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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.14 | -2.70% | 5.05 | 3.75 | 5.40 | 5.11 | 4.65 | 5.06 | 635,404 | 05:00:01 |
Acacia Research Corporation (Nasdaq: ACTG) (“Acacia” or the “Company”) today reported financial results for the three and nine months ended September 30, 2023.
Key Business Highlights
Third Quarter 2023 Financial Highlights
(In millions, except per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Intellectual property operations
$
1.8
$
6.3
$
6.3
$
17.0
Industrial operations
8.3
9.6
26.5
29.1
Total revenues
$
10.1
$
15.9
$
32.8
$
46.1
Operating loss
$
(15.4
)
$
(11.4
)
$
(37.3
)
$
(25.5
)
Unrealized gains (losses) 1
$
8.8
$
(36.4
)
$
18.8
$
(266.2
)
Realized gains (losses)
$
—
$
36.1
$
(9.4
)
$
114.4
Non-cash derivative liability gains 2
$
1.5
$
41.6
$
8.2
$
34.6
GAAP Net income (loss)
$
1.6
$
28.1
$
(7.7
)
$
(106.7
)
GAAP Diluted (loss) income per share
$
(0.03
)
$
0.02
$
(0.23
)
$
(2.63
)
1 Unrealized gains and (losses) are related to the change in fair value of equity securities as of the end of the reported period.
2 The non-cash derivative liability gains and (losses) are related to the change in fair value of Acacia’s Series A and B warrants and embedded derivatives and gains and (losses) from the exercise of warrants.
Martin D. McNulty, Jr. “MJ”, Interim Chief Executive Officer, stated, “In the last few weeks, our value-creation strategy has accelerated. We established a platform, in collaboration with accomplished executives we have worked with in the past, to acquire producing, cash generating oil and gas assets at what we believe will be favorable valuations. Acacia and our new partners are already evaluating potential asset acquisitions to take advantage of this new structure. Simultaneously, we reached an agreement to sell our stake in the last public holding in our life science portfolio, allowing us to recognize a meaningful profit on the trade once complete and further bolstering our capital position.”
“Our pipeline of acquisition targets continues to grow, mature, and advance,” continued Mr. McNulty. “We are methodically advancing specific opportunities, including both public and private targets. With the right processes in place and a growing number of opportunities, I am confident that 2024 will be a year of tangible progress.”
Third Quarter 2023 Financial Summary:
Life Sciences Portfolio
Acacia has generated $506.5 million in proceeds from sales and royalties of the Life Sciences Portfolio through September 30, 2023, which was purchased for an aggregate price of $301.4 million. At the end of the third quarter, the remaining positions in the Life Sciences Portfolio represent $76.1 million in book value, inclusive of Arix:
Balance Sheet and Capital Structure
Book Value as of September 30, 2023
At September 30, 2023, book value was $503.6 million and there were 99.9 million shares of common stock outstanding, for a book value per share of $5.04.
Book value and book value per share calculations are performed in accordance with GAAP. The calculation of book value under GAAP requires the Company to reflect the impact of liabilities associated with issuances of shares related to the exercise of the Company’s Series B warrants and conversion of the Company’s Series A preferred stock. The value of those liabilities varies over time based on fluctuations in the trading price of the Common Stock. The recapitalization transaction with Starboard which occurred on July 13, 2023 streamlines the Company’s capital structure and strengthens its financial position (the “recapitalization transactions”) and eliminated all of these instruments and the associated liabilities.
In connection with the recently completed recapitalization transactions with Starboard, which occurred on July 13, 2023:
Investor Conference Call
The Company will host a conference call today, November 13, 2023 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). To access the live call, please dial 888-506-0062 (U.S. and Canada) or 973-528-0011 (international) and if requested, reference conference ID 435061. The conference call will also be simultaneously webcasted on the investor relations section of the Company’s website at http://www.acaciaresearch.com under Events & Presentations. 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 the Company
Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating attractive businesses across the industrial, healthcare, energy, and mature technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management. Additional information about Acacia and its subsidiaries is available at www.acaciaresearch.com.
Safe Harbor Statement
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 the Company’s current expectations and speak only as of the date hereof. This news release attempts to identify forward-looking statements by using words such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or other forms of these words or similar words or expressions or the negative thereof, although not all forward-looking statements contain these terms. The Company’s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements as a result of various factors and uncertainties, including the Company’s ability to successfully implement its strategic plan, changes to the Company’s relationship and arrangements with Starboard Value LP, the Company’s ability to successfully identify and complete strategic acquisitions of businesses, divisions, and/or assets, the performance of businesses, divisions, and/or assets the Company acquires, 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, the decrease in demand for Printronix' products, general economic conditions, and the success of the Company’s investments. The Company’s Annual Report on Form 10-K, and other SEC filings discuss these and other important risks and uncertainties that may materially affect the Company’s business, results of operations and financial condition. In addition, actual results may differ as a result of additional risks and uncertainties of which the Company is currently unaware or which the Company does not currently view as material. Except as otherwise required by applicable law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
The results achieved by the Company in prior periods are not necessarily indicative of the results to be achieved by us in any subsequent periods. It is currently anticipated that the Company’s financial results will vary, and may vary significantly, from quarter to quarter.
ACACIA RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
September 30, 2023
December 31, 2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
344,733
$
287,786
Equity securities
64,511
61,608
Equity securities without readily determinable fair value
5,816
5,816
Equity method investments
30,934
30,934
Accounts receivable, net
5,896
8,231
Inventories
12,375
14,222
Prepaid expenses and other current assets
20,182
19,388
Total current assets
484,447
427,985
Property, plant and equipment, net
2,647
3,537
Goodwill
7,541
7,541
Other intangible assets, net
27,557
36,658
Deferred income tax assets, net
321
—
Leased right-of-use assets
1,488
2,005
Other non-current assets
5,146
5,202
Total assets
$
529,147
$
482,928
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
8,530
$
6,036
Accrued expenses and other current liabilities
5,256
14,058
Accrued compensation
5,202
4,737
Royalties and contingent legal fees payable
1,296
699
Deferred revenue
1,149
1,229
Senior secured notes payable
—
60,450
Total current liabilities
21,433
87,209
Deferred revenue, net of current portion
497
568
Series A embedded derivative liabilities
—
16,835
Series B warrant liabilities
—
84,780
Long-term lease liabilities
1,535
1,873
Deferred income tax liabilities, net
—
742
Other long-term liabilities
2,084
1,675
Total liabilities
25,549
193,682
Commitments and contingencies
Series A redeemable convertible preferred stock, par value $0.001 per share; stated value $100 per share; zero and 350,000 shares authorized, issued and outstanding as of September 30, 2023 and December 31, 2022, respectively; aggregate liquidation preference of zero and $35,000 as of September 30, 2023 and December 31, 2022, respectively
—
19,924
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; 99,886,322 and 43,484,867 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
99
43
Treasury stock, at cost, 16,183,703 shares as of September 30, 2023 and December 31, 2022
(98,258
)
(98,258
)
Additional paid-in capital
905,200
663,284
Accumulated deficit
(314,485
)
(306,789
)
Total Acacia Research Corporation stockholders' equity
492,556
258,280
Noncontrolling interests
11,042
11,042
Total stockholders' equity
503,598
269,322
Total liabilities, redeemable convertible preferred stock, and stockholders' equity
$
529,147
$
482,928
ACACIA RESEARCH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Revenues:
Intellectual property operations
$
1,760
$
6,320
$
6,330
$
16,997
Industrial operations
8,324
9,558
26,461
29,105
Total revenues
10,084
15,878
32,791
46,102
Costs and expenses:
Cost of revenues - intellectual property operations
5,470
5,282
15,218
14,480
Cost of revenues - industrial operations
4,377
4,648
13,530
13,432
Engineering and development expenses - industrial operations
172
156
593
491
Sales and marketing expenses - industrial operations
1,613
2,119
5,385
6,429
General and administrative expenses
13,872
15,038
35,338
36,813
Total costs and expenses
25,504
27,243
70,064
71,645
Operating loss
(15,420
)
(11,365
)
(37,273
)
(25,543
)
Other income (expense):
Equity securities investments:
Change in fair value of equity securities
8,823
(36,352
)
18,783
(266,202
)
(Loss) gain on sale of equity securities
—
36,060
(9,360
)
114,434
Earnings on equity investment in joint venture
3,375
850
3,375
42,935
Net realized and unrealized gain (loss)
12,198
558
12,798
(108,833
)
Change in fair value of the Series A and B warrants and embedded derivatives
1,525
41,638
8,241
34,590
(Loss) gain on foreign currency exchange
(70
)
(1,905
)
25
(4,532
)
Interest expense on Senior Secured Notes
(130
)
(1,072
)
(1,930
)
(5,532
)
Interest income and other, net
4,462
1,221
12,210
3,091
Total other income (expense)
17,985
40,440
31,344
(81,216
)
Income (loss) before income taxes
2,565
29,075
(5,929
)
(106,759
)
Income tax benefit (expense)
197
(679
)
(641
)
14,399
Net income (loss) including noncontrolling interests in subsidiaries
2,762
28,396
(6,570
)
(92,360
)
Net income attributable to noncontrolling interests in subsidiaries
(1,126
)
(306
)
(1,126
)
(14,319
)
Net income (loss) attributable to Acacia Research Corporation
$
1,636
$
28,090
$
(7,696
)
$
(106,679
)
(Loss) income per share:
Net (loss) income attributable to common stockholders - Basic
$
(1,740
)
$
20,587
$
(15,703
)
$
(112,507
)
Weighted average number of shares outstanding - Basic
94,328,452
38,052,426
67,072,835
42,830,700
Basic net (loss) income per common share
$
(0.02
)
$
0.54
$
(0.23
)
$
(2.63
)
Net (loss) income attributable to common stockholders - Diluted
$
(3,163
)
$
1,531
$
(15,703
)
$
(112,507
)
Weighted average number of shares outstanding - Diluted
99,122,973
71,164,236
67,072,835
42,830,700
Diluted net (loss) income per common share
$
(0.03
)
$
0.02
$
(0.23
)
$
(2.63
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20231113821268/en/
Investor Contact: FNK IR Rob Fink, 646-809-4048 rob@fnkir.com
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