MARA Holdings Inc (MARA) 2017 Q2 法說會逐字稿

Hello, and thank you for standing by. Welcome to Marathon Patent Group's Second Quarter 2017 Financial Results Conference Call. (Operator Instructions)

您好，感謝您的支持。歡迎參加馬拉松專利集團 2017 年第二季財務業績電話會議。（操作員指示）

At this time, I would like to turn the conference over to Jason Assad, Investor Relations with Marathon Patent Group. Please go ahead.

現在，我想將會議交給馬拉松專利集團投資者關係部門的 Jason Assad。請繼續。

Thank you, operator. Good afternoon, and welcome to Marathon Patent Group's 2017 Second Quarter Results Conference Call. With us today are Marathon's Founder and Chief Executive Officer, Doug Croxall; and Chief Financial Officer, Frank Knuettel.

謝謝您，接線生。下午好，歡迎參加馬拉松專利集團 2017 年第二季業績電話會議。今天與我們一起出席的有 Marathon 的創始人兼首席執行官 Doug Croxall 和首席財務官 Frank Knuettel。

Before I turn the call over to management, please remember that certain statements contained -- certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this release relate to, among other things, the effect of the global economic downturn on technology companies; the ability to successfully develop licensing programs and attract new business; rapid technological change in relevant markets; changes in demand for current and future intellectual property rights; legislative, regulatory and competitive developments addressing licensing and enforcement of patents and/or intellectual property in general; and general economic conditions.

在我將電話轉給管理階層之前，請記住，本新聞稿中包含的某些聲明屬於《1995 年私人證券訴訟改革法案》所定義的前瞻性聲明。本新聞稿中包含的前瞻性陳述涉及全球經濟衰退對科技公司的影響；成功制定許可計劃和吸引新業務的能力；相關市場的快速技術變革；對當前和未來知識產權的需求變化；針對專利和/或知識產權許可和執行的立法、監管和競爭發展；以及總體經濟狀況。

They're generally identified by words such as believes, may, expects, anticipates, should and similar expressions. Readers should not place undue reliance on such forward-looking statements, which are based upon the company's beliefs and assumption as of the date of this release.

它們通常用相信、可能、預期、預期、應該等類似的字眼來表示。讀者不應過度依賴此類前瞻性陳述，這些陳述基於本公司截至本新聞稿發布之日的信念和假設。

The company's actual results could differ materially due to risk factors and other items described in more detail in the Risk Factors section of the company's annual reports filed with the SEC, copies of which may be obtained at sec.gov. Subsequent events and developments may cause these forward-looking statements to change. The company specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances that occur after the date of this release, except as required by applicable law.

由於風險因素以及公司向美國證券交易委員會提交的年度報告中「風險因素」部分更詳細描述的其他項目，公司的實際業績可能存在重大差異，該報告的副本可在 sec.gov 上取得。後續事件和發展可能會導致這些前瞻性陳述發生變化。本公司明確表示不承擔因本新聞稿發布日期後發生的事件或情況變化而更新或修改這些前瞻性陳述的任何義務或意圖，除非適用法律要求。

In addition, certain of the financial information presented in this call references non-GAAP financial measures. The company's earnings release was issued this afternoon. It's available on the company's website, presents reconciliations to the appropriate GAAP measure and an explanation of why the company believes such non-GAAP financial measures are useful to investors.

此外，本次電話會議中提供的某些財務資訊引用了非公認會計準則財務指標。該公司的盈利報告於今天下午發布。該報告可在公司網站上查閱，其中提供了與適當的 GAAP 指標的對賬，並解釋了公司為何認為此類非 GAAP 財務指標對投資者有用。

Finally, this conference call is being webcast. The webcast link is available on the Investor Relations section of our website at marathonpg.com.

最後，本次電話會議正在網路直播。網路直播連結可在我們網站 marathonpg.com 的投資者關係部分找到。

With that, I'd like to now turn the call over to Marathon's CEO, Doug Croxall. Doug?

現在，我想將電話轉給 Marathon 的執行長 Doug Croxall。道格？

Thank you, Jason, and thank you, everyone, for joining us this afternoon to discuss Marathon Patent Group's second quarter 2017 operating results. We're going to handle the call a little differently than we have in the past. We believe there'll be quite a few questions. So I prepared brief remarks and I want to ensure that we have enough adequate time to address your questions afterwards.

謝謝傑森，也謝謝大家今天下午加入我們，討論馬拉松專利集團 2017 年第二季的經營業績。我們將以與過去略有不同的方式處理此電話。我們相信會有不少疑問。因此我準備了簡短的發言，並希望確保我們有足夠的時間來回答你們的問題。

On August 3, 2017, Marathon entered into an agreement with DBD Credit Funding, which charts the course for a retirement of 100% of our long-term debt as well as providing an arrangement with DBD for 3 of our portfolios. Under the restructuring agreement, Marathon's existing debt obligation of approximately $16 million will be assumed by a newly formed entity controlled by DBD, and Marathon will be released from further obligation for the debt and funding of the actions related to the transferred portfolios.

2017 年 8 月 3 日，Marathon 與 DBD Credit Funding 達成協議，該協議規定了我們 100% 長期債務的償還流程，並與 DBD 就我們的 3 個投資組合做出安排。根據重組協議，Marathon 現有的約 1,600 萬美元債務將由 DBD 控制的新成立的實體承擔，並且 Marathon 將不再承擔與轉移投資組合相關的債務和行動資金的義務。

The completion of the transaction is subject to a number of conditions, including a vote of shareholders. The restructuring agreement importantly not only allows for the elimination of the DBD debt, but also provides Marathon with a 45% residual revenue share once DBD recovers its costs, management fees and debt amounts.

交易的完成取決於若干條件，包括股東投票。重要的是，重組協議不僅允許消除 DBD 債務，而且一旦 DBD 收回其成本、管理費和債務金額，還將為 Marathon 提供 45% 的剩餘收入份額。

Until the restructuring agreement is completed however, which we expect to occur sometime in the third or fourth quarter, we'll continue to be obligated -- we will be continued to be obligated to pay any recoveries to DBD in accordance with our pre-existing arrangements. The 3 portfolios being transferred are Magnus IP, Traverse Technologies and Dynamic Advances. The company will retain ownership of its remaining portfolios, and we expect to continue enforcing those portfolios.

然而，在重組協議完成之前（我們預計該協議將在第三季或第四季的某個時候完成），我們將繼續有義務——我們將繼續有義務按照我們先前的安排向 DBD 支付任何追償款項。轉移的 3 個投資組合分別是 Magnus IP、Traverse Technologies 和 Dynamic Advances。該公司將保留其剩餘投資組合的所有權，並且我們預計將繼續執行這些投資組合。

In addition to continuing the IP monetization business through our remaining portfolios and the carried interest in the 3 portfolios contributed to the new entity, we also intend to consider and pursue other strategic alternatives.

除了透過我們剩餘的投資組合以及對新實體貢獻的 3 個投資組合的附帶權益繼續開展 IP 貨幣化業務之外，我們還打算考慮和尋求其他戰略替代方案。

That concludes my prepared remarks. With that, I'd now like to turn the call over to Frank, our CFO, for a brief overview of 2017 second quarter financial results. Immediately after we will open up the call for an extended Q&A session. Frank?

我的準備好的發言到此結束。現在，我想將電話轉給我們的財務長弗蘭克 (Frank)，讓他簡要介紹 2017 年第二季的財務表現。隨後我們將立即開始延長的問答環節。坦率？

Thanks, Doug. Our second quarter revenues from 2 newly issued licenses, which accounted for approximately 72% of our total revenues for the quarter, were approximately $369,000. And revenues from the 5 largest licenses representing revenues of approximately $34.3 million accounting for approximately 99% of the company's revenues for the 3 months ended June 30, 2016.

謝謝，道格。我們第二季來自 2 個新頒發的許可證的收入約為 369,000 美元，佔本季總收入的約 72%。其中，5 項最大許可證的收入約為 3,430 萬美元，占公司截至 2016 年 6 月 30 日的三個月收入的約 99%。

Direct cost of revenues in Q2 2017 was approximately $1 million as compared to direct cost of revenues in Q2 2016 of approximately $15.5 million, a decrease of 93%. Direct cost of revenue includes both contingent and noncontingent payments to patent enforcement counsel and patent enforcement advisers and inventors.

2017 年第二季的直接收入成本約為 100 萬美元，而 2016 年第二季的直接收入成本約為 1,550 萬美元，下降了 93%。直接收入成本包括向專利執行律師、專利執行顧問和發明人支付的或有費用和非或有費用。

The decline in the direct cost of revenues for the second quarter of 2017 relative to the second quarter of 2016 was associated with noncontingent counsel expenses -- while with no contingent counsel expenses and lower expert and noncontingent counsel expenses during the reporting period.

2017 年第二季直接收入成本相對於 2016 年第二季的下降與非或有律師費用有關——而在報告期內，沒有或有律師費用，而且專家和非或有律師費用較低。

The company reported other operating expenses in Q2 2017 of approximately $2.3 million, a 47% decrease as compared to other operating expenses of $4.9 million in Q2 2016. These expenses primarily consisted of amortization of patents, general expenses, compensation to our officers, directors and employees, professional fees and consulting incurred in connection with the day-to-day operation of our business.

該公司報告稱，2017 年第二季的其他營運費用約為 230 萬美元，與 2016 年第二季的 490 萬美元其他營運費用相比下降了 47%。這些費用主要包括專利攤銷、一般費用、對我們的官員、董事和員工的報酬、與我們日常業務運營相關的專業費用和諮詢費用。

Total other operating expenses declined for the 3 months ended June 30, 2017, relative to the same period in the prior year in almost every segment of our business, including patent amortization and impairment, compensation and third party consulting fees.

截至 2017 年 6 月 30 日的 3 個月，我們業務的幾乎所有部門的其他營運費用總額與去年同期相比均有所下降，包括專利攤提和減損、薪酬和第三方諮詢費。

The only component that saw an increase year-over-year -- the only component that saw increase in a year-over-year basis was professional fees, largely a result of the April financing and the amendment to our loan agreement with DBD. Noncash other operating expenses for the 3 months ended June 30, 2017, and June 30, 2016, include noncash operating expenses totaling $783,000 and $3.3 million, respectively, the biggest component of which in both periods was patent amortization and impairment.

唯一同比增長的部分——唯一同比增長的部分是專業費用，這主要是由於 4 月份的融資以及我們與 DBD 的貸款協議的修訂。截至 2017 年 6 月 30 日和 2016 年 6 月 30 日的 3 個月的非現金其他營運費用包括總計分別為 783,000 美元和 330 萬美元的非現金營運費用，其中兩個期間的最大組成部分都是專利攤銷和減值。

We reported a net loss of $2.2 million for the 3 months ended June 30, 2017, and net income was $7.9 million for the 3 months ended June 30, 2016. On a non-GAAP basis, the company's -- the company recorded a non-GAAP loss of $2.1 million for the 3 months ended June 30, 2017, compared to non-GAAP income in the amount of $16.5 million for the 3 months ended June 30, 2016.

我們報告稱，截至 2017 年 6 月 30 日的 3 個月淨虧損為 220 萬美元，截至 2016 年 6 月 30 日的 3 個月淨收入為 790 萬美元。根據非公認會計準則 (Non-GAAP)，該公司截至 2017 年 6 月 30 日的 3 個月的非公認會計準則虧損為 210 萬美元，而截至 2016 年 6 月 30 日的 3 個月的非公認會計準則收入為 1,650 萬美元。

A full reconciliation of GAAP to non-GAAP financials can be found in both the financial tables at the end of our first quarter results press release issued today as well as in the quarterly report filed today on Form 10-Q with the SEC.

我們今天發布的第一季業績新聞稿末尾的財務表格中，以及今天向美國證券交易委員會 (SEC) 提交的 10-Q 表季度報告中，都可以找到 GAAP 與非 GAAP 財務狀況的完整對帳。

We ended the second quarter of 2017 with cash totaling $1.1 million as compared to $5.0 million as of December 31, 2016. As of June 30, 2017, we had approximately 22.6 million weighted average basic shares outstanding versus approximately 15 million weighted average basic shares outstanding as of June 30, 2016.

截至 2017 年第二季度，我們的現金總額為 110 萬美元，而截至 2016 年 12 月 31 日的現金總額為 500 萬美元。截至 2017 年 6 月 30 日，我們已發行約 2,260 萬股加權平均基本股，而截至 2016 年 6 月 30 日，已發行約 1,500 萬股加權平均基本股。

Thank you for all of your attention. Operator, you may now open the call for questions.

謝謝大家的關注。接線員，您現在可以開始提問了。

(Operator Instructions) The first question is from Mike Latimore of Northland Capital Markets.

（操作員指示）第一個問題來自 Northland Capital Markets 的 Mike Latimore。

In terms of the -- just your patent monetization efforts, I assume that continues as planned here. And maybe you could just talk a little about your strategy. And what are some of the prospects -- best prospects you're seeing in the next 6 months or so?

就您的專利貨幣化努力而言，我認為這將按計劃繼續進行。也許您可以稍微談談您的策略。您認為未來 6 個月左右的最佳前景有哪些？

Mike, this is Doug. So yes, we are continuing to monetize the -- what we kind of call internally as the nondesignated portfolios. But I wouldn't expect results in the future likely we've been able to post in the past. And to the extent the 3 portfolios have already been designated to be exchanged for the debt, we really -- we are receiving -- if there are any interests, it's typically inbound, but we're not making any outbound efforts at this point in anticipation that those will be transferred to the new entity.

麥克，這是道格。是的，我們正在繼續將其貨幣化——我們內部稱之為非指定投資組合。但我並不期望未來能夠取得我們過去可能已經發布過的結果。並且，就這 3 個投資組合已被指定用於交換債務而言，我們確實 - 我們正在接收 - 如果有任何利息，通常是入站的，但我們目前沒有做出任何出站努力，因為預計這些利息將轉移到新的實體。

Got it. And then, just in terms of interest expense and share count, in the next couple of quarters, what should we think about that?

知道了。那麼，就利息支出和股票數量而言，在接下來的幾個季度裡，我們應該如何考慮呢？

So with respect to the interest expense, on the assumption that the shareholders approve the exchange referenced in the DBD transaction, the interest will decline to -- essentially to 0 upon the completion of that transaction, which we anticipate happening sometime in the late third quarter or possibly early fourth. With respect to share count, we had 24.3 million shares outstanding as of the end of last week. And any future transactions will have an impact on that, but we haven't announced it and are not disclosing any at this time.

因此，就利息費用而言，假設股東批准 DBD 交易中提到的交換，則利息將在該交易完成後下降至 0，我們預計這將在第三季末或第四季初的某個時候發生。就股票數量而言，截至上週末，我們共有 2,430 萬股流通股。任何未來的交易都會對此產生影響，但我們尚未宣布，目前也不會透露任何資訊。

(Operator Instructions) The next question is from [Joseph Delahouse], private investor.

（操作員指示）下一個問題來自私人投資者 [Joseph Delahouse]。

In the past quarterly calls, you've talked about how you're seeing, I guess, a fruitful market for being able to buy portfolios and patents at fairly attractive prices. Are you still in the mode of looking to acquire additional portfolios? Or has something totally shifted with the whole strategic alternatives sort of backdrop to the business case now?

在過去的季度電話會議上，您談到您看到一個富有成果的市場，可以以相當有吸引力的價格購買投資組合和專利。您是否仍在尋求收購更多投資組合？或者現在整個策略替代方案的商業案例背景是否已經完全改變了？

Well, we have not made any new acquisitions. But I wouldn't say that we've completely changed our business strategy, but we are clearly open to other opportunities. We really haven't had a lot of time to focus on what else Marathon could be doing. We've been pretty busy with the restructuring. But, look, I still think it's a -- I still think this is very many attractive acquisition opportunities out there. But with our balance sheet, we simply can't -- we simply can't afford them. And as far as what we might do in the future, the patent licensing space has obviously been very difficult. Doesn't make it impossible, but it's been very difficult. But we are also open to looking at other business strategies that might enhance shareholder value.

嗯，我們沒有進行任何新的收購。但我不會說我們已經完全改變了我們的經營策略，但我們顯然對其他機會持開放態度。我們確實沒有太多時間去關注 Marathon 還能做什麼。我們一直忙於重組。但是，看，我仍然認為這是一個——我仍然認為這是一個非常有吸引力的收購機會。但根據我們的資產負債表，我們根本無法負擔這些費用。至於我們未來可能採取的行動，專利授權領域顯然非常困難。這並非不可能，但非常困難。但我們也願意考慮其他可能提高股東價值的商業策略。

I see. Okay, and the revised, I guess, employment agreement or I guess consulting agreement with Erich Spangenberg. Can you talk about that a little bit? I mean, with such a very small portfolio of assets to, I guess, enforce, it just looks really odd for, I guess, a very large shareholder of the company to, I guess, be let go by the company, but then still employed for seemingly healthy, I guess, compensation salary as a consultant. Just anything you can add there?

我懂了。好的，我想，是與 Erich Spangenberg 修訂後的僱傭協議或諮詢協議。你能稍微談論一下這個嗎？我的意思是，對於一個公司非常大的股東來說，在資產組合規模如此之小的情況下，我想，要執行這些資產，這看起來真的很奇怪，我想，被公司解僱，但仍然受僱擔任顧問，並得到看似豐厚的薪酬。您還能添加什麼嗎？

I think the documents pretty much speak for themself. I'm not sure there is really anything to add other than the fact that Erich recognizes that our capital is pretty scarce. And with the juxtaposition of the portfolios to the new entity, the efforts that we really need from Erich are probably no longer needed. And the consulting agreement was really a interim phase to kind of help with lot of the transitioning that may occur if the shareholders vote to pass the restructuring agreement.

我認為這些文件本身就說明了一切。除了埃里希認識到我們的資金非常稀缺之外，我不確定還有什麼可以補充的。隨著投資組合與新實體的並置，我們真正需要埃里希付出的努力可能不再需要了。諮詢協議實際上是一個過渡階段，旨在幫助解決股東投票通過重組協議後可能發生的大量過渡問題。

Okay. Is he, I guess, still working on opportunities to bring business to Marathon?

好的。我猜他是否仍在努力尋找機會為馬拉松帶來商機？

To an extent, correct.

從某種程度上來說，是正確的。

The next question is from [Matt Rothman].

下一個問題來自[Matt Rothman]。

You didn't mention GE. What's the current status of that portfolio?

你沒有提到 GE。該投資組合的當前狀況如何？

It's -- we never really owned GE, right? We had a right to help monetize that portfolio and frankly the status hasn't changed. But again, without the proper capital resources, it's difficult to do anything with that opportunity. But it's still an opportunity.

我們從來沒有真正擁有過通用電氣，對吧？我們有權幫助將該投資組合貨幣化，坦白說，現狀並沒有改變。但同樣，如果沒有適當的資本資源，就很難利用這個機會做任何事。但這仍然是一個機會。

But if I recall correctly, there were certain loan payments had to be made every quarter. I think those already started there. I think it was $250,000 per quarter. Has Marathon made those payments? Will they continue to make those payments going forward?

但如果我沒記錯的話，每季都必須償還一定金額的貸款。我認為這些已經開始了。我認為每季是 25 萬美元。馬拉松支付了這些款項嗎？他們會繼續支付這些款項嗎？

Actually, we have not started -- they don't start until, I think, Q3.

實際上，我們還沒有開始——我認為他們要到第三季才開始。

Q2, Q2 2018.

2018 年第二季。

Q2.

問2.

So to be clear, in terms of monetization opportunity, the GE portfolio can still be monetized by Marathon?

那麼，從貨幣化機會的角度來看，GE 投資組合是否仍可透過 Marathon 貨幣化？

It's currently an opportunity, correct.

現在是一個機會，正確。

Are you projecting any revenue in 2017 or 2018 from GE?

您預計通用電氣 2017 年或 2018 年的收入是多少？

No.

不。

In terms -- just going back to Erich Spangenberg, is -- for the consultant period, is there a finite time line for his consultantship?

就條款而言——回到埃里希·斯潘根貝格 (Erich Spangenberg) 的問題，就顧問任期而言，他的顧問任期是否有一個有限的時間限制？

No.

不。

Now I guess, I'm confused because you just said that Erich recognized that the resources of the company were scarce, and I presume you meant monetarily. But I think you're still paying him his same monthly salary as he was making. And without the monetization opportunities, it's not clear to me why we'd keep him on as a consultant and pay him the same salary, recognizing that the company doesn't have the money to be kind of just giving away at this point?

現在我想，我感到困惑，因為你剛才說埃里希認識到公司的資源很稀缺，我猜你指的是金錢方面的資源。但我認為你仍然會支付他和以前一樣的月薪。如果沒有貨幣化機會，我不明白為什麼我們還要讓他繼續擔任顧問並支付給他同樣的薪水，因為公司現在沒有錢可以隨意贈送？

No, we're not giving anything away. And you asked me a question if there was a finite period. There isn't. It's consulting agreement, which either party can terminate. And when the work is completed, I suspect that both parties will mutually walk away from the consulting agreement. We're just not at that point right now.

不，我們不會洩漏任何東西。你問我是否存在一個有限的時期。沒有。這是諮詢協議，任何一方都可以終止。當工作完成時，我懷疑雙方都會放棄諮詢協議。只是我們現在還沒到那個地步。

Got it. Understood. And then, Signal IP, is there anything further there? Are there any settlements haven't been kind of from the balance sheet yet? Or is that all wrapped up now?

知道了。明白了。那麼，Signal IP，還有其他內容嗎？是否有任何結算尚未從資產負債表中體現？或者現在一切都結束了？

That's all wrapped up.

一切都結束了。

This concludes the question-and-answer session. I would like to turn the conference back over to Doug Croxall for any closing remarks.

問答環節到此結束。我想將會議交還給 Doug Croxall 做最後發言。

Appreciate everyone's time today. If you have any questions or if there's any follow-up questions, please do not hesitate to contact myself, Jason or Frank. And we look forward to talking to you in the near future.

感謝大家今天抽出時間。如果您有任何疑問或有任何後續問題，請隨時與我聯繫、Jason 或 Frank。我們期待不久的將來與您交談。

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

今天的電話會議到此結束。您可以斷開線路。感謝您的參與，祝您有個愉快的一天。