Company: CIFRW
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001819989-25-000112
Chunk: 178

Company: Cipher Mining Inc.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part II, Item 2
Chunk 178
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 and August 23, 2023 (as amended, the “Luminant Power Agreement”), for the supply of a fixed amount of electric power to the Odessa Facility at a fixed price for a term of five years, subject to certain early termination exemptions. The Luminant Power Agreement provides for subsequent automatic annual renewal unless either party provides written notice to the other party of its intent to terminate the agreement at least six months prior to the expiration of the then current term.The Company’s management determined that the Luminant Power Agreement meets the definition of a derivative under ASC 815, Derivatives and Hedging (“ASC 815”). Accordingly, the Luminant Power Agreement is recorded at its estimated fair value each reporting period with the change in the fair value recorded in change in fair value of derivative asset in the 

17

CIPHER MINING INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)

consolidated statements of operations. See additional information regarding valuation of the Luminant Power Agreement derivative in Note 18. Fair Value Measurements.The Company may opportunistically sell electricity in the ERCOT market in exchange for cash payments, rather than utilizing the power to mine for bitcoin at the Odessa Facility to manage the Company’s operating costs. From Power sales, the Company earned approximately $2.3 million and $1.4 million for the three months ended September 30, 2025, and 2024, respectively, and $4.7 million and $3.7 million for the nine months ended September 30, 2025, and 2024, respectively, and recorded this amount within Costs and operating (expenses) income on the condensed consolidated statement of operations, with the corresponding cost of the power sold recorded in Cost of revenue.Capped Call TransactionsIn connection with the pricing of the offering of 2031 Convertible Notes, the Company entered into capped call transactions with certain of the initial purchasers or their affiliates and certain other financial institutions (the “Capped Call Transactions”). The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the 2031 Convertible Notes. The Capped Call Transactions are generally expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2031 Convertible Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2031 Convertible Notes. The cap price of the