What changed in this filing

/stocks — the workspaceLOADING

Item 1. Legal Proceedings

2022-05-06 compared with 2021-11-15 · 59 added, 75 removed, 9 unchanged (94% of the section changed)

Legal Proceedings.

March 27, 2018, Jeffrey Feinberg, purportedly joined by the Jeffrey L.

Feinberg Personal Trust and the Jeffrey L.

Feinberg Family Trust,

filed a complaint against the Company and certain of its former officers and directors.

The complaint was filed in the Supreme Court

of the State of New York, County of New York.

The plaintiffs purported to state claims under Sections 11, 12(a)(2) and 15 of the federal

Securities Act of 1933 and common law claims for “actual fraud and fraudulent concealment,” constructive fraud, and negligent

misrepresentation, seeking unspecified money damages (including punitive damages), as well as costs and attorneys’ fees, and equitable

or injunctive relief.

On June 15, 2018, the defendants filed a motion to dismiss all claims asserted in the complaint and, on July 27,

2018, the plaintiffs filed an opposition to that motion.

The court heard argument on the motion and, on January 15, 2019, the court granted

the motion to dismiss, allowing 30 days for the filing of an amended complaint.

On February 15, 2019, Jeffrey Feinberg, individually

and as trustee of the Jeffrey L.

Feinberg Personal Trust, and Terrence K.

Ankner, as trustee of the Jeffrey L.

Feinberg Family Trust,

filed an amended complaint that purports to state the same claims and seeks the same relief sought in the original complaint.

7 and 22, 2019, defendants filed motions to dismiss the amended complaint and on April 5, 2019, plaintiffs filed an opposition to those

The court heard oral argument on the motions to dismiss on July 9, 2019, and at the conclusion of the argument the court took

the motions under submission.

On March 13, 2020, the court issued its Decision in which it granted the motions to dismiss in full and

ordered that the case be dismissed with prejudice.

On or about May 4, 2020, the plaintiffs filed a notice of appeal.

Plaintiffs filed

their opening appellate brief on January 4, 2021, and defendants filed their responsive appellate briefs on February 3, 2021.

Oral argument

on the appeal was conducted on April 1, 2021.

On April 22, 2021, the court’s Appellate Division issued its Decision and Order affirming

the dismissal of the case.

January 14, 2021, Plaintiff Michael Ho (“Plaintiff” or “Ho”) filed a Civil Complaint for Damages and Restitution

(“Complaint”) against Marathon Patent Group, Inc., now known as Marathon Digital Holdings, Inc.

(the “Company”)

and 10 Doe Defendants in the Superior Court of the State of California for the County of Riverside.

The Complaint alleges six causes

of action against the Company, (1) Breach of Written Contract;

(“Complaint”) against Marathon Digital Holdings, Inc.

(the “Company”) and 10 Doe Defendants.

The Complaint alleges

six causes of action against the Company, (1) Breach of Written Contract;

(2) Breach of Implied Contract;

(3) Quasi-Contract;

(4) Services Rendered;

(5) Intentional Interference with Prospective Economic Relations;

and (6) Negligent Interference with Prospective Economic Relations.

Claims 5 and 6 are pled against “all Defendants” and may involve later named defendants.

The Complaint seeks damages, restitution,

punitive damages, and costs of suit.

The claims arise from the same set of facts.

Ho alleges that the Company profited from commercially-sensitive

information he shared with the Company, purportedly under a mutual non-disclosure agreement, and that the Company failed to compensate

him for his role in securing the acquisition of a supplier of energy for the Company.

On February 22, 2021, the Company responded to

and (6) Negligent Interference with Prospective Economic

Relations, which is the one plead against “all Defendants” and is most likely to involve later named defendants.

arise from the same set of facts, Ho alleges that the Company profited from commercially-sensitive information he shared with the Company

and then it refused to compensate him for his role in securing the acquisition of a supplier of energy for the Company.

On February 22,

2021, the Company responded to Mr.

Ho’s Complaint with a general denial and the assertion of applicable affirmative defenses.

Then, on February 25, 2021, the

Company removed the action to the United States District Court in the Central District of California, where the action remains pending.

The parties are currently engaged in discovery, including written discovery and depositions.

The Company will move to have Plaintiff’s

claims dismissed before trial.

Trial is set to begin on March 3, 2022.

Due to outstanding issues of fact and law, it is impossible to

predict the outcome at this time;

however, after consulting legal counsel the Company is confident that it will prevail in this

litigation since it did not have a contract with Mr.

Ho and he did not disclose any commercially-sensitive information under any mutual

nondisclosure agreement that was used to structure any joint venture with energy providers .

October 6, 2020, the Company entered into a series of agreements with multiple parties to design and build a data center for up to 100-megawatts

in Hardin, MT.

on February 25, 2021, the Company removed the action to the United States District Court in the Central District of California, where

the action remains pending.

Marathon filed a motion for summary judgment/adjudication of all causes of action.

On February 11, 2022,

the Court granted the motion and dismissed Ho’s 2nd, 5th and 6th causes of action.

Discovery is closed.

The Court held a pre-trial

conference on February 24, 2022, where it vacated the March 3, 2022 trial date and ordered the parties to meet and confer on a new trial

The Court discussed the various theories of damages maintained by the parties.

In its ruling on the summary judgment motion

and at the pre-trial conference on February 24, 2022, the Court noted that a jury is more likely to accept $150,000 as an appropriate

damages amount if liability is found, as opposed to the various theories espoused by Ho that result in multi-million dollar recoveries.

Due to outstanding issues of fact and law, it is impossible to predict the outcome at this time;

however, after consulting legal counsel,

the Company is confident that it will prevail in this litigation, since it did not have a contract with Mr.

Ho and he did not disclose

any commercially-sensitive information under any mutual nondisclosure agreement that was used to structure any joint venture with energy

Trial is set to begin on May 26, 2022.

October 6, 2020, the Company entered into a series of agreements with multiple parties to design and build a data center for up to

100-megawatts in Hardin, MT.

In conjunction therewith, the Company filed a Current Report on Form 8-K on October 13, 2020.

The 8-K discloses that,

pursuant to a Data Facility Services Agreement, the Company issued 6,000,000 shares of restricted Common Stock, in transactions exempt

from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

During the quarter ended September 30, 2021, the Company

and certain of its executives received a subpoena to produce documents and communications concerning the Hardin, Montana data center

facility described in our Form 8-K dated October 13, 2020.

We understand that the SEC may be investigating whether or not there may have

been any violations of the federal securities law.

We are cooperating with the SEC.

discloses that, pursuant to a Data Facility Services Agreement, the Company issued 6,000,000 shares of restricted Common Stock, in

transactions exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

During the quarter ended

September 30, 2021, the Company and certain of its executives received a subpoena to produce documents and communications concerning

the Hardin, Montana data center facility described in our Form 8-K dated October 13, 2020.

We understand that the SEC may be

investigating whether or not there may have been any violations of the federal securities law.

We are cooperating with the

December 17, 2021, a putative class action complaint was filed in the United States District Court for the District of Nevada, against

the Company and present and former senior management.

The Complaint alleges securities fraud related to the disclosure of an SEC

investigation previously made by the Company on November 15, 2021.

Plaintiff Tad Schlatre served the Complaint on the Company

on March 1, 2022.

February 18, 2022, a shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against

current and former members of the Company’s board of directors and senior management.

The complaint is based on allegations substantially

similar to the allegations in the December 2021 putative securities class action complaint, related to the Company’s disclosure

of an SEC investigation previously made by the Company on November 15, 2021.

On March 4, 2022, the Complaint was served on the Company.

On April 4, 2022, the defendants moved to dismiss the Complaint.

On May 5, 2022, a second shareholder derivative complaint was filed

in the United States District Court for the District of Nevada, against current and former members of the Company’s board of directors

and senior management.

The complaint is based on allegations substantially similar to the allegations in the February 18, 2022

derivative complaint.

In the opinion of management, after consulting

legal counsel, the ultimate disposition of these five matters will not have a material adverse effect on the Company and its related

entities combined financial position, results of operations, or liquidity.

than as disclosed herein, we know of no other material, active or pending legal proceedings against us, nor are we involved as a plaintiff

in any material proceedings or pending litigation other than in the normal course of business.

Risk Factors.

required for smaller reporting companies.

Unregistered Sales of Equity Securities and Use of Proceeds.

Defaults Upon Senior Securities.

Mine Safety Disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings