Exhibit 99.1

 

 

 

FOR RELEASE

 

March 12, 2020

 

Acacia Research Reports Fourth Quarter and Full Year 2019 Financial Results

 

Company Further Rationalizes Expense Structure, Positioning Acacia to

Leverage Strategic Partnership with Starboard Value to Pursue Investment Opportunities

 

New York, NY – March 12, 2020 - Acacia Research Corporation (“we”, "Acacia" or "the Company") (Nasdaq: ACTG) today reported results for the three and 12-month periods ended December 31, 2019.

 

Clifford Press, Chief Executive Officer, stated, “We finished 2019 with a substantially expanded capital base, leaner cost structure, and the opportunity to build an exceptional platform for investing in unique transactions. We are gratified that our shareholders strongly endorsed our strategic partnership with Starboard Value, an ideal partner for Acacia as we work to leverage our substantial net tax assets and implement our absolute return investment strategy. We continue to build out our investment team and the opportunity to put this exceptional platform to work is only enhanced by current market conditions.”

 

Al Tobia, President and Chief Investment Officer, added, “Our next area of focus is to leverage the Starboard partnership to pursue investment opportunities with greater scale and flexibility that can systematically grow Acacia’s book value. As we actively explore a wide range of investment opportunities that include new revenue streams, royalty streams, intellectual property and other undervalued assets, we are prudently managing our cash. Acacia maintains a unique position, with strong capitalization and significant expertise to identify, evaluate, and monetize a wide range of asset classes. We expect 2020 will be a year of growth as we take concrete steps to turn this position, and our relationships, into tangible value.”

 

Full-Year 2019 Financial Summary:

 

·Cash and short-term investments totaled $168.3 million as of December 31, 2019, an increase from $165.5 million as of December 31, 2018.
·Gross revenues were $11.2 million.
·General and administrative expenses declined 12.6% as new management rationalized the company’s cost structure, including reducing rent and duplicative salaries.
·Operating loss was $23.4 million.
·GAAP net loss to common shareholders was $17.4 million or $(0.35) per basic share.

 

 

 

 

 1 
 

 

Fourth Quarter Financial Summary:

 

·Gross revenues were $688,000.
·Operating loss was $7.4 million.
·GAAP net income to common shareholders was $327,000 or $0.01 per basic share.

 

Investor Conference Call:

 

The Company will host a conference call today, Thursday, March 12, 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 (800) 367-2403 (U.S. and Canada) or (334) 777-6978 (international) and reference conference ID 5163391. 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.

 

 

 

 

 2 
 

 

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 Investor Contact:

FNK IR

Rob Fink, 646-809-4048

rob@fnkir.com

 

 

 3 
 

 

ACACIA RESEARCH CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

             

 

   December 31,   December 31, 
   2019   2018 
         
ASSETS          
Current assets:          
Cash and cash equivalents  $57,359   $128,809 
Trading securities - debt   93,843    33,642 
Trading securities - equity   17,140    3,012 
Accounts receivable   511    32,884 
Prepaid expenses and other current assets   2,912    3,125 
Total current assets   171,765    201,472 
           
Long-term restricted cash   35,000     
Investment at fair value   1,500    7,459 
Other investments       8,195 
Patents, net of accumulated amortization   7,814    6,587 
Leased right-of-use assets   1,264     
Other non-current assets   818    236 
Total assets  $218,161   $223,949 
           
           
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Accounts payable  $1,765   $3,698 
Accrued expenses and other current liabilities   7,265    4,299 
Accrued compensation   507    350 
Royalties and contingent legal fees payable   2,178    22,688 
Total current liabilities   11,715    31,035 
           
Series A warrant liabilities   3,568     
Series A embedded derivative liabilities   17,974     
Long-term lease liabilities   1,264     
Other long-term liabilities   593    1,674 
Total liabilities   35,114    32,709 
           
Series A redeemable convertible preferred stock, par value $100 per share; 350,000 shares authorized, issued and outstanding as of December 31, 2019; no shares authorized, issued or outstanding as of December 31, 2018   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; 100,000,000 shares authorized; 50,370,987 and 49,639,319 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively   50    50 
Treasury stock, at cost, 2,919,828 shares as of December 31, 2019 and December 31, 2018   (39,272)   (39,272)
Additional paid-in capital   652,003    651,156 
Accumulated deficit   (439,656)   (422,541)
Total Acacia Research Corporation stockholders' equity   173,125    189,393 
           
Noncontrolling interests   1,833    1,847 
           
Total stockholders' equity   174,958    191,240 
           
Total liabilities, redeemable convertible preferred stock, and stockholders' equity  $218,161   $223,949 

 

 

 4 
 

 

ACACIA RESEARCH CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

                       

 

   Three Months Ended December 31,   Years Ended December 31, 
   2019   2018   2019   2018 
                 
Revenues  $688   $49,203   $11,246   $131,506 
                     
Portfolio operations:                    
Inventor royalties   192    11,002    4,944    35,168 
Contingent legal fees   4    11,756    591    31,501 
Patent acquisition expenses               4,000 
Litigation and licensing expenses - patents   1,160    1,689    7,803    8,866 
Amortization of patents   857    11,560    3,194    27,120 
Other portfolio expenses   1,581    400    1,756    2,602 
Total portfolio operations   3,794    36,407    18,288    109,257 
Net portfolio income (loss)   (3,106)   12,796    (7,042)   22,249 
General and administrative expenses   4,328    2,754    16,376    18,728 
Impairment of patent-related intangible assets               28,210 
Operating income (loss)   (7,434)   10,042    (23,418)   (24,689)
                     
Other income (expense):                    
Change in fair value of investment, net   277    (5,142)   9,899    (59,103)
Loss on sale of investment   (1,083)   (15,390)   (9,230)   (19,095)
Impairment of other investment           (8,195)   (1,000)
Gain on disposal of other investment           2,000     
Other expense   (32)   (629)   (32)   (629)
Change in fair value of the Series A warrant and embedded derivative   4,518        4,518     
Interest income and other   2,241    149    5,505    847 
Total other income (expense)   5,921    (21,012)   4,465    (78,980)
                     
Loss before income taxes   (1,513)   (10,970)   (18,953)   (103,669)
                     
Income tax benefit (expense)   2,147    (397)   1,824    (1,179)
                     
Net income (loss) including noncontrolling interests in subsidiaries   634    (11,367)   (17,129)   (104,848)
                     
Net (income) loss attributable to noncontrolling interests in subsidiaries       (2)   14    (181)
                     
Net income (loss) attributable to Acacia Research Corporation  $634   $(11,369)  $(17,115)  $(105,029)
                     
Less: Accretion of redeemable preferred stock   (307)       (307)    
Net income (loss) attributable to common stockholders - basic  $327   $(11,369)  $(17,422)  $(105,029)
Basic net income (loss) per common share  $0.01   $(0.23)  $(0.35)  $(2.10)
Weighted average number of shares outstanding - basic   49,875,750    49,639,172    49,764,002    49,969,062 
                     
Add: Accretion of redeemable preferred stock   307        307     
Less: Mark-to-market adjustment for preferred stock embedded derivative   (3,258)       (3,258)    
Net loss attributable to common stockholders - diluted  $(2,624)  $(11,369)  $(20,373)  $(105,029)
Diluted net income (loss) per common share  $(0.05)  $(0.23)  $(0.40)  $(2.10)
Weighted average number of shares outstanding - diluted   54,406,835    49,639,172    50,896,773    49,969,062 

 

 

 

 

 

 5 


The following information was filed by Acacia Research Corp (ACTG) on Thursday, March 12, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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