Company Fully Engaged in Executing Strategic
Transactions in Collaboration with Starboard
Acacia Research Corporation (Nasdaq: ACTG) today reported
results for the three-month period ended September 30, 2020.
Clifford Press, Chief Executive Officer, stated, “Since
announcing our acquisition of the Woodford portfolio in June, we
have completed dispositions that have recovered two-thirds of our
purchase price. We continue to hold substantial value in the
securities of public and private companies remaining in the
portfolio.”
Holdings of the securities of life sciences companies in the
Woodford portfolio as of September 30, 2020 include:
Public
Company Securities (at market value at September 30,
2020)
Company
Ticker
Number of Shares
Value
Arix Bioscience plc 1
LSE: ARIX
25.8 mm
$37.0 mm
Sensyne Health plc
AIM: SENS
15.2 mm
$11.4 mm
Induction Healthcare Group plc
AIM: INHC
4.2 mm
$4.0 mm
Others
$2.1 mm
Total Public Holdings
$54.5 mm
Private
Company Securities (at September 30, 2020)
Company
Ownership Percentage
Value
Oxford Nanopore Technologies 2
6%
$108.0 mm
Next 4
positions:
Immunocore 2
5%
Viamet Pharmaceuticals 2, 3
26%
AMO Pharma 2, 4
18%
NovaBiotics 2, 4
4%
$31.0 mm
Total Private Holdings
$139.0 mm
1 To be transferred to the Company in the
fourth quarter of 2020
2 Value of Oxford Nanopore Technologies
securities based on observed transactions during the quarter;
Remaining holdings of private company securities valued at
cost.
3 To be transferred to the Company in the
fourth quarter of 2020.
4 Transferred to the Company in
October.
Mr. Press added, “We are working intensively with Starboard to
execute our investment strategy, leveraging our ready access to
committed capital for strategic transactions borne of our expertise
in corporate governance and operational restructuring.”
Al Tobia, Acacia’s Chief Investment Officer, added, “We believe
that structural inefficiencies in the small-cap value sector create
opportunities for us. Our areas of focus remain mature technology,
healthcare, industrial and certain financial services segments. We
are continuing to see attractive market conditions in the IP market
as well, and our team has recently completed an option agreement to
add a new portfolio.”
Mr. Tobia continued, “In order to provide existing stockholders
of Acacia the opportunity to invest alongside Starboard with
substantially similar terms as the Senior Secured Notes and Series
B Warrants issued to Starboard, today we expect to file a shelf
registration statement on Form S-3 with the SEC to facilitate the
rights offering and provide flexibility to the Company.”
Third Quarter 2020 Financial Summary:
- Cash and short-term investments totaled $303.1 million at
September 30, 2020, compared to $184.0 million at June 30, 2020 and
$168.3 million at December 31, 2019.
- Debt, which represents the Senior Secured Notes issued to
Starboard, was $115.0 million at September 30, 2020.
- Book value totaled $202.3 million as of September 30, 2020,
compared to $175.0 million at December 31, 2019. Acacia’s current
book value reflects issuance of Senior Secured Notes and
liabilities associated with upfront funding of the life science
portfolio acquisition, and reflects the allocated value based on
U.S. GAAP of assets transferred as of September 30, 2020.
- Gross revenues were $19.5 million.
- General and administrative expenses for the third quarter of
2020 increased by $3.1 million or 66%, compared with the third
quarter of 2019, due to business development and personnel
expenses.
- Operating loss was $2.8 million.
- GAAP net income to common stockholders was $29.2 million, or
$0.32 per diluted share, compared to a net loss of $(7.6 million),
or $(0.15) per diluted share, in the third quarter last year.
- The third quarter of 2020 reflected:
- A net non-cash benefit of $20 million related to the change in
the fair value of trading and investment securities, and securities
derivatives and forward contracts; and
- Income of $21 million related to the change in fair value of
warrants and embedded derivatives.
Investor Conference Call:
The Company will host a conference call today, Monday, November
9, 2020 at 11 a.m. ET/ 8 a.m. PT to discuss these results and
provide a business update.
To access the live call, please dial (877) 407-0778 (U.S. and
Canada) or (201) 689-8565 (international). The conference call will
also be simultaneously webcasted on the investor relations section
of the Company’s website at http://acaciaresearch.com under the
News & Events 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 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, including the impact of the COVID-19
pandemic 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 STATEMENTS OF OPERATIONS (In thousands, except
share and per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Revenues
$
19,466
$
1,711
$
25,399
$
10,558
Portfolio operations:
Inventor royalties
5,772
776
6,843
4,752
Contingent legal fees
6,609
35
6,855
587
Litigation and licensing expenses
- patents
1,001
987
3,497
6,643
Amortization of patents
1,174
863
3,522
2,337
Other portfolio expenses
(income)
-
(475
)
(308
)
175
Total portfolio operations
14,556
2,186
20,409
14,494
Net portfolio income (loss)
4,910
(475
)
4,990
(3,936
)
General and administrative
expenses
7,692
4,630
18,089
12,048
Operating loss
(2,782
)
(5,105
)
(13,099
)
(15,984
)
Other income (expense):
Change in fair value of
investment, net
(3,081
)
(4,266
)
3,704
9,622
Loss on sale of investment
-
(915
)
(2,762
)
(8,147
)
Impairment of other
investment
-
-
-
(8,195
)
Gain on disposal of other
investment
-
2,000
-
2,000
Change in fair value of the
Series A and B warrants and embedded derivatives
20,672
-
(46,612
)
-
Change in fair value of equity
securities derivative and forward contract
(64,011
)
-
17,542
-
Gain on sale of prepaid
investment and derivative
2,845
-
2,845
-
Change in fair value of trading
securities and equity securities - private
84,499
(482
)
81,907
132
Gain (loss) on sale of trading
securities
2,737
238
(4,272
)
226
Loss on foreign currency
exchange
(48
)
(106
)
(4,938
)
(106
)
Interest expense on Senior
Secured Notes
(2,410
)
-
(3,178
)
-
Interest income and other
10
1,028
811
3,012
Total other income (expense)
41,213
(2,503
)
45,047
(1,456
)
Income (loss) before income
taxes
38,431
(7,608
)
31,948
(17,440
)
Income tax benefit (expense)
(83
)
-
1,257
(323
)
Net income (loss) including
noncontrolling interests in subsidiaries
38,348
(7,608
)
33,205
(17,763
)
Net loss attributable to
noncontrolling interests in subsidiaries
-
-
-
14
Net income (loss) attributable to
Acacia Research Corporation
$
38,348
$
(7,608
)
$
33,205
$
(17,749
)
Net income (loss) attributable to
common stockholders - basic
$
30,529
$
(7,608
)
$
24,838
$
(17,749
)
Basic net income (loss) per
common share
$
0.63
$
(0.15
)
$
0.51
$
(0.36
)
Weighted average number of shares
outstanding - basic
48,467,885
49,828,361
48,949,706
49,727,385
Net income (loss) attributable to
common stockholders - diluted
$
29,204
$
(7,608
)
$
21,380
$
(17,749
)
Diluted net income (loss) per
common share
$
0.32
$
(0.15
)
$
0.36
$
(0.36
)
Weighted average number of shares
outstanding - diluted
90,624,702
49,828,361
60,153,773
49,727,385
(1) General and administrative
expenses were comprised of the following:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
General and administrative
expenses
$
7,204
$
4,330
$
16,846
$
11,295
Non-cash stock compensation
expense - G&A
488
300
1,243
753
Total general and administrative
expenses
$
7,692
$
4,630
$
18,089
$
12,048
The accompanying notes are an
integral part of these condensed consolidated financial
statements.
ACACIA RESEARCH CORPORATION UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands, except share and
per share data)
September 30,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
162,564
$
57,359
Trading securities - debt
-
93,843
Trading securities - equity
24,471
17,140
Equity securities - private
116,009
-
Equity securities derivative
17,818
-
Equity securities forward
contract
340
-
Prepaid investment
42,900
-
Accounts receivable
263
511
Prepaid expenses and other
current assets
1,685
2,912
Total current assets
366,050
171,765
Long-term restricted cash
35,000
35,000
Investment at fair value
982
1,500
Patents, net of accumulated
amortization
18,071
7,814
Leased right-of-use assets
1,101
1,264
Other non-current assets
5,311
818
Total assets
$
426,515
$
218,161
LIABILITIES, REDEEMABLE
CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
2,707
$
1,765
Accrued expenses and other
current liabilities
4,849
7,265
Accrued compensation
2,595
507
Royalties and contingent legal
fees payable
14,230
2,178
Senior Secured Notes Payable -
short-term
113,933
-
Total current liabilities
138,314
11,715
Series A warrant liabilities
5,604
3,568
Series A embedded derivative
liabilities
25,682
17,974
Series B warrant liabilities
42,796
-
Long-term lease liabilities
1,101
1,264
Other long-term liabilities
593
593
Total liabilities
214,090
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
September 30, 2020 and December 31, 2019, respectively; aggregate
liquidation preference of $35,000 as of September 30, 2020 and
December 31, 2019, respectively
10,134
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; 49,279,453 and 50,370,987
shares issued and outstanding as of September 30, 2020 and December
31, 2019, respectively
49
50
Treasury stock, at cost,
4,604,365 and 2,919,828 shares as of September 30, 2020 and
December 31, 2019, respectively
(43,270
)
(39,272
)
Additional paid-in capital
650,130
652,003
Accumulated deficit
(406,451
)
(439,656
)
Total Acacia Research Corporation stockholders' equity
200,458
173,125
Noncontrolling interests
1,833
1,833
Total stockholders' equity
202,291
174,958
Total liabilities, redeemable convertible preferred stock,
and stockholders' equity
$
426,515
$
218,161
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201109005603/en/
Acacia Research Investor Contact: FNK IR Rob Fink,
646-809-4048 rob@fnkir.com
Acacia Research Technolo... (NASDAQ:ACTG)
Historical Stock Chart
From Apr 2024 to May 2024
Acacia Research Technolo... (NASDAQ:ACTG)
Historical Stock Chart
From May 2023 to May 2024