—

Total other income (expense)    46,653 0—   (26,563 ) 0—


Net loss    $ (1,043,471 ) $ (2,000 ) $ (2,058,982 ) $ (2,000 )

Basic and diluted weighted average redeemable common shares outstanding    17,000,000 0—   17,000,000 0—

Basic and diluted net loss per redeemable common share    $ (0.05 ) $ 0—   $ (0.10 ) $ 0—

Basic and diluted weighted average
non-redeemable
common shares outstanding
   4,478,000 0—   4,478,000 0—

Basic and diluted net loss per
non-redeemable
common share
   $ (0.05 ) $ 0—   $ (0.10 ) $ 0—

~~See~~per share amounts)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended			Eight Months Ended
	2022			2021			September 30, 2022			September 30, 2021
Costs and operating expenses (income)
General and administrative	$	17,755		$	2,283		$	51,849		$	2,942
Depreciation		11			-			26			1
Change in fair value of derivative asset		(85,658	)		-			(85,658	)		-
Realized gain on sale of cryptocurrencies		(6	)		-			(6	)		-
Impairment of cryptocurrencies		320			-			859			-
Equity in loss of equity investment		8,345			-			20,577			-
Total costs and operating expenses (income)		(59,233	)		2,283			(12,353	)		2,943
Operating income (loss)		59,233			(2,283	)		12,353			(2,943	)
Other income (expense)
Interest income		55			1			106			1
Interest expense		-			(26	)		-			(27	)
Change in fair value of warrant liability		4			(113	)		115			(113	)
Total other income (expense)		59			(138	)		221			(139	)
Net income (loss)	$	59,292		$	(2,421	)	$	12,574		$	(3,082	)

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	)

Weighted average shares outstanding - basic		247,508,745			217,644,991			248,461,373			206,708,013
Weighted average shares outstanding - diluted		248,342,200			217,644,991			248,782,665			206,708,013

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

CIPHER MINING INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

~~For the Six~~ (DEFICIT)

(in thousands, except for share amounts)

(unaudited)

Three Months Ended ~~June~~September 30, 2022


	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

Three Months Ended September 30, 2021

~~(Restated)~~

~~(Unaudited)~~

Common Stock

Additional
Paid-in

Accumulated

Total
Stockholders’


Shares

Amount

Capital

Deficit

Equity

Balance - December 31, 2020
   4,478,000    $ 4,478    $ 1,451,172    $ (107,031 ) $ 1,348,619
Net loss    —      0—      0—      (1,015,511 ) (1,015,511 )
Balance - March 31, 2021
   4,478,000    4,478    1,451,172    (1,122,542 ) 333,108

Net loss    —      0—      0—      (1,043,471 ) (1,043,471 )
Balance - June 30, 2021
   $ 4,478,000    $ 4,478    $ 1,451,172    $ (2,166,013 ) $ (710,363 )

~~(1)~~

~~Cipher Mining Inc. (formerly known as Good Works Acquisition Corp.) was formed on June 24, 2020.~~


														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

The Founders Shares were not issued until July 2020. As a result, a comparative consolidated statement of changes in stockholder’s equity for the period ended June 2020 is not applicable. See accompanying notes to unaudited condensed consolidated financial statements.

~~See~~ accompanying notes toare an integral part of these unaudited condensed consolidated financial statements.

CIPHER MINING INC.

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

(in thousands, except for share amounts)

(unaudited)

Nine Months Ended September 30, 2022


	Common Stock						Additional			Treasury Stock						Accumulated			Total Stockholders’
	Shares			Amount			Paid-in Capital			Shares			Amount			Deficit			Equity
Balance as of December 31, 2021		252,131,679		$	252		$	425,438			(2,852,259	)	$	(3	)	$	(72,156	)	$	353,531
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement		1,802,123			2			(3,078	)		(672,424	)		(1	)		-			(3,077	)
Warrants exercised		20			-			-			-			-			-			-
Common stock cancelled		(2,890,173	)		(3	)		(9,997	)		-			-			-			(10,000	)
Share-based compensation		-			-			30,072			-			-			-			30,072
Net income		-			-			-			-			-			12,574			12,574
Balance as of September 30, 2022		251,043,649		$	251		$	442,435			(3,524,683	)	$	(4	)	$	(59,582	)	$	383,100

Eight Months Ended September 30, 2021


														Total
	Common Stock				Subscription			Additional			Accumulated			Stockholders’
	Shares		Amount		Receivable			Paid-in Capital			Deficit			Equity (Deficit)
Balance as of January 31, 2021		200,000,000	$	200	$	-		$	(200	)	$	(3	)	$	(3	)
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		-		-		-			-			(3,082	)		(3,082	)
Balance as of September 30, 2021		246,381,119	$	246	$	(1,690	)	$	384,508		$	(3,085	)	$	379,979

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

CIPHER MINING INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

~~For the Six Months Ended June 30, 2021~~

~~(Unaudited)~~

For the six months

ended June 30,


2021

2020


(As Restated)

Cash flows from operating activities:

Net loss    $ (2,058,982 ) $ (2,000 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Change in warrant liability    76,332 00
Interest earned on cash and marketable securities held in Trust Account    (5,249 ) 0
Changes in operating assets and liabilities:
Prepaid expenses    49,778 $ (23,000 )
Accounts payable and accrued expenses    789,479 50,000

Net cash (used in) provided by operating activities    (1,148,642 ) 25,000

Net change in cash    (1,148,642 ) 25,000
Cash, beginning of the period
   1,276,364 0

Cash, end of period
   $ 127,722 $ 25,000

~~See~~

(in thousands)

(unaudited)


	Nine Months Ended			Eight Months Ended
	September 30, 2022			September 30, 2021
Cash flows from operating activities
Net income (loss)	$	12,574		$	(3,082	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		26			1
Amortization of right-of-use assets		556			-
Change in fair value of derivative asset		(85,658	)		-
Change in fair value of warrant liability		(115	)		113
Share-based compensation		30,072			-
Equity in loss of equity investment		20,577			-
Realized gain on sale of cryptocurrencies		(6	)		-
Impairment of cryptocurrencies		859			-
Changes in assets and liabilities:
Proceeds from power sales		1,722			-
Proceeds from reduction of scheduled power		5,056			-
Proceeds from sale of cryptocurrencies		23			-
Receivables, related party		(731	)		-
Prepaid expenses and other current assets		5,412			(14,916	)
Security deposits		(1,103	)		(9,381	)
Accounts payable		400			87
Accrued expenses		1,408			78
Lease liability		37			-
Net cash used in operating activities		(8,891	)		(27,100	)
Cash flows from investing activities
Deposits on equipment		(184,095	)		(74,346	)
Purchases of property and equipment		(28,958	)		(130	)
Capital distributions from equity investee		43,291			-
Net cash used in investing activities		(169,762	)		(74,476	)
Cash flows from financing activities
Repurchase of common shares to pay employee withholding taxes		(3,077	)		-
Business Combination, net of issuance costs paid		-			383,853
Proceeds from borrowings on related party loan		-			7,038
Repayments under related party loan		-			(7,038	)
Net cash (used in) provided by financing activities		(3,077	)		383,853
Net (decrease) increase in cash and cash equivalents		(181,730	)		282,277
Cash and cash equivalents, beginning of the period		209,841			-
Cash and cash equivalents, end of the period	$	28,111		$	282,277
Supplemental disclosure of noncash investing and financing activities
Equity method investment acquired for non-cash consideration	$	93,208		$	-
Common stock cancelled	$	10,000		$	-
Right-of-use asset obtained in exchange for operating lease liability	$	5,859		$	-
Investment in equity investee in accrued expenses	$	5,316		$	-
Property and equipment purchases in accounts payable	$	3,971		$	-
Deposits on equipment in accrued expenses	$	3,746		$	-
Cryptocurrencies received from equity method investment	$	3,139		$	-
Property and equipment purchases in accounts payable, related party	$	2,724		$	-
Deposits on equipment in accounts payable, related party	$	492		$	-
Reclassification of deferred investment costs to equity method investment	$	174		$	-
Prepaid rent reclassified to lease liability	$	132		$	-
Deposits on equipment in accounts payable	$	51		$	-
Business Combination costs included in accrued expenses	$	-		$	1,024
Net assets assumed from GWAC in the Business Combination	$	-		$	433
Non-cash fair value of private warrants	$	-		$	261
Deferred investment costs included in accrued expenses	$	-		$	174
Business combination costs included in accounts payable	$	-		$	39

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

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Cipher Mining Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~Note 1 – Description of~~

NOTE 1. ORGANIZATION AND BUSINESS

Organization ~~and Business Operations~~

~~Cipher Mining Inc. (formerly known as~~

On August 27, 2021 (the “Closing Date”), Good Works Acquisition Corp. ~~until August 27, 2021) (the “Company”~~(“GWAC”) ~~was incorporated in Delaware on June 24, 2020. The Company is~~, a ~~blank check~~special purpose acquisition company, ~~formed for~~consummated 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 June 30, 2021, the Company had not commenced any operations. All activity for the period from June 24, 2020 (inception) through June 30, 2021 relates to the Company’s formation and initial public offering (“Public Offering” or “IPO”), and since completion of the IPO, getting ready to consummate a Business Combination since the finding of their target company. 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.

~~Initial Public Offering~~

On October 22, 2020, 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, generating gross proceeds of $150,000,000 which is described in Note 3.

Simultaneous with the closing of the IPO, 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”), generating gross proceeds of $2,228,000, which is described in Note 4.

~~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, generating proceeds of $15,000,000. On November 17, 2020, the underwriters purchased an additional 500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option, generating additional gross proceeds of $5,000,000.

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”).~~

~~Initial Business Combination~~

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 forth in Section 2(a)(16) 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.~~

~~Table of Contents~~

~~Note 1 – Description of Organization and Business Operations –~~

~~(Cont.)~~

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 are recorded at redemption value and classified as temporary equity 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 has 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.

~~Table of Contents~~

~~Note 1 – Description of Organization and Business Operations –~~

~~(Cont.)~~

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”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that 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 the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~Proposed Business Combination~~

~~On March 5~~

~~2021, the Company (or “Good Works”) entered into an~~ Agreement and Plan of Merger ~~(as it may be amended, supplemented or otherwise modified from time to time, the “~~

~~Merger Agreement~~

”dated as of March 4, 2021 (the “Merger Agreement”), by and among GWAC, Currency Merger Sub, Inc. (“Merger Sub”), a ~~Delaware~~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 ~~direct~~ subsidiary of ~~the Company (“~~

~~Merger Sub~~

~~”),~~GWAC (the “Merger” and, ~~Cipher Mining Technologies Inc., a Delaware corporation (“~~

~~Cipher~~

~~”).~~

~~The Merger Agreement and the transactions contemplated thereby were approved by the boards of directors of each of Good Works and Cipher.~~

~~The Business Combination~~

~~The Merger Agreement provides for, among other things, the following transactions at the closing: (i) Merger Sub will merge~~together with ~~and into Cipher, with Cipher as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Good Works (the “~~

~~Merger~~

~~”) and, in connection with the Merger, (ii) Good Works will change its name to Cipher Mining Inc. The Merger and~~ the other transactions contemplated by the Merger Agreement, ~~are hereinafter referred to as~~ the “

~~Business Combination~~

”.

The Business Combination is expected to close in the second quarter of 2021, following the receipt of the required approval by Good Works stockholders and the fulfillment (or waiver) of other customary closing conditions.

~~Business Combination Consideration~~

In accordance with the terms and subject to the conditions of the Merger Agreement, each share of Cipher common stock, par value $0.001 issued and outstanding shall be converted into the right to receive four hundred thousand (400,000) shares of Good Works common stock, par value $0.001 (“

~~Good Works Common Stock~~

”); provided that the exchange ratio shall be adjusted as needed to ensure the aggregate Merger consideration received by the sole stockholder of Cipher equals two hundred million (200,000,000) shares of Good Works Common Stock (at a value of ten dollars ($10.00) per share).

~~Table of Contents~~

~~Note 1 – Description of Organization and Business Operations –~~

~~(Cont.)~~

~~Representations and Warranties; Covenants~~

The Merger Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type, including with respect to the operations of Good Works and Cipher and that each of the parties have undertaken to procure approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “

~~HSR Act~~

”“Business Combination”). ~~In addition, Good Works has agreed to adopt an equity incentive plan as described in the Merger Agreement.~~

~~Conditions to Each Party’s Obligations~~

~~The obligation of Good Works and Cipher to consummate~~Following the Business Combination, the combined company was named Cipher Mining Inc. (“Cipher” or the “Company”). The Company comprises all of GWAC’s and Cipher Mining Technologies’ operations.

Business

The Company is ~~subject~~an emerging technology company that operates in the Bitcoin mining ecosystem in the United States. Specifically, the Company is developing and growing a cryptocurrency mining business specializing in Bitcoin. As a stand-alone, U.S.-based cryptocurrency mining business, the Company has begun its 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. 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.

Cipher Mining Technologies was established on January 7, 2021, in Delaware, by Bitfury Top Holdco B.V. and its subsidiaries (“Bitfury Top Holdco” and, with its subsidiaries, the “Bitfury Group”). As of September 30, 2022, Bitfury Top HoldCo (together with Bitfury Holding B.V., a subsidiary of Bitfury Top HoldCo, and referred to ~~certain closing conditions, including, but not limited to, (i) the expiration or termination~~herein as “Bitfury Holding”) beneficially owned approximately 81.6% of the ~~applicable waiting period under~~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 ~~HSR Act, (ii) the approval of Good Works stockholders, (iii) the approval of Cipher’s stockholders and (iv) the Registration Statement (as defined below) becoming effective.~~

In addition, the obligation of Good Works to consummate the Business Combination is subject to the fulfillment (or waiver) of other closing conditions, including, but not limited to, (i) the representations and warranties of Cipher being true and correct to the standards applicable to such representations and warranties and eachBitfury Group has control of the ~~covenants of Cipher having been performed or complied with in all material respect, (ii) the delivery to Good Works of evidence of satisfactory Tail Insurance (as~~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 ~~Merger Agreement) to be bound as~~nine months ended September 30, 2022. As of September 30, 2022, the ~~closing,~~Company had approximate balances of cash and ~~(iii) delivery~~cash equivalents of ~~all ancillary agreements required to be executed~~$28.1 million, total stockholders’ equity of $383.1 million and ~~delivered by Cipher or its sole stockholder and (iv) no Material Adverse Effect (as defined~~an accumulated deficit of $59.6 million. To date, the Company has, in ~~the Merger Agreement) shall have occurred.~~

The obligation of Cipher to consummate the Business Combination is also subject to the fulfillment (or waiver) of other closing conditions, including, but not limited to, (i) the representations and warranties of Good Works and Merger Sub being true and correct to the standards applicable to such representations and warranties and each of the covenants of Good Works having been performed or complied with in all material respects, (ii) the aggregate cash proceeds from Good Works trust account, together with thelarge part, relied on proceeds from the PIPE Financing (as defined below), equaling no less than $400,000,000 (after deducting any amounts paid to Good Works stockholders that exercise their redemption rights in connection with the Business Combination and net of unpaid transaction expenses incurred or subject to reimbursement by Good Works), (iii) Good Works total outstanding Indebtedness (as defined in the Merger Agreement) shall be less than twenty-five million dollars ($25,000,000.00), and (iv) the approval by Nasdaq of Good Works listing application in connection with the Business Combination

~~Termination~~

~~The Merger Agreement may be terminated under certain customary and limited circumstances prior to the closing~~consummation of the Business Combination ~~including, but not limited~~ to ~~(i)~~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 ~~mutual written consent~~the Company related to miners contributed in June 2022 and July 2022, respectively. See additional information regarding these losses in Note 8.

As of ~~Good Works~~September 30, 2022, the Company had $200.0 million of deposits on equipment on its unaudited condensed consolidated balance sheet, primarily for miners and, ~~Cipher, (ii) by Good Works if there is any breach~~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 ~~representations~~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 ~~warranties~~cryptocurrencies inflows from its sites, the ability to sell cryptocurrency received or earned, as well as potential sales of Cipher or if Cipher Mining fails to perform any covenant or agreement set forth in the Merger Agreement, in each case, such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iii) termination by Cipher if there is any breach of the representations and warranties of Good Works or if Good Works fails to perform any covenant or agreement set forth in the Merger Agreement, in each case, such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iv) subject to certain limited exceptions, by either Good Works or Cipher if the Business Combination is not consummated within six months of signing of the Merger Agreement, (v) by either Good Works or Cipher if certain required approvals are not obtained by Good Works stockholders after the conclusion of a meeting of Good Works stockholders held for such purpose at which such stockholders voted on such approvals, and (vi) termination by Good Works if Cipher’s sole stockholder does not deliver to Good Works a written consent approving the Business Combination within ten business days of the Consent Solicitation Statement (as defined in the Merger Agreement) being disseminated.

~~If the Merger Agreement is validly terminated, none of the parties to the Merger Agreement will have any liability or any further obligation~~Common Stock under the ~~Merger Agreement other than customary confidentiality obligations, except~~Company’s shelf

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

registration statement on Form S-3 (see additional information in ~~the case of Willful Breach (as defined in the Merger Agreement).~~

~~Table of Contents~~

Note ~~1 – Description of Organization~~12), will be sufficient to meet its operating and ~~Business Operations –~~

~~(Cont.)~~

~~Good Works Sponsor Support Agreement~~

~~Concurrently with the execution of the Merger Agreement, Good Works, and~~

~~I-B~~

~~Good Works, LLC (the “~~

~~Sponsor~~

~~”) and certain other stockholders of Good Works entered into an Acquiror Support Agreement (the “~~

~~Acquiror Support Agreement~~

~~”) pursuant to which the parties agreed to, among other things, (i) vote~~capital requirements for at any meeting of the stockholders of Good Works all of its shares of Good Works Common Stock held of record or thereafter acquired in favor of the Proposals (as defined in the Merger Agreement), (ii) be bound by certain other covenants and agreements related to the Business Combination and (iii) be bound by certain transfer restrictions with respect to such securities, prior to the closing of the Business Combination, in each case, on the terms and subject to the conditions set forth in the Acquiror Support Agreement.

~~Cipher Support Agreement~~

Concurrently with the execution of the Merger Agreement, the sole stockholder of Cipher representing the requisite votes necessary to approve the Business Combination entered into support agreements (the “

~~Company Support Agreement~~

”) with Good Works and Cipher, pursuant to which such holder agreed to (i) vote at any meeting of the stockholders of Cipher all of its Cipher Common Stock held of record or thereafter acquired in favor of the Proposals (as defined in the Merger Agreement) and appoint Good Works as such holder’s proxy, (ii) be bound by certain other covenants and agreements related to the Business Combination and (iii) be bound by certain transfer restrictions with respect to such securities, in each case, on the terms and subject to the conditions set forth in the Company Support Agreement.

~~Restrictive Covenant Agreements~~

~~Concurrently with the execution of the Merger Agreement, Bitfury Top Holdco B.V. (“~~

~~Bitfury~~

”), Cipher’s sole stockholder, and Good Works entered into a Restrictive Covenant Agreement pursuant to which Bitfury agreed, during the term of the agreement and subject to the parameters and limitations set forth in the agreement, not to hire or solicit Cipher Mining Inc.’s employees, not to compete with Cipher Mining Inc. and not to disparage Cipher Mining Inc. The agreement will terminate upon the earlier of seven yearsleast 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 ~~execution~~ performance and the Company has not 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 ~~the termination~~development, and possible cost overruns due to price and cost increases in services. The Company’s management has no current intention of ~~the Master Services and Supply Agreement (the “~~

~~MSSA~~

~~”) between Bitfury Holding B.V. (“~~

~~BHBV~~

~~”) and Cipher. Concurrently with the execution of the Merger Agreement, BHBV and Good Works entered~~entering into a ~~Restrictive Covenant Agreement pursuant to which BHBV agreed, during~~merger or acquisition within the ~~term of the agreement and subject to the parameters and limitations set forth~~next 12 months. The Company is in the ~~agreement, not to hire or solicit Cipher Mining Inc.’s employees, not to compete with Cipher Mining Inc.~~process of an active operational buildout and ~~not to disparage Cipher Mining Inc.. The agreement will terminate upon the earlier of seven years from the date of its execution or the termination of the MSSA.~~

~~PIPE Financing (Private Placement)~~

~~Concurrently with the execution of the Merger Agreement, Good Works entered into subscription agreements (the “~~

~~Subscription Agreements~~

~~”) with certain investors (the “~~

~~PIPE Investors~~

”). Pursuant to the Subscription Agreements, the PIPE Investors agreed to subscribe for and purchase, and Good Works agreed to issue and sell to such investors, immediately following the Closing (as defined in the Merger Agreement), an aggregate of 37,500,000 shares of Good Works Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $375,000,000 (the “

~~PIPE Financing~~

~~”).~~

~~The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide~~anticipates that ~~Good Works will grant the investors in the PIPE Financing certain customary registration rights.~~

~~Bitfury Private Placement~~

Concurrently with the execution of the Merger Agreement and the execution of the Subscription Agreements with the PIPE Investors, Bitfury agreed to subscribe for and purchase, and Good Works agreed to issue and sell to Bitfury, concurrent with the Closing (as defined in the Merger Agreement), an aggregate of 5,000,000 shares of Good Works Common Stock in exchange for a

~~benefit-in-kind~~

~~commitment as payment for such shares (the “Bitfury Private Placement”) pursuant to a subscription agreement with Good Works (the “~~

~~Bitfury Subscription Agreement~~

”). Bitfury agreed to cause BHBV to discount the Service Fees (as that term is defined in the MSSA) charged by BHBV under the MSSA as follows: that the first $200,000,000 of Service Fees payable by Cipher to BHBV under the MSSA described above shall be subject to a discount of 25%, to be applied at the point of invoicing and shown as a separate line item on each relevant invoice. For the avoidance of doubt, when the aggregate value of such discount reaches $50,000,000, such discount shall automatically cease to apply. Such discount shall constitute BHBV’s

~~benefit-in-kind~~

~~commitment as payment on behalf of its parent entity, for the issuance of the 5,000,000 shares of Good Works Common Stock pursuant to the Bitfury Private Placement.~~

~~Table of Contents~~

~~Note 1 – Description of Organization and Business Operations –~~

~~(Cont.)~~

~~Lock-Ups~~

~~The Sponsor, certain holders of Good Works Common Stock, and Bitfury, Cipher’s sole stockholder immediately prior to the closing of the Business Combination, will enter into~~

~~lock-up~~

~~agreements (the “~~

~~Lock-Up~~

~~Agreements~~

~~”) and be subject to post-closing~~

~~lock-ups~~

with respect to their shares of Good Works Common Stock (but excluding any Private Placement Units, which are units that were issued in a private placement to Good Works’ anchor investors simultaneously with the closing of its initial public offering; each unit consists of one share of Common Stock and

~~one-half~~

of one warrant and were purchased at a price of $10.00 per Private Placement Unit and excluding any shares of Good Works Common Stock issued to Bitfury in the Bitfury Private Placement, which are subject to a separate

~~lock-up~~

~~restriction, as described in the Bitfury Subscription Agreement); provided that the term of the~~

~~Lock-Up~~

~~shall be two years and the~~

~~Lock-up~~

~~will allow certain amounts of the shares to be publicly sold after 180 days, subject, in each case, to customary terms and conditions.~~

~~Amended and Restated Registration Rights Agreement~~

~~At the closing of the Business Combination, the Sponsor, certain stockholders of Good Works, and Bitfury (collectively, the “~~

~~Holders~~

~~”) will enter into an amended and restated registration rights agreement (the “~~

~~Registration Rights Agreement~~

~~”) with Good Works pursuant to which, among other things, the parties thereto~~additional capital will be ~~granted~~required to implement the buildout. The Company may also require additional capital to pursue certain ~~customary registrant rights with respect~~business opportunities or respond to ~~shares of Good Works Common Stock.~~

~~Risks and Uncertainties~~

~~Management continues to evaluate~~technological advancements, competitive dynamics or technologies, customer demands, challenges, acquisitions or unforeseen circumstances. Additionally, the ~~impact of the~~

~~COVID-19~~

pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s 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.

~~Going Concern Consideration~~

~~At June 30, 2021, the Company had cash of $127,722 and a working capital deficit of $(543,552). The~~ Company has incurred and expects to continue to incur significant costs related to becoming a public company. Accordingly, the Company may engage in ~~pursuit of~~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 the future could involve restrictive covenants relating to the Company’s capital raising activities and ~~acquisition plans. These conditions raise substantial doubt about~~other financial and operational matters, which may make it more difficult for the Company to obtain additional capital and to pursue business opportunities. If the Company is unable to obtain adequate financing on terms that are satisfactory to the Company, when the Company requires it, the Company’s ability to continue to grow or support the business and to 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 ~~going concern within one year after~~variety of risks to the ~~date that~~Company’s business and management cannot anticipate all the ways in which the current economic climate and financial ~~statements are issued. There~~market conditions could adversely impact the Company’s business.

The Company may experience disruptions to its business operations resulting from supply delays or 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 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 employees being impacted by COVID-19. The temporary shutdown was less than a week, and construction resumed at the site immediately after. If the Company is unable to effectively set up and service its miners, the Company’s 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 other pandemic, or other unfavorable global economic, business or political conditions, will not materially and adversely affect the Company’s ~~plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The~~business, prospects, financial ~~statements do not include any adjustments that might result from the outcome of this uncertainty.~~condition and operating results.

~~Table of Contents~~

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~Note 2 – Summary of Significant Accounting Policies~~

Basis of ~~Presentation (Restated)~~

presentation and principles of consolidation

The ~~accompanying~~Company prepares its unaudited condensed consolidated financial statements ~~are presented~~ in ~~conformity~~accordance with accounting principles generally accepted in the United States ~~of America~~ (“GAAP”) as determined by the FASB and pursuant to the accounting and disclosure rules and regulations of the ~~SEC,~~Securities and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for the fair presentation of the financial position as of March 31, 2021 and the results of operations and cash flows for the period presented and should be read in conjunction with the Company’s final prospectus for its Initial Public Offering as filed with the SEC on October 20, 2020, the Company’s annual report on Form

~~10-K~~

~~as filed with the SEC on February 17, 2021, the Company’s amended annual report on Form~~

~~10-K/A~~

~~as filed with the SEC on May 7, 2021, the Company’s sec~~

~~nd amended annual report on Form~~

~~10-K/A~~

~~as filed with the SEC on June 14, 2021, and the Company’s third amended annual report on Form~~

~~10-K/A~~

~~as filed with the SEC on January~~

~~, 2022, as well as the Company’s Current Reports on Form~~

~~8-K,~~

~~as filed with the SEC on March 5, 18, and 30, 2021.~~ Exchange Commission (“SEC”).

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The ~~interim results for the period ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.~~

As described in Note 3—Restatement of Previously Issued Financial Statements, the Company’s financial statements for the three and six months ended June 30, 2021 (the “Affected Period”), is restated in this Quarterly Report on Form

~~10-Q/A~~

~~(Amendment No. 1) (this “Quarterly Report”) to correct the misapplication of accounting guidance related to the Company’s Public Shares in the Company’s previously issued~~ unaudited condensed consolidated financial statements ~~for such period. The restated financial statements are indicated as “Restated” in~~include the ~~unaudited condensed consolidated financial statements and accompanying notes, as applicable. See Note 3—Restatement of Previously Issued Financial Statements for further discussion.~~

~~Emerging Growth Company~~

~~The Company is an “emerging growth company,” as defined in Section 2(a)~~accounts of the ~~Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),~~Company and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its ~~periodic reports~~controlled subsidiary, Cipher Mining Technologies. All intercompany transactions and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.balances have been eliminated.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to

~~non-emerging~~

growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of ~~Estimates~~

estimates

The preparation of financial statements in conformity with GAAP requires ~~the Company’s~~ 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 financial statements and the reported amounts of ~~revenues and~~ expenses during the reporting period.

The most significant estimates inherent in the preparation of the Company’s financial statements include, but are not limited to, those related to equity instruments issued in share-based compensation arrangements, valuations of the derivative asset and warrant liability, useful lives of property and equipment, and the valuation allowance associated with the Company’s deferred tax assets, among others. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, ~~the~~ actual results could differ significantly from those estimates.

Unaudited condensed consolidated financial statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of the Company’s management, these unaudited condensed consolidated financial statements reflect all adjustments, which consist of only normal recurring adjustments necessary for the fair presentation of the balances and results for the periods presented. These unaudited condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period.

A description of the Company’s significant accounting policies in included in the Company’s 2021 Form 10-K. You should read the unaudited condensed consolidated financial statements in conjunction with the Company’s audited consolidated financial statements and accompanying notes in the Company’s 2021 Form 10-K. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the Company’s audited consolidated financial statements included in the Company’s 2021 Form 10-K.

Change in fiscal year

Cipher Mining Technologies assumed GWAC’s financial calendar for the combined entity with the third fiscal quarter ending September 30, 2021 and its fiscal year ending December 31, 2021. This change to the fiscal year end was approved by the Company’s board of directors (“Board”) on September 23, 2021. Cipher Mining Technologies’ fiscal year previously ended on January 31.

~~Table~~

Investment in equity investees

The Company accounts for investments using the equity method of ~~Contents~~

~~Note 2 – Summary~~accounting if the investments provide the Company the ability to exercise significant influence, but not control, over its investees. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of ~~Significant Accounting Policies –~~

~~(Cont.)~~

~~Cash~~an investee of between 20 percent and ~~cash equivalents~~

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 Cipher.

The Company’s investments are subsequently adjusted to recognize the Company’s share of net income or losses as they occur. The Company also adjusts its investment upon receipt of cryptocurrency from an equity investee, which is accounted for as a distribution-in-kind. The Company’s share of investees’ earnings or losses is recorded, net of taxes, within equity in loss of equity investment on the Company’s consolidated statement of operations. Additionally, the Company’s interest in the net assets of its equity method investees is reflected on its consolidated balance sheet. If, upon Cipher’s contribution of nonfinancial assets to a joint venture, there is any difference between the cost of the investment and the amount of the underlying equity in the net assets of the 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

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

the Company’s proportionate share of the investee’s net income or loss. If Cipher is unable to relate the difference to specific accounts of the investee, the difference should be considered goodwill.

The Company considers ~~all short-term~~whether the fair value of its 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 the Company considered any such decline to be other than temporary (based on various factors, including historical financial results, success of the mining operations and the overall health of the investee’s industry), then the Company would record a write-down to the estimated fair value.

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.

Capitalized software costs

The Company accounts for the costs of software developed for internal use by capitalizing costs incurred during the application development stage to property and equipment, net on its consolidated balance sheet. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company plans to amortize the capitalized costs of internal-use software on a straight-line basis over the estimated useful life of the asset, which is expected to be three years. The Company will recognize the amortization in the consolidated statements of operations once the software is technologically feasible.

Leases

The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”). Accordingly, the Company determines whether an ~~original maturity~~arrangement contains a lease at the inception of ~~three~~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 the Company’s use by the lessor. The Company’s 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 the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines 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 Company’s 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, the Company generally uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

readily determinable. The Company’s incremental borrowing rate reflects the rate it 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 the Company’s 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, ~~when purchased to be cash equivalents.~~any fixed payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s 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. The Company ~~did~~has elected the practical expedient not ~~have any cash equivalents~~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 ~~June 30, 2021 or December 31, 2020.~~the Company’s lease components for balance sheet purposes.

~~Investment Held~~

Cryptocurrencies

Cryptocurrencies, including Bitcoin, are included in ~~Trust Account~~

~~Investment held~~current assets on the Company’s consolidated balance sheets. Cryptocurrencies received through the Company’s wholly-owned mining activities will be accounted for in ~~Trust Account consist of United States Treasury securities~~connection with ~~a maturity of 180 days or less. The~~the Company’s revenue recognition policy. Cryptocurrencies awarded to the Company ~~classifies its United States Treasury securities~~ as

~~held-to-maturity~~

distributions-in-kind from equity investees are accounted for in accordance with ~~FASB~~ ASC ~~Topic 320 “Investments—Debt~~845, Nonmonetary Transactions, and ~~Equity Securities.”~~

~~Held-to-maturity~~

~~securities~~recorded at fair value upon receipt.

Cryptocurrencies held by the Company are ~~those securities~~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. The Company determines the fair value of its 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. The Company recognized impairment charges of $0.3 million and $0.9 million on its cryptocurrency assets during the three and nine months ended September 30, 2022, respectively.

Cryptocurrencies awarded to the Company through its 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. The Company accounts for its sales of cryptocurrencies in accordance with the first in first out method of accounting.

Derivative Accounting

Luminant Power Agreement

On June 23, 2021, the Company entered into a power purchase agreement with Luminant ET Services Company LLC (“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”). Cipher is expecting to receive interconnection approval from the Electric Reliability Council of Texas (“ERCOT”) this year, which will allow the Company 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 Cipher as 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, the Company’s 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 the Company has the ability to sell its electricity in the ERCOT market rather than take physical delivery, physical delivery is not probable through the entirety of the contract and ~~intent~~therefore, the Company’s management does not believe the normal purchases and normal sales scope

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

exception applies to ~~hold until maturity.~~

~~Held-to-maturity~~

~~treasury securities are~~the Luminant Power Agreement. Accordingly, the Luminant Power Agreement (the non-hedging derivative contract) is recorded at ~~amortized cost and adjusted for~~an estimated fair value each reporting period with the ~~amortization or accretion of premiums or discounts.~~

~~A decline~~change in the ~~market~~fair value of

~~held-to-maturity~~

~~securities below cost that is deemed to be other than temporary, results~~recorded in ~~an impairment that reduces the carrying costs to such securities’~~change in fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the costvalue of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to

~~year-end,~~

~~forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in.~~

~~Premiums and discounts are amortized or accreted over the life of the related~~

~~held-to-maturity~~

~~security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item~~derivative asset in the consolidated ~~statement~~statements of operations. ~~Interest income is recognized when earned.~~

~~Fair Value Measurements (Restated)~~

~~FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines~~See additional information regarding valuation of the Luminant Power Agreement derivative in Note 3.

Depending on the spot market price of electricity, the Company 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 the Company’s operating costs. The Company, 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 ~~methods used to measure fair value~~accompanying condensed consolidated statements of operations during the three and nine months ended September 30, 2022. Once the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the sellerCompany begins cryptocurrency mining at the ~~measurement date. In determining fair value,~~Odessa Facility, costs under the ~~valuation techniques consistent with~~Luminant Power Agreement will be recorded in cost of revenues in the ~~market approach,~~Company’s consolidated statements of operations.

Income (loss) per share

Basic net income ~~approach and cost approach shall be used~~(loss) per share of Common Stock is computed by dividing net income (loss) allocated to ~~measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used~~common shareholders by the ~~buyer and seller~~weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in ~~pricing~~ the ~~asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those~~issuance of Common Stock that ~~buyer and seller would use~~then shared in ~~pricing~~ the ~~asset or liability based on market data obtained from sources independent~~earnings of the ~~Company. Unobservable inputs reflect~~entity. Dilutive potential common shares include the Company’s ~~assumptions about~~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 ~~inputs~~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 ~~buyer~~impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and ~~seller would use~~adjusts the numerator to remove the change in ~~pricing the asset or liability developed based on the best information available in the circumstances.~~

~~The fair value hierarchy is categorized into 3 levels based on the inputs as follows:~~


		~~Level 1 —~~		Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

		~~Level 2 —~~		Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

		~~Level 3 —~~		~~Valuations based on inputs that are unobservable and significant to the overall fair value measurement.~~

~~Table of Contents~~

~~Note 2 – Summary of Significant Accounting Policies –~~

~~(Cont.)~~

~~The~~ 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 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 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

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Recently issued and adopted accounting pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The new guidance removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted this guidance on January 1, 2022 with no impact to the Company’s consolidated financial statements upon adoption.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2021-04 reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. ASU 2021-04 provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. ASU 2021-04 was effective for the Company on January 1, 2022 and there was no impact on the Company’s financial statements or disclosures upon adoption.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on the Company’s consolidated financial statements or disclosures.

NOTE 3. FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities ~~which qualify~~subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as ~~financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed consolidated balance sheet~~follows as of ~~June 30, 2021 and~~ the ~~balance sheet as of December 31, 2020. The fair~~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 and cash equivalents, ~~prepaid assets,~~ accounts payable and accrued expenses ~~are estimated to~~ approximate ~~the carrying~~their recorded values ~~as of June 30, 2021 and December 31, 2020~~ due to the ~~short maturities~~short-term nature of these items.

There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Level 3 asset

On July 1, 2022, the Company 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 designated as a hedging instrument. The Company does not 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 as such, ~~instruments.~~

Fair Value Measured as of June 30, 2021


Level 1

Level 2

Level 3

Total

Assets:

U.S. Money Market held in Trust Account    $ 170,032,591    $ 0—      $ 0—      $ 170,032,591

   $ 170,032,591    $ 0—      $ 0—      $ 170,032,591

            Fair Value Measured as of June 30, 2021


Level 1

Level 2

Level 3

Total

Liabilities:

Private stock warrant liabilities    $ 0—      $ 0—      $ 199,402    $ 199,402

   $ 0—      $ 0—      $ 199,402    $ 199,402

Fair Value Measured as of December 31, 2020


Level 1

Level 2

Level 3

Total

Assets:

U.S. Money Market held in Trust Account    $ 203    $ 0—      $ 0—      $ 203
U.S. Treasury Securities held in Trust Account    170,027,139    0—      0—      170,027,139

   $ 170,027,342    $ 0—      $ 0—      $ 170,027,342

Liabilities:

Private stock warrant liabilities    $ 0—      $ 0—      $ 123,070    $ 123,070

   $ 0—      $ 0—      $ 123,070    $ 123,070

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 is five years. The ~~Private Warrants are accounted~~valuations performed by the third-party valuation firm engaged by the Company utilized discount rates of 7.19% and 7.39% as 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 ~~liabilities pursuant~~consideration for the modification to ~~ASC~~

~~815-40~~

the ramp up schedule under 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, ~~are~~as such, the 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 ~~of each reporting period. Changes in~~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 ~~are recorded~~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 ~~statement~~valuations of ~~operations each period.~~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

~~Table of Contents~~

~~Note 2 – Summary of Significant Accounting Policies –~~

~~(Cont.)~~

~~As of June 30, 2021 and December 31, 2020~~

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 4. PREPAID EXPENSES AND ACCRUED EXPENSES

As of September 30, 2022 and December 31, 2021, the Company had $8.3 million and $13.8 million, respectively, of prepaid expenses and other current assets, which was ~~determined using a Black Sholes valuation model using Level 3 inputs. Significant inputs~~almost entirely related to prepaid insurance as of both balance sheet dates.

The Company’s accrued expenses consisted of the ~~valuation are~~following as ~~follows:~~of the dates indicated (amounts in thousands):


	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

As of

December 31,

2020

As of

June 30

2021

Exercise price    $ 11.50 $ 11.50
Stock price    9.95 9.95
Volatility    18.40 % 23.8 %
Probability of completing a business combination    88.30 % 90 %
Term    5.42 5.17
Risk-free rate    0.42 % 0.90 %
Dividend yield    0.00 % 0.00 %

NOTE 5. CRYPTOCURRENCIES

The following table presents ~~a summary of~~information about the ~~changes~~Company’s cryptocurrencies (Bitcoin) (amounts in thousands):


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

The Company’s cryptocurrency activity for the nine months ended September 30, 2022 was entirely from Bitcoin. The fair market value of the ~~Private Warrants,~~Company’s Bitcoin as of September 30, 2022 was approximately $2.4 million and was estimated using the closing price of Bitcoin, which is a Level ~~3 liability, measured~~1 input (i.e., an observable input such as a quoted price in an active market for an identical asset). The Company had no cryptocurrency activity during the eight months ended September 30, 2021.

During the three and nine months ended September 30, 2022, the Company recorded impairment charges on its cryptocurrency holdings of $0.3 million and $0.9 million, respectively.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 ~~recurring basis.~~

Warrant liabilities at January 1, 2021    $ 123,070
Change in fair value of warrant liabilities    110,872

Warrant liabilities at March 31, 2021    $ 233,942
Change in fair value of warrant liabilities    (34,540 )

Warrant liabilities at June 30, 2021    $ 199,402

~~The~~

~~non-cash~~

~~loss on revaluation~~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 ~~Private Warrants~~execution of the Amended SuperAcme Agreement. The expected final purchase price under the Amended SuperAcme Agreement is ~~included~~subject to both the new fixed price terms and certain floating price terms, with payment due in ~~change~~advance of certain batches of miners being delivered. See additional information regarding a supplementary agreement with SuperAcme in ~~warrant liability~~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 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 ~~statement~~Master Services and Supply Agreement.

The Company previously had an agreement for the purchase of ~~operations.~~

~~Concentration~~between 28,000 to 56,000 mining rigs from Bitfury Top HoldCo, also made under, and as a part of, ~~Credit Risk~~

~~Financial instruments that potentially subject~~the Master Services and Supply Agreement. Upon execution of the agreement, the Company paid a $10.0 million deposit to ~~concentrations~~Bitfury Top HoldCo; however, the agreement for the purchase of ~~credit risk consist~~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):


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

__________

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

** Pursuant to the Company’s 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 ~~cash account~~supplementary agreement entered into on November 4, 2022 with SuperAcme.

****See Notes 9 and 15 for additional information regarding payments for BBACs.

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 ~~a financial institution, which, at times, may exceed~~equity investee on its consolidated balance sheet, with the ~~Federal Depository Insurance Coverage~~exception of ~~$250,000. At~~losses of $11.6 million and $7.2 million recognized by the Company related to the batches of miners contributed in June ~~30,~~2022 and July 2022, respectively. See additional information in Note 8.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 7. SECURITY DEPOSITS

Security deposits are shown in the table below as of the dates indicated (amounts in thousands):


	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

NOTE 8. INVESTMENT IN EQUITY INVESTEES

On June 10, 2021, the Company ~~has not experienced losses on this account~~ and ~~management believes~~WindHQ LLC (“WindHQ”) signed a binding definitive framework agreement with respect to the construction, buildout, deployment and operation of one 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 certain specified Data Centers at locations already identified by the parties (“Initial Data Centers”). Each 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 required to procure energy for Future Data Centers at the most favorable pricing then available. Similarly, the Company is ~~not exposed~~required to ~~significant risks on such account.~~

~~Derivative warrant liabilities~~

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is

~~re-assessed~~

procure the applicable equipment needed for the Future Data Centers at the ~~end~~most favorable pricing then available.

Under the WindHQ Joint Venture Agreement, WindHQ agrees to provide a series of services to each of the Data Centers, including but not limited to: (i) the design and engineering of each ~~reporting period.~~

~~The 114,000 Private Placement Warrants are recognized~~of the Data Centers; (ii) the procurement of energy equipment and other related services such as ~~derivative liabilities~~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 each Data Center (particularly the mining servers) as required under the WindHQ Joint Venture Agreement.

A development fee equal to 2% of capital expenditures in respect of the initial development of each Data Center shall be paid 50% to WindHQ and 50% to the Company. Furthermore, a fee equal to 2% of the 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 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 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 ~~Topic 815, “Derivatives~~810, and ~~Hedging”. Accordingly,~~ the Company ~~recognizes~~will not have a controlling voting interest in any of the ~~warrant instruments as liabilities at fair value~~Data Center LLCs. Based upon the Company's expectation that it will have significant influence over the operations and ~~adjust~~major decisions of the ~~instruments to fair value at each reporting period. The liabilities are subject to~~

~~re-measurement~~

~~at each balance sheet date until exercised, and any change in fair value is recognized in~~Data Center LLCs, the Company’s ~~statement~~49% ownership in each individual Data Center LLC will be separately accounted for under the equity method of ~~operations. The fair value of warrants issued~~accounting, as the Company does not expect to exercise control over the Data Center LLCs.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

On January 28, 2022, in connection with ~~our private placement was initially~~the WindHQ Joint Venture Agreement, Cipher Mining Technologies and ~~subsequently remeasured at fair value using~~Alborz Interests DC LLC (a subsidiary of WindHQ), as members, entered into the ~~Black Sholes method.~~

~~Table~~Amended and Restated Limited Liability Company Agreement of ~~Contents~~

~~Note 2 – Summary of Significant Accounting Policies –~~

~~(Cont.~~Alborz LLC (the “Alborz LLC Agreement”)

~~Common Stock Subject to Possible Redemption~~

~~The Company accounts for common stock subject to possible redemption~~. On May 16, 2022, in ~~accordance~~connection with the ~~guidance in~~WindHQ Joint Venture Agreement, Cipher Mining Technologies and Bear Interests DC LLC (a subsidiary of WindHQ), as members, entered into the ~~Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “~~

~~Distinguishing Liabilities from Equity~~

~~.” Common stock subject to mandatory redemption (if any) are classified as liability instruments~~Amended and ~~are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption~~Restated Limited Liability Company Agreement of Bear LLC (the “Bear LLC Agreement”). The Alborz and Bear LLC Agreements delineate the rights ~~that are either within the control~~and obligations of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, common stock are classified as stockholders’ equity. Our common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, at June 30, 2021, 17,000,000 shares of common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our balance sheet.

~~Offering Costs~~

~~Offering costs consisted of legal, accounting, and underwriting fees and other costs incurred that were directly~~members related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as

~~non-operating~~

~~expenses in the statement of operations. Offering costs associated with the common stock issued were charged against the carrying value~~construction, operation and management, respectively, of the ~~Public Shares upon~~Alborz Facility and the ~~completion~~Bear facility (the “Bear Facility”) also located in Texas. The Company is required to support and monitor (remotely) the operations of the ~~Initial Public Offering.~~ hardware at the Alborz Facility and the Bear Facility (particularly the mining servers) under the WindHQ Joint Venture Agreement.

The Company ~~classifies deferred underwriting commissions as~~

~~non-current~~

~~liabilities as their liquidation is not reasonably expected to require~~uses the ~~use of current assets or require the creation of current liabilities.~~

~~Income Taxes~~

~~The Company follows the asset and liability~~equity method of accounting to account for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable incomeits 49% equity interest in the ~~years in which those temporary differences are expected to be recovered or settled.~~LLCs. The ~~effect on deferred tax assets~~Company recognized $1.9 million and ~~liabilities of a change in tax rates is recognized in income~~$2.6 million as equity in the ~~period that included~~net loss of Alborz LLC in the ~~enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to~~accompanying unaudited condensed consolidated statements of operations during the ~~amount expected to be realized.~~

~~ASC 740 prescribes a recognition threshold~~three and ~~a measurement attribute for~~nine months ended September 30, 2022, respectively. Cryptocurrency mining operations had not commenced at the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penaltiesBear Facility as of September 30, ~~2020. The~~2022.

In June 2022 and July 2022, the Company ~~is currently not aware~~contributed 6,629 miners and 2,375 miners, respectively, to the Alborz Facility, which are included in the 12,953 total of ~~any issues under review~~miners contributed to the Alborz Facility. At the time of these contributions, the contributed miners had a fair value that ~~could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.~~

~~The provision for income taxes~~ was ~~deemed to be immaterial for~~lower than the ~~six month period ended June 30, 2021 and for the period from June 24, 2020 (inception) to December 31, 2020.~~

~~Net Loss Per Common Share (Restated)~~

~~The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per common share is calculated by dividing the net income (loss)~~cost paid by the ~~weighted average shares of redeemable and~~

~~non-redeemable~~

~~common stock outstanding for the respective period.~~

The calculation of diluted net income (loss) per common stock does not consider the effect of the warrants issued in connection with the Initial Public Offering (including exercise of the over-allotment option)Company to obtain them, and the ~~Private Placement to purchase an aggregate~~Company recognized losses of ~~7,614,000 shares of common stock in~~$7.2 million and $18.8 million during the calculation of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for three and ~~six~~nine months ended ~~June~~September 30, ~~2021. Accretion associated with the redeemable common stock is excluded from earnings per share as the redemption value approximates fair value.~~

~~The following table reflects presents a reconciliation~~2022, respectively. These losses were recorded within equity in loss of ~~the numerator and denominator used to compute basic and diluted net income (loss) per share of redeemable and~~

~~non-redeemable~~

~~common stock:~~

For the Three Months

For the Six Months


ended June 30, 2021

ended June 30, 2021


Redeemable

Non-redeemable

Redeemable

Non-redeemable

Basic and diluted net loss per share:
Numerator:

Allocation of net loss    $ (825,915 )    $ (217,556 )    $ (1,629,700 )    $ (429,282 )
Denominator:

Basic and diluted weighted average shares outstanding    17,000,000    4,478,000    17,000,000    4,478,000

Basic and diluted net loss per share    $ (0.05 )    $ (0.05 )    $ (0.10 )    $ (0.10 )

~~Table of Contents~~

~~Note 2 – Summary of Significant Accounting Policies –~~

~~(Cont.)~~

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect~~equity investment on the unaudited condensed consolidated statements of operations and represent a basis difference related to the Company’s ~~financial statements.~~

~~Note 3 – Restatement~~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 ~~Financial Statements~~

~~The Company concluded it should restate~~these batches of miners on its ~~previously issued~~ financial statements ~~by amending its Quarterly Report on Form~~

~~10-Q,~~

~~filed with~~over the ~~SEC on August 10, 2021, to classify all Public Shares in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC 480, paragraph~~

~~10-S99,~~

~~redemption provisions not solely within the control~~expected depreciation period of the Company require common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Public Shares in permanent equity, or total stockholders’ equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that,five years, the Company will ~~not redeem its public shares in an~~accrete this basis difference over the same period and will record the accretion amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporaryfor each reporting period within equity in ~~net tangible assets. Also, in connection with~~earnings (loss) of equity investment on its consolidated statements of income until the ~~change in presentation for~~miners are fully depreciated and the ~~Public Shares,~~corresponding basis difference is fully accreted. See accretion recorded during the Company also revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro ratanine months ended September 30, 2022 in the ~~income and losses~~table below.

Activity in investment in equity investee during the nine months ended September 30, 2022 consisted of the Company. As a result, the Company restated its previously filed financial statements to present all redeemable common stock as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering andfollowing (amounts in ~~accordance with ASC 480.~~

thousands):

~~Impact of the Restatement~~


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

~~The Company’s statement of stockholders’ equity has been restated to reflect the changes to the impacted stockholders’ equity accounts described above.~~

As Previously
Reported

Adjustment

As Restated

Balance - December 31, 2020 (Restated)

$
5,000,010


$
(3,651,391
)

$
1,348,619

Net loss (Restated)    (1,015,510 )    (1 )    (1,015,511 )
Change in value of common stock subject to possible redemption (Restated)    (3,651,392 )    3,651,392    —
Balance as of March 31, 2021

$
333,108


$
—


$
333,108

Net loss (Restated)    (1,043,471 )    —    (1,043,471 )
Balance as of June 30, 2021

$
(710,363
)

$
—


$
(710,363
)

The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the period from January 1, 2021 through June 30, 2021:

For the Period from January 1, 2021 through June 30, 2021


As Previously
Reported

Adjustment

As
Restated

Supplemental Disclosure of Noncash Financing Activities:

Change in value of common stock subject to possible redemption (restated)    $ 3,651,391    $ (3,651,391 )    $ 0

~~The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per share is presented below for the three and six months ended June 30, 2021:~~

Earnings Per Share for Common Stock


As Previously
Reported
(1)

Adjustment

As Restated

For the Three Months Ended June 30, 2021

Net loss    $ (1,043,472 )    $ 1    $ (1,043,471 )
Basic and Diluted weighted-average redeemable common shares outstanding    17,000,000    —      17,000,000
Basic and Diluted net loss per redeemable common share    $ (0.00 )    $ (0.05 )    $ (0.05 )
Basic and Diluted weighted-average
non-redeemable
common shares outstanding
   4,478,000    —      4,478,000
Basic and Diluted net loss per
non-redeemable
common shares
   $ (0.23 )    $ 0.18    $ (0.05 )

Earnings Per Share for Common Stock


As Previously
Reported
(1)

Adjustment

As Restated

For the Six Months Ended June 30, 2021

Net loss    $ (2,058,982 )    $ —      $ (2,058,982 )
Basic and Diluted weighted-average redeemable common shares outstanding    16,818,439    181,561    17,000,000
Basic and Diluted net loss per redeemable common share    $ (0.00 )    $ (0.10 )    $ (0.10 )
Basic and Diluted weighted-average
non-redeemable
common shares outstanding
   4,659,492    (181,492 )    4,478,000
Basic and Diluted net loss per
non-redeemable
common shares
   $ (0.44 )    $ 0.34    $ (0.10 )

~~(1) - The weighted average shares outstanding was calculated based on the~~

~~two-class~~

~~method, where the earnings per share was determined based on redeemable and~~

~~non-redeemable~~

~~common stock. The Company revised its earnings per share calculation to allocate net losses by the weighted average shares of redeemable and~~

~~non-redeemable~~

~~common stock outstanding for the respective period.~~

~~Note 4 – Initial Public Offering~~

~~Pursuant to the IPO on October 22, 2020, the Company sold 15,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of common stock and~~

~~one-half of~~

~~one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment.~~

~~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 partially exercised the over-allotment option by purchasing 1,500,000 Units (the “Over-Allotment Units”), and on November 17, 2020, the underwriters exercised a final over-allotment option and purchased an additional 500,000 Over-Allotment Units, generating aggregate of gross proceeds of $20,000,000.

Upon closing of the IPO and the sale of the Over-Allotment Units, a total of $170,000,000 ($10.00 per Unit) has been placed in a U.S.-based trust account, with Continental Stock Transfer & Trust Company acting as trustee.

~~Note 5 – Private Placement~~

On October 22, 2020, simultaneously with the closing of the Public Offering, the Anchor Investors purchased an aggregate of 228,000 Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $2,280,000, in a private placement that occurred simultaneously with the closing of the Public Offering. Each Private Unit consists of one share of common stock (“Private Share”) and

~~one-half~~

of one warrant (“Private Warrant”). Each whole Private Warrant is exercisable to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment. The proceeds from the Private Units were added to the proceeds from the Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).

~~Note 6 – Related Party Transactions~~

~~Founder Shares~~

~~In July 2020, Sponsor,~~

NOTE 9. RELATED PARTY TRANSACTIONS

Waiver, Lock-up and ~~our officers and directors (collectively,~~Board Observer Agreements

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.~~

~~Table of Contents~~

~~Note 6 – Related Party Transactions –~~

~~(Cont.)~~

~~Of the Founder Shares, several of the Founders were holding an aggregate of 750,000 shares which they had 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. In February 2021, all of the 750,000 shares were transferred to~~

~~not-for-profit~~

~~organizations that were approved by the board of directors.~~

~~The Founders (including the~~

~~not-for-profit~~

~~transferees) 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,~~made payments directly to Paradigm in place of Bitfury USA, in respect of manufacturing services for BBACs, totaling $11.0 million during the three months ended September 30, 2022 and the Company’s obligations to Bitfury USA under the 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 Bitfury USA, to accounts payable, related party during the three months ended September 30, 2022. These additional invoices related to mining equipment and services received by the Company prior to 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 condensed consolidated balance sheet was $3.2 million as of September 30, 2022. See Note 15 for additional information regarding the disposition of the 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 other ~~similar transaction after~~vendors on any remaining BBACs that would have been purchased from Bitfury USA under the ~~Business Combination that results in all~~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 ~~Company’s stockholders having~~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 ~~right~~Company 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 ~~exchange their shares~~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 ~~common stock~~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 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 ~~cash, securities or other property. Notwithstanding~~ the ~~foregoing, if~~mining and (ii) host, operate and manage the ~~last sale price~~Miners there, in each case in accordance with the terms and conditions of ~~our common stock equals or exceeds $12.00 per share (as adjusted~~the 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 availability schedule.

Thereafter, Standard Power shall provide the hosting capacity, housing and equipment for ~~stock splits, stock dividends, reorganizations, recapitalizations and~~Miners with 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~~specified energy utilization capacities that will be ~~released from~~delivered to the

~~lock-up.~~

~~Promissory Note — Related Party~~

~~In addition,~~ 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~~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 Purchase and Sale Agreements

The Company 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 “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company 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, 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 build the infrastructure necessary to support its planned operations. The Company determined that the Luminant Lease Agreement and ~~no written agreements exist with respect~~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 ~~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~~various components of the ~~post Business Combination entity at a price~~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 ~~$10.00 per Private Unit. The Private Units would be identical~~approximately $12.6 million (the “Independent Collateral Amount”). Half, or approximately $6.3 million, of the Independent Collateral Amount was paid to ~~the Private Units issued~~Luminant on September 1, 2021 and is recorded in ~~the Private Placement. At June 30, 2021, no Working Capital Loans have been issued.~~

~~Administrative Support Agreement~~

~~The Company has agreed, commencing~~security deposits on the ~~effective date~~condensed consolidated balance sheets as 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 $10,000 per month for office space, utilities and secretarial and administrative support.

~~Table of Contents~~

~~Note 7 – Investment Held in Trust Account~~

~~As of June~~September 30, 2021, investment in the Company’s Trust Account consisted of $170,032,591 in U.S. Money Market funds and $0 in U.S. Treasury Securities. All of the U.S. Treasury Securities matured on April 22, 2021. The Company classifies its United States Treasury securities as

~~held-to-maturity~~

~~in accordance with FASB ASC 320 “Investments — Debt and Equity Securities”.~~

~~Held-to-maturity~~

treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities on June 30, 20212022 and December 31, ~~2020 are as follows:~~

Carrying

Value/Amortized

Cost

Gross

Unrealized

Gains

Gross

Unrealized

losses

Fair Value

as of
December 31,

2021

U.S. Money Market    $ 203    $ —      $ —      $ 203
U.S. Treasury Securities    170,027,139    4,916    (148 )    170,031,907

   $ 170,027,342    $ 4,916    $ (148 )    $ 170,032,110

Carrying
Value/Amortized
Cost

Gross
Unrealized
Gains

T-Bill

Maturity

Gross
Unrealized
Losses

Fair Value

as of

June 30,

2021

U.S. Money Market    $ 203    $ 2,908    $ 170,074,000 $ (44,520 ) $ 170,032,591
U.S. Treasury Securities    170,064,795    9,205    $ (170,074,000 ) —   —

   $ 170,064,998    $ 12,113    $ 0 $ (44,520 ) $ 170,032,591

~~Note 8 – Commitments~~

~~Registration Rights~~

2021.The ~~holders of the Founder Shares, as well as the holders of the Private Units and any Private Warrants or Private Units that may~~other half will be issued in payment of Working Capital Loans made to the Company (and all underlying securities), are entitled to registration rights pursuant to an agreement that was signed on the effective date of Public Offering. 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 monthsdue 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 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.~~

~~Table of Contents~~

~~Note 8 – Commitments –~~

~~(Cont.)~~

~~Business Combination Marketing~~Sales 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~~will pay the Agent a commission of up 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. a cash fee for such services upon the consummation of a Business Combination in an amount equal 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).~~

~~In connection with its proposed business combination with Cipher Mining Technologies, the Company has an agreement with the law firm representing it in the matter whereby the Company pays 60%~~shares of the actual time charges incurred each month. If the business combination is not completed, no additional fees are payable by the Company, however if the business combination is completed, the Company will own an additional amount equal to the amounts billed (so that the aggregate amount paid would be 120% of actual time charges). As of June 30, 2021, if the business combination had closed on that date, the Company would owe $321,545 in additional legal fees.

~~Note 9 – Stockholders’ Equity~~

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 June 30, 2021 and December 31, 2020, respectively, there were 4,478,000 and 4,478,000~~its Common Stock under the Sales Agreement. The Company has not sold any shares of ~~common stock issued and outstanding, excluding 17,000,000 and 17,000,000 shares, respectively, subject to possible redemption.~~

~~The holders~~its Common Stock under the Sales Agreement as of the ~~Founder Shares have agreed, subject to certain limited exceptions, not to transfer, assign or sell any~~issuance of ~~the Founder Shares until the earlier of earlier of (1) one year after the completion~~these unaudited condensed consolidated financial statements.

CIPHER MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 13. WARRANTS

Upon consummation of the Business Combination, ~~and (2) the date on which~~ the Company ~~consummates~~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 ~~liquidation, merger, capital stock exchange, reorganization, or other similar transaction after~~private placement that closed concurrently with GWAC’s initial public offering (the “Private Placement Warrants”). The Public and Private Placement Warrants entitle the holder to purchase one share of Common Stock at an exercise price of $11.50 per share, subject to adjustment. There were 8,500,000 Public Warrants and 114,000 Private Placement Warrants outstanding as of the Closing Date of the Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations 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.~~

~~Any permitted transferees will be subject to the same restrictions and other agreements of the initial stockholders with respect to any Founder Shares.~~

~~Note 10 – Warrants~~

~~Public 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 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.

~~Table of Contents~~

~~Note 10 – Warrants –~~

~~(Cont.)~~

~~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.

~~Private Warrants -~~

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 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.

~~Note 11 – 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. The Company identified one subsequent event on July 8, 2021 related toBitfury

After September 30, 2022, but before the issuance of these unaudited condensed consolidated financial statements, the

~~S-4~~

~~amendment which covered an amendment~~ Company made payments totaling approximately $2.1 million directly to Paradigm in 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 ~~Bitfury subscription agreement. On July 8, 2021, the Bitfury Subscription Agreement was amended and restated in its entirety to provide that the 25%~~

~~benefit-in-kind~~

~~discount~~Company under the ~~MSSA (in~~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 the Company by Luminant in September 2022 in consideration for ~~Bitfury’s purchase~~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 ~~an aggregate~~the change in fair value of ~~5,000,000 shares~~derivative asset in the condensed consolidated statements of ~~Good Works Common Stock at a purchase price of $10.00 per share) will instead be paid~~operations for the three and nine months ended September 30, 2022. The Company received and recorded $5.1 million as a ~~$50 million cash~~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 ~~which~~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 ~~made at closing (as defined in~~resolved.

On November 8, 2022, the ~~Merger Agreement) in form~~Company also received a letter from Luminant requesting the Company deposit to Luminant the remaining half of ~~cash and/or forgiveness~~the Independent Collateral Amount under the Luminant Power Agreement. The Company expects to deliver to Luminant the remaining half of ~~outstanding indebtedness owed by Cipher to Bitfury. Only July 15, 2021,~~

~~I-Bankers~~

~~agreed to loan Good Works Acquisition Corp $100,000 to fund its operating expenses. The loan is unsecured and~~

~~non-interest~~

~~bearing and matures on~~ the ~~earlier~~Independent Collateral Amount before the end of ~~December 31, 2021 or the date that the Business Combination is consummated.~~November 2022.

~~Table of Contents~~

~~ITEM~~

Item 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~This~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 with~~consummation of the ~~SEC. The following discussion should be read in conjunction with our financial statements~~Business Combination, the “Closing Date”) and ~~related notes thereto included elsewhere in this report.~~

~~This Amendment No. 1 (“Amendment No. 1”)~~ to ~~the Quarterly Report on Form~~

~~10-Q/A~~

~~amends the Quarterly Report on Form~~

~~10-Q/A~~

of Cipher Mining Inc. ~~(formerly known~~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.

Overview

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 partially-owned Alborz Facility in February 2022.

In connection with our planned buildout, we entered into the Standard Power Hosting Agreement, the WindHQ Joint Venture Agreement and 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 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.

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 “controlled company” within the meaning of Nasdaq listing rules and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies” in our 2021 Form 10-K.

The Business Combination

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 a wholly‑owned direct subsidiary of GWAC, and the Company, the parties entered into the business combination transaction pursuant to which Merger Sub merged with 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:

•

the cancellation of each issued and outstanding share of Cipher Common Stock; and

•

the conversion into the right to receive a number of shares of our Common Stock based upon the Exchange Ratio.

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 ~~six~~$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 ~~ended June 30, 2021~~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 ~~“Affected Period”~~“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.

Recent Developments

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 ~~filed~~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 ~~Securities~~Amended SuperAcme Agreement, SuperAcme has delivered 17,833 miners to date, at an aggregate value of approximately $53.6 million, and ~~Exchange Commission~~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 are in discussions with Bitfury USA Inc. (“~~SEC”~~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 ~~August 10, 2021 (the “Original Filing”).~~

~~The~~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 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 ~~has~~

~~re-evaluated~~

~~the Company’s application of ASC~~

~~480-10-S99-3A~~

~~to its accounting classification of the redeemable common stock, par value $0.001 per share (the “Public Shares”~~LLC (“Luminant”), ~~issued~~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) to the Luminant Power Agreement. We received and recorded $1.7 million as part of the ~~units~~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 ~~Company’s initial public offering (the “IPO”) on~~ERCOT market in September 2022 and October ~~22, 2020. Historically,~~2022.

We wholly dispute the claims made by Luminant and have been engaged in discussions with Luminant in an attempt to reach a ~~portion~~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 ~~Public Shares was classified as permanent equity~~Independent Collateral Amount under the Luminant Power Agreement. We expect to ~~maintain stockholders’ equity greater than $5 million on~~deliver to Luminant the ~~basis that~~remaining half of the ~~Company will not redeem its Public Shares in an amount that would cause its net tangible assets~~Independent Collateral Amount before the end of November 2022.

For further information, see Note 15 to our unaudited condensed consolidated financial statements.

Known Trends or Future Events

Impact of COVID-19 and Other Economic, Business and Political Conditions

Our results of operations could be ~~less than $5,000,001, as described~~adversely affected by general conditions in the ~~Company’s amended~~global economy and ~~restated certificate of incorporation (the “Charter”). Pursuant to such~~

~~re-evaluation,~~

the Company’s management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Charter. In addition, in connection with the change in presentation for the Public Shares, the Company determined it should restate its earnings per share calculation to allocate income and losses shared pro rata between the two classesglobal financial markets, including conditions that are outside of ~~shares (redeemable and non-redeemable). This presentation contemplates a Business Combination~~our control, such as the ~~most likely outcome, in which case, both classes~~outbreak and global spread of ~~shares share pro rata~~COVID-19. The COVID-19 pandemic that was declared on March 11, 2020 has caused significant economic dislocation in the ~~income~~United States and ~~losses~~globally as governments, including the United States, introduced measures aimed at preventing the spread of ~~the Company.~~

~~Therefore, on December 17, 2021, the Company’s management~~COVID-19. The spread of COVID-19 and the ~~audit committee~~imposition of ~~the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued unaudited interim financial statements included~~related public health measures have resulted in, and are expected to continue to result in, increased volatility and uncertainty in the ~~Company’s Quarterly Report on Form~~

~~10-Q,~~

as amended, for the six months ended June 30, 2021, filed with the SEC on August 10, 2021 should be restated to report all Public Shares as temporary equity and should no longer be relied upon. As such, the Company will restate its financial statements, related footnotes, and other financial data as of and for the period ended June 30, 2021 included in the Original Filling should be restated in the Form

~~10-Q/A~~

~~No. 1,~~cryptocurrency space. Any severe or prolonged economic downturn, as a result of ~~this error.~~

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 may experience disruptions to our business operations 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 ~~change in accounting classification~~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 ~~redeemable common stock did~~COVID-19 pandemic is still highly uncertain and there is no assurance that the COVID-19 pandemic or any other pandemic, or other unfavorable global economic, business or political conditions, will not ~~have any impact on our liquidity, cash flows, revenues or costs of operating~~materially and adversely affect our business, prospects, financial condition and operating results.

Change in Fiscal Year

Starting with the ~~Affected Period or in any~~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 fiscal year end was approved by the Board on September 23, 2021. Cipher Mining Technologies’ fiscal year previously ended on January 31.

Results of Operations

Since our inception on January 7, 2021 and until the time of the ~~periods included in Item 8, Financial Statements~~Business Combination, our activities were primarily organizational and ~~Supplementary Data in this filing. The change in accounting classification of the redeemable common stock does not impact the amounts previously reported~~those necessary to prepare for the ~~Company’s cash and cash equivalents, operating expenses or total cash flows from operations for any~~Business Combination. Following the Business Combination, our activities have been focused on the set-up of ~~these periods.~~

~~The restatement is more fully described in Note 3 of the notes to the condensed consolidated financial statements included herein.~~

~~Overview~~

~~We are a blank check company incorporated on June 24, 2020~~cryptocurrency mining data centers as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). We consummated our Public Offering (as defined below) on October 22, 2020 and are currently in the process of locating suitable targets for our business combination. We intend to use the cash proceeds from our Public Offering and the Private Placement described below as well as additional issuances, if any,part of our ~~capital stock, debt or a combination~~planned buildout, including entry into agreements with Bitmain, SuperAcme and Bitfury Top HoldCo and its subsidiaries (together the “Bitfury Group”) for supply of ~~cash, stock~~miners and ~~debt to complete the Business Combination.~~

We expect to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.

~~Results of Operations~~other equipment and ~~Known Trends or Future Events~~

~~The Company has neither engaged in any significant business operations nor generated any revenues to date. All activities to date relate to the Company’s formation~~services. For further details, see “—Contractual Obligations and ~~the Public Offering. We expect to generate~~

~~non-operating~~

~~income in the form of interest income on cash, cash equivalents, and marketable securities that are held in the Trust Account (as defined below).~~Other Commitments.” We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance). Our plan of operation for 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.

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

We generated no revenue during the three months ended September 30, 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 ~~due diligence~~each of the following: accounting and audit expenses, investor relations and specific costs of operating as ~~we locate~~ a ~~suitable Business Combination.~~

~~For~~public company.

Change in the ~~six~~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.

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 $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.

Factors Expected to Affect Our Future Results

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.

Liquidity and Capital Resources

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.

Cash Flows

The following table summarizes our sources and uses of cash (in thousands):


	Nine Months Ended			Eight Months Ended
	September 30, 2022			September 30, 2021
Net cash used in operating activities	$	(8,891	)	$	(27,100	)
Net cash used in investing activities		(169,762	)		(74,476	)
Net cash (used in) provided by financing activities		(3,077	)		383,853
Net (decrease) increase in cash and cash equivalents	$	(181,730	)	$	282,277

Operating Activities

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 ~~$2,058,979~~$3.1 million, an increase in prepaid expenses and other current assets of $14.9 million that was primarily due to business insurance, increased security deposits of $9.4 million and a combined increase in accounts payable and accrued expenses totaling $0.2 million.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 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.

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2022 was $3.1 million, which ~~consisted~~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.

Limited Business History; Need for Additional Capital

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 have a specific business plan and timetable to complete our 12-month plan of operation. We are in the process of an active operational buildout and anticipate that additional capital will be required to implement the buildout. See also “—Liquidity and Capital Resources.” We 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, we have incurred and expect to continue to incur significant costs related to becoming a public company. Accordingly, we may engage in equity or debt financings or enter into credit facilities for the above-mentioned or other reasons; however, we may not be able to timely secure additional debt or equity financings on favorable terms, if at all. If we raise additional funds through equity financing, our existing stockholders could experience significant dilution. Furthermore, any debt financing obtained by us in the 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 significantly limited and we may be required 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, Industry and Operations—We will need to raise additional capital, which may not be available on terms acceptable to us, or at all” in our 2021 Form 10-K.

Contractual Obligations and Other Commitments

We have a lease agreement for executive office space, with an effective term that commenced on February 1, 2022 and monthly rent payments of approximately $0.1 million commencing on June 1, 2022. The initial lease term is for a period of five years and four months.

Mining and Mining Equipment

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


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

__________

* 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 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.

On October 11, 2021, we entered into an 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 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 the Mining Equipment as well as any digital currency mined using the Mining Equipment as collateral in respect of 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.

Non-GAAP Financial Measures

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 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 ~~$76,329, business combination~~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 ~~expenses~~results to those of ~~$2,032,419 offset by interest income on marketable securities held~~our competitors.

Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. For example, we expect that share-based compensation expense, which is excluded from the ~~Trust Account of $49,769.~~

~~Proposed Business Combination~~

~~On March 5, 2021,~~non-GAAP financial measures, will continue to be a significant recurring expense over the ~~Company (or “Good Works”) entered into~~coming years and is an ~~Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “~~

~~Merger Agreement~~

~~”), by and among Currency Merger Sub, Inc., a Delaware corporation and a wholly-owned direct subsidiary~~important part of the ~~Company (“~~

~~Merger Sub~~

~~”), and Cipher Mining Technologies Inc., a Delaware corporation (“~~

~~Cipher~~

~~”).~~

~~The Merger Agreement and the transactions contemplated thereby were approved by the boards of directors of each of Good Works and Cipher.~~

~~The Business Combination~~

The Merger Agreement provides for, among other things, the following transactions at the closing: (i) Merger Sub will merge with and into Cipher, with Cipher as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Good Works (the “

~~Merger~~

”) and, in connection with the Merger, (ii) Good Works will change its name to Cipher Mining Inc. The Merger and the other transactions contemplated by the Merger Agreement are hereinafter referred to as the “

~~Business Combination~~

”.

~~Business Combination Consideration~~

~~Good Works Common Stock~~

~~”);~~compensation provided that the exchange ratio shall be adjusted as needed to ensure the aggregate Merger consideration received by the sole stockholder of Cipher equals two hundred million (200,000,000) shares of Good Works Common Stock (at a value of ten dollars ($10.00) per share).

~~Table of Contents~~

~~Governance~~

Good Works has agreed to take all action within its power as may be necessary or appropriate such that, effective immediately after the closing of the Business Combination, Cipher Mining Inc.’s board of directors shall consist of seven directors, which directors shall be nominated pursuant to the Merger Agreement, which nominees include one Good Works designee. Additionally, the current Cipher management team will move to Good Works in their current roles and titles.

~~Representations and Warranties; Covenants~~

~~HSR Act~~

~~”). In addition, Good Works has agreed to adopt an equity incentive plan as described in the Merger Agreement.~~

~~Conditions to Each Party’s Obligations~~

~~The obligation of Good Works and Cipher to consummate the Business Combination is subject~~ to certain ~~closing conditions, including, but not limited to, (i) the expiration or termination~~employees, officers and directors. Similarly, we expect that depreciation of the applicable waiting period under the HSR Act, (ii) the approval of Good Works stockholders, (iii) the approval of Cipher’s stockholders and (iv) the Registration Statement (as defined below) becoming effective.

In addition, the obligation of Good Works to consummate the Business Combination is subject to the fulfillment (or waiver) of other closing conditions, including, but not limited to, (i) the representations and warranties of Cipher being true and correct to the standards applicable to such representations and warranties and each of the covenants of Cipher having been performed or complied with in all material respect, (ii) the delivery to Good Works of evidence of satisfactory Tail Insurance (as defined in the Merger Agreement)fixed assets will continue to be bound as of the closing, and (iii) delivery of all ancillary agreements required to be executed and delivered by Cipher or its sole stockholder and (iv) no Material Adverse Effect (as defined in the Merger Agreement) shall have occurred.

The obligation of Cipher to consummate the Business Combination is also subject to the fulfillment (or waiver) of other closing conditions, including, but not limited to, (i) the representations and warranties of Good Works and Merger Sub being true and correct to the standards applicable to such representations and warranties and each of the covenants of Good Works having been performed or complied with in all material respects, (ii) the aggregate cash proceeds from Good Works trust account, together with the proceeds from the PIPE Financing (as defined below), equaling no less than $400,000,000 (after deducting any amounts paid to Good Works stockholders that exercise their redemption rights in connection with the Business Combination and net of unpaid transaction expenses incurred or subject to reimbursement by Good Works), (iii) Good Works total outstanding Indebtedness (as defined in the Merger Agreement) shall be less than twenty-five million dollars ($25,000,000.00), and (iv) the approval by Nasdaq of Good Works listing application in connection with the Business Combination

~~Termination~~

The Merger Agreement may be terminated under certain customary and limited circumstances prior to the closing of the Business Combination, including, but not limited to, (i) by mutual written consent of Good Works and Cipher, (ii) by Good Works if there is any breach of the representations and warranties of Cipher or if Cipher Mining fails to perform any covenant or agreement set forth in the Merger Agreement, in each case, such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iii) termination by Cipher if there is any breach of the representations and warranties of Good Works or if Good Works fails to perform any covenant or agreement set forth in the Merger Agreement, in each case, such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iv) subject to certain limited exceptions, by either Good Works or Cipher if the Business Combination is not consummated within six months of signing of the Merger Agreement, (v) by either Good Works or Cipher if certain required approvals are not obtained by Good Works stockholders after the conclusion of a meeting of Good Works stockholders held for such purpose at which such stockholders voted on such approvals, and (vi) termination by Good Works if Cipher’s sole stockholder does not deliver to Good Works a written consent approving the Business Combination within ten business days of the Consent Solicitation Statement (as defined in the Merger Agreement) being disseminated.

~~Table of Contents~~

If the Merger Agreement is validly terminated, none of the parties to the Merger Agreement will have any liability or any further obligation under the Merger Agreement other than customary confidentiality obligations, except in the case of Willful Breach (as defined in the Merger Agreement).

~~Good Works Sponsor Support Agreement~~

~~Concurrently with the execution of the Merger Agreement, Good Works, and~~

~~I-B~~

~~Good Works, LLC (the “~~

~~Sponsor~~

~~”) and certain other stockholders of Good Works entered into an Acquiror Support Agreement (the “~~

~~Acquiror Support Agreement~~

”) pursuant to which the parties agreed to, among other things, (i) vote at any meeting of the stockholders of Good Works all of its shares of Good Works Common Stock held of record or thereafter acquired in favor of the Proposals (as defined in the Merger Agreement), (ii) be bound by certain other covenants and agreements related to the Business Combination and (iii) be bound by certain transfer restrictions with respect to such securities, prior to the closing of the Business Combination, in each case, on the terms and subject to the conditions set forth in the Acquiror Support Agreement.

~~Cipher Support Agreement~~

~~Company Support Agreement~~

~~Restrictive Covenant Agreements~~

~~Concurrently with the execution of the Merger Agreement, Bitfury Top Holdco B.V. (“~~

~~Bitfury~~

~~”), Cipher’s sole stockholder, and Good Works entered into a Restrictive Covenant Agreement pursuant to which Bitfury agreed, during~~recurring expense over the term of the agreement and subject to the parameters and limitations set forth in the agreement, not to hire or solicit Cipher Mining Inc.’s employees, not to compete with Cipher Mining Inc. and not to disparage Cipher Mining Inc. The agreement will terminate upon the earlier of seven years from the date of its execution or the terminationuseful life of the ~~Master Services and Supply Agreement (the “~~

~~MSSA~~

~~”) between Bitfury Holding B.V. (“~~

~~BHBV~~

~~”) and Cipher. The MSSA is included as Exhibit F to Exhibit 2.1 hereto, and the terms of the MSSA~~assets. Our non-GAAP financial measures are incorporated herein by reference. Concurrently with the execution of the Merger Agreement, BHBV and Good Works entered into a Restrictive Covenant Agreement pursuant to which BHBV agreed, during the term of the agreement and subject to the parameters and limitations set forth in the agreement, not to hire or solicit Cipher Mining Inc.’s employees, not to compete with Cipher Mining Inc. and not to disparage Cipher Mining Inc.. The agreement will terminate upon the earlier of seven years from the date of its execution or the termination of the MSSA.

~~PIPE Financing (Private Placement)~~

~~Concurrently with the execution of the Merger Agreement, Good Works entered into subscription agreements (the “~~

~~Subscription Agreements~~

~~”) with certain investors (the “~~

~~PIPE Investors~~

~~PIPE Financing~~

~~”).~~

The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Good Works will grant the investors in the PIPE Financing certain customary registration rights.

~~Bitfury Private Placement~~

~~benefit-in-kind~~

~~commitment as payment for such shares (the “Bitfury Private Placement”) pursuant to a subscription agreement with Good Works (the “~~

~~Bitfury Subscription Agreement~~

”). Bitfury agreed to cause BHBV to discount the Service Fees (as that term is defined in the MSSA) charged by BHBV under the MSSA as follows: that the first $200,000,000 of Service Fees payable by Cipher to BHBV under the MSSA described above shall be subject to a discount of 25%,meant to be ~~applied at the point of invoicing~~considered in isolation and shown as a separate line item on each relevant invoice. For the avoidance of doubt, when the aggregate value of such discount reaches $50,000,000, such discount shall automatically cease to apply. Such discount shall constitute BHBV’s

~~benefit-in-kind~~

~~commitment as payment on behalf of its parent entity, for the issuance of the 5,000,000 shares of Good Works Common Stock pursuant to the Bitfury Private Placement.~~

~~On July 8, 2021, the Bitfury Subscription Agreement was amended and restated~~should be read only in ~~its entirety to provide that the 25%~~

~~benefit-in-kind~~

discount under the MSSA (in consideration for Bitfury’s purchase of an aggregate of 5,000,000 shares of Good Works Common Stock at a purchase price of $10.00 per share) will instead be paid as a $50 million cash payment, which will be made at closing (as defined in the Merger Agreement) in form of cash and/or forgiveness of outstanding indebtedness owed by Cipher to Bitfury.

~~Table of Contents~~

~~Lock-Ups~~

~~The Sponsor, certain holders of Good Works Common Stock, and Bitfury, Cipher’s sole stockholder immediately prior to the closing of the Business Combination, will enter into~~

~~lock-up~~

~~agreements (the “~~

~~Lock-Up~~

~~Agreements~~

~~”) and be subject to post-closing~~

~~lock-ups~~

~~one-half~~

~~lock-up~~

~~restriction, as described in the Bitfury Subscription Agreement); provided that the term of the~~

~~Lock-Up~~

~~shall be two years and the~~

~~Lock-up~~

~~will allow certain amounts of the shares to be publicly sold after 180 days, subject, in each case, to customary terms and conditions.~~

~~Amended and Restated Registration Rights Agreement~~

~~At the closing of the Business Combination, the Sponsor, certain stockholders of Good Works, and Bitfury (collectively, the “~~

~~Holders~~

~~”) will enter into an amended and restated registration rights agreement (the “~~

~~Registration Rights Agreement~~

~~”) with Good Works pursuant to which, among other things, the parties thereto will be granted certain customary registrant rights with respect to shares of Good Works Common Stock.~~

~~Liquidity and Capital Resources~~

~~As of June 30, 2021 we had $127,722 of cash.~~

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”).

~~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.

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. We may withdraw interest to pay our taxes and liquidation expenses if we are unsuccessful in completing 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 we may pay from funds from the Public Offering held outside of the trust account or from interest earned on the funds held 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 or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

~~Table of Contents~~

Further, our Sponsor, officers and directors or their respective affiliates may, but are not obligated to, loan us funds as may be required (the “Working Capital Loans”). If we complete a 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 June 30, 2021, no Working Capital Loans have been issued.

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, we may have insufficient funds 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 available to us, we 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.

~~Off-Balance~~

~~Sheet Arrangements~~

~~We did not have any~~

~~off-balance~~

~~sheet arrangement as of June 30, 2021.~~

~~Contractual Obligations~~

~~As of June 30, 2021, we did not have any long-term debt, capital or operating lease obligations.~~

We entered into an administrative services agreement pursuant to which we will pay an affiliate of one of our directors for office space and secretarial and administrative services provided to members of our management team, in an amount not to exceed $10,000 per month.

~~We have engaged~~

~~I-Bankers~~

~~as an advisor in connection~~conjunction with our acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar Business Combination with one or more businesses or entities. We will pay

~~I-Bankers~~

~~for such services a fee equal to 4.5% of the gross proceeds of the Public Offering.~~

~~Critical Accounting Policies~~

~~Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our unaudited~~consolidated financial ~~information. We describe our significant accounting policies in Note 2 – Summary of Significant Accounting Policies, of the Notes to Financial Statements~~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 ~~accounting policies require that management apply significant judgments~~non-GAAP loss from operations, which excludes the impact of (i) depreciation of fixed assets, (ii) non-cash change in ~~defining~~fair value of our derivative asset and (iii) stock compensation expense, to its most directly comparable GAAP measure for the ~~appropriate assumptions integral~~periods indicated:


	Three Months Ended September 30,						Nine Months Ended			Eight Months Ended
	2022			2021			September 30, 2022			September 30, 2021
Reconciliation of non-GAAP loss from operations:
Operating income (loss)	$	59,233		$	(2,283	)	$	12,353		$	(2,943	)
Depreciation		11			-			26			1
Change in fair value of derivative asset		(83,936	)		-			(83,936	)		-
Stock compensation expense		10,494			-			30,072			-
Non-GAAP loss from operations	$	(14,198	)	$	(2,283	)	$	(41,485	)	$	(2,942	)

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 ~~financial estimates. On an ongoing basis, management reviews~~ the ~~accounting policies, assumptions, estimates~~most directly comparable GAAP measures for the periods indicated:


	Three Months Ended September 30,						Nine Months Ended			Eight Months Ended
	2022			2021			September 30, 2022			September 30, 2021
Reconciliation of non-GAAP net loss:
Net income (loss)	$	59,292		$	(2,421	)	$	12,574		$	(3,082	)
Non-cash adjustments to net income (loss):
Depreciation		11			-			26			1
Change in fair value of derivative asset		(83,936	)		-			(83,936	)		-
Change in fair value of warrant liability		4			(113	)		115			(113	)
Stock compensation expense		10,494			-			30,072			-
Total non-cash adjustments to net income (loss)		(73,427	)		(113	)		(53,723	)		(112	)
Non-GAAP net loss	$	(14,135	)	$	(2,534	)	$	(41,149	)	$	(3,194	)

Reconciliation of non-GAAP basic and diluted net loss per share:
Basic and diluted net income (loss) per share	$	0.24		$	(0.01	)	$	0.05		$	(0.01	)
Depreciation of fixed assets (per share)		-			-			-			-
Change in fair value of derivative asset (per share)		(0.34	)		-			(0.34	)		-
Change in fair value of warrant liability (per share)		-			-			-			-
Stock compensation expense (per share)		0.04			-			0.12			-
Non-GAAP basic and diluted net loss per share	$	(0.06	)	$	(0.01	)	$	(0.17	)	$	(0.01	)

Critical Accounting Policies and ~~judgments to ensure that our~~Use of Estimates

The preparation of financial statements ~~are presented fairly and~~ in ~~accordance~~conformity with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subjectGAAP requires management to ~~an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates. For a full discussion of our accounting~~make estimates and assumptions that ~~have been identified as critical in~~affect the ~~preparation~~reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the ~~Company’s~~unaudited condensed consolidated financial statements ~~please refer~~and the reported amounts of expenses during the reporting period. A description of our significant accounting policies in included in our 2021 Form 10-K. You should read the 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 ~~Good Works Acquisition Corp.’s~~our audited consolidated financial statements included in our 2021 Form

~~10-K/~~ 10-K.

Cryptocurrencies

Cryptocurrencies, including Bitcoin, are 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 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.

Investment in equity investee

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 financial results, success of 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.

Leases

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

~~Amendment No. 2~~ 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.

Derivative Accounting

Luminant Power Agreement

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 the Electric Reliability Council of Texas (“ERCOT”) this year, ~~ended December 31, 2020.~~

~~Recent Accounting Standards~~

~~Our~~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 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 sell our electricity in the ERCOT market rather than take physical delivery, physical delivery is not probable through the entirety of the contract and therefore, 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.~~

~~Table~~condensed consolidated statements of ~~Contents~~

~~JOBS Act~~

~~The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.~~ 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.

Emerging Growth Company

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.

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk~~

~~As of June 30, 2021, we were not subject to any material market or interest rate risk. Following the consummation of our Public Offering, the net proceeds~~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.

~~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.~~

this item.

Item 4. Controls and ~~Procedures~~

~~Under~~Procedures.

Limitations on effectiveness of controls and procedures

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.

Evaluation of disclosure controls and procedures

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 June 30, 2021, as such term is~~(as defined in Rules

13a-15(e)

and

15d-15(e)

under the Exchange ~~Act.~~Act). Based ~~upon~~on that evaluation, and in light of the SEC Staff Statement, our Certifying Officers concluded that, solely due to the Company’s restatement of its financial statements to reclassify the Company’s certain complex financial instruments as described in the

~~10-K/A~~

~~filed on May 7, 2021, June 14, 2021, and January 21, 2022, a material weakness existed and our disclosure controls and procedures were not effective as of June 30, 2021.~~

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 officer concluded that, as of September 30, 2022, our disclosure controls and ~~accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.~~

procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

~~During the most recently completed fiscal quarter, other than the material weakness related to the warrant accounting as described in the Form~~

~~10-K/A~~

~~filed on January 21, 2022, 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. We plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

PART ~~II -~~ II—OTHER INFORMATION

Item 1. Legal ~~Proceedings~~

~~None.~~

Proceedings.

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.

Item 1A. Risk ~~Factors~~

~~Factors that could cause our actual~~Factors.

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 ~~Amendment No. 1 to~~2021 Form 10-K and as updated in Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form

~~10-K~~

~~filed with~~ 10-Q for the ~~SEC on May 7, 2021. 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 ~~SEC.~~

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.

Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds~~

~~In July 2020, certain~~Proceeds.

Recent Sales of ~~our initial stockholders purchased 4,312,500 founder shares for an aggregate purchase price~~Unregistered Equity Securities

None.

Use 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.

Proceeds

On October 22, 2020, ~~we consummated the Public Offering of 15,000,000 Units. The Units were~~GWAC completed its initial public offering (the “GWAC IPO”). All shares 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.

~~I-Bankers~~

~~was representative of the several underwriters. The securities sold in the Public Offering~~ were registered ~~under the Securities Act on~~pursuant to a registration statement on Form

S-1

( (File No.

333-248333).

~~The SEC~~, as amended (the “GWAC Registration Statement”), declared effective by the ~~registration statement effective~~SEC 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~~ Simultaneous with the ~~Public Offering.~~

~~I-Bankers,~~

~~representative~~consummation of the ~~several underwriters~~GWAC IPO, GWAC consummated a private placement of units to certain another investors.

There has been no material change in the ~~Public Offering, received a portion~~expected use 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)~~GWAC IPO 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~~in our ~~common stock or to their associates, or to our affiliates.~~

2021 Form 10-K.

Item 3. Defaults Upon Senior ~~Securities~~

Securities.

None.

Item 4. Mine Safety ~~Disclosures~~

Disclosures.

Not applicable.

Item 5. Other ~~Information~~

~~None.~~

Information.

Not applicable.

Item 6. ~~Exhibits~~

~~INDEX TO EXHIBITS~~


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 t o Section 906 of the Sarbanes-Oxley Act of 2002.~~

101.INS*		~~Inline XBRL Instance Document.~~

101.SCH*		~~Inline XBRL Taxonomy Extension Schema Document.~~

101.CAL*		~~Inline XBRL Taxonomy Extension Calculation Linkbase Document.~~

101.DEF*		~~Inline XBRL Taxonomy Extension Definition Linkbase Document.~~

101.LAB*		~~Inline XBRL Taxonomy Extension Label Linkbase Document.~~

101.PRE*		~~Inline XBRL Taxonomy Extension Presentation Linkbase Document.~~

104*		~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).~~

*	~~Filed herewith.~~

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

~~(1)~~

The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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.

SIGNATURES

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.


			CIPHER MINING INC.

Date: ~~January 21,~~November 14, 2022	By:	~~By:~~		/s/ Tyler Page
				Tyler Page
				Chief Executive Officer
				(Principal Executive Officer)



Date: ~~January 21,~~November 14, 2022	By:	~~By:~~		/s/ Edward Farrell
				Edward Farrell
				Chief Financial Officer
				(Principal Financial Officer)


			Page
~~PART I FINANCIAL INFORMATION~~
PART I.	FINANCIAL INFORMATION	3
~~Item 1.~~		~~Financial Statements~~
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets ~~as of June 30, 2021 (unaudited) and December 31, 2020~~		1	3
		Condensed Consolidated ~~Statement~~Statements of Operations ~~for the three and six months ended June 30, 2021 and June 30, 2020 (unaudited)~~		2	4
		Condensed Consolidated Statement of Changes in ~~Stockholders’~~Stockholder's Equity ~~for the six months ended June 30, 2021 (unaudited)~~(Deficit)		3	5
		Condensed Consolidated ~~Statement~~Statements of Cash Flows ~~for the six months ended June 30, 2021 and June 30, 2020 (unaudited)~~		4	7
		Notes to Unaudited Condensed Consolidated Financial Statements ~~(unaudited)~~		5	8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		21	27
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		26	39
Item 4.		Controls and Procedures		26	39

PART II II.	OTHER INFORMATION

Item 1.		Legal Proceedings		27	40
Item 1A.		Risk Factors		27	40
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		27	40
Item 3.		Defaults Upon Senior Securities		28	40
Item 4.		Mine Safety Disclosures		28	41
Item 5.		Other Information		28	41
Item 6.	Exhibits	~~Exhibits~~		28	42
Signatures			29	43


	June 30, 2021			December 31, 2020
	(Restated) (Unaudited)
Assets
Cash	$	127,722		$	1,276,364
Prepaid expenses		247,593			297,371

Total current assets		375,315			1,573,735
Cash and securities held in Trust Accoun t		170,032,591			170,027,342

Total Assets	$	170,407,906		$	171,601,077

Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses	$	918,867		$	129,388

Total current liabilities		918,867			129,388

Warrant liability		199,402			123,070

Total Liabilities		1,118,269			252,458

Commitments		0			0
Common stock subject to possible redemption, $0.001 par value, 17,000,000 and 17,000,000 shares at June 30,2021 and December 31, 2020, respectively, at redemption value		170,000,000			170,000,000
Stockholders’ Equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; NaN issued and outstanding		0—			0—
Common stock, $0.001 par value; 100,000,000 shares authorized; 4,478,000 and 4,478,000 shares of common stock issued and outstanding at June 30, 2021 and December 31, 2020, excluding 17,000,000 and 17,000,000 shares, respectively, subject to possible redemption		4,478			4,478
Additional paid-in capital		1,451,172			1,451,172
Accumulated Deficit		(2,166,013	)		(107,031	)

Total stockholders’ equity		(710,363	)		1,348,619

Total Liabilities and Stockholders’ Equity	$	170,407,906		$	171,601,077


	For the three months ended June 30,						For the six months ended June 30,
	2021			2020			2021			2020
	(As Restated)						(As Restated)
Operating expenses	$	230,534		$	2,000		$	462,987		$	2,000
Business combination expenses		859,590			0—			1,569,432			0—

Loss from operations		(1,090,124	)		(2,000	)		(2,032,419	)		(2,000	)

Other income (expense)
Interest income		12,113			0—			49,769			0—
Change in warrant liability		34,540			0—			(76,332	)		0—

Total other income (expense)		46,653			0—			(26,563	)		0—


Net loss	$	(1,043,471	)	$	(2,000	)	$	(2,058,982	)	$	(2,000	)

Basic and diluted weighted average redeemable common shares outstanding		17,000,000			0—			17,000,000			0—

Basic and diluted net loss per redeemable common share	$	(0.05	)	$	0—		$	(0.10	)	$	0—

Basic and diluted weighted average non-redeemable common shares outstanding		4,478,000			0—			4,478,000			0—

Basic and diluted net loss per non-redeemable common share	$	(0.05	)	$	0—		$	(0.10	)	$	0—


	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance - December 31, 2020		4,478,000	$	4,478	$	1,451,172	$	(107,031	)	$	1,348,619
Net loss		—		0—		0—		(1,015,511	)		(1,015,511	)
Balance - March 31, 2021		4,478,000		4,478		1,451,172		(1,122,542	)		333,108

Net loss		—		0—		0—		(1,043,471	)		(1,043,471	)
Balance - June 30, 2021	$	4,478,000	$	4,478	$	1,451,172	$	(2,166,013	)	$	(710,363	)


	For the six months ended June 30,
	2021			2020
	(As Restated)
Cash flows from operating activities:
Net loss	$	(2,058,982	)	$	(2,000	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Change in warrant liability		76,332			00
Interest earned on cash and marketable securities held in Trust Account		(5,249	)		0
Changes in operating assets and liabilities:
Prepaid expenses		49,778		$	(23,000	)
Accounts payable and accrued expenses		789,479			50,000

Net cash (used in) provided by operating activities		(1,148,642	)		25,000

Net change in cash		(1,148,642	)		25,000
Cash, beginning of the period		1,276,364			0

Cash, end of period	$	127,722		$	25,000


	Fair Value Measured as of June 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
U.S. Money Market held in Trust Account	$	170,032,591	$	0—	$	0—	$	170,032,591

	$	170,032,591	$	0—	$	0—	$	170,032,591


	As of December 31, 2020			As of June 30 2021
Exercise price	$	11.50		$	11.50
Stock price		9.95			9.95
Volatility		18.40	%		23.8	%
Probability of completing a business combination		88.30	%		90	%
Term		5.42			5.17
Risk-free rate		0.42	%		0.90	%
Dividend yield		0.00	%		0.00	%


Warrant liabilities at January 1, 2021	$	123,070
Change in fair value of warrant liabilities		110,872

Warrant liabilities at March 31, 2021	$	233,942
Change in fair value of warrant liabilities		(34,540	)

Warrant liabilities at June 30, 2021	$	199,402


	For the Three Months						For the Six Months
	ended June 30, 2021						ended June 30, 2021
	Redeemable			Non-redeemable			Redeemable			Non-redeemable
Basic and diluted net loss per share:
Numerator:
Allocation of net loss	$	(825,915	)	$	(217,556	)	$	(1,629,700	)	$	(429,282	)
Denominator:
Basic and diluted weighted average shares outstanding		17,000,000			4,478,000			17,000,000			4,478,000

Basic and diluted net loss per share	$	(0.05	)	$	(0.05	)	$	(0.10	)	$	(0.10	)


	As Previously Reported			Adjustment			As Restated
Balance - December 31, 2020 (Restated)	$	5,000,010		$	(3,651,391	)	$	1,348,619
Net loss (Restated)		(1,015,510	)		(1	)		(1,015,511	)
Change in value of common stock subject to possible redemption (Restated)		(3,651,392	)		3,651,392			—
Balance as of March 31, 2021	$	333,108		$	—		$	333,108
Net loss (Restated)		(1,043,471	)		—			(1,043,471	)
Balance as of June 30, 2021	$	(710,363	)	$	—		$	(710,363	)


	Earnings Per Share for Common Stock
	As Previously Reported (1)			Adjustment			As Restated
For the Three Months Ended June 30, 2021
Net loss	$	(1,043,472	)	$	1		$	(1,043,471	)
Basic and Diluted weighted-average redeemable common shares outstanding		17,000,000			—			17,000,000
Basic and Diluted net loss per redeemable common share	$	(0.00	)	$	(0.05	)	$	(0.05	)
Basic and Diluted weighted-average non-redeemable common shares outstanding		4,478,000			—			4,478,000
Basic and Diluted net loss per non-redeemable common shares	$	(0.23	)	$	0.18		$	(0.05	)


	Carrying Value/Amortized Cost		Gross Unrealized Gains		Gross Unrealized losses			Fair Value as of December 31, 2021
U.S. Money Market	$	203	$	—	$	—		$	203
U.S. Treasury Securities		170,027,139		4,916		(148	)		170,031,907

	$	170,027,342	$	4,916	$	(148	)	$	170,032,110


	Carrying Value/Amortized Cost		Gross Unrealized Gains		T-Bill Maturity			Gross Unrealized Losses			Fair Value as of June 30, 2021
U.S. Money Market	$	203	$	2,908	$	170,074,000		$	(44,520	)	$	170,032,591
U.S. Treasury Securities		170,064,795		9,205	$	(170,074,000	)		—			—

	$	170,064,998	$	12,113	$	0		$	(44,520	)	$	170,032,591