0000934549FALSE00009345492024-05-092024-05-09

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): May 9, 2024
ACACIA RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware001-3772195-4405754
(State or other jurisdiction of
incorporation)		(Commission
File Number)		(I.R.S. Employer
Identification No.)
767 Third Avenue,
6th Floor
New York,
NY10017
(Address of principal executive offices)(Zip Code)
(Registrant’s telephone number, including area code): (332) 236-8500
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:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.001 per shareACTGThe Nasdaq Stock Market LLC
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
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.


Item 2.02.Results of Operations and Financial Condition.
On May 9, 2024, Acacia Research Corporation (the “Corporation) issued a press release announcing its financial results for the quarter ended March 31, 2024. A copy of that release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).
The information contained within this Report 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 Report 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, 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.
(d)Exhibits
Exhibit No.Description of Exhibit
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 9, 2024
ACACIA RESEARCH CORPORATION
By:/s/ Martin D. McNulty Jr.
Name:Martin D. McNulty Jr.
Title:Chief Executive Officer



Exhibit 99.1
logoa.jpg


Acacia Research Reports First Quarter 2024 Financial Results

Company Continues to Advance Capital Allocation Strategy
New York, NY, May 9, 2024 - Acacia Research Corporation (Nasdaq: ACTG) (“Acacia” or the “Company”) today reported financial results for the three months ended March 31, 2024.
Martin (“MJ”) D. McNulty, Jr., Chief Executive Officer, stated, “With the establishment of our strategic partnership with Benchmark Energy, and through its most recent acquisition, we have significantly diversified our portfolio and created a new value-creation platform in the Oil and Gas space. The recent sale of our Arix position completes the divestment of all public life science assets, significantly expanding our capital base which we continue to reallocate into new opportunities.”

“Our opportunity set is broad and includes investing in our existing businesses to continue to drive free cash flow, which has increased significantly over the last two quarters, and evaluate other operating companies for potential M&A,” continued Mr. McNulty. “We have a strong capital base, including approximately $400 million in cash and marketable securities as of today, which is net of cash deployed in connection with Benchmark’s recent acquisition. Going forward, Acacia is well positioned to execute on our priorities with an overarching goal of increasing our book value per share.”
Key Business Highlights
•Our book value per share at March 31, 2024 was $5.89 compared to $5.90 per share at December 31, 2023. Excluding the impact of the additional accrual of $6.2 million related to the AIP Matter (as defined below), our book value per share at March 31, 2024 would have been $5.95 per share.
•Generated $24.3 million in consolidated revenue for the quarter compared to $14.8 million in revenue in the first quarter of 2023, including $13.6 million in license fee revenue from the Company’s intellectual property operations.
•GAAP net loss of $0.2 million, or $0.00 per share, for the quarter. Excluding the additional accrual related to the AIP Matter, which represented $0.06 per share, earnings per share for the first quarter of 2024 would have been $0.06.
•Completed the sale of Acacia’s shares of Arix Bioscience Plc for a cash purchase price of $57.1 million (which represents a purchase price of 1.43 British pounds (or GBP) per share, based on the exchange rate on the date that the parties agreed to the purchase price) moving our previously reported unrealized gain of $28.6 million to a realized gain of $28.6 million.
•Recorded an additional $2.2 million of net realized and unrealized gains during the quarter.
•Subsequent to the end of the quarter on April 15, Benchmark completed the acquisition of certain upstream assets and related facilities in Texas and Oklahoma from a private seller expanding the portfolio of Benchmark by adding approximately 140,000 net acres and approximately 470 operated producing wells in the prolific Western Anadarko Basin throughout the Texas Panhandle and Western Oklahoma.
•Benchmark generated approximately $1.9 million in revenue in the first quarter, which does not reflect revenue in connection with Benchmark’s first acquisition following Acacia’s initial investment, which closed on April 15 (i.e., post quarter-end).
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First Quarter Financial Highlights
(In millions, except per share data)
Three Months Ended March 31,
20242023
(unaudited)
Intellectual property operations$13.6 $4.2 
Industrial operations8.8 10.6 
Energy operations1.9 — 
Total revenues$24.3 $14.8 
Operating loss$(2.1)$(9.3)
Unrealized (losses) gains1
$(26.7)$3.3 
Realized gains (losses)$28.9 $(1.4)
Legal liability fee$(6.2)$— 
Non-cash derivative liability gains2
$— $16.7 
GAAP Net (loss) income$(0.2)$9.4 
GAAP Diluted net loss per share$— $(0.07)
1 Unrealized gains and (losses) are related to the change in fair value of equity securities as of the end of the reported period and the reversal of the previously recorded unrealized gain on the Arix Bioscience Plc. for a realized gain.
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.
First Quarter 2024 Financial Summary:
•Total revenues were $24.3 million, compared to $14.8 million in the same quarter last year.
◦The Intellectual Property business generated $13.6 million in licensing and other revenue during the quarter, compared to $4.2 million in the same quarter last year.
◦Printronix generated $8.8 million in revenue during the quarter, compared to $10.6 million in the same quarter last year.
◦Benchmark generated $1.9 million in revenue in the quarter, and there was no comparable revenue in the same quarter last year as the acquisition of Benchmark closed on November 13, 2023.
•General and administrative expenses were $12.4 million, compared to $12.0 million in the same quarter of last year, with the increase primarily attributable to variable performance-based compensation costs for the Intellectual Property segment partially offset by a decrease in parent legal fees and a decrease in industrial segment G&A.
•Operating loss of $2.1 million, compared to loss of $9.3 million in the same quarter of last year, with the decrease due to higher revenues generated.
◦Printronix contributed $1.2 million in operating income which included $0.7 million of non-cash depreciation and amortization expense.
◦Benchmark contributed $0.2 million in operating income, which included $0.4 million of non-cash depreciation, depletion and amortization expense, and does not reflect $0.8 million of realized derivatives gain. Such income does not reflect revenue in connection with Benchmark’s first acquisition following Acacia’s initial investment, which closed on April 15 (i.e., post quarter-end).
•In February 2017, AIP Operation LLC, or AIP, an indirect subsidiary of the Company, adopted a Profits Interests Plan that granted a profit interest in Veritone 10% Warrants held by AIP to certain members of management and the Board of Directors of the Company as compensation for services rendered. Those members of management and the Board separated from Acacia in 2018 and 2019 and the Veritone 10% Warrants were exercised in 2020 and 2021. In the quarter ending March 31, 2024, we accrued for a potential legal liability of $6.2 million in connection with an ongoing matter involving those former executives’ separation from Acacia and their related profit interests under the Profits Interests Plan (the “AIP Matter”), representing $0.06 per share, which is incremental to $2.3 million that was expensed in prior periods. Such accrued amount is an estimate based on best available information to the Company.
•GAAP net loss of $0.2 million, or $0.00 per diluted share, compared to GAAP net income of $9.4 million, or $(0.07) diluted net loss per share, in the first quarter of last year.
◦Net income included $26.7 million in unrealized loss related to the reversal of the unrealized gains previously recorded for Arix shares sold in January 2024 and the corresponding realized gain for the sale.
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◦The first quarter included $2.3 million in non-recurring general and administrative charges.
◦Excluding the impact of the additional accrual relating to the AIP Matter, which represented $0.06 per share, our earnings per share for the first quarter of 2024 would be $0.06.
Life Sciences Portfolio
Acacia has generated $564.1 million in proceeds from sales and royalties of the Life Sciences Portfolio, which was purchased for an aggregate price of $301.4 million in 2020. At the end of the first quarter, the remaining positions in the Life Sciences Portfolio represented $25.7 million in book value:
•On January 19, 2024, the Company completed its sale of Arix shares, for an aggregate price of $57.1 million. Following the completion of the share sale, the Company and its subsidiaries no longer own any shares of Arix, and have sold all of their interests in all public life science entities.
•Acacia holds interests in three private companies, valued at an aggregate of $25.7 million, net of non-controlling interest, including an approximately 26% interest in Viamet Pharmaceuticals, Inc., an approximately 18% interest in AMO Pharma, Ltd., and an approximately 4% interest in NovaBiotics Ltd. Values are based on cost or equity accounting.
Balance Sheet and Capital Structure
•Cash, cash equivalents and equity investments measured at fair value totaled $461.7 million at March 31, 2024 compared to $403.2 million at December 31, 2023. The increase in cash was primarily due to timing of payments received from licensees.
•Equity securities without readily determinable fair value totaled $5.8 million at March 31, 2024, which amount was unchanged from December 31, 2023.
•Investment securities representing equity method investments totaled $19.9 million at March 31, 2024 (net of noncontrolling interests), which amount was unchanged from December 31, 2023. Acacia owns 64% of MalinJ1, which results in a 26% indirect ownership stake in Viamet Pharmaceuticals, Inc. for Acacia.
•The parent company’s total indebtedness was zero at March 31, 2024. On a consolidated basis, Acacia’s total indebtedness was $13.0 million in non-recourse debt at Benchmark as of March 31, 2024.
Book Value as of March 31, 2024
At March 31, 2024, book value was $589.6 million and there were 100.0 million shares of common stock outstanding, for a book value per share of $5.89. Excluding the impact of the additional accrual of $6.2 million related to the AIP Matter, our book value per share at March 31, 2024 would have been $5.95 per share.
Investor Conference Call
The Company will host a conference call today, May 9, 2024 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 136343. 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,”
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“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, Benchmark’s ability to execute on its business strategy, risks relating to price and other fluctuations in the oil and gas market, environmental liability risk, regulatory changes related to the oil and gas industry, other risks inherent in the ownership and operation of oil and gas assets, 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 materially 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.
Investor Contact:
FNK IR
Rob Fink, 646-809-4048
rob@fnkir.com
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ACACIA RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
March 31, 2024December 31, 2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$438,762 $340,091 
Equity securities22,918 63,068 
Equity securities without readily determinable fair value5,816 5,816 
Equity method investments30,934 30,934 
Accounts receivable, net15,372 80,555 
Inventories9,880 10,921 
Prepaid expenses and other current assets29,465 23,127 
Total current assets553,147 554,512 
Property, plant and equipment, net2,090 2,356 
Oil and natural gas properties, net24,952 25,117 
Goodwill8,990 8,990 
Other intangible assets, net29,690 33,556 
Operating lease, right-of-use assets1,717 1,872 
Deferred income tax assets, net6,567 2,915 
Other non-current assets4,572 4,227 
Total assets$631,725 $633,545 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$4,702 $3,261 
Accrued expenses and other current liabilities3,990 8,405 
Accrued compensation4,624 4,207 
Royalties and contingent legal fees payable3,011 10,786 
Deferred revenue1,069 977 
Accrued loss contingency8,450 — 
Total current liabilities25,846 27,636 
Deferred revenue, net of current portion356 458 
Long-term lease liabilities1,477 1,736 
Revolving credit facility13,025 10,525 
Other long-term liabilities1,417 3,581 
Total liabilities42,121 43,936 
Commitments and contingencies
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; 100,021,951 and 99,895,473 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively100 100 
Treasury stock, at cost, 16,183,703 shares as of March 31, 2024 and December 31, 2023(98,258)(98,258)
Additional paid-in capital906,337 906,153 
Accumulated deficit(239,915)(239,729)
Total Acacia Research Corporation stockholders' equity568,264 568,266 
Noncontrolling interests21,340 21,343 
Total stockholders' equity589,604 589,609 
Total liabilities and stockholders' equity$631,725 $633,545 
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ACACIA RESEARCH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended March 31,
20242023
Revenues:
Intellectual property operations$13,623 $4,176 
Industrial operations8,841 10,627 
Energy operations1,856 — 
Total revenues24,320 14,803 
Costs and expenses:
Cost of revenues - intellectual property operations7,001 4,738 
Cost of revenues - industrial operations4,049 5,220 
Cost of production - energy operations1,315 — 
Engineering and development expenses - industrial operations134 216 
Sales and marketing expenses - industrial operations1,555 1,913 
General and administrative expenses12,353 12,040 
Total costs and expenses26,407 24,127 
Operating loss(2,087)(9,324)
Other income (expense):
Equity securities investments:
Change in fair value of equity securities(26,701)3,343 
Gain (loss) on sale of equity securities28,861 (1,361)
Earnings on equity investment in joint venture— — 
Net realized and unrealized gain2,160 1,982 
Legal liability fee(6,243)— 
Change in fair value of the Series B warrants and embedded derivatives— 16,651 
(Loss) gain on foreign currency exchange(18)80 
Interest expense on Senior Secured Notes— (900)
Interest income and other, net4,890 3,441 
Total other income789 21,254 
(Loss) income before income taxes(1,298)11,930 
Income tax benefit (expense)1,109 (2,483)
Net (loss) income including noncontrolling interests in subsidiaries(189)9,447 
Net loss attributable to noncontrolling interests in subsidiaries3 — 
Net (loss) income attributable to Acacia Research Corporation$(186)$9,447 
(Loss) income per share:
Net (loss) income attributable to common stockholders - Basic$(186)$5,958 
Weighted average number of shares outstanding - Basic99,745,905 47,971,931 
Basic net income per common share$0.00 $0.12 
Net loss attributable to common stockholders - Diluted$(186)$(6,496)
Weighted average number of shares outstanding - Diluted99,745,905 89,067,821 
Diluted net loss per common share$0.00 $(0.07)
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Cover
May 09, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 09, 2024
Entity Registrant Name ACACIA RESEARCH CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-37721
Entity Tax Identification Number 95-4405754
Entity Address, Address Line One 767 Third Avenue,
Entity Address, Address Line Two 6th Floor
Entity Address, City or Town New York,
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10017
City Area Code 332
Local Phone Number 236-8500
Written Communications false
Soliciting Material true
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.001 per share
Trading Symbol ACTG
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000934549
Amendment Flag false
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