Marathon Patent Group Announces First Quarter 2019 Financial Results
LAS VEGAS, May 10, 2019 (GLOBE NEWSWIRE) -- 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 | ||||
Released May 10, 2019