United States securities and exchange commission logo
November 7, 2023
Salman Khan
Chief Financial Officer
Marathon Digital Holdings, Inc.
101 NE Third Avenue, Suite 1200
Fort Lauderdale, FL 33301
Re: Marathon Digital
Holdings, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2022
Form 10-Q for the
Quarterly Period Ended June 30, 2023
File No. 001-36555
Dear Salman Khan:
We have reviewed your October 12, 2023 response to our comment
letter and have the
following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your response to this letter, we may have
additional comments. Unless
we note otherwise, any references to prior comments are to comments in
our September 29,
2023 letter.
Form 10-K for the Fiscal Year ended December 31, 2022
Notes to Consolidated Financial Statements
Note 3 - Summary of Significant Accounting Policies
Revenues from Contracts with Customers, page 69
1. We continue to evaluate
your responses to prior comments regarding your revenue
recognition policy and
may have further comments.
Form 10-Q for the Quarterly Period Ended June 30, 2023
Notes to Condensed Consolidated Financial Statements
Note 5 - Revenue From Contracts With Customers, page 16
2. Your accounting policy
disclosure indicates, Variable consideration is included in the
transaction price only
to the extent that it is probable that a significant reversal in the
Salman Khan
Marathon Digital Holdings, Inc.
November 7, 2023
Page 2
amount of cumulative revenue recognized will not occur Please
revise to clarify that
the constraint is based on cumulative revenue under the accounting
contract, rather than
implying it is based on cumulative revenue earned from a customer.
3. In the last paragraph on page 17, you indicate that when you provide
bitcoin transaction
verification services as the operator and a participant in a private
pool, it is included as
Operator revenue. Please tell us why it is necessary to also
refer to when you are a
participant in a private pool considering that the mining pool is
Company-operated and
this intercompany activity would be eliminated.
4. In the last paragraph on page 17, you state that you provide computing
power to
collectives of third-party bitcoin miners as a participant. Please
clarify how you define
computing power. In this regard, consider revising your accounting
policy to define the
performance obligation as a service to perform hash calculations for
the pool
operator. Please revise your disclosure to use consistent terms to
describe this
performance obligation.
5. For Operator revenue, please revise to describe the components of the
consideration
received. That is, explain the nature of block rewards and
transactions fees.
6. For Participant contracts, please revise to provide a more complete
description of the
payout formulas by identifying the formula inputs that create
variability for each type of
compensation.
7. For Participant contracts, you indicate that a new contract is
determined to exist each
period that neither the Company, nor the pool operator, terminates the
arrangement.
Considering that the termination provisions are similar to a renewal
option, revise to
disclose, if true, that such renewal option is not a material right
because either the pricing
in the renewal periods is the exact same as the pricing in the initial
contract and there are
no upfront or incremental fees in the initial contract or the terms,
conditions, and
compensation amounts for the renewal options are at then market rates.
Part II - Other Information
Legal Proceedings
Ho v. Marathon, page 47
8. In response to prior comment 7, you refer to the heading for the notes
to condensed
consolidated financial statements indicating that dollars in the
document are in
FirstName LastNameSalman Khan
thousands. We note no such reference regarding the dollar amounts in
Part II of your
Comapany NameMarathon
filing. Digital
Please revise to ensureHoldings, Inc. the short citation is
applicable throughout your
you disclose
filing.
November 7, 2023 Page 2
FirstName LastName
Salman Khan
FirstName LastNameSalman Khan
Marathon Digital Holdings, Inc.
Comapany 7,
November NameMarathon
2023 Digital Holdings, Inc.
November
Page 3 7, 2023 Page 3
FirstName LastName
Please contact Melissa Walsh at 202-551-3224 or Stephen Krikorian at
202-551-3488 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Edwin Kim at 202-551-3297 or Larry Spirgel at 202-551-3815 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Jolie Kahn