Marathon Patent Group Announces 2020 Fiscal Third Quarter Financial Results
November 12 2020 - 8:00AM
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 2nd 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 AssadTelephone:
678-570-6791Email: Jason@marathonpg.com
Marathon Patent Group Investor
Contact:
Gateway Investor RelationsMatt Glover and Charlie
SchumacherTelephone:
949-574-3860Email: MARA@gatewayir.com
MARATHON PATENT GROUP, INC. AND
SUBSIDIARIESCONSOLIDATED 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
SUBSIDIARIESCONSOLIDATED 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
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 |
- |
|
|
- |
|
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
SUBSIDIARIESCONSOLIDATED 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 |
|
|
$ |
- |
|
|
|
|
|
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