Company: CIFRW
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001819989-25-000037
Chunk: 159

Company: Cipher Mining Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part II, Item 5
Chunk 159
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 596 Derivative asset- - 85,670 85,670 $111,953 $32,248 $85,670 $229,871 Liabilities included in:  Short-term borrowingsBitcoin loan payable$7,330 $- $- $7,330 $7,330 $- $- $7,330 The carrying values reported in the Company’s consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items.There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.Level 3 assetThe Company’s derivative asset, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the consolidated statements of operations. Subsequent changes in fair value are also recorded to change in fair value of derivative asset. The Luminant Power Agreement was not designated as a hedging instrument. The estimated fair value of the Company’s derivative asset was derived from Level 2 and Level 3 inputs (i.e., unobservable inputs) due to a lack of quoted prices for similar type assets and as such, is classified in Level 3 of the fair value hierarchy. Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years, and a remaining term of approximately 2.3 years. The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 5.86% and 5.96% as of March 31, 2025 and December 31, 2024, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors. Unrealized gains associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage