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Cipher Mining Provides Second Quarter 2024 Business Update

Current hashrate of ~8.7 EH/s on target for ~13.5 EH/s by end of 2024 and ~35.0 EH/s by end of 2025

Acquiring additional 1.7 GW of power capacity suitable for HPC infrastructure or bitcoin mining

Second Quarter 2024 GAAP Net Loss of $15m, and Non-GAAP Adjusted Loss of $3m

NEW YORK, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher” or the “Company”) today announced results for its second quarter ended June 30, 2024, with an update on its operations and business strategy.

“We currently operate ~8.7 EH/s of self-mining hashrate and are on track to hit ~13.5 EH/s by year-end 2024, and ~35.0 EH/s by year-end 2025,” said Tyler Page, CEO of Cipher.

“In addition to constructing the 300 MW facility at Black Pearl, we are on track to close the acquisition of our new Reveille data center site with up to 200 MW of capacity and are pleased to announce we have executed a term sheet for an option to acquire three new sites with a cumulative power capacity of 1.5 GW. These sites are well-suited for both bitcoin mining and HPC data centers. With our operations and construction teams, which are led by seasoned experts who have built and run HPC data centers for some of the top hyperscalers in the world, we are uniquely positioned to maximize opportunities in both bitcoin mining and HPC infrastructure.”

“We expect developing HPC infrastructure will be complementary to our bitcoin mining business and that we can strike the right balance between the two business lines to drive significant shareholder value for many years,” concluded Mr. Page.

Finance and Operations Highlights

  • Upgrade of Odessa site bringing total self-mining hashrate to ~13.5 EH/s on track for Q4 2024
  • Construction of 300 MW data center at Black Pearl underway with expected energization in Q2 2025
  • Acquisition of Reveille data center site with up to 200 MW of capacity well-suited for HPC data centers expected to close soon
  • Executed term sheet for option to acquire 1.5 GW of new sites in North America suitable for both HPC or bitcoin mining data centers
  • Q2 2024 GAAP diluted net loss of $0.05 per share, and non-GAAP diluted adjusted loss of $0.01 per share

Business Update Call and Webcast

The live webcast and a webcast replay of the conference call can be accessed from the investor relations section of Cipher’s website at https://investors.ciphermining.com. To access this conference call by telephone, register here to receive dial-in numbers and a unique PIN to join the call.

About Cipher

Cipher is an emerging technology company focused on the development and operation of bitcoin mining data centers. 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 United States. 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 that are not statements of historical fact, including statements about our beliefs and expectations regarding our future results of operations and financial position, business strategy, timing and likelihood of success, potential expansion of and additional bitcoin mining data centers, expectations regarding the operations of mining centers, and management plans and objectives, 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 “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” 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 our 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 press release, 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 5, 2024, and in Cipher’s subsequent filings with the Securities and Exchange Commission. 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:
Josh Kane
Head of Investor Relations at Cipher Mining
josh.kane@ciphermining.com

Media Contact:
Ryan Dicovitsky / Kendal Till
Dukas Linden Public Relations
CipherMining@DLPR.com

CIPHER MINING INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share amounts)
 
 June 30, 2024  December 31, 2023 
 (unaudited)    
ASSETS     
Current assets     
Cash and cash equivalents$122,557  $86,105 
Accounts receivable 286   622 
Receivables, related party 176   245 
Prepaid expenses and other current assets 3,599   3,670 
Bitcoin 138,079   32,978 
Derivative asset 44,702   31,878 
Total current assets 309,399   155,498 
Property and equipment, net 239,075   243,815 
Deposits on equipment 58,063   30,812 
Intangible assets, net 8,503   8,109 
Investment in equity investees 49,949   35,258 
Derivative asset 78,228   61,713 
Operating lease right-of-use asset 9,926   7,077 
Security deposits 22,246   23,855 
Other noncurrent assets 203   - 
Total assets$775,592  $566,137 
LIABILITIES AND STOCKHOLDERS’ EQUITY     
Current liabilities     
Accounts payable$13,733  $4,980 
Accounts payable, related party -   1,554 
Accrued expenses and other current liabilities 17,855   22,439 
Finance lease liability, current portion 3,595   3,404 
Operating lease liability, current portion 1,262   1,166 
Warrant liability -   250 
Total current liabilities 36,445   33,793 
Asset retirement obligation 19,337   18,394 
Finance lease liability 9,281   11,128 
Operating lease liability 9,181   6,280 
Deferred tax liability 10,577   5,206 
Total liabilities 84,821   74,801 
Commitments and contingencies (Note 13)     
Stockholders’ equity     
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding as of June 30, 2024 and December 31, 2023 -   - 
Common stock, $0.001 par value, 500,000,000 shares authorized, 335,557,872 and 296,276,536 shares issued as of June 30, 2024 and December 31, 2023, respectively, and 328,616,426 and 290,957,862 shares outstanding as of June 30, 2024, and December 31, 2023, respectively 336   296 
Additional paid-in capital 802,610   627,822 
Accumulated deficit (112,168)  (136,777)
Treasury stock, at par, 6,941,446 and 5,318,674 shares at June 30, 2024 and December 31, 2023, respectively (7)  (5)
Total stockholders’ equity 690,771   491,336 
Total liabilities and stockholders’ equity$775,592  $566,137 
      


CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(unaudited)
 
 Three months ended June 30,  Six months ended June 30, 
 2024  2023  2024  2023 
Revenue - bitcoin mining$36,808  $31,224  $84,945  $53,119 
Costs and operating expenses (income)           
Cost of revenue 14,281   15,868   29,101   24,009 
Compensation and benefits 16,285   12,668   29,321   24,605 
General and administrative 8,365   8,667   14,442   14,150 
Depreciation and amortization 20,251   14,412   37,495   26,067 
Change in fair value of derivative asset (21,980)  (3,222)  (29,339)  (8,550)
Power sales (1,109)  (5,651)  (2,282)  (5,749)
Equity in losses (gains) of equity investees 577   1,431   (161)  2,181 
Losses (gains) on fair value of bitcoin 16,309   (860)  (24,247)  (5,124)
Other gains -   -   -   (2,260)
Total costs and operating expenses (income) 52,979   43,313   54,330   69,329 
Operating (loss) income (16,171)  (12,089)  30,615   (16,210)
Other income (expense)           
Interest income 1,053   25   1,839   101 
Interest expense (372)  (485)  (772)  (886)
Change in fair value of warrant liability -   (22)  250   (59)
Other income (expense) 727   (12)  (1,231)  (12)
Total other income (expense) 1,408   (494)  86   (856)
(Loss) income before taxes (14,763)  (12,583)  30,701   (17,066)
Current income tax expense (335)  (31)  (721)  (48)
Deferred income tax expense (193)  (584)  (5,371)  (637)
Total income tax expense (528)  (615)  (6,092)  (685)
Net (loss) income$(15,291) $(13,198) $24,609  $(17,751)
Net (loss) income per share - basic and diluted$(0.05) $(0.05) $0.08  $(0.07)
Weighted average shares outstanding - basic 314,353,742   249,127,664   305,497,621   248,892,181 
Weighted average shares outstanding - diluted 314,353,742   249,127,664   316,652,300   248,892,181 


CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
 Six months ended June 30, 
 2024  2023 
Cash flows from operating activities     
Net income (loss)$24,609  $(17,751)
Adjustments to reconcile net income (loss) to net cash used in operating activities:     
Depreciation 37,192   26,067 
Amortization of intangible assets 303   - 
Amortization of operating right-of-use asset 565   452 
Share-based compensation 21,654   17,988 
Equity in (gains) losses of equity investees (161)  2,181 
Non-cash lease expense 762   878 
Other operating activities (1,839)  - 
Income taxes 5,371   637 
Bitcoin received as payment for services (85,281)  (52,836)
Change in fair value of derivative asset (29,339)  (8,550)
Change in fair value of warrant liability (250)  59 
Gains on fair value of bitcoin (24,247)  (5,124)
Changes in assets and liabilities:     
Accounts receivable 336   (282)
Receivables, related party 69   (512)
Prepaid expenses and other current assets 71   4,994 
Security deposits 1,609   (12)
Other non-current assets (203)  - 
Accounts payable (47)  (185)
Accounts payable, related party -   (1,529)
Accrued expenses and other current liabilities (2,745)  6,323 
Lease liabilities (417)  (594)
Net cash used in operating activities (51,988)  (27,796)
Cash flows from investing activities     
Proceeds from sale of bitcoin 10,334   52,475 
Deposits on equipment (35,748)  (2,932)
Purchases of property and equipment (15,766)  (28,541)
Purchases and development of software (698)  - 
Prepayments on financing leases -   (3,676)
Capital distributions from equity investees -   3,807 
Investment in equity investees (20,435)  (3,095)
Net cash (used in) provided by investing activities (62,313)  18,038 
Cash flows from financing activities     
Proceeds from the issuance of common stock 163,276   2,821 
Offering costs paid for the issuance of common stock (2,868)  (76)
Repurchase of common shares to pay employee withholding taxes (7,237)  (1,114)
Principal payments on financing lease (2,418)  (2,059)
Net cash provided by (used in) financing activities 150,753   (428)
Net increase (decrease) in cash and cash equivalents 36,452   (10,186)
Cash and cash equivalents, beginning of the period 86,105   11,927 
Cash and cash equivalents, end of the period$122,557  $1,741 


 Six months ended June 30, 
 2024  2023 
Supplemental disclosure of noncash investing and financing activities     
Reclassification of deposits on equipment to property and equipment$13,799  $72,130 
Bitcoin received from equity investees$5,907  $317 
Settlement of related party payable related to master services and supply agreement$1,554  $- 
Right-of-use asset obtained in exchange for finance lease liability$3,414  $14,212 
Equity method investment acquired for non-cash consideration$-  $1,926 
Sales tax accrual on machine purchases$-  $1,837 
Finance lease cost in accrued expenses$-  $2,034 
 

Non-GAAP Financial Measures

The following are reconciliations of our Adjusted Earnings, in each case excluding the impact of (i) the non-cash change in fair value of derivative asset, (ii) share-based compensation expense, (iii) depreciation and amortization, (iv) deferred income tax expense, (v) nonrecurring gains and losses and (vi) the non-cash change in fair value of warrant liability, to the most directly comparable GAAP measures for the periods indicated (in thousands):

  Three months ended June 30,  Six months ended June 30, 
  2024  2023  2024  2023 
Reconciliation of Adjusted Earnings:            
Net (loss) income $(15,291) $(13,198) $24,609  $(17,751)
Change in fair value of derivative asset  (21,980)  (3,222)  (29,339)  (8,550)
Share-based compensation expense  13,336   9,178   21,654   17,988 
Depreciation and amortization  20,251   14,412   37,495   26,067 
Deferred income tax expense  193   584   5,371   637 
Other gains - nonrecurring  -   -   -   (2,260)
Change in fair value of warrant liability  -   22   (250)  59 
Adjusted (loss) earnings  (3,491)  7,776   59,540   16,190 


Reconciliation of Adjusted (loss) earnings per share:            
Adjusted (loss) earnings $(3,491) $7,776  $59,540  $16,190 
Weighted average shares outstanding - diluted  314,353,742   249,127,664   316,652,300   248,892,181 
Adjusted (loss) earnings per share $(0.01) $0.03  $0.19  $0.07 

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