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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 24, 2000
ACACIA RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 000-26068 95-4405754
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
55 South Lake Avenue,
PASADENA, CALIFORNIA 91101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (626) 396-8300
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Item 5. Other Events.
On February 24, 2000, Acacia Research Corporation reported net loss for
the quarter ended December 31, 1999 of $1,794,000 and net loss for the year
ended December 31, 1999 of $8,197,000. The full text of the press release is set
forth in Exhibit 99.1 attached hereto and is incorporated in this report as if
fully set forth herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press release dated February 24, 2000
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SIGNATURES
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 hereunto duly authorized.
ACACIA RESEARCH CORPORATION
Dated: February 24, 2000 By: /s/ PETER FRANK
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Peter Frank, Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Exhibit
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99.1 Press release dated February 24, 2000
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[LOGO]
EXHIBIT 99.1
Contact: Rob Stewart
(626) 396-8300
FOR RELEASE
Thursday, February 24, 2000
ACACIA RESEARCH REPORTS FOURTH QUARTER AND YEAR-END FINANCIAL RESULTS
PASADENA, Calif., February 24, 2000 - Acacia Research Corporation
(Nasdaq/NMS:ACRI) today reported results for the quarter and year ended
December 31, 1999. Net loss for the quarter ended December 31, 1999 was
$1,794,000, or 15 cents per share, versus a net loss of $1,849,000, or 18
cents per share, for the comparable 1998 period. Net loss for the year ended
December 31, 1999 was $8,197,000, or 75 cents per share, versus a net loss of
$6,189,000, or 69 cents per share in 1998.
Losses before income taxes and minority interests for the quarter and year ended
in 1999 increased primarily due to research and development and start-up costs
of one of Acacia Research's new subsidiaries, Soundbreak.com, and the expansion
of subsidiary CombiMatrix's research and development efforts. Growth of the
Company's infrastructure, including additions to personnel and office space,
also added to the increase. The portion of net losses allocated to minority
interests for the quarter and year ended December 31, 1999 increased by
$1,989,000 and $2,031,000, respectively, over the comparable periods in 1998.
As of December 31, 1999, total assets were $51,791,000 of which $37,631,000 was
cash and cash equivalents. On February 7, 2000, Acacia Research issued a warrant
call, which expires March 8, 2000, to all holders of outstanding common stock
purchase warrants. If all outstanding warrants are exercised, the Company will
receive proceeds of approximately $13 million.
During the fourth quarter of 1999, the Company and its majority-owned
subsidiaries began to significantly increase financing, acquisition, and
operating activities. The Company intends to continue to invest in growing its
business and developing new Internet and technology related subsidiaries.
Highlights of the fourth quarter include:
- $7.5 million equity financing completed for Soundbreak.com, in
which the Company participated.
- $10.7 million of proceeds received by Acacia Research from the
exercise of common stock purchase warrants.
- Formation of Acacia Launchpad, a wholly-owned subsidiary of Acacia
Research whose mission is to incubate and accelerate the
development of new Internet businesses.
- $21 million private equity financing completed for Acacia
Research.
- Conversion of promissory notes to equity in CombiMatrix, which
eliminated all long-term debt previously carried by CombiMatrix
and the Company.
- Acquisition of a 31% ownership interest in Mediaconnex by Acacia
Research.
- Purchase of a 7.6% interest in The EC Company by Acacia Research,
which was finalized in January 2000.
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Page Two
Acacia Research Corporation
February 24, 2000
To further enhance the Company's and majority-owned subsidiaries' business
potential, a number of key personnel have recently been added:
- LISA Z. CRANE, former General Manager of NBC.com and Vice
President of NBC Interactive, was named President and Chief
Executive Officer of Soundbreak.com.
- GERALD KNUDSON, former President of Polaroid Medical Systems and
President and CEO of Resonex, Inc., was named President and Chief
Executive Officer of CombiMatrix.
- PETER FRANK, former Chief Financial Officer of Gramercy Pictures
and Vice President of Marketing Finance and Administration of 20th
Century Fox, was named Chief Financial Officer of Acacia Research.
- IRENE BYRNE, former Recruiting Team Leader for Disney Consumer
Products, was named Vice President, Human Resources of Acacia
Research.
- MARY ROSE COLONNA, former Controller of Universal Interactive
Studios and Manager of Post Production Finance at the Walt Disney
Company, was named Vice President, Finance and Controller of
Acacia Research.
- DANIEL KELLY, former Director of Business Development and
Licensing at Disney Interactive and Director of ESPN Sports and
Online Business at Disney Interactive, was named Vice President,
Strategic Development of Acacia Research.
Acacia Research is currently engaged in a variety of technology-related
businesses through our majority-owned subsidiaries and strategic acquisitions.
By providing business and technology infrastructure services and ongoing
operational support, Acacia Research can provide an environment that allows
early-stage companies to focus on their business strategies.
Acacia Research's majority-owned subsidiaries are:
- ACACIA LAUNCHPAD LLC was formed to incubate and accelerate the
development of new Internet companies. Launchpad will provide seed
capital and an environment that enables ideas to grow and get to
market quickly. Once a company is past the incubation stage,
Acacia Research can provide additional funding through direct
investments and capital secured from other strategic venture
investors as well as ongoing operational support. Acacia Research
owns 100% of the membership interest of Launchpad.
- COMBIMATRIX CORPORATION is developing a proprietary biochip array
processor system that integrates semiconductor technology with new
developments in biotechnology and chemistry. In initial
applications, CombiMatrix expects its array system to allow
researchers to perform hundreds of DNA tests on a sample of
genetic material simultaneously. As new therapeutic entities are
developed, biochip array products are expected to play an
important role in toxicity and clinical studies as well as
diagnostic products. Acacia Research owns 50.1% of the outstanding
common stock of CombiMatrix.
- MERKWERKS CORPORATION is currently developing a utility software
product for use with CD-Recordable, or CD-R, computer drives.
Acacia Research owns 99.9% of the outstanding common stock of
MerkWerks.
- SOUNDBREAK.COM INCORPORATED has developed a dynamic music website
that fuses the live entertainment value of radio with the power of
the Internet (HTTP://WWW.SOUNDBREAK.COM). Initially targeting
lovers of alternative music, Soundbreak.com offers a robust web
experience with live, 24-hour global webcasts hosted by
professional digital jocks, state-of-the-art graphics, and
extensive communication and user feedback tools. Acacia Research
owns 73.5% of the common stock, on an as-converted basis, of
Soundbreak.com.
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Page Three
Acacia Research Corporation
February 24, 2000
- SOUNDVIEW TECHNOLOGIES INCORPORATED owns intellectual property
related to the telecommunications field, including audio and video
blanking systems, also known as "V-chip" technology. Soundview
Technologies intends to license its technology to television
manufacturers. Acacia Research owns 66.7% of the outstanding
common stock of Soundview Technologies.
Some of Acacia Research's current minority-owned affiliates are:
- GREENWICH INFORMATION TECHNOLOGIES LLC is the exclusive marketing
and licensing agent for several patents relating to
video-on-demand and audio-on-demand technology. Acacia Research
owns 33.3% of the membership interest of Greenwich Information
Technologies.
- MEDIACONNEX COMMUNICATIONS, INC. is a business-to-business
e-commerce company focused on the $90 billion advertising market.
Acacia Research owns a 31% interest in Mediaconnex.
- SIGNATURE-MAIL.COM LLC has developed an on-demand software service
that allows users to personalize their e-mail and computer
documents with handwritten signatures, greetings, and drawings
(http://www.signature-mail.com). Acacia Research owns 25% of the
membership interest of Signature-mail.
- THE EC COMPANY is a leader in business-to-business Internet
exchange transactions for mid-market suppliers
(http://www.eccompany.com). Acacia Research owns a 7.6% interest
in The EC Company.
For more information, please visit Acacia Research's website at
http://www.acaciaresearch.com.
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE "SAFE
HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
THESE STATEMENTS ADDRESS FUTURE EVENTS AND CONDITIONS CONCERNING THE COMPANY'S
AND ITS SUBSIDIARY'S BUSINESS PLANS. SUCH STATEMENTS ARE BASED ON MANAGEMENT'S
CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF FACTORS AND UNCERTAINTIES,
SUCH AS FUTURE ECONOMIC CONDITIONS, CHANGES IN CONSUMER DEMAND, LEGISLATIVE,
REGULATORY AND COMPETITIVE DEVELOPMENTS, AND OTHER CIRCUMSTANCES AFFECTING
ANTICIPATED REVENUES AND COSTS, WHICH MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY. ACACIA RESEARCH URGES INVESTORS TO REVIEW IN DETAIL THE RISKS AND
UNCERTAINTIES DISCLOSED IN THE COMPANY'S FILINGS UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, INCLUDING, BUT NOT LIMITED TO THE COMPANY'S QUARTERLY
REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1999 AND THE COMPANY'S
REGISTRATION STATEMENT ON FORM S-3/A FILED ON FEBRUARY 7, 2000, COPIES OF WHICH
CAN BE OBTAINED FROM THE COMPANY OR THE SECURITIES AND EXCHANGE COMMISSION. THE
COMPANY EXPRESSLY DISCLAIMS ANY FUTURE OBLIGATION OR UNDERTAKING TO UPDATE OR
REVISE ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN.
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ACACIA RESEARCH CORPORATION (ACRI)
SUMMARY FINANCIAL INFORMATION
(unaudited)
CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
<TABLE>
<CAPTION>
12/31/99 12/31/98
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<S> <C> <C>
Total Assets $ 51,791 $ 19,769
Total Liabilities $ 1,633 $ 1,828
Minority Interests $ 4,896 $ -
Total Stockholders' Equity $ 45,262 $ 17,941
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share information)
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
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12/31/99 12/31/98 12/31/99 12/31/98
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<S> <C> <C> <C> <C>
Revenue (management fee income) $ 122 $ 382 $ 6 $ 264
Operating Expenses (9,542) (6,224) (3,546) (1,790)
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Operating Loss (9,420) (5,842) (3,540) (1,526)
Other Income (expense)
Interest income 389 302 158 106
Interest expense (254) (130) (130) (42)
Equity in Losses of Affiliates and Partnerships (1,121) (717) (154) (270)
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Total other expense (986) (545) (126) (206)
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Loss before income taxes & minority interests (10,406) (6,387) (3,666) (1,732)
Provision for income taxes (20) - - -
Minority Interests 2,229 198 1,872 (117)
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Net Loss $ (8,197) $ (6,189) $ (1,794) $ (1,849)
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Loss per common share (diluted) $ (0.75) $ (0.69) $ (0.15) $ (0.18)
Weighted average number of common shares 10,871,423 8,971,272 12,160,566 10,195,250
</TABLE>
