Good morning, ladies and gentlemen, and welcome to the Acacia Research Third Quarter 2022 Financial Results Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Fink. Sir, the floor is yours.

Thank you, operator. Hosting the call today are MJ McNulty, Interim Chief Executive Officer; and Rich Rosenstein, Chief Financial Officer. Before beginning, I would like to remind you that the information provided during this call may contain forward-looking statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives and expectations for future operation and are based on current estimates and projections, future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see the risk factors described in Acacia's annual report on Form 10-K and quarterly reports on Form 10-Q that are filed with the SEC. I would also like to remind everyone that a press release disclosing the financial results was issued this morning before the market opened. This release may be accessed on the company's website at acaciaresearch.com under the News and Events tab. With all that said, I'd like to turn the call over to MJ. MJ, the call is yours.

Thank you, Rob, and hi, everyone. Thanks for taking the time to join us this morning. Ten days ago, we announced the completion of a transaction with Starboard Value. As you may know, our partnership with Starboard began three years ago when we established a framework to evaluate a corporate acquisition strategy together. While our initial terms provided adequate capital and validated the opportunity, we learned along the way that there were some unintended complexities in our capital structure. This new agreement provides the ability to better pair the transactional and operational talent of the Acacia team with Starboard's platform, expertise, relationships, and capital. In addition, this transaction streamlines our capital structure and when complete simplifies our balance sheet without complicated derivatives. Importantly, on a go-forward basis, this new structure will provide all shareholders the ability to participate on the same footing as Starboard. Between our relationships and Starboard's networks, Acacia will have access to larger pools of capital that we can use to fund deals. We believe this transaction establishes our long-term operating model, positioning us to execute the strategy we have previously articulated. As part of the transaction, we're pleased to add Gavin Molinelli, a Starboard Partner and Portfolio Manager, as Chair of our Board. And with this milestone transaction now in place, Clifford Press, Acacia's CEO for the past three years has resigned from both the company and our Board. Clifford played a significant role in establishing this platform, implementing the strategy, and advancing us to this point with Starboard. On behalf of the company, we thank him and we wish him well. With that, I've been named to serve as interim CEO. For those of you who don't know me, prior to joining Acacia in the second quarter of this year, I was the Chief Executive Officer and a member of the Board of Directors at Starboard Value Acquisition Corp. Prior to my role with Starboard, I had a long history in private equity, which included Star Investment Holdings, Metalmark Capital, and Sun Capital Partners. Over that time, I led numerous acquisitions, including in Acacia's focus areas. With our ownership and capital structure clarified, I look forward to advancing the robust acquisition pipeline our talented and expanded teams have established since I joined. For some time, Starboard Value and Acacia have recognized an opportunity for a corporate acquirer operating in the space between hedge fund activism and private equity. We've seen first-hand that in some situations, activists do not have the necessary influence to create the required change without the ability to control the business. On the other hand, private equity can struggle to create catalysts and are increasingly left to participate in structured auction processes, which directly impact valuations. With Acacia, we now have a hybrid solution, a platform and vehicle that we believe brings the most effective parts of hedge fund and private equity structures together. Since I joined Acacia as Chief Operating Officer and Head of M&A, we have made significant progress implementing formal and institutional processes to enhance the scale and efficiency of the way we evaluate potential acquisitions. First, Acacia now has a great execution team, comprising proven professionals with public and private company acquisition expertise and experience in working with companies to enable value creation. Our in-house team is augmented by a world-class network of third-party advisors. As we scale up our team, we've refined our processes, institutionalizing our investment process from the ground up. This includes how we source potential targets, where we are benefiting from an excellent network of executive relationships augmented by an impressive set of institutional relationships. We have also clearly defined our screening process and criteria. We now have a clear set of metrics and benchmarks we utilize when evaluating potential transactions. Finally, we have a sophisticated institutional approach to due diligence. All of our potential acquisitions go through this rigorous process. Once we complete an acquisition, we rely on our own capabilities, but also those of the team we have built with significant operational capabilities. This network of operating partners with proven experience enables us to identify the merits, considerations, and future plans for any potential acquisitions quickly and efficiently. In addition, this network helps us drive operational improvements post-closing. We have a great deal of confidence in the professionals within this network. As a result of this hard work, our pipeline is now well defined. In terms of quantity and quality, it is the most robust that we have seen. The recent transactions with Starboard clarifies our structure, formalizes our relationship, and bolsters our capital. We now have all the pieces in place to move the strategy forward. Currently, market conditions have this pipeline more weighted toward public targets as valuations in the private markets have been elevated as a result of increased activity from private equity. While that won't always be the case, it is today, and we're nimble enough to shift our focus based on market realities. More importantly, we have a pipeline of actionable ideas that are far along in our research process and moving forward. While I would not expect any acquisitions to close before year-end, there is an urgency and multiple targets are active, actionable, and moving through our well-defined process. That said, we are patient and deliberate in our pursuits and we will not sacrifice our principles for the sake of merely completing an acquisition. We believe Acacia in partnership with Starboard has created a highly differentiated platform. We have a talented team with a wide range of skill sets and deep experience. We have a top-notch internal team executive network bringing us ideas. Acacia is well capitalized and between our relationships and Starboard's, we have access to additional capital we can engage to scale up our efforts. I think it's important to stress that acquisitions are only part of Acacia's strategy today. Certainly, it has been and will continue to be the primary area of focus. However, when I look at Acacia, I think it's important to note the various parts of our business. First, we have our life sciences holdings, which comprise the assets acquired in the life sciences portfolio. We continue to harvest gains from our public assets, and we maintain significant optimism for our private holdings of this portfolio. This transaction has and we believe will continue to create significant value for us. Second, we have public company holdings. Some of these are in the life sciences portfolio, but this also includes stock we have purchased as part of potential acquisition initiatives. We continue to actively pursue the strategy, particularly in situations where disconnected valuations present attractive opportunities. Third, we continue to effectively manage and invest in our intellectual property portfolio. Marc Booth, our Chief Intellectual Property Officer has a talented team, and we continue to believe this business can produce attractive, uncorrelated returns. Finally, we have Printronix, a private operating company. We acquired this business at an attractive valuation, and we are confident it can continue to generate cash to fund future initiatives. I'd now like to turn the call over to Rich to discuss the specific terms of our agreement with Starboard and our third-quarter financial results.

Thank you, MJ. Let me start by providing an overview of the agreement with Starboard, which will be executed in a sequence of transactions starting this month and concluding in the third quarter of 2023. Ultimately, this agreement will significantly streamline our capital structure with all in-the-money warrants exercised and all convertible preferred shares converted into common stock, as well as see Starboard invest at least $78.8 million in new capital to acquire shares at $5.25 per share. Pro forma for each transaction in this agreement, Acacia will have $390 million in cash and marketable securities with $308 million of that in cash. First, this agreement bolsters our innovative corporate acquisition platform, as MJ discussed. Starboard will invest at least $245 million in capital in Acacia. And as MJ mentioned, our team, processes, and pipeline are now in a position to deploy capital to pursue our acquisition strategy. Second, our capital structure will be much simpler with all shareholders investing in Acacia on the same basis. To achieve this, Starboard will first exercise its Series A warrants, resulting in approximately 11.5% common equity ownership in Acacia and approximately 27.5% voting interest inclusive of its existing ownership of convertible preferred stock. This was actually completed earlier this week. Acacia intends to commence a rights offering in the first quarter of 2023, offering one new share for every four shares owned with a maximum offering of more than 38 million shares. The offering price will be $5.25 per share. Starboard has committed to purchase at least 15 million shares in the offering, which means an incremental investment of at least $78.8 million. Next, in the second quarter of 2023, Starboard is committed to convert its $35 million in face value of convertible preferred stock into common stock following approval of amendments to the company's Certificate of Designation and Certificate of Incorporation, expected to be put to a vote of shareholders at Acacia's 2023 Annual Meeting. Finally, in July 2023, upon the maturity of the remaining $60 million in senior secured notes outstanding, Starboard has committed to exercise its 31.5 million Series B warrants at $3.65 per share. This will result in the pay down of the $60 million in notes and Starboard's payment of $55 million in cash to exercise these warrants. Importantly, the remaining 68.5 million Series B warrants will be canceled immediately following completion of the rights offering. In connection with all of these transactions, Acacia has agreed to make $75 million in payments to Starboard as compensation for its early exercise of each of these instruments; $9 million to be paid at the time of the Series A warrant exercise and the balance of $66 million to be paid at the time of the Series B warrant exercise in July 2023. This payment was based on a negotiation to reflect the estimated remaining time value of the various securities to be exercised early by Starboard and compares with the $91.5 million in warrant and embedded derivative liabilities on our balance sheet at September 30 and $133.2 million at June 30. Reflecting all of these transactions, Acacia's pro forma book value will be $520.1 million or $5.22 per share. The ultimate book value may vary upon additional shareholder participation in the rights offering, any incremental investment by Starboard beyond its 15 million minimum share commitment in the rights offering, and of course, any changes in book value owing to earnings in our business and changes in the value of our securities and private positions. If the full allotment of the rights offering were purchased, we would raise an additional $122 million of potential capital beyond Starboard's 15 million share minimum commitment. So in summary, once this process has been completed, Acacia will have approximately 100 million common shares outstanding, $60 million of liabilities attributable to the notes will be eliminated, and 31.5 million shares of common stock would be issued. $35 million of face value preferred stock will be eliminated, and 9.6 million shares of common stock will be issued. $91.5 million of warrant and embedded derivative liabilities would be eliminated, with $67 million of cash added upon the exercise of the Series A warrants sale of 15 million shares at $5.25 per share, net of the $75 million in early termination payments and also net of transaction costs. Acacia will then have no preferred shares or warrants outstanding. Starboard Value will own approximately 61% of the common equity, and Acacia will have a capital base representing cash and marketable securities of $390 million. Moving forward, with more than $300 million in cash, we expect the cash interest income to cover our ongoing parent, general, and administrative costs. Assuming our intellectual property business and our industrial printing business are at least self-funding, we expect to be able to fund our operations with little to no cash burn as we explore opportunities for value-creating acquisitions. Now let me turn to the third-quarter results. GAAP book value at September 30 was $282.5 million, or $7.33 per basic share compared to $268.2 million, or $6.60 per share as of June 30 and $430.5 million, or $8.80 per share at December 31, 2021. Now remember, this GAAP book value includes the impact of all warrant and embedded derivative liabilities on our balance sheet at September 30, which in turn has reflected the increase in the company's share price over time since these instruments were first issued. As these liabilities will be extinguished upon exercise or expiration of these warrants and convertible preferred stock, we think it is more useful to consider our book value should all of these instruments be converted. As I just described, the Starboard transactions will result in the elimination of all these derivative securities and preferred shares and result in a clean capital structure without any of these liabilities. For this reason, we have presented pro forma book value per share to capture the full impact of this agreement with Starboard. As this will take place over time, we have also presented these transactions as staged on a quarterly basis over the course of the next year to better illustrate how this will work over time. We have included this in our earnings release published this morning. Of note, you will see by the end of the first quarter of 2023, we will have more than $320 million in cash on our balance sheet following the first two steps in the sequence of transactions with Starboard. The Series A warrant exercise, which occurred earlier this week, and the rights offering expected to be completed in the first quarter. By July, we expect all of the warrants and derivatives to have been exercised and converted, by which time we will have a vastly simplified balance sheet with pro forma book value of $520 million, diluted shares outstanding of 99.6 million and resulting in a book value per share on a pro forma basis of $5.22. Now in terms of quarterly performance, revenues for the third quarter of 2022 were $15.9 million, compared to $1.6 million a year ago. Within that, Printronix contributed $9.6 million in revenue in the quarter with no contribution in the prior year, as the transaction closed in early October last year. Second, our intellectual property business generated $6.3 million in revenue related to patent assertion, compared to $1.6 million in the third quarter of last year. This is a reflection of the uneven nature of revenue timing in this business. General and administrative expenses were $15 million, compared to $10.3 million in the third quarter last year due to the inclusion of Printronix operating expenses and also increased parent business development expense. Intellectual property G&A expenses were flat to down year-over-year. Operating loss was $11.4 million during the quarter, a slight improvement over the $12.7 million operating loss a year ago. And breaking this down, Printronix contributed $0.4 million in operating income, and the intellectual property business had a similarly sized modest loss after patent amortization. The balance of our operating loss related to parent general and administrative expenses. Our realized gain on securities during the quarter of $36 million offset a similarly sized unrealized loss in the period; the latter is a reflection of the decline in share prices of our security positions over the last three months. Our GAAP net income was $28.1 million, or $0.02 per diluted share compared to net income of $89.8 million, or $0.86 per diluted share in the third quarter of last year. Recall that during the third quarter of 2021, Acacia recognized $101 million in realized and unrealized gains in the value of the life sciences portfolio acquired in June of 2020, primarily due to the IPO of Oxford Nanopore. We also recognized noncash income of $41.6 million in the quarter related to the change in fair value of the Starboard warrant and derivative liabilities due to the decline in Acacia share price during the third quarter. Now recall at the beginning of 2021, our net operating loss carryforward plus our capital loss carryforward stood at $286 million. Since that time, we have utilized nearly 90% of that to shelter realized gains. Cash and equity securities at fair value totaled $323.2 million at September 30, compared to $670.7 million at December 31, 2021. And recall also, we have retired $120 million in senior secured notes during 2022, and we've also repurchased $51 million of our own shares. And then last, debt was $61.4 million in senior secured notes issued to Starboard, down from $181.2 million at December 31, 2021. More detail on these results have been made available in the press release this morning and in our quarterly report on Form 10-Q, which we will file shortly. We believe the new agreement clarifies our increasingly collaborative relationship with Starboard, establishes a differentiated and well-resourced vehicle to pursue corporate acquisitions, and removes the most common concern from potential shareholders: our previously complex capital structure. Going forward, we believe the cash and marketable securities per share is an important metric for measuring our progress. At September 30, 2022, on a pro forma basis, assuming completion of all phases of the announced Starboard transaction, our cash and marketable securities per share would be $3.91, essentially where our stock is trading today. Importantly, this excludes any value from our private holdings, our intellectual property, and industrial businesses, all of which are carried on the basis of cost, nor does it include any value that we may create from future transactions. So essentially, shareholders investing in our stock price today are getting all of that for free. Over time, we do not intend to burn cash in our operations supported by interest income on our cash holdings. In summary, we have and continue to expand our pipeline of potential opportunities to acquire businesses. This pipeline is now larger and more advanced than it has ever been. And as MJ noted, we have defined processes for moving targets through this pipeline. These transactions can take a long time. We are patient, we are disciplined in valuations, and we are serious. And now I'd like to turn the call back over to MJ.

Thanks, Rich. So to summarize here, we’ve built a strong team, very strong institutionalized processes, and pro forma for the completion of our transaction with Starboard, we'll have approximately $3.91 in cash and marketable securities per share and a book value of $5.22 a share. As a reminder, as Rich said, book value includes both our private and our operating businesses at cost. Additionally, as Rich mentioned, we do not intend to burn any cash as interest earned on our cash holdings will support the pursuit of our acquisition strategy. And with that, we'd be pleased to take any questions.

Thank you, ladies and gentlemen. The floor is now open for questions. The first question is coming from Anthony Stoss with Craig-Hallum. Anthony, your line is live.

Thanks. Welcome aboard, MJ. I know you've been there for a short time as interim CEO. Let me ask a couple of questions that I often hear from shareholders. Recently, it's been about Viamet. How do you plan to monetize it?

Sure. So thanks, Tony. So as you know, we own approximately 26% of Viamet, which is, in essence, the recipient of royalties and milestone payments. One, we have received two milestone payments again this year, one of which in the second quarter was paid in the third quarter. It was a small milestone payment. And then there's a much larger one that we anticipate receiving before the end of the year. So at a minimum, we anticipate receiving those milestone payments and royalty payments, and we're excited about the opportunity that that represents for us. If there are opportunities to monetize that differently, we would certainly consider that. But at a minimum, the royalty stream is something that we're quite excited about.

Got it. And since you're holding the mic here, Rich, let me ask you a question on OpEx. It always jumps around, really difficult to predict just like your revenues, but at $17.3 million in September, should we think of that as kind of the go-forward rate on OpEx?

Our patent business has operating expenses that will fluctuate based on technical challenges. The Printronix business maintains relatively steady operating expenses, and as that business starts to grow more significantly due to executed partnerships, we may see an increase in expenses. Currently, it seems to be at a reasonable level. From an administrative and general perspective, our parent organization and business development initiatives will vary depending on the activity and transactions we pursue. In times of lower activity, expenses will decrease, while we may incur higher costs as we approach significant acquisitions that require thorough diligence. Overall, it's a reasonable baseline, but it will vary, especially based on success-driven opportunities.

Got it. And then two last questions. It's been a little while since we've had an update on the Wi-Fi IP portfolio. I know you guys are successful out of the gate. I know you have high hopes for it. Maybe if you wouldn't mind sharing if there's anything to share, kind of an update on that? And then I'm saving the last question for MJ.

Sure. So we often don't have kind of update commentary around specific IP portfolios. One thing I will say is that the portfolio that you mentioned is something that we're very excited about. It's actually more than delivered the capital that we invested in it already, which was a lot sooner than we had anticipated. We did have one large settlement last year, which not only was helpful from a financial return standpoint but also validated the quality of the portfolio in the marketplace, and that's actually generated a lot of meaningful discussions that we've had with additional potential licensees. Our goal is to maximize value, not to put revenue on the board as quickly as possible. So trust that we're looking to maximize the value of that portfolio. But our enthusiasm for it has only grown since we acquired it.

Got it. And then MJ, a lot of existing shareholders are ones that have exited Acacia. The underlying theme is, I don't know what I own. Am I going to own a part of Kohl's or what am I going to own a part of? So it's been three years since the Starboard agreement, no acquisitions to show for it. I mean I know the life sciences stuff was kind of ongoing before the Starboard agreement. I'm optimistic with you there that we can get something, hopefully, relatively soon. It'd be nice to have a large operating business so investors can actually look at what they own and what the true value of the stock is. Just love to hear your thoughts on anything related to that.

Yes, Tony, I appreciate your optimism, and we share it. When we first spoke at the end of the first quarter earnings call shortly after I joined, we put considerable effort into defining our identity and establishing the necessary processes and team to execute our strategy. Regarding your specific question about owning Kohl's, we are focused on acquiring good businesses that we can improve in collaboration with outstanding executives, whether they are currently with us or new hires. We are opportunistic in our approach, equipped with various strategies, including a hybrid private equity hedge fund model, which allows us to create catalysts for growth. Currently, we are concentrating on industrials, healthcare, and mature technology sectors, although we remain open to interesting opportunities outside these areas. We have dedicated significant time to building an attractive pipeline. We can engage in private acquisitions through bilateral discussions or auctions, though the latter is less appealing due to time allocation concerns. We are also looking at public business acquisitions and divisions within public companies. We feel optimistic about public-to-private opportunities, especially compared to what we saw six months to two years ago. We see many intriguing prospects in the public markets that allow us to be proactive buyers and create value in those businesses. As Rich and I have stated, we have the pipeline, the process, and the team to pursue these opportunities, but we are proceeding thoughtfully regarding our approach and valuation.

I want to clarify a point you made. You stated that the life science portfolio acquisition was completed before the Starboard deal, but that isn't accurate. Importantly, that transaction was only possible due to our partnership with Starboard. We entered into that relationship in November 2019. At the onset of COVID, we discovered this portfolio of life science investments, which we weren't initially set up to evaluate or pursue. It was an unexpected opportunity, a once-in-a-lifetime chance. We had about $160 million in cash available at the time, but to acquire this portfolio, we needed approximately $300 million in cash to put in escrow for the transaction. This would not have been feasible without the Starboard partnership and access to that capital. While this acquisition has been a key topic in our discussions, it's important to note that it has already generated $155 million more in capital than our original investment, and we still hold positions at book value. The book value of our private investments is largely based on costs, adding nearly $110 million of value or potentially more. Thus, this transaction has created an additional $265 million or more in value and would not have been achievable without Starboard's partnership. This distinction is crucial. We are very pleased with this transaction as it has created significant value, though it presents a challenging benchmark for our next steps, which we are committed to addressing.

Thanks to both of you guys for those detailed explanations and looking forward to seeing what comes next for Acacia. Thank you.

Yeah. Thanks, Tony.

Up next, we have Brett Reiss with Janny Montgomery Scott. Brett, please proceed.

Hi, gentlemen.

Good morning.

Hey, Brett.

Good morning. Hi. In terms of the timing of the first acquisition, are there any conditions preceding that have to happen in the simplification of the capital structure before you can pull the trigger on the deal? Like, for example, do you have to have shareholder approval in your pocket before you make the first acquisition?

No.

No, we don't.

Okay. So we're waiting until after the first of the year simply because you're doing additional due diligence or maybe you think there's just another shoe to drop in terms of the market volatility?

Yes. I mean, Brett, I think it's a great question. As we look at our pipeline, we're advancing a lot of things and they are at different stages of that pipeline. There are things that we saw very attractive, and pricing moved away from us. There are things that we thought were very attractive, and pricing has moved in our favor. It's not a question of waiting until the first of the year. It's really a question of making sure that we're undertaking the rigor of our investment analysis process such that we're making the right decisions. And as you know, transactions have lives of their own. And so as they advance through the pipeline and the stages of our work and our investment decision-making process, we'll move things to the phase where we can close something. There is not something in the pipeline that's in that final stage of closing a transaction. So it's not a question of waiting until the beginning of the year. It's making sure that we're advancing as many things as possible to that stage and getting as many shots on goal as we can. And if I think about it, my children are hockey players; they use the hockey analogy. We've spent a lot of time with the opposing offense in our zone. We moved into the neutral zone, and we were doing a decent job kind of making sure that puck wasn't getting into our zone, and now we're in the opposing team's zone, and we're continuing to take shots on goal. And our shot count is going up. And as you know, the higher the shot count, the higher the probability of getting goals up. So that's what we're focused on.

Right. Now how important to us is the extra capital that might come in from the exercise of the rights offering at $5.25 from other shareholders? And if the answer is yes, it's important, don't you have to make some sort of acquisition to attract attention to the market, to the company and, hence, realize a higher stock price so that shareholders other than Starboard, who's committed to investing the 15 million at $5.25, will be incentivized to exercise their rights?

Great question, Brett. We're very focused on enhancing shareholder value, and we believe that if we can show shareholders there's more than $5.25 per share in worth, then the rights offering will be appealing. If we can't achieve that, we understand that investors may hesitate to invest at that price. We collaborated with Starboard to set that price, which we think should attract shareholders based on the opportunities we see. However, we won't hastily announce an acquisition simply to drive that opportunity. We intend to remain disciplined and be responsible stewards of capital, which is our priority. Regarding timing, it's essential for us to be realistic rather than predict when deals will happen. If we can achieve something sooner, we would love to do it. If we identify an appealing opportunity that we can act on and finalize quickly, we would welcome that. But we won't commit to closing something by a specific date, such as before the rights offering, just to ensure its success.

Right. One last one, when you read Berkshire's annual report, he's got a checklist of criteria in businesses that he would like to purchase. In terms of what you're focusing on, can you refresh our recollection, what are we looking for? And is there a minimum and maximum deal size that's your kind of sweet spot?

Yes, Brett. So we also have a checklist of criteria that we go through and a checklist of plans to put together once we acquire a business. So we are admirers of Berkshire in that respect, and we've adopted that for ourselves. So we appreciate you bringing that up. In terms of what we're looking for, we're looking for businesses that we believe we can make better. And we believe we can make better in partnership with existing teams or with teams that we can bring on board with operating executives with whom we have relationships. This is a very valuable area of our partnership with Starboard as they have a lot of relationships and expertise in doing that in public companies, and we're looking to do that in not private companies, but companies within Acacia's stable. And so that's really what we're looking for at least at a high level, and that can take many different forms. In terms of size of business, we're not really constrained to the size of business that we can acquire. As you know, we acquired Printronix almost a year ago, as Rich mentioned earlier, that was on the smaller side. And we've bid on businesses that you've seen out in the public that are much larger. We have cash from our balance sheet, and we have relationships with other large institutional investors that like to participate in opportunities like these alongside folks like us. And so it really comes down to the situation. As I mentioned, we are focused on a couple of key areas of the economy right now. We're not precluded from doing things in other areas of the economy if we find them to be very attractive. We're not precluded from doing something like a life sciences portfolio again if we think that it's attractive, but we are trying to stay focused and disciplined on that formation, which is to acquire businesses that we think we can make better and, ultimately, great in partnership with really smart people around the table.

Great. Thank you for taking my question and of course, break a leg, I’ll say the best of luck.

Thanks, Brett.

Thanks, Brett. I’ll try not to break my leg down.

We have a question coming from Adam Eagleston with Formidable Asset Management. Your line is live.

Hello, gentlemen. Appreciate the time today. Again, congrats on the restructuring. Happy to see that as a long-time shareholder here. The question is, Rich mentioned, I think, getting all the ancillary businesses for free, which is great on the one hand, but on the other, tell us how you're thinking about the discount between book value and price that narrowed between $630 and $930 million, I think, in large part because of the buyback. So maybe walk us through your capital allocation decision, appreciate the more shots on goal analogy, but how do you think about your own stock as part of one of those shots on goal?

Thanks, Adam. We have repurchased $55 million of our own shares over the past year. We are certainly aware of the value of our stock and the discount it currently trades at. We would consider resuming buybacks if we cannot find better opportunities for deploying our capital. We have been inactive in the market while negotiating the recapitalization with Starboard and simplifying our balance sheet. However, our main focus is to maintain liquidity for opportunities that we believe will deliver attractive returns on investment. Simply reducing capital is not aligned with our strategic objectives. That said, we are aware of our stock's trading position, and during times when we lack acquisition opportunities, stock buybacks are something we would definitely consider.

Got it. So does that level of discount to book value service somewhat of your hurdle rate or how do you think about that?

I think that's a good way to approach it. We have opportunities to invest our capital, and we aim to do this in the most attractive manner. We will always compare that with the benefits of buying back our own stock, which raises the bar for us.

Okay. Fair enough. Thank you. Appreciate it.

Thank you.

Okay. We have no further questions in queue. I'd now like to turn it back to management for closing remarks.

Thanks, everyone. Thanks for the thoughtful questions. Thanks for taking the time with us this morning. And thanks for the support and the optimism about the platform here. We will continue to update you as things continue to develop, and we have some deals moving forward. So we look forward to talking to you next quarter.

Thank you, ladies and gentlemen. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.