Marathon Patent Group Announces 2020 Fiscal Third Quarter Financial Results

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  • 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.

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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 )
               
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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  
                               
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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     $  
       

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