Cipher Mining Inc. (NASDAQ: CIFR) ("Cipher" or the "Company"), a
U.S.-based bitcoin mining company, today announced results for its
third quarter ending September 30, 2022, along with an update on
its operations and deployment strategy.
"Against challenging market conditions, we are pleased to
announce earnings that demonstrate our resilient position as a
low-cost producer of bitcoin, while continuing to complete
significant deployment milestones in the completion of our data
centers," said Tyler Page, CEO of Cipher. "We brought our Alborz
data center up to full mining capacity, and shortly after quarter
end, we completed our Bear and Chief data centers. We expect to
bring the first 2.3 EH/s of hash rate online this month at our
207-megawatt facility at Odessa."
Finance and Operations Updates
- Cipher’s GAAP Diluted Net Income of
$0.24 per share was driven primarily by third quarter valuation of
Odessa power contract at ~$78.9 million.
- Cipher's initial data centers are on track and continue to
reach major milestones:
- Alborz: 40 MW wind-powered site with Cipher's joint venture
partner, now producing up to ~1.3 EH/s; and capable of mining up to
~4.5 bitcoin daily.
- Bear and Chief: Completed in October with a total initial
capacity of up to 20 MW, now producing up to ~0.6 EH/s; and capable
of mining up to ~2.0 bitcoin daily.
- Odessa: 207 MW site with infrastructure and rig installation
complete for first ~2.3 EH/s expected to begin mining this month;
mining rigs capable of producing an additional ~2.6 EH/s either
shipped or scheduled to ship by year-end.
- Across four initial data centers, Cipher remains on track to
deploy up to ~7.0 EH/s by early 2023, with a highly efficient
machine fleet, averaging ~31.5 J/TH, purchased at an average price
of ~$31.52/TH/s.
- The weighted average power price at the company's sites
currently under contract is approximately 2.7 c/kWh.
- ~196 bitcoin mined in the third quarter of 2022.
Business Update Call and Webcast
Cipher will host a conference call and webcast today at 8:00
a.m. Eastern Time to discuss the third quarter results for 2022 and
management's outlook for future financial and operational
performance. The live webcast and a webcast replay of the
conference call can be accessed from the investor relations page of
Cipher's website at https://investors.ciphermining.com. To access
this conference call, dial (800) 715-9871 or (646) 307-1963 and use
the conference ID 4350879.
About Cipher
Cipher is an emerging technology company focused on the
development and operation of bitcoin mining data centers in the
United States. Cipher is dedicated to expanding and
strengthening the Bitcoin network's critical infrastructure.
Together with its diversely talented team and strategic
partnerships, Cipher aims to be a market leader in bitcoin mining
growth and innovation. To learn more about Cipher, please
visit https://www.ciphermining.com/.
Forward Looking
Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws of the U.S. The
Company intends such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995 and
includes this statement for purposes of complying with these safe
harbor provisions. Any statements made in this press release or
during the business update conference call that are not statements
of historical fact, including statements about our beliefs and
expectations regarding our performance, strategy, expansion plans,
future operations, future operating results, projected costs,
prospects, plans, and objectives of our management, are
forward-looking statements and should be evaluated as such.
Forward-looking statements include information concerning possible
or assumed future results of operations, including descriptions of
our business plan and strategies. These forward-looking statements
generally are identified by the words "believe," "project,"
"expect," "anticipate," "estimate," "intend," "strategy," "future,"
"forecast," "opportunity," "plan," "may," "should," "will,"
"would," "will be," "will continue," "will likely result," and
similar expressions (including the negative versions of such words
or expressions).
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Cipher and its
management, are inherently uncertain. Such forward-looking
statements are subject to risks, uncertainties, and other factors
that could cause actual results to differ materially from those
expressed or implied by such forward looking statements. New risks
and uncertainties may emerge from time to time, and it is not
possible to predict all risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this document, including but not
limited to: volatility in the price of Cipher's securities due to a
variety of factors, including changes in the competitive and
regulated industry in which Cipher operates, variations in
performance across competitors, changes in laws and regulations
affecting Cipher's business, and the ability to implement business
plans, forecasts, and other expectations and to identify and
realize additional opportunities. The foregoing list of factors is
not exhaustive. You should carefully consider the foregoing factors
and the other risks and uncertainties described in the "Risk
Factors" section of our Annual Report on Form 10-K filed with the
Securities and Exchange Commission ("SEC") on March 4, 2022, the
"Risk Factors" sections of our Quarterly Report on Form 10-Q filed
with the SEC on May 10, 2022 and on August 9, 2022, and in Cipher's
subsequent filings with the SEC including Cipher's Quarterly Report
on Form 10-Q filed with the Securities and Exchange Commission
("SEC") on November 14, 2022. These filings identify and address
other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Cipher assumes no
obligation and, except as required by law, does not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise.
Contacts:Investor Contact:Lori
BarkerBlueshirt Group Investor
Relationscipher@blueshirtgroup.com
Media Contact:Ryan Dicovitsky / Kendal
TillDukas Linden Public RelationsCipherMining@DLPR.com
CIPHER MINING
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except for share and per share
amounts)
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
28,111 |
|
|
$ |
209,841 |
|
Receivables, related party |
|
|
731 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
|
8,276 |
|
|
|
13,819 |
|
Cryptocurrencies |
|
|
2,263 |
|
|
|
- |
|
Derivative asset |
|
|
30,393 |
|
|
|
- |
|
Total current assets |
|
|
69,774 |
|
|
|
223,660 |
|
Deposits on equipment |
|
|
200,033 |
|
|
|
114,857 |
|
Property and equipment,
net |
|
|
40,751 |
|
|
|
5,124 |
|
Security deposits |
|
|
11,455 |
|
|
|
10,352 |
|
Investment in equity
investee |
|
|
31,690 |
|
|
|
- |
|
Right-of-use asset |
|
|
5,303 |
|
|
|
- |
|
Derivative asset |
|
|
48,487 |
|
|
|
- |
|
Deferred investment costs |
|
|
- |
|
|
|
174 |
|
Total assets |
|
$ |
407,493 |
|
|
$ |
354,167 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,665 |
|
|
$ |
242 |
|
Accounts payable, related party |
|
|
3,216 |
|
|
|
- |
|
Operating lease liability, current portion |
|
|
1,002 |
|
|
|
- |
|
Accrued expenses |
|
|
10,726 |
|
|
|
257 |
|
Total current liabilities |
|
|
19,609 |
|
|
|
499 |
|
Operating lease liability, net
of current portion |
|
|
4,762 |
|
|
|
- |
|
Warrant liability |
|
|
22 |
|
|
|
137 |
|
Total liabilities |
|
|
24,393 |
|
|
|
636 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized,
none issued and outstanding as of September 30, 2022 and December
31, 2021 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value, 500,000,000 shares authorized,
251,043,649 and 252,131,679 shares issued as of September 30, 2022
and December 31, 2021, respectively, and 247,518,966 and
249,279,420 shares outstanding as of September 30, 2022 and
December 31, 2021, respectively |
|
|
251 |
|
|
|
252 |
|
Additional paid-in capital |
|
|
442,435 |
|
|
|
425,438 |
|
Treasury stock, at par, 3,524,683 and 2,852,259 shares at September
30, 2022 and December 31, 2021, respectively |
|
|
(4 |
) |
|
|
(3 |
) |
Accumulated deficit |
|
|
(59,582 |
) |
|
|
(72,156 |
) |
Total stockholders’ equity |
|
|
383,100 |
|
|
|
353,531 |
|
Total liabilities and stockholders’ equity |
|
$ |
407,493 |
|
|
$ |
354,167 |
|
|
|
CIPHER MINING
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except for share and per share
amounts)(unaudited)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended |
|
|
Eight Months Ended |
|
|
|
2022 |
|
|
2021 |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
Costs and operating
expenses (income) |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
$ |
17,755 |
|
|
$ |
2,283 |
|
|
$ |
51,849 |
|
|
$ |
2,942 |
|
Depreciation |
|
|
11 |
|
|
|
- |
|
|
|
26 |
|
|
|
1 |
|
Change in fair value of derivative asset |
|
|
(85,658 |
) |
|
|
- |
|
|
|
(85,658 |
) |
|
|
- |
|
Realized gain on sale of cryptocurrencies |
|
|
(6 |
) |
|
|
- |
|
|
|
(6 |
) |
|
|
- |
|
Impairment of cryptocurrencies |
|
|
320 |
|
|
|
- |
|
|
|
859 |
|
|
|
- |
|
Equity in loss of equity investment |
|
|
8,345 |
|
|
|
- |
|
|
|
20,577 |
|
|
|
- |
|
Total costs and operating expenses (income) |
|
|
(59,233 |
) |
|
|
2,283 |
|
|
|
(12,353 |
) |
|
|
2,943 |
|
Operating income (loss) |
|
|
59,233 |
|
|
|
(2,283 |
) |
|
|
12,353 |
|
|
|
(2,943 |
) |
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
55 |
|
|
|
1 |
|
|
|
106 |
|
|
|
1 |
|
Interest expense |
|
|
- |
|
|
|
(26 |
) |
|
|
- |
|
|
|
(27 |
) |
Change in fair value of warrant liability |
|
|
4 |
|
|
|
(113 |
) |
|
|
115 |
|
|
|
(113 |
) |
Total other income (expense) |
|
|
59 |
|
|
|
(138 |
) |
|
|
221 |
|
|
|
(139 |
) |
Net income (loss) |
|
$ |
59,292 |
|
|
$ |
(2,421 |
) |
|
$ |
12,574 |
|
|
$ |
(3,082 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share -
basic |
|
$ |
0.24 |
|
|
$ |
(0.01 |
) |
|
$ |
0.05 |
|
|
$ |
(0.01 |
) |
Net income (loss) per share -
diluted |
|
$ |
0.24 |
|
|
$ |
(0.01 |
) |
|
$ |
0.05 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - basic |
|
|
247,508,745 |
|
|
|
217,644,991 |
|
|
|
248,461,373 |
|
|
|
206,708,013 |
|
Weighted average shares
outstanding - diluted |
|
|
248,342,200 |
|
|
|
217,644,991 |
|
|
|
248,782,665 |
|
|
|
206,708,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(in
thousands)(unaudited)
|
|
Nine Months Ended |
|
|
Eight Months Ended |
|
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
12,574 |
|
|
$ |
(3,082 |
) |
Adjustments to reconcile net
income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
26 |
|
|
|
1 |
|
Amortization of right-of-use assets |
|
|
556 |
|
|
|
- |
|
Change in fair value of derivative asset |
|
|
(85,658 |
) |
|
|
- |
|
Change in fair value of warrant liability |
|
|
(115 |
) |
|
|
113 |
|
Share-based compensation |
|
|
30,072 |
|
|
|
- |
|
Equity in loss of equity investment |
|
|
20,577 |
|
|
|
- |
|
Realized gain on sale of cryptocurrencies |
|
|
(6 |
) |
|
|
- |
|
Impairment of cryptocurrencies |
|
|
859 |
|
|
|
- |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
Proceeds from power sales |
|
|
1,722 |
|
|
|
- |
|
Proceeds from reduction of scheduled power |
|
|
5,056 |
|
|
|
- |
|
Proceeds from sale of cryptocurrencies |
|
|
23 |
|
|
|
- |
|
Receivables, related party |
|
|
(731 |
) |
|
|
- |
|
Prepaid expenses and other current assets |
|
|
5,412 |
|
|
|
(14,916 |
) |
Security deposits |
|
|
(1,103 |
) |
|
|
(9,381 |
) |
Accounts payable |
|
|
400 |
|
|
|
87 |
|
Accrued expenses |
|
|
1,408 |
|
|
|
78 |
|
Lease liability |
|
|
37 |
|
|
|
- |
|
Net cash used in operating activities |
|
|
(8,891 |
) |
|
|
(27,100 |
) |
Cash flows from
investing activities |
|
|
|
|
|
|
Deposits on
equipment |
|
|
(184,095 |
) |
|
|
(74,346 |
) |
Purchases of property
and equipment |
|
|
(28,958 |
) |
|
|
(130 |
) |
Capital distributions
from equity investee |
|
|
43,291 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(169,762 |
) |
|
|
(74,476 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
Repurchase of common
shares to pay employee withholding taxes |
|
|
(3,077 |
) |
|
|
- |
|
Business Combination,
net of issuance costs paid |
|
|
- |
|
|
|
383,853 |
|
Proceeds from borrowings
on related party loan |
|
|
- |
|
|
|
7,038 |
|
Repayments under related
party loan |
|
|
- |
|
|
|
(7,038 |
) |
Net cash (used in) provided by financing activities |
|
|
(3,077 |
) |
|
|
383,853 |
|
Net (decrease) increase in
cash and cash equivalents |
|
|
(181,730 |
) |
|
|
282,277 |
|
Cash and cash equivalents,
beginning of the period |
|
|
209,841 |
|
|
|
- |
|
Cash and cash equivalents, end
of the period |
|
$ |
28,111 |
|
|
$ |
282,277 |
|
Supplemental
disclosure of noncash investing and financing
activities |
|
|
|
|
|
|
Equity method investment acquired for non-cash consideration |
|
$ |
93,208 |
|
|
$ |
- |
|
Common stock cancelled |
|
$ |
10,000 |
|
|
$ |
- |
|
Right-of-use asset obtained in exchange for operating lease
liability |
|
$ |
5,859 |
|
|
$ |
- |
|
Investment in equity investee in accrued expenses |
|
$ |
5,316 |
|
|
$ |
- |
|
Property and equipment purchases in accounts payable |
|
$ |
3,971 |
|
|
$ |
- |
|
Deposits on equipment in accrued expenses |
|
$ |
3,746 |
|
|
$ |
- |
|
Cryptocurrencies received from equity method investment |
|
$ |
3,139 |
|
|
$ |
- |
|
Property and equipment purchases in accounts payable, related
party |
|
$ |
2,724 |
|
|
$ |
- |
|
Deposits on equipment in accounts payable, related party |
|
$ |
492 |
|
|
$ |
- |
|
Reclassification of deferred investment costs to equity method
investment |
|
$ |
174 |
|
|
$ |
- |
|
Prepaid rent reclassified to lease liability |
|
$ |
132 |
|
|
$ |
- |
|
Deposits on equipment in accounts payable |
|
$ |
51 |
|
|
$ |
- |
|
Business Combination costs included in accrued expenses |
|
$ |
- |
|
|
$ |
1,024 |
|
Net assets assumed from GWAC in the Business Combination |
|
$ |
- |
|
|
$ |
433 |
|
Non-cash fair value of private warrants |
|
$ |
- |
|
|
$ |
261 |
|
Deferred investment costs included in accrued expenses |
|
$ |
- |
|
|
$ |
174 |
|
Business combination costs included in accounts payable |
|
$ |
- |
|
|
$ |
39 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
The following is a reconciliation of our non-GAAP loss from
operations, which excludes the impact of (i) depreciation of fixed
assets, (ii) non-cash change in fair value of our derivative asset
and (iii) stock compensation expense, to its most directly
comparable GAAP measure for the periods indicated:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended |
|
|
Eight Months Ended |
|
|
|
2022 |
|
|
2021 |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
Reconciliation of
non-GAAP loss from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
59,233 |
|
|
$ |
(2,283 |
) |
|
$ |
12,353 |
|
|
$ |
(2,943 |
) |
Depreciation |
|
|
11 |
|
|
|
- |
|
|
|
26 |
|
|
|
1 |
|
Change in fair value of
derivative asset |
|
|
(83,936 |
) |
|
|
- |
|
|
|
(83,936 |
) |
|
|
- |
|
Stock compensation
expense |
|
|
10,494 |
|
|
|
- |
|
|
|
30,072 |
|
|
|
- |
|
Non-GAAP loss from operations |
|
$ |
(14,198 |
) |
|
$ |
(2,283 |
) |
|
$ |
(41,485 |
) |
|
$ |
(2,942 |
) |
|
The following are reconciliations of our non-GAAP net loss and
non-GAAP basic and diluted net loss per share, in each case
excluding the impact of (i) depreciation of fixed assets (ii)
non-cash change in fair value of derivative asset, (iii) change in
fair value of warrant liability and (iv) stock compensation
expense, to the most directly comparable GAAP measures for the
periods indicated:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended |
|
|
Eight Months Ended |
|
|
|
2022 |
|
|
2021 |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
Reconciliation of
non-GAAP net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
59,292 |
|
|
$ |
(2,421 |
) |
|
$ |
12,574 |
|
|
$ |
(3,082 |
) |
Non-cash adjustments to net
income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
11 |
|
|
|
- |
|
|
|
26 |
|
|
|
1 |
|
Change in fair value of derivative asset |
|
|
(83,936 |
) |
|
|
- |
|
|
|
(83,936 |
) |
|
|
- |
|
Change in fair value of warrant liability |
|
|
4 |
|
|
|
(113 |
) |
|
|
115 |
|
|
|
(113 |
) |
Stock compensation expense |
|
|
10,494 |
|
|
|
- |
|
|
|
30,072 |
|
|
|
- |
|
Total non-cash adjustments to net income (loss) |
|
|
(73,427 |
) |
|
|
(113 |
) |
|
|
(53,723 |
) |
|
|
(112 |
) |
Non-GAAP net loss |
|
$ |
(14,135 |
) |
|
$ |
(2,534 |
) |
|
$ |
(41,149 |
) |
|
$ |
(3,194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
non-GAAP basic and diluted net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income
(loss) per share |
|
$ |
0.24 |
|
|
$ |
(0.01 |
) |
|
$ |
0.05 |
|
|
$ |
(0.01 |
) |
Depreciation of fixed assets
(per share) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Change in fair value of
derivative asset (per share) |
|
|
(0.34 |
) |
|
|
- |
|
|
|
(0.34 |
) |
|
|
- |
|
Change in fair value of
warrant liability (per share) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Stock compensation expense
(per share) |
|
|
0.04 |
|
|
|
- |
|
|
|
0.12 |
|
|
|
- |
|
Non-GAAP basic and diluted net loss per share |
|
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.01 |
) |
Cipher Mining (NASDAQ:CIFR)
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