Marathon Patent Group Announces 2020 Fiscal Third Quarter Financial Results

Rhea-AI Summary

Marathon Patent Group (NASDAQ:MARA) reported impressive financial results for the three and nine months ended September 30, 2020, showcasing a 160% increase in quarterly revenues to $835,184 and an 89% rise in nine-month revenues to $1.7 million, compared to the same periods last year. Despite an operating loss of $2.0 million for Q3 2020, the company significantly strengthened its balance sheet, now holding $27.1 million in cash. Notably, Marathon completed a $6.9 million public offering and secured long-term agreements for purchasing 10,500 ASIC miners, setting the stage for future growth.

Positive

• Quarterly revenue increased by 160% to $835,184.
• Nine-month revenue rose by 89% to $1.7 million.
• Balance sheet improved with cash of $27.1 million.
• Completed a $6.9 million public offering.
• Secured long-term purchase contracts for 10,500 ASIC miners.

Negative

• Operating loss of $2.0 million for the three months ended September 30, 2020.
• Cash used in operations was $1.4 million during Q3.

• Year Over Year Quarterly Revenues Increase 160%
• Strengthened Balance Sheet with Current Cash of $27.1M
• Since May 1, 2020, Company has Invested $72M to Grow Mining Operations
  

LAS VEGAS, Nov. 12, 2020 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ:MARA) ("Marathon" or "Company"), the largest publicly traded Bitcoin self-mining company in North America, today announced  its operating results for the three months and nine month periods ended September 30, 2020, as published in its Form 10-Q filed today with the Securities and Exchange Commission.

Recent Financial Highlights

• Reported revenues of $835,184 and $1.7 million during the three and nine months ended September 30, 2020 as compared to $321,716 and $908,175 during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2020, this represented an increase of $513,468 or 160% and an increase of $805,657 or 89% over the same period in 2019.
  
  
• Operating loss was approximately $2.0 million and $4.9 million for the three and nine months ended September 30, 2020 and operating loss of $807,859 and $2.5 million for the three and nine months ended September 30, 2019.
  
  
• Per share net loss was $(0.06) and $(0.28) per basic and diluted share for the three and nine months ended September 30, 2020 compared to $(0.12) and $(0.37) in the three and nine month periods ended September 30, 2019.
  
  
• Cash used in operations was $1.4 million and $3.4 million during the three months and nine months ended September 30, 2020, respectively.
  
  
• The Company had approximately $17.3 million of cash and cash equivalents as of September 30, 2020. Today, the Company has approximately $27.1 million of cash and cash equivalents.
  

Marathon’s Chief Financial Officer, Sim Salzman, commented, “We are pleased to announce sizeable year over year revenue growth of 160% and 89% respectively in the three and nine-month periods. During the quarter, the Company was able to enter into favorable purchase agreements with Bitmain that allowed for the material improvement in its current and future financial position. We look forward to continuing our aggressive growth trajectory, while taking advantage of recently executed long term agreements with fixed pricing regardless of increased bitcoin pricing.”

Recent Operational Highlights

• Completed $6.9 Million upsized underwritten public offering of common stock
  
  
• Purchased 700 next generation M31S+ ASIC Miners
  
  
• Entered into a long-term purchase contract with Bitmain for the purchase of 10,500 next generation Antminer S-19 Pro ASIC Miners
  
  
• Engaged Gateway to lead expanded investor relations program
  
  
• Entered into joint venture with Beowolf Energy for 105-Megawatt bitcoin mining data center
  
  
• Named Simeon Salzman as Chief Financial Officer
  
  
• Purchased an additional 10,000 next generation Antminer S-19 Pro ASIC Miners
  
  
• Materially strengthened balance sheet
  

Merrick Okamoto, Chief Executive Officer, stated, “Our third quarter represents the single most productive quarter in company history and since I took over the CEO role. While we reported record quarterly mining revenues, the majority of the fundamental improvements made to our business in the quarter are not represented in the current filing.

“With only 2,060 miners in operation in September when Bitcoin was trading at $10,000, the company generated $650,000 in Bitcoin revenue, our largest quarterly Bitcoin revenue in history. By the end of the 2^nd quarter in 2021, we will have 23,560 miners deployed which equates to a greater than 1100% increase in mining capacity. At current Bitcoin prices, our deployment of new miners has the potential to produce more than an 11 fold increase in our monthly revenue as compared to our September 2020 revenue production.”

About Marathon Patent Group

Marathon is a digital asset technology company that mines cryptocurrencies, with a focus on the blockchain ecosystem and the generation of digital assets.

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.

Marathon Patent Group Company Contact:

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

Marathon Patent Group Investor Contact:

Gateway Investor Relations
Matt Glover and Charlie Schumacher
Telephone: 949-574-3860
Email: MARA@gatewayir.com 

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

	September 30,				December 31,
	2020				2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	17,252,110			$	692,963
Digital currencies		451,889				1,141
Deposit		13,269,670				-
Prepaid expenses and other current assets		627,552				800,024
Total current assets		31,601,221				1,494,128
Other assets:
Property and equipment, net of accumulated depreciation and impairment charges of $7,507,970 and $6,157,786 for September 30, 2020 and December 31, 2019, respectively		4,682,293				3,754,969
Right-of-use assets		224,954				297,287
Intangible assets, net of accumulated amortization of $189,804 and $136,422 for September 30, 2020 and December 31, 2019, respectively		1,020,196				1,073,578
Total other assets		5,927,443				5,125,834
TOTAL ASSETS	$	37,528,664			$	6,619,962
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	1,010,188			$	1,238,197
Mining servers payable		-				513,700
Current portion of lease liability		93,197				87,959
Warrant liability		31,500				12,849
Total current liabilities		1,134,885				1,852,705
Long-term liabilities
Convertible notes payable		-				999,106
Note payable		62,500				-
Lease liability		44,361				120,479
Total long-term liabilities		106,861				1,119,585
Total liabilities		1,241,746				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 September 30, 2020 and December 31, 2019, respectively		-				-
Common stock, $0.0001 par value; 200,000,000 shares authorized; 38,962,432 and 8,458,781 issued and outstanding at September 30, 2020 and December 31, 2019, respectively		3,897				846
Additional paid-in capital		147,554,790				109,705,051
Accumulated other comprehensive loss		(450,719	)			(450,719	)
Accumulated deficit		(110,821,050	)			(105,607,506	)
Total stockholders’ equity		36,286,918				3,647,672
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	37,528,664			$	6,619,962

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

	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
	2020				2019				2020				2019
Revenues
Cryptocurrency mining revenue	$	835,184			$	321,716			$	1,713,832			$	908,175
Total revenues		835,184				321,716				1,713,832				908,175
Operating costs and expenses
Cost of revenue		1,636,046				478,811				3,529,770				1,486,039
Compensation and related taxes		614,604				409,609				1,908,741				1,224,900
Consulting fees		259,563				34,000				325,688				84,000
Professional fees		206,368				91,908				515,562				287,282
General and administrative		112,800				115,247				311,303				359,319
Total operating expenses		2,829,381				1,129,575				6,591,064				3,441,540
Operating loss		(1,994,197	)			(807,859	)			(4,877,232	)			(2,533,365	)
Other income (expenses)
Other income		7,983				300				114,391				181,195
Foreign exchange loss		-				-				-				(11,873	)
Loss on conversion of note		-				-				(364,832	)			-
Realized gain (loss) on sale of digital currencies		11,206				(11,236	)			15,466				13,208
Change in fair value of warrant liability		(21,875	)			68,551				(18,651	)			(7,753	)
Change in fair value of mining payable		-				-				(66,547	)			-
Interest income		2,466				8,428				4,845				30,802
Interest expense		-				(12,591	)			(20,984	)			(37,363	)
Total other (expenses) income		(220	)			53,452				(336,312	)			168,216
Loss before income taxes	$	(1,994,417	)		$	(754,407	)		$	(5,213,544	)		$	(2,365,149	)
Income tax expense		-				-				-				-
Net loss	$	(1,994,417	)		$	(754,407	)		$	(5,213,544	)		$	(2,365,149	)
Net loss per share, basic and diluted:	$	(0.06	)		$	(0.12	)		$	(0.28	)		$	(0.37	)
Weighted average shares outstanding, basic and diluted:		31,520,736				6,372,061				18,868,967				6,353,643
Net loss	$	(1,994,417	)		$	(754,407	)		$	(5,213,544	)		$	(2,365,149	)
Other comprehensive income:
Unrealized gain on foreign currency translation		-				-				-				-
Comprehensive loss attributable to Marathon Patent Group, Inc.	$	(1,994,417	)		$	(754,407	)		$	(5,213,544	)		$	(2,365,149	)

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	-			-		2,745,639			275			1,031,924			-				-				1,032,199
Issuance of common stock, net of offering costs/At-the-market offering	-			-		17,712,635			1,771			28,791,211			-				-				28,792,982
Common stock issued for purchase of mining servers	-			-		350,250			35			171,587			-				-				171,622
Common stock issued for note conversion	-			-		2,023,739			202			1,578,872			-				-				1,579,074
Issue common stock and warrant for cash	-			-		7,666,666			767			6,270,833			-				-				6,271,600
Warrant exercised for cash	-			-		4,722			1			5,312			-				-				5,313
Net loss	-			-		-			-			-			(5,213,544	)			-				(5,213,544	)
Balance as of September 30, 2020	-		$	-		38,962,432		$	3,897		$	147,554,790		$	(110,821,050	)		$	(450,719	)		$	36,286,918
	Preferred Stock					Common Stock					Additional Paid-in Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
	Number		Amount			Number		Amount
Balance as of June 30, 2020	-		$	-		24,526,302		$	2,453		$	118,933,134		$	(108,826,633	)		$	(450,719	)		$	9,658,235
Stock based compensation	-			-		-			-			360,211			-				-				360,211
Issuance of common stock, net of offering costs/At-the-market offering	-			-		6,764,742			676			21,985,300			-				-				21,985,976
Issue common stock and warrant for cash	-			-		7,666,666			767			6,270,833			-				-				6,271,600
Warrant exercised for cash	-			-		4,722			1			5,312			-				-				5,313
Net loss	-			-		-			-			-			(1,994,417	)			-				(1,994,417	)
Balance as of September 30, 2020	-		$	-		38,962,432		$	3,897		$	147,554,790		$	(110,821,050	)		$	(450,719	)		$	36,286,918

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

	For the Nine Months Ended
	September 30,
	2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,213,544	)		$	(2,365,149	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,797,959				412,083
Amortization of patents and website		53,382				53,382
Realized gain (loss) on sale of digital currencies		(15,466	)			(13,208	)
Change in fair value of warrant liability		18,651				7,753
Change in fair value of mining payable		66,547				-
Stock based compensation		1,032,199				620,030
Amortization of right-of-use assets		72,332				67,602
Changes in operating assets and liabilities:
Accounts receivables		-				-
Digital currencies		(1,713,832	)			(908,175	)
Lease liability		(70,880	)			(66,707	)
Prepaid expenses and other assets		172,472				154,930
Accounts payable and accrued expenses		351,960				(163,822	)
Net cash used in operating activities		(3,448,220	)			(2,201,281	)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of digital currencies		1,278,550				918,502
Purchase of property and equipment		(3,133,908	)			(5,224	)
Deposit for purchase of the miners		(13,269,670	)			-
Net cash (used in) provided by investing activities		(15,125,028	)			913,278
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received on issuance of notes payable		62,500				-
Proceeds from issuance of common stock/At-the-market offering		29,756,736				83,453
Offering costs for the issuance of common stock/At-the-market offering		(963,754	)			(3,636	)
Proceeds from issuance of common stock and warrant, net		6,271,600				-
Proceeds received on exercise of warrants		5,313				-
Net cash provided by financing activities		35,132,395				79,817
Net increase (decrease) in cash and cash equivalents		16,559,147				(1,208,186	)
Cash and cash equivalents — beginning of period		692,963				2,551,171
Cash and cash equivalents — end of period	$	17,252,110			$	1,342,985
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			$	2,233,773
Mining servers payable	$	-			$	1,852,477
Reduction of share commitment for purchase of mining servers	$	408,625			$	-
Common stock issued for note conversion	$	1,579,074			$	-

FAQ

What were Marathon Patent Group's revenue figures for Q3 2020?

Marathon Patent Group reported revenues of $835,184 for Q3 2020, a 160% increase year-over-year.

How much cash does Marathon have currently?

As of now, Marathon Patent Group has approximately $27.1 million in cash and cash equivalents.

What is the operational loss reported by Marathon for Q3 2020?

Marathon reported an operating loss of approximately $2.0 million for the three months ended September 30, 2020.

What significant mining capacity growth is expected from Marathon?

Marathon expects to deploy 23,560 miners by the end of Q2 2021, reflecting over a 1100% increase in mining capacity.

What agreements did Marathon enter into recently?

Marathon entered into long-term purchase contracts with Bitmain for the acquisition of 10,500 next generation ASIC miners.