8-K
MARA Holdings, Inc. (MARA)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 14, 2024
MARATHON
DIGITAL HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
| Nevada | 001-36555 | 01-0949984 |
|---|---|---|
| (State<br> or other jurisdiction<br><br> <br>of<br> incorporation) | (Commission<br><br> <br>File<br> Number) | (IRS<br> Employer<br><br> <br>Identification<br> No.) |
| 101<br> NE Third Avenue, Suite 1200<br><br> <br>Fort<br> Lauderdale, FL | 33301 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
Registrant’s telephone number, including area code: (800) 804-1690
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities
registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock | MARA | The<br> Nasdaq Capital Market |
ITEM1.01 Entry into a Material Definitive Agreement
On March 14, 2024, MARA Garden City LLC, a Delaware limited liability company (“Buyer”) and a subsidiary of Marathon Digital Holdings, Inc., a Nevada corporation (the “Company” or the “Registrant”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with APLD – Rattlesnake Den I LLC, a Delaware limited liability company (“Seller”), pursuant to which Buyer will acquire Seller’s data center in Garden City, Texas (the “Data Center”) and assume the ground lease of the land on which the Data Center sits. The Company is currently a customer of the Data Center.
Pursuant to and subject to the terms of the Purchase Agreement, Buyer will purchase from Seller the Data Center and certain related property (collectively, the “Transaction”) for a base purchase price of approximately $87.3 million, subject to customary purchase price adjustments (the “Purchase Price”). Additionally, in connection with the closing of the Transaction (the “Closing”), Seller and the Company will terminate the existing Master Servicing Agreements governing the Company’s current use of the Data Center, and the Seller will be entitled to retain all security deposits posted by the Company thereunder.
The Purchase Agreement contains customary representations and warranties made by the parties, customary covenants and agreements, and customary post-Closing obligations of Seller, which have been guaranteed by Applied Digital Corporation, a Delaware corporation.
The Closing is subject to customary closing conditions, including the accuracy of each party’s representations and warranties, and each party’s compliance with or waiver of its covenants and agreements contained in the Purchase Agreement (in each case, subject to certain materiality and other exceptions). The Closing is not subject to any financing contingency.
The foregoing summary of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text thereof, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference.
The representations, warranties and covenants contained in the Purchase Agreement described above were made only for purposes of such agreement and as of the specified dates set forth therein, were solely for the benefit of the parties to the Purchase Agreement, may be subject to limitations agreed upon by those parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between those parties instead of establishing particular matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on these representations, warranties or covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Seller or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the agreement containing them, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
ITEM8.01 Other Events
PressRelease
On March 14, 2024, the Company issued a press release announcing the Transaction. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
Forward-LookingStatements
This Current Report on Form 8-K and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, Registrant’s management as well as estimates and assumptions made by Registrant’s management. When used in the Filings the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions as they relate to Registrant or Registrant’s management identify forward-looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors relating to Registrant’s industry, Registrant’s operations and results of operations and any businesses that may be acquired by Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the forward-looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results.
ITEM9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description of Exhibit |
|---|---|
| 10.1^†^ | Purchase and Sale Agreement, dated as of March 14, 2024, by and between APLD – Rattlesnake Den I LLC, and MARA Garden City LLC |
| 99.1 | Press Release of Marathon Digital Holdings, Inc., dated as of March 14, 2024 |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document) |
| ^†^ | The<br> schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5) and Item 1.01, Instruction 4 of Form<br> 8-K. The Registrant agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon<br> its request. |
| --- | --- |
SIGNATURES
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.
Date: March 18, 2024
| MARATHON<br> DIGITAL HOLDINGS, INC. | |
|---|---|
| By: | /s/ Zabi Nowaid |
| Name: | Zabi<br> Nowaid |
| Title: | General<br> Counsel |
Exhibit 10.1
Exhibit99.1
MarathonDigital Holdings Enters Definitive Agreement To Acquire 200-Megawatt Bitcoin Mining Data Center Adjacent to a Wind Farm
AllCash Acquisition To Increase Marathon’s Bitcoin Mining Portfolio to 1.1 Gigawatts, 54% of which Will Reside on Sites Directly Ownedand Operated by the Company
FortLauderdale, FL – March 15, 2024 – Marathon Digital Holdings, Inc. (NASDAQ:MARA) (“Marathon” or“Company”), one of the world’s largest publicly traded Bitcoin miners and a leader in supporting and securing the Bitcoin ecosystem, has entered into a definitive purchase agreement to acquire Applied Digital Corporation’s (“Applied Digital”) Bitcoin mining data center in Garden City, Texas, with a name plate capacity of 200 megawatts, for a purchase price of $87.3 million, or approximately $437,000 per megawatt, prior to any purchase price adjustments. Marathon will pay the purchase price in cash from its balance sheet.
This transaction is Marathon’s second major acquisition of data centers dedicated to Bitcoin mining in the last four months and increases the amount of self-owned and operated megawatts in Marathon’s Bitcoin mining portfolio to 54%. Prior to the acquisition of its first two data centers, which closed in January of this year, Marathon’s Bitcoin mining portfolio consisted of 584 megawatts, 3% of which resided on sites directly owned and operated by the Company. Following the close of this acquisition and the anticipated expansion of the site in 2024, Marathon will have increased the number of megawatts in its mining portfolio to 1.1 gigawatts, 54% of which will reside on sites directly owned and operated by the Company.
The Bitcoin mining data center in Garden City, Texas is located adjacent to a wind farm and uses predominantly renewable energy. It was constructed and energized in 2023 and supports a workforce of approximately 25 employees. At this site, Marathon is currently converting approximately 100 megawatts (c. 4.5 exahash of miners) into economic value via Bitcoin mining.
By acquiring this data center, Marathon will take direct ownership of its current on-site operations and will also gain an additional 100 megawatts of capacity in which to expand, 32 megawatts of which are expected to be available as of the closing date and the remainder of which are subject to regulatory approvals. Marathon expects to expand its presence at the site in 2024 by an additional 100 megawatts to accommodate a total of 200-megawatts of capacity dedicated exclusively to Marathon’s Bitcoin mining operations.
In addition to providing Marathon with more influential and secure ownership of its operations as well as expansion opportunities, this transaction is also expected to reduce the cost per coin of Marathon’s current operations at the site by approximately 20%.
The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2024.
ManagementCommentary
“After taking over ownership and operational control of the data centers we recently acquired in Granbury, Texas and Kearney Nebraska, we are building on that momentum by now acquiring the Bitcoin mining data center in Garden City, Texas from Applied Digital,” said Fred Thiel, Marathon’s chairman and CEO. “This transaction increases our influence over our current operations, reduces our cost per coin by approximately 20% at the site, and provides us with an additional 100 megawatts of capacity in which to expand.
“Following the close of this transaction and the anticipated expansion of the site this year, our Bitcoin mining portfolio will consist of approximately 1.1 gigawatts of capacity, 54% of which will reside on sites we directly own and operate, and all of which are diversified across eleven sites on three continents. As a result, we will directly own and operate more megawatts than we had in our entire Bitcoin mining portfolio in December 2023.
“As a close collaborator of Applied Digital, we are intimately familiar with the site’s operations. Therefore, we expect a smooth transition as we work to integrate this renewably powered data center into our diversified portfolio of Bitcoin mining assets.”
Wes Cummins, CEO and chairman of the board at Applied Digital, commented, “Marathon has been a valuable partner of ours since 2022, and we welcome them as the new stewards of this state-of-the-art bitcoin mining data center in Garden City, Texas. We look forward to closing this mutually beneficial transaction, which we believe allows both companies to pursue their long-term strategies more effectively.”
Advisors
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to Marathon in connection with the transaction and Lowenstein Sandler LLP is serving as legal advisor to Applied Digital.
InvestorNotice
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider 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 fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024. If any of these risks were to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline, and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. See “Forward-Looking Statements” below.
Forward-LookingStatements
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements in this press release relate to the expected timing and achievement of our growth targets, specifically relating to our anticipated hash rate and exahash growth. You can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue,” or the negative of such terms, or other comparable terminology. Forward-looking statements include the assumptions underlying or relating to such statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that we believe may affect its business, results of operations and financial condition. The outcomes of the events described in these forward-looking statements are subject to risks, uncertainties and other factors described under the heading “Risk Factors” in the reports the Company files with the Securities and Exchange Commission. The Company cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results could differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements made in this press release relate only to events as of the date of this press release. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.
AboutMarathon Digital Holdings
Marathon is a digital asset technology company that focuses on supporting and securing the Bitcoin ecosystem. The Company is currently in the process of becoming one of the largest and most sustainably powered Bitcoin mining operations in North America.
For more information, visit www.mara.com, or follow us on:
Twitter: @MarathonDH
LinkedIn: www.linkedin.com/company/marathon-digital-holdings
Facebook: www.facebook.com/MarathonDigitalHoldings
Instagram: @marathondigitalholdings
MarathonDigital Holdings Company Contact:
Telephone: 800-804-1690
Email: ir@mara.com
MarathonDigital Holdings Media Contact:
Email: marathon@wachsman.com