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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Acacia Research Technologies | NASDAQ:ACTG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.11 | 2.24% | 5.02 | 4.92 | 5.33 | 5.06 | 4.95 | 4.98 | 178,660 | 23:05:52 |
Book Value as of December 31, 2020 Increases to $292.5 Million, or $5.94 Per Share
Acacia Research Corporation (Nasdaq: ACTG) today reported results for the three and 12-month period ended December 31, 2020.
Clifford Press, Chief Executive Officer, stated, “During the year, we completed our first transaction in our strategic partnership with Starboard Value LP (“Starboard”), and acquired a portfolio of late-stage life science assets, increasing our book value by more than $117.5 million. After acquiring this portfolio for $282.3 million, we sold several holdings to recover $188.5 million while retaining assets which were valued at more than $267.4 million as of December 31, 2020. Subsequent to year end, Immunocore, whose securities are included in the portfolio, conducted a successful IPO, following the release of positive clinical data, which increased the value of our holding by $31.9 million as of March 26, 2021. We continue to hold substantial value in the securities of public and private companies remaining in the portfolio.”
Our life sciences portfolio as of December 31, 2020 includes:
Public Company Securities (at market value at December 31, 2020)
CompanyTicker
Number of Shares
Value
Change since 9/30
Arix Bioscience plc 1 LSE: ARIX 25.8 mm $77.3 mm $40.3 mm Sensyne Health plc AIM: SENS 15.2 mm $23.3 mm $11.9 mm Induction Healthcare Group plc AIM: INHC 4.2 mm $4.2 mm ($0.2 mm) Total Public Holdings $104.8 mm $52.0 mmPrivate Company Securities (at December 31, 2020)
CompanyOwnership Percentage
Value
Oxford Nanopore Technologies ¹6%
$111.1 mm Immunocore 1, 24%
$26.0 mm Next three positions: Viamet Pharmaceuticals26%
AMO Pharma22%
NovaBiotics4%
$25.4 mm Total Private Holdings $162.5 mm1 Value of Oxford Nanopore Technologies and Immunocore securities based on observed transactions; remaining holdings of private company securities valued at cost.
2 Completed an IPO on February 4, 2021; Value at March 26, 2021 was $57.9 million
Al Tobia, Acacia’s Chief Investment Officer, added, “During 2020 we had gains, realized and unrealized, of approximately $175 million from the life sciences portfolio. During the first quarter of this year, our IP business completed the acquisition of a patent portfolio from Newracom. This portfolio provides a broad range of Wi-Fi IP that covers multiple applications including mobile devices, wearables, digital home, home automation, healthcare, and industrial automation. Our team is actively exploring licensing opportunities for the recently acquired patent families.”
Mr. Press concluded, “We remain active in collaboration with Starboard to evaluate further opportunities within the small-cap value sector with the goal of acquiring operating companies in the mature technology, healthcare, industrial and certain financial services segments.”
Full Year 2020 Financial Summary:
Fourth Quarter 2020 Financial Summary:
Book Value/Dilution
As of December 31, 2020, book value was $292.5 million and there were 49.2 million diluted shares outstanding in the fourth quarter of 2020, for a book value per share of $5.94.
Starboard Value holds the following securities:
Book value at December 31, 2020 reflects the impact of the following:
Assuming Starboard Value converted all preferred stock and exercised all warrants1:
The impact of this would be an incremental $590 million in book value, and an incremental 114.6 million shares outstanding. Pro forma for all of this exercise, book value would be $882.5 million, and diluted shares outstanding would be 163.8 million, for book value per share of $5.39.
Investor Conference Call:
The Company will host a conference call today, Monday, March 29, 2021 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 https://acaciaresearch.com/actg/investor_relations/3413 under the News & Events section. 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
Acacia Research (NASDAQ: ACTG) seeks to acquire undervalued businesses and pursues opportunities for value creation. We leverage our (i) access to flexible capital that can be deployed unconditionally, (ii) expertise in corporate governance and operational restructuring, (iii) willingness to invest in out of favor industries and businesses that suffer from a complexity discount and untangle complex, multi-factor situations, and (iv) expertise and relationships in certain sectors, to complete strategic acquisitions of businesses, divisions, and/or assets with a focus on mature technology, healthcare, industrial and certain financial segments. We seek to identify opportunities where we believe we are advantaged buyers, where we can avoid structured sale processes and create the opportunity to purchase businesses, divisions and/or assets of companies at an attractive price due to our unique capabilities, relationships, or expertise, or where we believe the target would be worth more to us than to other buyers. 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 identify and complete strategic acquisitions of businesses, divisions, and/or assets, 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.
1 Consistent with the Company's NOL preservation policies, the terms of the preferred stock and warrants prevent Starboard Value from converting or exercising such security to the extent such conversion or exercise would cause Starboard Value, together with its affiliates, to beneficially own in excess of 4.89% of the Company's then outstanding shares of common stock following such conversion or exercise.
ACACIA RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended
Years Ended
December 31,
December 31,
2020
2019
2020
2019
Revenues$
4,383
$
688
$
29,782
$
11,246
Portfolio operations: Inventor royalties
506
192
7,349
4,944
Contingent legal fees
564
4
7,419
591
Litigation and licensing expenses - patents
2,186
1,160
5,683
7,803
Amortization of patents
1,159
857
4,681
3,194
Other portfolio expenses (income)
-
1,581
(308
)
1,756
Total portfolio operations
4,415
3,794
24,824
18,288
Net portfolio income (loss)
(32
)
(3,106
)
4,958
(7,042
)
General and administrative expenses
6,387
4,328
24,476
16,376
Operating loss
(6,419
)
(7,434
)
(19,518
)
(23,418
)
Other income (expense): Change in fair value of investment, net
1,770
277
5,474
9,899
Gain (loss) on sale of investment
10,949
(1,083
)
8,187
(9,230
)
Impairment of other investment
-
-
-
(8,195
)
Gain on disposal of other investment
-
-
-
2,000
Change in fair value of the Series A and B warrants and embedded derivatives
(11,626
)
4,518
(58,238
)
4,518
Change in fair value of equity securities derivative and forward contract
(17,542
)
-
-
-
Gain on sale of prepaid investment and derivative
247
-
2,845
-
Change in fair value of trading securities and equity securities
99,878
(277
)
176,173
(145
)
Gain (loss) on sale of trading securities
11,623
1,963
7,352
2,188
Gain (loss) on foreign currency exchange
(5,825
)
104
(4,905
)
(2
)
Interest expense on Senior Secured Notes
(2,745
)
-
(5,923
)
-
Interest income and other
27
419
838
3,432
Total other income (expense)
86,756
5,921
131,803
4,465
Income (loss) before income taxes
80,337
(1,513
)
112,285
(18,953
)
Income tax benefit (expense)
(98
)
2,147
1,159
1,824
Net income (loss) including noncontrolling interests in subsidiaries
80,239
634
113,444
(17,129
)
Net loss attributable to noncontrolling interests in subsidiaries
-
-
-
14
Net income (loss) attributable to Acacia Research Corporation
$
80,239
$
634
$
113,444
$
(17,115
)
Net income (loss) attributable to common stockholders - basic
$
65,180
$
327
$
90,330
$
(17,422
)
Basic net income (loss) per common share$
1.34
$
0.01
$
1.85
$
(0.35
)
Weighted average number of shares outstanding - basic
48,508,903
49,875,750
48,840,829
49,764,002
Net income (loss) attributable to common stockholders - diluted
$
65,352
$
(2,624
)
$
88,471
$
(20,373
)
Diluted net income (loss) per common share$
1.33
$
(0.05
)
$
1.54
$
(0.40
)
Weighted average number of shares outstanding - diluted
49,244,141
54,406,835
57,435,128
50,896,773
ACACIA RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31,
December 31,
2020
2019
ASSETS
Current assets: Cash and cash equivalents$
165,546
$
57,359
Trading securities - debt
-
93,843
Trading securities - equity
109,103
17,140
Investment securities - private equity
143,257
-
Investment securities - equity method investments
30,673
-
Investment at fair value
2,752
1,500
Accounts receivable
506
511
Prepaid expenses and other current assets
5,832
2,912
Total current assets
457,669
173,265
Long-term restricted cash
35,000
35,000
Patents, net of accumulated amortization
16,912
7,814
Leased right-of-use assets
951
1,264
Other non-current assets
4,988
818
Total assets
$
515,520
$
218,161
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable
$
1,019
$
1,765
Accrued expenses and other current liabilities
3,707
7,265
Accrued compensation
2,265
507
Royalties and contingent legal fees payable
2,162
2,178
Senior Secured Notes Payable - short-term
115,663
-
Total current liabilities
124,816
11,715
Series A warrant liabilities
6,640
3,568
Series A embedded derivative liabilities
26,728
17,974
Series B warrant liabilities
52,341
-
Long-term lease liabilities
951
1,264
Other long-term liabilities
591
593
Total liabilities
212,067
35,114
Commitments and contingencies 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 December 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $35,000 as of December 31, 2020 and December 31, 2019, respectively
10,924
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 December 31, 2020 and December 31, 2019, respectively
49
50
Treasury stock, at cost, 4,604,365 and 2,919,828 shares as of December 31, 2020 and December 31, 2019, respectively
(43,270
)
(39,272
)
Additional paid-in capital
651,416
652,003
Accumulated deficit
(326,708
)
(439,656
)
Total Acacia Research Corporation stockholders' equity
281,487
173,125
Noncontrolling interests
11,042
1,833
Total stockholders' equity
292,529
174,958
Total liabilities, redeemable convertible preferred stock, and stockholders' equity
$
515,520
$
218,161
View source version on businesswire.com: https://www.businesswire.com/news/home/20210329005217/en/
Investor Contact: Rob Fink FNK IR 646-809-4048 rob@fnkir.com
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