Fellow investors,

Mara’s financial future is tied to Applied Digital not going bankrupt like Compute North did. Applied Digital borrowed $15 million to make facilities for MARA and are operating at a loss (for now).

They provide for MARA 180 MW in their Jamestown Facility, ND and 90 MW in Garden City, TX.

I am no financial expert but looking over this financial disclosure.

I am concerned. Here is the latest filing and an except below:

https://ir.applieddigital.com/sec-filings/all-sec-filings/content/0001144879-23-000028/0001144879-23-000028.pdf

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Summary:

Revenues

Hosting revenues increased by $12.3 million, or 100%, from zero for the three months ended November 30, 2021 to $12.3 million for the three months ended November 30, 2022. Hosting revenues increased by $19.3 million, or 100%, from zero for the six months ended November 30, 2021 to

$19.3 million for the six months ended November 30, 2022. The increase in hosting revenues was driven by our completion of our first hosting facility in Jamestown, North Dakota, which was brought online in phases during the final six months of the fiscal year ended May 31, 2022.

Cost of Revenues

Cost of revenues increased by $11.8 million, or 100%, from zero for the three months ended November 30, 2021 to $11.8 million for the three months ended November 30, 2022. Cost of revenues increased by $17.9 million, or 100%, from zero for the six months ended November 30, 2021 to $17.9 million for the six months ended November 30, 2022. The increase in cost of revenues was primarily driven by the initiation of our co-hosting business in late fiscal year ended May 31, 2022, which represents all of our continuing operations.

Cost of revenues for the three months ended November 30, 2022 consists of $0.9 million of depreciation and amortization expense attributable to the property, plant and equipment at our Jamestown, North Dakota hosting facility, $10.3 million of energy costs used to generate our hosting revenues, and $0.7 million of personnel expenses for employees directly working at the hosting facility.

Cost of revenues for the six months ended November 30, 2022 consists of $1.7 million of depreciation and amortization expense attributable to the property, plant and equipment at our Jamestown, North Dakota hosting facility, $15.1 million of energy costs used to generate our hosting revenues, and $1.1 million of personnel expenses for employees directly working at the hosting facility.

Operating Expenses

Selling, general and administrative expenses increased by $25.3 million, or 2,142%, from $1.2 million for the three months ended November 30, 2021 to $26.5 million for the three months ended November 30, 2022. The three primary drivers of selling, general and administrative expense for the three months ended November 30, 2022 were $1.5 million of employee salaries and benefits expense not directly attributable to revenues, $1.2 million of professional service expenses incurred to support the growth of the business, and stock-based compensation expense of $21.8 million. The stock-based compensation expense is primarily driven by restricted stock award and restricted stock unit grants made to directors, officers, and consultants in January 2022 that contained a vesting condition related to an effective registration statement of shares covering the resale of the shares of Common Stock underlying the awards. The registration statement covering the resale of these shares was deemed effective during the three months ended November 30, 2022, leading to a catch-up of expense as required by ASC 718. There was no stock-based compensation expense recognized during the three months ended November 30, 2021.

Selling, general and administrative expenses increased by $17.0 million, or 120%, from $14.2 million for the six months ended November 30, 2021 to $31.2 million for the six months ended November 30, 2022. The three primary drivers of selling, general and administrative expense for the six months ended November 30, 2022 were $2.8 million of employee salaries and benefits expense not directly attributable to revenues, $2.3 million of professional service expenses incurred to support the growth of the business, and stock-based compensation expense of $22.4 million. The stock-based compensation expense is primarily driven by restricted stock award