ACTG 8-K
Acacia Research Corp (ACTG)
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 |
| 3 |
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
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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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