GlobalOptions Group, Inc. (“GlobalOptions”) (OTCBB:GLOI) and Walker
Digital Holdings, LLC, a wholly-owned subsidiary of Walker Digital, LLC
(“Walker Digital”), announced today that they have completed the
previously announced merger of the two companies. The newly formed
entity consists of the patent portfolio created by Walker Digital, the
research and development lab led by renowned inventor, entrepreneur and
Priceline (NASDAQ:PCLN) founder Jay Walker. The company will do business
as Patent Properties, Inc. while it seeks a corporate name change to
Patent Properties, Inc. as expeditiously as possible.
“For the past 20 years, we have consistently created intellectual
property to address some of the most complex customer behavioral issues
in various industries, thus unlocking unrealized value for consumers and
businesses alike,” said Mr. Walker, Executive Chairman of Patent
Properties’ Board of Directors. “Today’s merger allows us to bring to
the public market a broad and still-growing portfolio of wholly-owned
inventions, as well as our ongoing efforts to protect and enforce our
property rights. In addition, we are now able to accelerate the
commercialization of an entirely new, big data business system for
patent licensing currently under development. We believe our new
licensing platform will address significant inefficiencies in the
multi-billion dollar patent licensing market.”
The company’s patent portfolio includes 379 granted patents, 93 pending
patent applications, intellectual property in development, a de-novo
patent licensing business and 19 litigation matters. The company expects
to grow its intellectual property portfolio over time.
Since 2011, Walker Digital has generated $65 million in revenues from
licensing and litigating its patent portfolio as well as from patent
sales. Patent Properties will pursue the previously filed litigations
and expects to file additional patent infringement cases before the end
of 2013.
“We are excited at the completion of the merger and believe the
transaction will enhance our ability to achieve returns on our patent
portfolio and to develop our most recent commercial initiative, a new
patent licensing solution for the broader market,” said Jon Ellenthal,
Chief Executive Officer of Patent Properties. “This transaction provides
us the financial flexibility to continue to execute our business plan
and monetize our vast portfolio of intellectual property.”
The company also announced the completion of an $11.6 million primary
private placement from the sale of 3,860,616 shares of common stock at
$3.00 per share. Investors also received 50% warrant coverage
exercisable for a period of three years at $3.00 per share. The warrants
are subject to a call if the stock trades above $6.00 per share for 20
of 30 business days once the underlying shares are registered. The
company intends to use its approximate $25 million in cash, which
comprises the net proceeds from the private placement plus the cash
currently on GlobalOptions’ balance sheet, to fund operations.
Under the merger transaction, all of the outstanding membership
interests of Walker Digital Holdings, LLC were exchanged for shares of
GlobalOptions common stock and shares of a new Series B Preferred Stock
of GlobalOptions. On a non-diluted basis, Walker Digital owns
approximately 64% of the economic interest and 80% of the voting
interest of the newly formed entity, respectively. Walker Digital may
also receive an additional 2,166,667 shares subject to certain
performance conditions. At the completion of the transaction and the
primary private placement, the company has 41,976,130 outstanding shares
on a fully diluted basis.
Broadband Capital Management served as GlobalOptions’ financial advisor
and lead placement agent; PowerOne Capital Markets Limited from Toronto,
Canada and Lake Street Capital Markets, LLC served as co-placement
agents in conjunction with the financing. Walker Digital’s legal counsel
is Robinson & Cole LLP and GlobalOptions’ legal counsel is Olshan Frome
Wolosky LLP.
Details regarding these and other terms of the transaction are set out
in the merger agreement, which is available on the SEC website at www.sec.gov.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
About Patent Properties, Inc.:
Patent Properties, Inc. (OTCBB:GLOI) intends to develop, enforce and
commercialize the patent and other intellectual property assets created
by Walker Digital, LLC, the research and development lab led by
internationally recognized inventor and entrepreneur Jay Walker. Mr.
Walker is best known as the founder of priceline.com
and has twice been named by TIME magazine as “one of the top 50 business
leaders of the digital age.” All of the patents owned by the company
were developed internally by Walker Digital, LLC, with Jay Walker as a
named inventor on all issued patents and the lead inventor on the vast
majority. Additional information regarding the company can be found at www.patentproperties.com.
Copyright Business Wire 2013