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Marathon Patent Group Announces 2019 Fiscal Year End Financial Results

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LAS VEGAS, March 23, 2020 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ:MARA) ("Marathon" or "Company"), today announced its operating results for the twelve months ended December 31, 2019, as published in its Annual Report on Form 10-K filed today with the Securities and Exchange Commission.

Operating Results for the Year Ended December 31, 2019

  • Total revenue was $1.2 million for the year ended December 31, 2019 compared to $1.6 million for the year ended December 31, 2018.

  • Operating loss improved to approximately $4.2 million (inclusive of non-cash expenses) for the year ended December 31, 2019 compared to an operating loss of approximately $12.1 million (inclusive of non-cash expenses) for the year ended December 31, 2018.

  • GAAP net loss improved to $(0.53) per basic and diluted share for the year ended December 31, 2019 compared to $(2.41) the year ended December 31, 2018.

  • Net cash used in operating activities decreased from approximately $8.2 million in 2018 to approximately $3.3 million in 2019, an improvement of approximately $4.9 million.

  • The Company had approximately $0.7 million of cash and cash equivalents as of December 31, 2019.

Merrick Okamoto, Chief Executive Officer, stated, “2019 was a year of tremendous volatility in underlying Bitcoin prices. We significantly increased our hash rate through adding to our mining infrastructure and dramatically reduced our costs, the ultimate profitability of Bitcoin mining is still directly tethered to the price of Bitcoin. Our 4th Quarter of 2019 was one of transition as we shut down our Mining operation in October and did not resume full operations until mid-December. While this reduced our 4th quarter revenue, our first 2 months of 2020 were the best on record since we started our Bitcoin Mining operation, producing over $468,000 of revenue from January 1st through February 29th. Then in March, Bitcoin experienced a precipitous decline of over 70%. While Bitcoin mining remains very challenging, we instituted additional cost savings to further reduce our expenses to do our level best to be in a position to profit from any future price appreciation should it come to pass.”

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)

December 31,

December 31,

2019

2018

ASSETS

Current assets:

Cash and cash equivalents

$

692,963

$

2,551,171

Digital currencies

1,141

-

Prepaid expenses and other current assets

800,024

464,006

Total current assets

1,494,128

3,015,177

Other assets:

Property and equipment, net of accumulated depreciation and impairment charges of $6,157,786 and $4,338,931 for December 31, 2019 and 2018, respectively

3,754,969

1,034,575

Right-of-use assets

297,287

-

Intangible assets, net of accumulated amortization of $136,422 and $65,245 for December 31, 2019 and 2018, respectively

1,073,578

1,144,755

Total other assets

5,125,834

2,179,330

TOTAL ASSETS

$

6,619,962

$

5,194,507

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

$

1,238,197

$

1,235,444

Mining servers payable

513,700

-

Current portion of lease liability

87,959

-

Warrant liability

12,849

39,083

Convertible notes payable

-

999,106

Total current liabilities

1,852,705

2,273,633

Long-term liabilities

Convertible notes payable

999,106

-

Lease liability

120,479

-

Total long-term liabilities

1,119,585

-

Total liabilities

2,972,290

2,273,633

Commitments and Contingencies

Stockholders' Equity:

Preferred stock, $0.0001 par value, 50,000,000 shares authorized, no shares issued and outstanding at December 31, 2019 and 2018, respectively

-

-

Common stock, $0.0001 par value; 200,000,000 shares authorized; 8,458,781 and 6,379,992 issued and outstanding at December 31, 2019 and 2018, respectively

846

638

Additional paid-in capital

109,705,051

105,461,396

Accumulated other comprehensive loss

(450,719

)

(450,719

)

Accumulated deficit

(105,607,506

)

(102,090,441

)

Total stockholders’ equity

3,647,672

2,920,874

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

6,619,962

$

5,194,507


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

For the Years Ended

December 31,

2019

2018

Revenues

Cryptocurrency mining revenue

$

1,185,227

$

1,495,402

Other revenue

-

66,970

Total revenues

1,185,227

1,562,372

Operating costs and expenses

Cost of revenue

2,482,181

3,351,758

Impairment of mining equipment

-

2,222,688

Impairment of leasehold improvements

447,776

-

Compensation and related taxes

1,475,450

1,984,301

Consulting fees

130,813

639,094

Professional fees

422,335

1,216,820

General and administrative

465,783

1,374,047

Break-up fee - issuance of shares to GBV

-

2,850,000

Total operating expenses

5,424,338

13,638,708

Operating loss

(4,239,111

)

(12,076,336

)

Other income (expenses)

Other income

181,995

112,471

Foreign exchange (loss) gain

(11,873

)

28,918

Realized gain (loss) on sale of digital currencies

36,092

(152,485

)

Change in fair value of warrant liability

26,234

1,699,522

Change in fair value of mining payable

507,862

-

Amortization of debt discount

-

(2,290,028

)

Interest income

33,651

14,230

Interest expense

(51,915

)

(81,482

)

Total other income (expenses)

722,046

(668,854

)

Loss before income taxes

$

(3,517,065

)

$

(12,745,190

)

Income tax expense

-

(69,134

)

Net loss attributable to common stockholders

$

(3,517,065

)

$

(12,814,324

)

Net loss per share, basic and diluted:

$

(0.53

)

$

(2.41

)

Weighted average shares outstanding, basic and diluted:

6,664,238

5,315,944

Net loss

$

(3,517,065

)

$

(12,814,324

)

Other comprehensive income:

Unrealized gain on foreign currency translation

-

15

Comprehensive loss attributable to Marathon Patent Group, Inc.

$

(3,517,065

)

$

(12,814,309

)


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

For the Years Ended

December 31,

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(3,517,065

)

$

(12,814,324

)

Adjustments to reconcile net loss to net cash (used in) operating activities:

Depreciation

923,304

2,003,695

Amortization of patents and website

71,177

66,017

Realized (gain) loss on sale of digital currencies

(36,092

)

152,485

Change in fair value of warrant liability

(26,234

)

(1,699,522

)

Change in fair value of mining payable

(507,862

)

-

Impairment of mining equipment

-

2,222,688

Impairment of leasehold improvements

447,776

-

Stock based compensation

933,682

1,425,683

Amortization of debt discount

-

2,290,028

Amortization of right-of-use assets

82,840

-

Bad debt allowance

-

6,826

Break-up fee - issuance of shares to GBV

-

2,850,000

Changes in operating assets and liabilities:

Digital currencies

(1,185,227

)

(1,495,402

)

Lease liability

(72,548

)

-

Litigation liability

-

(2,150,000

)

Prepaid expenses and other assets

(435,159

)

(371,151

)

Accounts payable and accrued expenses

2,753

(725,594

)

Net cash used in operating activities

(3,318,655

)

(8,238,571

)

CASH FLOWS FROM INVESTING ACTIVITIES

Sale of digital currencies

1,220,178

1,342,917

Acquisition of patents

-

(250,000

)

Purchase of property and equipment

(5,225

)

(5,251,719

)

Net cash provided by (used in) investing activities

1,214,953

(4,158,802

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common stock/At-the-market offering

255,893

-

Offering costs for the issuance of common stock/At-the-market offering

(10,399

)

-

Net cash provided by financing activities

245,494

-

Effect of foreign exchange rate changes

-

15

Net decrease in cash and cash equivalents

(1,858,208

)

(12,397,358

)

Cash and cash equivalents — beginning of period

2,551,171

14,948,529

Cash and cash equivalents — end of period

$

692,963

$

2,551,171

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

$

3,064,687

$

-

Common stock issued for note conversion

$

-

$

3,055,588

Restricted stock issuance

$

15

$

44

Mining servers payable

$

1,021,562

$

-

Warrants exercised into common shares

$

-

$

55,791