Accounting analysis

I have read the press Releases about the 10k Bitcoin cost and compared this to other miners (especially Mara) and have this to be very misleading.

The reasons for this are:

Riot builds their own buildings while Mara pays a hosting fee

Riot is actually 3 separate entities- a Bitcoin Mining firm, a Bitcoin Hosting Firm and Engineering.

Thus, I dug through both firms 3/31 Income statement (and related attachments) to look solely at Gross Margin percentages of both firms. This is a much more accurate description, as the expenses above gross margin are the costs to produce Bitcoin and any positive gross margin can be used to pay for the depreciation/ amortization of the machines, any other non direct costs (like legal) and then added with any impairment charges and gains from the sales of Bitcoin.

Based on both Firms 3/31, I found out the following:

Mara

Gross Revenue 51.132 Million

Energy/ Hosting. (33.377) Million (65%)

Selling, General & Adm. (15.344) Million (30%)

Gross Margin. 2.411 Million (5%)

Mara produced 2,195 Bitcoins in the first quarter, for total fees of 48.721 or a cost of 22,196

Riot

Revenue 48.023 Million (Bitcoin mining only)

Direct Costs (21.899) Million (per Press Release- 46%)

Selling, General & Adm. ( 8.311) Million (spread over each entity based on revenue received-17%)

Depreciation on Buildings (48.725) Million (Riot builds their buildings- versus Mara- and must take into account the depreciation charge against these buildings. I allocated this charge against the revenue that Riot earned through mining divided by the revenue they earned through mining and hosting- thus allocating some of the 57.9 Million charge against the hosting) 100%

Gross Margin (30.912) Million

the above more fully recognizes why Riot had a loss of 55 Million in quarter 1 while Mara had a loss of 7 Million.

Would appreciate any analytical comments from other Accountants or Finance Professionals. $Riot Blockchain, Inc.(RIOT)$ $Marathon Digital Holdings Inc(MARA)$