This Quarterly Report on Form
10-Q
includes forward-looking statements. These forward-looking statements are based
on our current expectations and beliefs concerning future developments and their
potential effects on us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these
forward-looking statements. Our forward-looking statements include, but are not
limited to, statements regarding our or our management team's expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any
statements that refer to projections, forecasts or other characterizations of
future events or circumstances, including any underlying assumptions, are
forward-looking statements. The words "anticipate," "believe," "continue,"
"could," "estimate," "expect," "intends," "may," "might," "plan," "possible,"
"potential," "predict," "project," "should," "would" and similar expressions may
identify forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Factors that might cause or
contribute to such forward-looking statements include, but are not limited to,
those set forth in the Risk Factors section of the Company's registration
statement and prospectus for the Company's initial public offering filed with
the SEC. The following discussion should be read in conjunction with our
financial statements and related notes thereto included elsewhere in this
report.
This Amendment No. 1 ("Amendment No. 1") to the Quarterly Report on Form
10-Q/A
amends the Quarterly Report on Form
10-Q/A
of Cipher Mining Inc. (formerly known as Good Works Acquisition Corp.) for the
six months ended June 30, 2021 (the "Affected Period"), as filed with the
Securities and Exchange Commission ("SEC") on August 10, 2021 (the "Original
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 unaudited interim financial statements
included in the Company's Quarterly Report on Form
10-Q,
as amended, for the six months ended June 30, 2021, filed with the SEC on
August 10, 2021 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, related footnotes, and other financial data as of and
for the period ended June 30, 2021 included in the Original Filling should be
restated in the Form
10-Q/A
No. 1, as a result of this error.
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.
The restatement is more fully described in Note 3 of the notes to the condensed
consolidated 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.
Results of Operations and Known Trends or Future Events
The Company has neither engaged in any significant business operations nor
generated any revenues to date. All activities to date relate to the Company's
formation and the Public Offering. We expect to generate
non-operating
income in the form of interest income on cash, cash equivalents, and marketable
securities that are held in the Trust Account (as defined below). We expect to
incur increased expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as for due
diligence expenses as we locate a suitable Business Combination.
For the six months ended June 30, 2021, we had a net loss of $2,058,979 which
consisted of change in fair value of warrant liability of $76,329, business
combination and operating expenses of $2,032,419 offset by interest income on
marketable securities held in the Trust Account of $49,769.
Proposed Business Combination
On March 5, 2021, the Company (or "Good Works") entered into an Agreement and
Plan of Merger (as it may be amended, supplemented or otherwise modified from
time to time, the "
Merger Agreement
"), by and among Currency Merger Sub, Inc., a Delaware corporation and a
wholly-owned direct subsidiary of the Company ("
Merger Sub
"), and Cipher Mining Technologies Inc., a Delaware corporation ("
Cipher
").
The Merger Agreement and the transactions contemplated thereby were approved by
the boards of directors of each of Good Works and Cipher.
The Business Combination
The Merger Agreement provides for, among other things, the following
transactions at the closing: (i) Merger Sub will merge with and into Cipher,
with Cipher as the surviving company in the merger and, after giving effect to
such merger, continuing as a wholly-owned subsidiary of Good Works (the "
Merger
") and, in connection with the Merger, (ii) Good Works will change its name to
Cipher Mining Inc. The Merger and the other transactions contemplated by the
Merger Agreement are hereinafter referred to as the "
Business Combination
".
The Business Combination is expected to close in the second quarter of 2021,
following the receipt of the required approval by Good Works stockholders and
the fulfillment (or waiver) of other customary closing conditions.
Business Combination Consideration
In accordance with the terms and subject to the conditions of the Merger
Agreement, each share of Cipher common stock, par value $0.001 issued and
outstanding shall be converted into the right to receive four hundred thousand
(400,000) shares of Good Works common stock, par value $0.001 ("
Good Works Common Stock
"); provided that the exchange ratio shall be adjusted as needed to ensure the
aggregate Merger consideration received by the sole stockholder of Cipher equals
two hundred million (200,000,000) shares of Good Works Common Stock (at a value
of ten dollars ($10.00) per share).

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Governance
Good Works has agreed to take all action within its power as may be necessary or
appropriate such that, effective immediately after the closing of the Business
Combination, Cipher Mining Inc.'s board of directors shall consist of seven
directors, which directors shall be nominated pursuant to the Merger Agreement,
which nominees include one Good Works designee. Additionally, the current Cipher
management team will move to Good Works in their current roles and titles.
Representations and Warranties; Covenants
The Merger Agreement contains representations, warranties and covenants of each
of the parties thereto that are customary for transactions of this type,
including with respect to the operations of Good Works and Cipher and that each
of the parties have undertaken to procure approval under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "
HSR Act
"). In addition, Good Works has agreed to adopt an equity incentive plan as
described in the Merger Agreement.
Conditions to Each Party's Obligations
The obligation of Good Works and Cipher to consummate the Business Combination
is subject to certain closing conditions, including, but not limited to, (i) the
expiration or termination of the applicable waiting period under the HSR Act,
(ii) the approval of Good Works stockholders, (iii) the approval of Cipher's
stockholders and (iv) the Registration Statement (as defined below) becoming
effective.
In addition, the obligation of Good Works to consummate the Business Combination
is subject to the fulfillment (or waiver) of other closing conditions,
including, but not limited to, (i) the representations and warranties of Cipher
being true and correct to the standards applicable to such representations and
warranties and each of the covenants of Cipher having been performed or complied
with in all material respect, (ii) the delivery to Good Works of evidence of
satisfactory Tail Insurance (as defined in the Merger Agreement) to be bound as
of the closing, and (iii) delivery of all ancillary agreements required to be
executed and delivered by Cipher or its sole stockholder and (iv) no Material
Adverse Effect (as defined in the Merger Agreement) shall have occurred.
The obligation of Cipher to consummate the Business Combination is also subject
to the fulfillment (or waiver) of other closing conditions, including, but not
limited to, (i) the representations and warranties of Good Works and Merger Sub
being true and correct to the standards applicable to such representations and
warranties and each of the covenants of Good Works having been performed or
complied with in all material respects, (ii) the aggregate cash proceeds from
Good Works trust account, together with the proceeds from the PIPE Financing (as
defined below), equaling no less than $400,000,000 (after deducting any amounts
paid to Good Works stockholders that exercise their redemption rights in
connection with the Business Combination and net of unpaid transaction expenses
incurred or subject to reimbursement by Good Works), (iii) Good Works total
outstanding Indebtedness (as defined in the Merger Agreement) shall be less than
twenty-five million dollars ($25,000,000.00), and (iv) the approval by Nasdaq of
Good Works listing application in connection with the Business Combination
.
Termination
The Merger Agreement may be terminated under certain customary and limited
circumstances prior to the closing of the Business Combination, including, but
not limited to, (i) by mutual written consent of Good Works and Cipher, (ii) by
Good Works if there is any breach of the representations and warranties of
Cipher or if Cipher Mining fails to perform any covenant or agreement set forth
in the Merger Agreement, in each case, such that certain conditions to closing
cannot be satisfied and the breach or breaches of such representations or
warranties or the failure to perform such covenant or agreement, as applicable,
are not cured or cannot be cured within certain specified time periods,
(iii) termination by Cipher if there is any breach of the representations and
warranties of Good Works or if Good Works fails to perform any covenant or
agreement set forth in the Merger Agreement, in each case, such that certain
conditions to closing cannot be satisfied and the breach or breaches of such
representations or warranties or the failure to perform such covenant or
agreement, as applicable, are not cured or cannot be cured within certain
specified time periods, (iv) subject to certain limited exceptions, by either
Good Works or Cipher if the Business Combination is not consummated within six
months of signing of the Merger Agreement, (v) by either Good Works or Cipher if
certain required approvals are not obtained by Good Works stockholders after the
conclusion of a meeting of Good Works stockholders held for such purpose at
which such stockholders voted on such approvals, and (vi) termination by Good
Works if Cipher's sole stockholder does not deliver to Good Works a written
consent approving the Business Combination within ten business days of the
Consent Solicitation Statement (as defined in the Merger Agreement) being
disseminated.

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If the Merger Agreement is validly terminated, none of the parties to the Merger
Agreement will have any liability or any further obligation under the Merger
Agreement other than customary confidentiality obligations, except in the case
of Willful Breach (as defined in the Merger Agreement).
Good Works Sponsor Support Agreement
Concurrently with the execution of the Merger Agreement, Good Works, and
I-B
Good Works, LLC (the "
Sponsor
") and certain other stockholders of Good Works entered into an Acquiror Support
Agreement (the "
Acquiror Support Agreement
") pursuant to which the parties agreed to, among other things, (i) vote at any
meeting of the stockholders of Good Works all of its shares of Good Works Common
Stock held of record or thereafter acquired in favor of the Proposals (as
defined in the Merger Agreement), (ii) be bound by certain other covenants and
agreements related to the Business Combination and (iii) be bound by certain
transfer restrictions with respect to such securities, prior to the closing of
the Business Combination, in each case, on the terms and subject to the
conditions set forth in the Acquiror Support Agreement.
Cipher Support Agreement
Concurrently with the execution of the Merger Agreement, the sole stockholder of
Cipher representing the requisite votes necessary to approve the Business
Combination entered into support agreements (the "
Company Support Agreement
") with Good Works and Cipher, pursuant to which such holder agreed to (i) vote
at any meeting of the stockholders of Cipher all of its Cipher Common Stock held
of record or thereafter acquired in favor of the Proposals (as defined in the
Merger Agreement) and appoint Good Works as such holder's proxy, (ii) be bound
by certain other covenants and agreements related to the Business Combination
and (iii) be bound by certain transfer restrictions with respect to such
securities, in each case, on the terms and subject to the conditions set forth
in the Company Support Agreement.
Restrictive Covenant Agreements
Concurrently with the execution of the Merger Agreement, Bitfury Top Holdco B.V.
("
Bitfury
"), Cipher's sole stockholder, and Good Works entered into a Restrictive
Covenant Agreement pursuant to which Bitfury agreed, during the term of the
agreement and subject to the parameters and limitations set forth in the
agreement, not to hire or solicit Cipher Mining Inc.'s employees, not to compete
with Cipher Mining Inc. and not to disparage Cipher Mining Inc. The agreement
will terminate upon the earlier of seven years from the date of its execution or
the termination of the Master Services and Supply Agreement (the "
MSSA
") between Bitfury Holding B.V. ("
BHBV
") and Cipher. The MSSA is included as Exhibit F to Exhibit 2.1 hereto, and the
terms of the MSSA are incorporated herein by reference. Concurrently with the
execution of the Merger Agreement, BHBV and Good Works entered into a
Restrictive Covenant Agreement pursuant to which BHBV agreed, during the term of
the agreement and subject to the parameters and limitations set forth in the
agreement, not to hire or solicit Cipher Mining Inc.'s employees, not to compete
with Cipher Mining Inc. and not to disparage Cipher Mining Inc.. The agreement
will terminate upon the earlier of seven years from the date of its execution or
the termination of the MSSA.
PIPE Financing (Private Placement)
Concurrently with the execution of the Merger Agreement, Good Works entered into
subscription agreements (the "
Subscription Agreements
") with certain investors (the "
PIPE Investors
"). Pursuant to the Subscription Agreements, the PIPE Investors agreed to
subscribe for and purchase, and Good Works agreed to issue and sell to such
investors, immediately following the Closing (as defined in the Merger
Agreement), an aggregate of 37,500,000 shares of Good Works Common Stock for a
purchase price of $10.00 per share, for aggregate gross proceeds of $375,000,000
(the "
PIPE Financing
").
The closing of the PIPE Financing is contingent upon, among other things, the
substantially concurrent consummation of the Business Combination. The
Subscription Agreements provide that Good Works will grant the investors in the
PIPE Financing certain customary registration rights.
Bitfury Private Placement
Concurrently with the execution of the Merger Agreement and the execution of the
Subscription Agreements with the PIPE Investors, Bitfury agreed to subscribe for
and purchase, and Good Works agreed to issue and sell to Bitfury, concurrent
with the Closing (as defined in the Merger Agreement), an aggregate of 5,000,000
shares of Good Works Common Stock in exchange for a
benefit-in-kind
commitment as payment for such shares (the "Bitfury Private Placement") pursuant
to a subscription agreement with Good Works (the "
Bitfury Subscription Agreement
"). Bitfury agreed to cause BHBV to discount the Service Fees (as that term is
defined in the MSSA) charged by BHBV under the MSSA as follows: that the first
$200,000,000 of Service Fees payable by Cipher to BHBV under the MSSA described
above shall be subject to a discount of 25%, to be applied at the point of
invoicing and shown as a separate line item on each relevant invoice. For the
avoidance of doubt, when the aggregate value of such discount reaches
$50,000,000, such discount shall automatically cease to apply. Such discount
shall constitute BHBV's
benefit-in-kind
commitment as payment on behalf of its parent entity, for the issuance of the
5,000,000 shares of Good Works Common Stock pursuant to the Bitfury Private
Placement.
On July 8, 2021, the Bitfury Subscription Agreement was amended and restated in
its entirety to provide that the 25%
benefit-in-kind
discount under the MSSA (in consideration for Bitfury's purchase of an aggregate
of 5,000,000 shares of Good Works Common Stock at a purchase price of $10.00 per
share) will instead be paid as a $50 million cash payment, which will be made at
closing (as defined in the Merger Agreement) in form of cash and/or forgiveness
of outstanding indebtedness owed by Cipher to Bitfury.

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Lock-Ups
The Sponsor, certain holders of Good Works Common Stock, and Bitfury, Cipher's
sole stockholder immediately prior to the closing of the Business Combination,
will enter into
lock-up
agreements (the "
Lock-Up
Agreements
") and be subject to post-closing
lock-ups
with respect to their shares of Good Works Common Stock (but excluding any
Private Placement Units, which are units that were issued in a private placement
to Good Works' anchor investors simultaneously with the closing of its initial
public offering; each unit consists of one share of Common Stock and
one-half
of one warrant and were purchased at a price of $10.00 per Private Placement
Unit and excluding any shares of Good Works Common Stock issued to Bitfury in
the Bitfury Private Placement, which are subject to a separate
lock-up
restriction, as described in the Bitfury Subscription Agreement); provided that
the term of the
Lock-Up
shall be two years and the
Lock-up
will allow certain amounts of the shares to be publicly sold after 180 days,
subject, in each case, to customary terms and conditions.
Amended and Restated Registration Rights Agreement
At the closing of the Business Combination, the Sponsor, certain stockholders of
Good Works, and Bitfury (collectively, the "
Holders
") will enter into an amended and restated registration rights agreement (the "
Registration Rights Agreement
") with Good Works pursuant to which, among other things, the parties thereto
will be granted certain customary registrant rights with respect to shares of
Good Works Common Stock.
Liquidity and Capital Resources
As of June 30, 2021 we had $127,722 of cash.
On October 22, 2020, we consummated a $150,000,000 initial public offering (the
"Public Offering") consisting of 15,000,000 units at a price of $10.00 per unit
("Unit"). Each Unit consists of one share of the Company's common stock, $0.001
par value (the "Common Stock"), and
one-half
of one redeemable warrant (each, a "Public Warrant"). Simultaneously with the
closing of the Public Offering, we consummated a $2,228,000 private placement
("Private Placement") of an aggregate of 228,000 private placement units (the
"Private Placement Units"). Upon closing of the Public Offering and the Private
Placement on October 22, 2020, $150,000,000 in proceeds from the Public Offering
and Private Placement was placed in a U.S.-based trust account maintained by
Continental Stock Transfer & Trust Company, acting as trustee (the "Trust
Account").
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 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.

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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 June 30, 2021, 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 Arrangements
We did not have any
off-balance
sheet arrangement as of June 30, 2021.
Contractual Obligations
As of June 30, 2021, 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.
Critical Accounting Policies
Management's discussion and analysis of our results of operations and liquidity
and capital resources are based on our unaudited financial information. We
describe our significant accounting policies in Note 2 - Summary of Significant
Accounting Policies, of the Notes to Financial Statements included in this
report. Our unaudited financial statements have been prepared in accordance with
U.S. GAAP. Certain of our accounting policies require that management apply
significant judgments in defining the appropriate assumptions integral to
financial estimates. On an ongoing basis, management reviews the accounting
policies, assumptions, estimates and judgments to ensure that our financial
statements are presented fairly and in accordance with U.S. GAAP. Judgments are
based on historical experience, terms of existing contracts, industry trends and
information available from outside sources, as appropriate. However, by their
nature, judgments are subject to an inherent degree of uncertainty, and,
therefore, actual results could differ from our estimates. For a full discussion
of our accounting estimates and assumptions that have been identified as
critical in the preparation of the Company's condensed consolidated financial
statements, please refer to Good Works Acquisition Corp.'s Form
10-K/A
Amendment No. 2 for the year ended December 31, 2020.
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.

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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.
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2021, we were not subject to any material market or interest rate
risk. Following the consummation of our Public Offering, the net proceeds of the
Public Offering and the Private Placement, including amounts in the Trust
Account, were invested in U.S. government treasury obligations with a maturity
of 185 days or less or in money market funds meeting certain conditions under
Rule
2a-7
under the Investment Company Act which invest only in direct U.S. government
treasury obligations. Due to the short-term nature of these investments, we
believe there was no associated material exposure to interest rate risk.
We have not engaged in any hedging activities since our inception. We do not
expect to engage in any hedging activities with respect to the market risk to
which we are exposed.
Item 4. Controls and Procedures
Under the supervision and with the participation of our management we conducted
an evaluation of the effectiveness of our disclosure controls and procedures as
of the end of the fiscal quarter ended June 30, 2021, as such term is defined in

Rules

13a-15(e)

and

15d-15(e)

under the Exchange Act. Based upon that evaluation and in light of the SEC Staff Statement, our Certifying Officers concluded that, solely due to the Company's restatement of its financial statements to reclassify the Company's certain complex financial instruments as described in the

10-K/A



filed on May 7, 2021, June 14, 2021, and January 21, 2022, a material weakness
existed and our disclosure controls and procedures were not effective as of
June 30, 2021.
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial and accounting officer or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, other than the material
weakness related to the warrant accounting as described in the Form
10-K/A
filed on January 21, 2022, there has been no change in our internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. We plan to
enhance our processes to identify and appropriately apply applicable accounting
requirements to better evaluate and understand the nuances of the complex
accounting standards that apply to our financial statements. Our plans at this
time include providing enhanced access to accounting literature, research
materials and documents and increased communication among our personnel and
third-party professionals with whom we consult regarding complex accounting
applications. The elements of our remediation plan can only be accomplished over
time, and we can offer no assurance that these initiatives will ultimately have
the intended effects.

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