SOURCE: Marathon Patent Group, Inc.

Marathon Patent Group, Inc.

October 13, 2014 08:30 ET

Marathon Patent Group Completes Major Transaction for Significant Patent Assets and Accepts Subscriptions for $5.5 Million Financing

LOS ANGELES, CA--(Marketwired - Oct 13, 2014) - Marathon Patent Group, Inc. (NASDAQ: MARA) On October 10, 2014, Marathon Patent Group, Inc. ("Marathon") entered into an interest sale agreement with MedTech Development, LLC. Pursuant to the Interest Sale Agreement, Marathon agreed to acquire from MedTech certain subsidiaries of MedTech consisting of 100% of the limited liability membership interests of OrthoPhoenix, LLC and TLIF, LLC as well as 100% of the shares of MedTech Development Deutschland GmbH. As a result, Marathon became the sole interest holder of OrthoPhoenix and TLIF as well as the sole shareholder and owner of MedTech GmbH. Each of the Subsidiaries owns certain medical technology patents, including pending litigation and settlement and licensing rights that are being acquired by the Company in the transaction.

The patent portfolios included as part of this transaction cover inventions and technologies related to kyphoplasty, intervertrebal inserts and heart valve technology. Cases are currently pending in the United States and Germany with respect to the Kyphoplasty technology, the United States with respect to the intervertrebal technology and Germany with respect to the heart valve technology. More information about the patents can be found at www.marathonpg.com.

The purchase price is $10.0 million in cash, with $1.0 million paid on closing and the remaining consideration paid over a nine-month period.

On October 9, 2014, the Company accepted subscriptions to issue 11% convertible notes in the aggregate principal amount of $5,500,000 due 2018 with 35% warrant coverage. The note and warrants, which on full conversion or exercise, at the initial conversion price of $15.00 per share and $16.50 per share for the warrants, could result in additional new shares being issued.

The notes carry a mandatory conversion clause should the stock trade at a closing price of at least $27.00 per share for any four trading days within an eight trading day period. Additional terms of the transaction may be found in a Form 8K which will be filed with the Securities and Exchange Commission on October 14, 2014.

"We are pleased with the acquisition of the medical device portfolios. We anticipate receiving a ruling on the infringement portion of the kyphoplasty German case on October 30, 2014," said Doug Croxall, Founder and CEO of Marathon Patent Group. "Additionally, with settlements already achieved in these portfolios, we will have recurring royalty revenue. The recurring nature of the revenue should provide some predictability to our upcoming quarterly revenue."

Croxall continued, "We are also pleased to have accepted subscriptions for a private offering with some of our existing shareholders. We expect to be in receipt of all the funds and complete the offering within the next day or two. While the Company continues to generate positive cash flow, the additional capital better positioned us to capitalize on the opportunity to acquire the three patent portfolios from MedTech. As is the case with this purchase and those that preceded it, we will continue to make investments that have the potential of generating a return on investment. I believe our ability to successfully implement and execute our business strategy is clearly evidenced by our recent SEC filing indicating we will be reporting approximately $13.5 million in revenues in our third quarter, up from $3.8 million in the second quarter."

About Marathon Patent Group:

Marathon is a patent acquisition and monetization company. The Company acquires patents from a wide-range of patent holders from individual inventors to Fortune 500 companies. Marathon's strategy of acquiring patents that cover a wide-range of subject matter allows the Company to achieve diversity within its patent asset portfolio. Marathon generates revenue with its diversified portfolio through actively managed concurrent patent rights enforcement campaigns. This approach is expected to result in a long-term, diversified revenue stream. 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.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein, and there shall not be any offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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