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United States securities and exchange commission logo
June 30, 2021
Cary Grossman
President
GOOD WORKS ACQUISITION CORP.
4265 San Felipe, Suite 603
Houston, TX 77027
Re: GOOD WORKS
ACQUISITION CORP.
Amendment No. 1 to
Registration Statement on Form S-4
Filed June 15, 2021
File No. 333-256115
Dear Mr. Grossman:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our June
3, 2021 letter.
Form S-1/A filed June 5, 2021
Questions and Answers About the Proposals, page 11
1. Include an additional
Q&A quantifying the total dilution that shareholders who elect not
to redeem their shares
may experience in connection with the business combination.
Provide disclosure of
the impact of each significant source of dilution, such as the amount
of equity held by
founders and convertible securities, including warrants retained by
redeeming shareholders.
Your disclosure should illustrate potential dilution to non-
redeeming shareholders
assuming different magnitudes of redemptions (e.g. minimum,
maximum and interim
redemption levels).
Cary Grossman
FirstName LastNameCary Grossman
GOOD WORKS ACQUISITION CORP.
Comapany
June NameGOOD WORKS ACQUISITION CORP.
30, 2021
June 30,
Page 2 2021 Page 2
FirstName LastName
What equity stake will current GWACs shareholders and current Ciphers
stockholder, Bitfury
Top HoldCo, hold..., page 12
2. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
Risk Factors, page 48
3. Please explain to us how a right of first refusal regarding the
purchase of chips is a
substantive right in light of the ability of Bitfury to control
Cipher.
4. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omissions in a registration
statement.
5. Please highlight material differences in the terms and price of
securities issued at the time
of the IPO as compared to private placements contemplated at the time
of the business
combination. Disclose if the SPAC s sponsors, directors, officers or
their affiliates will
participate in the private placement.
We may face litigation and other risks as a result of the material weakness in
our internal control
over financial reporting, page 79
6. Please update the disclosure to include the most recent restatement
for the Public
warrants.
The Sponsor and some of GWAC's directors and executive officers have interests
in the Business
Combination..., page 81
7. Please quantify the aggregate dollar amount and describe the nature of
what the sponsor
and its affiliates have at risk that depends on completion of a
business combination.
Include the current value of securities held, loans extended, fees
due, and out-of-pocket
expenses for which the sponsor and its affiliates are awaiting
reimbursement. Provide
similar disclosure for the company s officers and directors, if
material
Vote of The Sponsor, Directors and Officers, page 103
8. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement.
Cary Grossman
FirstName LastNameCary Grossman
GOOD WORKS ACQUISITION CORP.
Comapany
June NameGOOD WORKS ACQUISITION CORP.
30, 2021
June 30,
Page 3 2021 Page 3
FirstName LastName
Expected Revenue Structure, page 185
9. We note that you expect transaction fees to account for 40% of your
revenue, and provide
2.38 Bitcoin per block in 2025. We further note that your disclosure
addresses the
average transaction fees in dollars during the previous peaks in
Bitcoin value and
transactions. Please revise to include additional disclosure regarding
the total Bitcoin per
block that came from transaction fees during the peaks, and why
management believes it
will reach 2.38 Bitcoin per block in 2025.
Unaudited Pro Forma Condensed Combined Financial Information, page 209
10. We note in the description of the Bitfury Subscription Agreement on
pages 121 and 149
that Bitfury Top HoldCo agreed to subscribe for and purchase 5 million
shares of New
Cipher common stock for a benefit-in-kind commitment of $50 million as
payment. We
also note on page 187 that Standard Power shall provide the hosting
capacity, housing and
equipment for Miners and is responsible for proper installation and
the costs of work for
hosting the Miners and proper care and maintenance of the Miners, the
facilities and the
containers in which the Miners are installed, purchasing the
containers from Bitfury Top
HoldCo's affiliate or another supplier. We also note on page F-57 that
you believe the
Standard Hosting Agreement is a lease. Based on this disclosure, it is
unclear exactly
what equipment and services will be covered under the Bitfury
Subscription Agreement,
since Standard Power is the purchaser of equipment and services.
Please expand the
disclosure to clarify what equipment and services are expected to be
purchased by New
Cipher that would qualify for the 25% discount pursuant to the Bitfury
Subscription
Agreement.
11. We note in the description of the Bitfury Subscription Agreement on
pages 121 and 149
that Bitfury Top HoldCo agreed to subscribe for and purchase 5 million
shares of New
Cipher common stock for a benefit-in-kind commitment of $50 million as
payment. Please expand the disclosure in Note (3) on page 216 to
detail the accounting
treatment afforded to the Bitfury Private Placement, including how you
determined that
reflecting the $50 million as a Prepaid Services asset is within the
scope of ASC 340-10-
05 rather than analogous to guidance in ASC 505-10-50, which precludes
asset
classification and requires a deduction from equity instead. Please
address the risk factor
on page 51 that summarizes what you will do in the event Bitfury is
unable to perform its
obligations under the agreement and the uncertainty regarding
recoverability such risks
pose to you in your response.
Beneficial Ownership of Securities, page 240
12. Please disclose the sponsor and its affiliates total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
Cary Grossman
FirstName LastNameCary Grossman
GOOD WORKS ACQUISITION CORP.
Comapany
June NameGOOD WORKS ACQUISITION CORP.
30, 2021
June 30,
Page 4 2021 Page 4
FirstName LastName
Financial Statements, page F-1
13. We note on page 51 that "if Bitfury Top HoldCo is unable or refuses or
fails to perform its
obligations under the Master Services and Supply Agreement, whether
due to certain
economic or market conditions, bankruptcy, insolvency, lack of
liquidity, operational
failure, fraud, or for any other reason, it will have a material
adverse effect on our
business..." We also note in the description of the Master Services
and Supply
Agreement on page 246 that Bitfury Top HoldCo is required to use
commercially
reasonable efforts to manufacture (or procure the manufacture by its
suppliers and/or
subcontractors) and therefore, New Cipher may or may not be able to
utilize their discount
in future periods. Please provide an audited balance sheet of Bitfury
pursuant to Rule 3-13
of Regulation S-X to support the liquidity of Bitfury and its ability
to perform under the
Master Services and Supply Agreement.
Financial Statements - Good Works Acquisition Corp.
Note 11 - Subsequent Events, page F-47
14. Refer to your discussion of the binding definitive framework agreement
dated June 10,
2021 on pages 188 and 189. Please expand the disclosure of the joint
venture to include
the additional terms and details in the agreement, including your
responsibilities and how
the development fees and revenues will be allocated to venture
partners. Please also
describe your accounting policy for the joint venture.
15. Please expand the disclosure of the discount of the service fees to
clarify the accounting
treatment to be afforded to the benefit-in-kind commitment.
Financial Statements - Cipher Mining Technologies Inc., page F-49
16. Please update the financial statements and other financial information
in the filing for
New Cipher to include the interim period ended March 31, 2021. Please
refer to the
guidance in Rule 8-08 of Regulation S-X.
Revenue recognition, page F-55
17. We note your expanded disclosure for revenue recognition for digital
asset mining
services and mining pools. Please expand the disclosure to clarify how
your performance
obligations are impacted by the obligations by Standard Power on page
187 that states that
Standard Power will provide hosting capacity, housing and equipment
for Miners and is
responsible for proper installation and the costs of work for hosting
the Miners and proper
care and maintenance of the Miners, facilities and the containers in
which the Miners are
installed, purchasing the containers, etc. Please expand MD&A on pages
199 and 200
accordingly.
Cary Grossman
FirstName LastNameCary Grossman
GOOD WORKS ACQUISITION CORP.
Comapany
June NameGOOD WORKS ACQUISITION CORP.
30, 2021
June 30,
Page 5 2021 Page 5
FirstName LastName
Note 2. Basis of Presentation, Summary of Significant Accounting Policies and
Recent
Accounting Pronouncements
Fair Value of Digital Currency, page F-57
18. We note that the consideration you will receive for revenue is
non-cash consideration.
Please expand your accounting policy disclosure to include your
accounting policy for
indefinite-lived intangible assets, including impairments, in that the
fair value at the time
of the impairment will result in a new cost basis that will not be
adjusted upward for any
subsequent increase in fair value.
Recent accounting pronouncements issued but not yet adopted, page F-57
19. Please expand the disclosure to address the specific assets included
in the "electric power
infrastructure" to be consistent with the description of the Standard
Power agreement
described on page 187.
Note 6. Subsequent Events, page F-58
20. Refer to your discussion of the binding definitive framework agreement
dated June 10,
2021 on pages 188 and 189. Please expand the disclosure of the joint
venture to include
the additional terms and details in the agreement, including your
responsibilities and how
the development fees and revenues will be allocated to venture
partners. Please also
describe your accounting policy for the joint venture.
21. Please expand the disclosure of the benefit-in-kind commitment to
clarify the accounting
treatment.
You may contact Claire DeLabar, Senior Staff Accountant, at (202)
551-3349 or Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Derby, Staff
Attorney, at (202) 551-3334 or Larry Spirgel, Office Chief, at (202) 551-3815
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology