<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the Quarter Ended September 30, 1995 Commission File No. 0-26068
ACACIA RESEARCH CORPORATION
A California Corporation
IRS Employer Identification No. 95-4405754
12 S. Raymond Avenue, Pasadena, California 91105
Telephone (818) 449-6431
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
--------- --------
At September 30, 1995, 1,758,005 shares of common stock of the Registrant were
outstanding.
1
<PAGE> 2
Board of Directors
Acacia Research Corporation
The accompanying consolidated balance sheets of Acacia Research Corporation as
of September 30, 1995 and December 31, 1994, and the related statements of
operations for the nine months and three months ended September 30, 1995 and
1994, and cash flows for the nine months ended September 30, 1995 and 1994 were
not audited by us, and we do not express an opinion on them.
FINOCCHIARO & CO.
Pasadena, California
October 31, 1995
2
<PAGE> 3
ACACIA RESEARCH CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
ASSETS Sept 30, 1995 December 31,1994
---------------- -------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents (notes 2 and 5) $ 3,039,628 $ 1,000,389
Accounts receivable 62,308 13,577
Inventories (notes 2 and 3) 84,596 28,297
Prepaid expenses 381,079 145,002
Deferred advertising costs 182,621 -
Due from stockholders - business development (note 11) 1,055,000 -
-------------- --------------
Total current assets 4,805,232 1,187,265
Equipment, furniture, and fixtures, at cost (notes 2 and 4) 141,472 45,832
Other Assets
Investment in Acacia Capital Partners, L.P., at equity (note 15) 600,000 -
Organization costs, net of accumulated amortization of
$2,945 and $2,039 (note 2) 3,098 4,004
Deposits 4,264 3,735
-------------- --------------
Total other assets 607,362 7,739
-------------- --------------
Total Assets $ 5,554,066 $ 1,240,836
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 159,083 $ 91,996
Line of credit (note 10) 2,000,000 -
Convertible note payable (note 9) - 200,000
Income taxes payable 800 -
-------------- --------------
Total current liabilities 2,159,883 291,996
Deferred tax liability (notes 2 and 7) 2,627 2,627
-------------- --------------
Total liabilities 2,162,510 294,623
Commitments and contingencies (note 5)
Minority interest (note 2) 1,625,062 647,201
Stockholders' equity (note 6)
Common stock, no par value, 10,000,000 shares authorized,
1,758,005 shares in 1995 and 1,577,825 shares in 1994 issued
and outstanding, 35,000 shares unissued in 1995,
25,000 unissued in 1994 3,071,084 2,147,509
Accumulated deficit (1,194,590) (1,798,497)
Less stock subscriptions receivable (110,000) (50,000)
-------------- --------------
Total stockholders' equity 1,766,494 299,012
-------------- --------------
Total Liabilities And Stockholders' Equity $ 5,554,066 $ 1,240,836
============== ==============
</TABLE>
Unaudited
3
<PAGE> 4
ACACIA RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1995 and 1994 and Three Months Ended September
30, 1995 and 1994
<TABLE>
<CAPTION>
Nine months ended Three months ended
Sept 30, 1995 Sept 30, 1994 Sept 30, 1995 Sept 30, 1994
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales-Health care products $2,343,833 $174,088 $1,104,292 $87,902
Sales of business development investment 1,413,000 0 787,000 0
-------------------------------------------------------------
Total sales 3,756,833 174,088 1,891,292 87,902
Cost of goods sold 327,409 29,954 156,993 20,454
-------------------------------------------------------------
Gross profit 3,429,424 144,134 1,734,299 67,448
Operating expenses
Selling expenses 1,470,750 238,744 691,952 87,576
Marketing, general and administrative 1,339,617 706,476 547,266 322,817
-------------------------------------------------------------
Total operating expenses 2,810,367 945,220 1,239,218 410,393
-------------------------------------------------------------
Net income (loss) from operations 619,057 (801,086) 495,081 (342,945)
Other income (expense)
Management frees earned 1,362 0 1,112 0
Realized loss on trading securities 0 (2,800) 0 0
Unrealized loss on trading securities 0 1,505 0 0
Interest, net 392 9,425 457 4,196
-------------------------------------------------------------
Total other income (expense) 1,754 8,130 1,569 4,196
-------------------------------------------------------------
Income (loss) before provisions for taxes 620,811 (792,956) 496,650 (338,749)
Provision for taxes (note 7) 5,000 3,528 0 2,728
-------------------------------------------------------------
Net income (loss) before minority interest 615,811 (796,484) 496,650 (341,477)
Minority interest in net loss (income) (11,904) 26,819 (9,949) 16,232
Net Income (Loss) $603,907 ($769,665) $486,701 ($325,245)
=============================================================
Earnings (loss) per common share (note 9)
Primary $0.24 ($0.34) $0.19 ($0.15)
Fully diluted $0.24 ($0.34) $0.19 ($0.15)
Common equivalent shares outstanding (note 9)
Primary 2,503,319 2,237,357 2,594,349 2,237,357
Fully diluted 2,503,319 2,237,357 2,594,349 2,237,357
</TABLE>
Unaudited
4
<PAGE> 5
ACACIA RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1995 and 1994
<TABLE>
<CAPTION>
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (loss) income $ 603,907 $ (769,665)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 15,795 8,016
Gain on sale of developed business investment (1,385,473)
Minority interest in net income of subsidiary 11,904 (26,819)
Unrealized gain on trading securities (1,505)
Loss on sale of trading securities 2,800
Accrued interest income (1,000)
Deferred taxes 1,878
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable
inventories, prepaid expenses, and
other assets (166,257) 53,479
Increase (decrease) in accounts payable, accrued
expenses, and other current liabilities 66,251 599
---------------- ----------------
Net cash used in operating activities (853,873) (732,217)
Cash Flows From Investing Activities:
Capitalized expenditures (103,919) (13,279)
Purchase of interest in Acacia Capital Partners, L.P. (600,000)
Decrease (increase) in due from officer 73,447
---------------- -------------
Net cash used in investing activities (703,919) 60,148
Cash Flows From Financing Activities:
Proceeds from line of credit 2,000,000
Issuance of common stock 886,572 443,701
Proceeds from issuance of common stock warrants 10,000
Costs of issuing common stock (65,498)
Net proceeds from issuance of minority interest
by subsidiary 1,035,570 658,707
Dividends paid by subsidiary (69,613) (15,785)
Payment of convertible note payable (200,000)
--------------- -----------------
Net cash provided by financing activities 3,597,031 1,086,623
------------- -----------
Increase in cash and cash equivalents 2,039,239 414,554
Cash and cash equivalents, beginning 1,000,389 474,794
------------ -------------
Cash And Cash Equivalents, Ending $ 3,039,628 889,348
============= =============
</TABLE>
Unaudited
5
<PAGE> 6
ACACIA RESEARCH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
1. DEVELOPMENT STAGE COMPANY
Acacia Research Corporation (the "Company") was incorporated on January
25, 1993 under the state laws of California. The Company offers a range
of investment opportunities to its clients and shareholders. The Company
is engaged in business development, where it sponsors and nurtures
emerging or start-up businesses, as well as traditional capital
management utilizing proprietary stock selection models. Since
significant revenues have been earned from the sale of an initial
business development investment, Whitewing Labs, the Company no longer is
considered a development stage company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation - The accompanying consolidated financial
statements include the accounts of the Company and its subsidiary,
Whitewing Labs, a business developed by the Company. Intercompany
transactions and balances have been eliminated in consolidation.
Effective April 15, 1994, Whitewing Labs began issuing cumulative
convertible preferred stock. The holders of such stock are entitled to
all voting rights of common shareholders on a per share basis. For the
period ended September 30, 1995, the Company maintained a weighted
average majority interest of 63.83%, based upon voting shares outstanding
of Whitewing Labs.
Cash and cash equivalents - The Company considers all highly liquid
investments with a maturity of ninety days or less when purchased to be
cash equivalents. The Company invests excess cash in money market
accounts.
Trading securities - The Company has adopted the provisions of SFAS 115
and has classified all its securities as trading securities to be sold or
disposed of in the near term.
Inventories - Inventories are valued at the lower of cost, which is
determined by the first-in, first-out method, or market.
Equipment, furniture, and fixtures - Equipment, furniture, and fixtures
are recorded at cost. Major additions and improvements are capitalized.
The cost and related accumulated depreciation of property and equipment
retired or sold is removed from the account and any differences between
the undepreciated amount and the proceeds from the sale is charged or
credited to income. Depreciation is computed on a straight-line basis.
Organization costs - Organization costs are recorded at cost and are
amortized on a straight-line basis over a period of five years.
Income taxes - The Company accounts for income taxes in accordance with
SFAS 109, which accounts for deferred tax assets and liabilities based
upon temporary differences between financial and tax reporting. These
differences in accounting methods include depreciation and franchise tax
deductions. Deferred income tax liabilities have been provided for the
tax effect of these differences. The Company and subsidiary do not file
a consolidated income tax return.
6
<PAGE> 7
ACACIA RESEARCH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
3. INVENTORIES
Inventories at September 30, 1995, and December 31, 1994 consist of the
following:
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Finished goods $ 83,062 $ 26,763
Shipping supplies 1,534 1,534
------------- -------------
Total Inventories $ 84,596 $ 28,297
============= =============
</TABLE>
4. EQUIPMENT, FURNITURE, AND FIXTURES
Equipment, furniture, and fixtures consist of the following at September
30, 1995 and December 31, 1994:
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Computer equipment $ 38,331 $ 24,891
Furniture and fixtures 130,335 33,247
------------- -------------
168,666 58,138
Accumulated depreciation (27,194) (12,306)
------------- -------------
Total Equipment, Furniture, and Fixtures $ 141,472 $ 45,832
============= =============
</TABLE>
Depreciation expense for the nine months ended September 30, 1995 was
$14,888.
5. COMMITMENTS AND CONTINGENCIES
Lease obligations - As of September 30, 1995, the furniture and fixtures
account included assets in the amount of $8,661 financed by a capital
lease agreements which will expire in 1996 and 1999. Accumulated
depreciation includes $769 of amortization related to assets financed by
capital lease agreements. The amortization of assets under capital lease
has been included in depreciation expense.
The Company leases office facilities under operating leases, through
December 1996, with options to renew the leases at a rate determined by
the Consumer Price Index at the time of renewal. The Company's minimum
monthly lease payment for 1995 is $2,085. Consolidated rent expense for
the nine months ended September 30, 1995 was approximately $47,000.
At September 30, 1995, the future minimum lease payments for capital and
operating leases equalled the following:
<TABLE>
<CAPTION>
Capital Operating
------------- --------------
<S> <C> <C>
1995 $ 768 $ 13,819
1996 2,994 23,852
1997 2,184 -
1998 2,184 -
1999 1,638 -
------------- --------------
Totals 9,768 37,671
Less interest portion (2,233) -
------------- --------------
Minimum lease payments $ 7,535 $ 37,671
============= ==============
</TABLE>
7
<PAGE> 8
ACACIA RESEARCH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
5. COMMITMENTS AND CONTINGENCIES (continued)
Restricted cash - Whitewing Labs is required to maintain a reserve cash
account with a balance, at the end of each month, equal to 5.00% of the
preceding six months gross sales volume via credit card transactions or
$5,000, whichever is greater. As of September 30, 1995, $38,417 was
restricted.
Pending litigation - The Company's subsidiary has been named in pending
litigation alleging copyright, trademark infringement, and false
representations by mail, the subsidiary's counsel believes that the
claims are without merit, substantially covered by insurance, and the
Company intends to oppose the actions vigorously.
6. STOCK OPTIONS AND WARRANTS
During 1993, the Company adopted a stock option plan ("the Plan") which
authorizes the granting of both options intended to qualify as "incentive
stock options" under Section 422A of the Internal Revenue Code of 1986
("Incentive Stock Options") and stock options which are not intended to
so qualify ("Nonqualified Options") to officers, directors, employees,
consultants, and others expected to provide significant services to the
Company or its subsidiaries. The Plan, which covers an aggregate of
1,000,000 shares, was approved by the Board of Directors in October,
1993.
Under the terms of the Plan, options may be exercised upon terms approved
by the Board of Directors of the Company, and expire at a maximum of ten
years from the date of grant. Incentive Stock Options are granted at
prices equal to or greater than fair market value at the date of grant.
Nonqualified Stock Options are granted at prices equal to or greater than
85% of the fair market value at the date of grant. The Company's Board
granted to officers, directors, and consultants of the Company stock
options to purchase 779,225 shares of the Company's stock at $1.50 to
$5.10 per share, and 550,000 options were granted in 1993, 229,225 in
1994 and 10,000 in 1995. These options are fully vested and expire in
1995 and 1999. At September 30, 1995, these options represented the only
options outstanding and exercisable. No options were exercised during
1994. The Company issued 100,000 common stock warrants on January 1,
1995. The warrants grant the holder the option to purchase 100,000
shares of common stock for $4.00 per share. These warrants expire on
January 1, 2000. For the period ended September 30, 1995 options were
exercised on 44,000 shares, total proceeds, from these options to the
Company were $102,000.
7. PROVISION FOR INCOME TAXES
The consolidated provision for income taxes for the nine months ended
September 30, 1995 consists of the following:
<TABLE>
<CAPTION>
Current 1995
------- ------------
<S> <C>
State $ 800
============
</TABLE>
As of September 30, 1995, the Company has net operating loss
carryforwards of approximately $700,000 for federal income tax purposes
available to reduce future federal taxable income through 2009. The
Company also has net operating loss carryforwards of approximately
$150,000 for California state income tax purposes available to reduce
future California state taxable income through 1999.
8
<PAGE> 9
ACACIA RESEARCH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
7. PROVISION FOR INCOME TAXES (continued)
At September 30, 1995, the Company's subsidiary had net operating loss
carryforwards of approximately $600,000 for Federal income tax purposes
available to reduce future Federal taxable income through 2009. The
subsidiary also had net operating loss carryforwards of approximately
$283,000 for state income tax purposes. Approximately $139,000 and
$144,000 are available to reduce future state taxable income in
California and Arizona, respectively. Such carryforwards expire through
the years 1999 and 2009, respectively. It is anticipated that these
carryforwards will offset any current year taxable income.
The Company's deferred tax benefit from net operating losses of $120,000,
and the subsidiary's deferred benefit of $204,000 have not been reported
in these financial statements, or for the investment in unconsolidated
subsidiary. A valuation allowance in the amount of the tax benefits as
of the balance sheet date has been set up because it cannot be determined
whether the Company will generate future taxable income to realize any of
the tax benefits.
8. EARNINGS (LOSS) PER COMMON SHARE
Pursuant to SEC rules, common stock issued during the twelve month period
before the filing of the registration statement has been included in the
calculation of common equivalent shares, using the Treasury stock method,
as if they had been outstanding for all periods presented.
Primary and fully diluted earnings per common share for 1995 have been
presented based upon the weighted average of common shares outstanding
and shares determined to be outstanding from the conversion of stock
options and warrants for the quarter ended September 30, 1995. Primary
and fully diluted loss per common share for 1994 have been presented
based upon 1,458,132 shares outstanding and 779,225 shares determined to
be outstanding from the conversion of stock options.
9. CONVERTIBLE NOTE PAYABLE
As of December 31, 1994, the Company's subsidiary had a $200,000 note
payable, due on October 15, 1995, bearing interest at 10 percent per
annum, which is convertible into 40,000 shares of common stock at $5 per
share. This note was redeemed in the second quarter of 1995.
10. LINE OF CREDIT
The Company has a line of credit up to $2,000,000 collateralized by a
money market account. Interest on the outstanding balance is calculated
at 10% per annum. The line of credit expires on September 20, 1996.
9
<PAGE> 10
ACACIA RESEARCH CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
11. DUE FROM STOCKHOLDERS - BUSINESS DEVELOPMENT
As of September 30, 1995, the Company holds a promissory note from a
stockholder in the amount of $375,000. The note bears interest at 4% per
annum and is due in September of 1995. The note is secured by 50,000
shares of Whitewing Labs common stock. The Company received payments of
$348,000 in October 1995 on this note.
As of September 30, 1995, the Company holds a promissory note from a
stockholder in the amount of $400,000. The note bears interest at 5% per
annum and is due on December 5, 1995. The note is secured by 50,000
shares of Whitewing Labs common stock.
As of September 30, 1995, the Company holds a promissory note from a
stockholder in the amount of $60,000. The note bears interest at 5% per
annum and is due on November 15, 1995. The note is secured by 7,500
shares of Whitewing Labs common stock.
As of September 30, 1995, the Company holds a promissory note from a
stockholder in the amount of $100,000. The note bears interest at 5% per
annum and is due on December 5, 1995. The note is secured by 12,500
shares of Whitewing Labs common stock.
As of September 30, 1995, the Company holds a promissory note from a
stockholder in the amount of $120,000. The note bears interest at 5% per
annum and is due on November 15, 1995. The note is secured by 15,000
shares of Whitewing Labs common stock.
12. COMMON STOCK SUBSCRIPTION
As of September 30, 1995, the Company has a $50,000 unsecured promissory
note receivable from an individual. The note was issued in connection
with the purchase of 25,000 shares of common stock which have not been
issued to the individual. The note bears interest at 4% per annum and is
due in April 1995.
13. SUPPLEMENTAL CASH FLOW INFORMATION
As disclosed in Note 5, the Company incurred a capital lease obligation
in 1993 of $2,052 and $6,609 in 1995. Cash paid for the nine months
ended September 30, 1995 for interest was $158. The Company paid cash
for income taxes in the amount of $814 in 1994.
10
<PAGE> 11
ACACIA RESEARCH CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
14. SIGNIFICANT RISKS
As described in these financial statements, all operating revenues
earned by the Company are from the sale of health care products by its
subsidiary Whitewing Labs, as well as it's business development
investments. As of the date of these financial statements, the Company
has not yet generated any significant operating revenue from its
investment management services. As of the date of these financial
statements, management believes that its operating requirements for 1995
can be sustained with its existing working capital.
As of the date of these financial statements, the Company has invested
$500,000, and its subsidiary Whitewing Labs has also invested $100,000 in
Acacia Capital Partners, L.P. The Company expects its involvement as
general partner of Acacia Capital Partners, L.P. to provide additional
working capital necessary to support planned operations of the Company.
However, in part, the future success of the Company's operations is
dependent upon the ability of the Company, as general partner of Acacia
Capital Partners, L.P.("the Partnership"), to raise capital investment in
the Partnership. As general partner of the Partnership, the Company will
earn a management fee based upon the value of investments held by the
partnership, which will be paid to the Company on a quarterly basis. In
addition, the Company may earn performance fees equal to 20% of annual
net profits generated by investments. Management of the Company believes
that unless $25,000,000 is invested in the partnership, it is likely that
the management fees payable to the Company will not be sufficient to
sustain the Company's planned operations, and the Company would therefore
have to rely on capital raised through the sale of additional common
stock, or through the development of other new businesses. Accordingly,
there can be no assurance that the Company will be able to raise
sufficient capital investment in the Partnership to finance its ongoing
operations, or successfully raise capital through the issuance of
additional shares of common stock, or earn sufficient revenue from the
development of other new businesses.
15. INVESTMENT IN ACACIA CAPITAL PARTNERS, L.P.
As described in Note 14, the Company has acquired an interest in Acacia
Capital Partners, L.P., from which it will earn a management fee. As of
the date of this financial statement, the Company owns a majority
interest in the partnership. These financial statements reflect this
investment on the equity method, as control, and a majority ownership
percentage is considered temporary.
11
<PAGE> 12
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Position.
A. Consolidated results of operations
Three months ended September 30, 1995 vs. September 30, 1994
The third quarter of 1995 is the third consecutive profitable quarter for
Acacia Research Corporation. The Company earned $0.19 per common share
on net income of $486,701, compared to a net loss for the same period in
1994 of $0.15 per common share on a net loss of $325,245. The Company
was able to achieve profitability through revenue generated from its
business development investments. Acacia Research sold a portion of its
interest in a subsidiary, while maintaining voting control, during the
third quarter of 1995 for a gain of $787,000.
Third quarter sales of a Company subsidiary, Whitewing Labs, a business
developed by the Company, have increased from $87,902 in 1994 to
$1,104,292 in 1995. The increase in sales by Whitewing Labs can be
attributed to alternative direct response mailings, including the use of
magazine advertisements. Consequently, Whitewing Labs experienced larger
selling expenses in the third quarter of 1995 due in large part to the
increased advertising costs associated with its direct mail products.
Nine months ended September 30, 1995 vs. September 30, 1994
For the nine months ended, the Company's net income rose from a loss of
$769,665 in 1994, to net income of $603,907 in 1995. This resulted in
per share earnings from a deficit per share of $0.34 in 1994 to earnings
per share of $0.24 in 1995. The increase in earnings per share can be
attributed to income realized from its initial business development
investments as well as the increased sales volume from Whitewing Labs.
Outlook
As described in Note 14 of the consolidated financial statements, the
Company's success depends on its ability to raise capital for its
investment management services, which include Acacia Capital Partners,
L.P., as well as its ability to continue earning revenue from investments
by the Company in the development of new businesses.
The Company will institute a companion offshore private investment fund
to Acacia Capital Partners, L.P. designed for interested European
investors in January 1996. It is management's belief that the management
fees to be earned by Acacia Research as a general partner of private
investment funds, will increase significantly in 1996.
In addition to Whitewing Labs, the Company currently has two businesses
in development, both of which are high-tech related. Management foresees
at least one of these businesses to generate revenue for the Company in
1996. Whitewing Labs has filed a registration statement with the SEC and
its common stock is expected to be offered to the public by year-end.
12
<PAGE> 13
B. Consolidated Financial Position
For the first nine months of 1995, Acacia Research has increased its
total assets to $5,554,066 from total assets of $1,240,836 as of December
31, 1994. This has been accomplished primarily through the realization
of gains from its business development investments as well as the
issuance of additional common stock in Acacia Research Corporation.
Consolidated cash and cash equivalents have risen to $3,039,628 at
September 30, 1995 from $1,000,389 at December 31, 1994. A line of
credit, collaterized by a money market account, has been obtained by the
Company in the third quarter. The Company has invested $600,000 in
Acacia Capital Partners, L.P., which includes $100,000 invested by
Whitewing Labs. The Company has received notes as consideration for its
sale of 135,000 shares of Whitewing Labs common stock. Of this total,
payment was received for a note for 50,000 shares in October 1995. The
remaining notes are due in fourth quarter of 1995. A significant
increase in the amount of prepaid expenses and deferred advertising costs
was reported as of September 30, 1995. These increases can be attributed
to increased activity of the Company's subsidiary, Whitewing Labs
PART II - OTHER INFORMATION
There is no required reportable other information for the quarter ended
September 30, 1995.
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, thereunto duly authorized.
ACACIA RESEARCH CORPORATION
By: /s/ R. BRUCE STEWART
------------------------------
Date: November 8, 1995
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND STATEMENT OF OPERATIONS FOR PERIOD ENDED SEPTEMBER 30, 1995
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,040
<SECURITIES> 0
<RECEIVABLES> 62
<ALLOWANCES> 0
<INVENTORY> 85
<CURRENT-ASSETS> 4,085
<PP&E> 169
<DEPRECIATION> 141
<TOTAL-ASSETS> 5,554
<CURRENT-LIABILITIES> 2,160
<BONDS> 0
<COMMON> 3,071
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,071
<SALES> 3,757
<TOTAL-REVENUES> 3,757
<CGS> 327
<TOTAL-COSTS> 327
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 621
<INCOME-TAX> 5
<INCOME-CONTINUING> 616
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 604
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
