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

Marathon Patent Group Reports Third Quarter 2019 Financial Results

November 11, 2019

LAS VEGAS, Nov. 11, 2019 (GLOBE NEWSWIRE) -- Marathon Patent Group, Inc. (NASDAQ:MARA) (“Marathon” or “Company”), today reported its operating results for the three and nine months ended September 30, 2019, as published in its Form 10-Q filed on Friday, November 8th with the Securities and Exchange Commission. Of particular note is the increase in our net shareholders’ equity on our balance sheet to $3,489,345, well in excess of the $2.5 million minimum requirement under Nasdaq rules.

Operating results for the third quarter ended September 30, 2019, compared to the second quarter ended June 30, 2019.

-- Consummated purchase of 6,000 S-9 Bitmain 13.5 TH/s Bitcoin Antminers for $4,086,250 or 2,335,000 shares of its common stock at a price of $1.75 per share increasing shareholder equity expecting to satisfy Nasdaq listing rule Rule 5550(b)(1). -- Net equity in the third quarter improved to $3,489,345 from $1,722,607 in the second quarter, an improvement of over 100%. -- Third quarter 2019 revenues decreased to $321,715 compared to second quarter 2019 revenues of $355,765. -- Operating loss for the third quarter 2019 was $807,859 compared to an operating loss in the second quarter 2019 of 740,597 (inclusive of non-cash expenses) -- GAAP net loss was $(0.12) per basic and diluted share for the third quarter 2019 compared to $(0.09) for the second quarter 2019. -- Net cash used in operating activities in the third quarter was $650,764 compared to $657,972 during the second quarter 2019. -- The Company had approximately $1.3 million of cash and cash equivalents as of September 30, 2019.

Operating Results for the For the Three and Nine Months Ended September 30, 2019 and 2018

-- Revenues of $321,716 and $908,175 during the three and nine months ended September 30, 2019 as compared to $338,672 and $1.3 million during the three and nine months ended September 30, 2018. -- operating loss from continuing operations of $807,859 and $2.5 million for the three and nine months ended September 30, 2019 and operating loss of $1.5 million and $7.7 million for the three and nine months ended September 30, 2018. -- Net loss of $0.8 million and $2.4 million for the three and nine months ended September 30, 2019 and net loss of $1.3 million and $8.4 million for the three and nine months ended September 30, 2018.

Merrick Okamoto, Chief Executive Officer, stated, “While revenues remained relatively consistent with recent quarters, we are pleased to have recently consummated the purchase of 6,000 S-9 Bitmain 13.5 TH/s Bitcoin Antminers positioning us for what we expect to be sizeable growth in both top and bottom line results going forward.

The company began the installation of our 7,200 miners over the last two weeks. We anticipate the completion of the remaining miners over the next 6 to 8 weeks. Once the full deployment is completed, Marathon will have 7,200 miners in production and will increase our HashRate production level nearly seven-fold from 14 PH/s to approximately 100 PH/s, making us one of the largest publicly traded Bitcoin Mining companies in North America.”

Okamoto added, “Importantly, we believe this recent acquisition should evidence compliance with Nasdaq stockholders’ equity requirement for continued listing. We previously reported that on May 21, 2019, we received notice from the Nasdaq Capital Market that the Company had failed to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing as required under Listing Rule 5550(b)(1) as its Form 10-Q for the period ended March 31, 2019 reported stockholders’ equity of $2,158,192. With this transaction, net shareholders’ equity in the third quarter improved to $3,489,345.”

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) September 30, December 31, 2019 2018 ---------------- ---------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,342,985 $ 2,551,171 Digital currencies 2,881 - Prepaid expenses and other current assets 209,935 464,006 - ------------ - - ------------ - Total current assets 1,555,801 3,015,177 Other assets: Property and equipment, net of accumulated depreciation and impairment charges of $4,751,014 and $4,338,931 for September 30, 2019 and December 4,713,966 1,034,575 31, 2018, respectively Right-of-use assets 318,881 - Intangible assets, net of accumulated amortization of $118,627 and $65,245 1,091,373 1,144,755 for September 30, 2019 and December 31, 2018, respectively Total other assets 6,124,220 2,179,330 - ------------ - - ------------ - TOTAL ASSETS $ 7,680,021 $ 5,194,507 - ------------ - - ------------ - LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 1,071,621 $ 1,235,444 Mining servers payable 1,852,477 - Current portion of lease liability 85,689 - Warrant liability 46,836 39,083 Convertible notes payable 999,106 999,106 - ------------ - - ------------ - Total current liabilities 4,055,729 2,273,633 Long-term liabilities Lease liability 134,947 - Total long-term liabilities 134,947 - - ------------ - - ------------ - Total liabilities 4,190,676 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 September 30, 2019 and December 31, 2018, - - respectively Common stock, $0.0001 par value; 200,000,000 shares authorized; 7,703,461 and 6,379,992 issued and outstanding at September 30, 2019 and December 31, 771 638 2018, respectively Additional paid-in capital 108,394,883 105,461,396 Accumulated other comprehensive loss (450,719 ) (450,719 ) Accumulated deficit (104,455,590 ) (102,090,441 ) - ------------ - - ------------ - Total stockholders’ equity 3,489,345 2,920,874 - ------------ - - ------------ - TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 7,680,021 $ 5,194,507 - ------------ - - ------------ -

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, ----------------------------- ------------------------------ 2019 2018 2019 2018 ------------- -------------- -------------- -------------- Revenues Cryptocurrency mining revenue $ 321,716 $ 338,672 $ 908,175 $ 1,200,171 Other revenue - - - 66,970 - --------- - - ---------- - - ---------- - - ---------- - Total revenues 321,716 338,672 908,175 1,267,141 - --------- - - ---------- - - ---------- - - ---------- - Operating costs and expenses Cost of revenue 478,811 1,132,570 1,486,039 2,331,909 Compensation and related taxes 409,609 137,338 1,224,900 803,309 Consulting fees 34,000 347,500 84,000 573,286 Professional fees 91,908 126,446 287,282 1,157,246 General and administrative 115,247 89,859 359,319 1,212,469 Break-up fee - issuance of shares to GBV - - - 2,850,000 Total operating expenses 1,129,575 1,833,713 3,441,540 8,928,219 - --------- - - ---------- - - ---------- - - ---------- - Operating loss (807,859 ) (1,495,041 ) (2,533,365 ) (7,661,078 ) Other income (expenses) Other income 300 125,125 181,195 108,670 Foreign exchange loss - (8,003 ) (11,873 ) (31,096 ) Realized income (loss) on sale of digital (11,236 ) 8,760 13,208 (73,533 ) currencies Change in fair value of warrant liability 68,551 45,595 (7,753 ) 1,593,481 Amortization of debt discount - - - (2,290,028 ) Interest income 8,428 2,553 30,802 2,553 Interest expense (12,591 ) (19,446 ) (37,363 ) (68,891 ) - ---------- - - ---------- - Total other income (expenses) 53,452 154,584 168,216 (758,844 ) Net loss $ (754,407 ) $ (1,340,457 ) $ (2,365,149 ) $ (8,419,922 ) - --------- - - ---------- - - ---------- - - ---------- - Net loss per share, basic and diluted: $ (0.12 ) $ (0.22 ) $ (0.37 ) $ (1.69 ) - --------- - - ---------- - - ---------- - - ---------- - Weighted average shares outstanding, basic and 6,372,061 6,080,447 6,353,643 4,973,475 diluted: - --------- - - ---------- - - ---------- - - ---------- - Net loss $ (754,407 ) $ (1,340,457 ) $ (2,365,149 ) $ (8,419,922 ) Other comprehensive income: Unrealized gain on foreign currency translation - - - 15 Comprehensive loss attributable to Marathon $ (754,407 ) $ (1,340,457 ) $ (2,365,149 ) $ (8,419,907 ) Patent Group, Inc. - --------- - - ---------- - - ---------- - - ---------- -

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) For the nine months ended September 30, ------------------------------- 2019 2018 -------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (2,365,149 ) $ (8,419,922 ) Adjustments to reconcile net loss to net cash (used in) operating activities: Depreciation 412,083 1,405,147 Amortization of patents and website 53,382 48,222 Realized (gain) loss on sale of digital currencies (13,208 ) 73,533 Change in fair value of warrant liability 7,753 (1,593,481 ) Stock based compensation 620,030 496,435 Amortization of debt discount - 2,290,028 Amortization of right-of-use assets 67,602 - Bad debt allowance - 6,826 Break-up fee - issuance of shares to GBV - 2,850,000 Changes in operating assets and liabilities: Accounts receivables (102,098 ) Digital currencies (908,175 ) (1,098,073 ) Lease liability (66,707 ) - Litigation liability - (2,150,000 ) Prepaid expenses and other assets 154,930 (457,329 ) Accounts payable and accrued expenses (163,822 ) (631,873 ) Net cash used in operating activities (2,201,281 ) (7,282,585 ) - ---------- - - ----------- - CASH FLOWS FROM INVESTING ACTIVITIES Sale of digital currencies 918,502 1,024,540 Acquisition of patents - (250,000 ) Purchase of property and equipment (5,224 ) (5,251,719 ) - ---------- - - ----------- - Net cash provided by (used in) investing activities 913,278 (4,477,179 ) - ---------- - - ----------- - CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock/At-the-market offering 83,453 - Offering costs for the issuance of common stock/At-the-market offering (3,636 ) - Net cash provided by financing activities 79,817 - - ---------- - - ----------- - Effect of foreign exchange rate changes - 15 Net decrease in cash and cash equivalents (1,208,186 ) (11,759,749 ) Cash and cash equivalents — beginning of period 2,551,171 14,948,529 Cash and cash equivalents — end of period $ 1,342,985 $ 3,188,780 - ---------- - - ----------- - 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 $ 2,233,773 $ - - ---------- - - ----------- - Common stock issued for note conversion $ - $ 3,055,588 - ---------- - - ----------- - Restricted stock issuance $ - $ 44 - ---------- - - ----------- - Mining servers payable $ 1,852,477 $ - - ---------- - - ----------- - Warrants exercised into common shares $ - $ 55,791 - ---------- - - ----------- -