Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS:

On August 29, 2014, the Company entered into a patent purchase agreement (the “Clouding Agreement”) between Clouding Corp., a Delaware corporation and a wholly owned subsidiary of the Company (“Clouding” of the “Company”) and Clouding IP, LLC, a Delaware limited liability company (“Clouding IP” or “Seller”), pursuant to which Clouding acquired a portfolio of 70 patents (“Clouding IP Assets”) from Clouding IP. Clouding owns patents related to network and data management technology.

The Company paid Clouding IP (i) $1.4 million in cash, (ii) $1.0 million in the form of a promissory note issued by the Company that matures on October 31, 2014, (iii) 25,000 shares of its restricted common stock valued at $281,000 and (iv) fifty percent (50%) of the net recoveries (“revenue share”, gross revenues minus certain defined expenses) in excess of $4.0 million in net revenues that the Company  generates with respect to the patents purchased from Clouding IP. The Company valued the Common Stock at the fair market value on the date of the acquisition at $11.24 per share or $281,000.  The promissory note was paid in full prior to October 31, 2014. The revenue share under item (iv) above was recorded as an earn out liability on the Company balance sheet in accordance with the appraisal of the consideration paid and intangible value of the patents acquired, in the amount of $13,115,000.  Total consideration for the purchase of the patents was $15,796,000.

The Company accounted for the acquisition as a business combination in accordance with ASC 805 “Business Combinations”. Clouding acquired only the Clouding IP Assets and did not acquire any stock as part of the acquisition nor did Clouding acquire any other assets of Clouding IP. We are presenting the historical financial statements of Clouding IP Assets for the period ended August 28, 2014 and the year ended December 31, 2013 as part of this pro-forma disclosure.
 
These unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, and the unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and with the historical financial statements and related notes thereto. The unaudited pro forma condensed consolidated balance sheet is prepared as though the transactions occurred at the close of business on August 28, 2014. The pro forma statements of operations give effect to the transactions as thought they occurred on January 1, 2013. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been completed on January 1, 2013 or what results would be for any future periods.
 

 
 
 

Marathon Patent Group, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of August 28, 2014

 
  
Marathon Patent Group, Inc.
  
Clouding IP Assets
    
Combined Before Pro Forma Adjustments
    
Pro Forma Adjustments
  
Marathon Patent Group, Inc. Pro Forma
  
                                 
ASSETS
                                
Current Assets
                                
Cash
     5,051,565       -       5,051,565       (1,400,000 )
 (a)
     3,651,565  
Accounts Receivable - net
     10,000       -       10,000       -         10,000  
Prepaid expenses and other current assets
     1,003,058       -       1,003,058       -         1,003,058  
Total current assets
     6,064,623               6,064,623       (1,400,000 )       4,664,623  
                                           
Other Assets
                                          
Property and equipment, net
     14,550       -       14,550       -         14,550  
Intangible assets, net
     18,743,008       1,177,815       19,920,823       13,322,185  
 (b)
     33,243,008  
Goodwill
     2,227,488       -       2,227,488       1,296,000  
 (c)
     3,523,488  
Other assets
     6,000       5,000       11,000       (5,000 )
 (d)
     6,000  
Total other assets
     20,991,046       1,182,815       22,173,861       14,613,185         36,787,046  
                                           
Total Assets
     27,055,670       1,182,815       28,238,485       13,213,185         41,451,670  
                                           
LIABILITIES AND STOCKHOLDERS' EQUITY
                            
Liabilities
                                          
Accounts payable and acrued expenses
     1,646,406       539,096       2,185,502       (539,096 )
 (e)
     1,646,406  
Clouding IP earn out
     -       -       -       13,115,000  
 (f)
     13,115,000  
Note payable
     5,062,500       940,530       6,003,030       59,470  
 (g)
     6,062,500  
Other current liabilities
     30,664       -       30,664       -         30,664  
Total Liabilities
     6,739,570       1,479,626       8,219,196       12,635,374         20,854,570  
                                           
Stockholders' Equity
     -                                    
Preferred stock
     141       -       141       -         141  
Common stock
     6,561       -       6,561       281  
 (h)
     6,842  
Additional paid-in capital
     35,150,717       -       35,150,717       280,719  
 (h)
     35,431,436  
Other equity
     (58,523 )     (296,811 )     (355,334 )     296,811  
 (i)
     (58,523 )
Accumulated deficits
     (14,782,797 )     -       (14,782,797 )     -         (14,782,797 )
Total stockholder's equity
     20,316,100       (296,811 )     20,019,289       577,811         20,597,100  
                                           
Total Liabilities and Stockholder's Equity
     27,055,670       1,182,815       28,238,485       13,213,185         41,451,670  
                                           
 
 
 
 
Marathon Patent Group, Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
For the period ended August 28, 2014
 
   
Marathon Patent Group, Inc.
    
Clouding IP Assets
    
Combined Before Pro Forma Adjustments
    
Pro Forma Adjustments
    
Marathon Patent Group, Inc. Pro Forma
  
                               
 Revenues
     6,649,972       97,500       6,747,472       -       6,747,472  
                                         
 Cost of revenues (cost of revenue is exclusive of patent amortization expenses)
     3,670,551       344,878       4,015,429       -       4,015,429  
                                         
 Gross Profit
     2,979,421       (247,378 )     2,732,043       -       2,732,043  
                                         
 Expenses
                                        
 Amortiztion of intangibles
     2,198,819       347,562       2,546,381       -       2,546,381  
 Compensation and related taxes
     1,919,630       -       1,919,630       -       1,919,630  
 Consulting fees
     943,335       -       943,335       -       943,335  
 Professional fees
     798,377       -       798,377       -       798,377  
 General and adminsitrative
     320,907       -       320,907       -       320,907  
 Total operating expenses
     6,181,068       347,562       6,528,630       -       6,528,630  
                                         
 Operating income (loss) from continuing operations
     (3,201,647 )     (594,940 )     (3,796,587 )     -       (3,796,587 )
                                         
 Other income
                                        
 Other income
     632       -       632       -       632  
 Other expense
     (1,275,114 )     (55,111 )     (1,330,225 )     -       (1,330,225 )
                                         
 Net Loss
     (4,476,130 )     (650,051 )     (5,126,181 )     -       (5,126,181 )
                                         
 Net loss per share - basic and diluted
     (0.80 )                             (0.92 )
 Weighted average number of shares outstanding during the period - basic and dilluted
     5,592,260                               5,595,038  

 
 
 
 
Marathon Patent Group, Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
For the year ended December 31, 2013

   
Marathon Patent Group, Inc.
    
Clouding IP Assets
    
Combined Before Pro Forma Adjustments
    
Pro Forma Adjustments
    
Marathon Patent Group, Inc. Pro Forma
  
                               
 Revenues
     3,418,371       12,000,000       15,418,371       -       15,418,371  
                                         
 Cost of revenues (cost of revenue is exclusive of patent amortization expenses)
     957,040       12,140,037       13,097,077       -       13,097,077  
                                         
 Gross Profit
     2,461,331       (140,037 )     2,321,294       -       2,321,294  
                                         
 Expenses
                                        
 Amortiztion of intangibles
     1,038,505       528,585       1,567,090       -       1,567,090  
 Compensation and related taxes
     2,997,053       -       2,997,053       -       2,997,053  
 Consulting fees
     901,686       -       901,686       -       901,686  
 Professional fees
     655,202       -       655,202       -       655,202  
 General and adminsitrative
     544,338       -       544,338       -       544,338  
 Total operating expenses
     6,136,784       528,585       6,665,369       -       6,665,369  
                                         
 Operating income (loss) from continuing operations
     (3,675,453 )     (668,622 )     (4,344,075 )     -       (4,344,075 )
                                         
 Other income
                                        
 Other income
     265,012       -       265,012       -       265,012  
 Other expense
     (39,894 )     (34,155 )     (74,049 )     -       (74,049 )
                                         
 Net Loss
     (3,450,335 )     (702,777 )     (4,153,112 )     -       (4,153,112 )
                                         
 Net loss per share - basic
     (0.75 )                             (0.90 )
 Weighted average number of shares outstanding during the period - basic and diluted
     4,604,193                               4,604,193  
 
 
 
 
 
Marathon Patent Group, Inc.
Significant Notes and Assumptions to the Pro Forma Condensed Combined Financial Statements

Note 1 – Acquisition Consideration and Fair Value of Clouding IP Assets

The Company accounted for the acquisition as a business combination in accordance with ASC 805 “Business Combinations”. The Company determined the fair value of the assets purchases, and the net purchase price paid by the Company was subsequently allocated to assets acquired and liabilities assumed on the records of the Company as follows:

Intangible assets
  
$
14,500,000
  
Goodwill
    
1,296,000
  
Net purchase price
  
$
15,796,000
  

Total consideration paid of the following:
Cash
   $ 1,400,000  
Promissory Note
     1,000,000  
Common Stock
     281,000  
Earn Out Liability
     13,115,000  
Net purchase price
   $ 15,796,000  

Note 2 – Pro Forma Presentation Adjustments

The adjustments included in the column under the heading “Pro Forma Adjustments” in the unaudited pro forma condensed combined financial statements are as follows:

(a)  
To record the cash portion of the consideration for the acquisition.

(b)  
To record the fair value of the Clouding IP assets acquired.   The Company determined that the fair value of the Clouding IP assets were $14,500,000 at the time of the acquisition.

(c)  
To reflect the fair value of the goodwill associated with the acquisition of the Clouding IP Assets.

(d)  
To eliminate other assets not acquired by the Company.

(e)  
To eliminate Seller balances retained or settled by the Seller prior to the closing date.

(f)  
To record the fair value of the revenue share payable to the Seller pursuant to the acquisition of the Clouding IP Assets.

(g)  
To record the issuance of a note payable to Seller in the amount of $1.0 million as part of the purchase consideration of the Clouding IP Assets, net of Seller loans retained or settled by Seller prior to the closing date.

(h)  
To record the issuance of 25,000 shares of Common Stock of Marathon Patent Group, Inc. for the acquisition of the Clouding IP Assets.

(i)  
To eliminate Seller’s parent company investment in the Clouding IP Assets.