Marathon Patent Group Reports Third Quarter 2019 Financial Results
LAS VEGAS, Nov. 11, 2019 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ:MARA) ("Marathon" or "Company"), today reported its operating results for the three and nine months ended September 30, 2019, as published in its Form 10-Q filed on Friday, November 8th with the Securities and Exchange Commission. Of particular note is the increase in our net shareholders’ equity on our balance sheet to $3,489,345, well in excess of the $2.5 million minimum requirement under Nasdaq rules.
Operating results for the third quarter ended September 30, 2019, compared to the second quarter ended June 30, 2019.
- Consummated purchase of 6,000 S-9 Bitmain 13.5 TH/s Bitcoin Antminers for $4,086,250 or 2,335,000 shares of its common stock at a price of $1.75 per share increasing shareholder equity expecting to satisfy Nasdaq listing rule Rule 5550(b)(1).
- Net equity in the third quarter improved to $3,489,345 from $1,722,607 in the second quarter, an improvement of over 100%.
- Third quarter 2019 revenues decreased to $321,715 compared to second quarter 2019 revenues of $355,765.
- Operating loss for the third quarter 2019 was $807,859 compared to an operating loss in the second quarter 2019 of 740,597 (inclusive of non-cash expenses)
- GAAP net loss was $(0.12) per basic and diluted share for the third quarter 2019 compared to $(0.09) for the second quarter 2019.
- Net cash used in operating activities in the third quarter was $650,764 compared to $657,972 during the second quarter 2019.
- The Company had approximately $1.3 million of cash and cash equivalents as of September 30, 2019.
Operating Results for the For the Three and Nine Months Ended September 30, 2019 and 2018
- Revenues of $321,716 and $908,175 during the three and nine months ended September 30, 2019 as compared to $338,672 and $1.3 million during the three and nine months ended September 30, 2018.
- operating loss from continuing operations of $807,859 and $2.5 million for the three and nine months ended September 30, 2019 and operating loss of $1.5 million and $7.7 million for the three and nine months ended September 30, 2018.
- Net loss of $0.8 million and $2.4 million for the three and nine months ended September 30, 2019 and net loss of $1.3 million and $8.4 million for the three and nine months ended September 30, 2018.
Merrick Okamoto, Chief Executive Officer, stated, “While revenues remained relatively consistent with recent quarters, we are pleased to have recently consummated the purchase of 6,000 S-9 Bitmain 13.5 TH/s Bitcoin Antminers positioning us for what we expect to be sizeable growth in both top and bottom line results going forward.
The company began the installation of our 7,200 miners over the last two weeks. We anticipate the completion of the remaining miners over the next 6 to 8 weeks. Once the full deployment is completed, Marathon will have 7,200 miners in production and will increase our HashRate production level nearly seven-fold from 14 PH/s to approximately 100 PH/s, making us one of the largest publicly traded Bitcoin Mining companies in North America.”
Okamoto added, “Importantly, we believe this recent acquisition should evidence compliance with Nasdaq stockholders’ equity requirement for continued listing. We previously reported that on May 21, 2019, we received notice from the Nasdaq Capital Market that the Company had failed to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing as required under Listing Rule 5550(b)(1) as its Form 10-Q for the period ended March 31, 2019 reported stockholders’ equity of $2,158,192. With this transaction, net shareholders’ equity in the third quarter improved to $3,489,345.”
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, 2018. 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 "Safe Harbor" below.
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 terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading “Risk Factors” in the Company's Annual Reports on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
Name: Jason Assad
|MARATHON PATENT GROUP, INC. AND SUBSIDIARIES|
|CONSOLIDATED CONDENSED BALANCE SHEETS|
|September 30,||December 31,|
|Cash and cash equivalents||$||1,342,985||$||2,551,171|
|Prepaid expenses and other current assets||209,935||464,006|
|Total current assets||1,555,801||3,015,177|
|Property and equipment, net of accumulated depreciation and impairment charges of $4,751,014 and $4,338,931 for September 30, 2019 and December 31, 2018, respectively||4,713,966||1,034,575|
|Intangible assets, net of accumulated amortization of $118,627 and $65,245 for September 30, 2019 and December 31, 2018, respectively||1,091,373||1,144,755|
|Total other assets||6,124,220||2,179,330|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Accounts payable and accrued expenses||$||1,071,621||$||1,235,444|
|Mining servers payable||1,852,477||-|
|Current portion of lease liability||85,689||-|
|Convertible notes payable||999,106||999,106|
|Total current liabilities||4,055,729||2,273,633|
|Total long-term liabilities||134,947||-|
|Commitments and Contingencies|
|Preferred stock, $0.0001 par value, 50,000,000 shares authorized, no shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively||-||-|
|Common stock, $0.0001 par value; 200,000,000 shares authorized; 7,703,461 and 6,379,992 issued and outstanding at September 30, 2019 and December 31, 2018, respectively||771||638|
|Additional paid-in capital||108,394,883||105,461,396|
|Accumulated other comprehensive loss||(450,719||)||(450,719||)|
|Total stockholders’ equity||3,489,345||2,920,874|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||7,680,021||$||5,194,507|
|MARATHON PATENT GROUP, INC. AND SUBSIDIARIES|
|CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME|
|For the three months ended||For the nine months ended|
|September 30,||September 30,|
|Cryptocurrency mining revenue||$||321,716||$||338,672||$||908,175||$||1,200,171|
|Operating costs and expenses|
|Cost of revenue||478,811||1,132,570||1,486,039||2,331,909|
|Compensation and related taxes||409,609||137,338||1,224,900||803,309|
|General and administrative||115,247||89,859||359,319||1,212,469|
|Break-up fee - issuance of shares to GBV||-||-||-||2,850,000|
|Total operating expenses||1,129,575||1,833,713||3,441,540||8,928,219|
|Other income (expenses)|
|Foreign exchange loss||-||(8,003||)||(11,873||)||(31,096||)|
|Realized income (loss) on sale of digital currencies||(11,236||)||8,760||13,208||(73,533||)|
|Change in fair value of warrant liability||68,551||45,595||(7,753||)||1,593,481|
|Amortization of debt discount||-||-||-||(2,290,028||)|
|Total other income (expenses)||53,452||154,584||168,216||(758,844||)|
|Net loss per share, basic and diluted:||$||(0.12||)||$||(0.22||)||$||(0.37||)||$||(1.69||)|
|Weighted average shares outstanding, basic and diluted:||6,372,061||6,080,447||6,353,643||4,973,475|
|Other comprehensive income:|
|Unrealized gain on foreign currency translation||-||-||-||15|
|Comprehensive loss attributable to Marathon Patent Group, Inc.||$||(754,407||)||$||(1,340,457||)||$||(2,365,149||)||$||(8,419,907||)|
|MARATHON PATENT GROUP, INC. AND SUBSIDIARIES|
|CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS|
|For the nine months ended|
|CASH FLOWS FROM OPERATING ACTIVITIES|
|Adjustments to reconcile net loss to net cash (used in) operating activities:|
|Amortization of patents and website||53,382||48,222|
|Realized (gain) loss on sale of digital currencies||(13,208||)||73,533|
|Change in fair value of warrant liability||7,753||(1,593,481||)|
|Stock based compensation||620,030||496,435|
|Amortization of debt discount||-||2,290,028|
|Amortization of right-of-use assets||67,602||-|
|Bad debt allowance||-||6,826|
|Break-up fee - issuance of shares to GBV||-||2,850,000|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other assets||154,930||(457,329||)|
|Accounts payable and accrued expenses||(163,822||)||(631,873||)|
|Net cash used in operating activities||(2,201,281||)||(7,282,585||)|
|CASH FLOWS FROM INVESTING ACTIVITIES|
|Sale of digital currencies||918,502||1,024,540|
|Acquisition of patents||-||(250,000||)|
|Purchase of property and equipment||(5,224||)||(5,251,719||)|
|Net cash provided by (used in) investing activities||913,278||(4,477,179||)|
|CASH FLOWS FROM FINANCING ACTIVITIES|
|Proceeds from issuance of common stock/At-the-market offering||83,453||-|
|Offering costs for the issuance of common stock/At-the-market offering||(3,636||)||-|
|Net cash provided by financing activities||79,817||-|
|Effect of foreign exchange rate changes||-||15|
|Net decrease in cash and cash equivalents||(1,208,186||)||(11,759,749||)|
|Cash and cash equivalents — beginning of period||2,551,171||14,948,529|
|Cash and cash equivalents — end of period||$||1,342,985||$||3,188,780|
|Supplemental schedule of non-cash investing and financing activities:|
|Par value adjustment due to reverse split||$||1||$||-|
|Conversion of Series E Preferred Stock to common stock||$||-||$||551|
|Common stock issued for acquisition of patents||$||-||$||960,000|
|Common stock issued for purchase of assets||$||2,233,773||$||-|
|Common stock issued for note conversion||$||-||$||3,055,588|
|Restricted stock issuance||$||-||$||44|
|Mining servers payable||$||1,852,477||$||-|
|Warrants exercised into common shares||$||-||$||55,791|
Source: Marathon Patent Group, Inc.
Released November 11, 2019