Overview
• Marathon Digital will need to restate portions of its 2021 and 2022 financial reports due to an inquiry from the SEC.
• The issue is related to impairment calculations and determining if the company was acting as an agent or principal.
• The 2022 Q4 earnings report has been delayed until the 10-K filing is completed.
SEC Inquiry Finds Accounting Issues
Marathon Digital (MARA) announced that it will need to restate certain portions of their audited 2021 results and currently unaudited quarterly reports from 2022 after an inquiry from the U.S. Securities and Exchange Commission (SEC). According to an SEC filing, the issue relates to how the company calculated impairment on digital assets and whether it was acting as an agent in operating a third-party mining pool or a principal. Marathon stated that they do not expect any impact on total margin, operating income, or net income in either 2021 or any of the quarterly results in 2022.
Delayed Financial Reports
The SEC inquiry has caused Marathon Digital to delay their planned Q4 earnings report for 2022, which had previously been scheduled for Tuesday afternoon. The company anticipates that they will be able to file their 10-K within 15 days past the March 1 deadline; however, they are unable to guarantee this timeline due to unforeseen circumstances. Shares have risen 8.5% since midday Tuesday in response to this news announcement.
Impact on Investors
It is unclear what effect these restatements may have on investors at this time; however, Marathon believes that there will not be any significant changes made which could potentially affect shareholders negatively. They plan on providing further information once their audit process is complete, including details regarding any changes made during restatement periods and what those changes mean for investors moving forward with MARA stock purchases or sales.
Conclusion
The news of Marathon’s accounting issues has caused some concern among investors, but it remains unclear what kind of impact those issues might have on shareholders moving forward with MARA stock purchases or sales until more information becomes available once their audit process is complete. In the meantime, shares continue to rise 8.5% since midday Tuesday, despite delays in reporting their Q4 financial results for 2022 until after March 1st when their 10-K filing should be completed within 15 days after that date instead