Marathon Patent Group Announces 2020 Fiscal Third Quarter Financial Results

Los Angeles, California, UNITED STATES


  • Year Over Year Quarterly Revenues Increase 160%
  • Strengthened Balance Sheet with Current Cash of $27.1M
  • Since May 1, 2020, Company has Invested $72M to Grow Mining Operations

LAS VEGAS, Nov. 12, 2020 (GLOBE NEWSWIRE) -- 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 Assad
Telephone: 678-570-6791
Email: Jason@marathonpg.com

Marathon Patent Group Investor Contact:

Gateway Investor Relations
Matt Glover and Charlie Schumacher
Telephone: 949-574-3860
Email: MARA@gatewayir.com 


MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED 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 SUBSIDIARIES
CONSOLIDATED 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 SUBSIDIARIES
CONSOLIDATED 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 SUBSIDIARIES
CONSOLIDATED 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  $-