Cipher Mining Inc.
(NASDAQ: CIFR) (“Cipher” or the
“Company”), a leading developer and operator of bitcoin mining data
centers, today announced results for its fourth quarter and full
year ended December 31, 2022, with an update on its operations and
deployment strategy.
“We are pleased to announce financial results that demonstrate
our resilient position as a low-cost producer of bitcoin, while we
continue our steady march toward the completion of our initial data
centers,” said Tyler Page, CEO of Cipher. “As always, our focus is
on prudent growth through the cycle, which we can accomplish given
the strength of our balance sheet and the significant ramp up at
our Odessa facility. As we complete our initial build out at
Odessa, we will increase our focus on the tremendous organic growth
opportunities we have across our sites, as well as continue to
refine our pipeline of potential new projects and new opportunities
to drive shareholder value.”
Ed Farrell, CFO of Cipher Mining, said, “We commenced producing
revenues in the fourth quarter of 2022 with the energization of our
Odessa data center. With the ramp up of Odessa in 2023, we look
forward to providing the market with greater detail on our
operations, which we believe will illuminate our best-in-class unit
economics.”
Finance and Operations Updates
- Across four initial data centers, Cipher remains on track to
deploy up to ~5.7 EH/s by the end of Q1 2023, with a highly
efficient machine fleet, averaging ~31.4 J/TH, purchased at an
average price of ~$30.53/TH/s
- The weighted average power price at the Company’s current sites
is ~2.7 c/kWh
- ~515 and ~377 bitcoin mined in fiscal year 2022 and the fourth
quarter of 2022, respectively
- Cipher produced full year 2022 GAAP diluted net loss of $0.16
per share and non-GAAP diluted net loss of $0.26 per share
Recent Developments
Cipher began reporting unaudited monthly production and
operations updates in December 2022.
In January 2023, Cipher energized 13,300 new Bitmain and MicroBT
miners, representing an increase in hash rate of ~1.4 EH/s and a
~48% increase relative to the previous month. With the increase in
hash rate, Cipher produced ~343 bitcoin in January, representing a
~52% increase in production relative to the previous month. At
month-end, Cipher reported over 3.3 EH/s of self-mining operations
at the Odessa facility and ~4.3 EH/s of self-mining operations
across all the sites.
In February 2023, Cipher energized an additional 7,710 new
Bitmain and MicroBT miners, representing an increase in hash rate
of ~0.9 EH/s and a ~19% increase relative to the previous month.
With the increase in hash rate, Cipher produced ~398 bitcoin in
February, representing a ~16% increase in production relative to
the previous month. At month-end, Cipher reported over 4.2 EH/s of
self-mining operations at the Odessa facility and ~5.2 EH/s of
self-mining operations across all the sites.
Business Update Call and Webcast
Cipher will host a conference call and webcast today at 8:00
a.m. Eastern Time to discuss the fourth quarter and full year
results for 2022 and management’s outlook for future financial and
operational performance. The live webcast and a webcast replay of
the conference call can be accessed from the investor relations
page of Cipher’s website at https://investors.ciphermining.com. To
access this conference call, dial (800) -715-9871 and use the
conference ID 2007079.
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, 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 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 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 press release 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 press release. 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.
Contacts:Investor Contact:Josh
KaneHead of Investor Relations at Cipher
Miningjosh.kane@ciphermining.com
Media Contact:Ryan Dicovitsky / Kendal
TillDukas Linden Public RelationsCipherMining@DLPR.com
CIPHER MINING
INC.CONSOLIDATED BALANCE SHEETS(in
thousands, except for share and per share amounts)
|
December 31, |
|
|
2022 |
|
|
2021 |
|
ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
11,927 |
|
|
$ |
209,841 |
|
Accounts receivable |
|
98 |
|
|
|
- |
|
Receivables, related party |
|
1,102 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
7,254 |
|
|
|
13,819 |
|
Bitcoin |
|
6,283 |
|
|
|
- |
|
Derivative asset |
|
21,071 |
|
|
|
- |
|
Total current assets |
|
47,735 |
|
|
|
223,660 |
|
Property and equipment,
net |
|
191,784 |
|
|
|
5,124 |
|
Deposits on equipment |
|
73,018 |
|
|
|
114,857 |
|
Investment in equity
investees |
|
37,478 |
|
|
|
- |
|
Derivative asset |
|
45,631 |
|
|
|
- |
|
Operating lease right-of-use
asset |
|
5,087 |
|
|
|
- |
|
Security deposits |
|
17,730 |
|
|
|
10,352 |
|
Deferred investment costs |
|
- |
|
|
|
174 |
|
Total assets |
$ |
418,463 |
|
|
$ |
354,167 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
14,286 |
|
|
$ |
242 |
|
Accounts payable, related party |
|
3,083 |
|
|
|
- |
|
Accrued expenses and other current liabilities |
|
19,353 |
|
|
|
257 |
|
Finance lease liability, current portion |
|
2,567 |
|
|
|
- |
|
Operating lease liability, current portion |
|
1,030 |
|
|
|
- |
|
Warrant liability |
|
7 |
|
|
|
- |
|
Total current liabilities |
|
40,326 |
|
|
|
499 |
|
Asset retirement
obligation |
|
16,682 |
|
|
|
- |
|
Finance lease liability |
|
12,229 |
|
|
|
- |
|
Operating lease liability |
|
4,494 |
|
|
|
- |
|
Deferred tax liability |
|
1,840 |
|
|
|
- |
|
Warrant liability |
|
- |
|
|
|
137 |
|
Total liabilities |
|
75,571 |
|
|
|
636 |
|
Commitments and contingencies
(Note 14) |
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized,
none issued and outstanding as of December 31, 2022 and 2021 |
|
- |
|
|
|
- |
|
Common stock, $0.001 par value, 500,000,000 shares authorized,
251,095,305 and 252,131,679 shares issued as of December 31, 2022
and 2021, respectively, and 247,551,958 and 249,279,420 shares
outstanding as of December 31, 2022 and 2021, respectively |
|
251 |
|
|
|
252 |
|
Additional paid-in capital |
|
453,854 |
|
|
|
425,438 |
|
Accumulated deficit |
|
(111,209 |
) |
|
|
(72,156 |
) |
Treasury stock, at par, 3,543,347 and 2,852,259 shares at December
31, 2022 and 2021, respectively |
|
(4 |
) |
|
|
(3 |
) |
Total stockholders’ equity |
|
342,892 |
|
|
|
353,531 |
|
Total liabilities and stockholders’ equity |
$ |
418,463 |
|
|
$ |
354,167 |
|
|
|
|
|
|
|
|
|
CIPHER MINING
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except for share and per share
amounts)
|
Year Ended |
|
|
Eleven Months Ended |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Revenue - bitcoin mining |
$ |
3,037 |
|
|
$ |
- |
|
|
|
|
|
|
|
Costs and operating expenses
(income) |
|
|
|
|
|
Cost of revenue |
|
748 |
|
|
|
- |
|
General and administrative |
|
70,836 |
|
|
|
72,147 |
|
Depreciation |
|
4,378 |
|
|
|
5 |
|
Change in fair value of derivative asset |
|
(73,479 |
) |
|
|
- |
|
Power sales |
|
(458 |
) |
|
|
- |
|
Equity in losses of equity investees |
|
36,972 |
|
|
|
- |
|
Realized gain on sale of bitcoin |
|
(6 |
) |
|
|
- |
|
Impairment of bitcoin |
|
1,467 |
|
|
|
- |
|
Total costs and operating expenses |
|
40,458 |
|
|
|
72,152 |
|
Operating loss |
|
(37,421 |
) |
|
|
(72,152 |
) |
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
Interest income |
|
215 |
|
|
|
4 |
|
Interest expense |
|
(137 |
) |
|
|
(27 |
) |
Change in fair value of warrant liability |
|
130 |
|
|
|
22 |
|
Total other income (expense) |
|
208 |
|
|
|
(1 |
) |
|
|
|
|
|
|
Provision for income
taxes |
|
(1,840 |
) |
|
|
- |
|
Net loss |
$ |
(39,053 |
) |
|
$ |
(72,153 |
) |
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.16 |
) |
|
$ |
(0.33 |
) |
Weighted average shares
outstanding - basic and diluted |
|
248,227,458 |
|
|
|
218,026,424 |
|
|
|
|
|
|
|
|
|
CIPHER MINING INC.
CONSOLIDATED STATEMENT OF CASH FLOWS(in
thousands)
|
Year Ended |
|
|
Eleven Months Ended |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Cash flows from
operating activities |
|
|
|
|
|
Net loss |
$ |
(39,053 |
) |
|
$ |
(72,153 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
Depreciation |
|
4,378 |
|
|
|
5 |
|
Amortization of right-of-use assets |
|
772 |
|
|
|
- |
|
Share-based compensation |
|
41,504 |
|
|
|
63,765 |
|
Equity in losses of equity investees |
|
36,972 |
|
|
|
- |
|
Impairment of bitcoin |
|
1,467 |
|
|
|
- |
|
Non-cash lease expense |
|
137 |
|
|
|
- |
|
Income tax expense |
|
1,840 |
|
|
|
- |
|
Bitcoin received as payment for services |
|
(2,939 |
) |
|
|
- |
|
Change in fair value of derivative asset |
|
(73,479 |
) |
|
|
- |
|
Change in fair value of warrant liability |
|
(130 |
) |
|
|
(22 |
) |
Realized gain on sale of bitcoin |
|
(6 |
) |
|
|
- |
|
Changes in assets and liabilities: |
|
|
|
|
|
Proceeds from power sales |
|
1,721 |
|
|
|
- |
|
Proceeds from reduction of scheduled power |
|
5,056 |
|
|
|
- |
|
Proceeds from sale of Bitcoin |
|
23 |
|
|
|
- |
|
Accounts receivable |
|
(98 |
) |
|
|
- |
|
Receivables, related party |
|
(1,102 |
) |
|
|
- |
|
Prepaid expenses and other current assets |
|
6,433 |
|
|
|
(13,385 |
) |
Security deposits |
|
(7,378 |
) |
|
|
(10,352 |
) |
Accounts payable |
|
892 |
|
|
|
222 |
|
Accounts payable, related party |
|
1,530 |
|
|
|
- |
|
Accrued expenses |
|
748 |
|
|
|
254 |
|
Lease liabilities |
|
(203 |
) |
|
|
- |
|
Net cash used in operating activities |
|
(20,915 |
) |
|
|
(31,666 |
) |
Cash flows from
investing activities |
|
|
|
|
|
Deposits on equipment |
|
(188,103 |
) |
|
|
(114,856 |
) |
Purchases of property and
equipment |
|
(39,815 |
) |
|
|
(5,110 |
) |
Capital distributions from
equity investees |
|
54,009 |
|
|
|
- |
|
Payments for deferred
investment costs |
|
- |
|
|
|
(174 |
) |
Net cash used in investing activities |
|
(173,909 |
) |
|
|
(120,140 |
) |
Cash flows from
financing activities |
|
|
|
|
|
Repurchase of common shares to
pay employee withholding taxes |
|
(3,090 |
) |
|
|
(23,246 |
) |
Business Combination, net of
issuance costs paid |
|
- |
|
|
|
384,893 |
|
Proceeds from borrowings on
related party loan |
|
- |
|
|
|
7,038 |
|
Repayments under related party
loan |
|
- |
|
|
|
(7,038 |
) |
Net cash (used in) provided by financing activities |
|
(3,090 |
) |
|
|
361,647 |
|
Net (decrease) increase in
cash and cash equivalents |
|
(197,914 |
) |
|
|
209,841 |
|
Cash and cash equivalents,
beginning of the period |
|
209,841 |
|
|
|
- |
|
Cash and cash equivalents, end
of the period |
$ |
11,927 |
|
|
$ |
209,841 |
|
|
|
|
|
|
|
|
|
CIPHER MINING INC.
CONSOLIDATED STATEMENT OF CASH FLOWS –
CONTINUED(in thousands)
|
Year Ended |
|
|
Eleven Months Ended |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
Cash paid for interest |
$ |
- |
|
|
$ |
27 |
|
Cash paid for income taxes, net |
$ |
- |
|
|
$ |
- |
|
Supplemental
disclosure of noncash investing and financing
activities |
|
|
|
|
|
Equity method investment acquired for non-cash consideration |
$ |
127,796 |
|
|
$ |
- |
|
Reclassification of deposits on equipment to property and
equipment |
$ |
105,904 |
|
|
$ |
- |
|
Initial estimate of asset retirement obligation and related
capitalized costs |
$ |
16,509 |
|
|
$ |
- |
|
Right-of-use asset obtained in exchange for finance lease
liability |
$ |
14,998 |
|
|
$ |
- |
|
Deposits on equipment in accounts payable, accounts payable,
related party and accrued expenses |
$ |
13,403 |
|
|
$ |
- |
|
Property and equipment purchases in accounts payable and accounts
payable, related party |
$ |
13,994 |
|
|
$ |
18 |
|
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 |
$ |
5,316 |
|
|
$ |
- |
|
Bitcoin received from equity investees |
$ |
4,828 |
|
|
$ |
- |
|
Finance lease costs in accrued expenses |
$ |
339 |
|
|
$ |
- |
|
Reclassification of deferred investment costs to investment in
equity investees |
$ |
174 |
|
|
$ |
- |
|
Prepaid rent reclassified to operating lease liability |
$ |
132 |
|
|
$ |
- |
|
Net assets assumed from GWAC in the Business Combination |
$ |
- |
|
|
$ |
433 |
|
Non-cash fair value of private warrants |
$ |
- |
|
|
$ |
261 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
The following is a reconciliation of our non-GAAP loss from
operations, which excludes the impact of (i) depreciation and
amortization, (ii) non-cash change in fair value of our derivative
asset and (iii) stock compensation expense, to its most directly
comparable GAAP measure for the periods indicated (in
thousands):
|
|
Year Ended |
|
|
Eleven Months Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Reconciliation of
non-GAAP loss from operations: |
|
|
|
|
|
|
Operating loss |
|
$ |
(37,421 |
) |
|
$ |
(72,152 |
) |
Depreciation and
amortization |
|
|
5,150 |
|
|
|
5 |
|
Change in fair value of
derivative asset |
|
|
(71,758 |
) |
|
|
- |
|
Stock compensation
expense |
|
|
41,504 |
|
|
|
63,765 |
|
Non-GAAP loss from operations |
|
$ |
(62,525 |
) |
|
$ |
(8,382 |
) |
|
|
|
|
|
|
|
|
|
The following are reconciliations of our non-GAAP net loss and
non-GAAP basic and diluted net loss per share, in each case
excluding the impact of (i) depreciation and amortization (ii)
non-cash change in fair value of our derivative asset, (iii)
non-cash change in fair value of our warrant liability and (iv)
stock compensation expense, to the most directly comparable GAAP
measures for the periods indicated (in thousands, except for per
share amounts):
|
|
Year Ended |
|
|
Eleven Months Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Reconciliation of
non-GAAP net loss: |
|
|
|
|
|
|
Net loss |
|
$ |
(39,053 |
) |
|
$ |
(72,153 |
) |
Non-cash adjustments to net
loss: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
5,150 |
|
|
|
5 |
|
Change in fair value of derivative asset |
|
|
(71,758 |
) |
|
|
- |
|
Change in fair value of warrant liability |
|
|
130 |
|
|
|
22 |
|
Stock compensation expense |
|
|
41,504 |
|
|
|
63,765 |
|
Total non-cash adjustments to net loss |
|
|
(24,974 |
) |
|
|
63,792 |
|
Non-GAAP net loss |
|
$ |
(64,027 |
) |
|
$ |
(8,361 |
) |
|
|
|
|
|
|
|
Reconciliation of
non-GAAP basic and diluted net loss per share: |
|
|
|
|
|
|
Basic and diluted net loss per
share |
|
$ |
(0.16 |
) |
|
$ |
(0.33 |
) |
Depreciation and amortization
(per share) |
|
|
0.02 |
|
|
|
- |
|
Change in fair value of
derivative asset (per share) |
|
|
(0.29 |
) |
|
|
- |
|
Change in fair value of
warrant liability (per share) |
|
|
- |
|
|
|
- |
|
Stock compensation expense
(per share) |
|
|
0.17 |
|
|
|
0.29 |
|
Non-GAAP basic and diluted net loss per share |
|
$ |
(0.26 |
) |
|
$ |
(0.04 |
) |
Cipher Mining (NASDAQ:CIFR)
Historical Stock Chart
From Jul 2024 to Aug 2024
Cipher Mining (NASDAQ:CIFR)
Historical Stock Chart
From Aug 2023 to Aug 2024