Marathon Patent Group Announces 2019 Fiscal Year End Financial Results
LAS VEGAS, March 23, 2020 (GLOBE NEWSWIRE) -- 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 SUBSIDIARIES
CONSOLIDATED 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 | ||||
Released March 23, 2020