UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):          March 12, 2020

 

ACACIA RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)

 

Delaware 001-37721 95-4405754
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

 

4 Park Plaza, Suite 550

Irvine, California

92614
(Address of principal executive offices) (Zip Code)

 

 

Registrant’s telephone number, including area code:       (949) 480-8300

 

Not applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[  ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company  o

 

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 13(a) of the Exchange Act.  o

 

Securities registered pursuant to Section 12(b) of the Act:

 

TItle of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ACTG The Nasdaq Stock Market, LLC

 

 

 

 

     
 

 

Item 2.02. Results of Operations and Financial Condition.

 

On March 12, 2020, Acacia Research Corporation issued a press release announcing its financial results for the three months and the year ended December 31, 2019. A copy of that release is furnished as Exhibit 99.1 to this report.

 

The information in this Current Report on Form 8-K and the exhibit attached hereto as Exhibit 99.1 are being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K and the exhibit attached hereto as Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation by reference language in such filings, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

  (c) Exhibits.
     
    99.1 Press Release dated March 12, 2020 of Acacia Research Corporation.

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   

    ACACIA RESEARCH CORPORATION
     
Date:  March 12, 2020 By: /s/ Clifford Press                                      
    Name: Clifford Press
    Title:   Chief Executive Officer
     

 

 

 

 

 

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Exhibit Index

 

Exhibit Number Description
   
99.1 Press Release dated March 12, 2020 of Acacia Research Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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.

 

 

 

 

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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.

 

 

 

 

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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

 

 

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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  

 

 

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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  

 

 

 

 

 

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