Item 1.01 Entry into a Material Definitive Agreement.
On April 18, 2017, Marathon Patent Group, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors for the sale of an aggregate of 3,800,000 shares of the Company’s common stock, at a purchase price of $0.70 per share, and warrants to purchase 2,280,000 shares of common stock, at an exercise price of $0.83 per share, subject to adjustment as provided under the terms of the warrants. The warrants will be exercisable commencing six months from the date of issuance for a period expiring five years after the date six months after the date of issuance. The closing of the sales of the shares and warrants occurred on April 21, 2017.
The shares of common stock were issued in a registered direct offering pursuant to a prospectus supplement filed with the Securities and Exchange Commission on April 19, 2017, in connection with a takedown from the Registration Statement on Form S-3 (File No. 333-198569), which was declared effective by the Securities and Exchange Commission on January 6, 2015. A copy of the opinion of Sichenzia Ross Ference Kesner LLP relating to the legality of the issuance and sale of the shares is attached as Exhibit 5.1 hereto.
Pursuant to a registration rights agreement (the “Registration Rights Agreement”) entered into between the Company and the investors, the Company agreed to register the resale of the shares of common stock underlying the warrants, on a Form S-1 registration statement to be filed with the Securities and Exchange Commission (the “SEC”) within 45 days following the date of the offering (the “Filing Date”) and to cause the registration statement to be declared effective within 75 days following the date of the offering (or in the event of a “full review” by the SEC, the 105th calendar day following the date of the offering).
Pursuant to a placement agency agreement between the Company and Aegis Capital Corp. (“Aegis”), the Company retained Aegis as the exclusive placement agent for the offering of shares and warrants and paid Aegis a fee of $150,733 (equal to 5.67% of the gross proceeds) in connection with the offering. The Company also issued to Aegis, on the closing date, a warrant (the “Agent’s Warrant”) to purchase 57,000 shares of common stock at an exercise price equal to $0.77 per share. The Agent’s Warrant issued to Aegis is exercisable commencing upon issuance for a period expiring five years from the effective date of the offering.
In connection with the sale of the warrants issued to the investors and the Placement Agent, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.
The foregoing summary of the terms of the warrants, the Agent’s Warrant, the Purchase Agreement, the Registration Rights Agreement, and the Placement Agency Agreement issued to the investors, is subject to, and qualified in its entirety by, such documents attached hereto as Exhibit 4.1, 10.1, 10.2, and 10.3 respectively, which are incorporated herein by reference.