Marathon Digital to Correct Earnings Figures After SEC Letter

The crypto miner said certain financial statements published in 2021 and 2022 should not be relied upon

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Fred Thiel, CEO, Marathon Digital

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Marathon Digital was set to report financial results for the fourth quarter on Tuesday but postponed its earnings release. The crypto miner is set to recast some figures after the US securities regulator flagged inaccuracies.

The Las Vegas, Nevada-based company received a letter from the Securities and Exchange Commission’s corporation finance staff on Feb. 22 that picked out some accounting errors, according to a filing published Tuesday. 

The issues raised in the letter included the calculation of impairment of digital assets and its determination of revenue from contracts with customers. Impairment refers to how a digital asset is recorded when its price dips below its initial purchase price.

Marathon said it recently determined its prior assessment that it acted as an agent in operating a third-party mining pool was incorrect, and concluded that it was acting as a principal instead.  Portions of its financial statements in 2021 and as-yet unaudited quarterly reports for 2022 should not be relied upon, it added.

“The company estimates that both its revenues and its cost of revenues for the year ended December 31, 2021 were understated due to the ‘net’ vs. ‘gross’ presentation of revenues in its financial statements,” it said.

A number of figures are expected to change as a result of the restatement, including revenue, cost of revenue, energy and hosting.

The restatement is not expected to have an impact on total margin, operating income or net income in 2021 or 2022.

Marathon said because of the SEC’s letter, the company will be unable to file and make corrections to its 2022 annual report on Form 10-K by its March 1 deadline. However, it expects to file within 15 days of this deadline.

Marathon Digital’s stock is down nearly 70% in the last 12 months, but has risen over 17% in the last three months. It ended Tuesday trading roughly flat at $7.10 per share on the Nasdaq.


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