CIFR Cipher Mining Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 08, 2023

 

 

CIPHER MINING INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-39625	85-1614529
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1 Vanderbilt Avenue Floor 54 Suite C
New York, New York				10017
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (332) 262-2300

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		CIFR		The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per whole share		CIFRW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

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

 

 

---

Item 2.02 Results of Operations and Financial Condition.

On November 8, 2023, Cipher Mining Inc. (the “Company”) announced its results for the third quarter ended September 30, 2023. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K (the “Report”).

Item 7.01 Regulation FD Disclosure.

Earnings Release

 

On November 8, 2023, the Company posted a presentation to its website at https://investors.ciphermining.com (the “Presentation”). A copy of the Presentation is furnished as Exhibit 99.2 to this Report. The Company expects to use the Presentation, in whole or in part, and possibly with modifications, in connection with the earnings call with investors, analysts and others.

 

The information contained in the Presentation is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Presentation speaks only as of the date of this Report. The Company undertakes no duty or obligation to publicly update or revise the information contained in the Presentation, although it may do so from time to time. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. In addition, the exhibit furnished herewith contains statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibit. By furnishing the information contained in the Presentation, the Company makes no admission as to the materiality of any information in the Presentation that is required to be disclosed solely by reason of Regulation FD.

 

Miner Purchase

 

On October 4, 2023, the Company entered into an agreement with Bitmain Technologies Delaware Limited to purchase 1.2 EH/s worth of HASH Super Computing Servers (Antminer S21-200.0T model), for a total commitment of $24.0 million to be paid in cash and coupons, or $16.8 million in cash after applying coupons (the “Bitmain Agreement”). The Company expects the miners purchased under this agreement to be shipped in batches between January and June 2024. The Company expects to make periodic payments in accordance with the payment schedule under the Bitmain Agreement, with the final payment expected to occur one year after the delivery of the last batch of miners. Pursuant to the Bitmain Agreement, the Company is responsible for all logistics costs related to transportation, packaging for transportation and insurance related to the delivery of the miners.

 

Black Pearl Purchase

 

On November 6, 2023, the Company and its wholly-owned subsidiary, Cipher Black Pearl LLC, entered into a Purchase and Sale Agreement (the “PSA”) with Trinity Mining Group, Inc. (“Trinity”) to purchase a data center lease (the “Lease”) related to certain tracts or parcels of land containing at least 50 acres of land located in Winkler County, Texas (the “Leased Property”) and certain other agreements (the “Assumed Agreements”) providing for the construction of a new data center the Company expects to build and call “Black Pearl” or the “Black Pearl Facility”. The Lease has an initial term of ten years, and the Company has four consecutive options to renew for periods of ten years each. In addition to the Lease and the Assumed Agreements, the purchased assets under the PSA include certain books, records, reports, studies and governmental approvals related to the Leased Property, and an approval from the Electric Reliability Council of Texas (“ERCOT”) conditionally approving up to 300 MW of energy consumption at the interconnection point of the Leased Property (the “Purchased Assets”).

The consideration for the Purchased Assets will be $7.0 million (the “Purchase Price”). The Purchase Price will be paid by delivery of a number of whole shares of the Company’s common stock. The amount of the Company’s stock to be delivered under the PSA will be calculated by dividing the Purchase Price by the volume weighted average price of the Company’s common stock traded on the Nasdaq Global Select Market for the thirty (30) trading days immediately preceding the signing of the Purchase and Sale Agreement, determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

The shares of the Company’s common stock to be issued to Trinity will be issued pursuant to the Company's shelf registration statement on Form S-3, which was declared effective on October 6, 2022 (the “Registration Statement”), including all information, documents and exhibits filed with or incorporated by reference into the Registration Statement, providing for the offering, issuance and sale by the Company from time to time of up to $500.0 million in aggregate of the Company’s common stock, preferred stock, warrants and units. The Company’s obligations to consummate the transactions contemplated by the PSA are subject to the satisfaction of certain conditions precedent. To the extent those conditions are satisfied, or waived by the Company, the Company expects the closing date to occur before the end of December 2023. If the closing date occurs before the end of December 2023, the Company expects to deliver to Oncor Electric Delivery Company LLC (“Oncor”) up to $6.3 million as collateral that Oncor will be obligated to return to the Company, provided that the Company energizes at least 135MW at the Black Pearl Facility by May 15, 2026.

 

---

The information in Items 2.02 and 7.01 of this Report (including Exhibits 99.1 and 99.2 attached hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly provided by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

The following exhibits related to Item 2.02 and Item 7.01 shall be deemed to be furnished, and not filed:

 

Exhibit Number		Description
99.1		Press Release of the Company, dated November 8, 2023
99.2		Presentation of the Company, dated November 8, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

---

SIGNATURES

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

			Cipher Mining Inc.
Date:	November 8, 2023	By:	/s/ Tyler Page
			Tyler Page Chief Executive Officer

 

---

 

Exhibit 99.1

 

Cipher Mining Provides Third Quarter 2023 Business Update

 

Completed the Build-out of the Odessa Data Center and Achieved All-Time High Self-Mining Hash Rate Capacity of up to 7.2 Exahash per Second (“EH/s”)

 

Signed Agreement to Acquire a New Texas-based, ERCOT-approved Site with Interconnection up to 300 MW, Expected to Come Online in 2025

 

Purchased ~1.2 EH/s of the Latest Generation S21 Bitmain Rigs, Bringing Total Hash Rate in Operation and Under Contract to ~8.4 EH/s

 

GAAP Diluted Net Loss of $0.07 per Share

 

Non-GAAP Diluted Net Income of $0.02 per Share

 

 

NEW YORK—November 8, 2023—Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher” or the “Company”), a leading developer and operator of bitcoin mining data centers, today announced results for its third quarter 2023, with an update on its operations and deployment strategy.

 

“We are pleased to announce that we finalized the build-out of our Odessa facility and have achieved a self-mining capacity of up to 7.2 EH/s across our portfolio,” said Tyler Page, CEO of Cipher. “With this first phase of the Company’s growth now complete, we are also delighted to announce that we have signed an agreement to acquire a new Texas-based, ERCOT-approved site, called “Black Pearl,” with interconnection up to 300 MW.”

 

Cipher’s obligations under the Black Pearl purchase agreement are subject to certain conditions precedent that, if satisfied or waived by Cipher, would result in Cipher taking over a land lease for up to 50 years for the site itself, as well as the assignment of certain agreements relating to developing and running the site. Upon closing, Cipher will pay to the seller $7 million in consideration, to be paid by delivery of a number of Cipher common shares to be issued under the Company’s shelf registration statement previously filed on Form S-3. Cipher anticipates closing the transaction before the end of the year.

 

“Now that the first chapter of our growth story is complete, we are excited to embark on the next major phase of expansion,” said Mr. Page. “Black Pearl is a front-of-the-meter site that we aim to bring online in 2025. Having already successfully deployed four data centers, we are eager to start working on the fifth.”

 

“We have also purchased ~1.2 EH/s worth of the latest generation S21 Bitmain mining rigs for $14/TH, using a payment schedule that extends until one year after the delivery of the last batch of miners,” continued Mr. Page. “We remain committed to our disciplined approach to managing growth throughout the cycle. Whether it is purchasing new mining rigs, expanding our data centers, or developing a new site, we are proud

 

---

 

of the rigorous approach we consistently apply to developing the Company’s growth strategy. We believe we are well-positioned to come out a clear winner on the other side of the halving.”

 

Finance and Operations Highlights

 

 

 

Business Update Call and Webcast

 

The live webcast, to be held today at 8:00 a.m. Eastern Time, and a webcast replay of the conference call can be accessed from the investor relations section of Cipher’s website at https://investors.ciphermining.com. To access this conference call by telephone, register here to receive dial-in numbers and a unique PIN to join the call.

 

About Cipher

 

Cipher is an emerging technology company focused on the development and operation of bitcoin mining data centers. Cipher is dedicated to expanding and strengthening the Bitcoin network's critical infrastructure. Together with its diversely talented team and strategic partnerships, Cipher aims to be a market leader in bitcoin mining growth and innovation. To learn more about Cipher, please visit https://www.ciphermining.com/.

 

Forward Looking Statements

 

This press release contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations regarding our future results of operations and financial position, business strategy, timing and likelihood of success, potential expansion of bitcoin mining data centers, including the closing of the Black Pearl purchase agreement and development of the Black Pearl facility, expectations regarding the operations of mining centers and delivery of mining rigs, and management plans and objectives, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and

 

---

 

strategies. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).

 

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: volatility in the price of Cipher's securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, variations in performance across competitors, changes in laws and regulations affecting Cipher's business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 14, 2023, and in Cipher's subsequent filings with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

 

Contacts:

Investor Contact:

Josh Kane

Head of Investor Relations at Cipher Mining

josh.kane@ciphermining.com

 

Media Contact:

Ryan Dicovitsky / Kendal Till

Dukas Linden Public Relations

CipherMining@DLPR.com

 

 

 

 

 

 

 

 

---

 

 

 

 

 

CIPHER MINING INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

	September 30, 2023				December 31, 2022
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,342			$	11,927
Accounts receivable		360				98
Receivables, related party		-				1,102
Prepaid expenses and other current assets		3,962				7,254
Bitcoin		13,667				6,283
Derivative asset		33,087				21,071
Total current assets		54,418				47,735
Property and equipment, net		258,295				191,784
Deposits on equipment		1,220				73,018
Investment in equity investees		33,609				37,478
Derivative asset		46,963				45,631
Operating lease right-of-use asset		4,399				5,087
Security deposits		17,586				17,730
Total assets	$	416,490			$	418,463
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,604			$	14,286
Accounts payable, related party		1,554				3,083
Accrued expenses and other current liabilities		24,813				19,353
Finance lease liability, current portion		6,749				2,567
Operating lease liability, current portion		1,117				1,030
Warrant liability		56				7
Total current liabilities		38,893				40,326
Asset retirement obligation		17,966				16,682
Finance lease liability		12,014				12,229
Operating lease liability		3,645				4,494
Deferred tax liability		1,285				1,840
Total liabilities		73,803				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 September 30, 2023 and December 31, 2022		-				-
Common stock, $0.001 par value, 500,000,000 shares authorized, 259,682,742 and 251,095,305 shares issued as of September 30, 2023 and December 31, 2022, respectively, and 254,558,178 and 247,551,958 shares outstanding as of September 30, 2023 and December 31, 2022, respectively		259				251
Additional paid-in capital		490,655				453,854
Accumulated deficit		(148,222	)			(111,209	)
Treasury stock, at par, 5,124,564 and 3,543,347 shares at September 30, 2023 and December 31, 2022, respectively		(5	)			(4	)
Total stockholders’ equity		342,687				342,892
Total liabilities and stockholders’ equity	$	416,490			$	418,463

 

 

 

 

---

 

CIPHER MINING INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(unaudited)

 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022					2023				2022
Revenue - bitcoin mining	$	30,304			$	-				$	83,423			$	-
Costs and operating expenses (income)
Cost of revenue		13,008				-					37,017				-
General and administrative		23,898				17,755					62,653				51,849
Depreciation		16,217				11					42,284				26
Change in fair value of derivative asset		(4,744	)			(85,658	)				(13,294	)			(85,658		)
Power sales		(2,720	)			-					(8,469	)			-
Equity in losses of equity investees		1,998				8,345					4,179				20,577
Realized gain on sale of bitcoin		(2,505	)			(6	)				(10,711	)			(6		)
Impairment of bitcoin		3,443				320					8,076				859
Other gains		(95	)			-					(2,355	)			-
Total costs and operating expenses (income)		48,500				(59,233	)				119,380				(12,353		)
Operating (loss) income		(18,196	)			59,233					(35,957	)			12,353
Other income (expense)
Interest income		11				55					112				106
Interest expense		(627	)			-					(1,513	)			-
Change in fair value of warrant liability		10				4					(49	)			115
Other expense		(6	)			-					(18	)			-
Total other (expense) income		(612	)			59					(1,468	)			221
(Loss) income before taxes		(18,808	)			59,292					(37,425	)			12,574
Current income tax expense		(95	)			-					(143	)			-
Deferred income tax benefit		1,192				-					555				-
Total income tax benefit		1,097				-					412				-
Net (loss) income	$	(17,711	)		$	59,292				$	(37,013	)		$	12,574
Net (loss) income per share - basic	$	(0.07	)		$	0.24				$	(0.15	)		$	0.05
Net (loss) income per share - diluted	$	(0.07	)		$	0.24				$	(0.15	)		$	0.05
Weighted average shares outstanding - basic		251,789,350				247,508,745					249,858,033				248,461,373
Weighted average shares outstanding - diluted		251,789,350				248,342,200					249,858,033				248,782,665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

 

CIPHER MINING INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2023				2022
Cash flows from operating activities
Net (loss) income	$	(37,013	)		$	12,574
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		42,284				26
Amortization of operating right-of-use asset		688				556
Share-based compensation		28,687				30,072
Equity in losses of equity investees		4,179				20,577
Impairment of bitcoin		8,076				859
Non-cash lease expense		1,477				-
Deferred income taxes		(555	)			-
Bitcoin received as payment for services		(83,161	)			-
Change in fair value of derivative asset		(13,294	)			(85,658	)
Change in fair value of warrant liability		49				(115	)
Realized gain on sale of bitcoin		(10,711	)			(6	)
Changes in assets and liabilities:
Proceeds from sale of bitcoin		78,729				23
Proceeds from power sales		-				1,722
Proceeds from reduction of scheduled power		-				5,056
Accounts receivable		(262	)			-
Receivables, related party		(958	)			(731	)
Prepaid expenses and other current assets		3,238				5,412
Security deposits		144				(1,103	)
Accounts payable		2,366				400
Accounts payable, related party		(1,529	)			-
Accrued expenses and other current liabilities		10,732				1,408
Lease liabilities		(762	)			37
Net cash provided by (used in) operating activities		32,404				(8,891	)
Cash flows from investing activities
Deposits on equipment		(4,533	)			(184,095	)
Purchases of property and equipment		(32,980	)			(28,958	)
Capital distributions from equity investees		3,807				43,291
Investment in equity investees		(3,545	)			-
Prepayments on financing lease		(3,676	)			-
Net cash used in investing activities		(40,927	)			(169,762	)
Cash flows from financing activities
Proceeds from the issuance of common stock		11,644				-
Offering costs paid for the issuance of common stock		(298	)			-
Repurchase of common shares to pay employee withholding taxes		(3,224	)			(3,077	)
Principal payments on financing lease		(8,184	)			-
Net cash used in financing activities		(62	)			(3,077	)
Net decrease in cash and cash equivalents		(8,585	)			(181,730	)
Cash and cash equivalents, beginning of the period		11,927				209,841
Cash and cash equivalents, end of the period	$	3,342			$	28,111
Supplemental disclosure of noncash investing and financing activities
Reclassification of deposits on equipment to property and equipment	$	74,186			$	-
Right-of-use asset obtained in exchange for finance lease liability	$	14,212			$	-
Reclassification of receivables, related party to investment in equity investees	$	2,060			$	-
Equity method investment acquired for non-cash consideration	$	1,926			$	93,208
Sales tax accruals reversed due to exemption	$	1,837			$	-
Bitcoin received from equity investees	$	317			$	3,139
Common stock cancelled	$	-			$	10,000
Property and equipment purchases in accounts payable, accounts payable, related party and accrued expenses	$	-			$	6,695
Right-of-use asset obtained in exchange for operating lease liability	$	-			$	5,859
Investment in equity investees in accrued expenses	$	-			$	5,316
Deposits on equipment in accounts payable, accounts payable, related party and accrued expenses	$	-			$	4,289
Reclassification of deferred investment costs to investment in equity investees	$	-			$	174

 

 

---

 

Non-GAAP Financial Measures

 

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

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Reconciliation of non-GAAP income (loss) from operations:
Operating (loss) income		$	(18,196	)		$	59,233			$	(35,957	)		$	12,353
Depreciation and amortization			16,453				11				42,972				26
Change in fair value of derivative asset			(4,744	)			(85,658	)			(13,294	)			(85,658	)
Share-based compensation expense			10,699				10,494				28,687				30,072
Other gains - nonrecurring			-				-				(2,349	)			-
Non-GAAP income (loss) from operations		$	4,212			$	(15,920	)		$	20,059			$	(43,207	)

 

The following are reconciliations of our non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per share, in each case excluding the impact of (i) depreciation and amortization (ii) the non-cash change in the fair value of our derivative asset, (iii) share-based compensation expense, (iv) nonrecurring gains, (v) the non-cash change in the fair value of our warrant liability and (vi) deferred income tax expense, to the most directly comparable GAAP measures for the periods indicated (in thousands, except for per share amounts):

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Reconciliation of non-GAAP net income (loss):
Net (loss) income		$	(17,711	)		$	59,292			$	(37,013	)		$	12,574
Non-cash adjustments to net (loss) income:
Depreciation and amortization			16,453				11				42,972				26
Change in fair value of derivative asset			(4,744	)			(85,658	)			(13,294	)			(85,658	)
Share-based compensation expense			10,699				10,494				28,687				30,072
Other gains - nonrecurring			-				-				(2,349	)			-
Change in fair value of warrant liability			10				4				(49	)			115
Deferred income tax expense			1,192				-				555				-
Total non-cash adjustments to net (loss) income			23,610				(75,149	)			56,522				(55,445	)
Non-GAAP net income (loss)		$	5,899			$	(15,857	)		$	19,509			$	(42,871	)
Reconciliation of non-GAAP basic and diluted net income (loss) per share:
Basic and diluted net (loss) income per share		$	(0.07	)		$	0.24			$	(0.15	)		$	0.05
Depreciation and amortization (per share)			0.07				-				0.17				-
Change in fair value of derivative asset (per share)			(0.02	)			(0.35	)			(0.05	)			(0.35	)
Share-based compensation expense (per share)			0.04				0.04				0.11				0.12
Other gains - nonrecurring (per share)			-				-				(0.01	)			-
Change in fair value of warrant liability (per share)			-				-				-				-
Deferred income tax expense (per share)			-				-				-				-
Non-GAAP basic and diluted net income (loss) per share		$	0.02			$	(0.07	)		$	0.07			$	(0.18	)

 

 

---

Presentation for Business Update November 8, 2023

---

Forward-Looking Statements This communication contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this communication that are not statements of historical fact, including statements about our beliefs and expectations regarding our future results of operations and financial position, business strategy, timing and likelihood of success, potential expansion of bitcoin mining data centers, and management plans and objectives, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” and similar expressions (including the negative versions of such words or expressions). These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication, including but not limited to: volatility in the price of Cipher's securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, variations in performance across competitors, changes in laws and regulations affecting Cipher's business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2022, and in Cipher's subsequent filings with the Securities and Exchange Commission. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures We use non-GAAP financial measures to assess and analyze our operational results and trends and to make financial and operational decisions. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this presentation should not be considered alternatives to measurements required by GAAP, and should not be considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliation of non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this presentation. Reported results are presented in accordance with GAAP, whereas adjusted results are GAAP results adjusted to exclude the impact of (i) depreciation of fixed assets, (ii) change in fair value of warrant liability, (iii) non-cash change in fair value of our derivative asset and (iv) stock compensation expense. The contents and appearance of this presentation is copyrighted and the trademarks and service marks are owned by Cipher Mining Inc. All rights reserved.

---

Positioned to Win – Growing Through the Cycle Signed agreement to acquire a Texas-based greenfield site with a conditional ERCOT interconnection approval for up to 300 MW, called “Black Pearl” Purchased 1.2 EH/s of Bitmain’s newest generation S21 rigs for $14/TH Continued progress on grid connection at Alborz data center, expected 1H 2024 ~2.7cAnticipated Weighted Average Power Price (c/kWh)(1) 7.2 EH/sSelf-Mining Hash Rate Represents the expected weighted average power price at Cipher’s current sites GROWTH UPDATES BUILT TO SUCCEED ~96%of Portfolio Energized Through Fixed Price Power 33Cipher Employees

---

Key Indicators as of October 31, 2023 14.9 BTC Daily Production Capacity(2) 516 BTC BTC Held 4,032 BTC Year to Date Production 428 BTC Monthly Production October 7.2 EH/s Current 23.5 EH/s 2025 Potential(1) Self-Mining Hash rate Note: Values represented are approximations Assumes a PUE of 1.05 and an efficiency of 17.5 J/TH/s per rig for 300 MW build out at recently acquired greenfield site, Black Pearl Assumes network hash rate of 444 EH/s and 923 bitcoins mined per day 8.4 EH/s Current + Contracted

---

Bitcoin Mining Business Model POWER SOURCE MINING EQUIPMENT BITCOIN NETWORK Data center revenue includes a reward for the block mined, transaction fees, and potential power sales(1) Average block time is 10 minutes Time for Bitcoin system to mine a new block Block reward based on ratio of data center’s computing power to that of entire Bitcoin network Current block reward amounts to 6.25 bitcoins per block(2) Transaction fees are additional bitcoin paid to miners for confirming transactions Bitcoin Mining Dynamics Electricity Electricity Cost Computing Power Transaction Fees Bitcoin Reward Transaction Processing Assignment of Rewards 5 At certain sites, Cipher can opportunistically elect to use power at data center or sell to the market The block reward is cut in half after every 210,000 blocks are mined (~every 4 years); the latest revision was in May 2020

---

Is an ETF coming? Continued Network Hash Rate Growth Shifting Landscape for Mining Rigs? Represents average USD market price across major bitcoin exchanges from August 1, 2023, to October 31, 2023, per data.nasdaq.com Reflects Bitcoin network hash rate from August 1, 2023, to October 31, 2023, per blockchain.com BTC Price & Network Hash rate(1,2) Current emphasis 1 2 Acquire Assets at Cyclical Lows Power Use / Trading Optimization Optimize Production Pre-Halving Grayscale Wins SEC Lawsuit $27,401 | Aug. 29 FASB Ruling on Digital Assets $25,826 | Sep. 6 Bitmain New S21 Series $26,539 | Sep. 22 Canaan New A14 Series $26,368 | Sep. 25 SEC Further Delays BTC ETFs $26,951 | Sep. 28 All-Time High Hash Rate $34,443 | Oct. 31 MicroBT New M60 Series $33,998 | Oct. 24 Market Update 3

---

Data Centers Update ~$8,379 Weighted Avg. Electricity Cost per BTC(1) Odessa ~$8,390 all-in electricity cost per BTC(2) 90% of BTC production(3) Alborz ~$6,794 all-in electricity cost per BTC(4) 6% of BTC production(3) Bear & Chief ~$10,448 all-in electricity cost per BTC(5) 4% of BTC production(3) Steady Scaling KEY UPDATES Reflects weighted average all-in electricity cost from January to September 2023; September 2023 represents the latest electricity bills received Reflects electricity cost from January to September 2023, including TDU charges and net of revenue generated from opportunistic power sales; September 2023 represents the latest electricity bill received Reflects approximate percentage of Cipher’s October BTC production Reflects electricity cost from January to September 2023, including taxes, customer charges, and 2021 storm surcharge; September 2023 represents the latest electricity bill received Reflects combined electricity cost from January to September 2023, including taxes, settlement charges, and TSDP charges; September 2023 represents the latest electricity bills received 7 Hash Rate Growth

---

Operational Highlights Reflects approximate percentage of Cipher’s October BTC production YTD through October 2023 Reflects electricity cost from January to September 2023, including TDU charges and net of revenue generated from opportunistic power sales; September 2023 represents the latest electricity bill received Estimated for October 2023; assumes full up-time, network hash rate of 444 EH/s and 923 bitcoins mined per day Odessa ~$8,390 All-in Electricity Cost per BTC(3) ~12.9 Daily BTC Mining Capacity(4) ~6.2 EH/s 207 MW Operating Capacity ~3,531 BTC Mined YTD(2) Odessa – 90% of BTC Production(1)

---

Operational Highlights Reflects approximate percentage of Cipher’s October BTC production Joint venture with WindHQ LLC, of which Cipher owns ~0.64 EH/s YTD through October 2023; joint venture with WindHQ LLC, of which Cipher owns ~295 BTC Reflects electricity cost from January to September 2023, including taxes, customer charges, and 2021 storm surcharge; September 2023 represents the latest electricity bill received Estimated for October 2023; assumes full up-time, network hash rate of 444 EH/s and 923 bitcoins mined per day Alborz ~$6,794 All-in Electricity Cost per BTC(4) ~2.7 Daily BTC Mining Capacity(5) ~1.3 EH/s 40 MW Operating Capacity(2) ~603 BTC Mined YTD(3) Alborz – 6% of BTC Production(1)

---

Operational Highlights Bear & Chief Reflects approximate percentage of Cipher’s October BTC production Joint venture with WindHQ LLC, of which Cipher owns ~0.32 EH/s YTD through October 2023; joint venture with WindHQ LLC, of which Cipher owns ~206 BTC Reflects combined electricity cost from January to September 2023, including taxes, settlement charges, and TSDP charges; September 2023 represents the latest electricity bills received Estimated for October 2023; assumes full up-time, network hash rate of 444 EH/s and 923 bitcoins mined per day ~$10,448 All-in Electricity Cost per BTC(4) ~1.4 Daily BTC Mining Capacity(5) ~0.65 EH/s 20 MW Operating Capacity(2) ~421 BTC Mined YTD(3) Bear & Chief – 4% of BTC Production(1)

---

Financial Update

---

  September 30, 2023     December 31, 2022     (unaudited)         ASSETS           Current assets           Cash and cash equivalents $ 3,342     $ 11,927   Accounts receivable   360       98   Receivables, related party   -       1,102   Prepaid expenses and other current assets   3,962       7,254   Bitcoin   13,667       6,283   Derivative asset   33,087       21,071   Total current assets   54,418       47,735   Property and equipment, net   258,295       191,784   Deposits on equipment   1,220       73,018   Investment in equity investees   33,609       37,478   Derivative asset   46,963       45,631   Operating lease right-of-use asset   4,399       5,087   Security deposits   17,586       17,730   Total assets $ 416,490     $ 418,463   LIABILITIES AND STOCKHOLDERS’ EQUITY           Current liabilities           Accounts payable $ 4,604     $ 14,286   Accounts payable, related party   1,554       3,083   Accrued expenses and other current liabilities   24,813       19,353   Finance lease liability, current portion   6,749       2,567   Operating lease liability, current portion   1,117       1,030   Warrant liability   56       7   Total current liabilities   38,893       40,326   Asset retirement obligation   17,966       16,682   Finance lease liability   12,014       12,229   Operating lease liability   3,645       4,494   Deferred tax liability   1,285       1,840   Total liabilities   73,803       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 September 30, 2023 and December 31, 2022   -       -   Common stock, $0.001 par value, 500,000,000 shares authorized, 259,682,742 and 251,095,305 shares issued as of September 30, 2023 and December 31, 2022, respectively, and 254,558,178 and 247,551,958 shares outstanding as of September 30, 2023 and December 31, 2022, respectively   259       251   Additional paid-in capital   490,655       453,854   Accumulated deficit   (148,222 )     (111,209 ) Treasury stock, at par, 5,124,564 and 3,543,347 shares at September 30, 2023 and December 31, 2022, respectively   (5 )     (4 ) Total stockholders’ equity   342,687       342,892   Total liabilities and stockholders’ equity $ 416,490     $ 418,463   Consolidated Balance Sheets Note: In thousands, except for share and per share amounts

---

  Three Months Ended September 30,     Nine Months Ended September 30,     2023     2022     2023     2022   Revenue - bitcoin mining $ 30,304     $ -     $ 83,423     $ -   Costs and operating expenses (income)                       Cost of revenue   13,008       -       37,017       -   General and administrative   23,898       17,755       62,653       51,849   Depreciation   16,217       11       42,284       26   Change in fair value of derivative asset   (4,744 )     (85,658 )     (13,294 )     (85,658 ) Power sales   (2,720 )     -       (8,469 )     -   Equity in losses of equity investees   1,998       8,345       4,179       20,577   Realized gain on sale of bitcoin   (2,505 )     (6 )     (10,711 )     (6 ) Impairment of bitcoin   3,443       320       8,076       859   Other gains   (95 )     -       (2,355 )     -   Total costs and operating expenses (income)   48,500       (59,233 )     119,380       (12,353 ) Operating (loss) income   (18,196 )     59,233       (35,957 )     12,353   Other income (expense)                       Interest income   11       55       112       106   Interest expense   (627 )     -       (1,513 )     -   Change in fair value of warrant liability   10       4       (49 )     115   Other expense   (6 )     -       (18 )     -   Total other (expense) income   (612 )     59       (1,468 )     221   (Loss) income before taxes   (18,808 )     59,292       (37,425 )     12,574   Current income tax expense   (95 )     -       (143 )     -   Deferred income tax benefit   1,192       -       555       -   Total income tax benefit   1,097       -       412       -   Net (loss) income $ (17,711 )   $ 59,292     $ (37,013 )   $ 12,574   Net (loss) income per share - basic $ (0.07 )   $ 0.24     $ (0.15 )   $ 0.05   Net (loss) income per share - diluted $ (0.07 )   $ 0.24     $ (0.15 )   $ 0.05   Weighted average shares outstanding - basic   251,789,350       247,508,745       249,858,033       248,461,373   Weighted average shares outstanding - diluted   251,789,350       248,342,200       249,858,033       248,782,665   Consolidated Statement of Operations Note: In thousands, except for share and per share amounts

---

    Three Months Ended September 30,     Nine Months Ended September 30,       2023     2022     2023     2022   Reconciliation of non-GAAP net income (loss):                         Net (loss) income   $ (17,711 )   $ 59,292     $ (37,013 )   $ 12,574   Non-cash adjustments to net (loss) income:                         Depreciation and amortization     16,453       11       42,972       26   Change in fair value of derivative asset     (4,744 )     (85,658 )     (13,294 )     (85,658 ) Share-based compensation expense     10,699       10,494       28,687       30,072   Other gains - nonrecurring     -       -       (2,349 )     -   Change in fair value of warrant liability     10       4       (49 )     115   Deferred income tax expense     1,192       -       555       -   Total non-cash adjustments to net (loss) income     23,610       (75,149 )     56,522       (55,445 ) Non-GAAP net income (loss)   $ 5,899     $ (15,857 )   $ 19,509     $ (42,871 )                           Reconciliation of non-GAAP basic and diluted net income (loss) per share:                         Basic and diluted net (loss) income per share   $ (0.07 )   $ 0.24     $ (0.15 )   $ 0.05   Depreciation and amortization (per share)     0.07       -       0.17       -   Change in fair value of derivative asset (per share)     (0.02 )     (0.35 )     (0.05 )     (0.35 ) Share-based compensation expense (per share)     0.04       0.04       0.11       0.12   Other gains - nonrecurring (per share)     -       -       (0.01 )     -   Change in fair value of warrant liability (per share)     -       -       -       -   Deferred income tax expense (per share)     -       -       -       -   Non-GAAP basic and diluted net income (loss) per share   $ 0.02     $ (0.07 )   $ 0.07     $ (0.18 )     Three Months Ended September 30,     Nine Months Ended September 30,       2023     2022     2023     2022   Reconciliation of non-GAAP income (loss) from operations:                         Operating (loss) income   $ (18,196 )   $ 59,233     $ (35,957 )   $ 12,353   Depreciation and amortization     16,453       11       42,972       26   Change in fair value of derivative asset     (4,744 )     (85,658 )     (13,294 )     (85,658 ) Share-based compensation expense     10,699       10,494       28,687       30,072   Other gains - nonrecurring     -       -       (2,349 )     -   Non-GAAP income (loss) from operations   $ 4,212     $ (15,920 )   $ 20,059     $ (43,207 ) Non-GAAP Measures Note: In thousands, except for per share amounts The following is a reconciliation of our non-GAAP income (loss) from operations, which excludes the impact of depreciation and amortization non-cash change in fair value of our derivative asset share-based compensation expense nonrecurring gains, to its most directly comparable GAAP measure for the periods indicated: The following are reconciliations of our non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per share, in each case excluding the impact of (i) depreciation and amortization, (ii) the non-cash change in the fair value of our derivative asset, (iii) share-based compensation expense, (iv) nonrecurring gains, (v) the non-cash change in the fair value of our warrant liability and (vi) deferred income tax expense, to the most directly comparable GAAP measures for the periods indicated:

---

Appendix

---

  Common Stock     Additional     Accumulated     Treasury Stock     Total     Shares     Amount     Paid-in Capital     Deficit     Shares     Amount     Stockholders’ Equity   Balance as of June 30, 2022   251,001,072     $ 251     $ 431,966     $ (118,874 )     (3,511,490 )   $ (4 )   $ 313,339   Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement   42,577       -       (25 )     -       (13,193 )     -       (25 ) Share-based compensation   -       -       10,494       -       -       -       10,494   Net income   -       -       -       59,292       -       -       59,292   Balance as of September 30, 2022   251,043,649     $ 251     $ 442,435     $ (59,582 )     (3,524,683 )   $ (4 )   $ 383,100     Common Stock     Additional     Accumulated     Treasury Stock     Total     Shares     Amount     Paid-in Capital     Deficit     Shares     Amount     Stockholders’ Equity   Balance as of June 30, 2023   254,795,626     $ 254     $ 473,471     $ (130,511 )     (4,381,735 )   $ (4 )   $ 343,210   Issuance of common shares, net of offering costs - At-the-market offering   2,831,736       4       8,597       -       -       -       8,601   Delivery of common stock underlying restricted stock units, net of shares settled for tax withholding settlement   1,983,952       1       (2,112 )     -       (742,829 )     (1 )     (2,112 ) Share-based compensation   71,428       -       10,699       -       -       -       10,699   Net loss   -       -       -       (17,711 )     -       -       (17,711 ) Balance as of September 30, 2023   259,682,742     $ 259     $ 490,655     $ (148,222 )     (5,124,564 )   $ (5 )   $ 342,687   Statements of Changes in Stockholders’ Equity (Deficit) Note: In thousands, except for share amounts Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

---

  Nine Months Ended September 30,     2023     2022   Cash flows from operating activities           Net (loss) income $ (37,013 )   $ 12,574   Adjustments to reconcile net loss to net cash provided by (used in) operating activities:           Depreciation   42,284       26   Amortization of operating right-of-use asset   688       556   Share-based compensation   28,687       30,072   Equity in losses of equity investees   4,179       20,577   Impairment of bitcoin   8,076       859   Non-cash lease expense   1,477       -   Deferred income taxes   (555 )     -   Bitcoin received as payment for services   (83,161 )     -   Change in fair value of derivative asset   (13,294 )     (85,658 ) Change in fair value of warrant liability   49       (115 ) Realized gain on sale of bitcoin   (10,711 )     (6 ) Changes in assets and liabilities:           Proceeds from sale of bitcoin   78,729       23   Proceeds from power sales   -       1,722   Proceeds from reduction of scheduled power   -       5,056   Accounts receivable   (262 )     -   Receivables, related party   (958 )     (731 ) Prepaid expenses and other current assets   3,238       5,412   Security deposits   144       (1,103 ) Accounts payable   2,366       400   Accounts payable, related party   (1,529 )     -   Accrued expenses and other current liabilities   10,732       1,408   Lease liabilities   (762 )     37   Net cash provided by (used in) operating activities   32,404       (8,891 ) Cash flows from investing activities           Deposits on equipment   (4,533 )     (184,095 ) Purchases of property and equipment   (32,980 )     (28,958 ) Capital distributions from equity investees   3,807       43,291   Investment in equity investees   (3,545 )     -   Prepayments on financing lease   (3,676 )     -   Net cash used in investing activities   (40,927 )     (169,762 ) Cash flows from financing activities           Proceeds from the issuance of common stock   11,644       -   Offering costs paid for the issuance of common stock   (298 )     -   Repurchase of common shares to pay employee withholding taxes   (3,224 )     (3,077 ) Principal payments on financing lease   (8,184 )     -   Net cash used in financing activities   (62 )     (3,077 ) Net decrease in cash and cash equivalents   (8,585 )     (181,730 ) Cash and cash equivalents, beginning of the period   11,927       209,841   Cash and cash equivalents, end of the period $ 3,342     $ 28,111   Supplemental disclosure of noncash investing and financing activities           Reclassification of deposits on equipment to property and equipment $ 74,186     $ -   Right-of-use asset obtained in exchange for finance lease liability $ 14,212     $ -   Reclassification of receivables, related party to investment in equity investees $ 2,060     $ -   Equity method investment acquired for non-cash consideration $ 1,926     $ 93,208   Sales tax accruals reversed due to exemption $ 1,837     $ -   Bitcoin received from equity investees $ 317     $ 3,139   Common stock cancelled $ -     $ 10,000   Property and equipment purchases in accounts payable, accounts payable, related party and accrued expenses $ -     $ 6,695   Right-of-use asset obtained in exchange for operating lease liability $ -     $ 5,859   Investment in equity investees in accrued expenses $ -     $ 5,316   Deposits on equipment in accounts payable, accounts payable, related party and accrued expenses $ -     $ 4,289   Reclassification of deferred investment costs to investment in equity investees $ -     $ 174   Consolidated Statement of Cash Flows Note: In thousands

v3.23.3

Document And Entity Information	Nov. 08, 2023
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 08, 2023
Entity Registrant Name	CIPHER MINING INC.
Entity Central Index Key	0001819989
Entity Emerging Growth Company	true
Securities Act File Number	001-39625
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-1614529
Entity Address, Address Line One	1 Vanderbilt Avenue
Entity Address, Address Line Two	Floor 54
Entity Address, Address Line Three	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
Entity Information, Former Legal or Registered Name	N/A
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Ex Transition Period	false
Warrants Each Whole Warrant Exercisable For One Share Of Common Stock At An Exercise Price Of Eleven Point Five Zero Per Whole Share Member
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
Common Stock Par Value Point Zero Zero One Per Share Member
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	CIFR
Security Exchange Name	NASDAQ

---