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Marathon Patent Group Reports Second Quarter 2019 Financial Results

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2019 Sequential Quarterly Revenues Increase 54%

LAS VEGAS, Aug. 01, 2019 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ:MARA) ("Marathon" or "Company"), today reported its operating results for its second quarter for the three months ended June 30, 2019, as published in its Form 10-Q filed today with the Securities and Exchange Commission.

Operating Results for the Second Quarter Ended June 30, 2019 Compared to the First Quarter Ended March 31, 2019

  • Second quarter 2019 revenues increased 54% to $355,765 compared to first quarter 2019 revenues of $230,694.

  • Operating loss for the second quarter 2019 improved to 740,597 (inclusive of non-cash expenses) compared to an operating loss of $984,909 (inclusive of non-cash expenses) in the first quarter 2019.

  • GAAP net loss improved 44% to $(0.09) per basic and diluted share for the first quarter 2019 compared to $(0.16) for the first quarter 2019.

  • Net cash used in operating activities in the second quarter 2019 was $657,972 compared to $811,136 during the first quarter 2019.

  • The Company had approximately $1.7 million of cash and cash equivalents as of June 30, 2019.

Operating Results for the For the Three and Six Months Ended June 30, 2019 and 2018

  • Revenues of $355,765 and $586,459 during the three and six months ended June 30, 2019 as compared to $688,502 and $928,469 during the three and six months ended June 30, 2018.

  • Operating loss from continuing operations of $740,597 and $1.7 million for the three and six months ended June 30, 2019 and operating loss of $4.3 million and $6.2 million for the three and six months ended June 30, 2018.

  • Net loss of $565,880 and $1.6 million for the three and six months ended June 30, 2019 and net loss of $4.7 million and $7.1 million for the three and six months ended June 30, 2018.

Merrick Okamoto, Chief Executive Officer, stated, “We’re pleased to show continued financial improvement year to date, including a 54% increase in sequential 2019 quarterly revenues. As expected, recent improvements in the price of Bitcoin are clearly beneficial to our ongoing mining operations. Should prices continue to sustain at current levels, we believe it sets the stage to benefit our financial performance going forward.”

Okamoto added, “We are particularly pleased to have just recently welcomed Jesse Lund, former Head of Blockchain for IBM to our team. Jesse previously lead IBM's blockchain market development, digital currency strategy, solutions engineering and client engagement for banking and financial services. I look forward to working with him as we seek potential acquisition opportunities along with helping to monetize our patents, both which have the potential to create meaningful value for our shareholders.”

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, 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.

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)

June 30,

December 31,

2019

2018

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

1,688,426

$

2,551,171

Digital currencies

4,540

-

Prepaid expenses and other current assets

242,012

464,006

Total current assets

1,934,978

3,015,177

Other assets:

Property and equipment, net of accumulated depreciation and impairment charges of $4,613,653 and $4,338,931 for June 30, 2019 and December 31, 2018, respectively

759,853

1,034,575

Right-of-use assets

338,740

-

Intangible assets, net of accumulated amortization of $100,833 and $65,245 for June 30, 2019 and December 31, 2018, respectively

1,109,167

1,144,755

Total other assets

2,207,760

2,179,330

TOTAL ASSETS

$

4,142,738

$

5,194,507

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

$

1,065,452

$

1,235,444

Current portion of lease liability

83,179

-

Warrant liability

115,387

39,083

Convertible notes payable

999,106

999,106

Total current liabilities

2,263,124

2,273,633

Long-term liabilities

Lease liability

157,007

-

Total long-term liabilities

157,007

-

Total liabilities

2,420,131

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 June 30 2019 and December 31, 2018, respectively

-

-

Common stock, $0.0001 par value; 200,000,000 shares authorized; 6,385,405 and 6,379,992 issued and outstanding at June 30 2019 and December 31, 2018, respectively

639

638

Additional paid-in capital

105,873,870

105,461,396

Accumulated other comprehensive loss

(450,719

)

(450,719

)

Accumulated deficit

(103,701,183

)

(102,090,441

)

Total stockholders’ equity

1,722,607

2,920,874

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

4,142,738

$

5,194,507

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

For the three months ended

For the six months ended

June 30,

June 30,

2019

2018

2019

2018

Revenues

Cryptocurrency mining revenue

$

355,765

$

661,917

$

586,459

$

861,499

Other revenue

-

26,585

-

66,970

Total revenues

355,765

688,502

586,459

928,469

Operating costs and expenses

Cost of revenue

498,588

931,630

1,007,228

1,199,339

Compensation and related taxes

328,604

252,853

815,291

665,971

Consulting fees

30,000

187,583

50,000

225,786

Professional fees

110,341

226,514

195,374

1,030,800

General and administrative

128,829

558,894

244,072

1,122,610

Break-up fee - issuance of shares to GBV

-

2,850,000

-

2,850,000

Total operating expenses

1,096,362

5,007,474

2,311,965

7,094,506

Operating loss

(740,597

)

(4,318,972

)

(1,725,506

)

(6,166,037

)

Other income (expenses)

Other income (expenses)

190,332

(18,909

)

180,895

(16,455

)

Foreign exchange loss

-

(7,760

)

(11,873

)

(23,093

)

Realized income (loss) on sale of digital currencies

25,052

(71,226

)

24,444

(82,293

)

Change in fair value of warrant liability

(38,570

)

94,629

(76,304

)

1,547,886

Amortization of debt discount

-

(345,256

)

-

(2,290,028

)

Interest income

10,358

-

22,374

-

Interest expense

(12,455

)

(9,151

)

(24,772

)

(49,445

)

Total other income (expenses)

174,717

(357,673

)

114,764

(913,428

)

Net loss

$

(565,880

)

$

(4,676,645

)

$

(1,610,742

)

$

(7,079,465

)

Net loss per share, basic and diluted:

$

(0.09

)

$

(0.93

)

$

(0.25

)

$

(1.61

)

Weighted average shares outstanding, basic and diluted:

6,350,080

5,009,297

6,344,281

4,410,816

Net loss

$

(565,880

)

$

(4,676,645

)

$

(1,610,742

)

$

(7,079,465

)

Other comprehensive income:

Unrealized gain on foreign currency translation

-

-

-

15

Comprehensive loss attributable to Marathon Patent Group, Inc.

$

(565,880

)

$

(4,676,645

)

$

(1,610,742

)

$

(7,079,450

)

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

For the six months ended

June 30,

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(1,610,742

)

$

(7,079,465

)

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

Depreciation

274,722

806,598

Amortization of patents and website

35,588

29,914

Realized (gain) loss on sale of digital currencies

(24,444

)

82,293

Change in fair value of warrant liability

76,304

(1,547,886

)

Stock based compensation

412,475

457,382

Amortization of debt discount

-

2,290,028

Amortization of right-of-use assets

44,259

-

Bad debt allowance

-

6,826

Break-up fee - issuance of shares to GBV

-

2,850,000

Changes in operating assets and liabilities:

Digital currencies

(586,459

)

(861,499

)

Lease liability

(43,672

)

-

Litigation liability

-

(2,150,000

)

Prepaid expenses and other assets

122,853

(481,997

)

Accounts payable and accrued expenses

(169,992

)

(7,345

)

Net cash used in operating activities

(1,469,108

)

(5,605,151

)

CASH FLOWS FROM INVESTING ACTIVITIES

Sale of digital currencies

606,363

393,931

Acquisition of patents

-

(250,000

)

Purchase of property and equipment

-

(5,254,713

)

Net cash provided by (used in) investing activities

606,363

(5,110,782

)

Effect of foreign exchange rate changes

-

15

Net decrease in cash and cash equivalents

(862,745

)

(10,715,918

)

Cash and cash equivalents — beginning of period

2,551,171

14,948,529

Cash and cash equivalents — end of period

$

1,688,426

$

4,232,611

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

$

-

$

89

Common stock issued for acquisition of patents

$

-

$

960,000

Common stock issued for note conversion

$

-

$

3,055,588

Restricted stock issuance

$

-

$

11

Warrants exercised into common shares

$

-

$

55,791