mara - february 11, 2015

MARATHON PATENT GROUP (MARA)

February 11, 2015

David Hoff Founder

iphawk@outlook.com

First Legal Setback, a Settlement, and a Board Resignation

IP HAWK

David Hoff iphawk@outlook.com

@theiphawk http://theiphawk.blogspot.com

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.

Thoughts From the Hawk

Key Data

Price $6.70

TTM Revenue $24.06mm

Enterprise Value $93.12mm

Shares Outstanding 13.64mm

Shares Fully Diluted 19.56mm

Float 9.35mm

52 Week Range $2.78-9.73

3 Month Avg. Volume 112,253

Marathon Patent Group (MARA) issued a press release yesterday afternoon announcing an adverse ruling in their subsidiary

TLI Communications. The Virginia court granted defendants motion to dismiss the cases based on the patent being found

invalid due to an abstract idea and lacks an inventive concept and also cited the SCOTUS decision Alice. A copy of the

opinion can be found here. The cases in Virginia are now dismissed. The company in the press release stated they plan to

appeal the decision. MARA also announced they filed suit in Germany on Monday February 9th, likely in conjunction with

the US dismissal. The German court is not impacted by the SCOTUS Alice decision.

My opinion of the development: MARA is not going to win every single legal decision. By diversifying their patent

holdings they are able to mitigate the effects of a negative decision. The company will be faced with more negative

decisions in the future. Like baseball, a one for three average is great and will get you inducted into the hall of fame. A one

for three average in their cases should yield a substantial amount of revenue to MARA in the future.

There was a filing yesterday in the East Texas case with subsidiary Vantage Point and defendant Texas Instruments, which

shows a successful mediation between the parties. Texas Instruments filed an IPR challenging the patent claims at the patent

office, which was not instituted for review on January 6th, 2015. A Markman hearing was held on January 29th, 2015, which

I anticipate an order construing the claims within the next 3 months. I view this as an excellent development and is right in

the sweet spot where MARA is able to negotiate agreements with parties. It is further proof that Markman hearings and

positive developments at the patent office will derive settlements. It could be the first of many in the Vantage Point

subsidiary.

In an 8K filed this morning John Stetson tendered his resignation from his positions Secretary, EVP and a member of the

Board of Directors. A resignation letter was also attached, in which he was confident in the company due to the recent

$50mm funding and company’s execution over the past 2.5 years. He also wrote he will remain a large shareholder and

accessible to the company in the future. I view the development as a non-event. I expect the company to upgrade their BOD

with a new addition within the next few weeks. John is fairly young and likely wants to pursue other opportunities on a full

time basis. Replacing him with a industry veteran will be a welcome addition to the BOD.