What changed in this filing

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Item 9A. Controls and Procedures

2025-03-03 compared with 2024-02-28 · 85 added, 96 removed, 78 unchanged (70% of the section changed)

2 unchanged sentences

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on this evaluation, the Company’s management concluded that its disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2023 due to the previously identified material weakness.

As further discussed below under “Management’s Annual Report on Internal Control Over Financial Reporting,” management has identified certain material weaknesses, as set forth below.

The Company has developed a remediation plan for the weaknesses, which is described below under “Remediation.” As a result of such material weaknesses, the report of the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2023, Marcum LLP, regarding its audit of the Company’s internal control over financial reporting as of December 31, 2023, which is included below under the heading “Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting,” expresses an adverse opinion on the Company’s internal control over financial reporting as of December 31, 2023.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on this evaluation, our management concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim Consolidated Financial Statements will not be prevented or detected on a timely basis.

Management utilized the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.

Based on that assessment and the material weaknesses described below, Marathon’s management has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2023.

Material Weaknesses in Internal Control and Plan for Remediation

Based on its evaluation, management previously identified a material weakness in internal control over financial reporting that remained open as of year-end.

The material weakness included:

• A material weakness related to the ineffective design or implementation of information technology general controls or an alternative key manual control to prevent or detect material misstatements in revenue.

The material weaknesses associated with the design and implementation of the manual control over revenue recognition did not result in a material misstatement to the Company’s previously issued Consolidated Financial Statements, nor in the Consolidated Financial Statements included in this Annual Report on Form 10-K.

The Company’s Board of Directors and management take internal control over financial reporting and the integrity of its financial statements seriously.

Management continues to work to improve its controls related to the material weaknesses described above.

Management will continue to implement measures to remediate the material weaknesses, such that these controls are designed, implemented, and operating effectively.

In order to achieve the timely implementation of the above, Management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:

• Continue the process that was started during 2022 of adding to the Company’s internal resources to enhance its capabilities in the areas of technical accounting, financial reporting, and internal controls, including a full-time person dedicated to internal controls;

• Continue to utilize external third-party audit and SOX 404 implementation firms to enable the Company to improve the Company’s controls related to its material weaknesses;

• Continue to evaluate existing processes and implement new processes and controls where necessary in connection with remediating the Company’s material weaknesses, such that these controls are designed, implemented, and operating effectively.

• Continue to work and guide our vendors in the industry that are not accustomed to SOX requirements to enhance and progress the industry forward to be full SOX compliant.

The Company recognizes that the material weaknesses in its internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively.

Because the Company’s remediation efforts are ongoing, it cannot provide any assurance that these remediation efforts will be successful or that its internal control over financial reporting will be effective as a result of these efforts.

The Company continues to evaluate and work to improve its internal control over financial reporting related to the identified material weaknesses, and management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above.

In addition, the Company will report the progress and status of the above remediation efforts to the Audit Committee on a periodic basis.

As part of the Company’s ongoing program to implement changes and further improve its internal controls and in conjunction with is Code of Ethics, the Company’s independent directors have been working with management to include protocols and measures aimed at ensuring quality of its internal controls.

In our prior 10-K for the fiscal year ended as of December 31, 2023, we identified a material weakness in our internal control over financial reporting related to the ineffective design or implementation of IT general controls or an alternative key manual control to prevent or detect material misstatements in revenue.

During the current fiscal year, we completed the implementation and testing of the remediation measures designed to address this material weakness.

These measures included (a) utilizing third-party software tools to calculate revenue earned and performing reasonableness tests on the input data used by such software tools, (b) performing a revenue analytic control that compares the theoretical BTC earned to the actual BTC earned for reasonableness, and (c) ensuring that our vendors used in the controls above are publishing reliable and appropriate System and Organization Controls (“SOC”) reports so that the information being used in the performance of related controls above are reliable and accurate.

We have performed testing to evaluate the operating effectiveness of these remediation measures.

Based on the results of our testing, we have concluded that the material weakness related to the ineffective design or implementation of IT general controls or an alternative key manual control to prevent or detect material misstatements in revenue has been remediated as of December 31, 2024.

Our management excluded from its assessment of effectiveness of our internal control over financial reporting the internal controls of our recently acquired significant subsidiaries, Arkon Energy Hannibal LLC, Crown56 LLC, GC Data Center Equity Holdings, LLC, GC Data Center Granbury LLC, GC Data Center Holdings LLC, GC Data Center Kearney LLC and MARA Garden City LLC.

We have included the financial results of these subsidiaries in the consolidated financial statements from the date of acquisition.

Total assets and total revenues related to these entities that were excluded from our assessment of internal control over financial reporting collectively represented approximately 6.2% and 4.8% of our consolidated total assets and total revenue as of and for the year ended December 31, 2024, respectively.

Our management will include the internal controls of these entities in its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025.

As of December 31, 2024, we believe that our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of our financial reporting.

As part of our ongoing program to implement changes and further improve our internal controls and in conjunction with is Code of Ethics, our independent directors have been working with management to include protocols and measures aimed at ensuring quality of our internal controls.

Among those measures is the implementation of a whistle blower hotline, which allows third parties to anonymously report noncompliant activity.

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http://www.RedFlagReporting.com

Change in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting other than the ongoing remediation efforts undertaken by management.

Changes in Internal Controls over Financial Reporting

Other than the changes in connection with our implementation of the material weakness remediation plan discussed above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a‑15(f) or 15d‑15(f) of the Exchange Act) that occurred during the fourth quarter of December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Stockholders and Board of Directors of Marathon Digital Holdings, Inc.

Adverse Opinion on Internal Control over Financial Reporting

We have audited Marathon Digital Holdings, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weaknesses described in the following paragraph on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in “Management’s Annual Report on Internal Control Over Financial Reporting”:

• The Company has not designed or implemented effective information technology general controls or an alternative manual control to prevent or detect material misstatements in revenue.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal December 31, 2023 consolidated financial statements, and this report does not affect our report dated February 28, 2024 on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2023 and 2022 and the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, of the Company and our report dated February 28, 2024 expressed an unqualified opinion on those financial statements.

To the Stockholders and Board of Directors of MARA Holdings, Inc.

Opinion on Internal Control over Financial Reporting

We have audited MARA Holdings, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2024 and 2023 and the related consolidated statements of operations, equity, and cash flows and the related notes for each of the three years in the period ended December 31, 2024 of the Company, and our report dated March 3, 2025 expressed an unqualified opinion on those financial statements.

Explanatory Paragraph – Excluded Subsidiaries

As described in “Management Annual Report on Internal Control over Financial Reporting”, management has excluded its wholly-owned subsidiaries, Arkon Energy Hannibal LLC, Crown56 LLC, GC Data Center Equity Holdings, LLC, GC Data Center Granbury LLC, GC Data Center Holdings LLC, GC Data Center Kearney LLC and MARA Garden City LLC, from its assessment of internal control over financial reporting as of December 31, 2024 because these entities were acquired by the Company in purchase business combinations during 2024.

We have also excluded Arkon Energy Hannibal LLC, Crown56 LLC, GC Data Center Equity Holdings, LLC, GC Data Center Granbury LLC, GC Data Center Holdings LLC, GC Data Center Kearney LLC and MARA Garden City LLC from our audit of internal control over financial reporting.

These subsidiaries’ combined total assets and total revenues represent approximately 6.2% and 4.8%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31,2024.

Basis for Opinion

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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/s/ Marcum LLP

Costa Mesa, California

February 28, 2024

Costa Mesa, CA

March 3, 2025

OTHER INFORMATION

Director and Officer Trading Plans and Arrangements

On November 21, 2024 , Salman Khan , Chief Financial Officer , entered into a 10b5-1 Plan .

Khan’s 10b5-1 Plan provides for the potential sale of up to 66,800 shares of the Company’s common stock between the first potential sale date on March 3, 2025 and the expiration of the 10b5-1 Plan on May 30, 2025 .

Khan’s previous 10b5-1 Plan expired on December 31, 2024.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

1 unchanged sentence

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be disclosed in the Company’s definitive proxy statement on Schedule 14A for our 2024 annual meeting of stockholders (the “2024 Proxy Statement”) and is incorporated herein by reference.

The information required by this item will be disclosed in our Definitive Proxy Statement on Schedule 14A for our 2025 annual meeting of stockholders (the “2024 Proxy Statement”) and is incorporated herein by reference.

Our 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024 pursuant to Regulation 14A under the Exchange Act.

Code of Ethics

We have adopted a code of business conduct and ethics (our “Code of Ethics”) which is applicable to our directors, executive officers and employees, a copy of which is available on our website (https://ir.mara.com/corporate-governance/governance-documents).

1 unchanged sentence

The inclusion of our website address in this Annual Report does not include or incorporate by reference the information on the website into this Annual Report.

Insider Trading Policy

We maintain, and periodically review, an insider trading policy that governs the purchase, sale and/or disposition of our securities by our directors, officers, employees and contractors who may have access to and/or possession of material non-public information.

We have implemented processes that we believe are reasonably designed to promote compliance by us and by the covered persons with insider trading laws, rules and regulations and applicable listing standards.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report.

EXECUTIVE COMPENSATION

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The information required by this item will be disclosed in our 2025 Proxy Statement and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following exhibits are filed as part of this Annual Report.

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Provided Herewith

Restated Articles of Incorporation of Marathon Digital Holdings, Inc.

Amended and Restated Bylaws of Marathon Digital Holdings, Inc.

Restated Articles of Incorporation of the Company

Amended and Restated Bylaws of the Company

Description of Capital Stock

Indenture, dated November 18, 2021, by and between Marathon Digital Holdings, Inc.

Bank National Association

Indenture, dated as of November 18, 2021, between the Company and U.S.

Bank National Association, as trustee , relating to the 1.00% convertible senior notes

11/18/2021 4.1

Indenture, dated as of August 14, 2024, between the Company and U.S.

Bank Trust Company, National Association, as trustee, relating to the 2.125% convertible senior notes

8/14/2024 4.1

Indenture, dated as of November 20, 2024, between the Company and U.S.

Bank Trust Company, National Association, as trustee, relating to the 0.00% convertible senior notes

Form 8-K 11/21/2024 4.1

Indenture, dated as of December 4, 2024, between the Company and U.S.

Bank Trust Company, National Association, as trustee, relating to the 0.00% convertible senior notes.

Form 8-K 12/4/2024 4.1

Form of Common Stock Purchase Warrant

Marathon Digital Holdings, Inc.

6/29/2020 4.5

Amended and Restated 2018 Equity Incentive Plan

First Amendment to Amended and Restated 2018 Equity Incentive Plan

Form of Restricted Stock Unit Agreement

At-the-Market Offering Agreement, dated October 24, 2023, by and between Marathon Digital Holdings, Inc.

Executive Employment Agreement, dated April 26, 2021, by and between the Company and Fred Thiel

Executive Employment Agreement, dated May 31, 2023, by and between the Company and Salman Khan

Executive Employment Agreement, dated September 19 , 2023, by and between the Company and Zabi Nowaid

At-the-Market Offering Agreement, dated October 24, 2023, by and between the Company .

Wainwright & Co., LLC

Employee Employment Agreement, dated August 30, 2017, by and between Marathon Patent Group, Inc.

and James Crawford

Form 8-K 9/05/2017

Executive Employment Agreement, dated April 26, 2021, by and between Marathon Patent Group, Inc.

and Fred Thiel

Employment Agreement, dated December 20, 2021, by and between Marathon Digital Holdings, Inc.

and Ashu Swami

Executive Employment Agreement, dated November 21, 2022, by and between Marathon Digital Holdings, Inc.

Executive Employment Agreement, dated May 31, 2023, by and between Marathon Digital Holdings, Inc.

and Salman Khan

Executive Employment Agreement, dated July 29, 2022, by and between Marathon Digital Holdings, Inc.

and Adam Swick

NYDIG Digital Asset Custodial Terms and Conditions, dated July 27, 2021, by and between Marathon Digital Holdings, Inc.

and NYDIG Execution LLC

Shareholders’ Agreement, dated January 2023, by and between Marathon Digital Holdings, Inc.

and FS Innovation LLC

Marathon Digital Holdings, Inc.

NYDIG Digital Asset Custodial Terms and Conditions, dated July 27, 2021, by and between the Company and NYDIG Execution LLC

Shareholders’ Agreement, dated January 2023, by and between the Company and FS Innovation LLC

Purchase and Sale Agreement, dated as of March 14, 2024, by and between APLD – Rattlesnake Den I LLC, and MARA Garden City LLC

Statement of Policies and Procedures Governing Material Nonpublic Information and the Prevention of Insider Trading

21.1 Subsidiaries of Marathon Digital Holdings, Inc.

Consent of Marcu m LLP

Power of Attorney (included on the signature page) X

21.1 Subsidiaries of the Company

Consent of Marcum LLP

Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Marathon Digital Holdings, Inc.

Policy for the Recovery of Erroneously Awarded Compensation

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Indicates management contract or compensatory plan.

* This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the registrant specifically incorporates it by reference.

† The schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5).

The Company agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon its request.

* This certification is not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section.

Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

FORM 10-K SUMMARY

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 28, 2024

MARATHON DIGITAL HOLDINGS, INC.

March 3, 2025

MARA HOLDINGS, INC.

/s/ Fred Thiel

Chief Executive Officer and Executive Chairman

Chief Executive Officer and Chairman of the Board

(Principal Executive Officer)

1 unchanged sentence

Chief Financial Officer

(Principal Financial Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints Salman Khan and Zabi Nowaid, and each or either of them, acting individually, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or any of them, or their or his or her substitutes, may lawfully do or cause to be done or by virtue hereof.

(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Fred Thiel Chief Executive Officer and Executive Chairman

February 28, 2024

/s/ Fred Thiel Chief Executive Officer and Chairman of the Board March 3, 2025

Fred Thiel (Principal Executive Officer)

/s/ Salman Khan Chief Financial Officer February 28, 2024

Salman Khan (Principal Financial Officer)

/s/ Kevin DeNuccio

Director February 28, 2024

Kevin DeNuccio

/s/ Sarita James

Director February 28, 2024

/s/ Said Ouissal

Director February 28, 2024

/s/ Georges Antoun

Director February 28, 2024

/s/ Salman Khan Chief Financial Officer March 3, 2025

Salman Khan (Principal Financial and Accounting Officer)

/s/ Doug Mellinger Lead Independent Director March 3, 2025

Doug Mellinger

/s/ Georges Antoun Director March 3, 2025

Georges Antoun

/s/ Douglas Mellinger

Director February 28, 2024

Douglas Mellinger

/s/ Janet George Director March 3, 2025

/s/ Barbara Humpton Director March 3, 2025

Barbara Humpton

/s/ Jay Leupp Director March 3, 2025

/s/ Vicki Mealer-Burke Director March 3, 2025

Vicki Mealer-Burke

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 9A. Controls and Procedures