What changed in this filing

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Item 1A. Risk Factors

2023-03-16 compared with 2022-03-10 · 267 added, 200 removed, 601 unchanged (44% of the section changed)

combined organization will be faced with a market environment that cannot be predicted and that involves significant risks, many of which

will be beyond its control.

In addition to the other information contained in this Annual Report on Form 10-K, you should carefully consider

the material risks described below before investing in our securities.

If any of the following risks actually occur, our business, results

of operations and financial condition would likely suffer.

In these circumstances, the market price of our common stock could decline,

and you may lose all or part of your investment.

factors may have a materially adverse effect on our business, financial condition, and results of operations, including the risk, factors,

and uncertainties described under this Part I, Item 1A, and elsewhere in this Annual Report.

This is not an exhaustive list, and there

are other factors that may be applicable to our business that are not currently known to us or that we currently do not believe are material.

Any of these risks could have an adverse effect on our business, financial condition, operating results, or prospects, which could cause

the trading price of our common stock to decline, and you could lose part or all of your investment.

You should carefully consider the

risks, factors, and uncertainties described below, together with the other information contained in this Annual Report, as well as the

risk, factors, uncertainties, and other information we disclose in other filings we make with the SEC before making an investment decision

regarding our securities.

may be classified as an inadvertent investment company .

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assets (exclusive of government securities and cash items) on a consolidated basis.

have commenced digital asset mining, the outputs of which are cryptocurrencies, which may be deemed a security in the future, although

the SEC states that bitcoin, which is the only cryptocurrency we currently mine, is not a security (https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_fundstrading).

have commenced digital asset mining, the outputs of which are digital assets, which may be deemed a security in the future, although

the SEC states that bitcoin, which is the only digital asset we currently mine, is not a security (https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_fundstrading).

In the event that the digital assets other than bitcoin held by us exceed 40% of our total assets, exclusive of cash, we inadvertently

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conduct our operations.

If we determine to mine cryptocurrencies, other than bitcoin in the future, we will establish and disclose

the process and framework we use to determine if such digital assets are securities under Section 2(a)(1) of the Securities Act and will

address any specific risks in our policy and framework in making such a determination.

If we determine to mine digital assets other than bitcoin in the future, we will establish and disclose the process

and framework we use to determine if such digital assets are securities under Section 2(a)(1) of the Securities Act and will address

any specific risks in our policy and framework in making such a determination.

This description would also include any policy/framework

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affect an investment in us.

we acquire digital securities, even unintentionally, we may violate the Investment Company Act of 1940 and incur potential third-party

Company intends to comply with the 1940 Act in all respects.

To that end, if holdings of cryptocurrencies are determined to constitute

investment securities of a kind that subject the Company to registration and reporting under the 1940 Act, the Company will limit its

holdings to less than 40% of its assets.

Section 3(a)(1)(C) of the 1940 Act defines “investment company” to mean any issuer

that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns

or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive

of Government securities and cash items) on an unconsolidated basis.

Section 3(a)(2) of the 1940 Act defines “investment securities”

to include all securities except (A) Government securities, (B) securities issued by employees’ securities companies, and (C) securities

issued by majority-owned subsidiaries which (i) are not investment companies and (ii) are not relying on the exception from the definition

of investment company in section 3(c)(1) or 3(c)(7) of the 1940 Act.

As noted above, the SEC has not stated whether bitcoin and cryptocurrency

is an investment security, as defined in the 1940 Act.

or any pandemic, epidemic or outbreak of an infectious disease in the United States or elsewhere may adversely affect our business.

COVID-19 virus has had unpredictable and unprecedented impacts in the United States and around the world.

The World Health Organization

has declared the outbreak of COVID-19 as a “pandemic,” or a worldwide spread of a new disease.

Many countries around the

world have imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus.

In the United States,

federal, state and local governments have enacted restrictions on travel, gatherings, and workplaces, with exceptions made for essential

workers and businesses.

As of the date of this prospectus, we have not been declared an essential business.

As a result, we may be required

to substantially reduce or cease operations in response to governmental action or decree as a result of COVID-19.

We are still assessing

the effect on our business from COVID-19 and any actions implemented by the federal, state and local governments.

We have implemented

safety protocols to protect our staff, but we cannot offer any assurance that COVID-19 or any other pandemic, epidemic or outbreak of

an infectious disease in the United States or elsewhere, will not materially and adversely affect our business.

contributors to all or any digital asset network could propose amendments to the respective network’s protocols and software that,

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example, with respect to Bitcoins network, a small group of individuals contribute to the Bitcoin Core project on GitHub.com.

of contributors is currently headed by Wladimir J.

van der Laan, the current lead maintainer.

These individuals can propose refinements

or improvements to the bitcoin network’s source code through one or more software upgrades that alter the protocols and software

that govern the bitcoin network and the properties of bitcoin, including the irreversibility of transactions and limitations on the mining

of new bitcoin.

These individuals

can propose refinements or improvements to the Bitcoin network’s source code through one or more software upgrades that alter the

protocols and software that govern the Bitcoin network and the properties of Bitcoin, including the irreversibility of transactions and

limitations on the mining of new bitcoin.

Proposals for upgrades and discussions relating thereto take place on online forums.

For example, there is an ongoing

debate regarding altering the blockchain by increasing the size of blocks to accommodate a larger volume of transactions.

Although some

proponents support an increase, other market participants oppose an increase to the block size as it may deter miners from confirming

transactions and concentrate power into a smaller group of miners.

To the extent that a significant majority of the users and miners

on the bitcoin network install such software upgrade(s), the bitcoin network would be subject to new protocols and software that may

adversely affect an investment in the Shares.

In the event a developer or group of developers proposes a modification to the bitcoin

network that is not accepted by a majority of miners and users, but that is nonetheless accepted by a substantial plurality of miners

and users, two or more competing and incompatible blockchain implementations could result.

there is an ongoing debate regarding altering the blockchain by increasing the size of blocks to accommodate a larger volume of transactions.

Although some proponents support an increase, other market participants oppose an increase to the block size as it may deter miners from

confirming transactions and concentrate power into a smaller group of miners.

To the extent that a significant majority of the users

and miners on the Bitcoin network install such software upgrade(s), the Bitcoin network would be subject to new protocols and software

that may adversely affect an investment in the Shares.

In the event a developer or group of developers proposes a modification to the

Bitcoin network that is not accepted by a majority of miners and users, but that is nonetheless accepted by a substantial plurality of

miners and users, two or more competing and incompatible blockchain implementations could result.

This is known as a “hard fork.”

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the Bitcoin network protocol.

Although the MIT Media Lab’s Digital Currency Initiative funds the current maintainer Wladimir J.

van der Laan, among others, this type of financial incentive is not typical.

The lack of guaranteed financial incentive for contributors

to maintain or develop the bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the bitcoin

network may reduce incentives to address the issues adequately or in a timely manner.

Changes to a digital asset network which we are

mining on may adversely affect an investment in us.

The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin network

and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address

the issues adequately or in a timely manner.

Changes to a digital asset network which we are mining on may adversely affect an investment

a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the

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For example, the current fixed reward on the Bitcoin network

for solving a new block is twelve and a half (12.5) bitcoins per block;

the reward decreased from twenty-five (25) bitcoin in July 2016.

It is estimated that it will halve again in about four (4) years.

This reduction may result in a reduction in the aggregate hashrate

of the bitcoin network as the incentive for miners will decrease.

Moreover, miners ceasing operations would reduce the aggregate hashrate

on the bitcoin network, which would adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed

at which blocks are added to the blockchain until the next scheduled adjustment in difficulty for block solutions) and make the bitcoin

network more vulnerable to a malicious actor obtaining control in excess of fifty percent (50%) of the aggregate hashrate on the bitcoin

Periodically, the bitcoin network has adjusted the difficulty for block solutions so that solution speeds remain in the vicinity

of the expected ten (10) minute confirmation time targeted by the bitcoin network protocol.

for solving a new block is six and one quarter (6.25).

bitcoins per block;

the reward decreased from twelve and one half (12.5) bitcoin

It is estimated that it will halve again in March 2024, and then again in about four (4) years, and approximately every

four (4) years thereafter until the last bitcoin has been mined, which is estimated to be in or around 2140.

This reduction may result

in a reduction in the aggregate hashrate of the Bitcoin network as the incentive for miners will decrease.

Moreover, miners ceasing operations

would reduce the aggregate hashrate on the Bitcoin network, which would adversely affect the confirmation process for transactions (i.e.,

temporarily decreasing the speed at which blocks are added to the blockchain until the next scheduled adjustment in difficulty for block

solutions) and make the Bitcoin network more vulnerable to a malicious actor obtaining control in excess of fifty percent (50%) of the

aggregate hashrate on the Bitcoin network.

Periodically, the Bitcoin network has adjusted the difficulty for block solutions so that

solution speeds remain in the vicinity of the expected ten (10) minute confirmation time targeted by the Bitcoin network protocol.

believes that from time to time there will be further considerations and adjustments to the Bitcoin network, and others regarding the

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the past two years, digital asset mining operations have evolved from individual users mining with computer processors, graphics processing

units and first-generation servers.

Currently, new processing power brought onto the digital asset networks is predominantly added by

incorporated and unincorporated “professionalized” mining operations.

units and first-generation mining rigs.

Currently, new processing power brought onto the digital asset networks is predominantly added

by incorporated and unincorporated “professionalized” mining operations.

Professionalized mining operations may use proprietary

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digital asset network participants could adversely affect an investment in us.

digital asset exchanges on which digital assets trade are relatively new and, in most cases, largely unregulated and may therefore be

more exposed to fraud and failure than established, regulated exchanges for other products.

To the extent that the digital asset exchanges

representing a substantial portion of the volume in digital asset trading are involved in fraud or experience security failures or other

operational issues, such digital asset exchanges’ failures may result in a reduction in the price of some or all digital assets

and can adversely affect an investment in us.

digital asset exchanges on which the digital assets trade are new and, in most cases, largely unregulated.

Furthermore, many digital

asset exchanges (including several of the most prominent USD denominated digital asset exchanges) do not provide the public with significant

information regarding their ownership structure, management teams, corporate practices or regulatory compliance.

As a result, the marketplace

may lose confidence in, or may experience problems relating to, digital asset exchanges, including prominent exchanges handling a significant

portion of the volume of digital asset trading.

lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to fraud,

business failure, hackers or malware, or government-mandated regulation may reduce confidence in the digital asset networks and result

in greater volatility in digital asset values.

These potential consequences of a digital asset exchange’s failure could adversely

affect an investment in us.

or economic crises may motivate large-scale sales of digital assets, which could result in a reduction in some or all digital assets’

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would result in a reduction in their value and could adversely affect an investment in us.

ability to adopt technology in response to changing security needs or trends poses a challenge to the safekeeping of our digital assets.

ability to adopt technology in response to changing security needs or trends and reliance on third party, NYDIG, for custody poses

a challenge to the safekeeping of our digital assets.

history of digital asset exchanges has shown that exchanges and large holders of digital assets must adapt to technological change in

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threats, our digital assets may be subject to theft, loss, destruction or other attack, which could adversely affect an investment in

To the extent that NYDIG is no longer, due to the current banking crisis, able to safeguard our assets, we would be at risk of

loss if safeguarding protocols fail.

threats to us could result in, a loss of our digital assets, or damage to the reputation and our brand, each of which could adversely

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asset transactions are irrevocable and stolen or incorrectly transferred digital assets may be irretrievable.

As a result, any incorrectly

executed digital asset transactions could adversely affect an investment in us.

As a result, any

incorrectly executed digital asset transactions could adversely affect an investment in us.

asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient

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by insurance and for which no person is liable in damages which could adversely affect our operations and, consequently, an investment

assets held by us are not subject to FDIC or SIPC protections.

do not hold our digital assets with a banking institution or a member of the Federal Deposit Insurance Corporation (“FDIC”)

or the Securities Investor Protection Corporation (“SIPC”) and, therefore, our digital assets are not subject to the protections

enjoyed by depositors with FDIC or SIPC member institutions.

may not have adequate sources of recovery if our digital assets are lost, stolen or destroyed.

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the financial resources (including liability insurance coverage) to satisfy a valid claim of ours.

Furthermore, bitcoin is not subject

to FDIC or SIPC protection so the protection afforded to depositors at banking institutions.

sale of our digital assets to pay expenses at a time of low digital asset prices could adversely affect an investment in us.

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Starting January 1, 2016, New Hampshire requires anyone

who exchanges a digital currency for another currency must become a licensed and bonded money transmitter.

In numerous other states,

including Connecticut and New Jersey, legislation is being proposed or has been introduced regarding the treatment of bitcoin and other

digital assets.

who exchanges a digital asset for another currency must become a licensed and bonded money transmitter.

In numerous other states, including

Connecticut and New Jersey, legislation is being proposed or has been introduced regarding the treatment of bitcoin and other digital

Marathon will continue to monitor for developments in such legislation, guidance or regulations.

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our experience of a data loss relating to our Company’s digital assets could adversely affect an investment in our Company.

assets are controllable only by the possessor of both the unique public key and private key relating to the local or online digital

wallet in which the digital assets are held.

We are required by the operation of digital asset networks to publish the public key

relating to a digital wallet in use by us when it first verifies a spending transaction from that digital wallet and disseminates

such information into the respective network.

We safeguard and keep private the private keys relating to our digital assets by

relying on NYDig’s 100% cold storage custody solution held in a purpose-built physically-secure environment based on

established, industry best practices to safeguard our digital assets from theft, loss, destruction or other issues relating to

hackers and technological attack;

to the extent a private key is lost, destroyed or otherwise compromised and no backup of the

private key is accessible, we will be unable to access the digital assets held by it and the private key will not be capable of

being restored by the respective digital asset network.

Any loss of private

keys relating to digital wallets used to store our digital assets could adversely affect an investment in us.

many of our digital assets are held by digital asset exchanges, we face heightened risks from cybersecurity attacks and financial stability

of digital asset exchanges.

may transfer their digital asset from its wallet to digital asset exchanges prior to selling them.

Digital assets not held in Marathon’s

wallet are subject to the risks encountered by digital asset exchanges including a DDoS Attack or other malicious hacking, a sale of

the digital asset exchange, loss of the digital assets by the digital asset exchange and other risks similar to those described herein.

Marathon does not maintain a custodian agreement with any of the digital asset exchanges that hold the Marathon’s digital assets.

These digital asset exchanges do not provide insurance and may lack the resources to protect against hacking and theft.

to occur, Marathon may be materially and adversely affected.

assets are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet

in which the digital assets are held.

We are required by the operation of digital asset networks to publish the public key relating to

a digital wallet in use by us when it first verifies a spending transaction from that digital wallet and disseminates such information

into the respective network.

We safeguard and keep private the private keys relating to our digital assets by relying on NYDIG’s

100% cold storage custody solution held in a purpose-built physically-secure environment based on established, industry best practices

to safeguard our digital assets from theft, loss, destruction or other issues relating to hackers and technological attack;

to the extent

a private key is lost, destroyed or otherwise compromised and no backup of the private key is accessible, we will be unable to access

the digital assets held by it and the private key will not be capable of being restored by the respective digital asset network.

loss of private keys relating to digital wallets used to store our digital assets could adversely affect an investment in us.

the award of digital assets for solving blocks and transaction fees for recording transactions are not sufficiently high to cover expenses

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Decreased use and demand for bitcoins that we have accumulated may adversely affect their value and may adversely impact an investment

in the price of bitcoin may significantly influence the market price of our class A common stock

in the price of bitcoin may significantly influence the market price of our bitcoin holdings and therefore the price of our class A common

the extent investors view the value of our class A common stock as linked to the value or change in the value of our bitcoin, fluctuations

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bitcoin-related services or accept bitcoin as payment, which could also decrease the price of bitcoin.

are subject to an extensive, highly evolving and uncertain regulatory and business landscape and any adverse changes to, or our failure

to comply with, any laws and regulations, and adverse business reactions from counterparties could adversely affect our brand, reputation,

business, operating results, and financial condition.

business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory

interpretations and guidance, as well as counterparty risk in the markets in which we operate, including regulatory aspects from financial

services, federal energy and other regulators, the SEC, the CFTC, credit, crypto asset custody, exchange, and transfer, cross-border

and domestic money and crypto asset transmission, consumer and commercial lending, usury, foreign currency exchange, privacy, data governance,

data protection, cybersecurity, fraud detection, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions,

anti-money laundering, and counter-terrorist financing, as well as the same regulatory risks applicable to counterparties, most notably

hosting businesses, as well as the recent economic issues and bankruptcies befalling some in this industry.

Many of these legal and regulatory

regimes were adopted prior to the advent of the internet, mobile technologies, crypto assets, and related technologies.

some applicable laws and regulations do not contemplate or address unique issues associated with the crypto economy, are subject to significant

uncertainty, and vary widely across U.S.

federal, state, and local and international jurisdictions.

These legal and regulatory regimes,

including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent

manner from one jurisdiction to another, and may conflict with one another.

Moreover, the complexity and evolving nature of our business

and the significant uncertainty surrounding the regulation of the crypto economy requires us to exercise our judgment as to whether certain

laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions.

To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses,

limitations on our products and services, reputational harm, and other regulatory consequences, each of which may be significant and

could adversely affect our business, operating results, and financial condition.

Additionally,

various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in other countries may

adopt new laws and regulations, the direction and timing of which may be influenced by changes in the governing administrations and major

events in the crypto economy.

For example, following the failure of several prominent crypto trading venues and lending platforms, such

as FTX, Celsius Networks, Voyager and Three Arrows Capital in 2022 (even though these do not directly affect our business), the U.S.

Congress expressed the need for both greater federal oversight of the crypto economy and comprehensive cryptocurrency legislation.

the near future, various governmental and regulatory bodies, including in the United States, may introduce new policies, laws, and regulations

relating to crypto assets and the crypto economy generally, and crypto asset platforms in particular.

The failures of risk management

and other control functions at other companies that played a role in these events could accelerate an existing regulatory trend toward

stricter oversight of crypto asset platforms and the crypto economy.

to our business activities, we may be subject to ongoing examinations, oversight, and reviews and currently are, and expect in the future,

to be subject to investigations and inquiries, by U.S.

federal and state regulators, many of which have broad discretion to audit and

examine our business.

Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations,

and enforcement or other actions, including preventing or delaying us from offering certain products or services offered by our competitors

or could impact how we offer such products and services.

Adverse changes to, or our failure to comply with, any laws and regulations

have had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results, and financial

may have further restrictions on our liquidity due to unique risks which we could face in 2023.

risks to our liquidity outlook would include the following:

Deteriorating

macroeconomic conditions as a result of the potential for recession in 2023 discussed in the media

challenges arising from catastrophic events (such the FTX collapse and multiple bankruptcies of bitcoin mining companies in 2022

and 2023) that would adversely affect the credibility of, and therefore investor confidence in, companies engaged in the digital

declines in bitcoin prices and/or production, and increases in electricity costs which could adversely impact both the value of our

bitcoin holdings and our ongoing profitability

instability in the banking system and collapse of more banking institutions which could put

the liquidity and cash assets of third parties with which we do business such as miner hosting

entities and suppliers and us, if we bank in the future with an institution which subsequently

we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin,

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breaches and cyberattacks are of particular concern with respect to our bitcoin.

Bitcoin and other blockchain-based cryptocurrencies

have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

A successful security

breach or cyberattack could result in a partial or total loss of our bitcoin in a manner that may not be covered by insurance or indemnity

provisions of the custody agreement with a custodian who holds our bitcoin.

Such a loss could have a material adverse effect on our financial

condition and results of operations.

change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment

Company Act of 1940 and could adversely affect the market price of bitcoin and the market price of our class A common stock.

senior SEC officials have stated their view that bitcoin is not a “security” for purposes of the federal securities laws,

the SEC has so far refused to permit the listing of any bitcoin-based exchange traded funds, citing, among other things, concerns regarding

bitcoin market integrity and custodial protections.

It is possible that the SEC could take a contrary position to the one taken by its

senior officials or a federal court could conclude that bitcoin is a security.

Such a determination could lead to our classification

as an “investment company” under the Investment Company Act of 1940, which would subject us to significant additional regulatory

controls that could have a material adverse effect on our business and operations and also may require us to substantially change the

manner in which we conduct our business.

addition, if bitcoin is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions

imposed by those laws could adversely affect the market price of bitcoin and in turn adversely affect the market price of our class A

common stock.

Bitcoin and other blockchain-based digital assets have

been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

A successful security breach

or cyberattack could result in a partial or total loss of our bitcoin in a manner that may not be covered by insurance or indemnity provisions

of the custody agreement with a custodian who holds our bitcoin.

Such a loss could have a material adverse effect on our financial condition

and results of operations.

in intellectual property laws may adversely affect our intellectual property position.

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companies may design around technologies we have developed;

of our patents would be complex, uncertain and very expensive.

enforcement of our patents would be complex, uncertain and very expensive.

cannot be certain that patents will be issued as a result of any future patent applications, or that any of our patents, once issued,

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are dependent upon the efforts and services of our small executive team.

While we have a preliminary plan for succession of certain

key executive, the loss of any one of our key executives could have an adverse effect on our operations.

have identified a material weakness in our internal control over financial reporting which, if not timely remediated, may adversely affect

the accuracy and reliability of our future financial statements, and our reputation, business and the price of our common stock, as well

as may lead to a loss of investor confidence in us.

described under Item 9A.

“Controls and Procedures” below, management has concluded that a material weakness in our internal

control over financial reporting existed as of December 31, 2021.

This material weakness is more fully described in Item 9A.

internal control over financial reporting and our disclosure controls and procedures were not effective as of such date.

A material weakness

is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility

that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely

will take immediate action to remediate this material weakness.

While we believe the steps described under Item 9A below will improve

the effectiveness of our internal control over financial reporting and remediate the identified deficiencies, if our remediation efforts

are insufficient to address the material weakness or we identify additional material weaknesses in our internal control over financial

reporting in the future, our ability to analyze, record and report financial information accurately, to prepare our financial statements

within the time periods specified by the rules and forms of the SEC and to otherwise comply with our reporting obligations under the

federal securities laws and could be adversely affected.

The occurrence of, or failure to remediate, this material weakness and any future

material weaknesses in our internal control over financial reporting may adversely affect the accuracy and reliability of our financial

statements and have other consequences that could materially and adversely affect our business, including an adverse impact on the market

price of our common stock, potential actions or investigations by the SEC or other regulatory authorities, shareholder lawsuits, a loss

of investor confidence and damage to our reputation.

While we have a preliminary plan for succession of certain key

executive, the loss of any one of our key executives could have an adverse effect on our operations.

have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses

in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our

financial statements or cause us to fail to meet our periodic reporting obligations.

are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act.

Section 404 requires that we document and test

our internal control over financial reporting and issue management’s assessment of our internal control over financial reporting.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making this assessment,

we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control —

Integrated Framework.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,

such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented

or detected on a timely basis.

Based on our assessment, as of December 31, 2022, we concluded that our internal control over financial

reporting contained material weaknesses.

To remediate these material weaknesses, our management has been implementing and continues to

implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these

controls are designed, implemented, and operating effectively.

believe that these actions will remediate the material weakness.

However, the remediation cannot be deemed successful until the applicable

controls operate for a sufficient period of time and our management has concluded, through testing, that these controls are operating

If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, the accuracy and timeliness of the

filing of our annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in our reported

financial information, which could have a negative effect on the trading price of our common stock.

In addition, a material weakness

in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers,

reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have

a material adverse effect on our business, results of operations and financial condition.

We have unresolved SEC Staff Comments.

As stated in Item 1B of this Annual Report on Form 10-K, we have unresolved

SEC Staff Comments.

While we have restated our financial statements based on comments received to date, these comments remain unresolved

and are subject to further review and comment by the Staff.

We believe we have addressed all of the Staff concerns;

however, until the

Staff has completed its review, we have no assurance that unresolved comments, or additional comments from the Staff, will not result

in the need for additional restatements of our previously-issued financial statements.

This is not a likely result, in our view, but if

this were the case, we could be subject to a further restatement.

rely on third party hosting, which, among other things, often requires us to give the hosting company, a first lien on the mining rigs

installed on the site and creates business risk for us.

do not self-host our mining rigs and rely upon third party hosting facilities to power our mining rigs.

We are dependent upon the financial

viability of our hosting parties, and in 2022, several large publicly traded hosting companies have met with severe financial issues,

including bankruptcies.

Furthermore, in most hosting contracts, there is a requirement that the miner agree to permit the hosting company

to place a lien on the actual mining machines being hosted.

If the hosting company files for bankruptcy, it may take months for the liens

to be lifted, while the bankruptcy court and parties litigate these contracts and resolves issues as to ownership of assets and related

In these contracts, we also are often required to make significant deposits against future mining fees.

If the hosting party utilizes

the deposits, we could risk loss of the deposits and be left with an unsecured claim in the bankruptcy.

Lastly, as the bankruptcy process

includes an automatic stay in favor of the debtor company, until the stay is lifted or a bankruptcy plan approved, we may not be able

to move our mining rigs to a different location, even if the debtor rejects our hosting contract.

prices are very volatile and this may affect our ability to effectively manage growth plans and our profitability.

price of bitcoin is extremely volatile and in fiscal 2022 was in a range between approximately $15,600 and $48,100.

The cost to mine

a bitcoin is independent of the then current price of bitcoin, so when prices are low, the cost per coin to mine may consume much of

our available cash which means that there is less capital with which to invest in future company growth.

Similarly, when prices are low,

our profitability is decreased on a dollar for dollar basis correlated to the then price of bitcoin.

Given the volatility of bitcoin,

these factors render us unable to accurately predict in advance what our growth plans may be and accurately forecast any revenue and

profitability projections for any reporting period.

have commenced doing business overseas, and different countries have differing degrees of political, legal and fiscal stability.

exposes us to a wide range of political developments that could result in changes to contractual terms, laws and regulations.

we and our joint arrangements and associates face the risk of litigation and disputes worldwide.

in politics, laws and regulations can and do affect our operations.

Potential impacts include:

forced divestment of assets;

expropriation

cancellation or forced renegotiation of contract rights;

additional taxes including windfall taxes, restrictions on deductions

and retroactive tax claims;

antitrust claims;

changes to trade compliance regulations;

price controls;

local content requirements;

exchange controls;

changes to environmental regulations;

changes to regulatory interpretations and enforcement;

and changes to disclosure

requirements.

Any of these, individually or in aggregate, could have a material adverse effect on our earnings, cash flows and financial

time to time, social and political factors play a role in unprecedented and unanticipated judicial outcomes that could adversely affect

Non-compliance with policies and regulations could result in regulatory investigations, litigation and, ultimately, sanctions.

governments and regulatory bodies have, in our opinion, exceeded their constitutional authority by:

attempting unilaterally to amend

or cancel existing agreements or arrangements;

failing to honour existing contractual commitments;

and seeking to adjudicate disputes

between private litigants.

Additionally, certain governments have adopted laws and regulations that could potentially force us to violate

other countries’ laws and regulations, therefore potentially subjecting us to both criminal and civil sanctions.

Such developments

and outcomes could have a material adverse effect on our earnings, cash flows and financial condition.

future success depends on our ability to expand our organization to match the growth of our activities .

our operations grow, the administrative demands upon us will grow, and our success will depend upon our ability to meet those demands.

We are organized as a holding company, with numerous subsidiaries.

Both the parent company and each of our subsidiaries require certain

financial, managerial and other resources, which could create challenges to our ability to successfully manage our subsidiaries and operations

and impact our ability to assure compliance with our policies, practices and procedures.

These demands include, but are not limited to,

increased executive, accounting, management, legal services, staff support and general office services.

We may need to hire additional

qualified personnel to meet these demands, the cost and quality of which is dependent in part upon market factors outside of our control.

Further, we will need to effectively manage the training and growth of our staff to maintain an efficient and effective workforce, and

our failure to do so could adversely affect our business and operating results.

Currently, we have limited personnel in our organization

to meet our organizational and administrative demands.

our operations grow, the administrative demands and scaling demands upon us will grow, and our success will depend upon our ability to

meet those demands.

Both the parent company and each of our subsidiaries

require certain financial, managerial and other resources, which could create challenges to our ability to successfully manage our subsidiaries

and operations and impact our ability to assure compliance with our policies, practices and procedures.

These demands include, but are

not limited to, increased executive, accounting, management, legal services, staff support and general office services.

We may need to

hire additional qualified personnel to meet these demands, the cost and quality of which is dependent in part upon market factors outside

of our control.

Further, we will need to effectively manage the training and growth of our staff to maintain an efficient and effective

workforce, and our failure to do so could adversely affect our business and operating results.

Currently, we have limited personnel in

our organization to meet our organizational and administrative demands.

Relating to Marathon’s Stock

22 unchanged sentences

Stockholders’

equity of $2.5 million;

shares of publicly-held Common Stock with a market value of at least $1 million;

equity of $2,500 thousand;

shares of publicly held Common Stock with a market value of at least $1,000 thousand;

round-lot stockholders;

1 unchanged sentence

exercise of Nasdaq’s discretionary authority.

stock price may be volatile.

stock price is volatile.

market price of our Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various factors,

1 unchanged sentence

in our industry including changes which adversely affect bitcoin and other digital assets;

in bitcoin pricing;

pricing pressures;

11 unchanged sentences

our Common Stock.

there has been limited precedent set for financial accounting of bitcoin and other cryptocurrency assets, the determination that

we have made for how to account for cryptocurrency assets transactions may be subject to change.

there has been limited precedent set for the financial accounting of cryptocurrencies and related revenue recognition and no official

guidance has yet been provided by the Financial Accounting Standards Board or the SEC, it is unclear how companies

may in the future be required to account for cryptocurrency transactions and assets and related revenue recognition.

A change in regulatory

or financial accounting standards could result in the necessity to change our accounting methods and restate our financial statements.

Such a restatement could adversely affect the accounting for our newly mined cryptocurrency rewards and more generally negatively impact

our business, prospects, financial condition and results of operations.

Such circumstances would have a material adverse effect on our

ability to continue as a going concern or to pursue our new strategy at all, which would have a material adverse effect on our business,

prospects or operations as well as and potentially the value of any cryptocurrencies we hold or expect to acquire for our own account

and harm investors.

have never paid nor do we expect in the near future to pay cash dividends.

15 unchanged sentences

applicable exemption) under the Securities Act of 1933, as amended (“Securities Act”).

UNRESOLVED STAFF COMMENTS

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-K

Item 1A. Risk Factors