All statements other than statements of historical fact included in this Report
including, without limitation, statements under "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. When used in
this Report, words such as "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to us or the Company's
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and
information currently available to, the Company's management. Actual results
could differ materially from those contemplated by the forward-looking
statements as a result of certain factors detailed in our filings with the SEC.
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Report. Certain information contained
in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.
This Amendment No. 3 ("Amendment No. 3") to the Annual Report on Form
10-K/A
amends the Annual Report on Form
10-K/A
of Cipher Mining Inc. (formerly known as Good Works Acquisition Corp.) for the
fiscal year ended December 31, 2020 (the "Affected Period"), as filed with the
Securities and Exchange Commission ("SEC") on June 14, 2021 (the "Second Amended
Filing").
The Company has
re-evaluated
the Company's application of ASC
480-10-S99-3A
to its accounting classification of the redeemable common stock, par value
$0.001 per share (the "Public Shares"), issued as part of the units sold in the
Company's initial public offering (the "IPO") on October 22, 2020. Historically,
a portion of the Public Shares was classified as permanent equity to maintain
stockholders' equity greater than $5 million on the basis that the Company will
not redeem its Public Shares in an amount that would cause its net tangible
assets to be less than $5,000,001, as described in the Company's amended and
restated certificate of incorporation (the "Charter"). Pursuant to such
re-evaluation,
the Company's management has determined that the Public Shares include certain
provisions that require classification of all of the Public Shares as temporary
equity regardless of the net tangible assets redemption limitation contained in
the Charter. In addition, in connection with the change in presentation for the
Public Shares, the Company determined it should restate its earnings per share
calculation to allocate income and losses shared pro rata between the two
classes of shares (redeemable and non-redeemable). This presentation
contemplates a Business Combination as the most likely outcome, in which case,
both classes of shares share pro rata in the income and losses of the Company.
Therefore, on December 17, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee") concluded
that the Company's previously issued (i) audited balance sheet as of October 22,
2020 (the "Post IPO Balance Sheet"), as previously revised in the Company's
Annual Report on Form
10-K,
as amended, for the fiscal year ended December 31, 2020, filed with the SEC on
June 14, 2021 ("2020 Form
10-K/A
No. 2"), (ii) audited financial statements included in the 2020 Form
10-K/A
No. 2, (collectively, the "Affected Periods"), should be restated to report all
Public Shares as temporary equity and should no longer be relied upon. As such,
the Company will restate its financial statements for the Affected Periods in
this Form
10-K/A
for the Post IPO Balance Sheet and the Company's audited financial statements
included in the 2020 Form
10-K/A
No. 2.
The change in accounting classification of the redeemable common stock did not
have any impact on our liquidity, cash flows, revenues or costs of operating our
business, in the Affected Period or in any of the periods included in Item 8,
Financial Statements and Supplementary Data in this filing. The change in
accounting classification of the redeemable common stock does not impact the
amounts previously reported for the Company's cash and cash equivalents,
operating expenses or total cash flows from operations for any of these periods.
In connection with the restatement, our management reassessed the effectiveness
of its disclosure controls and procedures for the periods affected by the
restatement. As a result of that reassessment, we determined that our disclosure
controls and procedures for such periods were not effective with respect to
certain complex financial instruments. For more information, see Item 9A
included in this Annual Report on Form
10-K/A,
the Amendment No. 3.

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We have not amended our previously filed Quarterly Report on Form
10-Q.
The financial information that has been previously filed or otherwise reported
for these periods is superseded by the information in this Annual Report on Form
10-K/A,
and the financial statements and related financial information contained in such
previously filed reports should no longer be relied upon.
The restatement is more fully described in Note 2 of the notes to the financial
statements included herein.
Overview
We are a blank check company incorporated on June 24, 2020 as a Delaware
corporation and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (a "Business Combination"). We
consummated our Public Offering (as defined below) on October 22, 2020 and are
currently in the process of locating suitable targets for our business
combination. We intend to use the cash proceeds from our Public Offering and the
Private Placement described below as well as additional issuances, if any, of
our capital stock, debt or a combination of cash, stock and debt to complete the
Business Combination.
We expect to incur significant costs in the pursuit of our initial Business
Combination. We cannot assure you that our plans to raise capital or to complete
our initial Business Combination will be successful.
We completed the sale of 15,000,000 units (the "Units" and, with respect to the
shares of common stock included in the Units being offered, the "Public Shares")
at $10.00 per Unit on October 22, 2020. Simultaneous with the closing of the
Public Offering, we completed the sale of 228,000 Private Units (the "Private
Units") at a price of $10.00 per Private Unit in a private placement to certain
funds and accounts managed by Magnetar Financial LLC, Mint Tower Capital
Management B.V., Periscope Capital Inc., and Polar Asset Management Partners
Inc. (collectively, the "Anchor Investors").
As of December 31, 2020, a total of $170,000,000 of the net proceeds from the
IPO (including the partial exercise of the over-allotment option) and the
Private Placements were in a trust account established for the benefit of the
Company's public shareholders. The trust fund account is invested in
interest-bearing U.S. government securities and the income earned on those
investments is also for the benefit of our public shareholders.
Our management has broad discretion with respect to the specific application of
the net proceeds of IPO and the Private Placement, although substantially all of
the net proceeds are intended to be applied generally towards consummating a
business combination.
Results of Operations
As of December 31, 2020, we have not commenced any operations. All activity for
the period from June 24, 2020 (inception) through December 31, 2020, relates to
our formation and initial public offering ("Public Offering" of "IPO"), and,
since the completion of the IPO, searching for a target to consummate a Business
Combination. We will not generate any operating revenues until after the
completion of a Business Combination, at the earliest. We will generate
non-operating income
in the form of interest income from the proceeds derived from the Public
Offering and placed in the Trust Account (defined below).
For the period from June 24, 2020 (Inception) through December 31, 2020, we had
net loss of approximately $107,000. We incurred approximately $107,000 of
formation and operating costs (not charged against stockholders' equity),
consisting mostly of general and administrative expenses and a $19,000 change in
the fair value of warrant liabilities.
Liquidity and Capital Resources
As of December 31, 2020, we had cash outside our trust account of $1,276,364,
available for working capital needs. All remaining cash was held in the trust
account and is generally unavailable for our use, prior to an initial business
combination.
On October 22, 2020, the Company completed the sale of 15,000,000 units (the
"Units" and, with respect to the shares of common stock included in the Units
being offered, the "Public Shares") at $10.00 per Unit, generating gross
proceeds of $150,000,000.
Simultaneous with the closing of the IPO, the Company completed the sale of
228,000 Private Units (the "Private Units") at a price of $10.00 per Private
Unit in a private placement to certain funds and accounts managed by Magnetar
Financial LLC, Mint Tower Capital Management B.V., Periscope Capital Inc., and
Polar Asset Management Partners Inc. (collectively, the "Anchor Investors"),
generating gross proceeds of $2,228,000.

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In connection with the IPO, the underwriters were granted a
45-day
option from the date of the prospectus (the "Over-Allotment Option") to purchase
up to 2,250,000 additional units to cover over-allotments (the "Over-Allotment
Units"), if any. On October 26, 2020, the underwriters purchased an additional
1,500,000 Over-Allotment Units pursuant to the partial exercise of the
Over-Allotment Option. On November 17, 2020, the underwriters purchased an
additional 500,000 Over-Allotment Units pursuant to the partial exercise of the
Over-Allotment Option. The Over-Allotment Units were sold at an offering price
of $10.00 per Over-Allotment Unit, generating aggregate additional gross
proceeds of $20,000,000 to the Company. On November 17, 2020, the underwriters
canceled the remainder of the Over-Allotment Option.
We intend to use substantially all of the funds held in the trust account,
including any amounts representing interest earned on the trust account
(excluding the business combination marketing fees payable to
I-Bankers)
to complete our initial Business Combination. We may withdraw interest to pay
our taxes and liquidation expenses if we are unsuccessful in completing a
Business Combination. We estimate our annual franchise tax obligations to be
$200,000, which is the maximum amount of annual franchise taxes payable by us as
a Delaware corporation per annum, which we may pay from funds from the Public
Offering held outside of the trust account or from interest earned on the funds
held in the trust account and released to us for this purpose. Our 2020
franchise tax was calculated using a partial year proration and amounted to
$44,523. Our annual income tax obligations will depend on the amount of interest
and other income earned on the amounts held in the trust account reduced by our
operating expense and franchise taxes. We expect the interest earned on the
amount in the trust account will be sufficient to pay our income taxes. To the
extent that our equity or debt is used, in whole or in part, as consideration to
complete our initial Business Combination, the remaining proceeds held in the
trust account will be used as working capital to finance the operations of the
target business or businesses, make other acquisitions and pursue our growth
strategies.
Further, our Sponsor, officers and directors or their respective affiliates may,
but are not obligated to, loan us funds as may be required (the "Working Capital
Loans"). If we complete a Business Combination, we would repay the Working
Capital Loans. In the event that a Business Combination does not close, we may
use a portion of proceeds held outside the Trust Account to repay the Working
Capital Loans, but no proceeds held in the Trust Account would be used to repay
the Working Capital Loans. Such Working Capital Loans would be evidenced by
promissory notes. The notes would either be repaid upon consummation of a
Business Combination, without interest, or, at the lender's discretion, or
converted upon consummation of a Business Combination into additional Private
Placement Units at a price of $10.00 per Unit (the "Working Capital Units"). As
of December 31, 2020, no Working Capital Loans have been issued.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking
in-depth
due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate
our business prior to our Business Combination. Moreover, we may need to obtain
additional financing either to complete our Business Combination or because we
become obligated to redeem a significant number of our public shares upon
consummation of our Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business Combination. Subject
to compliance with applicable securities laws, we would only complete such
financing simultaneously with the completion of our Business Combination. If we
are unable to complete our Business Combination because we do not have
sufficient funds available to us, we will be forced to cease operations and
liquidate the Trust Account. In addition, following our Business Combination, if
cash on hand is insufficient, we may need to obtain additional financing in
order to meet our obligations.
Off-Balance
Sheet Financing Arrangements
We did not have any
off-balance
sheet arrangement as of December 31, 2020.
Contractual Obligations
As of December 31, 2020, we did not have any long-term debt, capital or
operating lease obligations.
We entered into an administrative services agreement pursuant to which we will
pay an affiliate of one of our directors for office space and secretarial and
administrative services provided to members of our management team, in an amount
not to exceed $10,000 per month.
We have engaged
I-Bankers
as an advisor in connection with our acquiring, engaging in a share exchange,
share reconstruction and amalgamation with, purchasing all or substantially all
of the assets of, entering into contractual arrangements with, or engaging in
any other similar Business Combination with one or more businesses or entities.
We will pay
I-Bankers
for such services a fee equal to 4.5% of the gross proceeds of the Public
Offering.

                                       27
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Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and income and expenses during the periods
reported. Actual results could materially differ from those estimates. We have
identified the following as our critical accounting policies:
Common Stock Subject to Possible Redemption
We account for its common stock subject to possible redemption in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
common stock subject to mandatory redemption (if any) is classified as liability
instruments and are measured at fair value. Conditionally redeemable common
stock (including common stock that features redemption rights that are either
within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely our control) are classified as temporary equity. At
all other times, common stock is classified as stockholders' equity. Our common
stock feature certain redemption rights that are considered to be outside of our
control and subject to the occurrence of uncertain future events. Accordingly,
as of the Initial Public Offering, 17,000,000 shares of common stock subject to
possible redemption are presented at redemption value as temporary equity,
outside of the stockholders' equity section of our condensed balance sheets.
Effective with the closing of the Initial Public Offering, we recognized the
accretion from initial book value to redemption amount, which, resulted in
charges against additional
paid-in
capital (to the extent available) and accumulated deficit.
Net Loss Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." Net income (loss) per common share is calculated by
dividing the net income (loss) by the weighted average shares of redeemable and
non-redeemable
common stock outstanding for the respective period.
The calculation of diluted net income (loss) per common stock does not consider
the effect of the warrants issued in connection with the Initial Public Offering
(including exercise of the over-allotment option) and the Private Placement to
purchase an aggregate of 7,614,000 shares of common stock in the calculation of
diluted income (loss) per share, because their exercise is contingent upon
future events and their inclusion would be anti-dilutive under the treasury
stock method. As a result, diluted net income (loss) per share is the same as
basic net income (loss) per share for the period from June 24, 2020 (inception)
through December 31, 2020. Accretion associated with the redeemable common stock
is excluded from earnings per share as the redemption value approximates fair
value.
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to ASC 480
and ASC
815-15.
The classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is
re-assessed
at the end of each reporting period.
We issued warrants to investors in our initial public offering and we issued
private placement warrants in the private placement we completed at the time of
our initial public offering. The private placement warrants are recognized as
derivative liabilities in accordance with ASC
815-40.
Accordingly, we recognize Private Warrants as liabilities at fair value and
adjust the instruments to fair value at each reporting period. The liabilities
are subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. The fair value of warrants issued in
connection with our private placement was measured at fair value using the Black
Sholes method for Private Warrants.
Recent Accounting Standards
Our management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying financial statements.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" under the JOBS Act and are allowed to comply with new
or revised accounting pronouncements based on the effective date for private
(not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or
revised accounting standards on the relevant dates on which adoption of such
standards is required for
non-emerging growth
companies. As a result, our financial statements may not be comparable to
companies that comply with new or revised accounting pronouncements as of public
company effective dates.

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Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an independent registered public accounting firm's
attestation report on our system of internal controls over financial reporting
pursuant to Section 404, (ii) provide all of the compensation disclosure that
may be required of
non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the independent
registered public accounting firm's report providing additional information
about the audit and the financial statements (auditor discussion and analysis),
and (iv) disclose certain executive compensation related items such as the
correlation between executive compensation and performance and comparisons of
the CEO's compensation to median employee compensation. These exemptions will
apply for a period of five years following the completion of this offering or
until we are no longer an "emerging growth company," whichever is earlier.

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