Marathon Patent Group Announces 2020 Fiscal First Quarter Financial Results

Rhea-AI Summary

Marathon Patent Group, Inc. (MARA) reported a significant 157% increase in revenues, reaching $592,487 for the first quarter of 2020, compared to $230,694 in Q1 2019. However, the operating loss grew to approximately $1.1 million from $1 million year-over-year. The net loss per share improved to $(0.12), an improvement from $(0.16) the previous year. The company has raised $5.5 million through an ATM and purchased $3 million in new mining equipment. CEO Merrick Okamoto expressed optimism about future growth, citing the acquisition of 1,360 next-gen miners.

Positive

• Revenues increased by 157%, reaching $592,487.
• Net loss per share improved to $(0.12) from $(0.16).
• Raised $5.5 million through an effective ATM.
• Acquired $3 million in new mining equipment to enhance operations.
• Strategic purchase of 1,360 miners expected to boost mining capacity.

Negative

• Operating loss increased to approximately $1.1 million from $1 million year-over-year.
• Net cash used in operating activities rose to $1.1 million compared to $0.8 million in Q1 2019.

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)

100%; border-collapse:collapse !important;">

		March 31,		December 31,
		2020				2019
		(Unaudited)
	ASSETS
	Current assets:
1%; width:1%; min-width:1%;">	69%; width:69%; min-width:69%;">Cash and cash equivalents	1%; width:1%; min-width:1%;">$	12%; width:12%; min-width:12%;">474,546	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	12%; width:12%; min-width:12%;">692,963	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">
	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)

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			For the Three Months Ended
			March 31,
1%; width:1%; min-width:1%;">	68%; width:68%; min-width:68%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	12%; width:12%; min-width:12%;">2020	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	12%; width:12%; min-width:12%;">2019	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">
	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

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	Preferred Stock		Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Number		Amount		Number		Amount
19%; width:19%; min-width:19%;">Balance as of December 31, 2019	7%; width:7%; min-width:7%;">-	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	7%; width:7%; min-width:7%;"> -	1%; width:1%; min-width:1%;">	7%; width:7%; min-width:7%;">8,458,781	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	7%; width:7%; min-width:7%;"> 846	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;"> 109,705,051	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;"> (105,607,506	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;"> (450,719	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;"> 3,647,672	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">
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)

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		For the Three Months Ended
		March 31,
1%; width:1%; min-width:1%;">	69%; width:69%; min-width:69%;">	1%; width:1%; min-width:1%;">	12%; width:12%; min-width:12%;">2020	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	12%; width:12%; min-width:12%;">2019	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">
	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

FAQ

What were Marathon Patent Group's revenues for Q1 2020?

Marathon Patent Group reported revenues of $592,487 for the first quarter of 2020.

How did Marathon's net loss per share change in Q1 2020?

The net loss per share improved to $(0.12) for Q1 2020, compared to $(0.16) in Q1 2019.

What is the expected impact of the new miners acquired by Marathon?

The newly acquired 1,360 miners are expected to dramatically increase Marathon's mining production capacity to approximately 129 petahash per second.

How much cash does Marathon have as of March 31, 2020?

As of March 31, 2020, Marathon had approximately $0.5 million in cash and cash equivalents.

What was the operating loss for Marathon in Q1 2020?

Marathon reported an operating loss of approximately $1.1 million for the first quarter of 2020.