MARATHON PATENT GROUP,INC. (NASDAQ:MARA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into Material Definitive Agreements
On August7, 2017, Marathon Patent Group,Inc. (the “Company”) entered into an exchange agreement (the “Exchange Agreement”) with the holder (the “Holder”) of a convertible promissory note, dated October16, 2014 (the “Note”), issued by the Company in the aggregate principal amount of $500,000. to the Exchange Agreement, the Holder agreed to exchange the Note, together with interest, in the amount of $2,750 due and payable thereon and relinquish any and all rights thereunder, for five hundred and two thousand seven hundred and fifty (502,750) shares of the Company’s newly authorized SeriesD Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Shares”). Each Preferred Share is initially convertible into five (5)shares of our common stock in accordance with the terms of the Certificate of Designation Of Rights, Powers, Preferences, Privileges And Restrictions of The 0% SeriesD Convertible Preferred Stock (the “SeriesD Certificate of Designation”).
The Company has relied upon the exemption from registration provided by Section3(a)(9)under the Securities Act of 1933, in connection with the issuance of the Preferred Shares.
The foregoing summary of the terms of the Exchange Agreement is incomplete and subject to, and qualified in its entirety by, the actual terms of the Exchange Agreement, the form of which is attached hereto as Exhibit10.1, which is hereby incorporated by reference.
The Preferred Shares are convertible into shares of common stock based on a conversion calculation equal to the stated value of such Preferred Shares, plus all accrued and unpaid dividends, if any as of such date of determination, divided by the conversion price. The stated value of each Preferred Share is $1.00 and the initial conversion price is $0.20 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. The Preferred Shares, with respect to dividend rights and rights on liquidation, winding-up and dissolution, in each case will rank senior to the Company’s common stock and all other securities of the Company that do not expressly provide that such securities rank on parity with or senior to the Preferred Shares. Until converted, each holder of Preferred Shares shall be entitled to the number of votes for each Preferred Share owned equal to the number of shares of Common Stock such Preferred Shares are convertible into (voting as a class with Common Stock), but not in excess of the conversion limitations set forth in the SeriesD Certificate of Designation.
Without limiting any other provision of the SeriesD Certificate of Designation, the Company may not authorize or issue any additional or other shares of capital stock that is (i)of senior rank to the Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding-up of the Company, (ii)of pari passu rank to the Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding-up of the Company or (iii)any junior stock having a maturity date (or any other date requiring redemption or repayment of such shares of such junior stock) that is prior to the date on which any Preferred Shares remain outstanding, without the prior express consent of the holders of at least a majority of the outstanding Preferred Shares, voting separate as a single class.
The foregoing summary of the terms of the SeriesD Certificate of Designation is incomplete and subject to, and qualified in its entirety by, the actual terms of the SeriesD Certificate of Incorporation, the form of which is attached hereto as Exhibit4.1, which is hereby incorporated by reference.
Item 3.02 Unregistered Sales of Equity Securities.
See Item 1.01 above, with respect to the issuance of the Preferred Shares.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On April7, 2017, the Company filed the Certificate of Designation Of Rights, Powers, Preferences, Privileges And Restrictions of The 0% SeriesD Convertible Preferred Stock with the Secretary of State of the State of Nevada designating 502,750 shares of preferred stock as “0% SeriesD Convertible Preferred Stock”.