Business Context and Reporting Period
This Form 8-K is filed by Marathon Patent Group, Inc. (noting the metadata reference to MARA Holdings, Inc. appears to be a discrepancy as the filing text identifies Marathon Patent Group, Inc.) for the reporting period of August 25, 2017, covering events occurring on August 22 and August 23, 2017. The company is an emerging growth company incorporated in Nevada.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial figures disclosed relate to executive compensation and a specific asset transfer:
- Retention Payment: $500,000 aggregate payment to the CEO.
- Consulting Fees: $20,000 per month for six months commencing October 1, 2017.
- Equity Grant: 3,000,000 shares of restricted common stock.
- Asset Transfer: All shares of common stock of 3d Nanocolor Corp. held by the Company.
Material Changes
The primary material change reported is the termination of the existing employment agreements with Doug Croxall, the Chief Executive Officer and Chairman of the Board, effective August 22, 2017. This was replaced by a Retention Agreement under which Mr. Croxall will continue to serve until no later than September 30, 2017. Under the new agreement, Mr. Croxall forfeits rights to severance, change of control, or termination pay previously available under the terminated agreements.
Outlook, Risks, and Contingencies
Legal Contingency: On August 23, 2017, the Company became aware of a summons and complaint filed by Jeffrey Feinberg against the Company and certain officers and directors. The lawsuit was filed in the Supreme Court of the State of California, County of Los Angeles, on August 21, 2017. The filing does not detail the specific allegations or the Company's defense strategy.
Management Commentary: The filing notes that Mr. Croxall was selected as a director based on his knowledge of the patent acquisition and monetization business. There are no family relationships between Mr. Croxall and other directors or officers.
Investor Verification Checklist
- Verify the exact nature and allegations of the lawsuit filed by Jeffrey Feinberg against the Company and its officers.
- Confirm the status of the shareholder approval required for the 3,000,000 share equity grant under the 2017 Equity Incentive Plan.
- Clarify the strategic rationale for transferring all shares of 3d Nanocolor Corp. to the CEO as part of the retention package.
- Monitor the transition of leadership duties given the CEO's term is set to end no later than September 30, 2017.