Marathon Patent Group Announces 2020 Fiscal First Quarter Financial Results

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LAS VEGAS, May 14, 2020 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ:MARA) ("Marathon" or "Company"), today announced its operating results for the three months ended March 31, 2020. The Company anticipates filing its Form 10-Q with the Securities and Exchange Commission later today.

Summary of Operating Results for the Quarter Ended March 31, 2020

  • Reported revenues of $592,487 during the three months ended March 31, 2020 as compared to $230,694 during the three months ended March 31, 2019, an increase of 157% over the same period in 2019.
  • Operating loss was approximately $1.1 million (inclusive of non-cash expenses) for the quarter ended March 31, 2020 compared to an operating loss of approximately $1 million (inclusive of non-cash expenses) for the quarter ended March 31, 2019.
  • Per share net loss improved to $(0.12) per basic and diluted share for the quarter ended March 31, 2020 compared to $(0.16) the quarter ended March 31, 2019.
  • Net cash used in operating activities was approximately $1.1 million in the quarter ended March 31, 2020, compared to approximately $0.8 million for the first quarter in 2019.
  • The Company had approximately $0.5 million of cash and cash equivalents as of March 31, 2020. Subsequently, the company raised $5.5mm from our effective ATM, purchased $3mm of new mining equipment and has $2.3mm cash on hand.

Merrick Okamoto, Chief Executive Officer, stated, “While we are pleased to have seen improved financial performance in the quarter on a year over year basis, it is recent initiatives that we believe have positioned us for potential accelerated growth going forward. In the last week, we announced the purchase of 1,360 next generation miners. Our mining production will produce 2.8x the petahash of our previous miners and dramatically lower our breakeven costs.”

Okamoto continued, “The combined purchase is another step supporting the Company's recent strategic initiatives focused on expanding its bitcoin mining operations.  Marathon anticipates that the 700 M30S+ miners will be deployed in June of 2020 and the S19 Pro’s in late July. When all 1,360 miners are fully deployed, Marathon estimates its aggregate operating hash rate will be approximately 129 petahash per second ("PH/s").”

Investor Notice

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, 2019. 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. Lastly, with the current worldwide situation caused by COVID-19, there can be no assurances as to when we may see any recovery in the bitcoin market, and if so, whether any recovery might be significant.

Forward-Looking Statements

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.

CONTACT INFORMATION

Name: Jason Assad
Phone: 678-570-6791
Email: Jason@marathonpg.com


MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)

    March 31,   December 31,  
    2020       2019    
    (Unaudited)      
  ASSETS        
  Current assets:        
  Cash and cash equivalents $ 474,546     $ 692,963    
  Digital currencies   2,892       1,141    
  Accounts receivable - net of allowance for bad debt of $0 for March 31, 2020   117,811       -    
  Prepaid expenses and other current assets   908,348       800,024    
  Total current assets   1,503,597       1,494,128    
           
  Other assets:        
  Property and equipment, net of accumulated depreciation and impairment charges of $6,220,792 and $6,157,786 for March 31, 2020 and December 31, 2019, respectively   2,835,563       3,754,969    
  Right-of-use assets   273,173       297,287    
  Intangible assets, net of accumulated amortization of $154,216 and $136,422 for March 31, 2020 and December 31, 2019, respectively   1,055,784       1,073,578    
  Total other assets   4,164,520       5,125,834    
  TOTAL ASSETS $ 5,668,117     $ 6,619,962    
           
  LIABILITIES AND STOCKHOLDERS’ EQUITY        
           
  Current liabilities:        
  Accounts payable and accrued expenses $ 1,312,159     $ 1,238,197    
  Mining servers payable   -       513,700    
  Current portion of lease liability   89,054       87,959    
  Warrant liability   3,062       12,849    
  Total current liabilities   1,404,275       1,852,705    
  Long-term liabilities        
  Convertible notes payable   999,106       999,106    
  Lease liability   95,018       120,479    
  Total long-term liabilities   1,094,124       1,119,585    
  Total liabilities   2,498,399       2,972,290    
           
  Commitments and Contingencies        
           
  Stockholders' Equity:        
  Preferred stock, $0.0001 par value, 50,000,000 shares authorized, no shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively   -       -    
  Common stock, $0.0001 par value; 200,000,000 shares authorized; 9,212,106 and 8,458,781 issued and outstanding at March 31, 2020 and December 31, 2019, respectively   922       846    
  Additional paid-in capital   110,284,952       109,705,051    
  Accumulated other comprehensive loss   (450,719 )     (450,719 )  
  Accumulated deficit   (106,665,437 )     (105,607,506 )  
  Total stockholders’ equity   3,169,718       3,647,672    
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,668,117     $ 6,619,962    
           



MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

      For the Three Months Ended  
      March 31,  
        2020       2019    
  Revenues          
  Cryptocurrency mining revenue   $ 592,487     $ 230,694    
  Total revenues     592,487       230,694    
             
  Operating costs and expenses          
  Cost of revenue     1,153,241       508,640    
  Compensation and related taxes     233,657       486,687    
  Consulting fees     41,812       20,000    
  Professional fees     146,642       85,033    
  General and administrative     108,937       115,243    
  Total operating expenses     1,684,289       1,215,603    
  Operating loss     (1,091,802 )     (984,909 )  
  Other income (expenses)          
  Other income (expenses)     106,408       (9,437 )  
  Foreign exchange loss     -       (11,873 )  
  Realized loss on sale of digital currencies     (4,222 )     (608 )  
  Change in fair value of warrant liability     9,787       (37,734 )  
  Change in fair value of mining payable     (66,547 )     -    
  Interest income     1,880       12,016    
  Interest expense     (13,435 )     (12,317 )  
  Total other income (expenses)     33,871       (59,953 )  
  Loss before income taxes   $ (1,057,931 )   $ (1,044,862 )  
  Income tax expense     -       -    
  Net loss   $ (1,057,931 )   $ (1,044,862 )  
             
  Net loss per share, basic and diluted:   $ (0.12 )   $ (0.16 )  
  Weighted average shares outstanding, basic and diluted:     8,655,525       6,338,418    
             
             
  Net loss   $ (1,057,931 )   $ (1,044,862 )  
  Other comprehensive income:          
  Unrealized gain on foreign currency translation     -       -    
  Comprehensive loss attributable to Marathon Patent Group, Inc.   $ (1,057,931 )   $ (1,044,862 )  
             

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

   Preferred Stock   Common Stock   Additional Paid-in Capital   Accumulated Deficit   Accumulated Other Comprehensive Loss   Total Stockholders' Equity  
  Number   Amount   Number   Amount          
Balance as of December 31, 2019 -   $ -   8,458,781   $ 846   $ 109,705,051   $ (105,607,506 )   $ (450,719 )   $ 3,647,672    
Stock based compensation -     -   -     -     23,238     -       -       23,238    
Issuance of common stock, net of offering costs/At-the-market offering -     -   403,075     41     385,076     -       -       385,117    
Common stock issued for purchase of mining servers -     -   350,250     35     171,587     -       -       171,622    
Net loss -     -   -     -     -     (1,057,931 )     -       (1,057,931 )  
Balance as of March 31, 2020 -   $ -   9,212,106   $ 922   $ 110,284,952   $ (106,665,437 )   $ (450,719 )   $ 3,169,718    
                                 



MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

    For the Three Months Ended  
    March 31,  
      2020       2019    
  CASH FLOWS FROM OPERATING ACTIVITIES        
  Net loss $ (1,057,931 )   $ (1,044,862 )  
  Adjustments to reconcile net loss to net cash used in operating activities:        
  Depreciation   510,781       137,361    
  Amortization of patents and website   17,794       17,794    
  Realized loss on sale of digital currencies   4,222       608    
  Change in fair value of warrant liability   (9,787 )     37,734    
  Change in fair value of mining payable   66,547       -    
  Stock based compensation   23,238       282,180    
  Amortization of right-of-use assets   24,114       21,795    
  Changes in operating assets and liabilities:        
  Accounts receivables   (117,811 )     -    
  Digital currencies   (474,676 )     (230,694 )  
  Lease liability   (24,365 )     (21,441 )  
  Prepaid expenses and other assets   (108,324 )     55,364    
  Accounts payable and accrued expenses   73,961       (66,975 )  
  Net cash used in operating activities   (1,072,237 )     (811,136 )  
  CASH FLOWS FROM INVESTING ACTIVITIES        
  Sale of digital currencies   468,703       224,449    
  Net cash provided by investing activities   468,703       224,449    
  CASH FLOWS FROM FINANCING ACTIVITIES        
  Proceeds from issuance of common stock/At-the-market offering   401,891       -    
  Offering costs for the issuance of common stock/At-the-market offering   (16,774 )     -    
  Net cash provided by financing activities   385,117       -    
           
  Net decrease in cash and cash equivalents   (218,417 )     (586,687 )  
  Cash and cash equivalents — beginning of period   692,963       2,551,171    
  Cash and cash equivalents — end of period $ 474,546     $ 1,964,484    
           
  Supplemental schedule of non-cash investing and financing activities:        
  Par value adjustment due to reverse split $ -     $ 1    
  Common stock issued for purchase of mining servers $ 171,622     $ -    
  Reduction of share commitment for purchase of mining servers $ 408,625        

Source: Marathon Patent Group, Inc.

Released May 14, 2020