Marathon Digital Holdings Announces Updates on Bitcoin Production and Mining Operations for November 2022

Marathon Digital Holdings, Inc.

– Produced 472 BTC in November 2022 and 1,087 BTC since quarter

– Increased unrestricted cash balances to $61.7 million and unrestricted bitcoin holdings to 4,200 BTC as of November 30th

– Initiated the pilot deployment of Immersion and installed approximately 14,000 S19 XPs in Texas

LAS VEGAS, Dec. 6, 2022 (GLOBE NEWSWIRE) — Marathon Digital Holdings, Inc. (NASDAQ:MARA) (“marathon” or “enterprise”)a leader in supporting and securing the Bitcoin ecosystem, today released unaudited updates on Bitcoin (“BTC”) production and miner deployment for November 2022.

Management Comment
“In November, we strengthened our liquidity position, produced 472 bitcoin and began improving the efficiency of our mining operations with new technologies,” said Fred Thiel, Marathon Chairman and CEO. “Given the current macro environment, we have taken proactive steps to reduce our revolver credits to $30 million as of November 30 from $50 million as of November 9th. The combination of this debt repayment and our monthly production increased our unrestricted bitcoin holdings from 1,950 BTC on November 9 to 4,200 BTC on November 30, and we ended the month with $61.7 million in cash.

“Our November production was negatively impacted by the cutback at the King Mountain, Texas site. This amplified cut was caused by weather-related energy spot market prices combined with lower bitcoin prices. We are working with the new operator to optimize cut strategies and site operations and expect to see productivity improvements at King Mountain over the coming months.

“While Applied Digital awaits regulatory approval to power its Garden City, Texas facility, facility construction and mining server installations are underway, according to publicly available information. At the same time, Marathon continues its strategy to improve how efficiently we convert power into value. We recently launched an immersion pilot program and our first 14,000 S19 XPs, which are 30% more energy efficient than the previous server generation, were successfully installed at Applied Digital’s Garden City, Texas facility in November.

The story goes on

“We remain confident that Marathon is well positioned to continue to grow into one of the largest and most energy efficient operators in the industry.”

Current Highlights

• Produced 472 BTC in November 2022 and 1,087 BTC in the quarter to date ended December 1st

• As of December 1st, the active mining fleet consisted of approximately 69,000 active miners capable of producing approximately 7.0 EH/s

• 14,000 S19 XPs were installed in Garden City, TX in November and are currently live

• Depending on Applied Digital’s power schedule, the Company expects to have between 7.0 EH/s and 9.0 EH/s online by December 31, 2022

• Year-to-date through November 30, 2022, 3,669 BTC were produced, a 35% increase over the same period last year

• Estimate that approximately $22 million of the remaining $42 million in deposits at Compute North is recoverable, while the recoverability of the remainder remains unknown pending bankruptcy proceedings

• Reduced Revolver credits from $50 million on November 9 to $30 million on November 30

• Unrestricted bitcoin holdings as of November 30, 2022 were approximately 4,200 BTC with a fair market value of approximately $72.1 million

• Total bitcoin holdings increased to 11,757 BTC as of November 30, 2022

• Unrestricted cash on hand as of November 30, 2022 was approximately $61.7 million

Compute North Deposits Update
As previously announced, the company had paid approximately $50 million in operating contributions to Compute North companies. To date, the Company has written off approximately $8 million of these deposits. In November, the company determined that approximately $22 million of the remaining $42 million is likely to be entirely repayable as deposits. The collectability of the remaining $20 million of deposits and other previously impaired amounts remains subject to the bankruptcy proceedings and the Company continues to work with various interested parties to determine their ultimate collectability.

Miner Energization and Installation Updates
According to the latest publicly available information, construction of rigs and installation of miners is underway at Applied Digital’s data center sites as Applied Digital awaits regulatory approval to power its newest rigs.

In November, Marathon launched an immersion-cooled pilot. Immersion is the process of immersing mining servers in non-conductive liquids and can have several advantages compared to traditional air-cooled solutions, including reduced maintenance and downtime, the ability to “overclock” a mining server, etc. Based on the result From this initial project, Marathon can allocate additional resources for immersion cooling.

As of November 30, approximately 14,000 of the company’s previously purchased S19 XPs were facing power after successful installation in Texas. Once all of Marathon’s previously purchased miners are installed, approximately 66% of the company’s hash rate is expected to be generated by S19 XPs, which are approximately 30% more energy efficient than the previous generation of mining servers.

Notice to Investors
Investing in our securities involves a high level of risk. Before making any investment decision, you should carefully review the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 10, 2022. Should any of these risks materialize, our business, financial condition or results of operations would likely suffer. In this case, the value of our securities could fall and you could lose all or part of your investment. The risks and uncertainties we describe are not the only ones we face. Additional risks of which we are currently unaware or which we currently consider immaterial could also adversely affect our business. In addition, our past financial performance may not be a reliable indicator of future performance and historical trends should not be used to predict future results. Future changes in network-wide mining difficulty rate or bitcoin hash rate may also have a material impact on Marathon’s future bitcoin production performance. Additionally, all discussions of financial metrics assume mining difficulty levels as of November 2022. See “Forward-Looking Statements” below.

Forward-Looking Statements
The statements made in this press release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of words such as “may”, ” will”, “plan”, “should”, “expect”, “anticipate”, “estimate”, “continue” or comparable terms. By their nature, such forward-looking statements are subject to certain risks, trends and uncertainties, many of which the Company cannot accurately predict and some of which the Company may not even anticipate and include factors that could cause actual results to differ materially from those projected or recommended. Readers are cautioned not to place undue reliance on these forward-looking statements and are encouraged to review the factors listed above along with the additional factors under the heading “Risk Factors” in the Company’s annual reports on Form 10-K, as amended, to be reflected or amended by the Company’s Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update or supplement any forward-looking statement that may become untrue as a result of subsequent events, new information or otherwise.

About Marathon Digital Holdings
Marathon is a digital asset technology company focused on supporting and securing the Bitcoin ecosystem. The company is currently in the process of becoming one of the largest and most sustainably operated bitcoin mining operations in North America while assets remain slim.

Marathon Digital Inventory company Contact:
Phone: 800-804-1690
Email: [email protected]

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