0000950170-22-002861 | 10-K | XBRL Viewer

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2021	Jan. 31, 2021
Current assets
Cash and cash equivalents	$ 209,841,257
Prepaid expenses	13,818,825	$ 0
Total current assets	223,660,082
Property and equipment, net	5,124,266	1,637
Deposits on equipment	114,856,314
Deferred offering costs		171,450
Deferred investment costs	174,250
Security deposits	10,352,306
Total assets	354,167,218	173,087
Current liabilities
Accounts payable	241,764	1,919
Accrued expenses	257,487	174,648
Total current liabilities	499,251	176,567
Warrant liability	136,800
Total liabilities	636,051	176,567
Commitments and contingencies (Note 9)
Stockholders' equity (deficit)
Preferred stock, $0.001 par value, 10,000,000 shares authorized and none issued and outstanding as of December 31, 2021, no shares authorized as of January 31, 2021
Common stock, $0.001 par value, 500,000,000 shares authorized, 252,131,679 shares issued and 249,279,420 shares outstanding as of December 31, 2021, 200,000,000 shares authorized and subscribed as of January 31, 2021	252,132	200,000
Subscription receivable		(5)
Additional paid-in capital	425,437,931	(199,995)
Treasury stock, at par, 2,852,259 shares as of December 31, 2021, no shares as of January 31, 2021	(2,852)
Accumulated deficit	(72,156,044)	(3,480)
Total stockholders' equity (deficit)	353,531,167	(3,480)
Total liabilities and stockholders' equity (deficit)	$ 354,167,218	$ 173,087

CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Dec. 31, 2021	Jan. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	0
Preferred stock, shares issued	0
Preferred stock, shares outstanding	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	5,000
Common stock, shares issued	252,131,679
Common stock, shares outstanding	249,279,420
Common stock, shares subscribed		500
Treasury stock, shares	2,852,259	0

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	1 Months Ended	11 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Jan. 31, 2021	Dec. 31, 2021
Costs and expenses
General and administrative	$ 3,475	$ 72,146,944
Depreciation	5	4,867
Total costs and expenses	3,480	72,151,811
Operating loss	(3,480)	(72,151,811)
Other expense
Interest income		4,331
Interest expense		(26,912)
Change in fair value of warrant liability		21,828
Total other expense		(753)
Net loss	$ (3,480)	$ (72,152,564)
Basic and diluted net loss per share		$ (0.33)
Basic and diluted weighted average number of shares outstanding		218,026,424

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)	Total	Previously Reported	Common Stock	Common Stock Previously Reported	Common Stock Retroactive Application of Recapitalization	Subscription Receivable	Subscription Receivable Previously Reported	Additional Paid-in Capital	Additional Paid-in Capital Previously Reported	Additional Paid-in Capital Retroactive Application of Recapitalization	Treasury Stock	Accumulated Deficit	Accumulated Deficit Previously Reported
Beginning balance at Jan. 06, 2021	$ 0		$ 0			$ 0		$ 0				$ 0
Beginning balance, Shares at Jan. 06, 2021			0
Subscription receivable				$ 1			$ (5)		$ 4
Subscription receivable, shares				500
Net loss	(3,480)	$ (3,480)											$ (3,480)
Ending balance at Jan. 31, 2021	(3,480)	$ (3,480)	$ 200,000	$ 1	$ 199,999	(5)	$ (5)	(199,995)	$ 4	$ (199,999)		(3,480)	$ (3,480)
Ending balance, Shares at Jan. 31, 2021			200,000,000	500	199,999,500
Cash received for common stock subscribed	5					$ 5
Business Combination, net of redemptions and equity issuance costs of $40.6 million	385,167,646		$ 46,381					385,121,265
Business Combination, net of redemptions and equity issuance costs of $40.6 million, Shares			46,381,119
Delivery of Common stock underlying restricted stock units			$ 5,751					(5,751)
Delivery of common stock underlying restricted stock units, Shares			5,750,560
Shares settled for tax withholding on vesting of restricted stock units	(23,245,913)							(23,243,061)			$ (2,852)
Shares settled for tax withholding on vesting of restricted stock units, Shares											(2,852,259)
Share-based compensation	63,765,473							63,765,473
Net loss	(72,152,564)											(72,152,564)
Ending balance at Dec. 31, 2021	$ 353,531,167		$ 252,132					$ 425,437,931			$ (2,852)	$ (72,156,044)
Ending balance, Shares at Dec. 31, 2021			252,131,679								(2,852,259)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parentheticals) $ in Millions	11 Months Ended
	Dec. 31, 2021 USD ($)
Statement of Stockholders' Equity [Abstract]
Equity issuance cost	$ 40.6

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	1 Months Ended	11 Months Ended
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	Jan. 31, 2021	Dec. 31, 2021
Cash flows from operating activities
Net loss	$ (3,480)	$ (72,152,564)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	5	4,867
Change in fair value of warrant liability		(21,828)
Share-based compensation		63,765,473
Changes in assets and liabilities:
Prepaid expenses		(13,385,639)
Security deposits		(10,352,306)
Accounts payable	277	221,775
Accrued expenses	3,198	254,289
Net cash used in operating activities		(31,665,933)
Cash flows from investing activities
Deposits on equipment		(114,856,314)
Purchases of property and equipment		(5,109,426)
Payments for deferred investment costs		(174,250)
Net cash used in investing activities		(120,139,990)
Cash flows from financing activities
Proceeds from borrowings on related party loan		7,038,038
Repayments under related party loan		(7,038,038)
Proceeds from the issuance of common stock		5
Business Combination, net of issuance costs paid		384,893,088
Repurchase of common shares to pay employee withholding taxes		(23,245,913)
Net cash provided by financing activities		361,647,180
Net increase in cash and cash equivalents		209,841,257
Cash and cash equivalents, end of the period		209,841,257
Supplemental disclosure of cash flow information
Cash paid for interest		26,912
Supplemental disclosure of noncash investing and financing activities
Property and equipment purchases in accounts payable	1,642	18,070
Net assets assumed from GWAC in the Business Combination		433,186
Non-cash fair value of private warrants		$ 261,060
Deferred offering costs included in accrued expenses	$ 171,450

Organization and Business

11 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business

NOTE 1. ORGANIZATION AND BUSINESS

Organization

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

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

Business

The Company is an emerging technology company that operates in the Bitcoin mining ecosystem in the United States. Specifically, the Company is developing and growing a cryptocurrency mining business, specializing in Bitcoin. As a stand-alone, U.S.-based cryptocurrency mining business, the Company has begun its buildout of cryptocurrency mining sites in the United States. The Company began deployment of capacity in the first quarter of 2022, with mining operations beginning at one site in February 2022 and with power and infrastructure readiness at two of its other mining sites planned by the end of March 2022.

Cipher Mining Technologies was established on January 7, 2021, in Delaware, by Bitfury Top Holdco B.V. and its subsidiaries (“Bitfury Top Holdco” and, with its subsidiaries, the “Bitfury Group”), a global full-service blockchain and technology specialist and one of the leading private infrastructure providers in the blockchain ecosystem. 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 82.6% and 83.4% of the Company’s common stock as of December 31, 2021 and upon completion of the Business Combination (as defined above), respectively, with sole voting and sole dispositive power over those shares and, as a result, the Bitfury Group has control of the Company as defined in Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation.”

Risks and uncertainties

Liquidity and Financial Condition

The Company incurred a net loss of $72.2 million and negative cash flows from operations of $31.7 million for the eleven months ended December 31, 2021. As of December 31, 2021, the Company had approximate balances of cash and cash equivalents of $209.8 million, working capital of $223.2 million, total stockholders’ equity of $353.5 million and an accumulated deficit of $72.2 million. To date, the Company has, in large part, relied on proceeds from the consummation of the Business Combination to fund its operations. During the eleven months ended December 31, 2021, the Company paid approximately $114.9 million as deposits on equipment, primarily for miners, and has significant future commitments related to these deposits as detailed in Note 6, for which the Company will need additional capital in order to meet these commitments in accordance with the existing contractual terms. Management believes that the Company’s existing financial resources, combined with its ability to delay or change its planned buildout steps, are sufficient to meet its operating and capital requirements for at least 12 months from the date these consolidated financial statements are issued.

There is limited historical financial information about the Company upon which to base an evaluation of its performance and the Company has not generated any revenues from its business to date. The business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration and/or development, and possible cost overruns due to price and cost increases in services. Management of the Company has no current intention of entering into a merger or acquisition within the next 12

months and has a specific business plan and timetable to complete our 12-month plan of operation. The Company is in the process of an active operational buildout and anticipates that additional capital will be required to implement the buildout. The Company may also require additional capital to pursue certain business opportunities or respond to technological advancements, competitive dynamics or technologies, customer demands, challenges, acquisitions or unforeseen circumstances. Additionally, the Company has incurred and expects to continue to incur significant costs related to becoming a public company. Accordingly, the Company may engage in equity or debt financings or enter into credit facilities for the above-mentioned or other reasons; however, the Company may not be able to timely secure additional debt or equity financings on favorable terms, if at all. If the Company raises additional funds through equity financing, its existing stockholders could experience significant dilution. Furthermore, any debt financing obtained by the Company in 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. If the Company is unable to obtain adequate debt or equity financing for its planned buildout, the Company may be required to delay or change its planned buildout steps, which may adversely affect the Company's business plan.

COVID-19

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 the outbreak and global spread of the novel coronavirus disease (“COVID-19”). The COVID-19 pandemic that was declared on March 11, 2020 has caused significant economic dislocation in the United States and globally as governments across the world, including the United States, introduced measures aimed at preventing the spread of COVID-19. The spread of COVID-19 and the imposition of related public health measures have resulted in, and are expected to continue to result in, increased volatility and uncertainty in the cryptocurrency space. Any severe or prolonged economic downturn, as result of the COVID-19 pandemic or otherwise, could result in a variety of risks to the business and management cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact its business.

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. The future impact of the COVID-19 pandemic is still highly uncertain and there is no assurance that the COVID-19 pandemic or any other pandemic, or other unfavorable global economic, business or political conditions, will not materially and adversely affect the Company's business, prospects, financial condition, and operating results.

Summary of Significant Accounting Policies

11 Months Ended

Dec. 31, 2021

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 consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) as determined by the FASB and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”).

The Merger was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, GWAC is treated as the acquired company and Cipher Mining Technologies is treated as the acquirer for financial statement reporting purposes.

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Cipher Mining Technologies issuing stock for the net assets of GWAC, accompanied by a recapitalization. The net assets of GWAC are stated at historical cost, with no goodwill or other intangible assets recorded, see Note 3.

Cipher Mining Technologies was determined to be the accounting acquirer based on an evaluation of the following facts and circumstances:

•

Cipher Mining Technologies’ existing shareholder has the greatest voting interest in the Company;

•

the majority of the members of the board of directors of the Company are primarily composed of individuals associated with Cipher Mining Technologies;

•

Cipher Mining Technologies’ senior management is the senior management of the Company; and

•

Cipher Mining Technologies’ operations prior to the Reverse Recapitalization comprise the only ongoing operations of the Company after the consummation of the Business Combination.

The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Cipher Mining Technologies. The shares and corresponding capital amounts and losses per share prior to the Business Combination have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination, see Note 3.

The consolidated financial statements include the accounts of the Company and its controlled subsidiary, Cipher Mining Technologies. All intercompany transactions and balances have been eliminated.

Emerging growth company

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

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on the previously reported financial position.

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

Change in fiscal year

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

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. The Company’s cash equivalents consist of funds held in a money market account. The Company had $101.0 million and nil in cash equivalents as of December 31, 2021 and January 31, 2021, respectively.

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on these deposits.

Fair value of financial instruments

The Company’s financial assets and liabilities are accounted for in accordance with ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs when measuring fair value and classifies those inputs into three levels:

Level 1 – Observable inputs, such as quoted prices in active markets for identical assets and liabilities.

Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life.

Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgement. Accordingly, the degree of judgement exercised by management in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Deferred offering and deferred investment costs

Deferred offering costs consist of legal fees incurred as of the balance sheet date that were directly related to the Business Combination and were allocated as offering costs to the proceeds received and substantially charged to shareholders' equity (deficit) upon the consummation of the Business Combination, see Note 3.

Deferred investment costs consist of legal fees incurred through the balance sheet date that are directly related to the formation of a joint venture and which will be capitalized as part of the Company’s total investment in the joint venture upon consummation of the joint venture agreement, see Note 9.

Property and equipment, net

Property and equipment consists primarily of construction-in-progress at one of the Company’s planned sites in Texas and computer equipment and is stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer-related assets. Construction-in-progress consists primarily of leasehold improvements at one of the Texas sites which, when placed into service, will be depreciated in accordance with the lease term of five years.

Property and equipment, net consisted of the following:


	December 31, 2021			January 31, 2021
Computer equipment	$	59,720		$	1,642
Construction-in-progress		5,069,418			-
Property and equipment, gross		5,129,138			1,642
Less: accumulated depreciation		(4,872	)		(5	)
Property and equipment, net	$	5,124,266		$	1,637

Impairment of long-lived assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used will be measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized will be measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no indicators of impairment during the eleven months ended December 31, 2021 or during the period from January 7, 2021 (inception) through January 31, 2021.

Common stock warrants

Upon the 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”). See Note 11 for additional information on the Public and Private Placement Warrants.

The Company is capitalized as a single class of common stock, accordingly, a qualifying cash tender offer of more than 50% of the Common Stock will always result in a change-in-control, and in accordance with ASC 815-40-55-3, this would not preclude permanent equity classification of the Public Warrants; therefore, the Public Warrants are equity classified.

The Private Placement Warrants are accounted for as a liability under ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity,” as they are a freestanding financial instrument that require the Company to transfer assets upon exercise. The Company recorded the Private Placement Warrants as a liability in the consolidated balance sheet at fair value on the Closing Date, with subsequent changes in fair value recognized in the change in fair value of warrant liability within the consolidated statements of operations. The Private Placement Warrants were valued using a Black-Scholes option-pricing model as described in Note 4.

Share-based compensation

The Company accounts for all share-based payments to employees, consultants and directors, which may include grants of stock options, stock appreciation rights, restricted stock awards, and restricted stock units (“RSUs”) to be recognized in the consolidated financial statements, based on their respective grant date fair values. As of December 31, 2021, the Company has awarded only RSUs with service-based vesting conditions (“Service-Based RSUs”) and performance-based RSUs with market-based vesting conditions (“Performance-Based RSUs”). Compensation expense for all awards is amortized based upon a graded vesting method over the estimated requisite service period. All share-based compensation expenses are recorded in general and administrative expense in the consolidated statements of operations. Forfeitures are recorded as they occur. See also Note 12 below.

The fair value of Service-Based RSUs is the closing market price of the Company's Common Stock on the date of the grant. The Company employs a Monte Carlo simulation technique to calculate the fair value of the Performance-Based RSUs on the date granted based on the average of the future simulated outcomes. The Performance-Based RSUs contain different market-based vesting conditions that are based upon the achievement of certain market capitalization milestones. Under the Monte Carlo simulation model, a number of variables and assumptions are used including, but not limited to, the underlying price of the Company's Common Stock, the expected stock price volatility over the term of the award, a correlation coefficient, and the risk-free rate. The Performance-Based RSUs awarded do not have an explicit requisite service period, therefore compensation expense is recorded over a derived service period based upon the estimated median time it will take to achieve the market capitalization milestone using a Monte Carlo simulation.

Weighted average assumptions used in the November 17, 2021 Monte Carlo valuation model for Performance-Based RSUs awarded on that date were: expected volatility of 96.1% and a risk-free rate of 1.60% based upon a remaining term of 10 years.

Treasury stock

Treasury share purchases obtained through share withholdings for taxes are recorded at par value.

Revenue recognition

The Company will recognize revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

•

Step 1: Identify the contract with the customer

•

Step 2: Identify the performance obligations in the contract

•

Step 3: Determine the transaction price

•

Step 4: Allocate the transaction price to the performance obligations in the contract

•

Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

•

Variable consideration

•

Constraining estimates of variable consideration

•

The existence of a significant financing component in the contract

•

Noncash consideration

•

Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

Digital asset mining services

Providing computing power in digital asset transaction verification services will be an output of the Company’s ordinary activities. The provision of providing such computing power is a performance obligation. The transaction consideration the Company receives, if any, is noncash consideration, which the Company will measure at fair value on the date received. The consideration is all variable. There is no significant financing component in these transactions.

Mining pools

The Company will also enter into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company will be entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which will be recorded as contra-revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company will measure at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Consideration is constrained from recognition until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive; at this time, cumulative revenue is no longer probable of significant reversal, i.e., associated uncertainty is resolved.

Fair value of the cryptocurrency awards received will be determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management expects to exercise significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

There is no significant financing component in these transactions. There is, however, consideration payable to the customer in the form of a pool operator fee, payable only if the pool is the first to solve the equation; this fee will be deducted from the proceeds received by the Company and will be recorded as contra-revenue, as it does not represent a payment for a distinct good or service as described in ASC 606-10-32-25.

Certain aspects of the Company’s performance obligations, such as providing computing power, may be contracted to various third parties and there is a risk that if these parties are unable to perform or curtail their operations, the Company’s revenue and operating results may be affected. Please see Note 9 for additional information about the Company’s power arrangements.

Cryptocurrencies

Cryptocurrencies, including Bitcoin, will be included in current assets in the consolidated balance sheets. Cryptocurrencies purchased will be recorded at cost and cryptocurrencies awarded to the Company through its mining activities will be accounted for in connection with the Company’s revenue recognition policy disclosed above.

Cryptocurrencies will be accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

Purchases of cryptocurrencies made by the Company will be included within investing activities in the consolidated statements of cash flows, while cryptocurrencies awarded to the Company through its mining activities will be included as a non-cash adjustment within operating activities in the consolidated statements of cash flows. The sales of cryptocurrencies will be included within investing activities in the consolidated statements of cash flows and any realized gains or losses from such sales will be included in other income (expense) in the consolidated statements of operations. The Company will account for its gains or losses in accordance with the first in first out (“FIFO”) method of accounting.

Income taxes

The Company complies with the accounting and reporting requirements of FASB ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2021 or January 31, 2021. The Company did not record any interest and penalties for the unrecognized tax benefits for the eleven months ended December 31, 2021 or during the period from January 7, 2021 (inception) through January 31, 2021, though its policy is to recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense.

The Company files income tax returns in the United States federal tax jurisdiction and various state jurisdictions. The Company did not have any foreign operations during any periods presented in these consolidated financial statements. The statute of limitations for assessment by the Internal Revenue Service and state tax authorities is open since inception, and in addition, carryforward attributes generated since inception may be adjusted upon examination to the extent utilized in a future period. The Company is not aware of any tax examinations currently taking place.

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 views its operations and manages its business in one segment.

Leases

Effective February 1, 2021, the Company began accounting for leases in accordance with ASC 842, “Leases”. Accordingly, the Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.

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

For the Company’s operating leases, fixed lease payments will be recognized as lease expense on a straight-line basis over the lease term. Variable lease costs are expensed as incurred and are not included in the measurement of ROU assets and lease liabilities.

The Company entered into a series of agreements with affiliates of Luminant ET Services Company LLC (“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”). Additionally, the Company executed a lease for office space dated December 17, 2021. Once either the Luminant Lease Agreement or the office lease are effective and the Company has control over the applicable leased asset, the Company will record both a ROU asset and a corresponding lease liability in accordance with ASC 842 for each lease component as applicable under the respective agreements.

Recently issued and adopted accounting pronouncements

Recently adopted accounting pronouncements

Effective February 1, 2021, the Company early adopted ASC 842 using the modified retrospective method. This new guidance requires a lessee to recognize both a ROU asset representing its right to use the underlying asset for the lease term and a liability for future lease payments on the balance sheet for almost all of its leases. The new guidance continues to differentiate between finance leases and operating leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time. Classification for both lessees and lessors is now based on an assessment of whether a lease contract is economically similar to the purchase of a non-financial asset from the perspective of control. The new guidance also requires quantitative and qualitative disclosures to enable users to understand the amount, timing, and judgments related to leases and the related cash flows. There was no impact to the Company's consolidated financial statements as of or for the eleven months ending December 31, 2021 resulting from the early adoption of ASC 842.

Recently issued accounting pronouncements not yet adopted

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, which is intended to simplify various aspects related to accounting for income taxes. The new guidance removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. Management is currently evaluating the impact of the adoption of ASU 2019-12 on our consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)”. ASU 2021-04 reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. ASU 2021-04 provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 will be effective for all entities for fiscal years beginning after December 15, 2021. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2021-04 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures.

Business Combination

11 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Business Combination

NOTE 3. BUSINESS COMBINATION

As discussed in Note 1, on August 27, 2021, GWAC, Merger Sub and Cipher Mining Technologies consummated the Business Combination (the “Closing”), with Cipher Mining Technologies surviving the Merger as a wholly-owned subsidiary of Cipher.

At the effective time of the Merger (the “Effective Time”), and subject to the terms and conditions of the Merger Agreement, each share of Cipher Mining Technologies common stock was canceled and converted into the right to receive 400,000 shares (the “Exchange Ratio”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”).

Upon the Closing, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 510,000,000 shares, $0.001 par value per share, of which, 500,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as preferred stock (“Preferred Stock”). The holder of each share of Common Stock is entitled to one vote.

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

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

•

the cancellation of each issued and outstanding share of Cipher Mining Technologies common stock; and

•

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

The following table reconciles the elements of the Business Combination to the statement of cash flows and the statement of changes in stockholders’ equity (deficit) for the eleven months ended December 31, 2021.


	Recapitalization
Cash - GWAC trust and cash, net of redemptions	$	43,197,478
Cash - PIPE Financing		322,350,000
Cash, subscription receivable and/or debt forgiveness - Bitfury Private Placement		60,000,000
Add: Non-cash net assets assumed from GWAC		433,186
Less: Fair value of private warrants		(261,060	)
Less: Transaction costs and advisory fees allocated to equity		(40,551,958	)
Net Business Combination		385,167,646
Less: Non-cash net assets assumed from GWAC		(433,186	)
Less: Transaction costs and advisory fees allocated to warrants		(102,432	)
Add: Fair value of private warrants		261,060
Net cash contributions from Business Combination	$	384,893,088

The Company recorded transaction costs and advisory fees allocated to the Private Placement Warrants as a component of change in fair value of warrant liability in the statement of operations.

The number of shares of Common Stock issued immediately following the consummation of the Business Combination was as follows:


Common stock of GWAC, net of redemptions			4,345,619
GWAC founder shares			3,572,500
GWAC private placement shares			228,000
Shares issued in PIPE Financing			32,235,000
Shares issued in the Bitfury Private Placement			6,000,000
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock			46,381,119
Cipher common shares issued in Business Combination (1)			200,000,000
Shares outstanding			246,381,119

(1)

The number of Cipher Mining Technologies common shares outstanding immediately prior to the Business Combination was 500 shares converted at the Exchange Ratio.

Fair Value Measurements

11 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 4. 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:


	Fair Value Measured as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets included in:
Cash and cash equivalents
Money market securities	$	101,004,331	$	-	$	-	$	101,004,331
	$	101,004,331	$	-	$	-	$	101,004,331
Liabilities included in:
Warrant liability	$	-	$	-	$	136,800	$	136,800
	$	-	$	-	$	136,800	$	136,800

Fair values of cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate the recorded value due to the short-term nature of these items. The Company’s Private Placement Warrants are 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 the Company’s Common Stock. The following table presents significant assumptions utilized in the valuations of the Private Placement Warrants as of the dates indicated:


	August 26, 2021			December 31, 2021
Risk-free rate		0.84	%		1.20	%
Dividend yield rate		0.00	%		0.00	%
Volatility		21.6	%		58.8	%
Contractual term (in years)		5.00			4.65
Exercise price	$	11.50		$	11.50

The following table presents changes in the fair value of the Private Placement Warrants for the eleven months ended December 31, 2021:


Balance, February 1, 2021	$	-
Assumed in Business Combination		261,060
Change in fair value		(124,260	)
Balance, December 31, 2021	$	136,800

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Prepaid and Accrued Expenses

11 Months Ended

Dec. 31, 2021

Prepaid And Accrued Expenses [Abstract]

Prepaid and Accrued Expenses

NOTE 5. PREPAID AND ACCRUED EXPENSES

As of December 31, 2021, the Company had $13.8 million of prepaid expenses on its consolidated balance sheet, which was almost entirely related to prepaid insurance. There were no prepaid expenses as of January 31, 2021.

The Company's accrued expenses consisted of the following:


	December 31, 2021		January 31, 2021
Accounting and audit	$	152,800	$	875
Legal costs		100,000		171,450
Employee related		4,687		-
Investor relations		-		2,323
Total accrued expenses	$	257,487	$	174,648

Deposits on Equipment

11 Months Ended

Dec. 31, 2021

Disclosure Deposits On Equipment [Abstract]

Deposits on Equipment

NOTE 6. DEPOSITS ON EQUIPMENT

As of December 31, 2021, the Company had outstanding executed purchase agreements for the purchase of (1) 27,000 Antminer S19j Pro (100 TH/s) miners from Bitmain Technologies Limited (“Bitmain”) and (2) 60,000 MicroBT M30S, M30S+ and M30S++ miners from SuperAcme Technology (Hong Kong) Limited (“SuperAcme”). The Company also has an agreement for the purchase of between 28,000 to 56,000 mining rigs from Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement between the Company and Bitfury Top HoldCo dated August 26, 2021. The agreement is a non-binding commitment unless and until confirmed by a mutually executed order confirmation. See Note 8 for more information on the Master Services and Supply Agreement. All of the miners to be acquired under the purchase agreements with Bitmain and SuperAcme are to be delivered in monthly batches from January 2022 through December 2022.

Additionally, the Company also entered into two agreements with Bitfury USA Inc., a subsidiary of Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement, to purchase a total of 200 units of BlockBox air-cooled containers (each a “BBAC”), the modular data centers that house mining machines. The delivery of the first 20 containers is expected to begin in the first quarter of 2022 and the remainder are expected to be delivered in 20 batches between May 2022 and October 2022.

The maximum purchase agreement commitments, deposits paid and expected delivery timing (remaining balances are payable in advance of shipping) are summarized below:


Vendor	Agreement Date	Maximum Purchase Commitment*		Deposits Paid		Expected Shipping
Bitmain Technologies Limited**	August 20, 2021 and August 30, 2021	$	171,135,000	$	75,024,010	January 2022 - September 2022
SuperAcme Technology (Hong Kong)**	September 2, 2021		222,400,800		22,240,080	July 2022 - December 2022
Bitfury Top HoldCo B.V.	October 11, 2021	***			10,000,000	***
Bitfury USA Inc. and other vendors (primarily for BBACs)	Various		44,594,951		7,592,224
Total		$	438,130,751	$	114,856,314

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

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

*** As of December 31, 2021, there were no mutually executed order confirmations and as such, the Company had no binding commitments to acquire miners from Bitfury Top HoldCo.

Security Deposits

11 Months Ended

Dec. 31, 2021

Deposit Assets Disclosure [Abstract]

Security Deposits

NOTE 7. SECURITY DEPOSITS

Security deposits as of December 31, 2021 are shown in the table below. No security deposits had been paid as of January 31, 2021.


	December 31, 2021
Luminant Purchase and Sale Agreement collateral (see Note 9)	$	3,063,020
Luminant Power Purchase Agreement Independent Collateral Amount (see Note 9)		6,276,902
Office lease security deposit		922,384
Other deposits		90,000
Total security deposits	$	10,352,306

- Definition

The entire disclosure for affiliate whose security is pledged as collateral for security registered or being registered.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 13
-Paragraph (a)
-Subparagraph (4)
-Subsection 02

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Number 210
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-Paragraph (a)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subsection 02

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
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-Subparagraph (1)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 13
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(2))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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+ Details

Related Party Transactions

11 Months Ended

Dec. 31, 2021

Related Party Transactions

NOTE 8. RELATED PARTY TRANSACTIONS

Master Services and Supply Agreement

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

not obligated to order any equipment or services from the Bitfury Group under the Master Services and Supply Agreement.

In addition to the Master Services and Supply Agreement, Cipher and Bitfury Holding also entered into a fee side letter, which sets out the basic pricing framework applicable under the Master Services and Supply Agreement for any services. Under the side letter, monthly fees for any potential future services, if any, would be determined by reference to two groups of services, which may be provided under the Master Services and Supply Agreement: (i) Bitfury Top HoldCo’s “onsite” services fee would be calculated on a straight cost +5% basis (plus applicable duties and taxes); and (ii) Bitfury Top HoldCo’s “remote services” would be calculated on a ratchet basis applying a management fee of $1000/MW up to 445MW (capped at $200,000/month) and $450USD/MW above 445MW (plus applicable duties and taxes).

Purchase commitments and deposits on equipment

As discussed above in Note 6, the Company entered into agreements with Bitfury Top HoldCo providing the Company an option to purchase mining rigs and with Bitfury USA Inc., a subsidiary of Bitfury Top HoldCo, for BBACs. Such agreements are pursuant to the Master Services and Supply Agreement. As of December 31, 2021, the Company had paid $10.0 million and $5.1 million to Bitfury Top HoldCo and Bitfury USA Inc., respectively, pursuant to these agreements, which were recorded to deposits on equipment on the Company's consolidated balance sheet.

In addition, Bitfury Top HoldCo made payments on the Company's behalf totaling approximately $2.4 million during the eleven months ended December 31, 2021 for deposits on equipment and/or construction-in-progress. The Company reimbursed Bitfury Top HoldCo for these amounts plus a 7% service fee upon completion of the Business Combination and, as a result, recorded the amounts reimbursed to Bitfury (including the service fee) as follows: approximately $2.5 million is included in deposits on equipment and approximately $0.1 million in included in construction-in-progress on the Company's consolidated balance sheet as of December 31, 2021.

Accounts payable, related party

The chief executive officer (“CEO”) and chief financial officer of the Company purchased several computers and funded other operating expenses of the Company and were subsequently reimbursed by an affiliate of Bitfury Top HoldCo. Additionally, the affiliate of Bitfury Top HoldCo also paid a consulting fee to the Company’s CEO for several months prior to the CEO being hired on a full-time basis by the Company. These amounts totaled $47,475 and were recorded as a related party accounts payable line item on the Company’s balance sheets until they were reclassified to the related party loan on August 26, 2021(see further discussion below).

Related party loan

The Company entered into a loan agreement with an affiliate of Bitfury Top HoldCo (the “Lender”) for an initial amount of $0.1 million on February 8, 2021. The interest rate under the loan was initially set at 0.3% and the Lender approved multiple increases to the outstanding loan balance, as well as paid vendors directly on behalf of the Company. On August 26, 2021, the loan agreement was amended by the parties to amend the interest rate per annum to 2.5%, to revise the maturity date to August 31, 2021, and to update the total amount disbursed under the loan to approximately $7.0 million, which included the reclassified accounts payable related party balance of $47,475. The $7.0 million outstanding loan balance was repaid by the Company at the Closing on August 27, 2021 by offsetting it against the $60.0 million of cash due under the Bitfury Private Placement. The Company recognized $26,823 of interest expense on its consolidated statement of operations during the eleven months ended December 31, 2021, which represents all interest due to the Lender under this loan agreement at the revised interest rate of 2.5%.

Subscription receivable

On January 7, 2021, the Company received a letter for a subscription for 500 shares (200,000,000 shares converted at the Exchange Ratio) of its Common Stock from Bitfury Top HoldCo in exchange for a future payment of $5, which was recorded as a subscription receivable on the balance sheet as of January 31, 2021. The Company received payment for the subscribed shares on February 24, 2021.

Commitments and Contingencies

11 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 9. COMMITMENTS AND CONTINGENCIES

Litigation

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

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 December 31, 2021. The Company does not anticipate recognizing any significant losses relating to these arrangements.

Power and hosting arrangements

The Company is party to several power and hosting arrangements as described below.

Luminant power arrangement

On June 23, 2021, the Company entered into a power purchase agreement, which was subsequently amended and restated on July 9, 2021 and further amended on February 28, 2022, with Luminant for the supply of electric power to one of our planned sites in Texas for a term of five years with a subsequent automatic annual renewal provision (as amended, the “Luminant Power Agreement”).

The Luminant Lease Agreement leases the Company a plot of land where the planned data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) will be set up for the Texas site. The Company also entered into the Purchase and Sale Agreement dated June 28, 2021, with amendment and restatement on July 9, 2021 (as amended and restated the “Luminant Purchase and Sale Agreement””) with another Luminant affiliate. The Company entered into the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement to build the infrastructure necessary to support its planned operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under the new lease guidance (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values.

Under the Luminant Power Agreement, the Company is required to provide Luminant with collateral of approximately $12.6 million (the “Independent Collateral Amount”). Half, or approximately $6.3 million, of the Independent Collateral Amount was paid to Luminant on September 1, 2021 and is recorded in security deposits on the consolidated balance sheet as of December 31, 2021, as the Company received notice that Luminant had commenced construction of the Interconnection Electrical Facilities. The other half will be due 15 days prior to the date on which the Interconnection Electrical Facilities are completed and made operational. The Independent Collateral Amount will remain in place throughout the term of the Luminant Power Agreement. Details of the construction of the Interconnection Electrical Facilities, including collateral arrangements that are in addition to the Independent Collateral Amount, are set out in the Luminant Purchase and Sale Agreement. Under the Luminant Purchase and Sale Agreement, the Company provided approximately $3.1 million as collateral separate from the Independent Collateral Amount, which is recorded in security deposits on the consolidated balance sheet as of December 31, 2021.

The Combined Luminant Lease Agreement is effective from the date of the Company’s notification of the Effective Date of the Business Combination, which was August 27, 2021, and shall continue for five years following completion of the substation, subject to renewal provisions aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates, with monthly installments of principal and interest due over a five-year period starting upon transfer of legal title of the substation to the Company (estimated total undiscounted principal payments of $13.1 million). At the end of the lease term for the Interconnection

Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC at a price to be determined based upon bids obtained in the secondary market.

Standard Power hosting agreement

Under the Standard Power Hosting Agreement entered into on February 3, 2021 by the Company and 500 N 4th Street LLC, doing business as Standard Power (“Standard Power”), the Company agrees to provide Standard Power with Bitcoin miners with a specified energy utilization capacity necessary to generate computational power at three Ohio facilities (the “Miners”). Standard Power, in turn, is obligated to (i) host the Miners in specialized containers and provide the electrical power and transmission and connection equipment necessary for the mining and (ii) host, operate and manage the Miners there, in each case in accordance with the terms and conditions of the Standard Power Hosting Agreement.

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

Thereafter, Standard Power shall provide the hosting capacity, housing and equipment for Miners with the specified energy utilization capacities that will be delivered to the facilities in accordance with the availability schedule, as may be amended and supplemented. Standard Power also undertakes to be responsible for the proper installation and the costs of work for hosting the Miners in the specialized containers in each facility and for the proper care and maintenance of the Miners, the facilities and the containers in which the Miners are installed.

Under the Standard Power Hosting Agreement, the Company is obligated to pay a hosting fee and an operational service fee. The Company’s payment obligations under the Standard Power Hosting Agreement become effective on a pro rata basis according to the number of Miners in operation in accordance with the terms of this agreement. The Standard Power Hosting Agreement provides for a term of five years with automatic five-year renewal provisions. The associated fees paid under the Standard Power Hosting Agreement will be expensed as services are received.

WindHQ power arrangement and joint venture

On June 10, 2021, the Company and WindHQ, LLC (“WindHQ”) signed a binding definitive framework agreement with respect to the construction, buildout, deployment and operation of one or more data centers (“Data Centers”) in the United States (the “WindHQ Joint Venture Agreement”).

The WindHQ Joint Venture Agreement provides that the parties shall collaborate to fund the construction and buildout of certain specified Data Centers at locations already identified by the parties (“Initial Data Centers”). Each Initial Data Center will be owned by a separate limited liability company (each, an “Initial Data Center LLC”), and WindHQ and the Company will each own 51% and 49%, respectively, of the initial membership interests of each Initial Data Center LLC.

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

Under the WindHQ Joint Venture Agreement, WindHQ agrees to provide a series of services to each of the Data Centers, including but not limited to: (i) the design and engineering of each of the Data Centers; (ii) the procurement of energy equipment and other related services such as logistics for each of the Data Centers; and (iii) the construction work for each of the Data Centers. Furthermore, the Company is required to support and monitor

(remotely) the operations of the hardware at each Data Center (particularly the mining servers) as required under the WindHQ Joint Venture Agreement.

A development fee equal to 2% of capital expenditures in respect of the initial development of each Data Center shall be paid 50% to WindHQ and 50% to the Company. Furthermore, a fee equal to 2% of the gross revenues of each of the Data Centers will be payable monthly based on the immediately prior month gross revenue of such Data Center, 50% to WindHQ and 50% to the Company.

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

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

On January 28, 2022, in connection with the WindHQ Joint Venture Agreement, Cipher Mining Technologies and Alborz Interests DC LLC (a subsidiary of WindHQ), as members, entered into the Amended and Restated Limited Liability Company Agreement of Alborz LLC (the “Alborz LLC Agreement”). The Alborz LLC Agreement delineates the rights and obligations of the members related to the construction, operation and management of the Alborz facility located in Texas.

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

Stockholders' Equity (Deficit)

11 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity (Deficit)

NOTE 10. STOCKHOLDERS’ EQUITY (DEFICIT)

As of December 31, 2021, 510,000,000 shares with a par value of $0.001 per share are authorized, of which, 500,000,000 shares are designated as Common Stock and 10,000,000 shares are designated as Preferred Stock.

Common Stock

Holders of each share of Common Stock are entitled to dividends when, as and if declared by the Board. As of December 31, 2021, 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.

Cipher Mining Technologies

As of January 31, 2021, 5,000 common shares of Cipher Mining Technologies were authorized with a par value of $0.001 per share, and 500 units were subscribed, which were issued subsequent to January 31, 2021, as discussed above in Note 8. In connection with the Business Combination, the 500 common shares of Cipher Mining Technologies were converted into 200,000,000 shares of the Company’s Common Stock.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Warrants

11 Months Ended

Dec. 31, 2021

Warrants and Rights Note Disclosure [Abstract]

Warrants

NOTE 11. WARRANTS

The Company assumed the Public and Private Placement Warrants, as mentioned above in Note 2, upon consummation of the Business Combination. The Public and Private Placement Warrants entitle the holder to purchase one share of Common Stock at an exercise price of $11.50 per share, subject to adjustment. There were 8,500,000 Public Warrants and 114,000 Private Placement Warrants outstanding both as of the Closing Date of the Business Combination and as of December 31, 2021. 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.

Public Warrants

The Public Warrants are exercisable at any time commencing on October 19, 2021, provided in each case that the Company has an effective registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of Common Stock is available (or the Company permits holders to exercise their Public Warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares of Common Stock are registered, qualified or exempt from registration under the securities or blue sky laws of the state of residence of the holder. The Public Warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described below with respect to the Private Placement Warrants):

•

in whole and not in part;

•

at a price of $0.01 per warrant;

•

upon a minimum of 30 days’ prior written notice of redemption to each warrant holder;

•

if, and only if, the closing price of the Company's Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, stock capitalizations, reorganizations, recapitalizations and the like), for any 20 trading days within a 30-trading day period ending three trading days before the Company sends notice of redemption to warrant holders.

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

Private Placement Warrants

The Private Placement Warrants have terms and provisions that are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Common Stock issuable upon the exercise of the Private Placement Warrants did not become transferable, assignable or salable until September 27, 2021, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.

Share-based Compensation

11 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Compensation

NOTE 12. SHARE-BASED COMPENSATION

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

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

On November 10, 2021, the Board approved grants of RSUs under the Incentive Award Plan to the Company's Chief Executive Officer (“CEO”), to the Company's Chief Financial Officer (“CFO”), as well as to several other executives, consultants and directors, which grants were effective November 17, 2021. The RSUs awarded to the directors and a grant of 5,676,946 RSUs made to the CEO were fully vested upon grant on November 17, 2021. Additionally, the CEO received an additional grant of 7,096,183 RSUs, 2,838,473 of which are Service-Based RSUs and 4,257,710 of which are Performance-Based RSUs. The Board approved additional grants of RSUs for several new employees on December 7, 2021. The CFO, other executives, employees and consultants received Service-Based RSUs. The material terms of the RSU grants are described below. There were no awards granted during the period from January 7, 2021 (inception) through January 31, 2021. As of December 31, 2021, 3,062,798 shares of Common Stock were available for issuance under the Incentive Award Plan.

During the eleven months ended December 31, 2021, the Company recognized total share-based compensation for the following categories of awards:


Service-Based RSUs	$	62,094,704
Performance-Based RSUs		1,670,769
Total share-based compensation expense	$	63,765,473

Service-Based RSUs

A summary of the Company's unvested Service-Based RSU activity for the eleven months ended December 31, 2021 is shown below:


	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at February 1, 2021		-		$	-
Granted		12,548,804			8.09
Vested		(5,750,566	)		8.15
Unvested at December 31, 2021		6,798,238		$	8.04

There was approximately $39.4 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 in equal installments on the first four anniversaries of the vesting commencement date as determined by the Board, which will generally coincide with the timing when the employee or consultant began to provide services to the Company, and which may precede the grant date. Vesting is subject to the award recipient's continuous service on the applicable vesting date; provided, that if the award recipient's employment is terminated by the Company 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 $10 billion market capitalization milestone (described further below) is achieved and the CEO remains in continuous service through such achievement, any then-unvested Service-Based RSUs awarded to the CEO will also vest.

Performance-Based RSUs

A summary of the Company's unvested Performance-Based RSU activity for the eleven months ended December 31, 2021 is shown below:


	Number of Shares		Weighted Average Grant Date Fair Value
Unvested at February 1, 2021		-	$	-
Granted		4,257,710		7.76
Unvested at December 31, 2021		4,257,710	$	7.76

There was approximately $31.4 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 2.4 years.

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

Income Taxes

11 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 13. INCOME TAXES

No provision for federal income taxes has been recorded for the eleven months ended December 31, 2021 or for the period from January 7, 2021 (inception) through January 31, 2021. Current income taxes are based upon the current period's income taxable for federal and state tax reporting purposes. Deferred income taxes (benefits) are provided for certain income and expenses, which are recognized in different periods for tax and financial reporting purposes. Deferred tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income, and net operating loss (“NOL”) carryforwards.

A reconciliation of the expected tax computed at the U.S. statutory federal income tax rate to the total benefit for income taxes is shown below:


	Eleven Months Ended December 31, 2021			For the period January 7, 2021 (inception) through January 31, 2021
Income tax benefit at federal statutory rate		21.0	%		21.0	%
State taxes, net of federal benefit		1.0	%		5.1	%
162m limitations		(13.4	)%		0.0	%
Stock compensation		(3.3	)%		0.0	%
Change in valuation allowance		(5.3	)%		(26.1	)%
Income tax provision (benefit)		0.0	%		0.0	%

Significant components of the Company's deferred tax assets and liabilities were as follows:


	December 31, 2021			January 31, 2021
Deferred tax assets:
Net operating loss carryforwards	$	6,711,946		$	434
Share-based compensation		1,457,280			-
Accruals and other temporary differences		67,294			836
Gross deferred tax assets		8,236,520			1,270
Property and equipment, net		(574	)		(361	)
Valuation allowance		(8,235,946	)		(909	)
Net deferred tax assets	$	-		$	-

As required by ASC 740, management of the Company has evaluated the evidence bearing upon the realizability of its deferred tax assets. Based on the weight of available evidence, both positive and negative, management has determined that it is more likely than not that the Company will not realize the benefits of these assets. Accordingly, the Company recorded a valuation allowance of $8.2 million at December 31, 2021. The valuation allowance increased by $8.2 million during the eleven months ended December 31, 2021, primarily as a result of the increase in NOL carryforwards generated in the current period.

As of December 31, 2021, the Company had Federal and State NOL carryforwards of approximately $29.8 million and $8.8 million, respectively. The Federal NOL carryforwards do not expire, but the State NOL carryforwards expire if not utilized prior to 2041.

Utilization of the U.S. federal and state NOL carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income and tax liabilities, respectively. The Company has not completed a study to assess whether a change of ownership has occurred, or whether there have been multiple ownership changes since its formation, due to the significant cost and complexity associated with such a study. Any limitation may result in expiration of a portion of the NOL carryforwards before utilization. Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Net Loss Per Share

11 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

NOTE 14. NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss allocable 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 the Company’s Common Stock. Basic net loss per common share is the same as dilutive net loss per common share for the eleven months ended December 31, 2021 and for the period from January 7, 2021 (inception) through January 31, 2021, as the inclusion of all potential common shares would have been antidilutive. Potential common shares consist of public and private warrants to purchase Common Stock (using the treasury stock method) that were sold by GWAC in its initial public offering or concurrent with its initial public offering, respectively, and assumed by the Company as of the Effective Date of the Business Combination, as well as unvested RSUs and PSUs.

The following table presents the securities that are excluded from the computation of diluted net loss per common share as of December 31, 2021, because including them would have been antidilutive. There were no potentially dilutive securities as of January 31, 2021.


	December 31, 2021
Public Warrants		8,500,000
Private Placement Warrants		114,000
Unvested RSUs		11,055,948
		19,669,948

Subsequent Events

11 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

NOTE 15. SUBSEQUENT EVENTS

In addition to the subsequent events noted above in Note 9, the following items also occurred subsequent to December 31, 2021:

On January 1, 2022, 1,554,064 of the Company's outstanding Service-Based RSUs awarded to employees and consultants vested and 659,231 of those shares were repurchased by the Company for tax withholdings owed by the employees. The repurchased shares were recognized in treasury stock on the consolidated balance sheet following the repurchase.

In January 2022 and February 2022, the Company made payments totaling approximately $22.3 million to Bitmain and $18.5 million to SuperAcme for miners, as well as payments totaling approximately $18.0 million to Bitfury USA Inc. for other mining-related equipment. These payments were related to purchase commitments disclosed above in Note 6 and increased the Company's deposits on equipment on the consolidated balance sheet subsequent to year end.

Summary of Significant Accounting Policies (Policies)

11 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of presentation and principles of consolidation

Cipher Mining Technologies was determined to be the accounting acquirer based on an evaluation of the following facts and circumstances:

•

Cipher Mining Technologies’ existing shareholder has the greatest voting interest in the Company;

•

the majority of the members of the board of directors of the Company are primarily composed of individuals associated with Cipher Mining Technologies;

•

Cipher Mining Technologies’ senior management is the senior management of the Company; and

•

Cipher Mining Technologies’ operations prior to the Reverse Recapitalization comprise the only ongoing operations of the Company after the consummation of the Business Combination.

The consolidated financial statements include the accounts of the Company and its controlled subsidiary, Cipher Mining Technologies. All intercompany transactions and balances have been eliminated.

Emerging Growth Company

Emerging growth company

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on the previously reported financial position.

Use of Estimates

Use of estimates

Change in Fiscal Year

Change in fiscal year

Cash and Cash Equivalents

Cash and cash equivalents

Concentrations of Credit Risk

Concentrations of credit risk

Fair Value of Financial Instruments

Fair value of financial instruments

Level 1 – Observable inputs, such as quoted prices in active markets for identical assets and liabilities.

Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Deferred Offering and Deferred Investment Costs

Deferred offering and deferred investment costs

Property and Equipment, Net

Property and equipment, net

Property and equipment, net consisted of the following:


	December 31, 2021			January 31, 2021
Computer equipment	$	59,720		$	1,642
Construction-in-progress		5,069,418			-
Property and equipment, gross		5,129,138			1,642
Less: accumulated depreciation		(4,872	)		(5	)
Property and equipment, net	$	5,124,266		$	1,637

Impairment of Long-lived Assets

Impairment of long-lived assets

Common Stock Warrants

Common stock warrants

Share-based Compensation

Share-based compensation

Treasury Stock

Treasury stock

Treasury share purchases obtained through share withholdings for taxes are recorded at par value.

Revenue Recognition

Revenue recognition

•

Step 1: Identify the contract with the customer

•

Step 2: Identify the performance obligations in the contract

•

Step 3: Determine the transaction price

•

Step 4: Allocate the transaction price to the performance obligations in the contract

•

Step 5: Recognize revenue when the company satisfies a performance obligation

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

•

Variable consideration

•

Constraining estimates of variable consideration

•

The existence of a significant financing component in the contract

•

Noncash consideration

•

Consideration payable to a customer

Digital asset mining services

Mining pools

Income taxes

Segment information

Recently Issued and Adopted Accounting Pronouncements

Recently issued and adopted accounting pronouncements

Recently adopted accounting pronouncements

Recently issued accounting pronouncements not yet adopted

Summary of Significant Accounting Policies (Tables)

11 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Property and Equipment

Property and equipment, net consisted of the following:


	December 31, 2021			January 31, 2021
Computer equipment	$	59,720		$	1,642
Construction-in-progress		5,069,418			-
Property and equipment, gross		5,129,138			1,642
Less: accumulated depreciation		(4,872	)		(5	)
Property and equipment, net	$	5,124,266		$	1,637

Business Combination (Tables)

11 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Schedule of Reconciliation of Elements of Business Combination


	Recapitalization
Cash - GWAC trust and cash, net of redemptions	$	43,197,478
Cash - PIPE Financing		322,350,000
Cash, subscription receivable and/or debt forgiveness - Bitfury Private Placement		60,000,000
Add: Non-cash net assets assumed from GWAC		433,186
Less: Fair value of private warrants		(261,060	)
Less: Transaction costs and advisory fees allocated to equity		(40,551,958	)
Net Business Combination		385,167,646
Less: Non-cash net assets assumed from GWAC		(433,186	)
Less: Transaction costs and advisory fees allocated to warrants		(102,432	)
Add: Fair value of private warrants		261,060
Net cash contributions from Business Combination	$	384,893,088

Schedule of Common Stock Issued Following the Consummation of Business Combination

The number of shares of Common Stock issued immediately following the consummation of the Business Combination was as follows:


Common stock of GWAC, net of redemptions			4,345,619
GWAC founder shares			3,572,500
GWAC private placement shares			228,000
Shares issued in PIPE Financing			32,235,000
Shares issued in the Bitfury Private Placement			6,000,000
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock			46,381,119
Cipher common shares issued in Business Combination (1)			200,000,000
Shares outstanding			246,381,119

(1)

The number of Cipher Mining Technologies common shares outstanding immediately prior to the Business Combination was 500 shares converted at the Exchange Ratio.

Fair Value Measurements (Tables)

11 Months Ended

Dec. 31, 2021

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:


	Fair Value Measured as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets included in:
Cash and cash equivalents
Money market securities	$	101,004,331	$	-	$	-	$	101,004,331
	$	101,004,331	$	-	$	-	$	101,004,331
Liabilities included in:
Warrant liability	$	-	$	-	$	136,800	$	136,800
	$	-	$	-	$	136,800	$	136,800

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:


	August 26, 2021			December 31, 2021
Risk-free rate		0.84	%		1.20	%
Dividend yield rate		0.00	%		0.00	%
Volatility		21.6	%		58.8	%
Contractual term (in years)		5.00			4.65
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 fair value of the Private Placement Warrants for the eleven months ended December 31, 2021:


Balance, February 1, 2021	$	-
Assumed in Business Combination		261,060
Change in fair value		(124,260	)
Balance, December 31, 2021	$	136,800

Prepaid and Accrued Expenses (Tables)

11 Months Ended

Dec. 31, 2021

Prepaid And Accrued Expenses [Abstract]

Schedule of Accrued Expenses

The Company's accrued expenses consisted of the following:


	December 31, 2021		January 31, 2021
Accounting and audit	$	152,800	$	875
Legal costs		100,000		171,450
Employee related		4,687		-
Investor relations		-		2,323
Total accrued expenses	$	257,487	$	174,648

Deposits on Equipment (Tables)

11 Months Ended

Dec. 31, 2021

Disclosure Deposits On Equipment [Abstract]

Schedule of Purchase Agreement Commitments, Deposits Paid and Expected Delivery Timing

The maximum purchase agreement commitments, deposits paid and expected delivery timing (remaining balances are payable in advance of shipping) are summarized below:


Vendor	Agreement Date	Maximum Purchase Commitment*		Deposits Paid		Expected Shipping
Bitmain Technologies Limited**	August 20, 2021 and August 30, 2021	$	171,135,000	$	75,024,010	January 2022 - September 2022
SuperAcme Technology (Hong Kong)**	September 2, 2021		222,400,800		22,240,080	July 2022 - December 2022
Bitfury Top HoldCo B.V.	October 11, 2021	***			10,000,000	***
Bitfury USA Inc. and other vendors (primarily for BBACs)	Various		44,594,951		7,592,224
Total		$	438,130,751	$	114,856,314

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

*** As of December 31, 2021, there were no mutually executed order confirmations and as such, the Company had no binding commitments to acquire miners from Bitfury Top HoldCo.

Security Deposits (Tables)

11 Months Ended

Dec. 31, 2021

Deposit Assets Disclosure [Abstract]

Schedule of Security Deposits Consisted

Security deposits as of December 31, 2021 are shown in the table below. No security deposits had been paid as of January 31, 2021.


	December 31, 2021
Luminant Purchase and Sale Agreement collateral (see Note 9)	$	3,063,020
Luminant Power Purchase Agreement Independent Collateral Amount (see Note 9)		6,276,902
Office lease security deposit		922,384
Other deposits		90,000
Total security deposits	$	10,352,306

Share-based Compensation (Tables)

11 Months Ended

Dec. 31, 2021

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation Expense

During the eleven months ended December 31, 2021, the Company recognized total share-based compensation for the following categories of awards:


Service-Based RSUs	$	62,094,704
Performance-Based RSUs		1,670,769
Total share-based compensation expense	$	63,765,473

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 eleven months ended December 31, 2021 is shown below:


	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at February 1, 2021		-		$	-
Granted		12,548,804			8.09
Vested		(5,750,566	)		8.15
Unvested at December 31, 2021		6,798,238		$	8.04

Performance-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 Performance-Based RSU activity for the eleven months ended December 31, 2021 is shown below:


	Number of Shares		Weighted Average Grant Date Fair Value
Unvested at February 1, 2021		-	$	-
Granted		4,257,710		7.76
Unvested at December 31, 2021		4,257,710	$	7.76

Income Taxes (Tables)

11 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Reconciliation of Expected Tax Computed at U.S. Statutory Federal Income Tax Rate to Total Benefit for Income Taxes

A reconciliation of the expected tax computed at the U.S. statutory federal income tax rate to the total benefit for income taxes is shown below:


	Eleven Months Ended December 31, 2021			For the period January 7, 2021 (inception) through January 31, 2021
Income tax benefit at federal statutory rate		21.0	%		21.0	%
State taxes, net of federal benefit		1.0	%		5.1	%
162m limitations		(13.4	)%		0.0	%
Stock compensation		(3.3	)%		0.0	%
Change in valuation allowance		(5.3	)%		(26.1	)%
Income tax provision (benefit)		0.0	%		0.0	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities were as follows:


	December 31, 2021			January 31, 2021
Deferred tax assets:
Net operating loss carryforwards	$	6,711,946		$	434
Share-based compensation		1,457,280			-
Accruals and other temporary differences		67,294			836
Gross deferred tax assets		8,236,520			1,270
Property and equipment, net		(574	)		(361	)
Valuation allowance		(8,235,946	)		(909	)
Net deferred tax assets	$	-		$	-

Net Loss Per Share (Tables)

11 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Common Shares Excluded from Computation of Diluted Net Loss Per Common Share


	December 31, 2021
Public Warrants		8,500,000
Private Placement Warrants		114,000
Unvested RSUs		11,055,948
		19,669,948

Organization and Business - Additional Information (Details) - USD ($)	1 Months Ended	11 Months Ended
	Jan. 31, 2021	Dec. 31, 2021	Aug. 27, 2021	Jan. 06, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net loss	$ (3,480)	$ (72,152,564)
Cash flows from operations		(31,665,933)
Cash and cash equivalents		209,841,257
Working capital		223,200,000
Stockholders' equity	(3,480)	353,531,167		$ 0
Accumulated deficit	$ (3,480)	(72,156,044)
Deposits on equipment		$ 114,856,314
Bitfury Top HoldCo
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Ownership percentage		82.60%	83.40%

Summary of Significant Accounting Policies - Additional Information (Details)		1 Months Ended	11 Months Ended
	Nov. 17, 2021	Jan. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) Segment
Property, Plant and Equipment [Line Items]
Cash equivalents			$ 101,000,000
Unrecognized tax benefits		0	0
Unrecognized tax benefit, interest and penalties		$ 0	$ 0
Number of segment \| Segment			1
Change in accounting principle, accounting standards update, adoption date			Feb. 01, 2021
Change in accounting principle, accounting standards update, early adoption			true
Change in accounting principle, accounting standards update, immaterial effect [true false]			true
Accounting Standards Update [Extensible Enumeration]			us-gaap:AccountingStandardsUpdate201602Member
Performance-Based RSUs
Property, Plant and Equipment [Line Items]
Expected volatility rate	96.10%
Risk-free rate	1.60%
Weighted average remaining term	10 years
Common Stock
Property, Plant and Equipment [Line Items]
Cash tender offer minimum percentage			50.00%
Computer Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets			3 years
Construction in Progress
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets			5 years

Summary of Significant Accounting Policies - Summary of Property and Equipment (Details) - USD ($)	Dec. 31, 2021	Jan. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 5,129,138	$ 1,642
Less: accumulated depreciation	(4,872)	(5)
Property and equipment, net	5,124,266	1,637
Computer Equipment
Property, Plant and Equipment [Line Items]
Property and equipment gross	59,720	$ 1,642
Construction in Progress
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 5,069,418

Business Combination - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		11 Months Ended
	Aug. 27, 2021	Dec. 31, 2021	Jan. 31, 2021
Business Acquisition [Line Items]
Common stock, par value		$ 0.001	$ 0.001
Shares authorized		510,000,000
Share par value		$ 0.001
Common stock, shares authorized		500,000,000	5,000
Preferred stock, shares authorized		10,000,000	0
Common stock voting rights		one vote
Common stock, shares issued		252,131,679
Common stock, shares outstanding	246,381,119	249,279,420
Shares issued, price per share	$ 10.00
GWAC
Business Acquisition [Line Items]
Fixed exchange ratio (in shares)	200,000,000
Shares authorized	510,000,000
Share par value	$ 0.001
Common stock, shares authorized	500,000,000
Preferred stock, shares authorized	10,000,000
Common stock voting rights	Common Stock is entitled to one vote
Common stock shares held	8,146,119
PIPE Investors
Business Acquisition [Line Items]
Aggregate of shares (in Shares)	32,235,000
Shares issued, price per share	$ 10.00
Gross proceeds	$ 322.4
Common stock shares held	32,235,000
Bitfury Top HoldCo
Business Acquisition [Line Items]
Common stock, shares issued	200,000,000
Common stock, shares outstanding	200,000,000
Aggregate of shares (in Shares)	6,000,000
Shares issued, price per share	$ 10.00
Gross proceeds	$ 60.0
Bitfury Top HoldCo \| Bitfury Private Placement
Business Acquisition [Line Items]
Common stock, shares issued	6,000,000
Common Stock \| GWAC
Business Acquisition [Line Items]
Fixed exchange ratio (in shares)	400,000
Common stock, par value	$ 0.001

Business Combination - Schedule of Reconciliation of Elements of Business Combination (Details)	11 Months Ended
	Dec. 31, 2021 USD ($)
Business Acquisition [Line Items]
Less: Fair value of private warrants	$ (261,060)
Less: Transaction costs and advisory fees allocated to equity	(40,551,958)
Net Business Combination	385,167,646
Less: Transaction costs and advisory fees allocated to warrants	(102,432)
Add: Fair value of private warrants	261,060
Net cash contributions from Business Combination	384,893,088
Bitfury Private Placement
Business Acquisition [Line Items]
Cash, subscription receivable and/or debt forgiveness	60,000,000
GWAC
Business Acquisition [Line Items]
Add: Non-cash net assets assumed	433,186
Less: Non-cash net assets assumed	(433,186)
GWAC Trust and Cash, Net of Redemptions
Business Acquisition [Line Items]
Cash	43,197,478
PIPE Financing
Business Acquisition [Line Items]
Cash	$ 322,350,000

Business Combination - Schedule of Common Stock Issued Following the Consummation of Business Combination (Details) - shares		11 Months Ended
	Aug. 27, 2021	Dec. 31, 2021
Business Acquisition [Line Items]
Common stock, shares outstanding	246,381,119	249,279,420
Common Stock
Business Acquisition [Line Items]
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock		46,381,119
GWAC
Business Acquisition [Line Items]
Common stock, net of redemptions	4,345,619
Cipher common shares issued in Business Combination	200,000,000
GWAC \| Common Stock
Business Acquisition [Line Items]
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock	46,381,119
Cipher common shares issued in Business Combination	400,000
GWAC \| Founder Shares
Business Acquisition [Line Items]
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock	3,572,500
GWAC \| Private Placement
Business Acquisition [Line Items]
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock	228,000
GWAC \| PIPE Financing
Business Acquisition [Line Items]
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock	32,235,000
GWAC \| Bitfury \| Private Placement
Business Acquisition [Line Items]
Business Combination, PIPE Financing and Bitfury Private Placement shares - Common Stock	6,000,000

Business Combination - Schedule of Common Stock Issued Following the Consummation of Business Combination (Parenthentical) (Details) - shares	Aug. 27, 2021	Jan. 07, 2021
Business Acquisition [Line Items]
Shares converted at exchange ratio	500	500

Fair Value Measurements - Summary of Financial Assets And Liabilities Measurement on Recurring Basis (Details) - Fair Value, Recurring	Dec. 31, 2021 USD ($)
Assets included in:
Assets, fair value	$ 101,004,331
Liabilities:
Liabilities, fair value	136,800
Level 1
Assets included in:
Assets, fair value	101,004,331
Level 3
Liabilities:
Liabilities, fair value	136,800
Warrant Liability
Liabilities:
Liabilities, fair value	136,800
Warrant Liability \| Level 3
Liabilities:
Liabilities, fair value	136,800
Money Market Securities
Assets included in:
Cash and cash equivalents	101,004,331
Money Market Securities \| Level 1
Assets included in:
Cash and cash equivalents	$ 101,004,331

Fair Value Measurements - Summary of Assumptions Utilized in Valuations of Private Placement Warrants (Details) - Private Placement Warrants	Dec. 31, 2021	Aug. 26, 2021
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Term	4 years 7 months 24 days	5 years
Risk-free Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Private placement warrants, Measurement input	1.20	0.84
Dividend Yield Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Private placement warrants, Measurement input	0.00	0.00
Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Private placement warrants, Measurement input	58.8	21.6
Exercise price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Private placement warrants, Measurement input	11.50	11.50

Fair Value Measurements - Summary of Change in the Fair Value of the Private Placement Warrants (Details) - Private Placement Warrants	11 Months Ended
	Dec. 31, 2021 USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Assumed in Business Combination	$ 261,060
Change in fair value	(124,260)
Balance, December 31, 2021	$ 136,800

Prepaid and Accrued Expenses - Additional Information (Details) - USD ($)	Dec. 31, 2021	Jan. 31, 2021
Prepaid And Accrued Expenses [Abstract]
Prepaid expenses	$ 13,818,825	$ 0

Prepaid and Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($)	Dec. 31, 2021	Jan. 31, 2021
Accrued Expenses [Abstract]
Accounting and audit	$ 152,800	$ 875
Legal costs	100,000	171,450
Employee related	4,687	0
Investor relations	0	2,323
Total accrued expenses	$ 257,487	$ 174,648

Deposits on Equipment - Additional Information (Details)	3 Months Ended	11 Months Ended
	Mar. 31, 2022 Containers	Dec. 31, 2021 Batch Antminer Containers Mining
Property, Plant and Equipment [Line Items]
Description of purchase agreements		the Company had outstanding executed purchase agreements for the purchase of (1) 27,000 Antminer S19j Pro (100 TH/s) miners from Bitmain Technologies Limited (“Bitmain”) and (2) 60,000 MicroBT M30S, M30S+ and M30S++ miners from SuperAcme Technology (Hong Kong) Limited (“SuperAcme”). The Company also has an agreement for the purchase of between 28,000 to 56,000 mining rigs from Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement between the Company and Bitfury Top HoldCo dated August 26, 2021. The agreement is a non-binding commitment unless and until confirmed by a mutually executed order confirmation. See Note 8 for more information on the Master Services and Supply Agreement. All of the miners to be acquired under the purchase agreements with Bitmain and SuperAcme are to be delivered in monthly batches from January 2022 through December 2022.
Bitfury USA Inc
Property, Plant and Equipment [Line Items]
Expected delivery starting month and year		2022-05
Expected delivery ending month and year		2022-10
Number of block box air cooled containers to be purchased \| Containers		200
Number of batches containers expected to be delivered \| Batch		20
Scenario Forecast \| Bitfury USA Inc
Property, Plant and Equipment [Line Items]
Number of containers expected to be delivered \| Containers	20
BlocKBox Air-Cooled Containers \| Bitfury USA Inc
Property, Plant and Equipment [Line Items]
Description of purchase agreements		also entered into two agreements with Bitfury USA Inc., a subsidiary of Bitfury Top HoldCo, made under, and as a part of, the Master Services and Supply Agreement, to purchase a total of 200 units of BlockBox air-cooled containers (each a “BBAC”), the modular data centers that house mining machines. The delivery of the first 20 containers is expected to begin in the first quarter of 2022 and the remainder are expected to be delivered in 20 batches between May 2022 and October 2022.
Maximum \| Bitfury Top Hold Co [Member]
Property, Plant and Equipment [Line Items]
Number of miners to be purchased \| Mining		56,000
Minimum \| Bitfury Top Hold Co [Member]
Property, Plant and Equipment [Line Items]
Number of miners to be purchased \| Mining		28,000
Bitmain Technologies Limited
Property, Plant and Equipment [Line Items]
Number of miners to be purchased \| Antminer		27,000
Expected delivery starting month and year		2022-01
Expected delivery ending month and year		2022-09
SuperAcme Technology (Hong Kong)
Property, Plant and Equipment [Line Items]
Number of miners to be purchased \| Antminer		60,000
Expected delivery starting month and year		2022-07
Expected delivery ending month and year		2022-12
Bitmain and SuperAcme
Property, Plant and Equipment [Line Items]
Expected delivery starting month and year		2022-01
Expected delivery ending month and year		2022-12

Deposits on Equipment - Schedule of Purchase Agreement Commitments, Deposits Paid and Expected Delivery Timing (Details)	11 Months Ended
	Dec. 31, 2021 USD ($)
Property Plant And Equipment [Line Items]
Maximum Purchase Commitment	$ 438,130,751
Deposits Paid	$ 114,856,314
Bitfury Top HoldCo
Property Plant And Equipment [Line Items]
Agreement Date	Oct. 11, 2021
Deposits Paid	$ 10,000,000
Bitmain Technologies Limited
Property Plant And Equipment [Line Items]
Maximum Purchase Commitment	171,135,000
Deposits Paid	$ 75,024,010
Expected Shipping Starting Month and Year	2022-01
Expected Shipping Ending Month and Year	2022-09
Bitmain Technologies Limited \| Agreement One
Property Plant And Equipment [Line Items]
Agreement Date	Aug. 20, 2021
Bitmain Technologies Limited \| Agreement Two
Property Plant And Equipment [Line Items]
Agreement Date	Aug. 30, 2021
SuperAcme Technology (Hong Kong)
Property Plant And Equipment [Line Items]
Agreement Date	Sep. 02, 2021
Maximum Purchase Commitment	$ 222,400,800
Deposits Paid	$ 22,240,080
Expected Shipping Starting Month and Year	2022-07
Expected Shipping Ending Month and Year	2022-12
Bitfury USA Inc. and Other Vendors (Primarily for BBACs)
Property Plant And Equipment [Line Items]
Maximum Purchase Commitment	$ 44,594,951
Deposits Paid	$ 7,592,224

Security Deposits - Schedule of Security Deposits Consisted (Details)	Dec. 31, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Office lease security deposit	$ 922,384
Other deposits	90,000
Total security deposits	10,352,306
Luminant Purchase and Sale Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collateral amount	3,063,020
Luminant Power Purchase Agreement Independent
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collateral amount	$ 6,276,902

Related Party Transactions - Additional Information (Details)					11 Months Ended
	Aug. 27, 2021 USD ($) shares	Aug. 26, 2021 USD ($)	Feb. 08, 2021 USD ($)	Jan. 07, 2021 USD ($) shares	Dec. 31, 2021 USD ($) $ / MW MW	Jan. 31, 2021 shares
Related Party Transaction [Line Items]
Outstanding loan balance repaid					$ 7,038,038
Common stock, shares subscribed \| shares						500
Shares converted \| shares	500			500
Master Services and Supply Agreement
Related Party Transaction [Line Items]
Agreement, date of commencement					Aug. 26, 2021
Agreement, initial term					84 months
Agreement, auto renewal period					12 months
Bitfury Top HoldCo
Related Party Transaction [Line Items]
Common stock value subscriptions				$ 5
Common stock, shares subscribed \| shares				500
Shares converted \| shares				200,000,000
Bitfury Top HoldCo \| Master Services and Supply Agreement
Related Party Transaction [Line Items]
Onsite service fee percentage calculation, description					Bitfury Top HoldCo’s “onsite” services fee would be calculated on a straight cost +5% basis (plus applicable duties and taxes)
Management fee range in megawatts \| MW					445
Management fee per megawatt up to four forty five megawatt \| $ / MW					1,000
Management fee per megawatt above four forty five megawatt \| $ / MW					450
Capped amount per month					$ 200,000
Bitfury Top HoldCo \| Purchase Agreement
Related Party Transaction [Line Items]
Percentage of service fee					7.00%
Bitfury Top HoldCo \| Deposits on Equipment \| Purchase Agreement
Related Party Transaction [Line Items]
Payment to related party					$ 10,000,000.0
Amount reimbursed to related party including service fee					2,500,000
Bitfury Top HoldCo \| Construction in Progress \| Purchase Agreement
Related Party Transaction [Line Items]
Amount reimbursed to related party including service fee					100,000
Bitfury Top HoldCo \| Deposits on Equipment and Construction-in-Progress \| Purchase Agreement
Related Party Transaction [Line Items]
Payment to related party					$ 2,400,000
Bitfury Top HoldCo \| Loan Agreement
Related Party Transaction [Line Items]
Debt instrument face amount			$ 100,000
Related party debt interest rate		2.50%	0.30%		2.50%
Related party maturity date		Aug. 31, 2021
Outstanding loan due to related parties		$ 7,000,000.0
Reclassification of account payable Related party debt to related party loan payable		$ 47,475
Outstanding loan balance repaid	$ 7,000,000.0
Related party debt accrued interest					$ 26,823
Bitfury USA Inc \| Deposits on Equipment \| Purchase Agreement
Related Party Transaction [Line Items]
Payment to related party					$ 5,100,000
Private Placement \| Bitfury Top HoldCo \| Loan Agreement
Related Party Transaction [Line Items]
Consideration Received on Transaction	$ 60,000,000.0

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions	11 Months Ended
	Dec. 31, 2021	Sep. 01, 2021	Jul. 09, 2021
Loss Contingencies [Line Items]
Percentage of development fee payment	50.00%
Percentage of share in gross revenue payment by joint venture.	50.00%
Initial Data Center LLC
Loss Contingencies [Line Items]
Percentage of Interest in Joint Venture	49.00%
Future Date Center LLC \| Maximum
Loss Contingencies [Line Items]
Expected percentage of interest in future joint venture	49.00%
Luminant Power Arrangement
Loss Contingencies [Line Items]
Definitive power purchase agreement date	Jun. 23, 2021
Payment of independent collateral amount description	Half, or approximately $6.3 million, of the Independent Collateral Amount was paid to Luminant on September 1, 2021 and is recorded in security deposits on the consolidated balance sheet as of December 31, 2021, as the Company received notice that Luminant had commenced construction of the Interconnection Electrical Facilities. The other half will be due 15 days prior to the date on which the Interconnection Electrical Facilities are completed and made operational.
Independent collateral amount paid		$ 6.3
Definitive power purchase agreement amendment date	Jul. 09, 2021
Definitive power purchase agreement further amendment date	Feb. 28, 2022
Term of power agreement	5 years
Required collateral amount for power purchase agreement			$ 12.6
Purchase and sale agreement date	Jun. 28, 2021
Amendment and restatement date on purchase and sale agreement	Jul. 09, 2021
Combined Luminant Lease Agreement
Loss Contingencies [Line Items]
Effective start date of lease agreement	Aug. 27, 2021
Lease agreement period	5 years
Principal and interest due over period	5 years
Undiscounted principal payments	$ 13.1
Standard Power Arrangement
Loss Contingencies [Line Items]
Standard power hosting agreement date	Feb. 03, 2021
Term of power agreement	5 years
Renewal term period of power agreement.	5 years
Agreement term description	The Standard Power Hosting Agreement provides for a term of five years with automatic five-year renewal provisions.
Wind HQ
Loss Contingencies [Line Items]
Definitive framework agreement date	Jun. 10, 2021
Development fee percentage on capital expenditure	2.00%
Percentage of development fee payment	50.00%
Payable fee percentage on gross revenue	2.00%
Percentage of share in gross revenue payment by joint venture.	50.00%
Wind HQ \| Initial Data Center LLC
Loss Contingencies [Line Items]
Percentage of Interest in Joint Venture	51.00%
Wind HQ \| Future Date Center LLC \| Minimum
Loss Contingencies [Line Items]
Expected percentage of interest in future joint venture	51.00%
Security Deposits \| Luminant Power Arrangement
Loss Contingencies [Line Items]
Collateral amount	$ 3.1

Stockholders' Equity (Deficit) - Additional Information (Details) - $ / shares			11 Months Ended
	Aug. 27, 2021	Jan. 07, 2021	Dec. 31, 2021	Jan. 31, 2021
Shares authorized			510,000,000
Share par value			$ 0.001
Common stock, par value			$ 0.001	$ 0.001
Common stock, shares authorized			500,000,000	5,000
Preferred stock, shares authorized			10,000,000	0
Common stock, shares subscribed				500
Common stock voting rights			one vote
Shares converted	500	500
Conversion of stock, shares issued	200,000,000

Warrants - Additional Information (Details) - $ / shares	11 Months Ended
	Dec. 31, 2021	Aug. 27, 2021
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	114,000
Public Warrants
Subsidiary Sale Of Stock [Line Items]
Warrant outstanding	8,500,000	8,500,000
Warrant expiration term		5 years
Redemption price	$ 0.01
Minimum period for written notice of redemption	30 days
Redemption closing price	$ 18.00
Consecutive trading days	20 days
Consecutive trading days after commencement	30 days
Warrant description	Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described below with respect to the Private Placement Warrants):•in whole and not in part;•at a price of $0.01 per warrant;•upon a minimum of 30 days’ prior written notice of redemption to each warrant holder;•if, and only if, the closing price of the Company's Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, stock capitalizations, reorganizations, recapitalizations and the like), for any 20 trading days within a 30-trading day period ending three trading days before the Company sends notice of redemption to warrant holders.

Share-based Compensation - Additional Information (Details) - USD ($) $ in Millions			1 Months Ended	11 Months Ended
	Nov. 17, 2021	Aug. 27, 2021	Jan. 31, 2021	Dec. 31, 2021
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Vesting period				4 years
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 are available for issuance under awards granted pursuant to the Incentive Award Plan. In addition, the number of shares of Common Stock available for issuance under the Incentive Equity Plan will be increased on January 1 of each calendar year beginning in 2022 and ending in 2031 by an amount equal to the lesser of (a) three percent (3%) of the total number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares determined by the Board.
Service-Based RSUs
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation arrangement award fully vested upon grant				5,750,566
Share-based compensation arrangement award granted				12,548,804
Unrecognized compensation expense				$ 39.4
Unrecognized compensation expense, weighted-average vesting period				1 year 7 months 6 days
Share-based compensation award vest upon achievement of maximum market capitalization				$ 10,000.0
Performance-Based RSUs
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation arrangement award granted				4,257,710
Unrecognized compensation expense				$ 31.4
Unrecognized compensation expense, weighted-average vesting period				2 years 4 months 24 days
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		3.00%
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				3,062,798
Incentive Award Plan \| Restricted Stock Units
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation arrangement award granted			0
Incentive Award Plan \| Restricted Stock Units \| CEO
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation arrangement award fully vested upon grant	5,676,946
Share-based compensation arrangement award granted	7,096,183
Incentive Award Plan \| Service-Based RSUs \| CEO
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation arrangement award granted	2,838,473
Incentive Award Plan \| Performance-Based RSUs \| CEO
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation arrangement award granted	4,257,710
Incentive Award Plan \| Performance-Based RSUs \| Tranche One \| CEO
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Vesting rights percentage				33.33%
Share-based compensation award vest upon achievement of maximum market capitalization				$ 5,000.0
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]
Vesting rights percentage				33.33%
Share-based compensation award vest upon achievement of maximum market capitalization				$ 7,500.0
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]
Vesting rights percentage				33.33%
Share-based compensation award vest upon achievement of maximum market capitalization				$ 10,000.0
Award lookback period				30 days

Share-based Compensation - Schedule of Share-based Compensation Expense (Details)	11 Months Ended
	Dec. 31, 2021 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 63,765,473
Service-Based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	62,094,704
Performance-Based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,670,769

Share-based Compensation - Summary of Unvested RSU Activity (Details)	11 Months Ended
	Dec. 31, 2021 $ / shares shares
Service-Based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Unvested, Beginning \| shares
Number of Shares, Granted \| shares	12,548,804
Number of Shares, Vested \| shares	(5,750,566)
Number of Shares, Unvested, Ending \| shares	6,798,238
Weighted Average Grant Date Fair Value, Unvested, Beginning \| $ / shares
Weighted Average Grant Date Fair Value, Granted \| $ / shares	$ 8.09
Weighted Average Grant Date Fair Value, Vested \| $ / shares	8.15
Weighted Average Grant Date Fair Value, Unvested, Ending \| $ / shares	$ 8.04
Performance-Based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Unvested, Beginning \| shares
Number of Shares, Granted \| shares	4,257,710
Number of Shares, Unvested, Ending \| shares	4,257,710
Weighted Average Grant Date Fair Value, Unvested, Beginning \| $ / shares
Weighted Average Grant Date Fair Value, Granted \| $ / shares	$ 7.76
Weighted Average Grant Date Fair Value, Unvested, Ending \| $ / shares	$ 7.76

Income Taxes - Additional Information (Details) - USD ($)	1 Months Ended	11 Months Ended
	Jan. 31, 2021	Dec. 31, 2021
Operating Loss Carryforwards [Line Items]
Provision for federal income taxes	$ 0	$ 0
Valuation allowance	$ 909	8,235,946
Increase in valuation allowance		8,200,000
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards		29,800,000
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards		$ 8,800,000
Operating loss carryforwards, expiration year		2041

Income Taxes - Reconciliation of Expected Tax Computed at U.S. Statutory Federal Income Tax Rate to Total Benefit for Income Taxes (Details)	1 Months Ended	11 Months Ended
	Jan. 31, 2021	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income tax benefit at federal statutory rate	21.00%	21.00%
State taxes, net of federal benefit	5.10%	1.00%
162m limitations	0.00%	(13.40%)
Stock compensation	0.00%	(3.30%)
Change in valuation allowance	(26.10%)	(5.30%)
Income tax provision (benefit)	0.00%	0.00%

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2021	Jan. 31, 2021
Deferred tax assets:
Net Operating loss carryforwards	$ 6,711,946	$ 434
Share-based compensation	1,457,280
Accruals and other temporary difference	67,294	836
Gross deferred tax assets	8,236,520	1,270
Property and equipment, net	(574)	(361)
Valuation allowance	$ (8,235,946)	$ (909)

Net Loss Per Share - Schedule of Common Shares Excluded from Computation of Diluted Net Loss Per Common Share (Details)	11 Months Ended
	Dec. 31, 2021 shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of net loss per common share	19,669,948
Public Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of net loss per common share	8,500,000
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
Unvested RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of net loss per common share	11,055,948

Subsequent Events - Additional Information (Details) - USD ($) $ in Millions		2 Months Ended	11 Months Ended
	Jan. 01, 2022	Feb. 28, 2022	Dec. 31, 2021
Subsequent Event \| Bitmain Technologies Limited
Subsequent Event [Line Items]
Payments made related to purchase commitments		$ 22.3
Subsequent Event \| SuperAcme Technology (Hong Kong)
Subsequent Event [Line Items]
Payments made related to purchase commitments		18.5
Subsequent Event \| Bitfury USA Inc
Subsequent Event [Line Items]
Payments made related to purchase commitments		$ 18.0
Service-Based RSUs
Subsequent Event [Line Items]
Shares vested			5,750,566
Service-Based RSUs \| Subsequent Event
Subsequent Event [Line Items]
Shares repurchased for tax withholdings owed by employees	659,231
Service-Based RSUs \| Employees and Consultants \| Subsequent Event
Subsequent Event [Line Items]
Shares vested	1,554,064