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 theSEC . 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 ofCipher Mining Inc. (formerly known asGood Works Acquisition Corp. ) for the fiscal year endedDecember 31, 2020 (the "Affected Period"), as filed with theSecurities and Exchange Commission ("SEC") onJune 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") onOctober 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, onDecember 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 ofOctober 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 endedDecember 31, 2020 , filed with theSEC onJune 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. 25 -------------------------------------------------------------------------------- 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 onJune 24, 2020 as aDelaware 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) onOctober 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 onOctober 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 byMagnetar Financial LLC ,Mint Tower Capital Management B.V. ,Periscope Capital Inc. , andPolar Asset Management Partners Inc. (collectively, the "Anchor Investors "). As ofDecember 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-bearingU.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 ofDecember 31, 2020 , we have not commenced any operations. All activity for the period fromJune 24, 2020 (inception) throughDecember 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 fromJune 24, 2020 (Inception) throughDecember 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 ofDecember 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. OnOctober 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 byMagnetar Financial LLC ,Mint Tower Capital Management B.V. ,Periscope Capital Inc. , andPolar Asset Management Partners Inc. (collectively, the "Anchor Investors "), generating gross proceeds of$2,228,000 . 26 -------------------------------------------------------------------------------- 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. OnOctober 26, 2020 , the underwriters purchased an additional 1,500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. OnNovember 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. OnNovember 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 aDelaware 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 ofDecember 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 ofDecember 31, 2020 . Contractual Obligations As ofDecember 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 -------------------------------------------------------------------------------- Critical Accounting Policies The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted inthe 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 fromJune 24, 2020 (inception) throughDecember 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. 28 -------------------------------------------------------------------------------- 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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