MARA Holdings, Inc. 10-Q

Item 1A. Risk Factors. There are no updates or changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021 except as set forth below. Our business could be harmed by prolonged power and internet outages, shortages, or capacity constraints and deployment delays. Our operations require a significant amount of electrical power and access to high-speed internet to be successful. If we are unable to secure sufficient electrical power, or if we lose internet access for a prolonged period, we may be required to reduce our operations or cease them altogether. We are also dependent upon our third-party energy providers to power miners upon installation, and there may be delays in deployment and implementation. If any of these scenarios occurs, our business and results of operations may be materially and adversely affected. We may face capital calls as a result of our existing loan agreements. During October 2022, we borrowed an additional $50 million under our RLOC facility and provided an additional 3,993 bitcoin as collateral which increased the Company’s collateral balance to 7,821 bitcoin. On November 9, 2022, bitcoin prices declined to a new yearly low which triggered a capital call of an additional 1,669 bitcoin to cover collateral for our $50 million RLOC and $50 million term loan borrowings, bringing its total collateral balance to 9,490 bitcoin. The Company’s remaining unrestricted balance is 1,950 and any further decrease in bitcoin prices could cause us to have to pledge all or a substantial portion of our remaining bitcoin holdings. There is no assurance that if there are continued marked decreases in the price of bitcoin that our remaining unrestricted bitcoin will be sufficient to cover further increased collateral requirements or that if not, that we would have sufficient capital to cover any resulting capital calls, which could result in our not being able to maintain liquidity and could force us to consider reorganization or liquidation. We are subject to risks associated with our need for significant electrical power. Our operations have required significant amounts of electrical power, and, as we continue to expand our mining fleet, we anticipate our demand for electrical power will continue to grow. If we are unable to continue to obtain sufficient electrical power on a cost-effective basis, we may not realize the anticipated benefits of our significant capital investments. Additionally, our operations could be materially adversely affected by prolonged power outages. Therefore, we may have to reduce or cease our operations in the event of an extended power outage, or as a result of the unavailability or increased cost of electrical power. If this were to occur, our business and results of operations could be materially and adversely affected. 34 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. Not applicable.