Marathon Digital (MARA) 28 Nov 172017 Q3 Earnings call transcript

Welcome to Marathon Patent Group's Investor Update Conference Call [Operator Instructions]. At this time, I would like to turn the conference over to Jason Assad, Investor Relations with Marathon Patent Group. Please go ahead.

Thank you, Operator. Good afternoon, and welcome to Marathon Patent Group's Investor Update Conference Call. Marathon's Financial Chief Officer, are Croxall; Officer, today Chief and Frank us Founder Executive and Doug With Knuettel.

this the In Global addition, portion for Bit of of Q&A Ventures, will Charles be joining Allen, call. Director us

Before I management, that meaning forward-looking statements certain of of are over the in release Litigation within please XXXX. Reform this Act remember contained statements the turn call to the Private Securities

required circumstances law. these to statements described that these to assumptions factors actual technology results which general; be or global and reports applicable due date the statements technological companies; new Exchange such to cause copies among The Forward-looking forward-looking developments change. and economic by ability company Securities are of statements release. should revise other to, Commission, and events generally the company's identified future Subsequent or except Factors this and may as expressions. release, economic believes, and reliance rights; regulatory contained downturn as in differ obtained of effect They're business; on in of materially relevant intellectual the general result such relate develop statements, on patents may after in developments successfully competitive other legislative, changed and the licensing, as changes things, any in forward-looking enforcement the conditions. date words the addressing of could the detail forward-looking intention attract as expects, to company's for of filings of place this licensing change this undue Readers in at the and of current company's specifically demand The and property similar markets; by items Risk which anticipates, update release of may, more risk not programs section occur beliefs in with rapid www.sec.gov. or should the and a upon property events disclaims and/or based intellectual obligation

The the call is I'd is over www.marathonpg.com. Doug? section conference turn on With link Doug webcast of being available now CEO, Finally, Marathon to Croxall. Relations call this the like webcast. to our website that, at Investor

to for Marathon Thanks, agreements, Group's thank Investor a Bit questions. currencies, this secures announcement lead afternoon be that to disclosed of time little everyone, we which those chain We'll that Ventures to Jason, had joining conditions, number Global digital a of including want answer in mining this by appropriate Global recent block the satisfaction Conference the Incorporated Ventures Call. shareholder of ownership the you, acquisition to Because us call and of company Patent past. differently discuss to entered following asset allow in of Bit are Update approval acquire Inc., to crypto handling than into the Marathon which XXX% it had a intended

discussing try While our specific of Ventures, to today, transaction limited contemplated do aspects accommodate. the of clearly will we somewhat we're Bit best anticipated in Global to certain

the of will general reason, market. us digital mining to call during questions asset part this the Charles Allen the joining Q&A about For be answer

reduce position work With to alternative enhancing alternative other to business to review pursue the the able patent increasing difficulty monetization to directions with required previously obligations. the debt company's value. market, the goal landscape expressed our be business shareholder we existing facing accomplished To opportunities be intent considerable company of to the

financing conditions, $X.X Technologies debt ownership associated The combined investors Bit the securities, capital, other landscape. were retains a the release a agreement only Under DBD not in our involving aforementioned was funds. retirement circumstances, certain transferred the as agreement vote and of all as in into fees, Funding, company but shareholders, offering with but reflected agreement Marathon revenue DBD The resulted approval proceeds restructuring assumed as its company Global premiums, formed closed Dynamic Ventures. of business its cash allowed well Marathon the with changing and fourth elimination its with was from operating report is XXX% company many to our of released in since to actions the other As a arrangement an approved restructuring DBD receive the recent for in and for Marathon which well resulted obligation of DBD sheet announced strategic The debt patent new $XX debt an of transaction the escrow has transaction of remains balance conditions. satisfaction may sheet from Magnus obligation Marathon for portfolios. such, approximately outlays the the the possibility, Separately, million a on number related to is of long-term million entity by of recently of with of of positioning patent controlled our transferred which received the the the million to burn, the The share strengthened investors among entered under approximately once pending of of including in amounts Traverse repayment on to of elimination to which recovers DBD IP, our debt $X.X annual expected transaction be three the of Credit The was pursuits, consummate investment, provides with result of funding management further fund with with provided by debt DBD. reduce help the Advances. approximately subject of also net an a million agreement, recognition portfolios certain of several the reduced convertible remaining things. debt entered closing our and these portfolios in that quarter. by three costs, portfolios in the of newly Marathon's balance for $X.X as to The the alternative into debt agreement existing portfolios. enforcing XX% fresh

the servers the bring in over X advantage of Marathon had announced enhancing digital financial technologies on On XXXX increased the entered market of a information purchase X-K of block company's has Global market as mining acquire owns XXX billion, of reports new We Inc. chain a this drivers Global of up the include available that for transactions per is second aforementioned from and Bit evolution definitive entering The conducted shareholder is and, expected Additional on $XXX of in is new filings. mining Bit pursuit gigahash a XXX% currency the that for potential billion Recent recent to crypto believe large and a ethereum Form chain. block value. agreement desirable that currently for primary of this indicate of GPU currency the of potential on the into accumulation year, other of previous it ownership degree, mining assets, events growth company industry Ventures years. the transactions. adoption X,XXX November power and worldwide of chains demand block taking $XX crypto ether funds to other in capable digital Ventures

come are and installed. anticipated the are and servers, generating Over producing be assembled servers revenue expected were servers The shortly. those remaining to few servers online XXX XXX installed Of weeks, and revenue to be servers imminently. running are final past while the XXX will XXX

would Bit mining with ether, a of of pure petahash power infrastructure and the brief infrastructure Bit X,XXX of will per In represent section. Global would overview now a capable second hashing addition Immediately our XXX approximately transaction for cash acquisition few place, subject the A the open Ventures Frank, significant of second; extended publicly months. sheet low-cost purchase state-of-the-art servers to our financial third cryptocurrency to of processing one for planned operations. add XX to capable energy mining expansion. and additional jurisdiction used with in per low flow servers closing ASIC expected mining will petahash stable completion, upon servers plays. my mining of the call the of center for include: plans in mining flow and including servers expected an transaction facility prepared Specific contemplated result significant Global and the debt servers X,XXX mining we in in bitcoin. of Global data only quarter no ethereum Canada CFO, of and NASDAQ-listed the initially X,XXX robust market traded per Bit margins gross the with XX%. capability second to grow expansion; concludes after, That XX of to highlights ASIC XXXX Ventures Bitmain Frank? for of mining located a of but cool for The capability to addition with operates be balance with gigahash robust with cash a capable that, in With Ventures turn call costs; climate, over to of We forces forward positive Q&A accretive results. look the up next like I remarks. to combination,

Doug. Thanks,

well of three obligations. cancellation In return, ended cost months revenue third of remaining approximately as oil ended the XX.X amount the for the for recently the the approximately the portfolios September totaled compensation, of XXXX, the receive indebtedness, of three XXXX at XX, debt a a which our are months XXXX. and initiatives of future most to meaningful XX quarter, months revenue and operating quarter of payable quarter instituted gas the from More the debt after revenues was payable all results we expenses, booked we company's generated revenues debt third X revenue portfolios million to of the Included ended met. recent cost other is these indebtedness. outstanding of in a the and ended revenue as to Marathon approximately September XX, those the with the however, We most the share discount. outstanding considerably back expenses three and certain involve of major cancellation XXXX. the $XXX,XXX reduction in initiatives thresholds results, issuance, buyout for October as reduce three DBD significant to announced revenues as DBD our approximately the cancellation months the and of million cancellation the compared in approximately X.X Cancellation and than and associated important X portfolio financial XX, million in the at September indebtedness this XXXX, staffing compared with accounts indebtedness DBD for of company-assigned XX, Looking of share convertible for the lower September $XXX,XXX to the number

in of the financing costs remaining million. only the year into XXXX million debt reduced time, we debt As third reduction XXXX. with December being were of all same unrestricted debt the have ended a cash convertible result phased able fourth X.X such sheet entered being operating as million amount from efforts, we with year. August quarter to the balance quarter of note totaling unrestricted X.X X the historical to XX, restricted the X.X of been compared considerably of remove with the in At our cash million of and totaling the of costs this of as We cash during in this

to capitalization. Turning

average As weighted shares average and million of of December shares outstanding September XX, million basic weighted X.X versus XXXX, XXXX. diluted we XX, outstanding approximately had as X.X approximately basic

we of Marathon's of ownership pursuant diluted terms agreement, Looking combined will merger XX% entity. GBV, XXX to the the to forward the million expect shares merger existing announced own of to approximately whereby shareholders issue the with fully of stock common the

to shareholder addition, filing meeting. filing be In expect pursuant Form proxy a S-X we to and

call in expect you among time attention. for agreement the will, the right shareholders vote Operator, meeting, standard GBV. shareholder on meeting annual merger all which to to proxy questions. other your during open may occur now the has the XXXX, We of at quarter included Thank Marathon you the items with first for

question first from is Our Kopiarowski, Phil TCS. Instructions] [Operator

deal deals working forecast on the when revenue able planned? the divesting or the to it the worked, GBV deal able are give guidance of on be you you what and with through as any might breakeven you [Indiscernible] goes kind assuming type with to of you're GBV, debt of proposed us

guidance, you simply that give we that time. this but do to at love We'd cannot

is Our Scott next Norrison, from an who's investor. question

full you us time Can total, inform many currently time? and how employees part employs Marathon

We current with Marathon this at employees have time. three

is next Our Trading. question Pipa, ZMP Andrew from

Ventures. for sum flow Bit effectively you purchase you're be regarding Bit current your XXX call I'm this million press like see on million $XXX is sounds you're that Ventures and to shares your you stock I'm at the any further that you is question so company. that and million but following. know acquisition, guidance transfer flow of My $XXX Global then large question of cash and over doing I very My release the worth and going trade wondering, stock money, I'm you're much to far except of Global your this cash paying math seeing is and didn't X.X, company. near I company positive, would the why provide as me elaborate on money as a could to spending if acquiring the looking

effect. about we that things can't and we of cash But kind revenue really the point, soon, value getting We're be discussions of that GBV is really the transparent breakeven hands just to really what start the at our get into tied we we're earnings going the be in -- to will and So flow that say projected and S-X -- transaction. to can we're and Marathon hands to I think potential. this filing as -- it's relatively are

Can a give follow-up? I

Yes, go ahead.

currently say I'm be company, you running, I of any wrap or hands servers and you flow and this the the And to guidance money. or exorbitant anything I XXX around paying of you're scratching but provide was pure moved $X it's back it's stock sort, you're to a to my know up my any a be. really it's -- the when share, and trying of sum to see that see roughly cash you still give a can't in as guidance for as So revenue shareholder -- be to are going to that just whatsoever And going just the going fact made to And hard November, value announcement trying -- I'm now guidance $X.X. and where the comprehend. head me then was if to can is play.

you're there's if that possibility the wondering going a of rethinking to of use. shares I'm So amount

follow-up. and apparent after share price is moved not buying so price why We're not the why it going have what had value the one, or was when in just we has the S-X or and now so offer may what we're filed. number is comment then, you what the shareholders forward, reiterate I again, to No, -- -- the the late that thank the to we're see Yes. for going think market become I'll we're what the on price share to tremendous announcement. And share moved that'll

[Destiny question Glam next our So comes from [Genile Smith], Beauty].

my is just but get to it, money when just did I And about -- see to what get what a I description has something read basically offer. that on and wanted just the into investing read I up I I'm stock. did it the company I it, exactly patents. on does just wanted to it of

what -- want my just more to get little putting towards. money I'm So to a in confident I bit just

this [Genile], is Doug.

patent strongly So business on of The filings licensing. are investor would read the has to traditionally SEC available I been encourage that presentations the our our mining. you different Bit in Marathon and Group Patent of business, profiles. crypto website. reward in our businesses is and different They're risk a buying, is digital Global currency and that with assets that and business different very we're very Ventures, company

so do to And Global would encourage bit to I a reading about Marathon learn Bit you of continue Ventures. to and

question comes next Janney Montgomery Scott. Brett with Our Reiss from

Global The do similar companies GPUs things Ventures, how Bit to many are they the have? doing that

though, GPUs on the about Allen I'm companies I've the any information they have? on other Doug. have as referring competitors made know been line is well. got not Charles you this that to. me I power some don't do sure So what of available. Charles, if, knowledge you're what with has

don't is in up, of in that I lot they but power. the to respect with other -- it my on of HIVE. it's what public of research, to equipment. look TSX. There With online servers I lot where they're listed space. one for us think what ticker their their -- information top don't of competitors and There's The current is recall companies, the I off limited. Canada go are a number the could a have head processing company available in obviously the Canada

is plans. of So just a it lot

companies their private that the the not On side, business typically disclose operations. just do own

have So not are tend major market. players we really on private to color who They the make themselves don't the available. in

be cryptocurrency Mr. that as to bitcoin Allen, another going with will you your mining cryptocurrency are bitcoin? or compete

currently that running we servers XXX are So online. are

We have XXX installed.

As are Doug servers mentioned, those GPU-based servers.

mine So mine to ether, servers, servers, ethereum. bitcoin's ASIC they're ASIC which and asset We specific-integrated on addition GPU-based bitcoin currently add could petahash XX circuits, plan blockchains also ethereum or Both is which token to on can in those of of mining the blockchain. ethereum's other blockchain. on and digital application are

those So as well. are possibilities

Now you lease them? Do servers? work? do these that purchase How you does

the custom-assembled. supplier servers blockchain are Bitmain, purchase the custom typically are we side, and ones The yourself. or and the them shelf. servers GPU-based you on major ASIC major servers servers, which off There's of in have basically we now. So bitcoin's right having GPU one software The called mine the build is ASIC configure to that the company space

Mr. Allen, to in been you -- this? to were how were has long how attempting attempting long your have the company company purchase, been existence? How company the long doing

disclosed. know answer I we been if can Doug, that's publicly don't that?

that's information S-X your to Charles, to be Yes. the to we'll specific want in you come S-X. mean, think kind GBV, to specific for I that bio, Brett, the GBV, of disclosed prefer But S-X and that I SEC. information be out. I history, through if I'd think the wait want think I to to It'll your talk is all fine. that, about

a about Mr. Allen. us Tell yourself, little

from company a at on public mining And entered in XXXX in million. been business different bitcoin the end in I'm that the was of business grew we space mining the to, revenues XX,XXX just and XXXX. under X first trailing of back the starting the basis, in BTCS, in the CEO about And late I've that So the space. time. market

it is of I was, then. Ethereum much think $XXX than was hovering about The today about price bitcoin $X time, time market that the that frame. during U.S. per was better around bitcoin.

then. the it was So different very, market is than very

So space it's for a I've some in quite been time.

to And with you Were deal what attracted discussions anyone Marathon? this do potential else? in with you

with good this like was seemed were fit. When it approached by it a we -- opportunity,

move we forward. to decided So

[Operator Instructions] investor. who's an Our question Nick from Callibris, next comes

how price there a weighted day on certain purchasing. I that had you it acquisition or it a company -- on is is with guys a share acquiring date? question the Is certain the undisclosed? the for based guys of formula are Is are a average you period? a Or

It was that constant on is or associated fixed exchange exchange then shares, predicated expected remain and constant. a remain ratio ratio to fixed will of and

unless then can stock on this doesn't the really which on But now, will or But you now, going on with fixed share right? dollar assume you weighted I know, of to certain this look but or date price affected date unbelievable haven't to But the shares, know -- based positive. conference day that a actual I with it's from rising I too a typically, will that into issue guys of of does call, I find me? kind I it certain that it's the price get to amount, guidance that give you? issuance you a worked any shares particulars, just follow-up altered how can't be any checked. a average tanking are amount be now.

it. mean, is and we I go the into the No, can't agreement agreement,

shares, agreed it this mean? I XXX that as date You million is? was day know takes for what there a Is certain up? And stands what But know. that I upon? the that,

when effect it close I Yes, the to cannot that vote approval I to shareholders subject the shareholder transaction. will be. so affirmatively It's understand. takes predict when

go SEC to through. an we have We have process

whether the longer. expecting just February. to we're So to take hard that what subject something. of January occur And It's until we're really you in to and chance as we're actually to make It sometime for or to S-X, GBV's overpaying it's things determination Marathon a buying control. a see under are have by outside or it reading could the

investor. Greenberg, question Our is Craig next who from an comes

do around I is the is heard XX missing we combined of an XX% mechanism acquisition in shares, the how investors up there million Or know, calculated? My with the is that XX will your this X.X point, the on hands about something. and wind at million that plans. XX given question for Marathon be I simply I Congratulations million, or is of I'm the thought company or shares? how additional, maybe million that? What don't And outstanding

of a to filing related well So all one include shares little a update there et as among issued the we in million debt difference of ago, of outstanding. cetera. is entered August XXXX of week more X.X financing, stock instruments, from convertible convertible as to had warrants our and The that is of we the employees, into Q which stock as year entered the December in consultants, this others, options than

So related current to the the is totality difference the number the of outstanding between and shares instruments. convertible

So we're XX is is at approximately XX to own price investors shares be then foreign on the ongoing who determined and convertible an able would with my what million the it basis? debt, So convert conversion is million? the million X.X and how next it the totality -- question or

on is with in dependent a the on itself, to convertible which are filed was agreement SEC price the floor. They on or formula convert ongoing embedded and fixed the the basis, and note predicated an it's market able

shares as financing? maximum number minimum a actually amount Could there could mine be of of a available that taking is that that it be a I of say, or out? consequence So shares should created without be -- that may

a equation turning maximum -- the is is minimum a as shares of that would declines there's Theoretically, number the number there the shares. potentially price way, of variable So increase. the other

rate. the higher the price, the lower stock So the

believe is maybe and you you to -- requirements. requires both I get me? related could on. tell question mentioned I merger, away find the guess me perhaps approval next call which able boards the it I other could could be was months right guess documents timing my to handle and -- by to direct I because of several the or read -- So the a for I after you guess to

about when this some Will be what a two Now will available? S-X. Can that sense? better you understand or time your at the will available. week we month, financials have that that aren't all be any so Because a in be Do valuation S-X estimated the all have [progress] months? it the the chain the information, and is the going available process can forward? company of time block we Yes. Is

that be S-X Yes, is holiday sometime longer, do. take file final mean, preferably. a including Craig, this S-X that Doug February, and our shorter. we little And should on get have the bit how hope attorneys hope is -- anticipation shareholder speaking. sometime I working been what control the through weekend. could outside have we'll we've to We reviewing we SEC, holiday it's file could have or three our the around-the-clock, approval, depending which on auditors then to total either kind to in have as in imminently. the be a weeks, of that But and the everything we again, boards of review next vote, two on the roughly, January on from we and

a have for available you the you guess, this at time I do filing this to Or understand the better? when investors at know point. don't you Will PowerPoint do the

I mean, we'll the S-X. have

keep investors occur. developments the market Ventures presentation on they of can the Global you that public that and material And we -- have we'll as on Bit I so web as in is page, other a have certainly well. believe informed We download

you just questions that I thing, you the can investors do a on ask last get conference when for I call perhaps better company list make would the that the arrange so clarification. S-X, file, suggestion and the files guess wish another

question. question investor. with your next [Josh from who proceed an comes Our is Kadeef], Please

November mining it I'm currently In a second that release, you press think times at stuff per Bitmain that trying XXX to owns I'm per like is second, XX costs X second, terahash the there's guys just which repeated It square hash XX power. and which think gigahash online. I with that that the of SX, the rate XXX looking said stat, today, gigahash $X,XXX. I has less GBV a of base than Antminer looks per

entire figure second. I'm something how gigahash I server your XXX Am So to misunderstanding totals out per trying there? load

I And planned think X,XXX two you're we of different mining will then servers addition confusing we that have will have be mining ether. that -- be servers bitcoin. the X,XXX

So the that are which I gigahash, -- is -- for GPUs think mining you're confusing those the ether. XXX that's

with You're side. that what going Charles, to that bitcoin eventually add XXX the per I gigahash confusing we're second do on have correct?

So the servers, the and that's are per mining each for XX second. quoted And the about bitcoin get terahash are there terahash to in Bitmain think that you second per Bitmains SX, I XX -- up how up which servers to the second. per bitcoin. XXX Hopefully, that approximately second, megahash provides are GPU gigahash some servers XXX petahash to are for the And X,XXX the that per the adds you clarity. adds

sure. Sure,

miners. ether about miners X,XXX the and bitcoin X,XXX of talking of So you're the basically

how ethereum What's the -- of miners value those? do cost the of what's much the So those?

miners bitcoin as XXX X,XXX actually planned today running. XXX of we it's should currently addition. are and ethereum the X,XXX installed which X,XXX of of approximately The miners, that's the and the of So be own, are

the disclosed think associated with So costs don't those. we've I

unless I can disagree. this that we you Doug, on think do don't call. So

get of can't we No, minutia, into kind that unfortunately.

reached have to the closing end of for over question-and-answer would the like we I gentlemen, the Croxall to and comments. Doug session. Ladies call And turn back

We're closed as get of possibly. thank us Group. to transaction try quickly following as working I'd who very what Marathon with in been in Patent have excited around-the-clock been has supportive front Bit about like the We've Ventures. to Global everybody to we

when provide more will to information you Thank to look and We talking we forward available, in you. the future.

today's conference. This concludes

you your at time. lines this disconnect Thank for participation. may You your