MARATHON PATENT GROUP,INC. (NASDAQ:MARA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into Material Definitive Agreements
Unit Purchase Agreement
On August14, 2017, Marathon Patent Group,Inc. (the “Company”) entered into a unit purchase agreement (the “Unit Purchase Agreement”) with certain accredited investors providing for the sale of $3,503,500 of a total possible offering of up to $5,500,000 (the “Offering”) of 5% secured convertible promissory notes (the “Convertible Notes”), which are convertible into shares of the Corporation’s common stock and a five year warrant (the “Warrants”) to purchase shares of Common Stock with an exercise price of $0.30 per share (the “Warrant Shares”).
5% Convertible Promissory Notes
At the Closing, the Company shall deliver to the investors the Convertible Notes, which shall be in the principal aggregate amount of $3,503,500 payable in full on May14, 2018. The Convertible Notes bear interest at 5% per annum with interest payable in cash upon maturity or in connection with any voluntary or mandatory conversion. The conversion price for the principal in connection with voluntary conversions shall be equal to the lesser of (i)$0.20 per share, or (ii)the closing bid price of the Company’s common stock on the day prior to conversion of the Convertible Note; provided that such conversion price may not be less than $0.10 per share, subject to adjustment as set forth therein.
The Convertible Notes are convertible, in whole or in part, into shares of Common Stock at the option of the holder of the Convertible Note (the “Holder”), at any time and from time to time after the date of issuance and until the Convertible Note is no longer outstanding, subject to a 4.99% beneficial ownership limitation. Upon not less than 61 days’ prior notice to the Company, the Holder may increase the beneficial ownership limitation, provided that the beneficial ownership limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of the Convertible Note held by the Holder.
to the Convertible Notes, the cumulative number of shares of Common Stock issuable upon (a)the exercise of the Warrants issued to the Unit Purchase Agreement and (b)the conversion of the Convertible Notes issued to the Unit Purchase Agreement, may not exceed 19.99% shares of Common Stock, subject to adjustments as set forth in the Convertible Note until shareholder approval is obtained.
The Company may not prepay or redeem the Convertible Notes in whole or in part without the prior written consent of the Holder, and any prepayment must be undertaken on a pro rata basis for all Convertibles Notes then outstanding. Each Convertible Note ranks pari passu in right of payment with all other Convertible Notes now or hereafter issued in accordance with the Unit Purchase Agreement.
Common Stock Purchase Warrant
In connection with the Unit Purchase Agreement entered into with the investors, the Company issued Warrants to the investors to purchase up to 17,517,500 shares of Common Stock with an exercise price of $0.30 per share. The Warrants are exercisable at any time commencing six months from the date of issuance for a term of five (5)years, subject to a 4.99% beneficial ownership limitation which may be increased to 9.99% upon not less than 61 days’ prior notice to the Company. The Warrant may be exercised on a “cashless” basis at any time after six months from the date of issuance of the Warrant if there is no effective Registration Statement registering, or no current prospectus available for the resale of, all of the Warrant Shares.
