February 5, 2015

IP HAWK
MARATHON PATENT GROUP (MARA)
If you believe in Marathon Management then you believe this
is a good deal, its all about execution.

David Hoff

David Hoff
iphawk@outlook.com
Founder
@theiphawk
http://theiphawk.blogspot.com
iphawk@outlook.com

Thoughts From the Hawk

Marathon Patent Group (MARA) filed an 8K tuesday, an amended 8K yesterday morning, and a press release announcing a
$50M long term financing with Fortress Investment Group (FIG).
Highlights:

$15M up front and access to another $35M.

Locked up Erich Spangenberg's shares.
100,000 warrants at $7.44, 5 year warrants.
134,409 shares.
Need to generate $15M in revenue over a 4 quarter period.
Fortress will receive 30% of revenues applied to the $15M until its paid off.

Fortress has done deals with other public patent companies which include, ANDR, CRDS, DSS, INVT, NLST, and SITO.
All of these companies were in distressed situations and were forced to take on aggressive terms favorable to Fortress.
I believe the stock has been weak for two reasons. First there are low expectations for the Q4 2014 earnings release. No
matter how many times it is explained to analyze a patent company based on yearly results and quarterly results tend to be
lumpy. Secondly, investors are like deer in headlights and are in limbo to see the use of proceeds. The last deal was done
with the medical device asset with court rulings pending in Germany.
I expect the use of proceeds to go towards the purchase of another high value litigation portfolio, which will hopefully
already have litigation filed against a number of defendants. I believe it is highly unlikely that MARA will acquire another
publicly traded company.
MARA went from $3mm revenues in 2013 to $20mm+ in revenues in 2014, 500% top line growth. MARA is profitable with
between $8-10mm in cash. With a busy 2015 calendar and an additional $50M in financing it is prime time for Marathon
management to execute.
Key Data
Price

$6.95

TTM Revenue

$24.06mm

Enterprise Value

$97.33mm

Shares Outstanding

13.64mm

Shares Fully Diluted

19.56mm

Float

9.35mm

52 Week Range

$2.78-9.73

3 Month Avg. Volume

113,724

I am long MARA. I have not been paid to prepare or disseminate this report by Marathon or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.