Company Advances Absolute Return Strategy and
Enhances IP Portfolio with Acquisition of Excalibur IP and Wireless
Networking Patents from L3Harris
Acacia Research Corporation (“we”, "Acacia" or "the Company")
(Nasdaq: ACTG) today reported results for the three-month period
ended March 31, 2020.
Clifford Press, Chief Executive Officer, stated, “Acacia has
made significant progress in 2020 furthering our absolute return
strategy. Subsequent to the end of the quarter, we acquired two
attractive patent portfolios, bringing us to four acquisitions for
the year. Adding these assets to our existing portfolio creates an
attractive blend of licensing and litigation opportunities to
pursue. We expect these additions to begin generating licensing
revenues in the second quarter with significant contribution
beginning in 2021.”
Al Tobia, President and Chief Investment Officer, added, “Recent
market volatility has opened many corporate development
opportunities and we are busy identifying, and evaluating these
opportunities. Our focus remains on growing book value and
leveraging our substantial net tax assets and capital partnership
with Starboard Value.”
First Quarter 2020 Financial Summary:
- Cash and trading securities totaled $158.1 million as of March
31, 2020, a decrease from $168.3 million as of December 31,
2019.
- Gross revenues were $3.8 million.
- Operating loss was $3.6 million.
- GAAP net loss to common shareholders was $12.2 million or $0.24
per basic and diluted share.
IP Portfolio Acquisitions
Subsequent to the end of the first quarter, a subsidiary of
Acacia acquired Excalibur IP, a portfolio of more than 2,500
patents that were spun out of Yahoo! prior to its sale to Verizon.
The patents cover technologies including internet search, cloud
computing, e-commerce, location-based services, mobile apps, media
management and social networking. These patents have applicability
to a variety of industries, including: enterprise software, web
search and analytics, online shopping and advertising, and
audio/video streaming among others.
In addition, the subsidiary also acquired a significant
portfolio of nearly 150 patents from L3Harris. These patents cover
commercial applications of Wi-Fi and Internet-of-Things
technologies. These patents have applicability to a wide variety of
products and markets, including consumer electronics, home and
office wireless networking, home automation, smart metering,
industrial wireless control systems and remote access systems.
Investor Conference Call:
The Company will host a conference call today, Monday, May 11,
2020, to discuss these results and provide a business update at 11
a.m. ET/ 8 a.m. PT.
To access the live call, please dial 877-407-0778 (U.S. and
Canada) or 201-689-8565 (international) and reference conference ID
13703484. The conference call will also be simultaneously webcasted
on the investor relations section of the Company’s website at
http://acaciaresearch.com under the events and presentations tab.
Following the conclusion of the live call, a replay of the webcast
will be available on the Company's website for at least 30
days.
About Acacia Research Corporation
Founded in 1993, Acacia Research Corporation (ACTG) invests in
Intellectual Property Assets and partners with inventors and patent
owners to realize the financial value in their patented inventions.
Acacia bridges the gap between invention and application,
facilitating efficiency and delivering monetary rewards to the
patent owner.
Information about Acacia Research Corporation and its
subsidiaries is available at www.acaciaresearch.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This news release contains forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based upon our
current expectations and speak only as of the date hereof. Our
actual results may differ materially and adversely from those
expressed in any forward-looking statements as a result of various
factors and uncertainties, including the ability to successfully
implement our strategic plan, the ability to successfully build out
a new leadership team within a certain timeframe, the ability to
streamline financial reporting, the ability to successfully develop
licensing programs and attract new business, changes in demand for
current and future intellectual property rights, legislative,
regulatory and competitive developments addressing licensing and
enforcement of patents and/or intellectual property in general,
general economic conditions and the success of our investments. Our
Annual Report on Form 10-K, recent and forthcoming Quarterly
Reports on Form 10-Q, recent Current Reports on Form 8-K, and any
amendments to the forgoing, and other SEC filings discuss some of
the important risk factors that may affect our business, results of
operations and financial condition. We undertake no obligation to
revise or update publicly any forward-looking statements for any
reason.
The results achieved in the most recent quarter are not
necessarily indicative of the results to be achieved by us in any
subsequent quarters, as it is currently anticipated that Acacia
Research Corporation’s financial results will vary, and may vary
significantly, from quarter to quarter. This variance is expected
to result from a number of factors, including risk factors
affecting our results of operations and financial condition
referenced above, and the particular structure of our licensing
transactions, which may impact the amount of inventor royalties and
contingent legal fees expenses we incur from period to period.
ACACIA RESEARCH CORPORATION UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands, except share and
per share data)
March 31,
December 31,
2020
2019
ASSETS
Current assets: Cash and cash equivalents
$
58,678
$
57,359
Trading securities - debt
88,963
93,843
Trading securities - equity
10,470
17,140
Accounts receivable
621
511
Prepaid expenses and other current assets
3,653
2,912
Total current assets
162,385
171,765
Long-term restricted cash
35,000
35,000
Investment at fair value
1,387
1,500
Patents, net of accumulated amortization
12,550
7,814
Leased right-of-use assets
1,395
1,264
Other non-current assets
1,004
818
Total assets
$
213,721
$
218,161
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable
$
3,136
$
1,765
Accrued expenses and other current liabilities
4,376
7,265
Accrued compensation
1,127
507
Royalties and contingent legal fees payable
2,070
2,178
Total current liabilities
10,709
11,715
Series A warrant liabilities
2,610
3,568
Series A embedded derivative liabilities
21,682
17,974
Series B warrant liabilities
6,231
-
Long-term lease liabilities
1,395
1,264
Other long-term liabilities
583
593
Total liabilities
43,210
35,114
Series A redeemable convertible preferred stock, par
value $0.001 per share; stated value $100 per share; 350,000 shares
authorized, issued and outstanding as of March 31, 2020 and
December 31, 2019, respectively; aggregate liquidation preference
of $35,000 as of March 31, 2020 and December 31, 2019, respectively
8,720
8,089
Stockholders' equity: Preferred stock, par value $0.001 per
share; 10,000,000 shares authorized; no shares issued or
outstanding
-
-
Common stock, par value $0.001 per share; 300,000,000 shares
authorized; 49,813,443 and 50,370,987 shares issued and outstanding
as of March 31, 2020 and December 31, 2019, respectively
50
50
Treasury stock, at cost, 3,496,726 and 2,919,828 shares as of March
31, 2020 and December 31, 2019, respectively
(40,586
)
(39,272
)
Additional paid-in capital
651,441
652,003
Accumulated deficit
(450,947
)
(439,656
)
Total Acacia Research Corporation stockholders' equity
159,958
173,125
Noncontrolling interests
1,833
1,833
Total stockholders' equity
161,791
174,958
Total liabilities, redeemable convertible preferred stock,
and stockholders' equity
$
213,721
$
218,161
ACACIA RESEARCH CORPORATION UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except
share and per share data)
Three Months Ended
March 31,
2020
2019
Revenues
$
3,815
$
3,387
Portfolio operations:
Inventor royalties
426
1,353
Contingent legal fees
234
177
Litigation and licensing expenses
- patents
1,037
3,801
Amortization of patents
1,043
656
Other portfolio expenses (income)
(234
)
650
Total portfolio operations
2,506
6,637
Net portfolio income (loss)
1,309
(3,250
)
General and administrative
expenses
4,878
3,655
Operating loss
(3,569
)
(6,905
)
Other income (expense):
Change in fair value of
investment, net
4,108
6,908
Loss on sale of investment
(3,316
)
(5,590
)
Change in fair value of the
Series A and B warrants and embedded derivatives
(4,382
)
-
Change in fair value of trading
securities
(6,117
)
675
Gain (loss) on sale of trading
securities
112
(43
)
Interest income and other
535
871
Total other income (expense)
(9,060
)
2,821
Loss before income taxes
(12,629
)
(4,084
)
Income tax benefit (expense)
1,338
(314
)
Net loss including noncontrolling
interests in subsidiaries
(11,291
)
(4,398
)
Net loss attributable to
noncontrolling interests in subsidiaries
-
14
Net loss attributable to Acacia
Research Corporation
$
(11,291
)
$
(4,384
)
Less: Dividend on Series A
redeemable convertible preferred stock
(263
)
-
Less: Accretion of Series A
redeemable convertible preferred stock
(631
)
-
Net loss attributable to common
stockholders - basic and diluted
$
(12,185
)
$
(4,384
)
Basic and diluted net loss per
common share
$
(0.24
)
$
(0.09
)
Weighted average number of shares
outstanding - basic and diluted
49,875,396
49,655,881
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200511005309/en/
Acacia Research Investor Contact: FNK IR Rob Fink,
646-809-4048 rob@fnkir.com
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