LOS ANGELES, CA--(Marketwired - Aug 14, 2017) - Marathon Patent Group, Inc. (NASDAQ: MARA) ("Marathon" or "Company"), an IP licensing and commercialization company, today announced its operating results for the three months ended June 30, 2017, as published in its Quarterly Report on Form 10-Q filed today with the Securities and Exchange Commission.

Operating Results for the Quarter Ended June 30, 2017 / Subsequent Events

• Total revenue of $369 thousand and $34.3 million for the three months ended June 30, 2017 and June 30, 2016, respectively.
  
  
• Operating loss was approximately $2.9 million (including non-cash expenses) for the three months ended June 30, 2017 compared to operating income of $14.0 million for the three months ended June 30, 2016.
  
  
• Our GAAP net loss was $(0.10) per basic and diluted share for the three months ended June 30, 2017, with 22,566,648 weighted average basic and diluted shares outstanding as of June 30, 2017, compared to GAAP income of $0.53 per basic share and $0.49 per diluted share for the three months ended June 30, 2016, with 14,994,697 weighted average basic shares and 16,031,564 weighted average diluted shares outstanding as of June 30, 2016, respectively.
  
  
• On a per share basis, our Non-GAAP net loss was $(0.09) per basic and diluted share for the three months ended June 30, 2017, compared to Non-GAAP income of $1.10 per basic share and $1.03 per diluted share for the three months ended June 30, 2016, respectively.
  
  
• Marathon entered into an agreement with DBD Credit Funding, LLC. whereby 100% of debt was cancelled, and the Company will receive a 45% residual revenue share once DBD recovers its costs and debt amounts in exchange for the assignment of three of the Company's portfolios to DBD.   
  
  

Conference Call

Marathon will host a corresponding conference call to discuss the results with Chief Executive Officer Doug Croxall and Chief Financial Officer Frank Knuettel II on Monday August 14, 2017 at 4:30 PM ET/1:30 PM PT. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-0792 ten minutes prior to the scheduled start time. International calls should dial (201) 689-8263.

In addition, the call will be broadcast live over the Internet and can be accessed through the Investor Relations section of the Company's website at www.marathonpg.com. The broadcast will be archived online upon completion of the conference call. A telephonic replay of the conference call will also be available until 11:59 p.m. ET on Monday, August 28, 2017 by dialing (844) 512-2921 in the U.S. and Canada and (412) 317-6671 internationally and entering the pin number: 13668206.

About Marathon Patent Group

Marathon is an IP licensing and commercialization company. The Company acquires and manages IP rights from a variety of sources, including large and small corporations, universities and other IP owners. Marathon has a global focus on IP acquisition and management. The Company's commercialization division is focused on the full commercialization lifecycle which includes discovering opportunities, performing due diligence, providing capital, managing development, protecting and developing IP, assisting in execution of the business plan, and realizing shareholder value. To learn more about Marathon Patent Group, visit www.marathonpg.com.

Safe Harbor Statement

Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"), not limited to Risk Factors relating to its patent business contained therein. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

CONSOLIDATED BALANCE SHEETS
					June 30, 2017			December 31, 2016
ASSETS
Current assets:
	Cash				$	1,095,721		$	4,998,314
	Accounts receivable - net of allowance for bad debt of $387,976 as of June 30, 2017 and December 31, 2016					116,336			95,069
	Bonds posted with courts					375,603			-
	Note receivable					588,864			225,982
	Prepaid expenses and other current assets, net of discounts of $2,659 for June 30, 2017 and $3,724 for December 31, 2016					128,718			202,067
		Total current assets				2,305,242			5,521,432
Other assets:
	Property and equipment, net of accumulated depreciation of $128,718 and $108,407 for June 30, 2017 and December 31, 2016					12,213			28,329
	Intangible assets, net of accumulated amortization of $12,691,608 and $11,323,185 for June 30, 2017 and December 31, 2016					11,358,722			12,314,628
	Deferred tax assets					-			-
	Other non current assets, net of discounts of $0 for June 30, 2017 and $797 for December 31, 2016					200,000			201,203
	Goodwill					224,353			222,843
		Total other assets				11,795,288			12,767,003
			Total Assets		$	14,100,530		$	18,288,435
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable and accrued expenses				$	5,294,616		$	7,217,078
	Clouding IP earn out - current portion					81,930			81,930
	Notes payable, net of discounts of $503,572 for June 30, 2017 and $852,404 for December 31, 2016					5,622,173			13,162,007
						10,998,719			20,461,015
Long-term liabilities
	Notes Payable, net of discount of $1,302,129 for June 30, 2017 and $57,763 for December 31, 2016					11,499,723			4,670,502
	Clouding IP earn out					1,386,203			1,400,082
	Deferred tax Liability					-			-
	Revenue share liability					1,225,000			1,000,000
	Other long term liability					39,853			43,978
		Total long-term liabilities				14,150,779			7,114,562
			Total liabilities			25,149,498			27,575,577
Stockholders' Deficit:
	Preferred stock Series B, $.0001 par value, 100,000,000 shares authorized: 782,004 issued and outstanding at June 30, 2017 and December 31, 2016					78			78
	Common stock, $.0001 par value; 200,000,000 shares authorized; 23,257,472 at June 30, 2017 and 18,552,472 at December 31, 2016					2,326			1,856
	Additional paid-in capital					53,950,993			49,877,710
	Accumulated other comprehensive (loss)					(933,245)			(1,060,390)
	Accumulated deficit					(63,749,987)			(57,942,548)
	Total Marathon Patent Group Stockholders' Deficit					(10,729,834)			(9,123,294)
Non-controlling Interests						(319,134)			(163,848)
Total Equity						(11,048,968)			(9,287,142)
Total liabilities and stockholders' equity					$	14,100,530		$	18,288,435
The accompanying notes are an integral part to these audited consolidated financial statements.

 

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
				For The					For The				For The				For The
				Three Months					Three Months				Six Months				Six Months
				Ended					Ended				Ended				Ended
				June 30, 2017					June 30, 2016				June 30, 2017				June 30, 2016
Revenues				$		368,800			$	34,349,762			$	446,937			$	36,409,438
Expenses
	Cost of revenues					1,024,078				15,467,763				1,479,486				18,107,740
	Amortization of patents and website					639,887				1,961,411				1,345,846				3,987,310
	Compensation and related taxes					760,542				1,120,924				1,846,088				2,154,270
	Consulting fees					85,580				364,836				56,801				645,612
	Professional fees					645,144				498,212				1,070,830				903,705
	General and administrative					142,281				223,130				386,286				428,513
	Goodwill impairment					-				83,000				-				83,000
	Patent impairment					-				620,696				-				993,890
		Total operating expenses				3,297,512				20,339,972				6,185,337				27,304,040
Operating income (loss) from operations						(2,928,712	)			14,009,790				(5,738,400	)			9,105,398
Other income (expenses)
	Other income (expense)					913,357				(17,745	)			898,532				(31,532	)
	Foreign exchange gain (loss)					102,913				(69,201	)			17,050				(62,223	)
	Change in fair value adjustment of Clouding IP earn out					-				169,172				13,879				167,830
	Warrant income (expense)					208,301				-				(4,907	)			-
	Interest income					621				931				1,862				1,862
	Interest expense					(564,680	)			(844,407	)			(1,133,499	)			(1,851,256	)
		Total other income (expenses)				660,512				(761,250	)			(207,083	)			(1,775,319	)
Loss before benefit for income taxes						(2,268,200	)			13,248,540				(5,945,483	)			7,330,079
Income tax expense						(17,242	)			(5,345,983	)			(17,242	)			(3,320,935	)
Net income (loss)						(2,285,442	)			7,902,557				(5,962,725	)			4,009,144
Net loss attributable to non-controlling interests						84,650				3,722				155,286				3,722
Net income (loss) attributable to common shareholders				$		(2,200,792	)		$	7,906,279			$	(5,807,439	)		$	4,012,866
Income (loss) per common share:
Basic				$		(0.10	)		$	0.53			$	(0.28	)		$	0.27
Fully Diluted				$		(0.10	)		$	0.49			$	(0.28	)		$	0.25
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic						22,566,648				14,994,697				20,822,791				14,980,919
Fully Diluted						22,566,648				16,031,564				20,822,791				16,017,786
Net loss				$		(2,200,792	)		$	7,906,279			$	(5,807,439	)		$	4,012,866
Other Comprehensive Loss:
Unrealized gain (loss) on foreign currency translation						126,062				(150,171	)			127,144				97,256
Comprehensive loss						(2,074,730	)			7,756,108				(5,680,295	)			4,110,122
Less: comprehensive income related to non-controlling interest						84,650				3,722				155,286				3,722
Comprehensive loss attributable to Marathon Patent Group, Inc.				$		(1,990,080	)		$	7,759,830			$	(5,525,009	)		$	4,113,844
The accompanying notes are an integral part to these audited consolidated financial statements.

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
				For The Six					For The Six
				Months Ended					Months Ended
				June 30, 2017					June 30, 2016
Cash flows from operating activities:
Net loss				$		(5,807,439	)	$	4,012,866
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
	Depreciation					948			2,710
	Amortization of patents and website					1,345,846			3,987,310
	Deferred tax asset					-			3,547,856
	Deferred tax liability					-			(275,490	)
	Impairment of intangible assets					-			993,890
	Impairment of goodwill					-			83,000
	Stock based compensation					183,356			1,062,200
	Stock issued for services					-			136,000
	Non-cash interest, discount, and financing costs					59,607			664,182
	Change in fair value of Clouding earn out					(13,879	)		(167,830	)
	Allowance for doubtful accounts					-			12,226
	Non-controlling interest					(155,286	)		(3,722	)
	Other non-cash adjustments					(120,703	)		(104,899	)
Changes in operating assets and liabilities
	Accounts receivable					(21,267	)		(2,718	)
	Bonds posted with courts					(375,603	)		(518,455	)
	Prepaid expenses and other assets					(289,533	)		165,301
	Other non current assets					1,203			-
	Accounts payable and accrued expenses					(1,922,462	)		(469,660	)
		Net cash provided by (used) in operating activities				(7,115,212	)		13,124,767
Cash flows from investing activities:
	Acquisition of patents					-			(1,150,000	)
	Purchase of property, equipment, and other intangible assets					(4,194	)		(6,291	)
		Net cash used in investing activities				(4,194	)		(1,156,291	)
Cash flows from financing activities:
	Payment on note payable in connection with the acquisition of Medtech and Orthophoenix					-			(2,953,779	)
	Payment on Fortress note payable					-			(3,973,854	)
	Payment on 3Dnano license note payable					(100,000	)		-
	Cash received upon issuance of equity (net of issuance costs)					3,753,063			-
	Issuance of Warrants					137,334			-
	Medtronic note payable					600,000			-
	3Dnano convertible notes payable					50,000			-
	Payments on Siemen's notes payable					(1,000,000	)		-
	Payments on notes payable to vendors					(125,000	)		-
	Payments on notes payable, net					(103,000	)		(437,070	)
		Net cash provided (used in) by financing activities				3,212,397			(7,364,703	)
Effect of exchange rate changes on cash						4,416			(145	)
Net decrease in cash						(3,902,593	)		4,603,628
Cash at beginning of period						4,998,314			2,555,151
Cash at end of period				$		1,095,721		$	7,158,779
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid for:
		Interest expense		$		456,917			1,187,074
		Taxes paid		$		17,242			27,682
		Loan fees		$		-		$	-
		Cash invested in 3DNano		$		-		$	115,000
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Revenue share liability incurred in conjunction with note payable				$		225,000		$	-
Warrant issued in conjunction with common stock issuance				$		257,957		$	-
Note payable issued in conjunction with the acquisition of Munitech patents				$		-		$	1,750,000
Convertible debt warrant repricing				$		-		$	6,425
The accompanying notes are an integral part to these audited consolidated financial statements.

		Non-GAAP Reconciliation
		For the Three Months Ended June 30, 2017			For the Three Months Ended June 30, 2016			For the Six Months Ended June 30, 2017			For the Six Months Ended June 30, 2016
Net income (loss) attributable to Common Shareholders		$	(2,200,792)		$	7,906,279		$	(5,807,439)		$	4,012,866
Non-GAAP
Amortization of intangible assets & depreciation			640,364			1,961,411			1,346,794			3,987,310
Equity-based compensation			141,931			647,764			183,356			1,192,797
Impairment of intangible assets			-			703,696			-			1,076,890
Change in the fair value of the clouding IP liability			-			(169,172)			(13,879)			(167,830)
Warrant < Income > Expense, net			(208,301)			-			4,907			-
Non-cash Other < Income > expense, net			(913,357)			-			(898,532)			-
Non-cash interest expense			449,998			58,492			685,209			664,182
Deferred tax benefit			-			5,345,983			-			3,320,935
Other			1,526			13,284			2,535			14,936
Non-GAAP earnings (loss)		$	(2,088,631)		$	16,467,737		$	(4,497,049)		$	14,108,086