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 SUBSIDIARIESCONSOLIDATED 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 
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