Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 04, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 001-39625 | |
Entity Registrant Name | CIPHER MINING INC. | |
Entity Central Index Key | 0001819989 | |
Current Fiscal Year End Date | --12-31 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1614529 | |
Entity Address, Address Line One | 1 Vanderbilt Avenue, Floor 54 | |
Entity Address, Address Line Two | Suite C | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10017 | |
City Area Code | 332 | |
Local Phone Number | 262-2300 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CIFR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 250,955,743 | |
Warrants | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per whole share | |
Trading Symbol | CIFRW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 1,741 | $ 11,927 |
Prepaid expenses and other current assets | 2,260 | 7,254 |
Bitcoin | 10,536 | 6,283 |
Derivative asset | 25,786 | 21,071 |
Total current assets | 42,317 | 47,735 |
Property and equipment, net | 267,790 | 191,784 |
Deposits on equipment | 1,675 | 73,018 |
Investment in equity investees | 33,098 | 37,478 |
Derivative asset | 49,466 | 45,631 |
Operating lease right-of-use asset | 4,635 | 5,087 |
Security deposits | 17,742 | 17,730 |
Total assets | 416,723 | 418,463 |
Current liabilities | ||
Accrued expenses and other current liabilities | 22,746 | 19,353 |
Finance lease liability, current portion | 11,189 | 2,567 |
Operating lease liability, current portion | 1,087 | 1,030 |
Warrant liability | 66 | 7 |
Total current liabilities | 38,695 | 40,326 |
Asset retirement obligation | 17,538 | 16,682 |
Finance lease liability | 10,836 | 12,229 |
Operating lease liability | 3,936 | 4,494 |
Deferred tax liability | 2,508 | 1,840 |
Total liabilities | 73,513 | 75,571 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding as of June 30, 2023 and December 31, 2022 | ||
Common stock, $0.001 par value, 500,000,000 shares authorized, 254,795,626 and 251,095,305 shares issued as of June 30, 2023 and December 31, 2022, respectively, and 250,413,891 and 247,551,958 shares outstanding as of June 30, 2023 and December 31, 2022, respectively | 254 | 251 |
Additional paid-in capital | 473,471 | 453,854 |
Accumulated deficit | (130,511) | (111,209) |
Treasury stock, at par, 4,381,735 and 3,543,347 shares at June 30, 2023 and December 31, 2022, respectively | (4) | (4) |
Total stockholders' equity | 343,210 | 342,892 |
Total liabilities and stockholders' equity | 416,723 | 418,463 |
Related party | ||
Current assets | ||
Accounts receivable | 1,614 | 1,102 |
Current liabilities | ||
Accounts payable | 1,554 | 3,083 |
Nonrelated Party | ||
Current assets | ||
Accounts receivable | 380 | 98 |
Current liabilities | ||
Accounts payable | $ 2,053 | $ 14,286 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 254,795,626 | 251,095,305 |
Common stock, shares outstanding | 250,413,891 | 247,551,958 |
Treasury stock, shares | 4,381,735 | 3,543,347 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue - bitcoin mining | $ 31,224 | $ 53,119 | ||
Costs and operating expenses (income) | ||||
Cost of revenue | 15,868 | 24,009 | ||
General and administrative | 21,335 | $ 16,704 | 38,755 | $ 34,094 |
Depreciation | 14,412 | 8 | 26,067 | 15 |
Change in fair value of derivative asset | (3,222) | (8,550) | ||
Power sales | (5,651) | (5,749) | ||
Equity in losses of equity investees | 1,431 | 12,079 | 2,181 | 12,232 |
Realized gain on sale of bitcoin | (4,185) | (8,206) | ||
Impairment of bitcoin | 2,828 | 535 | 4,633 | 539 |
Other gains | (2,260) | |||
Total costs and operating expenses | 42,816 | 29,326 | 70,880 | 46,880 |
Operating loss | (11,592) | (29,326) | (17,761) | (46,880) |
Other income (expense) | ||||
Interest income | 25 | 44 | 101 | 51 |
Interest expense | (485) | (886) | ||
Change in fair value of warrant liability | (22) | 63 | (59) | 111 |
Other expense | (12) | (12) | ||
Total other income (expense) | (494) | 107 | (856) | 162 |
Loss before taxes | (12,086) | (29,219) | (18,617) | (46,718) |
Current income tax expense | (31) | (48) | ||
Deferred income tax expense | (584) | (637) | ||
Total income tax expense | (615) | (685) | ||
Net loss | $ (12,701) | $ (29,219) | $ (19,302) | $ (46,718) |
Net loss per share - basic | $ (0.05) | $ (0.12) | $ (0.08) | $ (0.19) |
Net loss per share - diluted | $ (0.05) | $ (0.12) | $ (0.08) | $ (0.19) |
Weighted average shares outstanding - basic | 249,127,664 | 247,730,410 | 248,892,181 | 248,945,581 |
Weighted average shares outstanding - diluted | 249,127,664 | 247,730,410 | 248,892,181 | 248,945,581 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance at Dec. 31, 2021 | $ 353,531 | $ 252 | $ 425,438 | $ (72,156) | $ (3) |
Beginning balance, Shares at Dec. 31, 2021 | 252,131,679 | (2,852,259) | |||
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement | (3,052) | $ 2 | (3,053) | $ (1) | |
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement, Shares | 1,759,546 | (659,231) | |||
Common stock cancelled, Shares | 20 | ||||
Warrants exercised | (10,000) | $ (3) | (9,997) | ||
Warrants exercised, Shares | (2,890,173) | ||||
Share-based compensation | 19,578 | 19,578 | |||
Net Income (Loss) | (46,718) | (46,718) | |||
Ending balance at Jun. 30, 2022 | 313,339 | $ 251 | 431,966 | (118,874) | $ (4) |
Ending balance, Shares at Jun. 30, 2022 | 251,001,072 | (3,511,490) | |||
Beginning balance at Mar. 31, 2022 | 342,494 | $ 254 | 431,899 | (89,655) | $ (4) |
Beginning balance, Shares at Mar. 31, 2022 | 253,685,763 | (3,511,490) | |||
Common stock cancelled | (10,000) | $ (3) | (9,997) | ||
Common stock cancelled, Shares | (2,890,173) | ||||
Delivery of common stock underlying restricted stock units, Shares | 205,482 | ||||
Share-based compensation | 10,064 | 10,064 | |||
Net Income (Loss) | (29,219) | (29,219) | |||
Ending balance at Jun. 30, 2022 | 313,339 | $ 251 | 431,966 | (118,874) | $ (4) |
Ending balance, Shares at Jun. 30, 2022 | 251,001,072 | (3,511,490) | |||
Beginning balance at Dec. 31, 2022 | $ 342,892 | $ 251 | 453,854 | (111,209) | $ (4) |
Beginning balance, Shares at Dec. 31, 2022 | 251,095,305 | 251,095,305 | (3,543,347) | ||
Issuance of common shares, net of offering costs - At-the-market offering | $ 2,745 | $ 1 | 2,744 | ||
Issuance of common shares, net of offering costs - At-the-market offering, Shares | 978,207 | ||||
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement | (1,113) | $ 2 | (1,115) | ||
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement, Shares | 2,473,756 | (838,388) | |||
Share-based compensation | 17,988 | 17,988 | |||
Share-based compensation, Shares | 248,358 | ||||
Net Income (Loss) | (19,302) | (19,302) | |||
Ending balance at Jun. 30, 2023 | $ 343,210 | $ 254 | 473,471 | (130,511) | $ (4) |
Ending balance, Shares at Jun. 30, 2023 | 254,795,626 | 254,795,626 | (4,381,735) | ||
Beginning balance at Mar. 31, 2023 | $ 344,620 | $ 253 | 462,181 | (117,810) | $ (4) |
Beginning balance, Shares at Mar. 31, 2023 | 253,050,088 | (4,144,081) | |||
Issuance of common shares, net of offering costs - At-the-market offering | 2,745 | $ 1 | 2,744 | ||
Issuance of common shares, net of offering costs - At-the-market offering, Shares | 978,207 | ||||
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement | (632) | (632) | |||
Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement, Shares | 674,817 | (237,654) | |||
Share-based compensation | 9,178 | 9,178 | |||
Share-based compensation, Shares | 92,514 | ||||
Net Income (Loss) | (12,701) | (12,701) | |||
Ending balance at Jun. 30, 2023 | $ 343,210 | $ 254 | $ 473,471 | $ (130,511) | $ (4) |
Ending balance, Shares at Jun. 30, 2023 | 254,795,626 | 254,795,626 | (4,381,735) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (19,302) | $ (46,718) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 26,067 | 15 |
Amortization of operating right-of-use asset | 452 | 347 |
Share-based compensation | 17,988 | 19,578 |
Equity in losses of equity investees | 2,181 | 12,232 |
Impairment of bitcoin | 4,633 | 539 |
Non-cash lease expense | 878 | |
Deferred income taxes | 637 | |
Bitcoin received as payment for services | (52,836) | |
Change in fair value of derivative asset | (8,550) | |
Change in fair value of warrant liability | 59 | (111) |
Realized gain on sale of bitcoin | (8,206) | |
Changes in assets and liabilities: | ||
Proceeds from sale of bitcoin | 52,474 | |
Accounts receivable | (282) | |
Receivables, related party | (512) | (467) |
Prepaid expenses and other current assets | 4,994 | 4,134 |
Security deposits | (12) | (1,065) |
Accounts payable | (184) | 104 |
Accounts payable, related party | (1,529) | |
Accrued expenses and other current liabilities | 6,323 | 1,209 |
Lease liabilities | (594) | 271 |
Net cash provided by (used in) operating activities | 24,679 | (9,932) |
Cash flows from investing activities | ||
Deposits on equipment | (2,932) | (156,811) |
Purchases of property and equipment | (28,541) | (13,069) |
Capital distributions from equity investees | 3,807 | 10,065 |
Investment in equity investees | (3,095) | |
Prepayments on financing lease | (3,676) | |
Net cash used in investing activities | (34,437) | (159,815) |
Cash flows from financing activities | ||
Proceeds from the issuance of common stock | 2,821 | |
Offering costs paid for the issuance of common stock | (76) | |
Repurchase of common shares to pay employee withholding taxes | (1,114) | (3,052) |
Principal payments on financing lease | (2,059) | |
Net cash used in financing activities | (428) | (3,052) |
Net decrease in cash and cash equivalents | (10,186) | (172,799) |
Cash and cash equivalents, beginning of the period | 11,927 | 209,841 |
Cash and cash equivalents, end of the period | 1,741 | 37,042 |
Supplemental disclosure of noncash investing and financing activities | ||
Reclassification of deposits on equipment to property and equipment | 72,130 | |
Right-of-use asset obtained in exchange for finance lease liability | 14,212 | |
Finance lease costs in accrued expenses | 2,034 | |
Equity method investment acquired for non-cash consideration | 1,926 | 75,933 |
Sales tax accruals reversed due to exemption | 1,837 | |
Bitcoin received from equity investees | $ 317 | 1,326 |
Property and equipment purchases in accounts payable, accounts payable, related party and accrued expenses | 5,459 | |
Deposits on equipment in accounts payable and accounts payable, related party | 10,972 | |
Common stock cancelled | 10,000 | |
Right-of-use asset obtained in exchange for operating lease liability | 5,859 | |
Investment in equity investees in accrued expenses | 4,345 | |
Reclassification of deferred investment costs to investment in equity investees | $ 174 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (12,701) | $ (29,219) | $ (19,302) | $ (46,718) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization
Organization | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | NOTE 1. ORGANIZATI ON Nature of operations Cipher Mining Inc. (“Cipher” or the “Company”) is an emerging technology company that develops and operates industrial scale bitcoin mining data centers. The Company operates or jointly operates four bitcoin mining data centers in Texas including one wholly-owned data center and three partially-owned data centers that were acquired through investments in joint ventures. Bitcoin mining is the Company’s principal revenue generating business activity. The Company began deployment of capacity in the first quarter of 2022, with mining operations beginning at the partially-owned Alborz facility in February 2022 (the “Alborz Facility”). In August 2022, installation of the last mining rigs delivered to the Alborz Facility was completed. In October 2022, installation at the partially-owned Bear facility (the “Bear Facility”) and the partially-owned Chief facility (the “Chief Facility”) was also completed. In November 2022, the Company began bitcoin mining operations at the wholly-owned Odessa facility (the “Odessa Facility”) and is continuing to expand those operations. Cipher Mining Technologies Inc. (“CMTI”) 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”). Bitfury Top HoldCo (together with Bitfury Holding B.V., a subsidiary of Bitfury Top HoldCo, and referred to herein as “Bitfury Holding”) beneficially owned approximately 80.6 % of the Company’s common stock, $ 0.001 par value per share (“Common Stock”), as of June 30, 2023, with sole voting and sole dispositive power over those shares and, as a result, Bitfury Top HoldCo has control of the Company as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). As of August 4, 2023, pursuant to that certain Lock-up Agreement, dated as of August 26, 2021, by and between GWAC and Bitfury Top HoldCo , 129,017,513 of Bitfury Top HoldCo’s shares of the Company’s Common Stock remain subject to lock-up w hich, subject to any potential modifications under the waiver agreement with Bitfury Top HoldCo entered into on April 8, 2022 , is expected to expire on August 27, 2023 . Out-of-period-adjustments Cost of revenue and power sales for the six months ended June 30, 2023 included out-of-period adjustments of approximately $ 2.0 million and $ 1.6 million, respectively, that increased both cost of revenue and power sales on the unaudited condensed consolidated statements of operations for the six months ended June 30, 2023 , and resulted in net increases to operating loss and loss before taxes of approximately $ 0.4 million during the same period. These out-of-period adjustments related to power costs and power sales for the year ended December 31, 2022 at the Company’s Odessa Facility, which are invoiced on a net basis by the Company’s power provider. Management evaluated the impact of this error on the Company’s previously issued audited consolidated financial statements for the year ended December 31, 2022, as well as on its unaudited condensed consolidated financial statements for the six months ended June 30, 2023, assessing the error both quantitatively and qualitatively, and concluded that the error was not material to the financial statements for either period. Risks and uncertainties Liquidity, capital resources and limited business history The Company has historically experienced net losses and negative cash flows from operations. As of June 30, 2023, the Company had approximate balances of cash and cash equivalents of $ 1.7 million, working capital of $ 3.6 million, total stockholders’ equity of $ 343.2 million and an accumulated deficit of $ 130.5 million. For fiscal years ended December 31, 2022 and 2021, the Company, in large part, relied on proceeds from the consummation of its business combination with Good Works Acquisition Corp. (“GWAC”) to fund its operations; however, during the six months ended June 30, 2023, the Company utilized proceeds from sales of bitcoin earned by or received from its bitcoin mining data centers to support its operating expenses. During the six months ended June 30, 2023, the Company sold 2,063 bitcoin for proceeds of approximately $ 52.5 million . Additionally, in January 2023, the Company was approached by a third party that offered to purchase coupons that the Company had received from Bitmain Technologies Limited (“Bitmain”) during fiscal year 2022. These transferrable coupons provided the Company with potential discounts of approximately $ 10.9 million that could only be redeemed with the purchase of additional miners from Bitmain prior to the coupons’ April 2023 expiration date. As the Company did not intend to purchase additional Bitmain miners prior to the expiration date of the coupons, it sold the coupons to the interested third party for proceeds of approximately $ 2.3 million, which it recorded in other gains within costs and operating expenses (income) on its unaudited condensed consolidated statement of operations during the six months ended June 30, 2023. The Company monitors its balance sheet on an ongoing basis to determine the proper mix of bitcoin retention and bitcoin sales to support its cash requirements and ongoing operations. Bitcoin is classified as a current asset on the Company’s balance sheets due to its intent and ability to sell bitcoin to support operations when needed. Operating activities provided approximately $ 24.7 million of cash during the six months ended June 30, 2023. During the six months ended June 30, 2023, the Company paid approximately $ 2.9 million of deposits for mining equipment and reclassified approximately $ 72.1 million to property and equipment in connection with the receipt of miners and other equipment at the Odessa Facility. As of June 30, 2023 , the Company had 61,024 miners located at the Odessa Facility and had 12,953 , 3,254 and 3,254 contributed miners at its partially-owned Alborz Facility, Bear Facility and Chief Facility, respectively. As of June 30, 2023, the Company had approximately $ 1.7 million of deposits on equipment on its unaudited condensed consolidated balance sheet, primarily related to shipping costs associated with miners to be delivered under the Canaan Agreement (defined below). On May 4, 2023, the Company entered into an agreement with Canaan Creative Global Pte. Ltd. (“Canaan”) to purchase 11,000 new A1346 model miners (the “Canaan Agreement”), all of which were delivered prior to June 30, 2023 and have been installed at the Odessa Facility. Because the Company is paying for the Canaan miners over time, the Company does not yet hold title to the miners. The Company paid an initial 10 % deposit plus 18 % of the total purchase price prior to delivery, and is required to pay monthly installment payments for the Canaan miners through November 2023, at which time title to the miners will transfer to the Company. The Company expects to fund its ongoing payment obligations for the purchase through its ongoing operations, including by selling bitcoin generated at its data centers. Management intends to continue with the infrastructure buildout at the Odessa Facility to get the site to full capacity in support of the Company’s current business plans. Management believes that the Company’s existing financial resources, combined with projected cash and bitcoin inflows from its data centers and its intent and ability to sell bitcoin received or earned, will be sufficient to enable the Company to meet its operating and capital requirements for at least 12 months from the date these unaudited condensed consolidated financial statements are issued. There is limited historical financial information about the Company upon which to base an evaluation of its performance. The business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in exploration and/or development, and possible cost overruns due to price and cost increases in services. The Company’s management has no current intention of entering into a merger or acquisition within the next 12 months. The Company may require additional capital to pursue certain business opportunities or respond to technological advancements, competitive dynamics or technologies, challenges, acquisitions or unforeseen circumstances. Additionally, the Company has incurred and expects to continue to incur significant costs related to operating as a public company. Accordingly, the Company may engage in equity or debt financings or enter into credit facilities for the above-mentioned or other reasons; however, the Company may not be able to timely secure additional debt or equity financings on favorable terms, if at all. If the Company raises additional funds through equity financing, its existing stockholders could experience significant dilution. Furthermore, any debt financing obtained by the Company in the future could involve restrictive covenants relating to the Company’s capital raising activities and 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, which may adversely affect the Company’s business plan. Macroeconomic conditions: COVID-19 and other economic, business and political conditions The Company’s 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 any epidemics, pandemics or disease outbreaks or other public health conditions. For example, the COVID-19 pandemic (“COVID-19”) that was declared on March 11, 2020 has caused significant economic dislocation in the United States (“U.S.”) and globally as governments across the world, including the U.S., introduced measures aimed at preventing the spread of COVID-19. While most policies and regulations implemented by governments in response to COVID-19 have been lifted, they have had a significant impact, both directly and indirectly, on global business and commerce. The Company may experience disruptions to its business operations resulting from supply 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. If the Company is unable to effectively set up and service its miners, its ability to mine bitcoin will be adversely affected. There is no assurance that COVID-19 or any other pandemic, or other unfavorable global economic, business or political conditions, such as a rise in energy prices, a slowdown in the U.S. or international economy, high inflation rates or other factors, will not materially and adversely affect the Company’s business, prospects, financial condition and operating results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The Company prepares its unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”) as determined by the FASB and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and its controlled subsidiary, CMTI. All intercompany transactions and balances have been eliminated. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of 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 its derivative asset and warrant liability under Level 3 of the fair value hierarchy, useful lives of property and equipment, the asset retirement obligation 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 is included in the Company’s 2022 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 2022 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 2022 Form 10-K. Segment information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is comprised of several members of its executive management team. The Company views its operations and manages its business in one segment. Net loss per share Basic net loss per share is computed by dividing net loss allocated to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share adjusts net loss and net loss per common share for the effect of all potentially dilutive shares of Common Stock. Potential common shares consist of the Company’s outstanding public and private placement warrants to purchase Common Stock, as well as unvested restricted stock units (“RSUs”). Basic net loss per common share is the same as dilutive net loss per common share for all periods presented as the inclusion of all potential common shares would have been antidilutive. The following table presents the common shares that are excluded from the computation of diluted net loss per common share at June 30, 2023 and 2022, because including them would have been antidilutive. June 30, 2023 2022 Public warrants 8,499,980 8,499,980 Private placement warrants 114,000 114,000 Unvested RSUs 23,134,869 12,975,614 31,748,849 21,589,594 Recently issued and adopted accounting pronouncements In June 2016, the FASB issued Accounting Standards Update ASU No. 2016‑13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which was codified with its subsequent amendments as ASC Topic 326, Financial Instruments – Credit Losses (“ASC 326”). ASC 326 seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, including trade receivables, and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require an entity to replace the incurred loss impairment methodology in other GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The adoption of this guidance on January 1, 2023 did not have a material impact on the Company’s unaudited condensed consolidated financial statements and disclosures. The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change. The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on its condensed consolidated financial statements. |
Bitcoin
Bitcoin | 6 Months Ended |
Jun. 30, 2023 | |
CryptocurrenciesAbstract | |
Bitcoin | NOTE 3. BITCOIN The following table presents information about the Company’s bitcoin (in thousands): Balance as of January 1, 2023 $ 6,283 Bitcoin received from equity investees 317 Revenue recognized from bitcoin mined, net of receivable 52,836 Proceeds from sale of bitcoin, net of realized gain ( 44,267 ) Impairment of bitcoin ( 4,633 ) Balance as of June 30, 2023 $ 10,536 The fair value of the Company’s bitcoin as of June 30, 2023 was approximately $ 12.3 million and was estimated using the closing price of bitcoin, which is a Level 1 input (i.e., an observable input such as a quoted price in an active market for an identical asset). During the three and six months ended June 30, 2023, the Company recorded impairment charges on its bitcoin holdings of approximately $ 2.8 million and $ 4.6 million , respectively. Impairment charges were approximately $ 0.5 million for both the three and six months ended June 30, 2022 . |
Derivative Asset
Derivative Asset | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Asset | NOTE 4. DERIVATIVE ASSET 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 and August 26, 2022 (as amended, the “Luminant Power Agreement”), for the supply of a fixed amount of electric power to the Odessa Facility at a fixed price for a term of five years , subject to certain early termination exemptions. The Luminant Power Agreement provides for a subsequent automatic annual renewal unless either party provides written notice to the other party of its intent to terminate the agreement at least six months prior to the expiration of the then current term. Starting from July 1, 2022 , and prior to the receipt of interconnection approval from the Electric Reliability Council of Texas (“ERCOT”), under the take or pay framework of the Luminant Power Agreement and pursuant to the ramp-up schedule agreed to between Luminant and Cipher, 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 met 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 therefore, the Company’s management does not believe 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 its 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 16. Fair Value Measurements . 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 bitcoin at the Odessa Facility during peak times in order to most efficiently manage the Company’s operating costs. The Company earned approximately $ 5.7 million and $ 5.7 million , respectively from power sales for the three and six months ended June 30, 2023, and recorded this amount in power sales within costs and operating expenses (income) on the unaudited condensed consolidated statement of operations, with the corresponding cost of the power sold recorded in cost of revenue. See Note 1. Organization for information regarding the out-of-period adjustments recorded during the six months ended June 30, 2023 , which affected cost of power, power sales, net operating loss and net loss on the Company’s unaudited condensed consolidated statement of operations. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following (in thousands): June 30, 2023 December 31, 2022 Miners and mining equipment $ 158,318 $ 79,909 Leasehold improvements 135,209 94,807 Software 1,054 596 Office and computer equipment 279 88 Autos 73 73 Furniture and fixtures 88 69 Construction-in-progress 2,167 20,437 Total cost of property and equipment 297,188 195,979 Less: accumulated depreciation ( 29,398 ) ( 4,195 ) Property and equipment, net $ 267,790 $ 191,784 During the six months ended June 30, 2023 and 2022, the Company placed approximately $ 34.4 million and nil , respectively, of construction-in-progress into service at the Odessa Facility. Depreciation expense was approximately $ 14.4 million and $ 26.1 million , respectively, for the three and six months ended June 30, 2023 and included approximately $ 0.4 million and $ 0.9 million , respectively, of accretion expense related to the Company’s asset retirement obligation. Depreciation expense was immaterial for the three and six months ended June 30, 2022. During the first quarter of fiscal 2023, the Company received the remaining 17,094 MicroBT M30S, M30S+ and M30S++ miners (“MicroBT miners”) related to t he framework agreement of September 2021 with SuperAcme Technology (Hong Kong) Limited (“SuperAcme”), which was amended and restated by the Amended and Restated Framework Agreement on Supply of Blockchain Servers (the “Amended and Restated Framework Agreement”), dated as of May 6, 2022, and subject to the Supplementary Agreement of the Framework Agreement on Supply of Blockchain Servers (the “Supplementary Agreement). These MicroBT miners received during the first quarter of fiscal 2023 had an aggregate cost of approximately $ 50.7 million and were purchased by the Company at the new fixed and floating price terms set forth in the Supplementary Agreement. The Company also received 4,622 Antminer S19j Pro (100 TH/s) (“S19j Pro”) miners from Bitmain with a cost basis of approximately $ 1.6 million during the first quarter of fiscal 2023. As of June 30, 2023 , the Company had a total of 35,117 MicroBT miners, 14,907 S19j Pro miners and 11,000 Canaan A1346 model miners for a total of 61,024 miners at its Odessa Facility. See additional information regarding the Canaan miners in Note 1. Organization and Note 11. Leases . |
Deposits on Equipment
Deposits on Equipment | 6 Months Ended |
Jun. 30, 2023 | |
Disclosure Deposits On Equipment [Abstract] | |
Deposits on Equipment | NOTE 6. DEPOSITS ON EQUIPMENT In November and December 2022, the Company agreed to purchase 5,000 and 2,200 , respectively, S19j Pro miners from Bitmain. The Company utilized accumulated Bitmain credits and coupons for the majority of the purchase price for these miners and has no further payments due in respect of these orders. Information regarding the quantity of Bitmain miners received pursuant to these agreements during the six months ended June 30, 2023 is disclosed in Note 5. Property and Equipment . As of June 30, 2023 , the Company did not have material open purchase agreement commitments. As of June 30, 2023, deposits on equipment was $ 1.7 million , primarily related to shipping costs and peripheral cables associated with the equipment from the Canaan Agreement described in Note 1. Organization and further in Note 11. Leases . |
Security Deposits
Security Deposits | 6 Months Ended |
Jun. 30, 2023 | |
Deposit Assets Disclosure [Abstract] | |
Security Deposits | NOTE 8. SECURITY DEPOSITS The Company’s security deposits consisted of the following (in thousands): June 30, 2023 December 31, 2022 Luminant Power Purchase Agreement Independent Collateral Amount $ 12,554 $ 12,554 Luminant Purchase and Sale Agreement collateral 3,063 3,063 Operating lease security deposits 967 960 Other deposits 1,158 1,153 Total security deposits $ 17,742 $ 17,730 |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental financial information | NOTE 9. SUPPLEMENTAL FINANCIAL INFORMATION As of June 30, 2023 and December 31, 2022, the Company had approximately $ 2.3 million and $ 7.3 million , respectively, of prepaid expenses and other current assets, which was primarily related to prepaid insurance other than approximately $ 1.2 million of bitcoin temporarily held for the Company’s joint venture partner, WindHQ LLC (“WindHQ”), as of December 31, 2022. The Company’s accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2023 December 31, 2022 Taxes (primarily sales tax) $ 12,929 $ 18,798 Power costs 3,374 - Finance lease (1) 2,373 339 Legal settlement (2) 2,000 - Employee compensation 1,045 - Legal fees 376 215 Other 649 1 Total accrued expenses and other current liabilities $ 22,746 $ 19,353 __________ (1) See Note 11. Leases for additional information regarding the Company’s finance leases. (2) See Note 12. Commitments and Contingencies for additional information regarding the legal settlement accrual as of June 30, 2023 . |
Investment in Equity Investees
Investment in Equity Investees | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Investees | NOTE 7. INVESTMENTS IN EQUITY INVESTEES The Company uses the equity method of accounting to account for its 49 % equity interest in its partially owned mining operations Alborz LLC, Bear LLC and Chief, LLC (the “Data Center LLCs”). The Company recognized a total of approximately $ 1.4 million and $ 2.2 million of net losses in equity in losses of equity investees within the condensed consolidated statements of operations during the three and six months ended June 30, 2023, respectively, and $ 12.1 million and $ 12.2 million of net losses in equity in losses of equity investees during the three and six months ended June 30, 2022, respectively. Cryptocurrency mining operations for the Data Center LLCs consisted only of minimal activity at the Alborz Facility for the six months ended June 30, 2022. During fiscal year 2022, the Company contributed miners and mining equipment to the Alborz, Bear and Chief Facilities. The majority of these contributed miners had a fair value that was lower than the cost paid by the Company to obtain them, and the Company recognized losses at the time of the contributions, resulting in basis differences related to the Company’s investments in Alborz LLC, Bear LLC and Chief LLC, all of which recorded the contributions of equipment from the Company at the historical cost paid by the Company to obtain the equipment. As Alborz LLC, Bear LLC and Chief LLC depreciate the historical cost of these miners on their respective financial statements over the expected depreciation period of five years , the Company accretes these basis differences over the same period and records the accretion amount for each reporting period within equity in losses of equity investees on its statements of operations until these miners are fully depreciated and the corresponding basis differences are fully accreted. As of June 30, 2023, the Company had remaining basis differences totaling approximately $ 28.1 million that have not yet been accreted. Accretion recorded by the Company during the six months ended June 30, 2023 is shown in the table below and was recorded within equity in losses of equity investees on the statement of operations. Activity in the Company’s investments in equity investees during the six months ended June 30, 2023 consisted of the following (in thousands): Balance as of January 1, 2023 $ 37,478 Cost of miners and mining equipment contributed 1,925 Accretion of basis differences related to miner contributions 3,340 Capital distributions ( 3,807 ) Bitcoin received from equity investees ( 317 ) Equity in net losses of equity investees ( 5,521 ) Balance as of June 30, 2023 $ 33,098 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10. RELATED PARTY TRANSACTIONS Related party receivables The Company recorded related party receivables of approximately $ 1.6 million and $ 1.1 million as of June 30, 2023 and December 31, 2022, respectively, related to expenses paid on behalf of the Data Center LLCs for which it expects to be reimbursed. Purchase commitments, deposits on equipment and related party payables The Company entered into two agreements with Bitfury USA Inc. (“Bitfury USA”), made under, and as a part of, the Master Services and Supply Agreement to purchase BBACs. Additionally, Bitfury USA contracted with third-party vendors for the purchase of equipment and the receipt of services related to Cipher’s future mining operations. Pursuant to one of these arrangements between Bitfury USA and a third-party vendor, Paradigm Controls of Texas, LLC (“Paradigm”), the Company made payments directly to Paradigm in place of Bitfury USA, in respect of manufacturing services for BBACs, totaling approximately $ 5.8 million during the six months ended June 30, 2023 and the Company’s obligations to Bitfury USA under the Master Services and Supply Agreement were reduced by the same amount. As of December 31, 2022 , in relation to the Company assisting WindHQ with the liquidation of some of WindHQ’s bitcoin holdings, the Company had approximately $ 1.2 million of bitcoin and approximately $ 0.3 million of proceeds received, but not yet transferred to WindHQ, respectively, recorded in accounts payable, related party on its consolidated balance sheet. During the six months ended June 30, 2023, all of the bitcoin held by the Company on behalf of WindHQ was liquidated and all proceeds received from the liquidation were forwarded to WindHQ, leaving no remaining amount payable to WindHQ in accounts payable, related party as of June 30, 2023 on the Company’s unaudited condensed consolidated balance sheet. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | NOTE 11. LEASES Combined Luminant Lease Agreement 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 for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842 (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. 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 $ 15.0 million). The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of five years , with renewal provisions that are aligned with the Luminant Power Agreement. Despite lease commencement in November 2022, the Company has not been required by Luminant to make any lease payments for the substation, therefore the Company is continuing to accrue amounts due under the Combined Luminant Lease Agreement in accrued expenses and other current liabilities on its unaudited condensed consolidated balance sheet. The Company expects to begin making monthly lease payments in August 2023. 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. Canaan Agreement As described in Note 1. Organization , the Company entered into the Canaan Agreement to purchase 11,000 new A1346 model miners, all of which were received prior to June 30, 2023 and have been installed at the Odessa Facility. The Company was required to pay a total of approximately $ 4.1 million prior to delivery of the miners. The Company will also make six monthly installment payments of approximately $ 1.7 million each month, through November 2023, at which time the Company will obtain title to the miners. The Company determined that the Canaan Agreement contains embedded leases as defined in ASC 842, one for each batch of miners delivered. Based on the terms of the arrangement and intent of the parties, the Company has classified the leases of the Canaan miners as finance leases. Each lease commences upon delivery of the associated batch, as the delivery date represents the date upon which the Company obtains the right to use the assets for a period of time in exchange for consideration. As a result of all 11,000 miners being delivered to the Company in June 2023, the Company determined there will effectively be a single lease commencement date for all of the underlying right-of-use assets. The lease term for the Canaan miners will be six months, aligning with the final payment and title transfer date. Upon title transfer, the Company will continue depreciating the residual value of the miners over their remaining useful life. Office headquarters lease The Company entered into an operating lease for office space located in New York. The lease has an initial term of 64 months and commenced on February 1, 2022 . The lease does not provide the Company with renewal options. Additional lease information Components of the Company’s lease expenses are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Finance leases: Amortization of ROU assets (1) $ 1,027 $ - $ 1,816 $ - Interest on lease liability 477 - 878 - Total finance lease expense 1,504 - 2,694 - Operating leases: Operating lease expense 467 371 921 618 Variable lease cost - - - - Total operating lease expense 467 371 921 618 Total lease expense $ 1,971 $ 371 $ 3,615 $ 618 __________ (1) Amortization of finance lease ROU assets is included within depreciation expense. The Company did no t incur any variable lease costs during any of the periods presented. Other information related to the Company’s leases is shown below (dollar amounts in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating cash flows - operating lease $ 396 $ - $ 791 $ - Right-of-use assets obtained in exchange for operating lease liabilities $ - $ - $ - $ 5,859 June 30, 2023 December 31, 2022 Weighted-average remaining lease term – finance lease (in years) 2.7 4.7 Weighted-average remaining lease term – operating lease (in years) 3.9 4.4 Weighted-average discount rate – finance lease 11.0 % 11.0 % Weighted-average discount rate – operating lease 10.9 % 10.9 % Finance lease ROU assets (1) $ 26,868 $ 14,471 __________ (1) As of June 30, 2023 and December 31, 2022, the Company had recorded accumulated amortization of approximately $ 2.3 million and $ 0.5 million , respectively, for the finance lease ROU assets. Finance lease ROU assets are recorded within property and equipment, net on the Company’s consolidated balance sheets. As of June 30, 2023, future minimum lease payments during the next five years are as follows (in thousands): Finance Lease Operating Lease Total Remaining Period Ended December 31, 2023 $ 10,511 $ 790 $ 11,301 Year Ended December 31, 2024 4,068 1,581 5,649 Year Ended December 31, 2025 4,068 1,581 5,649 Year Ended December 31, 2026 4,068 1,581 5,649 Year Ended December 31, 2027 2,712 659 3,371 Total lease payments 25,427 6,192 31,619 Less present value discount ( 3,402 ) ( 1,169 ) ( 4,571 ) Total $ 22,025 $ 5,023 $ 27,048 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12. COMMITMENTS AND CONTINGENCIES 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 June 30, 2023. The Company does not anticipate recognizing any significant losses relating to these arrangements. Contingencies The Company, and its subsidiaries, are subject at times to various claims, lawsuits and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the Company’s insurance program. The Company maintains property and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance, the Company may establish an accrual for such loss, retention or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying unaudited condensed consolidated balance sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statements, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying unaudited condensed consolidated statements of operations. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. On the basis of current information, the Company does not believe there is a reasonable possibility that a material loss, if any, will result from any claims, lawsuits and proceedings to which the Company is subject to either individually, or in the aggregate. Luminant Power Agreement On November 18, 2022, Luminant filed suit against CMTI in the 95 th District Court of Dallas County, Texas, asserting Texas state law claims for declaratory judgment and “money had and received”, seeking recoupment and return of money previously paid by Luminant to CMTI in connection with Luminant’s (and its affiliates’) construction and energization of Cipher’s bitcoin mining data center in Odessa, Texas. These prior payments were (i) the sum of $ 5.1 million paid to CMTI in September 2022 pursuant to a contractual provision requiring such payment in the parties’ written and executed August 25, 2022 Third Amendment to the Luminant Power Agreement, and (ii) the sum of $ 1.7 million also paid to CMTI in September 2022, as agreed by the parties, for electrical power sold by Luminant for CMTI’s benefit into the open market prior to the final energization of the Company’s facility. Luminant contends that such payments were mistaken because, although voluntarily made by Luminant, they were not actually due under the terms of the Luminant Power Agreement, as amended. The Company filed its answer on January 17, 2023, denying any liability to Luminant. Cipher has not received payment from Luminant for electricity sold in the ERCOT market in September 2022 and October 2022. The Company wholly disputes the claims made by Luminant and intends to contest the case vigorously. The parties have exchanged basic discovery disclosures, and discovery and motion practice have not substantively commenced. An initial trial date has been set. The parties continue to discuss a potential resolution and, while the Company does not yet know how or when this matter will be resolved, it has established a $ 2.0 million accrual for the cost of resolving the claims. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 13. STOCKHOLDERS’ EQUITY As of June 30, 2023 , 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 (“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 the issuance of these unaudited condensed consolidated financial statements, 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, for which there currently are none outstanding. During the six months ended June 30, 2023 , the Company issued 2,473,759 shares of Common Stock to officers, employees and consultants in settlement of an equal number of fully vested RSUs awarded to these individuals, and 248,358 shares of Common Stock to directors, pursuant to grants made under the Cipher Mining Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”). The Company immediately repurchased 838,388 of these shares of Common Stock from officers and employees, with a fair value of approximately $ 1.1 million, to cover taxes related to the settlement of vested RSUs, as permitted by the Incentive Award Plan. The Company placed the repurchased shares in treasury stock. At-the-Market Sales 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”). In connection with the filing of the Registration Statement, the Company also entered into an at the market offering agreement (the “Prior Sales Agreement”) with H.C. Wainwright & Co., LLC (the “Prior Agent”), under which the Company may, from time to time, sell shares of its Common Stock having an aggregate offering price of up to $ 250.0 million in “at the market” offerings through the Prior Agent. During the six months ended June 30, 2023, in connection with the Prior Sales Agreement, the Company received proceeds of approximately $ 2.7 million, net of issuance costs, from the sale of 978,207 shares of common stock, with an average fair value of $ 2.78 p er share. Effective August 1, 2023, the Company terminated the Prior Sales Agreement. On August 3, 2023, the Company entered into a Controlled Equity OfferingSM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., Canaccord Genuity LLC, Needham & Company, LLC and Compass Point Research & Trading, LLC. See Note 18. Subsequent Events for additional information related to the Sales Agreement. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | NOTE 14. WARRANTS Upon consummation of the business combination, the Company assumed Common Stock warrants that were originally issued in GWAC’s initial public offering (the “Public Warrants”), as well as warrants that were issued in a private placement that closed concurrently with GWAC’s initial public offering (the “Private Placement Warrants”). The Public and 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 8,499,980 Public Warrants and 114,000 Private Placement Warrants outstanding as of both June 30, 2023 and December 31, 2022 . The exercise price and number of shares of 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 the Company’s recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of 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. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | NOTE 15. SHARE-BASED COMPENSATION 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 is 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, 2023, this resulted in an increase of 7,426,559 shares of Common Stock available for issuance under the Incentive Award Plan. As of June 30, 2023 , 5,694,657 shares of Common Stock were available for issuance under the Incentive Award Plan. The Company recognized total share-based compensation expense in general and administrative expenses on the unaudited condensed consolidated statements of operations for the following categories of awards as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Service-based RSUs $ 5,580 $ 6,685 $ 10,827 $ 12,858 Performance-based RSUs 3,378 3,379 6,720 6,720 Common stock, fully-vested 220 - 441 - Total share-based compensation expense $ 9,178 $ 10,064 $ 17,988 $ 19,578 Service-based RSUs A summary of the Company’s unvested Service-based RSU activity for the six months ended June 30, 2023 is shown below: Number of Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2023 14,441,044 $ 3.96 Granted 6,909,873 $ 2.25 Vested ( 2,473,758 ) $ 5.91 Unvested at June 30, 2023 18,877,159 $ 3.08 As of June 30, 2023 , there was approximately $ 32.7 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 1.6 years. If not fully vested upon grant, Service-based RSUs awarded generally vest over a period ranging from two to four years in equal installments on the award’s anniversary of the vesting commencement date, which will generally coincide with the timing when the employee or consultant began to provide services to the Company, as determined by the Board, 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 without “cause”, by 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) or due to award recipient’s death or permanent disability, 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 Company achieves a $ 10 billion market capitalization milestone (described further below) 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 new activity for unvested Performance-based RSUs during the six months ended June 30, 2023 There were 4,257,710 unvested Performance-based RSUs with a weighted average grant date fair value of $ 7.76 as of both June 30, 2023 and December 31, 2022. As of June 30, 2023 , there was approximately $ 11.1 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 0.9 years. One-third of the outstanding 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. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 16. FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands): Fair Value Measured as of June 30, 2023 Level 1 Level 2 Level 3 Total Assets included in: Cash and cash equivalents Money market securities $ 175 $ - $ - $ 175 Accounts receivable 380 - - 380 Derivative asset - - 75,252 75,252 $ 555 $ - $ 75,252 $ 75,807 Liabilities included in: Warrant liability $ - $ - $ 66 $ 66 $ - $ - $ 66 $ 66 Fair Value Measured as of December 31, 2022 Level 1 Level 2 Level 3 Total Assets included in: Cash and cash equivalents Money market securities $ 10,943 $ - $ - $ 10,943 Accounts receivable 98 - - 98 Derivative asset - - 66,702 66,702 $ 11,041 $ - $ 66,702 $ 77,743 Liabilities included in: Warrant liability $ - $ - $ 7 $ 7 $ - $ - $ 7 $ 7 The carrying values reported in the Company’s consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the 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. Level 3 asset The Company’s derivative asset, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its unaudited condensed consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the unaudited condensed consolidated statements of operations. Subsequent changes in fair value are also recorded to change in fair value of derivative asset. The Luminant Power Agreement was not designated as a hedging instrument. 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, 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, which has a remaining term of approximately 4.0 years . The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 6.94 % and 6.83 % as of June 30, 2023 and December 31, 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 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 six months ended June 30, 2023 (in thousands): Balance as of January 1, 2023 $ 66,702 Change in fair value 8,549 Balance as of June 30, 2023 $ 75,251 Level 3 liability The Company’s Private Placement Warrants (as defined in Note 14. Warrants ) are its only liability classified within Level 3 of the fair value hierarchy because the fair value is based on significant inputs that are unobservable in the market. The valuation of the Private Placement Warrants uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. The Company engaged a valuation firm to determine the fair value of the Private Placement Warrants using a Black-Scholes option-pricing model and the quoted price of its Common Stock. The following table presents significant assumptions utilized in the valuations of the Private Placement Warrants as of the dates indicated: June 30, 2023 December 31, 2022 Risk-free rate 4.36 % 4.06 % Dividend yield rate 0.00 % 0.00 % Volatility 74.7 % 90.0 % Contractual term (in years) 3.2 3.7 Exercise price $ 11.50 $ 11.50 The following table presents changes in the estimated fair value of the Private Placement Warrants for the six months ended June 30, 2023 (in thousands): Balance as of January 1, 2023 $ 7 Change in fair value 59 Balance as of June 30, 2023 $ 66 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 17. INCOME TAXES The determination of income tax expense in the unaudited condensed consolidated statements of operations is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur. The Company recorded income tax expense of approximately 3.7 % and nil of loss before taxes for each of the six months ended June 30, 2023 and 2022 , respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18. SUBSEQUENT EVENTS At-the-Market Sales Agreement On August 3, 2023, the Company entered into a Controlled Equity OfferingSM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., Canaccord Genuity LLC, Needham & Company, LLC and Compass Point Research & Trading, LLC (each, an “Agent” and, together, the “Agents”), pursuant to which the Company may offer and sell, from time to time through or to the Agents, shares of its Common Stock, for aggregate gross proceeds of up to $ 250.0 million (the “Shares”). The offering and sale of up to $ 250.0 million of the Shares has been registered under the Registrati on Statement, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed with the SEC on August 4, 2023 (the “Prospectus Supplement”). Pursuant to the Sales Agreement, the Agent selected by the Company (such Agent, the “Designated Agent”) may sell the Shares in sales deemed to be “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. The Company has no obligation to sell any of the Shares under the Sales Agreement and may at any time suspend or terminate the offering of the Shares pursuant to the Sales Agreement upon notice and subject to other conditions. The Agents will act as sales agents and will use commercially reasonable efforts to sell on the Company’s behalf all of the Shares requested to be sold by it, on mutually agreed terms between the Agents and the Company. Under the terms of the Sales Agreement, the Company agreed to pay the Designated Agent a commission up to 3.0 % of th e aggregate gross proceeds from any Shares sold through such Designated Agent pursuant to the Sales Agreement. In addition, the Company agreed to reimburse certain expenses incurred by the Agents in connection with the Sales Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of presentation and principles of consolidation The Company prepares its unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”) as determined by the FASB and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and its controlled subsidiary, CMTI. All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of 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 its derivative asset and warrant liability under Level 3 of the fair value hierarchy, useful lives of property and equipment, the asset retirement obligation 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 Interim Condensed Consolidated Financial Statements | 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 is included in the Company’s 2022 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 2022 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 2022 Form 10-K. |
Segment information | Segment information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is comprised of several members of its executive management team. The Company views its operations and manages its business in one segment. |
Net loss per share | Net loss per share Basic net loss per share is computed by dividing net loss allocated to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share adjusts net loss and net loss per common share for the effect of all potentially dilutive shares of Common Stock. Potential common shares consist of the Company’s outstanding public and private placement warrants to purchase Common Stock, as well as unvested restricted stock units (“RSUs”). Basic net loss per common share is the same as dilutive net loss per common share for all periods presented as the inclusion of all potential common shares would have been antidilutive. The following table presents the common shares that are excluded from the computation of diluted net loss per common share at June 30, 2023 and 2022, because including them would have been antidilutive. June 30, 2023 2022 Public warrants 8,499,980 8,499,980 Private placement warrants 114,000 114,000 Unvested RSUs 23,134,869 12,975,614 31,748,849 21,589,594 |
Recently Issued and Adopted Accounting Pronouncements | Recently issued and adopted accounting pronouncements In June 2016, the FASB issued Accounting Standards Update ASU No. 2016‑13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which was codified with its subsequent amendments as ASC Topic 326, Financial Instruments – Credit Losses (“ASC 326”). ASC 326 seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, including trade receivables, and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require an entity to replace the incurred loss impairment methodology in other GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The adoption of this guidance on January 1, 2023 did not have a material impact on the Company’s unaudited condensed consolidated financial statements and disclosures. The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change. The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on its condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Computation of Diluted Net Income (Loss) Per Common Share | The following table presents the common shares that are excluded from the computation of diluted net loss per common share at June 30, 2023 and 2022, because including them would have been antidilutive. June 30, 2023 2022 Public warrants 8,499,980 8,499,980 Private placement warrants 114,000 114,000 Unvested RSUs 23,134,869 12,975,614 31,748,849 21,589,594 |
Bitcoin (Tables)
Bitcoin (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CryptocurrenciesAbstract | |
Schedule of Bitcoin | The following table presents information about the Company’s bitcoin (in thousands): Balance as of January 1, 2023 $ 6,283 Bitcoin received from equity investees 317 Revenue recognized from bitcoin mined, net of receivable 52,836 Proceeds from sale of bitcoin, net of realized gain ( 44,267 ) Impairment of bitcoin ( 4,633 ) Balance as of June 30, 2023 $ 10,536 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net consisted of the following (in thousands): June 30, 2023 December 31, 2022 Miners and mining equipment $ 158,318 $ 79,909 Leasehold improvements 135,209 94,807 Software 1,054 596 Office and computer equipment 279 88 Autos 73 73 Furniture and fixtures 88 69 Construction-in-progress 2,167 20,437 Total cost of property and equipment 297,188 195,979 Less: accumulated depreciation ( 29,398 ) ( 4,195 ) Property and equipment, net $ 267,790 $ 191,784 |
Security Deposits (Tables)
Security Deposits (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Deposit Assets Disclosure [Abstract] | |
Schedule Of security deposits consisted | June 30, 2023 December 31, 2022 Luminant Power Purchase Agreement Independent Collateral Amount $ 12,554 $ 12,554 Luminant Purchase and Sale Agreement collateral 3,063 3,063 Operating lease security deposits 967 960 Other deposits 1,158 1,153 Total security deposits $ 17,742 $ 17,730 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of accrued expenses and other current liabilities | The Company’s accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2023 December 31, 2022 Taxes (primarily sales tax) $ 12,929 $ 18,798 Power costs 3,374 - Finance lease (1) 2,373 339 Legal settlement (2) 2,000 - Employee compensation 1,045 - Legal fees 376 215 Other 649 1 Total accrued expenses and other current liabilities $ 22,746 $ 19,353 __________ (1) See Note 11. Leases for additional information regarding the Company’s finance leases. (2) See Note 12. Commitments and Contingencies for additional information regarding the legal settlement accrual as of June 30, 2023 . |
Investment in Equity Investees
Investment in Equity Investees (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Activity in Investment in Equity Investee | Activity in the Company’s investments in equity investees during the six months ended June 30, 2023 consisted of the following (in thousands): Balance as of January 1, 2023 $ 37,478 Cost of miners and mining equipment contributed 1,925 Accretion of basis differences related to miner contributions 3,340 Capital distributions ( 3,807 ) Bitcoin received from equity investees ( 317 ) Equity in net losses of equity investees ( 5,521 ) Balance as of June 30, 2023 $ 33,098 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Components of Lease Expenses | Components of the Company’s lease expenses are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Finance leases: Amortization of ROU assets (1) $ 1,027 $ - $ 1,816 $ - Interest on lease liability 477 - 878 - Total finance lease expense 1,504 - 2,694 - Operating leases: Operating lease expense 467 371 921 618 Variable lease cost - - - - Total operating lease expense 467 371 921 618 Total lease expense $ 1,971 $ 371 $ 3,615 $ 618 __________ (1) Amortization of finance lease ROU assets is included within depreciation expense. |
Schedule of Other Information Related to Leases | Other information related to the Company’s leases is shown below (dollar amounts in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating cash flows - operating lease $ 396 $ - $ 791 $ - Right-of-use assets obtained in exchange for operating lease liabilities $ - $ - $ - $ 5,859 June 30, 2023 December 31, 2022 Weighted-average remaining lease term – finance lease (in years) 2.7 4.7 Weighted-average remaining lease term – operating lease (in years) 3.9 4.4 Weighted-average discount rate – finance lease 11.0 % 11.0 % Weighted-average discount rate – operating lease 10.9 % 10.9 % Finance lease ROU assets (1) $ 26,868 $ 14,471 __________ (1) As of June 30, 2023 and December 31, 2022, the Company had recorded accumulated amortization of approximately $ 2.3 million and $ 0.5 million , respectively, for the finance lease ROU assets. Finance lease ROU assets are recorded within property and equipment, net on the Company’s consolidated balance sheets. |
Schedule of Future Minimum Lease Payments | As of June 30, 2023, future minimum lease payments during the next five years are as follows (in thousands): Finance Lease Operating Lease Total Remaining Period Ended December 31, 2023 $ 10,511 $ 790 $ 11,301 Year Ended December 31, 2024 4,068 1,581 5,649 Year Ended December 31, 2025 4,068 1,581 5,649 Year Ended December 31, 2026 4,068 1,581 5,649 Year Ended December 31, 2027 2,712 659 3,371 Total lease payments 25,427 6,192 31,619 Less present value discount ( 3,402 ) ( 1,169 ) ( 4,571 ) Total $ 22,025 $ 5,023 $ 27,048 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Share-based Compensation Expense | The Company recognized total share-based compensation expense in general and administrative expenses on the unaudited condensed consolidated statements of operations for the following categories of awards as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Service-based RSUs $ 5,580 $ 6,685 $ 10,827 $ 12,858 Performance-based RSUs 3,378 3,379 6,720 6,720 Common stock, fully-vested 220 - 441 - Total share-based compensation expense $ 9,178 $ 10,064 $ 17,988 $ 19,578 |
Service-Based RSUs | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Summary of Unvested RSU Activity | A summary of the Company’s unvested Service-based RSU activity for the six months ended June 30, 2023 is shown below: Number of Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2023 14,441,044 $ 3.96 Granted 6,909,873 $ 2.25 Vested ( 2,473,758 ) $ 5.91 Unvested at June 30, 2023 18,877,159 $ 3.08 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets And Liabilities Measurement on Recurring Basis | The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands): Fair Value Measured as of June 30, 2023 Level 1 Level 2 Level 3 Total Assets included in: Cash and cash equivalents Money market securities $ 175 $ - $ - $ 175 Accounts receivable 380 - - 380 Derivative asset - - 75,252 75,252 $ 555 $ - $ 75,252 $ 75,807 Liabilities included in: Warrant liability $ - $ - $ 66 $ 66 $ - $ - $ 66 $ 66 Fair Value Measured as of December 31, 2022 Level 1 Level 2 Level 3 Total Assets included in: Cash and cash equivalents Money market securities $ 10,943 $ - $ - $ 10,943 Accounts receivable 98 - - 98 Derivative asset - - 66,702 66,702 $ 11,041 $ - $ 66,702 $ 77,743 Liabilities included in: Warrant liability $ - $ - $ 7 $ 7 $ - $ - $ 7 $ 7 |
Summary of Changes in the Estimated Fair Value of the Derivative Asset | The following table presents the changes in the estimated fair value of the derivative asset measured using significant unobservable inputs (Level 3) for the six months ended June 30, 2023 (in thousands): Balance as of January 1, 2023 $ 66,702 Change in fair value 8,549 Balance as of June 30, 2023 $ 75,251 |
Summary of Assumptions Utilized in Valuations of Private Placement Warrants | The following table presents significant assumptions utilized in the valuations of the Private Placement Warrants as of the dates indicated: June 30, 2023 December 31, 2022 Risk-free rate 4.36 % 4.06 % Dividend yield rate 0.00 % 0.00 % Volatility 74.7 % 90.0 % Contractual term (in years) 3.2 3.7 Exercise price $ 11.50 $ 11.50 |
Summary of Change in the Fair Value of the Private Placement Warrants | The following table presents changes in the estimated fair value of the Private Placement Warrants for the six months ended June 30, 2023 (in thousands): Balance as of January 1, 2023 $ 7 Change in fair value 59 Balance as of June 30, 2023 $ 66 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Common Shares Excluded from Computation of Diluted Net Loss Per Common Share | The following table presents the common shares that are excluded from the computation of diluted net loss per common share at June 30, 2023 and 2022, because including them would have been antidilutive. June 30, 2023 2022 Public warrants 8,499,980 8,499,980 Private placement warrants 114,000 114,000 Unvested RSUs 23,134,869 12,975,614 31,748,849 21,589,594 |
Organization - Additional Infor
Organization - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||||||||
Aug. 04, 2023 shares | Jun. 30, 2023 USD ($) Mining $ / shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) DataCenters Mining $ / shares | Jun. 30, 2022 USD ($) | May 04, 2023 Miner | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Cost of revenue | $ 15,868,000 | $ 24,009,000 | ||||||||
Power sales | 5,651,000 | 5,749,000 | ||||||||
Operating loss | 11,592,000 | $ 29,326,000 | 17,761,000 | $ 46,880,000 | ||||||
Loss before taxes | 12,086,000 | 29,219,000 | 18,617,000 | 46,718,000 | ||||||
Cash flow provided by operations | 24,679,000 | (9,932,000) | ||||||||
Cash and cash equivalents | 1,741,000 | 37,042,000 | 1,741,000 | 37,042,000 | $ 11,927,000 | $ 209,841,000 | ||||
Working capital | 3,600,000 | 3,600,000 | ||||||||
Stockholders' equity | 343,210,000 | $ 313,339,000 | 343,210,000 | 313,339,000 | $ 344,620,000 | 342,892,000 | $ 342,494,000 | $ 353,531,000 | ||
Accumulated deficit | 130,511,000 | 130,511,000 | 111,209,000 | |||||||
Deposits on equipment | (2,932,000) | $ (156,811,000) | ||||||||
Deposits on equipment, primarily for miners | $ 1,675,000 | $ 1,675,000 | $ 73,018,000 | |||||||
Number of bitcoin mining data centers | DataCenters | 4 | |||||||||
Number of bitcoin wholly-owned data centers | DataCenters | 1 | |||||||||
Number of bitcoin partially owned data centers | DataCenters | 3 | |||||||||
Proceeds from sale of coupons | $ 2,300,000 | |||||||||
Sale Of Bitcoin | 2,063 | |||||||||
Proceeds from sale of Bitcoin | 52,500,000 | |||||||||
Out-of-period-adjustments | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Cost of revenue | 2,000,000 | |||||||||
Power sales | 1,600,000 | |||||||||
Operating loss | (400,000) | |||||||||
Loss before taxes | (400,000) | |||||||||
Bitmain Technologies Limited | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Discounted coupon amount | $ 10,900,000 | |||||||||
Coupon expiry date, month and year | 2023-04 | |||||||||
Canaan Agreement | Canaan Creative Global Pte. Ltd | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Number of new A1346 model miners purchased | Miner | 11,000 | |||||||||
Percentage of initial deposit paid | 10% | 10% | ||||||||
Percentage of purchase price paid | 18% | 18% | ||||||||
Odessa Facility | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Cost of equipment transferred from deposits on equipment | $ 72,100,000 | |||||||||
Total number of miners | Mining | 61,024 | 61,024 | ||||||||
Alborz Facility | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Number of miners and other mining equipment | Mining | 12,953 | 12,953 | ||||||||
Bear Facility | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Number of miners and other mining equipment | Mining | 3,254 | 3,254 | ||||||||
Chief Facility | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Number of miners and other mining equipment | Mining | 3,254 | 3,254 | ||||||||
Bitfury Top HoldCo | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Ownership percentage | 80.60% | 80.60% | ||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||
Bitfury Top HoldCo | Subsequent Event | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Common stock shares subject to lock-up | shares | 129,017,513 | |||||||||
Lock-up agreement expiration date | Aug. 27, 2023 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - ASU 2016-13 | Jun. 30, 2023 |
Property, Plant and Equipment [Line Items] | |
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2023 |
Change in accounting principle, accounting standards update, adoption | true |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Computation of Diluted Net Income (Loss) Per Common Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of net loss per common share | 31,748,849 | 21,589,594 |
Public Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of net loss per common share | 8,499,980 | 8,499,980 |
Private Placement Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of net loss per common share | 114,000 | 114,000 |
Unvested RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of net loss per common share | 23,134,869 | 12,975,614 |
Bitcoin - Schedule of Bitcoin (
Bitcoin - Schedule of Bitcoin (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Bitcoin [Abstract] | ||||
Balance as of January 1, 2023 | $ 6,283 | |||
Bitcoin received from equity investees | 317 | $ 1,326 | ||
Revenue recognized from bitcoin mined, net of receivable | 52,836 | |||
Proceeds from sale of bitcoin, net of realized gain | (44,267) | |||
Impairment of bitcoin | $ (2,828) | $ (535) | (4,633) | $ (539) |
Balance as of June 30, 2023 | $ 10,536 | $ 10,536 |
Bitcoin - Additional Informatio
Bitcoin - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Bitcoin [Abstract] | ||||
Fair market value of Bitcoin in level 1 input | $ 12.3 | $ 12.3 | ||
Impairment charges on bitcoin | $ 2.8 | $ 0.5 | $ 4.6 | $ 0.5 |
Derivative Asset - Additional I
Derivative Asset - Additional Information (Details) - Luminant Power Agreement - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 26, 2022 | Feb. 28, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective agreement date for scheduled amount of energy | Jul. 01, 2022 | |||
Sale of electricity back to ERCOT | $ 5.7 | $ 5.7 | ||
Luminant ET Services Company LLC | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Definitive power purchase agreement date | Jun. 23, 2021 | |||
Definitive power purchase agreement amendment date | Jul. 09, 2021 | |||
Definitive power purchase agreement further amendment date | Aug. 26, 2022 | Feb. 28, 2022 | ||
Term of power agreement | 5 years |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 297,188 | $ 195,979 |
Less: accumulated depreciation | (29,398) | (4,195) |
Property and equipment, net | 267,790 | 191,784 |
Miners and Mining Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | 158,318 | 79,909 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | 135,209 | 94,807 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | 1,054 | 596 |
Office and Computer Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | 279 | 88 |
Autos | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | 73 | 73 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | 88 | 69 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 2,167 | $ 20,437 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) Miner | Mar. 31, 2023 USD ($) Miner | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Miner | Jun. 30, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Construction-in-progress placed into service | $ | $ 34,400 | ||||
Depreciation expense | $ | $ 14,412 | $ 8 | 26,067 | $ 15 | |
Accretion expense related to asset retirement obligation | $ | $ 400 | $ 900 | |||
Bitmain | |||||
Property, Plant and Equipment [Line Items] | |||||
Aggregate cost | $ | $ 1,600 | ||||
Number of miners deployed | 4,622 | ||||
SuperAcme Technology (Hong Kong) Limited | |||||
Property, Plant and Equipment [Line Items] | |||||
Aggregate cost | $ | $ 50,700 | ||||
Number of MicroBT miners deployed | 17,094 | ||||
Odessa Facility | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of MicroBT miners deployed | 35,117 | 35,117 | |||
Number of antminer pro miners deployed | 14,907 | 14,907 | |||
Number of Canaan miners deployed | 11,000 | 11,000 | |||
Number of miners deployed | 61,024 | 61,024 |
Deposits on Equipment - Additio
Deposits on Equipment - Additional Information (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) ProMiner | Nov. 30, 2022 ProMiner | |
Property, Plant and Equipment [Line Items] | |||
Deposits on equipment | $ | $ 1,675 | $ 73,018 | |
Bitmain Technologies Limited | |||
Property, Plant and Equipment [Line Items] | |||
Description of purchase agreements | the Company agreed to purchase 5,000 and 2,200, respectively, S19j Pro miners from Bitmain. The Company utilized accumulated Bitmain credits and coupons for the majority of the purchase price for these miners and has no further payments due in respect of these orders. Information regarding the quantity of Bitmain miners received pursuant to these agreements during the six months ended June 30, 2023 is disclosed in Note 5. Property and Equipment. As of June 30, 2023, the Company did not have material open purchase agreement commitments. | ||
Number of miners to be purchased | ProMiner | 2,200 | 5,000 |
Security Deposits - Schedule of
Security Deposits - Schedule of Security Deposits Consisted (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Operating lease security deposits | $ 967 | $ 960 |
Other deposits | 1,158 | 1,153 |
Total security deposits | 17,742 | 17,730 |
Luminant Power Purchase Agreement | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Collateral amount | 12,554 | 12,554 |
Luminant Purchase and Sale Agreement | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Collateral amount | $ 3,063 | $ 3,063 |
Supplemental Financial Inform_3
Supplemental Financial Information - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Prepaid expenses and other current assets | $ 2,260 | $ 7,254 |
Wind HQ | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Temporarily held cryptocurrency | $ 1,200 |
Supplemental Financial Inform_4
Supplemental Financial Information - Schedule of Accrued Expenses And Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accrued Expenses And Other Current Liabilities [Abstract] | ||
Taxes (primarily sales tax) | $ 12,929 | $ 18,798 |
Power costs | 3,374 | |
Finance lease | 2,373 | 339 |
Legal settlement | 2,000 | |
Employee compensation | 1,045 | |
Legal fees | 376 | 215 |
Other | 649 | 1 |
Total accrued expenses and other current liabilities | $ 22,746 | $ 19,353 |
Investment in Equity Investee_2
Investment in Equity Investees - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) Mining | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Mining | Jun. 30, 2022 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Remaining Basis Differences Not Yet Been Accreted | $ 28.1 | $ 28.1 | ||
Alborz Facility | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of miners and other mining equipment | Mining | 12,953 | 12,953 | ||
Alborz, Bear & Chief Equity Investees | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Company's share of equity method investment loss | $ (1.4) | $ (12.1) | $ (2.2) | $ (12.2) |
Alborz, Bear and Chief Joint Ventures | Miners and Mining Equipment | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Estimated useful lives of assets | 5 years | 5 years | ||
Initial Data Center LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of interest in joint venture | 49% |
Investment in Equity Investee_3
Investment in Equity Investees - Schedule of Activity in Investment in Equity Investee (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Balance, January 1, 2023 | $ 37,478 | |
Cost of miners and mining equipment contributed | 1,925 | |
Accretion of basis differences related to miner contributions | 3,340 | |
Capital distributions | (3,807) | $ (10,065) |
Bitcoin received from equity investees | (317) | $ (1,326) |
Equity in net loss of equity investee | (5,521) | |
Balance as of June 30, 2023 | $ 33,098 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Bitcoin | $ 10,536 | $ 6,283 |
Bitfury USA Inc | ||
Related Party Transaction [Line Items] | ||
Payment for manufacturing services on behalf of related party | 5,800 | |
Data Center LLCs | Related party | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | $ 1,600 | 1,100 |
Wind HQ | ||
Related Party Transaction [Line Items] | ||
Bitcoin | 1,200 | |
Bitcoin received as payment for services | $ 300 |
Leases - Additional Information
Leases - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) Miner | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | May 04, 2023 Miner | |
Lessee, Lease, Description [Line Items] | ||||||
Lease initial term | 64 months | |||||
Lease commencement date | Feb. 01, 2022 | |||||
Variable lease costs | $ 0 | $ 0 | $ 0 | $ 0 | ||
Combined Luminant Lease Agreements | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Principal and interest due over period | 5 years | |||||
Estimated undiscounted principal payments | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | |||
Lease initial term | 5 years | |||||
Lease commencement date | Nov. 22, 2022 | |||||
Canaan Agreement | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Payment of miners | $ 4,100,000 | |||||
Monthly installment payment for miners | $ 1,700,000 | |||||
Number of miners delivered | Miner | 11,000 | |||||
Affiliates of Luminant ET Services Company LLC | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease agreement date | Jun. 29, 2021 | |||||
Lease amendment and restatement date | Jul. 09, 2021 | |||||
Canaan Creative Global Pte. Ltd | Canaan Agreement | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of new A1346 model miners purchased | Miner | 11,000 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Finance lease: | ||||
Amortization of ROU asset | $ 1,027 | $ 1,816 | ||
Interest on lease liability | 477 | 878 | ||
Total finance lease expense | 1,504 | 2,694 | ||
Operating leases: | ||||
Operating lease expense | 467 | $ 371 | 921 | $ 618 |
Total operating lease expense | 467 | 371 | 921 | 618 |
Total lease expense | $ 1,971 | $ 371 | $ 3,615 | $ 618 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | ||||
Operating cash flows - operating lease | $ 396 | $ 791 | ||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 5,859 | |||
Weighted-average remaining lease term - finance lease (in years) | 2 years 8 months 12 days | 2 years 8 months 12 days | 4 years 8 months 12 days | |
Weighted-average remaining lease term - operating lease (in years) | 3 years 10 months 24 days | 3 years 10 months 24 days | 4 years 4 months 24 days | |
Weighted-average discount rate - finance lease | 11% | 11% | 11% | |
Weighted-average discount rate - operating lease | 10.90% | 10.90% | 10.90% | |
Finance lease ROU asset | $ 26,868 | $ 26,868 | $ 14,471 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Leases - Schedule of Other In_2
Leases - Schedule of Other Information Related to Leases (Parenthetical) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Accumulated amortization for finance lease ROU asset | $ 2.3 | $ 0.5 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Finance lease: | |
Remaining Period Ended December 31, 2023 | $ 10,511 |
Year Ended December 31, 2024 | 4,068 |
Year Ended December 31, 2025 | 4,068 |
Year Ended December 31, 2026 | 4,068 |
Year Ended December 31, 2027 | 2,712 |
Total lease payments | 25,427 |
Less present value discount | (3,402) |
Total | 22,025 |
Operating leases: | |
Remaining Period Ended December 31, 2023 | 790 |
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 lease payments | 6,192 |
Less present value discount | (1,169) |
Total | 5,023 |
Total | |
Remaining Period Ended December 31, 2023 | 11,301 |
Year Ended December 31, 2024 | 5,649 |
Year Ended December 31, 2025 | 5,649 |
Year Ended December 31, 2026 | 5,649 |
Year Ended December 31, 2027 | 3,371 |
Total lease payments | 31,619 |
Less present value discount | (4,571) |
Total | $ 27,048 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - Luminant Power Agreement - USD ($) $ in Millions | 3 Months Ended | |
Sep. 29, 2022 | Jun. 30, 2023 | |
Loss Contingencies [Line Items] | ||
Amount received from Power Agreement | $ 5.1 | |
Proceeds from power sales | $ 1.7 | |
Accrual cost of resolving claims | $ 2 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Aug. 03, 2023 | Sep. 21, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Shares authorized | 510,000,000 | |||||||
Share par value | $ 0.001 | |||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | ||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||
Common stock voting rights | one vote | |||||||
Common stock, shares issued | 254,795,626 | 251,095,305 | ||||||
Public Warrants | ||||||||
Warrant outstanding | 8,499,980 | |||||||
Private Placement Warrants | ||||||||
Warrant outstanding | 114,000 | |||||||
Common Stock | ||||||||
Shares issued | 205,482 | |||||||
Common stock, shares issued | 251,001,072 | 254,795,626 | 253,050,088 | 251,095,305 | 253,685,763 | 252,131,679 | ||
At the Market Offering Agreement | Maximum | ||||||||
Aggregate amount of offering price to be received | $ 250 | |||||||
At the Market Offering Agreement | Maximum | Subsequent Event | ||||||||
Aggregate amount of offering price to be received | $ 250 | |||||||
Prior Sales Agreement | ||||||||
Proceeds received from sale of common stock | $ 2.7 | |||||||
Sale of shares of common stock | 978,207 | |||||||
Sale of stock, price per share | $ 2.78 | |||||||
Incentive Award Plan | Officers, employees and consultants | ||||||||
Shares issued | 2,473,759 | |||||||
Incentive Award Plan | Directors | ||||||||
Common stock, shares issued | 248,358 | |||||||
Restricted Stock Units | Officers, employees and consultants | ||||||||
Repurchase of common stock related to tax withholding settlement | 838,388 | |||||||
Repurchase of common stock related to tax withholding settlement, fair value | $ 1.1 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Subsidiary Sale Of Stock [Line Items] | ||
Number of common stock entitled to purchase | 1 | |
Exercise price of warrants | $ 11.50 | |
Private Placement Warrants | ||
Subsidiary Sale Of Stock [Line Items] | ||
Warrant outstanding | 114,000 | |
Public Warrants | ||
Subsidiary Sale Of Stock [Line Items] | ||
Warrant outstanding | 8,499,980 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |||
Aug. 27, 2021 | Jun. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | |
Common Stock | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, description | 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 is 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. | |||
Service-Based RSUs | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Unrecognized compensation expense | $ 32.7 | |||
Unrecognized compensation expense, weighted-average vesting period | 1 year 7 months 6 days | |||
Share-based compensation award vest upon achievement of maximum market capitalization | $ 10,000 | |||
Number of unvested shares | 18,877,159 | 14,441,044 | ||
Weighed average grant date fair value | $ 3.08 | $ 3.96 | ||
Performance-Based RSUs | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Unrecognized compensation expense | $ 11.1 | |||
Unrecognized compensation expense, weighted-average vesting period | 10 months 24 days | |||
Number of unvested shares | 4,257,710 | |||
Weighed average grant date fair value | $ 7.76 | $ 7.76 | ||
Equity Incentive Plan | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Maximum percentage of annual increase in shares available for incentive plan to outstanding common stock | 3% | |||
Equity Incentive Plan | Common Stock | Maximum | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Number of shares available for issuance of awards | 19,869,312 | |||
Incentive Award Plan | Common Stock | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Number of shares available for issuance of awards | 5,694,657 | |||
Number of shares available for issuance of awards increase (decrease) | 7,426,559 | |||
Incentive Award Plan | Performance-Based RSUs | Tranche One | CEO | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation award vest upon achievement of maximum market capitalization | $ 5,000 | |||
Award lookback period | 30 days | |||
Incentive Award Plan | Performance-Based RSUs | Tranche Two | CEO | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation award vest upon achievement of maximum market capitalization | $ 7,500 | |||
Award lookback period | 30 days | |||
Incentive Award Plan | Performance-Based RSUs | Tranche Three | CEO | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation award vest upon achievement of maximum market capitalization | $ 10,000 | |||
Award lookback period | 30 days |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Share-based Compensation Expense (Details) - General and Administrative Expense - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 9,178 | $ 10,064 | $ 17,988 | $ 19,578 |
Service-Based RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 5,580 | 6,685 | 10,827 | 12,858 |
Performance-Based RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 3,378 | $ 3,379 | 6,720 | $ 6,720 |
Common Stock, Fully-Vested | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 220 | $ 441 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Unvested RSU Activity (Details) - Service-Based RSUs | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Unvested, Beginning | shares | 14,441,044 |
Number of Shares, Granted | shares | 6,909,873 |
Number of Shares, Vested | shares | (2,473,758) |
Number of Shares, Unvested, Ending | shares | 18,877,159 |
Weighted Average Grant Date Fair Value, Unvested, Beginning | $ / shares | $ 3.96 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 2.25 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 5.91 |
Weighted Average Grant Date Fair Value, Unvested, Ending | $ / shares | $ 3.08 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets And Liabilities Measurement on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets included in: | ||
Accounts receivable | $ 380 | $ 98 |
Assets, fair value | 75,807 | 77,743 |
Liabilities: | ||
Liabilities, fair value | 66 | 7 |
Level 1 | ||
Assets included in: | ||
Accounts receivable | 380 | 98 |
Assets, fair value | 555 | 11,041 |
Level 3 | ||
Assets included in: | ||
Assets, fair value | 75,252 | 66,702 |
Liabilities: | ||
Liabilities, fair value | 66 | 7 |
Warrant Liability | ||
Liabilities: | ||
Liabilities, fair value | 66 | 7 |
Warrant Liability | Level 3 | ||
Liabilities: | ||
Liabilities, fair value | 66 | 7 |
Money Market Securities | ||
Assets included in: | ||
Cash and cash equivalents | 175 | 10,943 |
Money Market Securities | Level 1 | ||
Assets included in: | ||
Cash and cash equivalents | 175 | 10,943 |
Derivative Asset | ||
Assets included in: | ||
Assets, fair value | 75,252 | 66,702 |
Derivative Asset | Level 3 | ||
Assets included in: | ||
Assets, fair value | $ 75,252 | $ 66,702 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Level 3 | 6 Months Ended | 12 Months Ended | |
Jul. 01, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percentage of discount rate utilized | 6.94% | 6.83% | |
Luminant Power Agreement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative term of contract | 4 years |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Change in Estimated Fair Value of Derivative Asset (Details) - Level 3 - Derivative Asset $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance, beginning of period | $ 66,702 |
Change in fair value | $ 8,549 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change in Fair Value of Derivative Asset |
Balance, end of period | $ 75,251 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Assumptions Utilized in Valuations of Private Placement Warrants (Details) - Private Placement Warrants | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and Rights Outstanding, Term | 3 years 2 months 12 days | 3 years 8 months 12 days |
Risk-free Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private placement warrants, Measurement input | 0.0436 | 0.0406 |
Dividend Yield Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private placement warrants, Measurement input | 0 | 0 |
Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private placement warrants, Measurement input | 0.747 | 0.90 |
Exercise price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private placement warrants, Measurement input | 11.5 | 11.5 |
Fair Value Measurements - Sum_4
Fair Value Measurements - Summary of Change in the Fair Value of the Private Placement Warrants (Details) - Private Placement Warrants $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Balance, beginning of period | $ 7 |
Change in fair value | $ 59 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants |
Balance, end of period | $ 66 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Income tax expense percentage | 3.70% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Aug. 03, 2023 | Sep. 21, 2022 | Jun. 30, 2023 | |
Maximum | At the Market Offering Agreement | |||
Subsequent Event [Line Items] | |||
Aggregate amount of offering price to be received | $ 250 | ||
Bitfury USA Inc | |||
Subsequent Event [Line Items] | |||
Payment for manufacturing services on behalf of related party | $ 5.8 | ||
Subsequent Event | Maximum | At the Market Offering Agreement | |||
Subsequent Event [Line Items] | |||
Designated agent commission percentage | 3% | ||
Aggregate amount of gross proceeds | $ 250 | ||
Aggregate amount of offering price to be received | $ 250 |