Marathon Patent Group Announces 2020 Fiscal First Quarter Financial Results
May 14 2020 - 10:19AM
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
SUBSIDIARIESCONSOLIDATED CONDENSED BALANCE SHEETS(Unaudited)
|
|
March
31, |
|
December
31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
474,546 |
|
|
$ |
692,963 |
|
|
|
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
SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME(Unaudited)
|
|
|
For the
Three Months Ended |
|
|
|
|
March 31, |
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
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
SUBSIDIARIESCONSOLIDATED 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 |
- |
|
|
- |
|
- |
|
|
- |
|
|
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
SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS(Unaudited)
|
|
For the
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
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 |
|
|
|
|
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