Marathon Patent Group Announces First Quarter 2019 Financial Results
May 10 2019 - 8:30AM
Marathon Patent Group, Inc. (NASDAQ:
MARA)
("Marathon" or "Company"), today announced its operating results
for the three months ended March 31, 2019, as published in its Form
10-Q filed today with the Securities and Exchange Commission.
Operating Results for the Quarter Ended March 31,
2019
- Revenues of $230,694 during the three months ended March 31,
2019 compared to $239,967 during the three months ended March 31,
2018.
- Operating loss improved to $984,909 (inclusive of non-cash
expenses) for the quarter ended March 31, 2019 compared to an
operating loss of $1.8 million (inclusive of non-cash expenses)
quarter ended March 31, 2018.
- GAAP net loss improved to $(0.16) per basic and diluted share
for the quarter ended March 31, 2019 compared to $(0.63) for the
quarter ended March 31, 2018.
- Net cash used in operating activities decreased from $5.9
million for the three months ended March 31, 2018 to $811,136
during the three months ended March 31, 2019. The net cash used in
operating activities plus revenue generated from the sale of
digital currencies of $224,449 results in total cash used by the
Company for the three months ended March 31, 2019 of $586,687.
- The Company had approximately $2 million of cash and cash
equivalents as of March 31, 2019.
Merrick Okamoto, Chief Executive Officer, stated,
“We’re pleased to show significant financial improvement on a year
over year basis including significant reductions in our operating
costs, While recent improvements in the price of Bitcoin are
clearly beneficial to our ongoing mining operations and should
benefit our financial performance in our Q2, we continue to seek
potential acquisition opportunities that we deem to offer the best
opportunity for appreciation 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) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,964,484 |
|
|
$ |
2,551,171 |
|
Digital currencies |
|
|
5,637 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
|
309,501 |
|
|
|
464,006 |
|
Total current assets |
|
|
2,279,622 |
|
|
|
3,015,177 |
|
|
|
|
|
|
Other assets: |
|
|
|
|
Property and equipment, net of accumulated depreciation and
impairment charges of $4,476,292 and $4,338,931 for March 31, 2019
and December 31, 2018, respectively |
|
|
897,214 |
|
|
|
1,034,575 |
|
Right-of-use assets |
|
|
358,332 |
|
|
|
- |
|
Intangible assets, net of accumulated amortization of $83,039 and
$65,245 for March 31, 2019 and December 31, 2018, respectively |
|
|
1,126,961 |
|
|
|
1,144,755 |
|
Total other assets |
|
|
2,382,507 |
|
|
|
2,179,330 |
|
TOTAL ASSETS |
|
$ |
4,662,129 |
|
|
$ |
5,194,507 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,168,469 |
|
|
$ |
1,235,444 |
|
Current portion of lease liability |
|
|
80,971 |
|
|
|
- |
|
Warrant liability |
|
|
76,817 |
|
|
|
39,083 |
|
Convertible notes payable |
|
|
999,106 |
|
|
|
999,106 |
|
Total current liabilities |
|
|
2,325,363 |
|
|
|
2,273,633 |
|
Long-term liabilities |
|
|
|
|
Lease liability |
|
|
178,574 |
|
|
|
- |
|
Total long-term liabilities |
|
|
178,574 |
|
|
|
- |
|
Total liabilities |
|
|
2,503,937 |
|
|
|
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 March 31, 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 March 31, 2019
and December 31, 2018, respectively |
|
|
639 |
|
|
|
638 |
|
Additional paid-in capital |
|
|
105,743,575 |
|
|
|
105,461,396 |
|
Accumulated other comprehensive loss |
|
|
(450,719 |
) |
|
|
(450,719 |
) |
Accumulated deficit |
|
|
(103,135,303 |
) |
|
|
(102,090,441 |
) |
Total stockholders’ equity |
|
|
2,158,192 |
|
|
|
2,920,874 |
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
$ |
4,662,129 |
|
|
$ |
5,194,507 |
|
MARATHON PATENT GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME |
(Unaudited) |
|
|
|
For the three months ended |
|
|
March 31, |
|
|
|
2019 |
|
|
|
2018 |
|
Revenues |
|
|
|
|
Cryptocurrency mining revenue |
|
$ |
230,694 |
|
|
$ |
199,582 |
|
Other revenue |
|
|
- |
|
|
|
40,385 |
|
Total revenues |
|
|
230,694 |
|
|
|
239,967 |
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
Cost of revenue |
|
|
508,640 |
|
|
|
267,709 |
|
Compensation and related taxes |
|
|
486,687 |
|
|
|
413,118 |
|
Consulting fees |
|
|
20,000 |
|
|
|
38,203 |
|
Professional fees |
|
|
85,033 |
|
|
|
804,286 |
|
General and administrative |
|
|
115,243 |
|
|
|
563,716 |
|
Total operating expenses |
|
|
1,215,603 |
|
|
|
2,087,032 |
|
Operating
loss |
|
|
(984,909 |
) |
|
|
(1,847,065 |
) |
Other income
(expenses) |
|
|
|
|
Other income (expenses) |
|
|
(9,437 |
) |
|
|
2,454 |
|
Foreign exchange loss |
|
|
(11,873 |
) |
|
|
(15,332 |
) |
Realized loss on sale of digital currencies |
|
|
(608 |
) |
|
|
(11,067 |
) |
Change in fair value of warrant liability |
|
|
(37,734 |
) |
|
|
1,453,257 |
|
Amortization of debt discount |
|
|
- |
|
|
|
(1,944,772 |
) |
Interest income |
|
|
12,016 |
|
|
|
- |
|
Interest expense |
|
|
(12,317 |
) |
|
|
(40,295 |
) |
Total other expenses |
|
|
(59,953 |
) |
|
|
(555,755 |
) |
Net loss |
|
$ |
(1,044,862 |
) |
|
$ |
(2,402,820 |
) |
|
|
|
|
|
Net loss per share, basic and diluted: |
|
$ |
(0.16 |
) |
|
$ |
(0.63 |
) |
Weighted average shares outstanding, basic and
diluted: |
|
|
6,338,418 |
|
|
|
3,805,684 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,044,862 |
) |
|
$ |
(2,402,820 |
) |
Other comprehensive income: |
|
|
|
|
Unrealized gain on foreign currency translation |
|
|
- |
|
|
|
15 |
|
Comprehensive loss attributable to Marathon Patent Group,
Inc. |
|
$ |
(1,044,862 |
) |
|
$ |
(2,402,805 |
) |
MARATHON PATENT GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
(Unaudited) |
|
|
|
For the three months ended |
|
|
March 31, |
|
|
|
2019 |
|
|
|
2018 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
Net loss |
|
$ |
(1,044,862 |
) |
|
$ |
(2,402,820 |
) |
Adjustments to reconcile net loss to net cash (used in) operating
activities: |
|
|
|
|
Depreciation |
|
|
137,361 |
|
|
|
232,006 |
|
Amortization of patents and website |
|
|
17,794 |
|
|
|
12,120 |
|
Realized loss on sale of digital currencies |
|
|
608 |
|
|
|
11,067 |
|
Change in fair value of warrant liability |
|
|
37,734 |
|
|
|
(1,453,257 |
) |
Stock based compensation |
|
|
282,180 |
|
|
|
329,525 |
|
Amortization of debt discount |
|
|
- |
|
|
|
1,944,772 |
|
Amortization of right-of-use assets |
|
|
21,795 |
|
|
|
- |
|
Bad debt allowance |
|
|
- |
|
|
|
6,826 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Digital currencies |
|
|
(230,694 |
) |
|
|
(199,582 |
) |
Lease liability |
|
|
(21,441 |
) |
|
|
- |
|
Litigation liability |
|
|
- |
|
|
|
(2,150,000 |
) |
Prepaid expenses and other assets |
|
|
55,364 |
|
|
|
(91,183 |
) |
Accounts payable and accrued expenses |
|
|
(66,975 |
) |
|
|
110,104 |
|
Net cash used in operating activities |
|
|
(811,136 |
) |
|
|
(3,650,422 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
Sale of digital currencies |
|
|
224,449 |
|
|
|
120,470 |
|
Acquisition of patents |
|
|
- |
|
|
|
(250,000 |
) |
Purchase of property and equipment |
|
|
- |
|
|
|
(5,800,629 |
) |
Net cash provided by (used in) investing activities |
|
|
224,449 |
|
|
|
(5,930,159 |
) |
|
|
|
|
|
Effect of foreign exchange rate changes |
|
|
- |
|
|
|
15 |
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
(586,687 |
) |
|
|
(9,580,566 |
) |
Cash and cash equivalents — beginning of period |
|
|
2,551,171 |
|
|
|
14,948,529 |
|
Cash and cash equivalents — end of period |
|
$ |
1,964,484 |
|
|
$ |
5,367,963 |
|
|
|
|
|
|
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 |
|
$ |
- |
|
|
$ |
357 |
|
Par value adjustment due to reverse split |
|
$ |
- |
|
|
$ |
960,000 |
|
Common stock issued for note conversion |
|
$ |
- |
|
|
$ |
2,095,588 |
|
Restricted stock issuance |
|
$ |
- |
|
|
$ |
39 |
|
Warrants exercised into common shares |
|
$ |
- |
|
|
$ |
55,791 |
|
|
|
|
|
|
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