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REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ACACIA RESEARCH CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C>
CALIFORNIA 95-4405754
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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12 SOUTH RAYMOND AVENUE
PASADENA, CALIFORNIA 91105
(818) 449-6431
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
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KATHRYN KING-VAN WIE, CHIEF OPERATING OFFICER
ACACIA RESEARCH CORPORATION
12 SOUTH RAYMOND AVENUE
PASADENA, CALIFORNIA 91105
(818) 449-6431
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES OF COMMUNICATIONS TO:
D. STEPHEN ANTION, ESQ.
O'MELVENY & MYERS LLP
400 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA 90071-2899
(213) 669-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, subject to
market conditions and certain contractual restrictions on transfer.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF NUMBER OF SECURITIES PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE OF EACH CLASS OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED TO BE REGISTERED SECURITY(1)(2) PRICE(1) REGISTRATION FEE(2)
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Common Stock, no par value
per share................ 400,000 $7.8125 $3,125,000 $947.00
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(c), the price of the Common Stock in is based upon the
average of the high and low prices of the Common Stock on the Nasdaq
National Market on August 11, 1997.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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SUBJECT TO COMPLETION, DATED , 1997
PROSPECTUS
ACACIA RESEARCH CORPORATION
400,000 SHARES OF
COMMON STOCK
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THIS PROSPECTUS RELATES TO THE SALE BY SECURITYHOLDERS OF ACACIA RESEARCH
CORPORATION (THE "COMPANY") OF UP TO AN AGGREGATE OF 400,000 SHARES OF COMMON
STOCK, NO PAR VALUE PER SHARE (THE "COMMON STOCK"), OF THE COMPANY. THE SHARES
ARE CURRENTLY HELD BY H. LEE BROWNE AND DAVID H. SCHMIDT (THE "SELLING
SECURITYHOLDERS"), WHO ACQUIRED SUCH SHARES FROM THE COMPANY IN JULY, 1997 IN A
PRIVATE PLACEMENT. THE SHARES MAY BE SOLD FROM TIME TO TIME BY THE SELLING
SECURITYHOLDERS IN PRIVATELY NEGOTIATED TRANSACTIONS, IN BROKERS' TRANSACTIONS,
TO MARKET MAKERS OR IN BLOCK PLACEMENTS, AT MARKET PRICES PREVAILING AT THE TIME
OF SALE OR AT PRICES OTHERWISE NEGOTIATED. SEE "SELLING SECURITYHOLDERS" AND
"PLAN OF DISTRIBUTION."
THE COMPANY WILL NOT RECEIVE ANY OF THE PROCEEDS FROM THE SALE OF THE SHARES
BEING SOLD BY THE SELLING SECURITYHOLDERS. THE COMPANY HAS AGREED TO BEAR THE
EXPENSES INCURRED IN CONNECTION WITH THE REGISTRATION OF THE SHARES OFFERED BY
THIS PROSPECTUS. THE SELLING SECURITYHOLDERS WILL PAY OR ASSUME BROKERAGE
COMMISSIONS OR SIMILAR CHARGES INCURRED IN THE SALE OF THE SHARES OFFERED BY
THIS PROSPECTUS.
THE COMPANY'S COMMON STOCK IS TRADED ON THE NASDAQ NATIONAL MARKET UNDER THE
SYMBOL "ACRI." THE CLOSING SALE PRICE OF THE COMMON STOCK ON AUGUST 14, 1997, AS
REPORTED BY NASDAQ, WAS $8.625 PER SHARE.
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THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1997.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the securities offered
hereby. This Prospectus does not contain all of the information set forth in
such Registration Statement and the exhibits thereto. For further information
with respect to the Company, reference is hereby made to the Registration
Statement and the exhibits thereto, which may be inspected without charge at the
public reference facilities maintained at the principal office of the Commission
at 450 Fifth Street, N.W., Room 1024, Washington D.C. 20549 and at the
Commission's regional offices at 7 World Trade Center, New York, New York 10048
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials may be obtained upon written request
from the public reference section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Electronic registration statements
made through the Electronic Data Gathering, Analysis and Retrieval System are
publicly available through the Commission's Web site (http://www.sec.gov).
Statements contained in the Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete and in each
instance reference is made to the copy of such contract or other document filed
(or incorporated by reference) as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Commission. Such reports
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at the addresses shown
above. Copies of such material can be obtained from the Public Reference Section
of the Commission at the address shown above at prescribed rates or through the
Commission's Web site. Reports and other information concerning the Company may
also be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "ACRI." Certain information, reports and proxy statements of the Company
are also available for inspection at the offices of the Nasdaq National Market
Reports Section, 1735 K Street, Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, as noted below, are incorporated by reference into this Prospectus:
(a) Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1996; (b)
Amendment to Annual Report on Form 10-K/A for the fiscal year ended December 31,
1996; (C) AMENDMENT NO. 2 TO ANNUAL REPORT ON FORM 10-K/A FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1996; (d) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997; (e) Amendment to Quarterly Report on Form 10-Q/A for the quarter
ended March 31, 1997; (F) AMENDMENT NO. 2 TO QUARTERLY REPORT ON FORM 10-Q/A FOR
THE QUARTER ENDED MARCH 31, 1997; (g) Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997; (h) Current Report on Form 8-K filed April 29,
1997; (i) Current Report on Form 8-K filed July 21, 1997; (j) the description of
the Common Stock contained in the Company's Registration Statement on Form 8-A
filed with the Commission on or about May 11, 1995 and Amendment No. 1 to Form
8-A on Form 8-A/A filed June 5, 1995.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Selling Securityholder Securities, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing such documents.
Any statement contained herein or in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement.
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Any such statement so modified or superseded shall not be deemed to constitute a
part of this Prospectus, except as so modified or superseded. The Company hereby
undertakes to provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus has been delivered, upon the written or
oral request of such person, a copy of any or all of the documents referred to
in "Incorporation of Certain Information by Reference" which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents. Requests for such copies should be directed to the Secretary at
Acacia Research Corporation, 12 South Raymond Avenue, Pasadena, California
91105.
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, AND
SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION APPEARING
ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED HEREIN. INVESTORS SHOULD ALSO
CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER THE HEADING "RISK FACTORS."
THE COMPANY
Acacia Research Corporation, a California corporation (the "Company"), is a
capital management company that provides investment advisory services, and also
provides management services to and makes direct investments in emerging
corporations. The Company's operations are comprised of two lines of business:
(i) investment advisor to domestic and offshore private investment funds; and
(ii) investing in and developing start-up business ventures. The Company is
diversified and each business segment is operated independently. See "Risk
Factors--No Assurance of Success."
The Company currently manages two domestic private investment partnerships
whose limited partners are required to be "accredited investors" under
Regulation D promulgated under the 1933 Act. The Company is also the investment
advisor to two offshore investment corporations. Client funds are invested
primarily in mid-cap to large-cap U.S. equities. The Company may manage
additional private investment partnerships and offshore investment funds in the
future. See "Risk Factors--Risks Associated with the Money Management Business;
Profitability Uncertain."
The Company also participates in the formation of emerging or start-up
companies in various business fields by arranging for and contributing capital
and providing management assistance. Potential ventures are evaluated based on
the ability of the business to become viable and reach a significant milestone
with the Company's initial investment. See "Risk Factors--Risks Associated with
the Emerging Companies."
The Company has significant economic interests in five companies that it has
formed, taking an active role in each company's growth and advancement. These
emerging companies are: (i) Soundview Technologies Incorporated ("Soundview
Technologies"); (ii) Greenwich Information Technologies LLC ("Greenwich
Information Technologies"); (iii) MerkWerks Corporation ("MerkWerks"); (iv)
CombiMatrix Corporation ("CombiMatrix"); and (v) Whitewing Labs, Inc.
("Whitewing"). Soundview Technologies, Greenwich Information Technologies,
MerkWerks, CombiMatrix, and Whitewing are collectively referred to hereinafter
as the "Affiliates." See "Risk Factors" for risks associated with each
individual Affiliate.
Soundview Technologies was formed in 1996 and owns intellectual property
related to the telecommunications field, which includes audio and video blanking
systems, also known as V-chip technology. Soundview Technologies has developed a
V-chip retrofit device, the V Chip Converter-TM-, for use in televisions already
in existence that will be "deaf" to V-chip signals. Soundview Technologies may
pursue business opportunities with television manufacturers, chip manufacturers,
and television accessory companies about efficient and cost-effective methods of
commercializing its technology. Soundview Technologies has incurred substantial
losses and has not had any revenues to date.
Greenwich Information Technologies was formed in 1996 and is the exclusive
marketing and licensing agent for several patents relating to video-on-demand
and audio-on-demand technology. To date, Greenwich Information Technologies has
incurred substantial losses and has not had any revenues.
MerkWerks was formed in 1995 and is currently developing a software utility
product for use with CD-Recorder, or CD-R, computer drives. The initial version
of the product, CD WonderWriter-TM-, will be for the Macintosh platform.
MerkWerks anticipates adapting this software for Microsoft-Registered Trademark-
Windows-TM- platform. To date, MerkWerks has incurred substantial losses and has
not had any revenues.
CombiMatrix was formed in 1996 and is engaged in a highly specialized and
focused research effort to streamline the drug-discovery process. CombiMatrix is
in a developmental stage, has incurred substantial losses and has not generated
any revenues to date.
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Whitewing was formed in 1993 and develops and markets a line of nutritional
supplement products. Whitewing conducted an initial public offering of its
common stock in February 1996. Whitewing stock and warrants trade on the Nasdaq
Small Cap Market under the symbols "WWLI" and "WWLI-W," respectively.
Development of emerging businesses is subject to all of the problems,
expenses, delays and risks inherent in the establishment of a new business
enterprise, many of which are beyond the Company's ability to control, including
uncertain market conditions and the absence of an operating history. Moreover,
the Company expects to encounter competition in the area of business
opportunities from other entities having similar business objectives, such as
venture capital funds. Many of these potential competitors may possess greater
financial, technical, human and other resources than the Company. Accordingly,
there can be no assurance that the Company's plan of operations will be
successful or that the Company will be able to achieve or maintain profitable
operations. See "Risks Factors--No Assurance of Success" and "Risks Associated
with the Emerging Companies."
The Company has never paid any cash dividends on its Common Stock and does
not anticipate that it will pay dividends in the foreseeable future. Instead,
the Company intends to apply any earnings to the development and expansion of
its business.
The Company was incorporated in the State of California on January 25, 1993,
and conducted its initial public offering on June 15, 1995. The Company's Common
Stock trades on the Nasdaq National Market System ("Nasdaq") under the symbol
"ACRI."
The Company maintains its executive offices at 12 South Raymond Avenue,
Pasadena, California 91105 and its telephone number is (818) 449-6431.
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RECENT DEVELOPMENTS
On July 6, 1997, the Company acquired majority ownership of Soundview
Technologies through the purchase of 35% of the outstanding common stock of
Soundview Technologies from the Selling Securityholders. The Company paid a
purchase price for the Soundview shares of $500,000 cash, notes in the aggregate
principal amount of $900,000 due November 1, 1997 (the "Notes") and the 400,000
shares of the Company's common stock that are being offered by this Prospectus.
Prior to this transaction, the Company owned 16.4% of the shares of common stock
of Soundview Technologies. Following the transaction, the Company owns 51.4% of
the outstanding shares of Soundview Technologies.
In order to secure repayment of the Notes, the Company pledged certain of
its acquired shares of Soundview Technologies, which are to be transferred back
to the two selling shareholders in the event the Company defaults on the
repayment of the Notes. In addition, the Company granted the two selling
shareholders certain registration rights with respect to the 400,000 shares of
the Company's common stock.
FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Reference is made in particular to the description of the Company's plans
and objectives for future operations, assumptions underlying such plans and
objectives and other forward-looking statements included in this Prospectus.
Such statements may be identified by the use of forward-looking terminology such
as "may," "will," "expect," "believe," "estimate," "anticipate," "intend,"
"continue," or similar terms, variations of such terms or the negative of such
terms. Such statements are based on management's current expectations and are
subject to a number of factors and uncertainties which could cause actual
results to differ materially from those described in the forward-looking
statements. The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based. Factors which could cause such results to differ materially
from those described in the forward-looking statements include those set forth
below.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE A
HIGH DEGREE OF RISK. PRIOR TO MAKING AN INVESTMENT DECISION, PROSPECTIVE
INVESTORS IN THE COMPANY'S SECURITIES SHOULD GIVE CAREFUL CONSIDERATION TO,
AMONG OTHER THINGS, THE RISK FACTORS SET FORTH BELOW.
NO ASSURANCE OF SUCCESS:
The Company's operations are comprised of two lines of business: (i)
management of private investment funds; and (ii) investing in start-up business
ventures. The Company's business operations are subject to numerous risks
associated with managing investment funds and establishing new business
ventures. Continued implementation of the plan of operations of the Company and
each of the Company's new business ventures will be subject to all of the
problems, expenses and uncertainties inherent in the establishment of new
business enterprises, many of which are subject to outside influences over which
the Company has no control, including technological advances and product
obsolescence, uncertain market acceptance, increased levels of competition,
increases in operating costs including costs of supplies, personnel, and
equipment, reduced margins caused by competitive pressures and changes in
general economic conditions and governmental regulation imposed under federal,
state or local laws. There can be no assurance that the Company's new business
ventures will be able to market any product on a commercial scale, that these
new business ventures will ever achieve or maintain profitable operations or
that they, or the Company, will be able to remain in business.
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RISKS ASSOCIATED WITH THE MONEY MANAGEMENT BUSINESS; PROFITABILITY UNCERTAIN:
Although management of the Company has had extensive experience in the
investment industry, the Company itself is a recently formed business entity and
has a short history of operations and only limited revenues.The Company
currently manages two domestic partnership funds and two offshore investment
funds.The Company invests a portion of its own funds in the domestic partnership
funds as a general partner.The Company does not invest Company funds in the
offshore investment funds.From its inception through June 30, 1997, the Company
has received approximately $370,000 in aggregate performance and management fees
from managing the four investment funds. The Company is attempting to increase
the assets invested in the various funds it manages.There can be no assurance as
to the level of additional capital that the Company will be able to raise for
its investment funds.
The Company has formulated its plan of operations based on certain
assumptions regarding the potential monies that will be invested in its funds
under management and the anticipated performance of, and profits that can be
realized by, these funds.Although these assumptions are based on the best
estimates of management, there can be no assurance that these assessments will
prove to be correct.Any future success of the Company will depend upon many
factors, including factors which may be beyond the control of the Company or
which cannot be predicted at this time.These factors include the amount of
assets under management in the Company's investment funds, the performance of
those funds, the overall performance of the equity markets in the United States,
the success of the Company's stock selecting strategy and other factors. The
Company's income from managing the investment funds is comprised of fixed
management fees, as well as performance fees which are based on the performance
of each individual fund, as the Company receives a percentage of the profit
earned by each fund.
POTENTIAL FLUCTUATIONS IN THE FUTURE RESULTS OF OPERATION OF THE COMPANY:
The Company's operating results may vary significantly from quarter to
quarter due to a variety of factors including the amount of money invested in
the private investment funds managed by the Company, the performance of such
investment funds, the results of operations of the Affiliates, the nature and
timing of investments in new businesses by the Company and the timing of the
sales of securities of the Affiliates.
The Company also expects to incur significant start-up expenses in pursuing
and developing new business ventures.To date, the Company has lacked a
consistent source of recurring revenue and most of its revenues have come from
sales of securities of the Affiliates.
POTENTIAL FLUCTUATIONS IN FUTURE RESULTS OF OPERATIONS OF THE AFFILIATES:
To date, Whitewing has experienced substantial operating losses and its
operating results have varied significantly from quarter to quarter due to a
variety of factors.For further information regarding the nature of and the
fluctuations in Whitewing's operating results, potential investors are directed
to review Whitewing's filings under the Exchange Act, available from the SEC.
CombiMatrix, MerkWerks, Greenwich Information Technologies and Soundview
Technologies have generated no revenues to date.The Company anticipates that any
results of operations of these Affiliates are likely to vary significantly as a
result of a number of factors, including the timing of new product introductions
by each of these Affiliates, the novelty of the technology owned by these
Affiliates, the strength of each of these Affiliates' intellectual property
rights, each Affiliates ability to exploit its technology, the volume and timing
of orders received, product line maturation, the impact of price competition,
and each Affiliate's ability to access distribution channels. Many of these
factors are beyond the control of the Affiliates. There can be no assurance that
any Affiliate will experience growth in the future or be profitable on an
operating basis in any future period.
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RISKS ASSOCIATED WITH THE EMERGING COMPANIES:
Involvement in emerging companies is marked by a high degree of risk,
including difficulties in selecting ventures with viable business plans and
acceptable likelihoods of success and future profitability. There is a high
probability of loss associated with investments in start-ups. Identifying and
developing each new business opportunity also requires the Company to dedicate
significant amounts of financial resources, management attention and personnel,
with no assurance in any individual case that these expenditures will prove
fruitful.
The Company generally invests in start-up ventures with no operating
histories, unproven technologies and products and, in some cases, the need for
identification and implementation of experienced management. Because of the
uncertainties and risks associated with such start-up ventures, investors in the
Company should expect substantial losses associated with failed ventures. In
addition, markets for venture capital in the United States are increasingly
competitive.As a result, the Company faces potential losses of business
opportunities and possible deterioration of the terms of available financings
and equity investments in start-up ventures. Furthermore, the Company may lack
financial resources to fully fund additional ventures in which it could
participate and the Company as well as its Affiliates may be dependent upon
external financing to provide sufficient capital.
UNCERTAINTY OF EMERGING COMPANIES; LACK OF MARKET ACCEPTANCE OF PRODUCTS:
COMBIMATRIX. CombiMatrix is developing technologies involving combinatorial
chemistry, which could represent significant improvements over existing
technologies in the speed and cost-effectiveness of drug discovery. The
Company's investment in CombiMatrix is subject to the risks associated with new
technologies, including the viability of the technology, unknown market
acceptance, difficulties in obtaining financing, the strength of its
intellectual property protection, increasing competition, and the ability to
convert technology into revenues. In addition, because the technologies critical
to the success of this industry are in their infancy, no assurances can be given
that CombiMatrix will be able to successfully implement its technologies. In the
event its technologies prove to be successful, CombiMatrix intends to pursue
collaborations with pharmaceutical companies, which may include the licensing of
CombiMatrix's screening libraries and possibly the licensing of internally
developed chemical compounds. No assurances can be given that CombiMatrix, even
if successful in developing its technologies, would be able to successfully
implement the collaborative efforts with pharmaceutical companies.
CombiMatrix intends to vigorously protect its intellectual property
rights.There can be no assurance, however, that CombiMatrix's pending patent
applications will issue or that a third party will not violate, or attempt to
invalidate, CombiMatrix's intellectual property rights, possibly forcing
CombiMatrix to expend substantial legal fees. Successful challenges to certain
of CombiMatrix's patents, if issued, would materially adversely affect
CombiMatrix's business, operating results and financial condition.
There can be no assurance that certain aspects of CombiMatrix's technology
will not be reverse-engineered by third parties without violating CombiMatrix's
proprietary rights. CombiMatrix's existing protections also may not preclude
competitors from developing products with features and prices similar to or
better than those of CombiMatrix.
GREENWICH INFORMATION TECHNOLOGIES. Greenwich Information Technologies is
the exclusive marketing and licensing agent for a number of domestic and
international patents and other intellectual property pertaining to
information-on-demand systems. Although Greenwich Information Technologies
believes that it has marketing and licensing rights to enforceable patents, no
assurances can be given that other companies will not challenge the underlying
patents to these rights or develop competing technologies that do not infringe
such patents. Furthermore, whether or not competing products emerge, it is
uncertain whether and to what extent Greenwich Information Technologies will be
able to profitably market and license its rights to the information-on-demand
technology.
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SOUNDVIEW TECHNOLOGIES. Soundview Technologies was formed in March 1996 to
commercialize patent rights of a method of video and audio blanking technology,
also known as V-chip technology, that screens objectionable television
programming and blocks it from the viewer. Although Soundview Technologies
believes that it owns an enforceable patent on its technology, no assurances can
be given that other companies will not challenge Soundview Technologies' patent
rights or develop competing technologies that do not infringe Soundview
Technologies' patent. Additionally, whether or not competing products emerge, it
is uncertain whether and to what extent Soundview Technologies will be able to
profitably exploit its technology.
MERKWERKS. MerkWerks was formed in September 1995 as a software development
company, whose first product will be software for use with CD-recordable disk
drives for Macintosh platforms. MerkWerks is in the developmental stage and, to
date, has not completed the development of any products or generated any
revenues. Although MerkWerks anticipates that development of its first software
product will be completed shortly and that its first product may be marketed,
through license or sale, in 1997, no assurances can be given that MerkWerks will
ever be able to successfully market its products or that a market for such
products will develop.
The success of MerkWerks' software depends on its acceptance by original
equipment manufacturers (OEMs) that produce CD-recordable disk drives.MerkWerks
strategy is to convince these OEMs of the utility of MerkWerks' software so that
the OEMs will install such software in the CD-recordable disk drives prior to
their sale to the end-user, which will generate license fees for MerkWerks and
generate market acceptance of MerkWerks' platform. No assurances can be given
that MerkWerks' software will gain the acceptance of OEMs or ever be
incorporated into CD-recordable disk drives.
MerkWerks' initial software release will be designed for use with the
Macintosh platform. In addition, MerkWerks anticipates adapting its software to
the Windows platform. However, it is uncertain whether MerkWerks will be
successful in adapting its software to the Windows platform, and, if successful,
whether a viable market will develop for this product.
UNCERTAIN REVENUES OF AFFILIATES:
CombiMatrix, MerkWerks, Greenwich Information Technologies and Soundview
Technologies have generated no revenues to date and have had substantial losses.
Although each of these companies is developing products for marketing and
commercial sale, either through direct sales or licensing, no assurances can be
given that any of these companies will ever generate meaningful revenues or will
ever be profitable.
AFFILIATES' NEED FOR ADDITIONAL CAPITAL; SUBSEQUENT FINANCINGS:
To date, the Affiliates have primarily relied upon the sale of equity
securities, including sales to the Company, and certain loans from the Company,
to generate the funds needed to finance the implementation of their plans of
operations. The Affiliates may be required to obtain additional financing
through bank borrowings, debt or equity financings or otherwise, or curtail such
activities. No assurance can be given that the Affiliates will continue to be
able to obtain financing or will obtain financing on favorable terms.
LACK OF MANAGEMENT; NEED FOR MARKETING AND SALES PERSONNEL:
CombiMatrix, MerkWerks, Greenwich Information Technologies and Soundview
Technologies have generated no revenues to date. There can be no assurance these
companies will be able to meet their anticipated working capital needs for
developing their products. Failure to properly develop these products will
prevent these companies from generating meaningful product sales. Further
success in developing commercially viable products will create the need for
these companies to expand their management personnel. Some of these companies
will require the Company's assistance in identifying and implementing
9
<PAGE>
experienced management teams and no assurances can be given that these companies
will be successful in assembling qualified and effective management teams.
Additionally, unlike Greenwich Information Technologies and Soundview
Technologies, which intend to primarily license their respective technologies to
third parties for commercial exploitation, CombiMatrix and MerkWerks currently
intend to develop, manufacture, market and sell, and in the case of CombiMatrix
license, their respective products directly to customers. Because CombiMatrix
and MerkWerks have not completed the research and development of their products,
they have not hired marketing and sales personnel or finalized strategic
marketing plans. There can be no assurance that CombiMatrix and MerkWerks will
be able to attract and retain qualified marketing and sales personnel or that
any marketing efforts undertaken by the companies will be successful.
DEPENDENCE ON KEY PERSONNEL; NEED TO RETAIN PERSONNEL:
The Company's success will depend on its ability to attract, retain and
motivate the qualified personnel that will be essential to the Company's current
plans and future development. The competition for such personnel is intense and
there can be no assurance that the Company will be successful in retaining its
existing key employees or in attracting and retaining the required additional
personnel. In particular, the success of the Company and each Affiliate will
also be greatly determined by the retention, motivation and success of the
individuals discussed in the following paragraphs regarding the Company and its
Affiliates:
THE COMPANY. The Company's success will depend to a significant extent upon
the continued services of Paul R. Ryan, the Company's President and Chief
Executive Officer, who also serves as a co-general partner of the two domestic
private investment partnerships and as portfolio manager for the two offshore
investment funds. The Company does not maintain key person life insurance
coverage with respect to Mr. Ryan.
COMBIMATRIX. CombiMatrix's success will depend to a significant extent upon
the continued services of, CombiMatrix's Vice President--Research and
Development. The Company maintains key person life insurance coverage with
respect to this individual in the amount of $1,000,000.
GREENWICH INFORMATION TECHNOLOGIES. Greenwich Information Technologies'
success will depend to a significant extent upon the continued services of H.
Lee Browne, Greenwich Information Technologies' President and Chief Executive
Officer (and a major shareholder in the Company). Neither Greenwich Information
Technologies nor the Company maintains key person life insurance coverage with
respect to Mr. Browne.
SOUNDVIEW TECHNOLOGIES. Soundview Technologies' success will depend to a
significant extent upon the continued services of H. Lee Browne, Soundview
Technologies' President and Chief Executive Officer, and David Schmidt,
Soundview Technologies' Vice President and Director of Technology. Neither
Soundview Technologies nor the Company maintains key person life insurance
coverage with respect to Mr. Browne or Mr. Schmidt.
MERKWERKS. MerkWerks' success will depend to a significant extent upon the
continued service of James Merkle, Jr., MerkWerks' President. The Company
currently maintains key person life insurance coverage with respect to Mr.
Merkle in the amount of $1,000,000.
10
<PAGE>
COMPETITION FACING THE COMPANY'S MONEY MANAGEMENT BUSINESS:
Competition in the investment markets and among providers of investment
management services is intense. Some of these competing providers have greater
financial, marketing and other resources, as well as greater research
capabilities than the Company. The Company believes that its products and
services are differentiated from those of its competitors and well-suited for
the investment marketplace. However, there can be no assurance that the Company
will prove successful in its efforts to attract the desired amount of funds for
investment in the funds managed by the Company.
COMPETITION FACING THE AFFILIATES:
WHITEWING. The markets for Whitewing's products are intensely competitive.
The nutritional supplements market is characterized by frequent product
introductions, short product life cycles, rapid price declines and eroding
profit margins and evolving customer preferences. In each of its product lines,
Whitewing competes and is expected in the future to compete with a large number
of companies with significantly greater financial and other resources.Many of
Whitewing's current and potential competitors have significantly greater name
recognition, research capabilities and financial and technical resources than
Whitewing, and many have long-standing positions and established brand names in
their markets.
COMBIMATRIX. The pharmaceutical and biotechnology industries are subject to
intense competition and rapid and significant technological change. Many
organizations are actively attempting to identify and optimize compounds and
build libraries for potential pharmaceutical development. CombiMatrix will
compete directly with the research departments of pharmaceutical companies,
biotechnology companies, other combinatorial chemistry companies, and research
and academic institutions. Many of these competitors have greater financial and
other resources, and more experience in research and development, than
CombiMatrix. Historically, pharmaceutical companies have maintained close
control over their research activities, including the synthesis, screening, and
optimization of chemical compounds. Many of these companies, which represent the
greatest potential market for CombiMatrix's services and compounds, are
developing combinatorial chemistry and other methodologies to improve
productivity. In addition, these companies may already have large collections of
compounds previously synthesized or ordered from chemical supply catalogs or
other sources against which they may screen new targets. Other sources of
compounds include compounds extracted from natural products, such as plants and
microorganisms, and compounds created using rational drug design. Academic
institutions, governmental agencies and other research organizations are also
conducting research in areas in which CombiMatrix is working, either on their
own or through collaborative efforts.
CombiMatrix anticipates that it will face increased competition in the
future as new companies enter the market and advanced technologies become
available. CombiMatrix's processes may be rendered obsolete or uneconomical by
technological advances or entirely different approaches developed by one or more
of CombiMatrix's competitors. The existing approaches of CombiMatrix's
competitors or new approaches or technology developed by CombiMatrix's
competitors may be more effective than those developed by CombiMatrix.
GREENWICH INFORMATION TECHNOLOGIES. Although Greenwich Information
Technologies believes that it has marketing and licensing rights to enforceable
patents and other intellectual property relating to video and audio on demand,
no assurances can be given that other companies will not develop competing
technologies that offer better or less expensive alternatives to those offered
by Greenwich Information Technologies. In the event a competing technology
emerges, Greenwich Information Technologies would expect substantial
competition.Potential competitors could have significantly greater research
capabilities and financial and technical resources than Greenwich Information
Technologies, and some could have established brand names in the market for such
products.
11
<PAGE>
SOUNDVIEW TECHNOLOGIES. Soundview Technologies believes that its V-chip
technology is protected by enforceable patent rights.However, no assurances can
be given that other companies will not develop competing technologies that offer
better or less expensive alternatives to those offered by Soundview
Technologies. Many potential competitors could have significantly greater
research capabilities and financial and technical resources than Soundview
Technologies, and some could have established brand names in the market for
television products.
MERKWERKS. There are currently approximately 25 CD-recordable disk drive
software packages on the market. MerkWerks' first product is not yet complete or
ready for sale. Thus, the acceptance of MerkWerks' software in the market is
unproven and speculative. The markets for software products are intensely
competitive and are characterized by rapid changes in technological standards.
MerkWerks faces competition from large companies with substantial technical,
marketing and financial resources, allowing them to aggressively develop,
enhance and market competing products. These advantages may allow competitors to
dominate distribution channels and to respond more quickly than MerkWerks to
emerging technologies or to changing customer requirements.Numerous actions by
these competitors, including price reductions and product giveaways, increased
promotion, the introduction of enhanced products and product bundling could have
a material adverse effect on MerkWerks ability to develop and market its
software products and on MerkWerks business, financial condition and operating
results.
PROPRIETARY TECHNOLOGY:
The success of the business of CombiMatrix, Greenwich Information
Technologies, Soundview Technologies, and MerkWerks relies, to varying degrees,
on proprietary technology and the protection and exclusivity thereof.
CombiMatrix, Greenwich Information Technologies, and Soundview Technologies will
depend largely on the protection of enforceable patent rights.CombiMatrix
currently has an application on file with the United States Patent and Trademark
Office seeking a patent on its core technology, while Greenwich Information
Technologies and Soundview Technologies have patent or rights to patents that
have been issued as well as have additional patents pending. MerkWerks intends
to rely on a combination of statutory and common law, copyright, trademark and
trade secret law, and licensing agreements to protect its software product.
In addition to the protection that may be afforded by patents and the
various laws protecting proprietary rights, the Affiliates enter into
confidentiality agreements with certain third parties and to generally limits
access to information relating to their intellectual property. Despite these
precautions, third parties may be able to gain access to and use their
intellectual property to develop similar competing technologies and/or products.
Any substantial unauthorized use of the Affiliates patent and other proprietary
rights, could materially and adversely affect the business and operational
results of the Affiliates.
NEW PRODUCTS AND TECHNOLOGICAL CHANGES AFFECTING THE AFFILIATES:
The markets for each Affiliate's products are also marked by extensive
competition, rapidly changing technology, frequent product improvements, and
evolving industry standards. The success of each Affiliate will depend on its
ability to develop and market new products or enhance existing ones to meet the
evolving needs of the market for such products. There can be no assurance that
the Affiliates' existing or future products will be successful or profitable. In
addition, there can be no assurance that products or technologies developed by
others will not render the Affiliates' products noncompetitive or obsolete.
NEED FOR ADDITIONAL CAPITAL; SUBSEQUENT FINANCINGS:
To date, the Company has relied upon the sale of equity securities to
generate the funds needed to finance the implementation of its plan of
operations. The Company has in the past also relied on gains from the sale of
investment securities, including those of Whitewing, CombiMatrix, Soundview
Technologies, and MerkWerks, as well as equity interests in Greenwich
Information Technologies as additional
12
<PAGE>
sources of revenue. The Company may be required to obtain additional financing
through bank borrowings, debt or equity financings or otherwise.
MINORITY POSITIONS IN CERTAIN AFFILIATES:
WHITEWING. The Company currently owns 532,459 shares of the common stock of
Whitewing, representing 18.4% of the outstanding shares and has voting control
over 789,709 shares of common stock of Whitewing, representing 27.3% of the
outstanding shares. R. Bruce Stewart, the Company's Chief Financial Officer, is
Chairman of the Board of Directors of Whitewing and Paul Ryan, the Company's
President and Chief Executive Officer, is also a member of the Board of
Directors of Whitewing, representing half of Whitewing's Board of Directors.
This minority position and board representation results in the Company having
influence at Whitewing, but not the ability to control the decision-making at
Whitewing.
GREENWICH INFORMATION TECHNOLOGIES. The Company currently maintains a
membership interest of 30.02% in Greenwich Information Technologies. Although a
senior member of Greenwich Information Technologies, the Company does not hold a
majority of the board of three senior members. Similarly, the Company has no
control over the day to day operations of Greenwich Information Technologies,
which are directed by the chief executive officer, H. Lee Browne, a major
shareholder of the Company. This minority position results in the inability of
the Company to control or direct the decision-making of Greenwich Information
Technologies in any meaningful way.
MANAGEMENT AND PERFORMANCE FEES:
The level of management and performance fee revenue received by the Company
will depend upon the amount of money invested in the funds managed by the
Company, which in turn will depend to a large extent upon the performance of the
funds managed by the Company. There can be no assurance that the Company will
prove successful in raising any additional capital for the investment funds
managed by the Company.
INVESTMENT IN THE PARTNERSHIP:
As of June 30, 1997, the Company had invested $504,389 in the two domestic
private partnership funds it manages, and may invest additional amounts to
acquire or increase its interests in these or other funds.To the extent that the
Company's funds are so committed, they will be subject to all of the risks to be
encountered by all investors in such funds as a result of the investment
strategy adopted for the funds by the Company as a general partner, including
the risks associated with short sales, hedging, option trading, trading on
margin and other leverage transactions. The investment strategy adopted by the
domestic funds managed by the Company, and any other funds it subsequently
invests, could result in substantial losses, and these losses could have a
material adverse impact on the operational results of the Company. Conversely,
if any partnership funds in which Company funds are invested prove to be
profitable, the partners thereof, including the Company, will be credited with
partnership net income. The Company will thereby incur income tax liability,
even if it receives little or no cash distributions from such funds. Since the
stated intention of the funds managed by the Company is to reinvest
substantially all income and gain allocable to the partners thereof, the Company
does not anticipate receiving distributions of cash from the funds to the
partners, including the Company, that could be used to pay any income tax on
partnership profits.
It is the present intention of the Company to limit its investment in
certain designated assets, including investments in domestic partnership funds,
to an amount not exceeding forty-five percent in the aggregate, of the Company's
total assets, to avoid characterization of the Company as an investment company
that would be subject to regulation under the Investment Company Act of 1940.
13
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth certain information regarding beneficial
ownership of shares of the Company's Common Stock by the Selling Securityholders
as of July 31, 1997 and the number of shares which may be offered for the
account of the Selling Securityholders or their transferees or distributees from
time to time. Because the Selling Securityholders may sell all or any part of
their shares pursuant to this Prospectus, no estimate can be given as to the
number of shares that will be held by the Selling Securityholders upon
termination of this offering.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
BENEFICIALLY NUMBER OF SHARES BENEFICIALLY PERCENT BENEFICIALLY
OWNED PRIOR TO WHICH MAY BE SOLD OWNED AFTER THE OWNED AFTER THE
SELLING SECURITYHOLDERS OFFERING (1) IN THIS OFFERING OFFERING (1) OFFERING
- ---------------------------------- ----------------- ------------------ ----------------- ---------------------
<S> <C> <C> <C> <C>
H. Lee Browne..................... 210,000 200,000 10,000 *
David H. Schmidt.................. 210,000 200,000 10,000 *
------- ------- ------ ---
</TABLE>
- ------------------------
* Less than 1%.
(1) Includes, for each of H. Lee Browne and David H. Schmidt, options to
purchase 10,000 shares.
PLAN OF DISTRIBUTION
The shares offered hereby may be sold by the Selling Securityholders or by
their respective pledgees, donees, transferees or other successors in interest.
Such sales may be made at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The shares may be sold by one or more of the
following: (a) one or more block trades in which a broker or dealer so engaged
will attempt to sell all or a portion of the shares held by the Selling
Securityholders as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchase by a broker or dealer as
principal and resale by such broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (d) privately negotiated transactions between the Selling Securityholders
and purchasers without a broker-dealer. The Selling Securityholders may effect
such transactions by selling shares to or through broker-dealers, and such
broker-dealers will receive compensation in negotiated amounts in the form of
discounts, concessions, commissions or fees from the Selling Securityholders
and/or the purchasers of the shares for whom such broker-dealers may act as
agent or to whom they sell as principal, or both (which compensation to a
particular broker-dealer might be in excess of customary commissions). Such
brokers or dealers or other participating brokers or dealers and the Selling
Securityholders may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, in connection with such sales. Except for customary
selling commissions in ordinary brokerage transactions, any such underwriter or
agent will be identified, and any compensation paid to such persons will be
described, in a Prospectus Supplement. In addition, any securities covered by
this Prospectus that qualify for sale pursuant to Rule 144 might be sold under
Rule 144 rather than pursuant to this Prospectus.
LEGAL MATTERS
The validity of the shares of Common Stock intended to be sold pursuant to
this Prospectus will be passed upon for the Company by O'Melveny & Myers LLP.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K/A for the year ended December 31, 1996 have been so
included in reliance on the report of Finocchiaro & Co., independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
14
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SECURITYHOLDERS.THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
Prospectus Summary............................. 4
Recent Developments............................ 6
Forward Looking Statements..................... 6
Risk Factors................................... 6
Selling Securityholders........................ 14
Plan of Distribution........................... 14
Legal Matters.................................. 14
Experts........................................ 14
</TABLE>
ACACIA RESEARCH
CORPORATION
400,000 SHARES OF
COMMON STOCK
---------------------
PROSPECTUS
---------------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the registration and sale of the Selling
Securityholder Securities are as follows:
<TABLE>
<S> <C>
SEC registration fee............................................... $
Printing and engraving............................................. 5,000
Accounting fees and expenses....................................... 5,000
Legal fees and expenses............................................ 10,000
Blue Sky filing fees and expenses.................................. 3,000
Miscellaneous expenses............................................. 5,000
---------
Total............................................................
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Articles of Incorporation and Bylaws of the Company, each as
amended to date, require the Company to indemnify its officers and directors to
the fullest extent permitted by Section 317 of the California General
Corporation Law and applicable law. Section 317 of the California General
Corporation Law makes provision for the indemnification of officers, directors
and other corporate agents in terms sufficiently broad to indemnify such
persons, under certain circumstances, for liabilities (including reimbursement
of expenses incurred) arising under the Securities Act of 1933, as amended.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------
<S> <C>
4.1 Form of Specimen Certificate of Company's Common Stock(1)
5.1 Opinion of O'Melveny & Myers LLP regarding legality of securities being registered
23.1 Consent of Finocchiaro & Co.
23.2 Consent of O'Melveny & Myers LLP (contained in Exhibit 5.1)
24.1 Power of Attorney (contained on signature page hereof)
</TABLE>
- ------------------------
(1) Previously filed as an exhibit to the Company's Registration Statement on
Form SB-2, File No. SB2-33-87368-L.A., and incorporated by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales ar being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if,
II-1
<PAGE>
in the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(5) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 6
above, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pasadena, State of California, on August 15, 1997.
ACACIA RESEARCH CORPORATION
By /s/ PAUL R. RYAN
--------------------------------------
Paul R. Ryan, President and Chief
Executive Officer
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Paul R. Ryan and Kathryn King-Van Wie, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement (or any other registration statement for the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933), and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or either of them or their or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- ------------------
<C> <S> <C>
/s/ PAUL R. RYAN President, Chief Executive Officer
------------------------------------------- and Director (Principal Executive August 15, 1997
Paul R. Ryan Officer)
/s/ R. BRUCE STEWART Chief Financial Officer and Chairman
------------------------------------------- of the Board (Principal Financial August 15, 1997
R. Bruce Stewart and Accounting Officer)
/s/ BROOKE P. ANDERSON
------------------------------------------- Director August 15, 1997
Brooke P. Anderson
/s/ FRED A. DE BOOM
------------------------------------------- Director August 15, 1997
Fred A. de Boom
/s/ EDWARD W. FRYKMAN
------------------------------------------- Director August 15, 1997
Edward W. Frykman
</TABLE>
<PAGE>
EXHIBIT 5.1
August
15th
1 9 9 7
Acacia Research Corporation
12 South Raymond Avenue
Pasadena, California 91105
Re: Registration on Form S-3 of Common Stock, no par value,
of Acacia Research Corporation (the "Company")
---------------------------------------------------------
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3 to
be filed with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of 400,000 shares of
Common Stock, no par value, of the Company (the "Common Stock") to be sold by
certain shareholders of the Company. We have examined the proceedings heretofore
taken in connection with the authorization of the Common Stock.
Based upon such examination and upon such matters of fact and law as we have
deemed relevant, we are of the opinion that the Common Stock has been duly
authorized by all necessary corporate action on the part of the Company and are
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
O'MELVENY & MYERS LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Acacia Research Corporation on Form S-3 of our report dated July 31, 1997
incorporated by reference into the Annual Report on Form 10-K/A of Acacia
Research Corporation for the fiscal year ended December 31, 1996 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ Finocchiaro & Co.
Finocchiaro & Co.
Pasadena, California
August 14, 1997
