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PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Marathon Patent Group Announces 2018 Fiscal Year End Financial Results

March 25, 2019

LAS VEGAS, March 25, 2019 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ: MARA ) (“Marathon” or “Company”), today announced its operating results for the twelve months ended December 31, 2018, 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, 2018

-- Total revenue increased 201% to $1.6 million for the year ended December 31, 2018 compared to $0.5 million for the year ended December 31, 2017. -- Operating loss improved to $12.1 million (inclusive of non-cash expenses) for the year ended December 31, 2018 compared to an operating loss of $14.2 million (inclusive of non-cash expenses) for the year ended December 31, 2017. -- GAAP net loss improved to $(0.60) per basic and diluted share for the year ended December 31, 2018 compared to $(4.80) the year ended December 31, 2017. -- Net cash used in operating activities decreased from $10,808,483 in 2017 to $8,238,571 in 2018, a decrease of $2,569,912. The $8,238,571 cash loss also included a onetime charge of $2,150,000 for the Symantec settlement. Without this settlement, the cash used in operating activities would have been $6,088,571. -- The Company had approximately $2.6 million of cash and cash equivalents as of December 31, 2018.

Merrick Okamoto, Chief Executive Officer, stated, “We’re pleased to have shown financial improvement on a year over year basis. Looking forward, our Board of Directors continues 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

December 31, December 31, 2018 2017 - ------------ - - ----------- - ASSETS Current assets: Cash and cash equivalents $ 2,551,171 $ 14,948,529 Accounts receivable - net of allowance for bad debt of $0 and $387,976 for - 6,826 December 31, 2018 and December 31, 2017, respectively Prepaid expenses and other current assets 464,006 92,855 - ------------ - - ----------- - Total current assets 3,015,177 15,048,210 Other assets: Property and equipment, net of accumulated depreciation and impairment charges of $4,338,931 and $134,513 for December 31, 2018 and December 31, 1,034,575 10,011 2017, respectively Intangible assets, net of accumulated amortization of $65,245 for December 1,144,755 - 31, 2018 Total other assets 2,179,330 10,011 - ------------ - - ----------- - TOTAL ASSETS $ 5,194,507 $ 15,058,221 - ------------ - - ----------- - LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 1,235,444 $ 1,961,784 Litigation liability - 2,150,000 Warrant liability 39,083 1,794,396 Convertible notes payable, net of discount of $2,290,028 for December 31, 999,106 1,763,920 2017 - ------------ - - ----------- - Total current liabilities 2,273,633 7,670,100 Total liabilities 2,273,633 7,670,100 - ------------ - - ----------- - Commitments and Contingencies Stockholders’ Equity: Preferred stock, $0.0001 par value, 50,000,000 shares authorized, 0 and 5,513 issued and outstanding at December 31, 2018 and December 31, 2017, - 1 respectively Common stock, $0.0001 par value; 200,000,000 shares authorized; 25,519,940 and 12,477,781 issued and outstanding at December 31, 2018 and December 31, 2,552 1,248 2017, respectively Additional paid-in capital 105,459,482 97,113,723 Accumulated other comprehensive loss (450,719 ) (450,734 ) Accumulated deficit (102,090,441 ) (89,276,117 ) - ------------ - - ----------- - Total stockholders’ equity 2,920,874 7,388,121 - ------------ - - ----------- - TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 5,194,507 $ 15,058,221 - ------------ - - ----------- -

For the year ended December 31, -------------------------------- 2018 2017 - ----------- - - ----------- - Revenues Cryptocurrency mining revenue $ 1,495,402 $ - Other revenue 66,970 519,622 - ----------- - - ----------- - Total revenues 1,562,372 519,622 - ----------- - - ----------- - Operating costs and expenses Cost of revenue 3,351,758 3,470,847 Impairment of mining equipment 2,222,688 - Compensation and related taxes 1,984,301 4,362,371 Consulting fees 639,094 537,695 Professional fees 1,216,820 2,797,648 General and administrative 1,374,047 831,001 Goodwill impairment - 228,401 Patent impairment - 2,475,149 Break-up fee - issuance of shares to GBV 2,850,000 - Total operating expenses 13,638,708 14,703,112 - ----------- - - ----------- - Operating loss (12,076,336 ) (14,183,490 ) Other income (expenses) Other income (expenses) 112,471 (3,173,341 ) Foreign exchange gain (loss) 28,918 (463,821 ) Gain on debt extinguishment - 2,970,313 Gain on Fortress debt settlement - 11,940,493 Loss on sale of companies - (2,610,783 ) Realized loss on sale of digital currencies (152,485 ) - Change in fair value adjustment of Clouding IP earn out - 1,482,012 Change in fair value of warrant liability 1,699,522 (21,855,723 ) Loss on warrants exchanged for common stock - (980,400 ) Gain on exchange of warrants to series E - 305,358 Amortization of debt discount (2,290,028 ) (3,561,109 ) Interest income 14,230 2,793 Interest expense (81,482 ) (1,309,823 ) - ----------- - Loss before income taxes (12,745,190 ) (31,437,521 ) Income tax (expense) benefit (69,134 ) 103,952 - ----------- - Net loss attributable to common stockholders $ (12,814,324 ) $ (31,333,569 ) - ----------- - - ----------- - Net loss per share, basic and diluted: $ (0.60 ) $ (4.80 ) - ----------- - - ----------- - Weighted average shares outstanding, basic and diluted: 21,263,774 6,522,649 - ----------- - - ----------- - Net loss attributable to common stockholders $ (12,814,324 ) $ (31,333,569 ) Other comprehensive income: Unrealized gain on foreign currency translation 15 609,656 Comprehensive loss attributable to Marathon Patent Group, Inc. $ (12,814,309 ) $ (30,723,913 ) - ----------- - - ----------- -

Preferred Stock Common Stock ------------------- -------------------- Additional Accumulated Non-Controlli Total Paid-in Accumulated Other ng Stockholders’ Number Amount Number Amount Capital Deficit Comprehensive Interest Equity Income (Loss) ---------- ------- ---------- ------- --------------- ---------------- -------------- ------------ --------------- Balance as of December 31, 195,501 $ 20 4,638,118 $ 463 $ 49,879,161 $ (57,942,548 ) $ (1,060,390 ) $ (163,848 ) $ (9,287,142 ) 2016 Stock-based compensation - - 775,000 78 1,976,738 - - - 1,976,816 expense Issuance of Series D 125,688 13 - - 678,700 - - - 678,713 Preferred Stock Conversion of Series B (195,500 ) (20 ) 195,500 20 - - - - - Preferred Stock Conversion of Series D (125,688 ) (13 ) 628,438 63 107,224 - - - 107,274 Preferred Stock Warrants converted to Series E 5,512 1 - - - 21,525,410 - - - 21,525,411 preferred stock Common stock issued for - - 1,807,565 181 1,445,871 - - - 1,446,052 note conversion Beneficial conversion - - - - 4,017,729 - - - 4,017,729 feature Proceeds received from - - 3,492,047 349 16,074,067 - - - 16,074,416 private placement Issue common stock for - - 619,250 62 1,183,966 - - - 1,184,028 conversion of warrants Warrant - - - - 137,334 - - - 137,334 liability Common stock issued for - - 320,449 32 435,457 - - - 435,489 account payable Loss on sale - - - - (42,576 ) - - - (42,576 ) of companies Gain on extinguishment - - - - (305,358 ) - - - (305,358 ) of warrant liability Par value adjustment and additional - - 1,414 - - - - - - shares issued due to reverse split Currency translation - - - - - - 609,656 - 609,656 loss Net loss - - - - - (31,333,569 ) - 163,848 (31,169,721 ) Balance as of December 31, 5,513 1 12,477,781 1,248 97,113,723 (89,276,117 ) (450,734 ) $ - 7,388,121 2017 Stock based - - 443,400 44 1,425,639 - - - 1,425,683 compensation Conversion of Series E (5,513 ) (1 ) 5,511,543 551 (550 ) - - - - preferred stock Common stock issued for - - 250,000 25 959,975 - - - 960,000 acquisition of patents Issue common stock for - - 17,731 2 55,789 - - - 55,791 exercise of warrants Common stock issuance related to - - 3,819,485 382 3,055,206 - - - 3,055,588 note conversion Break-up fee - issuance of - - 3,000,000 300 2,849,700 - - 2,850,000 shares to GBV Currency translation - - - - - - 15 - 15 gain Net loss - - - - - (12,814,324 ) - - (12,814,324 ) Balance as of December 31, - $ - 25,519,940 $ 2,552 $ 105,459,482 $ (102,090,441 ) $ (450,719 ) $ - $ 2,920,874 2018 -------- - - --- - ---------- - ----- - ----------- - - ------------ - - ---------- - - -------- - - ----------- -

For the year ended December 31, -------------------------------- 2018 2017 - ----------- - - ----------- - CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (12,814,324 ) $ (31,333,569 ) Adjustments to reconcile net loss to net cash (used in) operating activities: Depreciation 2,003,695 26,106 Amortization of patents and website 66,017 1,824,162 Loss on sale of companies - 2,610,784 Gain on debt extinguishment - (2,970,313 ) Gain on extinguishment of warrant liability - (305,358 ) Gain on Fortress loan extinguishment - (11,940,494 ) Realized loss on sale of digital currencies 152,485 - Change in fair value of warrant liability (1,699,522 ) 21,855,723 Impairment of intangible assets - 2,475,149 Impairment of goodwill - 228,401 Impairment of mining equipment 2,222,688 - Stock based compensation 1,425,683 1,976,816 Amortization of debt discount 2,290,028 3,561,109 Warrants exchanged for common stock - 980,400 Bad debt allowance 6,826 - Change in fair value of Clouding earnout - (1,482,012 ) Break-up fee - issuance of shares to GBV 2,850,000 - Non-controlling interest - 163,848 Litigation liability - 2,150,000 Changes in operating assets and liabilities: Accounts receivables - 88,243 Digital currencies (1,495,402 ) - Litigation liability (2,150,000 ) - Prepaid expenses and other assets (371,151 ) 335,194 Other non current assets - 201,203 Accounts payable and accrued expenses (725,594 ) (1,253,875 ) Net cash used in operating activities (8,238,571 ) (10,808,483 ) - ----------- - - ----------- - CASH FLOWS FROM INVESTING ACTIVITIES Purchase of digital currencies 1,342,917 - Acquisition of patents (250,000 ) - Purchase of property and equipment (5,251,719 ) (7,788 ) - ----------- - Net cash used in investing activities (4,158,802 ) (7,788 ) - ----------- - - ----------- - CASH FLOWS FROM FINANCING ACTIVITIES Payment on note payable - (1,273,000 ) Proceeds received on issuance of notes payable - 5,488,693 Proceeds received on private placement - 16,074,416 Proceeds from warrant purchase - 17,410 Proceeds received on exercise of warrants - 141,100 Net cash provided by financing activities - 20,448,619 - ----------- - - ----------- - Effect of foreign exchange rate changes 15 317,867 Net (decrease) increase in cash and cash equivalents (12,397,358 ) 9,950,215 Cash and cash equivalents — beginning of period 14,948,529 4,998,314 Cash and cash equivalents — end of period $ 2,551,171 $ 14,948,529 - ----------- - - ----------- - SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest expense $ - $ 1,543,925 - ----------- - - ----------- - Cash paid during the year for income taxes $ - $ 5,459 - ----------- - - ----------- - Supplemental schedule of non-cash investing and financing activities: Issuance of Series D Preferred Stock $ - $ 678,713 - ----------- - - ----------- - Conversion of Series B Preferred Stock to common stock $ - $ 20 - ----------- - - ----------- - Conversion of Series D Preferred Stock to common stock $ - $ 63 - ----------- - - ----------- - Conversion of Series E Preferred Stock to common stock $ 551 $ - - ----------- - - ----------- - Warrants converted to Series E preferred stock $ - $ 21,525,410 - ----------- - - ----------- - Warrants reclassed to equity $ - $ 18,187 - ----------- - - ----------- - Common stock issued for acquisition of patents $ 960,000 $ - - ----------- - - ----------- - Common stock issued for note conversion $ 3,055,588 $ 1,549,803 - ----------- - - ----------- - Restricted stock issuance $ 44 $ 78 - ----------- - - ----------- - Beneficial conversion feature $ - $ 4,017,729 - ----------- - - ----------- - Common stock issued fro account payable $ - $ 331,739 - ----------- - - ----------- - Warrants exercised into common shares $ 55,791 $ - - ----------- - - ----------- -