MARA 10-Q Quarter ended March 31, 2013

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from __________ to __________

MARATHON PATENT GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Nevada		333 -171214		01- 0949984
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)
2331 Mill Road, Suite 100, Alexandria, VA				22314
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (703) 232-1701

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer (Do not check if smaller reporting company)	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.  51,608,810 shares of common stock are issued and outstanding as of May 14 , 2013.

TABLE OF CONTENTS

		Page No.
PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations (unaudited)	4
	Consolidated Statements of Cash Flows (unaudited)	5
	Notes to Unaudited Consolidated Financial Statements.	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	29
Item 4.	Controls and Procedures.	29
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	30
Item 3.	Defaults upon Senior Securities.	30
Item 4.	Mine Safety Disclosures.	30
Item 5.	Other Information.	30
Item 6.	Exhibits.	30

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, “Marathon Patent Group, Inc.,” “we,” “us,” “our” and similar terms refer to Marathon Patent Group, Inc., a Nevada corporation, and subsidiaries.

Item 1.  Financial  Statements

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES

(FORMERLY AMERICAN STRATEGIC MINERALS CORPORATION )

(DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

		March 31, 2013				December 31, 2012
		(Unaudited)
ASSETS
Current assets:
Cash		$	2,916,476			$	2,354,169
Marketable securities - available for sale securities			6,250				12,500
Prepaid expenses			30,666				40,333
Assets of discontinued operations - current portion			53,395				82,145
Total current assets			3,006,787				2,489,147
Other assets:
Property and equipment, net			9,722				-
Intangible assets, net			474,605				492,152
Assets of discontinued operations - long term portion			230,088				1,035,570
Total other assets			714,415				1,527,722
Total Assets		$	3,721,202			$	4,016,869
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses		$	153,169			$	57,158
Liabilities of discontinued operations			30,664				30,664
Total liabilities			183,833				87,822
Stockholders' Equity:
Preferred stock, $.0001 par value, 50,000,000 shares
authorized: none issued and outstanding			-				-
Common stock, ($.0001 par value; 200,000,000 shares authorized;
45,546,345 and 45,546,345 issued and outstanding at March 31, 2013 and December 31, 2012			4,555				4,555
Additional paid-in capital			11,192,230				10,972,122
Accumulated other comprehensive income - marketable securities available for sale			(6,250	)			-
Deficits accumulated during the development stage			(7,642,670	)			(7,037,134	)
Total Marathon Patent Group, Inc. equity			3,547,865				3,939,543
Non-controlling interest in subsidiary			(10,496	)			(10,496	)
Total stockholders' equity			3,537,369				3,929,047
Total liabilities and stockholders' equity		$	3,721,202			$	4,016,869

See accompanying notes to unaudited consolidated financial statements.

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES

(FORMERLY AMERICAN STRATEGIC MINERALS CORPORATION )

(DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

		FOR THE THREE MONTHS				FOR THE THREE MONTHS				PERIOD FROM INCEPTION
		ENDED				ENDED				(APRIL 30, 2011) TO
		MARCH 31, 2013				MARCH 31, 2012				MARCH 31, 2013
		(Unaudited)				(Unaudited)				(Unaudited)
Revenues		$	-			$	-			$	-
Expenses
Compensation and related taxes			426,675				840,943				3,103,137
Consulting fees			45,224				1,829,423				2,087,368
Professional fees			158,472				262,739				673,189
General and administrative			84,006				124,469				401,493
Total operating expenses			714,377				3,057,574				6,265,187
Operating loss from continuing operations			(714,377	)			(3,057,574	)			(6,265,187	)
Other income (expenses)
Other income			-				125,000				125,000
Realized loss other than temporary decline - available for sale			-				-				(112,500	)
Interest expense			(230	)			-				(383	)
Interest income			291				-				1,269
Total other income			61				125,000				13,386
Loss from continuing operations before provision for income taxes			(714,316	)			(2,932,574	)			(6,251,801	)
Provision for income taxes			-				-				-
Loss from continuing operations			(714,316	)			(2,932,574	)			(6,251,801	)
Discontinued operations:
Gain (loss) from discontinued operations, net of tax			108,780				(27,305	)			(1,401,365	)
Net loss			(605,536	)			(2,959,879	)			(7,653,166	)
Less: Net loss attributable to non-controlling interest			-				-				10,496
Net loss attributable to Marathon Patent Group, Inc.		$	(605,536	)		$	(2,959,879	)		$	(7,642,670	)
Loss per common share, basic and diluted:
Loss from continuing operations		$	(0.02	)		$	(0.09	)		$	(0.22	)
Loss from discontinued operations			0.00				(0.00	)			(0.05	)
		$	(0.01	)			(0.09	)		$	(0.27	)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - Basic and Diluted			45,546,345				32,894,061				28,225,822

See accompanying notes to unaudited consolidated financial statements.

MARATHON PATENT GROUP, INC. AND SUBSIDIARIES

(FORMERLY AMERICAN STRATEGIC MINERALS CORPORATION )

(DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

		FOR THE THREE MONTHS				FOR THE THREE MONTHS				PERIOD FROM INCEPTION
		ENDED				ENDED				(APRIL 30, 2011) TO
		MARCH 31, 2013				MARCH 31, 2012				MARCH 31, 2013
		(Unaudited)				(Unaudited)				(Unaudited)
Cash flows from operating activities:
Net loss attributable to Marathon Patent Group, Inc.		$	(605,536	)		$	(2,959,879	)		$	(7,642,670	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization expense			17,547				-				26,320
Depreciation expense			278				-				278
Stock based compensation on warrants granted			49,197				2,536,075				2,772,359
Stock based compensation on options granted			170,911				-				1,685,849
Common stock issued for services			-				75,000				198,287
Non-controlling interest			-				-				(10,496	)
Non-cash other income			-				(125,000	)			(125,000	)
Realized loss other than temporary decline - available for sale			-				-				112,500
Impairment of mineral rights			-				-				1,355,474
Impairment of assets of discontinued operations			-				-				30,248
Changes in operating assets and liabilities
Assets of discontinued operations - current portion			28,750				-				(33,395	)
Prepaid expenses			9,667				(88,855	)			(47,266	)
Deposits			-				3,500				(3,500	)
Assets of discontinued operations - long term portion			-				-				3,915
Accounts payable and accrued expenses			96,011				75,260				153,170
Net cash used in operating activities			(233,175	)			(483,899	)			(1,523,927	)
Cash flows from investing activities:
Acquisition of mineral rights			-				(325,000	)			(325,000	)
Acquisition of patents			-				-				(500,000	)
Note receivable - related party			-				-				(147,708	)
Collection on note receivable - related party			-				-				147,708
Purchase of property and equipment			(10,000	)			-				(10,000	)
Sale of real estate property (discontinued operations)			817,482				-				1,393,959
Acquisition of real estate property			-				-				(1,366,627	)
Capitalized cost related to improvements of real estate property (discontinued operations)			(12,000	)			-				(257,420	)
Net cash provided by (used in) investing activities			795,482				(325,000	)			(1,065,088	)
Cash flows from financing activities:
Payment on note payable			-				(930,000	)			(930,000	)
Payment on note payable - related party			-				(152,974	)			(152,974	)
Payment in connection with the cancellation of stock and rescission agreement			-				-				(132,000	)
Proceeds from disgorgement of former officer short swing profits			-				-				50,000
Proceeds from advances payables			-				-				100,000
Proceeds from promissory note - related party			-				-				53,500
Proceeds from sale of common stock, net of issuance costs			-				5,768,965				6,516,965
Net cash provided by financing activities			-				4,685,991				5,505,491
Net  increase in cash			562,307				3,877,092				2,916,476
Cash at beginning of period			2,354,169				129,152				-
Cash at end of period		$	2,916,476			$	4,006,244			$	2,916,476
SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:
Cash paid for:
Interest		$	230			$	-			$	383
Income taxes		$	-			$	-			$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of a note payable to a related party in connection with the purchase of mining rights		$	-			$	-			$	99,474
Issuance of common stock for advances payable		$	-			$	100,000			$	100,000
Assumption of prepaid assets upon exercise of option agreement		$	-			$	-			$	43,157
Assumption of accounts payable upon exercise of option agreement		$	-			$	-			$	30,664
Issuance of a note payable in connection with an option agreement		$	-			$	1,000,000			$	930,000
Issuance of common stock in connection with an option agreement		$	-			$	5,000,000			$	1,000
Common stock issued for acquisition of patents		$	-			$	-			$	925

See accompanying notes to unaudited consolidated financial statements.

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

Marathon Patent Group, Inc. (“the Company”), formerly American Strategic Minerals Corporation, was incorporated under the laws of the State of Nevada on February 23, 2010.

On December 7, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada in order to change its name to “American Strategic Minerals Corporation” from “Verve Ventures, Inc.”, and increase the Company’s authorized capital to 200,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred stock, par value $0.0001 per share. During June 2012, the Company decided to discontinue its exploration and potential development of uranium and vanadium minerals business. Additionally, in November 2012, the Company decided to discontinue its real estate business.

On August 1, 2012, the shareholders holding a majority of the Company’s voting capital voted in favor of (i) changing the name of the Company to “Fidelity Property Group, Inc.” and (ii) the adoption the 2012 Equity Incentive Plan and reserving 10,000,000 shares of common stock for issuance thereunder (the “2012 Plan”).  The board of directors of the Company (the “Board of Directors”) approved the name change and the adoption of the 2012 Plan on August 1, 2012. The Company did not file an amendment to its Articles of Incorporation with the Secretary of State of Nevada and subsequently abandoned the decision to adopt the “Fidelity Property Group, Inc.” name.

On October 1, 2012, the shareholders holding a majority of the Company’s voting capital voted and authorized the Company to (i) change the name of the Company to Marathon Patent Group, Inc. (the “Name Change”) and (ii) effectuate a reverse stock split of the Company’s common stock by a ratio of 3-for-2 (the “Reverse Split”) within one year from the date of approval of the stockholders of the Company.  The Board of Directors of the Company approved the Name Change and the Reverse Split on October 1, 2012. The Company’s Board of Directors determined the name “Marathon Patent Group, Inc.” better reflects the long-term strategy in exploring other opportunities and the identity of the Company going forward.  On February 15, 2013, the Company filed the Certificate of Amendment with the Secretary of State of the State of Nevada in order to effectuate the Name Change. Currently, the Reverse Split has been authorized by the Company’s shareholders but has not been effectuated.

On January 26, 2012, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with American Strategic Minerals Corporation, a Colorado corporation (“Amicor”) and the shareholders of Amicor (the “Amicor Shareholders”).  Upon closing of the transaction contemplated under the Exchange Agreement (the “Share Exchange”), on January 26, 2012, the Amicor Shareholders transferred all of the issued and outstanding capital stock of Amicor to the Company in exchange for an aggregate of 10,000,000 shares of the common stock of the Company.  The Share Exchange caused Amicor to become a wholly-owned subsidiary of the Company.  Additionally, as further consideration for entering into the Exchange Agreement, certain Amicor Shareholders received ten-year warrants to purchase an aggregate of 6,000,000 shares of the Company’s common stock with an exercise price of 0.50 per share.  Prior to acquisition by the Company, Amicor owned certain mining and mineral rights.

Amicor, formerly Nuclear Energy Corporation, was incorporated under the laws of the State of Colorado on April 30, 2011.  Amicor owns mining leases of federal unpatented mining claims and leases private lands in the states of Utah and Colorado for the purpose of exploration and potential development of uranium and vanadium minerals.

Prior to the Share Exchange, the Company was a shell company with no business operations.

The Share Exchange was accounted for as a reverse-merger and recapitalization. Amicor was the acquirer for financial reporting purposes and the Company was the acquired company. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Share Exchange were those of Amicor and was recorded at the historical cost basis of Amicor, and the consolidated financial statements after completion of the Share Exchange included the assets and liabilities of the Company and Amicor, historical operations of Amicor and operations of the Company from the closing date of the Share Exchange.

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

On June 11, 2012, the Company terminated various leases related to its uranium mining claims (the “Claims”), consisting of: the Cutler King Property (3 unpatented mining claims); “Centennial-Sun Cup” (42 unpatented mining claims); “Bull Canyon” (2 unpatented mining claims); “Martin Mesa” (51 unpatented mining claims); “Avalanche/Ajax” (8 unpatented mining claims) and “Home Mesa” (9 unpatented mining claims).  The Company had acquired the Claims through the acquisition of Amicor on January 26, 2012. The decision by the Company to terminate these leases followed changes in management and direction of the Company, a review of the uranium market, and the timing and costs expected to pursue the business.

On June 11, 2012, the Company entered into a rescission agreement (the “Rescission Agreement”) with Amicor, and the Amicor Shareholders.  Each of the Amicor Shareholders had previously received shares of the Company’s common stock (and certain of the Amicor Shareholders also received warrants to purchase shares of the Company’s common stock) (collectively, the “Shareholder Securities”) pursuant to the Rescission Agreement.   Each of the Amicor Shareholders, with the exception of one, agreed to return the Shareholder Securities to the Company for cancellation and to enter into joint mutual releases with the Company.  Furthermore, pursuant to the terms of the Rescission Agreement, George Glasier resigned from his position as President, Chief Executive Officer and Chairman of the Company; Kathleen Glasier resigned from her position as Secretary of the Company, Michael Moore resigned from his position as Chief Operating Officer and Vice President of the Company and each of David Andrews and Kyle Kimmerle resigned from their position as a director of the Company.  As a result of the foregoing, the Company cancelled 9,806,667 shares of the Company’s common stock and 4,800,000 warrants and terminated the mining leases entered into with the Amicor Shareholders. Additionally, the Company paid an aggregate of $132,000 to Amicor Shareholders upon the execution of the Rescission Agreement.

Under the terms of the Rescission Agreement, the Company’s employment agreement with Mr. Glasier resigned and all options, warrants and rights to acquire any shares of the Company’s common stock, whether vested or unvested, were terminated as of the date of the Rescission Agreement.  Additionally, under the terms of the Rescission Agreement, the Company’s lease for certain office space, dated as of January 26, 2012 with Silver Hawk Ltd., an entity owned and controlled by George Glasier and Kathleen Glasier, was terminated.

On June 11, 2012, the Company and Pershing Gold Corporation (“Pershing”) exercised its right under the Option Agreement executed in January 2012, through the assignment of Pershing’s wholly owned subsidiary, Continental Resources Acquisition Sub, Inc. (“Acquisition Sub”), (see Note 5). As a result of the assignment, Acquisition Sub became a wholly owned subsidiary of the Company and the Company acquired all of Pershing’s uranium assets.

On November 14, 2012, the Company entered into a Share Exchange Agreement (the "Sampo Exchange Agreement") with Sampo IP LLC, a Virginia limited liability company ("Sampo"), a company that holds certain intellectual property rights, and the members of Sampo (the "Sampo Members"). Upon closing of the transaction contemplated under the Sampo Exchange Agreement (the "Sampo Share Exchange"), on November 14, 2012, the Sampo Members (6 members) transferred all of the issued and outstanding membership interests of Sampo to the Company in exchange for an aggregate of 9,250,000 shares of the common stock of the Company. Additionally, the Company made a cash payment to Sampo of $500,000 pursuant to the terms of the Sampo Exchange Agreement.

Upon the closing of the Sampo Share Exchange, Mark Groussman resigned as the Company’s Chief Executive Officer and John Stetson resigned as the Company’s President and Chief Operating Officer and simultaneously with the effectiveness of the Sampo Share Exchange, Doug Croxall was appointed as the Company’s Chief Executive Officer and Chairman and John Stetson was appointed as the Company’s Chief Financial Officer and Secretary.  LVL Patent Group LLC, of which Mr. Croxall is the Chief Executive Officer, and John Stetson, were former members of Sampo and received 4,000,000 and 500,000 shares of the Company’s common stock, respectively, in connection with the Sampo Share Exchange.