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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
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/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996.
OR
/ / TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
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COMMISSION FILE NUMBER 0-26068
ACACIA RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
California 95-4405754
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(State or other jurisdiction of (I.R.S. Employer
incorporation organization) Identification No.)
12 South Raymond Avenue, Pasadena CA 91105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 449-6431
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
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
filing requirements for the past 90 days. YES / X / NO
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Indicate by check mark that disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. / X /
The aggregate market value of the voting stock held by non-affiliates of
the registrant, computed by reference to the average bid and asked prices of
such stock, as of March 27, 1997 was approximately $12,140,563. (All
officers and directors of the registrant are considered affiliates.)
At March 27, 1997 the registrant had 2,078,172 shares of Common Stock,
and no shares of Preferred Stock, all no par value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement for its Annual
Meeting of Shareholders to be filed with the Commission within 120 days after
the close of the registrant's fiscal year are incorporated by reference into
Part III.
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The Registrant amends its Form 10-K for the fiscal year ended December 31,
1996 to add parentheses to indicate a loss of $262,737 in equity in earnings
of investments for the year ended December 31, 1996, which appears in the
Statement of Operations Data table in Item 6. Selected Financial Data.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data set forth below as of December 31, 1995 and
1996, and for the period January 25, 1993 (inception) through December 31,
1993 and the years ended December 31, 1994, 1995 and 1996, has been derived
from the Company's audited consolidated financial statements included
elsewhere herein, and should be read in conjunction with those financial
statements (including the notes thereto).
Marketing, general and administrative expense incurred in 1996 includes
a write-down of $559,250 relating to two promissory notes held by the
Company, which are secured by Whitewing stock. The notes, which are currently
past due, have been written down to the market value price of the collateral
held by the Company as of December 31, 1996. The Company intends to collect
on these notes and will take such action deemed by the Company to be
necessary and appropriate to ensure that these notes do not remain
outstanding for an extended period of time.
Financial statements for 1995 and 1996 were restated to reflect the
Company's auditors' determination that the appropriate accounting for
the Company's nonstatutory stock options and the reporting of deferred tax
benefits for the difference between market value and option price require the
establishment of deferred tax assets related to nonstatutory stock options
only for those options for which the Company has recorded compensation
expense for financial statement purposes. Prior to this determination, the
Company reported the deferred tax benefit for all nonstatutory options.
On the advice of its auditors, the Company has historically taken the
position that all nonstatutory options created a deferred tax benefit.
However, in accordance with current interpretations of generally accepted
accounting principles, the Company's auditors have now determined that
deferred tax benefits should only be recorded for those nonstatutory stock
options that the Company has or will record book expense. Generally accepted
accounting principles allow deferred tax assets to be recorded only on
temporary differences. For the most of the Company's nonstatutory stock
options, a book expense will not be recorded. Therefore, these differences
are permanent differences rather than temporary and do not give rise to
deferred tax benefits.
Based on this interpretation, the Company has restated its financial
position to reflect the tax savings in the year that the options are
exercised, and the entry will be reported as in increase to common stock and
a reduction of income taxes payable. The amount of this entry may vary
depending on the details of the option and when it is exercised.
Financial statements for 1994 and 1995 were restated to reflect a change
in accounting for the Company's investment in Whitewing to the equity method
due to the Company's reduced ownership interest in Whitewing. The Company
also accounts for its investments in CombiMatrix, Soundview Technologies, and
Greenwich Information Technologies as well as the two private investment
partnerships of which the Company is a general partner on the equity method.
However, financial statements for the years ended December 31, 1995 and
December 31, 1996 reflect consolidation with MerkWerks Corporation. Financial
statements for periods prior to the period ending December 31, 1995 were
originally consolidated to include the accounts of the Company and Whitewing.
These prior statements included operating revenue earned by the Company from
the sale of health care products by Whitewing. Prior to this restatement,
sales for the Company were reported as $455,359 in 1994, as compared to no
revenues from this source reported in 1994 in the restated financial
statements.
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STATEMENT OF OPERATIONS DATA: For the years ended December 31, 1996, 1995 and
1994 and the period ended 1993
<TABLE>
<CAPTION>
1996 1995 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues
Gains on sales of securities, net $ 876,499 $3,194,241 $ 0 $ 0
Unrealized gain attributable to
issuance of common stock 1,066,408 0 0 0
Equity in earnings of investments (262,737) 271,023 (137,782) (276,465)
Management fees 1,458,078 2,880 0 0
Interest income 102,334 49,567 37,502 8,215
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Total revenue 3,240,582 3,517,711 (100,280) (268,250)
Marketing, general and administrative 2,219,617 1,399,042 724,156 597,848
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Income (loss) before minority interest
and taxes 1,020,965 2,118,669 (824,436) (866,098)
Minority interest in net loss of
consolidated subsidiary (10,796) (459) 0 0
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Income (loss) before provision for
taxes 1,031,761 2,119,128 (824,436) (866,098)
Provision for Income Taxes 605,341 287,817 3,541 1,486
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Net Income (loss) $ 426,420 $1,831,311 $ (827,977) $ (867,584)
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Earnings (loss) per common share
Fully diluted $0.16 $0.72 ($0.35) ($0.44)
Weighted average shares outstanding
Fully diluted 2,680,433 2,558,647 2,357,050 1,991,000
BALANCE SHEET DATA: December 31,
1996 and 1995
1996 1995
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Total assets $5,377,770 $3,843,954
Total liabilities $ 822,358 $ 357,979
Minority interest $ 0 $ 10,796
Stockholders' equity $4,555,412 $3,475,179
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DATED: April 30, 1997 ______________________________
/s/ PAUL R. RYAN
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Paul R. Ryan
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
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SIGNATURE TITLE DATE
<S> <C> <C>
/s/ R. BRUCE STEWART Chairman of the Board of Directors, April 30, 1997
- --------------------------- Chief Financial Officer (Principal
R. Bruce Stewart Financial and Accounting Officer)
/s/ PAUL R. RYAN Chief Executive Officer and President April 30, 1997
- --------------------------- (Principal Executive Officer)
Paul R. Ryan
/s/ KATHRYN KING-VAN-WIE
- --------------------------- Chief Operating Officer and Secretary April 30, 1997
Kathryn King-Van-Wie
/s/ BROOKE P. ANDERSON
- --------------------------- Director April 30, 1997
Brooke P. Anderson
/s/ FRED A. de BOOM
- --------------------------- Director April 30, 1997
Fred A. de Boom
/s/ EDWARD W. FRYKMAN
- --------------------------- Director April 30, 1997
Edward W. Frykman
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