Marathon Patent Group, Inc. (Form: S-4/A, Received: 01/24/2018 16:09:31)

Large accelerated filer

Accelerated filer

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Smaller reporting company

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this registration statement.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ]

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Prospectus Summary

This summary highlights selected information from this proxy statement/prospectus/information statement and may not contain all of the information that is important to you. To better understand the Merger, the proposals being considered at the Special Meeting and GBV’s shareholder actions that are the subject of the written consent, you should read this entire proxy statement/prospectus/information statement carefully, including the Merger Agreement attached as Annex A , the opinion of Roth Capital Partners, LLC attached as Annex B and the other annexes to which you are referred herein. For more information, please see the section entitled “Where You Can Find More Information” in this proxy statement/prospectus/information statement.

The Companies

Marathon Patent Group, Inc.

11601 Wilshire Blvd., Ste. 500

Los Angeles, CA 90025

(703) 232-1701

Marathon maintains a portfolio of patents. Marathon acquired patents and patent rights from owners or other ventures and sought to monetize the value of the patents through litigation and licensing strategies, alone or with others. On January 18, 2018, Marathon acquired four new patents related to the transmission and exchange of cryptocurrencies between buyers and sellers increasing its owned patents to 90, exclusive of patents previously contributed to a special purpose entity, which include U.S. patents and foreign patents . Marathon and certain of its subsidiaries entered into a First Amendment to Amended and Restated Revenue Sharing and Securities Purchase Agreement and Restructuring Agreement dated August 3, 2017 (the “First Amendment and Restructuring Agreement”), with DBD Credit Funding LLC (“DBD”) to restructure and replace the obligations of Marathon under an Amended and Restated Revenue Sharing and Securities Purchase Agreement, dated January 10, 2017, amending the original agreement entered into by Marathon and DBD on January 29, 2015. As contemplated in the First Amendment and Restructuring Agreement, in connection with the elimination of Marathon’s long-term debt to DBD, on October 20, 2017 Marathon entered into agreements with DBD and assigned several of its patents to a special purpose entity managed by DBD.

On October 20, 2017, we closed the First Amendment and Restructuring Agreement with DBD to restructure and replace the obligations of Marathon under that certain Amended and Restated Revenue Sharing and Securities Purchase Agreement, dated January 10, 2017, which was originally entered into on January 29, 2015. Pursuant to the First Amendment and Restructuring Agreement, certain patents were assigned to the newly created special purpose entity (“SPE”) elected by DBD, which SPE is under the management and control of an affiliate of DBD. As a result, DBD now has full, direct control over the patents under the SPE structure. Our interest of 30% of the SPE may not have any value after the recoupment of DBD ’s investment and its costs and expenses. We retain no control over, ownership of, or recourse to, the SPE’s patents. As a result, we are wholly-dependent on the efforts and experience of DBD, as well as the costs associated with the efforts of DBD, for any recoveries under these patents as to which we do not anticipate receiving any.

Global Bit Ventures, Inc.

2 Burlington Woods Dr., Ste.100

Burlington, MA 01803

(781) 222-4347

Founded in 2017, GBV is a digital asset mining company. GBV intends to power and secure the blockchain by verifying blockchain transactions using custom hardware and software. GBV intends to use its hardware to mine bitcoin (BTC) and ether (ETH), two different forms of digital assets. Bitcoin and ether rely on different technologies based on the blockchain. Wherein bitcoin is a digital currency and ether is generally associated with smart contracts and digital tokens, GBV will be compensated in digital assets by the respective blockchain network that it secures for its efforts, which is how GBV will earn revenue by mining.

Blockchains are decentralized digital ledgers that record and enable secure peer-to-peer transactions without third party intermediaries. Blockchains enable the existence of digital assets by allowing participants to confirm transactions without the need for a central certifying authority. When a participant requests a transaction, a peer-to-peer network consisting of computers, known as nodes, validate the transaction and the user’s status using known algorithms. After the transaction is verified, it is combined with other transactions to create a new block of data for the ledger. The new block is added to the existing blockchain in a way that is permanent and unalterable, and the transaction is complete. The following illustration outlines the process of a transaction between two digital asset holders.

Digital assets (also known as cryptocurrency) are a medium of exchange that uses encryption techniques to control the creation of monetary units and to verify the transfer of funds. Many consumers use digital assets because it offers cheaper and faster peer-to-peer payment options without the need to provide personal details. Every single transaction made and the ownership of every single digital asset in circulation is recorded in the blockchain. Miners use powerful computers that tally the transactions to run the blockchain. These miners update each time a transaction is made and ensure the authenticity of information. The miners receive a transaction fee for their service in the form of a portion of the new digital “coins” that are issued.

Blockchain based transactions can involve digital assets, contracts, records, or other information.

Mining digital assets typically requires a substantial amount of specialized computer hardware and server equipment including a cost-effective data center to house the hardware. GBV has contracted with a datacenter based in Quebec, Canada, to house and run its first 1,000 specialized servers which commenced operation in late 2017.

In September 2017, GBV contracted with CIARA Technologies, a Canadian affiliate of Hypertec Group, to purchase 1,000 specialized mining servers and associated equipment for approximately $3.98 million, excluding tax. The servers are to be installed and located in Quebec, Canada at a Hypertec Group datacenter. Hypertec Systems Inc. and GBV are parties to a Master Services Agreement and GBV received initial delivery of the servers during October 2017. GBV funded the acquisition with the proceeds of the GBV Notes and other sales of its securities. GBV paid approximately $2.0 million of the purchase order during September 2017 and paid an additional approximately $1.9 8 million during November 2017. GBV currently owns 1,000 GPU mining servers with each server having 13 GPUs capable of 250 GH/s. As of the date of this proxy statement/prospectus/information statement approximately 620 servers are currently online and mining at approximately 140 GH/s in total. GBV anticipates that the remaining GPU servers will come online in February 2018 upon the completion of certain modifications being made to the data center.

In January 2018, GBV contracted to purchase 1,300 of Bitmain’s Antminer S9 miners, which are expected to utilize an estimated 1.8 MW of power once fully deployed and add 14 Ph/s of ASIC mining capacity, for a purchase price of approximately $2.6 million, excluding tax Bitmain is one of the world’s most recognized Application Specific Integrated Circuit (“ASIC”) server manufacturers. The 1,300 Antminer S9s are expected to utilize an estimated 1.8 MW of power once fully deployed and add 14 Ph/s of ASIC mining capacity. The Antminer S9s are able to mine any cryptocurrency using the SHA256 algorithm, including bitcoin. As of the date of this proxy statement/prospectus/information statement, the Antminer S9s are not online or mining.

For additional information about the aforementioned Master Services Agreement by and between GBV and Hypertec Systems, Inc., see “Reasons for Merger” on page 9.

GBV is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. GBV has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, GBV, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the GBV’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Global Bit Acquisition Sub, Inc.

Merger Sub is a wholly owned subsidiary of Marathon, and was formed solely for the purposes of carrying out the Merger.

The Merger (see page 65)

If the Merger is completed, Merger Sub will merge with and into GBV, with GBV surviving as a wholly owned subsidiary of Marathon.

At the Effective Time of the Merger, each share of (A) GBV Common Stock will automatically be cancelled and converted into shares of either Marathon’s Series C Preferred Stock or Marathon’s Common Stock: (B) GBV Series A Stock will automatically be cancelled and converted into shares of either Marathon’s Series C Preferred Stock or Marathon’s Common Stock; and (C) all of GBV Notes will automatically be cancelled and converted into shares of either Marathon’s Series C Preferred Stock or Marathon’s Common Stock. Marathon will not assume outstanding and unexercised warrants and options to purchase shares of GBV’s capital stock, and none are outstanding. The total number of shares of Marathon’s Common Stock and Common Stock that is issuable under the Series C Preferred Stock is 126,674,557. After the completion of the Merger, Marathon will change its corporate name to “Marathon Blockchain, Inc.” or similar name determined by the board of directors of Marathon as required by the Merger Agreement.

The closing of the Merger will occur no later than the second business day after the last of the conditions to the Merger has been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of each such conditions), or at such other time as Marathon and GBV agree. Marathon and GBV anticipate that the consummation of the Merger will occur in the first quarter of 2018. However, because the Merger is subject to a number of conditions, neither Marathon nor GBV can predict exactly when the closing will occur, or if it will occur at all.

Although each of GBV and Marathon have invested in additional servers and acquired additional assets since the execution of the Merger Agreement, the parties have agreed that the Merger Consideration (as defined herein) will not be adjusted as a result of such purchases.

Reasons for the Merger (see page 67)

In connection with Marathon’s agreement to acquire GBV, Marathon has secured financing in connection with winding down the patenting business and working capital for reduced operations while it prepares for the acquisition of GBV. Marathon is transitioning from its historic business into businesses involved in supporting the blockchain and digital asset (cryptocurrency) ecosystem , although Marathon may continue to acquire intellectual property related to and seek to enforce patents involving blockchain and digital asset technologies directly or with third parties. While reducing its reliance on patent enforcement and licensing for the generation of revenue, Marathon has undertaken steps to dedicate its resources and efforts towards blockchain and digital asset (cryptocurrency) acquisition. Cryptocurrencies are one form of digital assets. As a result, we sometimes use the phrases “cryptocurrency” and “digital assets” interchangeably. These activities include the acquisition of businesses and assets engaged in or necessary for supporting the business of mining, as described below, including the direct acquisition of businesses, equipment and technology that service the blockchain ecosystem as well as the outright acquisition of digital assets, such as cryptocurrency, that may be held for appreciation or exchanged for other digital or non-digital assets or sold. Marathon intends to complete the acquisition of GBV and enter into a new and unproven business model with significant risks, both known and unknown, as more fully described in the section titled “Risk Factors”, below. In connection with that newly-adopted business strategy, Marathon anticipates it will be necessary to add personnel to the management team, as well as other personnel, to enhance assessment of controls over risks, to review and seek approval of regulatory bodies (including the NASDAQ Capital Market for continued listing of its Common Stock) and will face other uncertainties associated with the evolving business and regulatory risks of blockchain and digital assets (cryptocurrency). There is no assurance that Marathon will be able to successfully navigate these risks or that regulatory and other requirements will not have a material adverse effect on the goals and objectives of Marathon or prevent Marathon from realizing its objectives.

On September 27, 2017, GBV placed a purchase order with Ciara Technologies, Inc., a company incorporated under the laws of Canada (“Ciara”), whereby Ciara agreed to sell certain equipment to GBV pursuant to a Master Services Agreement (the “Master Services Agreement”) dated December 15, 2017, with Hypertec Systems, Inc., a company incorporated under the laws of Canada which is an affiliate of Ciara (“Hypertec Systems”). In accordance with the terms and subject to the conditions of the Master Services Agreement, Hypertec Systems, or its affiliates, agents, suppliers or subcontractors, shall provide to GBV, the services and equipment which are set forth in the Master Services Agreement, including the equipment in the purchase order, for a term of 36 months (the “Term”), which term is automatically renewable for additional one year periods unless GBV gives notice of termination. Pursuant to the Master Services Agreement, Hyertec Systems shall provide such standard services as may be requested by GBV from time to time, including, but not limited to (i) providing dedicated floor space for equipment and storage, (ii) heating, ventilation, air conditioning and fire suppression facilities, (iii) sufficient electrical power, (iv) multiple security level including turnstile doors, access codes and biometrics, (v) on-site staff 24-hours/7-days, (vi) access to one CAT5E for internet connectivity and (vii) access to one steel shelf for every 25kW of power required (the “Services”). In exchange for such Services during the Term, GBV shall pay to Hypertec Systems a monthly recurring charge for base capacity reservation fees (“MRC”), and any applicable charges including, but not limited to, features and installation charges. Hypertec Systems shall provide all services, free of charge, except for Managed Internet Bandwidth Services, dedicated secured storage spare and the kWh used, until such time as the servers purchased from Ciara are running at a hash rate of at least two hundred and thirteen (213) gigahash per second for a period of five (5) consecutive days as determined by Hypertec Systems , provided that it is consistent with the hash rate shown on GBV’s pool. The equipment purchased from Ciara pursuant to the purchase order dated September 27, 2017, had a purchase price of approximately $3.98 million, excluding tax, and consisted of mining servers and other related equipment. In addition to the MRC, GBV shall also reimburse Hypertec Systems for actual metered power used by GBV at the actual kWh rates paid by Hypertec Systems to its power provider, on a monthly basis, multiplied by the power usage effectiveness. GBV has the ability to request other optional services from Hypertec Systems for additional costs. Hypertec Systems is required to maintain certain insurance levels covering the equipment of GBV, which equipment is housed on their premises. In connection with GBV’s purchase of 1,300 additional Antminer S9 miners, these servers have not been installed, and GBV is currently seeking an appropriate location to install these servers.

Following the Merger, the combined organization will focus on the development of GBV’s new business involving the blockchain ecosystem and generation of digital assets. GBV is focused on mining digital assets and intends to add specialized computer equipment and plans to expand its activities to mine new digital assets.

	●	Management Team . It is expected that the combined organization will be led by the management from GBV and a board of directors with representation from each of Marathon and GBV.

	●	Cash Resources. The combined organization is expected to have approximately $8.0 million in cash and cash equivalents at the closing of the Merger, which Marathon and GBV believe is sufficient to enable GBV to implement its near-term business plans.

Opinion of the Marathon Financial Advisor (see page 67)

A written opinion dated December 13, 2017, addressed to Marathon’s board of directors, provided a “fairness opinion” to the effect that, as of the date of the opinion and based on and subject to various assumptions, qualifications and limitations described in the opinion, the aggregate consideration to be paid by Marathon in the proposed Merger was fair, from a financial point of view, to holders of Marathon’s Common Stock. Roth Capital Partners, LLC (“Roth”) rendered the opinion. The full text of this written opinion to Marathon’s board of directors, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement/prospectus/information statement and is incorporated by reference in its entirety herein. Holders of Marathon’s Common Stock are encouraged to read the opinion carefully in its entirety.

The opinion was provided to Marathon’s board of directors in connection with its evaluation of the aggregate consideration to be paid for by Marathon in the Merger. It does not address any other aspect of the proposed Merger or any alternative to the Merger and does not constitute a recommendation as to how Marathon’s shareholders of Marathon should vote or act in connection with the Merger or otherwise.

Overview of the Merger Agreement

Merger Consideration (see page 76)

At the Effective Time, all outstanding shares of GBV ’s capital stock and GBV Notes shall convert into the right to receive shares of Marathon’s Series C Preferred Stock or Common Stock as follows:

	●	At the Effective Time of the Merger, each share of (A) common stock of GBV, par value $0.0001 per share (“GBV Common Stock”) will automatically be cancelled and converted into shares of either (x) Series C Preferred Stock of Marathon (the “Series C Preferred Stock”) or (y) common stock, par value $0.0001 per share of Marathon (“Common Stock”): (B) Series A Preferred Stock, par value $0.0001 per share, of GBV (“GBV Series A Stock”) will automatically be cancelled and converted into shares of either (x) Series C Preferred Stock or (y) Common Stock; and (C) all of GBV’s outstanding convertible debt (“GBV Notes”) will automatically be cancelled and converted into shares of either Marathon’s Series C Preferred Stock or Common Stock. Marathon will not assume outstanding and unexercised warrants and options to purchase shares of GBV’s capital stock, and none are outstanding. The total number of shares of Marathon’s Common Stock and Common Stock that is issuable under the Series C Preferred Stock is 126,674,557.

	●	Marathon shareholders will continue to own and hold their existing shares of Marathon’s Common Stock and Marathon’s preferred stock. Marathon debt holders owning $ 2,613,948 of 5% convertible promissory notes (the “Marathon Notes”) as of January 22, 2018 , will convert their unconverted notes into Series E-1 Convertible Preferred Stock of Marathon (“Series E-1 Preferred Stock”) if not converted to Common Stock prior to the Merger. Marathon Series E Convertible Preferred Stock (“Series E Preferred Stock”) holders owning 5, 511.70 shares of Series E Preferred Stock convertible into 5, 511,702 shares of Common Stock) as of January 22, 2018 will continue to remain outstanding. The vesting of 448,775 unexercised options to purchase shares of Marathon’s Common Stock, which are substantially vested, will remain outstanding as of the closing of the Merger. All 794,717 warrants to purchase shares of Marathon’s Common Stock are currently exercisable into 794,717 shares of Common Stock. The Marathon’s Common Stock, preferred stock, warrants and options will remain in effect pursuant to their terms. Immediately after the conversion of the GBV Common Stock, the GBV Series A Stock and the GBV Notes, Marathon shall have issued 81% of its issued and outstanding Common Stock, on a fully-diluted basis, under the Merger Agreement to GBV prior to giving effect of the issuance of 1 million shares of Marathon’s Common Stock on December 13, 2017 at $5.00 per share in a registered offering subsequent to the Merger Agreement and other changes in Marathon’s capitalization following the date of the Merger Agreement. For these purposes, Marathon’s fully-diluted Common Stock is defined as the outstanding common stock of Marathon, plus conversion of preferred stock, options and warrants of Marathon, prior to the registered offering (the “Fully-Diluted Common Stock of Marathon”), with Marathon current shareholders, the holders of the Marathon Notes, option holders and warrant holders owning, or holding rights to acquire, approximately 19% the Fully-Diluted Common Stock of Marathon upon closing of the Merger (as such percentages are increased or reduced for the registered offering and any other shares issued or cancelled prior to the closing of the Merger).

●

After the completion of the Merger, Marathon will change its corporate name to “Marathon Blockchain, Inc.” or similar name determined by the board of directors of Marathon as required by the Merger Agreement. For a more complete description of the Merger exchange ratio please see the section entitled “The Merger Agreement” in this proxy statement/prospectus/information statement.

The Merger Agreement does not include a price-based termination right, and there will be no adjustment to the total number of shares of Marathon’s Common Stock that GBV’s shareholders will be entitled to receive for changes in the market price of Marathon’s Common Stock after the date the Merger Agreement was signed. Accordingly, the market value of the shares of Marathon’s Common Stock issued pursuant to the Merger will depend on the market value of the shares of Marathon’s Common Stock at the time the Merger closes, and could vary significantly from the market value on the date of this proxy statement/prospectus/information statement and the date of the Merger Agreement. The full text of the Merger Agreement is incorporated by reference into this proxy statement/prospectus/information statement.

Treatment of Marathon’s Stock Options and Warrants (see page 135)

The number of shares of Marathon’s Common Stock underlying such options and the exercise price for such options as of January 22, 2018, is 448,775, which are substantially vested, at a weighted average exercise price of $16.22. The terms governing options to purchase Marathon’s Common Stock will otherwise remain in full force and effect following the closing of the Merger.

On November 28, 2017, Marathon entered into an exchange agreement with the holders of outstanding warrants to purchase 6,656,000 shares of the Marathon’s Common Stock, originally issued on August 31, 2017 and on September 27, 2017, and such holders exchanged such warrants and relinquished any and all rights thereunder for 5,511.70 shares of Marathon’s newly authorized Series E Preferred Stock, based on the cashless exercise calculation of the warrant. The 5,511.70 shares of Series E Preferred Stock, issued on November 30, 2017, are convertible into an aggregate of 5,511,702 shares of Common Stock.

The Series E Preferred Stock is convertible into shares of Common Stock based on a conversion calculation equal to the stated value of each share of Series E Preferred Stock, plus all accrued and unpaid dividends, if any as of such date of determination, divided by the conversion price. The stated value of each share of Series E Preferred Stock is $6,000 and the initial conversion price is $6.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. The Series E Preferred stock, with respect to dividend rights and rights on liquidation, winding-up and dissolution, in each case will rank senior to Marathon’s Common Stock and all other securities that do not expressly provide that such securities rank on parity with or senior to the Series E Preferred Stock. Until converted, each holder of Series E Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock such Series E Preferred Stock is convertible into (voting as a class with Common Stock), but not in excess of the conversion limitations set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of the 0% Series E Convertible Preferred Stock (the “Series E Certificate of Designation”).

Without limiting any other provision of the Series E Certificate of Designation, Marathon may not authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series E Preferred Stock in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding-up of Marathon, (ii) of pari passu rank to the Series E Preferred Stock in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding-up of Marathon or (iii) any junior stock having a maturity date (or any other date requiring redemption or repayment of such shares of such junior stock) that is prior to the date on which any Series E Preferred Stock shall remain outstanding, without the prior express consent of the holders of at least a majority of the outstanding shares of Series E Preferred Stock, voting separate as a single class.

The Series E-1 Preferred Stock issued pursuant to the Merger Agreement will rank junior in all respects to the Series E Preferred Stock.

Treatment of GBV’s Stock Options and Warrants (see page 75)

There are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, contracts, arrangements or undertakings of any kind to which GBV is a party or by which GBV is bound (i) obligating GBV to issue, deliver or sell, or cause to be issued, delivered or sold, equity interests in, or any security convertible or exercisable for or exchangeable into any equity interest in, GBV, (ii) obligating GBV to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of GBV Common Stock.

Conditions to the Completion of the Merger (see page 135)

To consummate the Merger, Marathon’s shareholders must approve (a) the Merger Agreement and the transactions contemplated thereby, including the Merger and the issuance of shares of Marathon’s Common Stock in the Merger, and (b) an amendment to the Amended and Restated Articles of Incorporation of Marathon effecting the Marathon Name Change. Additionally, GBV’s shareholders must adopt the Merger Agreement thereby approving the Merger and the other transactions contemplated by the Merger Agreement. In addition to obtaining such shareholder approvals and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived.

No Solicitation (see page 140)

Subject to any fiduciary obligations applicable to its boards of directors, under the Merger Agreement Marathon and GBV shall not (and shall not cause or permit any of their affiliates to) engage in any discussions or negotiations with any person or take any action that would be inconsistent with the transactions contemplated by the Merger Agreement. GBV shall notify Marathon immediately if any person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing. Marathon shall notify GBV immediately if any person makes any proposal, offer, inquiry or contact with respect to any of the foregoing.

Marathon and GBV also agree they will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press releases or other public statements with respect to the Merger Agreement or the Merger and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchanges.

Termination of the Merger Agreement (see page 145)

Either Marathon or GBV can terminate the Merger Agreement under certain circumstances, which would prevent the Merger from being consummated. The Merger Agreement provides for closing of the Merger on or before February 28, 2018, as the “outside termination date”. However, Marathon and GBV intend to amend the Merger Agreement to extend the termination date to March 15, 2018, subject to consecutive 14-day extensions upon mutual written consent, but no later than April 30, 2018. Any further extensions after April 30, 2018, shall require a mutual agreement between Marathon and GBV.

Termination Fee (see page 147)

Neither Marathon nor GBV will be required to pay any termination fees or reimburse the other party for expenses incurred in connection with the Merger.

GBV Notes (see page 149)

In September 2017, GBV issued aggregate amount of $2,000,000 in secured convertible notes payable, or the GBV Notes, to multiple investors. The GBV Notes are convertible into GBV’s common stock at $0.20 per share, subject to adjustments including an adjustment upon issuance of subsequent shares of common stock, have a 5% annual interest rate and mature on March 6, 2019 and March 28, 2019. The GBV Notes are secured by all assets and properties of the Company. On October 17, 2017, GBV issued a secured convertible note to an investor for $1,750,000 convertible into GBV Common Stock at $0.20 per share, subject to adjustments including an adjustment upon issuance of subsequent shares of common stock, has a 5% annual interest rate and matures on March 28, 2019. The GBV Notes will be converted into Marathon’s Series C Preferred Stock or Common Stock at the Effective Time of the Merger.

Certain current shareholders and holders of the Marathon Note own GBV Notes in addition to their Marathon holdings and will receive additional shares of Marathon’s Series C Preferred Stock or Common Stock upon the closing of the Merger.

It is expected by both Marathon and GBV that all of Marathon’s shareholders and holders of the Marathon Note who are GBV shareholders or holders of the GBV Notes will cast all of their votes for approval of Proposal Nos. 1 and 2.

Support and Voting Agreements (see page 74)

On November 1, 2017, Marathon entered into an amendment with Doug Croxall, Marathon’s Chief Executive Officer (the “Amendment to Retention Agreement”), to amend the retention agreement signed on August 22, 2017 , whereby his tenure as Chief Executive Officer would be extended until December 31, 2017. Mr. Croxall entered into a Voting and Standstill Agreement on November 1, 2017, whereby he agreed to vote all of the shares he either directly or beneficially owns or acquires as instructed by Marathon’s board of directors and to not sell any shares until 10 days after a change of control as defined in the agreement. Mr. Croxall received 700,000 shares of Marathon’s Common Stock in connection with the agreements.

Lock-Up Agreements (see page 74)

As of January 22, 2018, Marathon’s shareholders who have committed to execute lock-up agreements beneficially owned in the aggregate approximately 5.9% of the outstanding shares of Marathon’s Common Stock.

Management Following the Merger (see page 78 )

The Merger Agreement does not specify or require specific management appointments. Marathon and GBV are expected to agree to a management team to afford continuity to the combined companies as well as management with skills in blockchain and digital assets businesses. It is expected that the appointment of all management and directors will be determined prior to the closing of the Merger.

Interests of Certain Directors, Officers and Affiliates of Marathon and GBV (see pages 76 and 90 )

In considering the recommendation of Marathon’s board of directors with respect to the issuance of Marathon’s Common Stock pursuant to the Merger Agreement and the other matters to be acted upon by Marathon’s shareholders at the Special Meeting, Marathon’s shareholders should be aware that certain members of Marathon’s board of directors and executive officers of Marathon have interests in the Merger that may be different from, or in addition to, interests they have as Marathon’s shareholders. For example, Marathon has entered into certain agreements with each of its remaining executive officers (Doug Croxall and Francis Knuettel II) that may result in the receipt by such executive officers of cash severance payments and other following the Effective Time of the Merger, and have received cash payments and other benefits in connection with the Merger Agreement prior to the Effective Time (collectively, not individually, and excluding the value of any accelerated vesting of equity awards).

Doug Croxall, Marathon’s Chief Executive Officer, will receive a retention payment in the total amount of $500,000 pursuant to the Amendment to Retention Agreement, of which payment $312,500 was paid previously and $187,500 is payable upon the closing of the Merger.

As of January 22, 2018 , Marathon’s directors and executive officers beneficially owned, in the aggregate approximately 7.6 % of the outstanding shares of Marathon’s Common Stock which will be shares of the parent company of GBV following the Merger.

In considering the recommendation of GBV’s board of directors with respect to approving the Merger and related transactions by written consent, GBV’s shareholders should be aware that certain members of GBV’s board of directors and certain of GBV’s executive officers have interests in the Merger that may be different from, or in addition to, interests they have as GBV’s shareholders. For example, certain of GBV’s directors and executive officers or their family members have invested in the GBV Notes and acquired “founders” shares at reduced prices than may have been available to other GBV shareholders but which will be exchanged, at the closing of the Merger, and become shares of Marathon’s Series C Preferred Stock or Common Stock at the same ratio of other GBV Common Stock, GBV Series A Stock and GBV Notes, certain of GBV’s directors and executive officers are expected to become directors and executive officers of Marathon upon the closing of the Merger, and all of GBV’s directors and executive officers will be entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement or upon closing of the Merger.

As of January 22, 2018 , all of GBV’s directors and executive officers, together with their affiliates, owned approximately 3. 5 % of the outstanding shares of GBV’s capital stock, on an as converted to common stock basis.

Risk Factors (see page 25)

Both Marathon and GBV are subject to various risks associated with their businesses and their industries. In addition, the Merger poses a number of risks to each company and its respective shareholders, including the possibility that the Merger may not be completed and the following risks:

	●	The exchange share issuance amounts under the Merger Agreement are not adjustable based on the market price of Marathon’s Common Stock, so the Merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed. For example on December 11, 2017, Marathon closed on a sale of one million shares with a $5 million investment in its Common Stock and of 1,354,546 shares with a $7.4 million investment in its Common Stock , as a result of which the Merger Agreement was amended to provide for removal of a percentage ratio and only the share issuance amounts will be issued as agreed;

	●	The exchange share issuance amounts under the Merger Agreement are not adjustable based on the net cash of either Marathon or GBV at the Effective Time, so the relative ownership of the combined organization as between current shareholders of GBV and current shareholders of Marathon may not reflect the ratio of net cash of Marathon and GBV, respectively, at the closing of the Merger;

	●	The Merger may be completed even though material adverse changes may result solely from the announcement of the Merger, changes in the industry in which Marathon and GBV operate that apply to all companies generally and other causes;

	●	Some of Marathon’s and GBV’s respective officers and directors have interests that are different from or in addition to those considered by other shareholders of GBV and Marathon and which may influence them to support or approve the Merger;

	●	The market price of the combined organization’s (Marathon’s) common stock may decline as a result of the Merger;

	●	Marathon’s and GBV’s shareholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger;

	●	During the pendency of the Merger, Marathon and GBV may not be able to enter into a business combination with another party under certain circumstances because of restrictions in the Merger Agreement, which could adversely affect their respective businesses;


	●	Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement;

	●	Because the lack of a public market for shares of GBV’s capital stock and GBV Notes makes it difficult to evaluate the fairness of the Merger, GBV’s shareholders and GBV Note holders may receive consideration in the Merger that is less than the fair market value of the shares of GBV’s capital stock or GBV Notes and/or Marathon may pay more than the fair market value of the shares of GBV’s capital stock and/or GBV Notes; and

	●	If the conditions to the Merger are not met, the Merger will not occur.

These risks and other risks are discussed in greater detail under the section entitled “Risk Factors” in this proxy statement/prospectus/information statement. Marathon and GBV both encourage you to read and consider all of these risks carefully.

Regulatory Approvals (see page 129)

Marathon must comply with applicable federal and state securities laws and the rules and regulations of The NASDAQ Capital Market (“NASDAQ”) in connection with the issuance of shares of Marathon’s Common Stock and the filing of this proxy statement/prospectus/information statement with the SEC. As of the date hereof, the registration statement of which this proxy statement/prospectus/information statement is a part has not become effective.

NASDAQ Stock Market Listing (see page 129)

Prior to consummation of the Merger, Marathon intends to file an initial listing application with NASDAQ which is required for continued listing of Marathon’s Common Stock on NASDAQ. If such application is accepted, Marathon anticipates that Marathon’s Common Stock will be listed on The NASDAQ Capital Market following the closing of the Merger under the trading symbol “MARA”. There can be no assurance that such application will be accepted of that Marathon will be able to continue to be listed on NASDAQ. On January 2, 2018 Marathon received written notification of non-compliance from NASDAQ pursuant to NASDAQ’s Listing Rule 5620(a) and 5810(c)(2)(G) for its failure to hold an annual meeting of shareholders during 2017. Marathon has scheduled an annual meeting of shareholders for February 8, 2018, which Marathon believes will result in regaining compliance with NASDAQ’s listing requirement for such deficiency.

Anticipated Accounting Treatment (see page 130)

For accounting purposes, GBV is considered to be acquiring Marathon in the Merger.

Appraisal Rights (see page 130)

Holders of Marathon’s capital stock are not entitled to appraisal rights in connection with the Merger under Nevada law. Holders of GBV’s capital stock who do not consent to or vote in favor of the Merger, however, are entitled to appraisal rights in connection with the Merger under Nevada law. For more information about such rights, see the provisions of Sections 92A.300 through 92A.500 of the Nevada Revised Statutes (“NRS”) attached hereto as Annex C , and the section entitled “The Merger—Appraisal Rights” in this proxy statement/prospectus/information statement.

Comparison of Shareholder Rights (see page 273)

Both Marathon and GBV are incorporated under the laws of the State of Nevada and, accordingly, the rights of the shareholders of each are currently, and will continue to be, governed by the NRS. If the Merger is completed, GBV’s shareholders and holders of the GBV Notes as well as the holders of Marathon Notes will become shareholders of Marathon, and their rights will be governed by the NRS, Marathon’s Amended and Restated Bylaws and, Marathon’s Amended and Restated Articles of Incorporation (as amended by the amendments set forth in Annex D assuming Proposal No. 2 is approved). The rights of Marathon’s shareholders contained in Marathon’s Amended and Restated Articles of Incorporation and Marathon’s Amended and Restated Bylaws differ from the rights of GBV’s shareholders under GBV’s Amended and Restated Articles of Incorporation and GBV’s Bylaws , as more fully described under the section entitled “Comparison of Rights of Holders of Marathon Stock and GBV Stock” in this proxy statement/prospectus/information statement.

Nevada		6794		01-0949984
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Title of Each Class of Securities to be Registered	Amount to be Registered			Proposed Maximum Offering Price Per Security			Proposed Maximum Aggregate Offering Price			Amount of Registration Fee
Common stock, par value $0.0001 per share		4,372,429	⁽¹⁾	$	5.62	⁽²⁾	$	24,573,050.98	⁽²⁾	$	3,059.34
Common stock, par value $0.0001 per share, underlying Series C Preferred Stock		122,302,128	⁽¹⁾	$	5.62	⁽²⁾	$	687,337,959.36	⁽²⁾	$	85,573.58
Common stock, par value $0.0001 per share, underlying Series E Preferred Stock		5,511,702		$	5.62	⁽²⁾	$	30,975,765.24	⁽²⁾	$	3,856.48
Common stock, par value $0.0001 per share, underlying Series E-1Preferred Stock		5,067,435	⁽¹⁾	$	5.62	⁽²⁾	$	28,478,984.70	⁽²⁾	$	3,545.63
Total		137,253,694		$	5.62		$	771,365,760.28		$	96,035.03

	By Order of the Board of Directors:

	/s/ Merrick D . Okamoto
	Merrick D . Okamoto,
	Chairman of the Board of Directors

THE MERGER		68
Background of the Merger		68
Marathon’s Reasons for the Merger		70
GBV Reasons for the Merger		70
Opinion of the Marathon’s Financial Advisor		70
Interests of Certain Directors, Officers and Affiliates of Marathon and GBV		76
Interests of the GBV Directors and Executive Officers in the Merger		77
Management Following the Merger		78
Limitations of Liability and Indemnification		78
GBV’s Stock Options and Warrants		78

THE MERGER AGREEMENT		79
General		79
Merger Consideration		79
Directors and Officers of Marathon Following the Merger		80
Background of Officers and Directors		80
Directors and Officers of GBV Following the Merger		82
Rights, Privileges and Liabilities of Surviving Corporation		82
Articles of Incorporation and Bylaws of Marathon and GBV		82
Conditions to the Consummation of the Merger		82
Representations and Warranties		83
Other Agreements		84
Description of Marathon’s Series C Convertible Preferred Stock		84
Description of Marathon’s Series E-1 Convertible Preferred Stock		84

AGREEMENTS RELATED TO THE MERGER		85
Lock-Up Agreements		85
Voting and Standstill Agreements		85

MATTERS BEING SUBMITTED TO A VOTE OF MARATHON’S SHAREHOLDERS		85
Proposal No. 1: Approval of the Merger and the Issuance of Common Stock in the Merger		85
Proposal No. 2: Approval of Marathon Name Change		86
Proposal No. 3: Approval of Possible Adjournment of the Marathon Special Meeting		86

MARKET PRICE AND DIVIDEND INFORMATION		87
Marathon’s Common Stock		87
Dividends		87

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER		87
Generally		87
U.S. Federal Income Tax Consequences of the Merger to U.S. Holders		89
Reporting and Retention Requirements		89
Ownership Interests		89
Equity Compensation Plans		90
Interests of Certain GBV Directors and Officers in the Merger		90
Form of the Merger		91
Merger Consideration		91
Effective Time of the Merger		92
Regulatory Approvals		92
NASDAQ Stock Market Listing		92
Anticipated Accounting Treatment		93
Appraisal Rights		93

	(1)	Reflects the number of shares of the registrant to be issued to the security holders of Global Bit Ventures, Inc. (“GBV”).

	(2)	Pursuant to Rule 457(c) under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is equal to the product obtained by multiplying (a) $5.62, which represents the average of the high and low prices of the registrant on December 14, 2017, by (b) the number of shares of registrant’s securities issuable in connection with the Merger.

	By Order of Marathon Board of Directors,

	Merrick Okamoto Chairman of the Board of Directors Los Angeles, California January [●], 2018

QUESTIONS AND ANSWERS ABOUT THE MERGER		1

PROSPECTUS SUMMARY		6
The Companies		6
The Merger		8
Reasons for the Merger		9
Opinion of the Marathon Financial Advisor		10
Overview of the Merger Agreement		11
Merger Consideration		11
Treatment of Marathon’s Stock Options and Warrants		12
Treatment of GBV’s Stock Options and Warrants		12
Conditions to the Completion of the Merger		12
No Solicitation		12
Termination of the Merger		12
Termination Fee		13
GBV Notes		13
Support and Voting Agreements		13
Lock-Up Agreements		13
Management Following the Merger		14
Interests of Certain Directors, Officers and Affiliates of Marathon and GBV		14
Risk Factors		15
Regulatory Approvals		16
NASDAQ Stock Market Listing		16
Anticipated Accounting Treatment		16
Appraisal Rights		16
Comparison of Shareholder Rights		16

SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA		17
Selected Historical Financial Data of Marathon		17
Selected Historical Financial Data of GBV		19
Unaudited Pro Forma Condensed Combined Financial Information		19

RISK FACTORS		25
Risks Related to the Merger		25
Risks Related to Marathon		28
Risks Related to Marathon’s Indebtedness		37
Risks Relating to Marathon’s Stock		38
Risks Related to the Business GBV Upon Completion of the Merger		42
Risks Related to GBV and Digital Assets After the Merger		45
Risks Related to GBV’s Mining Business		63

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		64

THE SPECIAL MEETING OF MARATHON’S SHAREHOLDERS		65
Date, Time and Place		65
Purpose of the Special Meeting		65
Recommendation of Marathon’s Board of Directors		65
Record Date and Voting Power		66
Voting and Revocation of Proxies		66
Required Vote		67
Solicitation of Proxies		67
Other Matters		68
No Appraisal Rights		68
Comparison Of Shareholder Rights		68

MARATHON PATENT GROUP, INC.’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		94
Legal Proceedings		95
INCORPORATION OF DOCUMENTS BY REFERENCE		95
COMPARISON OF RIGHTS OF HOLDERS OF MARATHON STOCK AND GBV STOCK		96
Elections; Voting; Procedural Matters		97
Indemnification of Officers and Directors and Advancements of Expenses		100
Dividends		100
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		101
PRINCIPAL SHAREHOLDERS OF GBV		101
PRINCIPAL SHAREHOLDERS OF COMBINED COMPANY		102
LEGAL MATTERS		103
EXPERTS		103
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES		103
WHERE YOU CAN FIND MORE INFORMATION		103
GLOBAL BIT VENTURES INC.'S MANAGEMENT’S DISCUSSION AND ANALYSIS		F-B-18
Overview		F-B-18
Critical Accounting Policies and Use of Estimates		F-B-18
Results of Operations		F-B-18
Liquidity and Capital Resources		F-B-18
Operating Activities		F-B-19
Investing Activities		F-B-19
Financing Activities		F-B-19
Recently Issued Accounting Pronouncements		F-B-19
Off-Balance Sheet Arrangements		F-B-19
EXHIBIT INDEX		II-4

INDEX TO MARATHON’S FINANCIAL STATEMENTS

INDEX TO GBV’S FINANCIAL STATEMENTS		F-B-2

ANNEX A—AGREEMENT AND PLAN OF MERGER AND REORGANIZATION		A-1

ANNEX B—OPINION OF ROTH CAPITAL PARTNERS, LLC		B-1

ANNEX C—NEVADA REVISED STATUTES		C-1

ANNEX D—MARATHON’S AMENDED AND RESTATED ARTICLES OF INCORPORATION		D-1

Name		Title
Merrick Okamoto Charles Allen		Interim Chief Executive Officer * Chief Executive Officer
Michal Handerhan Francis Knuettel II		President Chief Financial Officer

* Through closing of the Merger.

	Nine Months Ended September 30,						Years Ended December 31,
	2017			2016			2016			2015

Revenues	$	609,650		$	36,452,551		$	36,629,276		$	18,977,794

Expenses
Cost of revenues		1,544,322			19,202,118			19,064,473			16,603,792
Amortization of patents and website		1,803,264			6,018,196			7,453,004			10,825,164
Compensation and related taxes		3,718,034			3,406,841			5,483,031			5,419,252
Consulting fees		189,819			903,032			1,279,092			2,324,248
Professional fees		1,686,955			1,336,201			1,797,922			2,548,492
General and administrative		599,416			612,284			840,179			1,143,869
Goodwill impairment		-			83,000			4,336,307			-
Patent impairment		723,218			6,525,273			11,958,882			5,793,409
Total operating expenses		10,265,028			38,086,945			52,212,890			44,658,226

Operating loss from continuing operations		(9,655,378	)		(1,634,394	)		(15,583,614	)		(25,680,432	)

Other income (expenses)
Other income (expense)		(283,243	)		(68,647	)		(57,454	)		170,706
Foreign exchange gain (loss)		(463,191	)		(238,073	)		(367,847	)		(61,868	)
Change in fair value adjustment of Clouding IP earn out		768,200			2,122,208			1,832,872			6,137,116
Interest income		2,793			2,793			4,353			1,068
Interest expense		(2,416,722	)		(2,500,321	)		(3,140,375	)		(4,245,982	)
Loss on debt extinguishment		(283,237	)		-			-			(1,416,915	)
Total other income (expenses)		(2,675,400	)		(682,040	)		(1,728,451	)		584,125

Loss from continuing operations before benefit for income taxes		(12,330,778	)		(2,316,434	)		(17,312,065	)		(25,096,307	)

Income tax benefit (expense)		(29,433	)		26,974			(11,516,807	)		8,156,448

Net income (loss)		(12,360,211	)		(2,289,460	)		(28,828,872	)		(16,939,859	)

Net income (loss) attributable to noncontrolling interests		(124,714	)		27,918			163,848			-

Net income (loss) attributable to common shareholders	$	(12,484,925	)	$	(2,261,542	)	$	(28,665,024	)	$	(16,939,859	)

Income (loss) per common share:
Basic and fully diluted	$	(2.24	)	$	(0.61	)	$	(7.55	)	$	(4.77	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and fully diluted		5,564,465			3,736,213			3,794,515			3,552,196

	At September 30,					At December 31,
	2017			2016		2016			2015
ASSETS
Current Assets	$	4,863,262		$	2,511,122	$	5,521,432		$	4,778,902
Other Assets		7,828,417			36,193,147		12,767,003			42,448,691
		12,691,679			38,704,269		18,288,435			47,227,593
Total Assets

LIABILITIES
Current Liabilities		21,206,379			17,303,738		20,461,015			16,951,648
Long-Term Liabilities		718,411			9,023,798		7,114,562			17,600,203
Total Liabilities		21,924,790			26,327,536		27,575,577			34,551,851

Stockholders’ equity		(9,233,111	)		12,376,733		(9,287,142	)		12,675,742

Total liabilities and stockholders’ equity		12,691,679			38,704,269		18,288,435			47,227,593

	For the period from August 9, 2017 (Inception) to September 30, 2017

Operating expenses:
General and administrative		54,210
Total operating expenses		54,210

Net loss from operations		(54,210	)

Other expenses:
Interest expenses		(548	)
Total other expenses		(548	)

Net loss	$	(54,758	)

Net loss per share, basic and diluted	$	(0.97	)

Weighted average shares outstanding, basic and diluted		56,604

		(1)			(2)			Pro Forma				Pro Forma
		GBV			Marathon			Adjustments		Note 3		Combined

ASSETS
Current assets
Cash and cash equivalents	$	204,204		$	122,172		$	-			$	326,376
Restricted cash		-			3,919,718			-				3,919,718
Accounts receivable		-			123,630			-				123,630
Notes receivable		-			588,864			-				588,864
Prepaid expense and other current assets		1,148			108,878			-				110,026
Total current assets		205,352			4,863,262			-				5,068,614

Property and equipment, net		2,000,000			9,803			-				2,009,803
Intangible assets		-			7,590,213							7,590,213
Goodwill		-			228,401			133,975,788		(b)		133,975,788
								(228,401	)	(b)
Total assets	$	2,205,352		$	12,691,679		$	133,747,387			$	148,644,418

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	14,610			1,954,836			100,000		(d)		2,069,446
Clouding IP earn out - current portion		-			32,637			-				32,637
Revenue share liability		-			1,225,000			-				1,225,000
Warrant liability		-			2,411,750							2,411,750
Notes payable		-			15,582,156							15,582,156
Total current liabilities		14,610			21,206,379			100,000				21,320,989
Secured convertible notes payable		2,000,000						(2,000,000	)	(c)		-
Clouding IP earn out		-			681,175			-				681,175
Revenue share liability		-			37,236			-				37,236
Total liabilities		2,014,610			21,924,790			(1,900,000	)			22,039,400

Commitments and contingencies

Stockholders’ deficit
Preferred stock, $.0001 par value		-			78							78
Common stock, $.001 par value		300			3,111			134,151		(a)		134,451
								(3,111	)	(b)
Additional paid-in-capital		475,200			61,833,077			(134,151	)	(a)		126,855,247
								124,514,276		(b)
								(61,833,077	)	(b)
								(78	)	(b)
								2,000,000		(c)
Accumulated other comprehensive income (loss)		-			(450,623	)		450,623		(b)		-
Stock subscription receivable		(230,000	)		-			-				(230,000	)
Accumulated deficit		(54,758	)		(70,427,472	)		70,427,472		(b)		(154,758	)
								(100,000	)	(d)
Total company stockholders’ equity		190,742			(9,041,829	)		135,456,105				126,605,018
Noncontrolling interests		-			(191,282	)		191,282				-
Total stockholders’ equity		190,742			(9,233,111	)		135,647,387				126,605,018
Total liabilities and stockholders’ equity	$	2,205,352		$	12,691,679		$	133,747,387			$	148,644,418

			Estimated		Estimated
Change in stock price	Stock price		purchase price		goodwill
Increase of 10%	$	6.26	$	137,137,062	$	146,598,574
Decrease of 10%	$	5.12	$	111,920,794	$	121,382,306
Increase of 20%	$	6.83	$	149,789,302	$	159,250,814
Decrease of 20%	$	4.55	$	99,365,247	$	108,826,759
Increase of 30%	$	7.40	$	162,464,119	$	171,925,631
Decrease of 30%	$	3.98	$	86,837,508	$	96,299,020
Increase of 50%	$	8.54	$	187,901,260	$	197,362,772
Decrease of 50%	$	2.85	$	61,899,089	$	71,360,601

	Common		Additional
	Stock		Paid in Capital

Issuance of 126,674,557 shares of Marathon’s common stock		126,675		(126,675	)
Adjustments due to reverse merger		7,476		(7,476	)
		134,151		(134,151	)

Total consideration	$	124,514,276	(y)
Preferred stock, $.0001 par value		(78	)
Common stock, $.001 par value		(3,111	)
Additional paid-in-capital		(61,833,077	)
Accumulated other comprehensive income (loss)		450,623
Accumulated deficit		70,427,472
Noncontrolling interests		191,282
Write-down/(write-up) of assets:
Goodwill		228,401
Goodwill - related to the Merger	$	133,975,788

	●	any effect resulting from the announcement or pendency of the Merger or any related transactions;

	●	the taking of any action, or the failure to take any action, by either Marathon or GBV required to comply with the terms of the Merger Agreement;

	●	any natural disaster or any act or threat of terrorism or war anywhere in the world, any armed hostilities or terrorist activities anywhere in the world, any threat or escalation or armed hostilities or terrorist activities anywhere in the world, or any governmental or other response or reaction to any of the foregoing;

	●	general economic or political conditions or conditions generally affecting the industries in which Marathon or GBV, as applicable, operates;

	●	any illegality or rejection by a governmental body, of the blockchain or digital asset industry, or changes in the prices of digital assets;

	●	any change in accounting requirements, tax treatment or principles or any change in applicable laws, rules, or regulations or the interpretation thereof;

	●	with respect to Marathon, any change in the stock price or trading volume of Marathon’s Common Stock excluding any underlying effect that may have caused such change;

	●	with respect to GBV, the termination, sublease, or assignment or disruption in the facility arrangements involving Hypertec Systems or other location housing the business or operations of GBV;

	●	with respect to Marathon, continued losses from operations or decreases in cash balances of Marathon not materially inconsistent with kind and degree of losses from operations and decreases in cash balances which have occurred since September 30, 2017, unfavorable outcome or commencement of any litigation or claims against Marathon;

	●	with respect to Marathon, the winding down of Marathon’s operations not materially inconsistent with the kind and degree of winding down activities which have occurred since September 30, 2017; and

	●	with respect to GBV and Marathon, any change in the cash position of GBV or Marathon resulting from operations in the ordinary course of business.

	●	investors react negatively to the prospects of the combined organization, business and financial condition following the Merger;

	●	the effect of the Merger on the combined organization’s business and prospects is not consistent with the expectations of financial or industry analysts; or

	●	the combined organization does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts.

	●	There is a significant time lag between acquiring a patent portfolio and recognizing revenue from such patent asset. During such time lag, substantial amounts of costs are likely to be incurred that could have a negative effect on our results of operations, cash flows and financial position;

	●	The monetization of a patent portfolio is a time consuming and expensive process that may disrupt our operations. If our monetization efforts are not successful, our results of operations could be harmed. In addition, we may not achieve anticipated synergies or other benefits from such acquisition; and

	●	We may encounter unforeseen difficulties with our business or operations in the future that may deplete our capital resources more rapidly than anticipated. As a result, we may be required to obtain additional working capital in the future through public or private debt or equity financings, borrowings or otherwise. If we are required to raise additional working capital in the future, such financing may be unavailable to us on favorable terms, if at all, or may be dilutive to our existing shareholders. If we fail to obtain additional working capital, as and when needed, such failure could have a material adverse impact on our business, results of operations and financial condition.

	●	patent applications we may file may not result in issued patents or may take longer than we expect to result in issued patents;

	●	we may be subject to interference proceedings;

	●	we may be subject to opposition proceedings in the U.S. or foreign countries;

	●	any patents that are issued to us may not provide meaningful protection;

	●	we may not be able to develop additional proprietary technologies that are patentable;

	●	other companies may challenge patents issued to us;

	●	other companies may have independently developed and/or patented (or may in the future independently develop and patent) similar or alternative technologies, or duplicate our technologies;

	●	other companies may design around technologies we have developed; and

	●	enforcement of our patents would be complex, uncertain and very expensive.

	●	our inability to enter into a definitive agreement with respect to any potential acquisition, or if we are able to enter into such agreement, our inability to consummate the potential acquisition;

	●	difficulty integrating the operations, technology and personnel of the acquired entity including achieving anticipated synergies;

	●	our inability to achieve the anticipated financial and other benefits of the specific acquisition;

	●	difficulty in maintaining controls, procedures and policies during the transition and monetization process;

	●	diversion of our management’s attention from other business concerns; and

	●	failure of our due diligence process to identify significant issues, including issues with respect to patented technologies and patent portfolios and other legal and financial contingencies.

	●	our patent applications, trademarks and copyrights may not be granted and, if granted, may be challenged or invalidated;

	●	issued trademarks, copyrights, or patents may not provide us with any competitive advantages when compared to potentially infringing other properties;

	●	our efforts to protect our intellectual property rights may not be effective in preventing misappropriation of our technology; or

	●	our efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those we acquire and/or prosecute.

	●	make it difficult for us to satisfy our debt obligations;

	●	make us more vulnerable to general adverse economic and industry conditions;

	●	limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirements;

	●	expose us to interest rate fluctuations because the interest rate on the debt under our existing credit facility is variable;

	●	require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes;

	●	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

	●	place us at a competitive disadvantage compared to competitors that may have proportionately less debt and greater financial resources.

	●	economic and demand factors affecting our industry;

	●	pricing pressures;

	●	increased operating costs;

	●	competitive conditions; and

	●	other operating difficulties.

	●	a $1.00 minimum closing bid price;

	●	stockholders’ equity of $2.5 million;

	●	500,000 shares of publicly-held Common Stock with a market value of at least $1 million;

	●	300 round-lot stockholders; and

	●	compliance with NASDAQ’s corporate governance requirements, as well as additional or more stringent criteria that may be applied in the exercise of NASDAQ’s discretionary authority.

	●	$4 minimum closing bid price;
	●	$4 or $5 million stockholders equity;
	●	$5 or $15 million market value of publicly held shares;
	●	2 year operating history;
	●	$50 million of market value of listed securities;
	●	$750,000 of net income from continuing operations
	●	1 million publicly held shares;
	●	300 round lot holders; and
	●	3 market makers.

	●	448,775 shares of our Common Stock issuable upon the exercise of outstanding stock options having a weighted average exercise price of $16.22 per share;

	●	794,717 shares of our Common Stock issuable upon the exercise of outstanding warrants with a weighted average exercise price of $6.90;

	●	1 share of Common Stock issuable upon conversion of 1 outstanding share of Series B Preferred Stock;

	●	5,511,702 shares of Common Stock issuable upon conversion of 5,511.70 outstanding shares of Series E Preferred Stock;

	●	up to 3,267,435 shares of Common Stock issuable upon conversion of $4,053,948 in outstanding convertible notes.

	●	300,000 shares of Common Stock issuable to members of our Board of Directors and advisors.

	●	126,674,557 shares of Common Stock issuable upon the closing of the Merger.

	●	changes in our industry including changes which adversely affect bitcoin, ether and other digital assets ;

	●	competitive pricing pressures;

	●	our ability to obtain working capital financing;

	●	additions or departures of key personnel;

	●	sales of our Common Stock;

	●	our ability to execute our business plan;

	●	operating results that fall below expectations;

	●	loss of any strategic relationship;

	●	regulatory developments; and

	●	economic and other external factors.

	●	latent impacts resulting from the diversion of the respective management team’s attention from ongoing business concerns as a result of the devotion of management’s attention to the Merger and performance shortfalls at one or both of the companies;

	●	difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects;

	●	the possibility of faulty assumptions underlying expectations regarding the integration process;

	●	unanticipated issues in integrating information technology, communications programs, financial procedures and operations, and other systems, procedures and policies;

	●	difficulties in managing GBV, addressing differences in business culture and retaining key personnel;

	●	unanticipated changes in applicable laws and regulations;

	●	managing tax costs or inefficiencies associated with integrating the operations of GBV;

	●	coordinating geographically separate organizations; and

	●	unforeseen expenses or delays associated with the Merger.

	●	continued worldwide growth in the adoption and use of bitcoins and other digital assets;

	●	government and quasi-government regulation of bitcoins and other digital assets and their use, or restrictions on or regulation of access to and operation of the digital asset network or similar digital assets systems;

	●	the maintenance and development of the open-source software protocol of the bitcoin network and ether network;

	●	changes in consumer demographics and public tastes and preferences;

	●	the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;

	●	general economic conditions and the regulatory environment relating to digital assets; and
	●	the impact of regulators focusing on digital assets and digital securities and the costs associated with such regulatory oversight.

	●	Management Team . It is expected that the combined organization will be led by the management team from GBV and a board of directors with representation from each of Marathon and GBV.

	●	Cash Resources . The combined organization is expected to have approximately $8.0 million in cash and cash equivalents at the closing of the Merger, which Marathon and GBV believe is sufficient to enable GBV to implement its near-term business plans.

	●	the strategic alternatives of Marathon to the Merger, including the discussions that Marathon’s management and Marathon’s board of directors previously conducted related to internal organic growth, investment in new technologies and with other potential target acquisitions and Merger partners;

	●	the changes in the patent monetization industry following legislative changes and increasingly hostile legal, regulatory and business environment creating risk for longer and more costly campaigns for patent licensing and enforcement by non-practicing entities, referred to as NPEs, such as Marathon seeking to enforce patents and the unlikelihood that such circumstances would change for the benefit of Marathon’s shareholders in the foreseeable future;

	●	the risk associated with, and uncertain value and costs to shareholders, of liquidating Marathon;

	●	the opportunity as a result of the Merger for Marathon’s shareholders to participate in the GBV opportunity; and

	●	the interest expressed by Marathon’s investors and note holders of their desire to evaluate opportunities, such as GBV, to enter into blockchain and digital assets related businesses.

	●	the potential increased access to sources of capital and a broader range of investors to support the GBV growth objectives;

	●	the potential to provide its current shareholders with greater liquidity by owning stock in a public company;

	●	GBV’s board of directors’ belief that no alternatives to the Merger were reasonably likely to create greater value for GBV’s shareholders after reviewing the various strategic options to enhance shareholder value that were considered by GBV’s board of directors;

	●	the cash resources of the combined organization expected to be available at the closing of the Merger; and

	●	the expectation that the Merger will be treated as a reorganization for U.S. federal income tax purposes.