Acacia Research Reports Second Quarter Financial Results.NEWPORT BEACH Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. , Calif. -- Acacia acacia (əkā`shə), any plant of the large leguminous genus Acacia, often thorny shrubs and trees of the family Leguminosae (pulse family). Research Corporation (Nasdaq:ACTG ACTG Acting ACTG AIDS Clinical Trial Group ACTG Actuating/Actuator ) (Nasdaq:CBMX) today reported results for the three months ended June June: see month. 30, 2006. Acacia Research Corporation comprises two operating groups, the Acacia Technologies
"Acacia Technologies' revenues for the second quarter increased to $14,371,000 compared to $2,682,000 in the year ago period. Trailing 12-month revenues increased to $34,117,000 compared to $22,428,000 as of the end of the first quarter of 2006. Acacia Technologies reported GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income of $1,191,000 or $0.04 per share, including non-cash patent amortization and non-cash stock compensation charges totaling $2,215,000. Cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments increased by $3,050,000 from the previous quarter to $40,715,000. We continue to expect significant growth in 2006 annual revenues compared to 2005," commented Acacia Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Paul Ryan Paul Ryan may refer to:
"In the second quarter, Acacia generated revenues from 27 new licensing agreements, covering 9 different licensing programs, including licenses of our Laptop Same as laptop computer. laptop - portable computer Connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. technology to IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , our Multi-Dimensional Bar Code technology to Intel and U.S. Bank National Association, our Resource Scheduling technology to Cerner Cerner Corporation (NYSE: CERN) is an international IT corporation in the healthcare industry with more than 7,700 employees. As of June 2006, approximately 1,900 associates in the United States and 300 associates in India were involved full-time in the software development , McKesson McKesson Corporation (NYSE: MCK) is a large United States-based corporation specializing in the distribution of health care systems, medical supplies and pharmaceutical products. and Siemens (Siemens AG, Munich, Germany, www.siemens.com) A leading European electrical and electronics firm founded in 1847. Siemens has more than 430,000 employees in nearly 200 countries, and more than 50,000 professionals are engaged in research and development. , our Audio/Video Enhancement & Synchronization (1) See synchronous and synchronous transmission. (2) Ensuring that two sets of data are always the same. See data synchronization. (3) Keeping time-of-day clocks in two devices set to the same time. See NTP. and Image Resolution technology to Philips (company) Philips - A Dutch multinational electronics company. It produces washing machines, consumer electronics, integrated circuits and light bulbs. Together with Sony they set the Compact Disc standard, especially Green Book CD-ROM. Electronics and initial licenses, for two new licensing programs, to Brooks Brooks , Gwendolyn Elizabeth 1917-2000. American poet known for her verse detailing the dreams and struggles of African Americans. An early volume of poems, Annie Allen (1949), was awarded a Pulitzer Prize. Noun 1. Automation for our Dynamic Manufacturing Modeling technology and MathSoft MathSoft was founded in 1984 by Allen Razdow to provide powerful mathematical programs to students, teachers, and professionals. The company became most famous for its Mathcad software, a powerful application for solving and visualizing nearly any type of mathematical problem. for our Product Activation Product activation is a license validation procedure required by some proprietary computer software programs. Specifically, product activation refers to a method where a software application hashes hardware serial numbers and an ID number specific to the product's license (a technology. "Acacia Technologies also acquired control of 5 new patent portfolios in the second quarter and now controls 46 patent portfolios. Our licensing success continues to grow and is increasing opportunities for partnering with owners of patented technologies as we continue to build our leadership position in technology licensing," concluded Mr. Ryan Ryan may refer to: Places
"The CombiMatrix group recognized revenues of $1,792,000 for the second quarter of 2006. Of this amount, $1,218,000 was product and service revenue and $574,000 was government contract revenue. Our sequential One after the other in some consecutive order such as by name or number. product and service revenue growth quarter over quarter was 24% relative to the first quarter of 2006 and over 111% relative to the second quarter of 2005. Our government revenues declined relative to the second quarter of 2005, due to anomalously a·nom·a·lous adj. 1. Deviating from the normal or common order, form, or rule. 2. Equivocal, as in classification or nature. high revenues during that quarter," commented Amit A`mit´ v. t. 1. To lose. A lodestone fired doth presently amit its proper virtue. - Sir T. Browne. Kumar Kumar (from Sanskrit meaning prince or an (unmarried) youth) is an Indian title, given name or family name. As a title it can mean son of a Rājā, prince, or heir apparent and enters in princely compound titles. , CEO and President of CombiMatrix Corporation. "It is important to note that product revenues for the second quarter of 2006 also included $71,000 from our diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler subsidiary, CombiMatrix Molecular Diagnostics. Though modest, this is noteworthy since it represents the first revenue generated from our subsidiary for diagnostic product sales. CombiMatrix is among a handful of companies worldwide that have sold diagnostic microarray See micro array. microarray - A technique for performing many DNA experiments in parallel. Nothing to do with computers. products. Our transition from R&D to commercial sales through the launch of new products and services should continue to drive revenue growth in the future," concluded Dr. Kumar. Acacia Research Corporation Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Financial Results For the Three Months Ended June 30, 2006 and 2005 Consolidated revenues for the second quarter of 2006 were $16,163,000 versus $4,539,000 in the comparable 2005 period. Second quarter 2006 revenues recognized by the Acacia Technologies group were $14,371,000 versus $2,682,000 in the comparable 2005 period. Second quarter 2006 revenues recognized by the CombiMatrix group were $1,792,000 versus $1,857,000 in the comparable 2005 period. The second quarter 2006 consolidated net loss was $2,251,000 versus $5,417,000 in the comparable 2005 period. The second quarter 2006 net loss was comprised of net income for the Acacia Technologies group of $1,191,000 and a net loss of $3,442,000 for the CombiMatrix group. The second quarter 2006 consolidated results included non-cash patent amortization, stock compensation and depreciation charges totaling $3,204,000 versus $1,891,000 in the comparable 2005 period. The increase in non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. primarily reflects Acacia Research Corporation's adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123 (revised 2004), "Share-Based Payments," ("SFAS No. 123(R)"), effective January January: see month. 1, 2006, which requires public companies to measure all employee stock-based compensation awards using a fair-value method and record such expense in their consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . Consolidated stock compensation expense for the second quarter of 2006 totaled $1,362,000 ($193,000 included in research and development expense and $1,169,000 included in marketing, general and administrative expense). Acacia Research Corporation adopted SFAS No. 123(R) using the modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. prospective method, which requires companies to apply SFAS No. 123(R) to stock-based compensation awards granted after the adoption of SFAS No. 123(R), and to any portion of stock-based compensation awards that were granted prior to the adoption of SFAS No. 123(R) and have not vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) by the date that the company adopts SFAS No. 123(R). Accordingly, prior period financial statements have not been modified. Second quarter 2006 consolidated results also included a non-cash gain of $1,490,000 related to the adjustment of the CombiMatrix group's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. warrant liability to fair value as of June 30, 2006 and a non-cash impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $297,000, recorded by the Acacia Technologies group, related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of certain patent-related assets during the quarter. Second quarter 2006 government contract costs (incurred solely by the CombiMatrix group) totaled $542,000 versus $1,209,000 in the comparable 2005 period. The decrease was due to an anomalously high level of activity under the CombiMatrix group's biological threat detection contract with the Department of Defense during the second quarter of 2005. Second quarter 2006 internal research and development expenses were $2,182,000 (including non-cash stock compensation charges of $193,000) versus $1,415,000 in the comparable 2005 period. During the second quarter of 2006 and 2005, the CombiMatrix group continued internal research and development efforts to improve and expand the CombiMatrix group's technology and product offerings. The increase in internal research and development expenses was due primarily to the impact of the CombiMatrix group's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , CombiMatrix Molecular Diagnostics, which was formed and began research and development activities in the second quarter of 2005. Marketing, general and administrative expenses, including non-cash stock compensation charges, for the second quarter of 2006 were $6,670,000 versus $4,276,000 in the comparable 2005 period. Second quarter 2006 marketing, general and administrative expense included $1,169,000 in non-cash stock compensation expense versus $15,000 in the comparable 2005 period. Excluding the impact of the adoption of SFAS No. 123(R), the increase was due primarily to the addition of licensing, business development and engineering personnel for the Acacia Technologies group, an increase in the Acacia Technologies group's patent-related research and consulting expenses for new and ongoing licensing programs, and an increase in corporate, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. related to the Acacia Technologies group's ongoing operations. The change also reflects an increase in general and administrative expenses incurred by the CombiMatrix group in connection with the ongoing operations of CombiMatrix Molecular Diagnostics. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter of 2006 and 2005 include inventor INVENTOR. One who invents or finds out something. 2. The patent laws of the United States authorize a patent to be issued to the original inventor; if the invention is suggested by another, he is not the inventor within the meaning of those laws; but in that royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. expenses of $3,998,000 and $528,000, respectively, and contingent Fortuitous; dependent upon the possible occurrence of a future event, the existence of which is not assured. The word contingent denotes that there is no present interest or right but only a conditional one which will become effective upon the happening of the legal fees expenses of $3,849,000 and $592,000, respectively. The majority of the Acacia Technologies group's patent and patent rights agreements are subject to agreements with inventors This is a list of inventors. See also: List of scientists, Timeline of invention, List of inventions named after people, List of inventors killed by their own inventions, and . that contain provisions granting to the original patent owners the right to receive inventor royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. based on future net revenues, as defined in the respective agreements and are also subject to contingent legal fee arrangements with external law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the timing and amount of related revenues recognized by the Acacia Technologies group from these patent portfolios. Financial Condition Total consolidated assets were $108,685,000 as of June 30, 2006 compared to $121,434,000 as of December December: see month. 31, 2005. Cash and cash equivalents and short-term investments on a consolidated basis totaled $50,691,000 as of June 30, 2006 compared to $59,173,000 as of December 31, 2005. Controls and Procedures Due to a revenue recognition issue with one of our license agreements, as of June 30, 2006, we concluded that we did not maintain effective controls over revenue recognition. Specifically, the controls over the evaluation of certain non-standard terms and conditions contained in certain of the Acacia Technologies group's license agreements were not effective to ensure that revenue was recognized in the proper period in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . This control deficiency A shortage or insufficiency. The amount by which federal Income Tax due exceeds the amount reported by the taxpayer on his or her return; also, the amount owed by a taxpayer who has not filed a return. resulted in an audit adjustment to our preliminary interim consolidated financial statements for the quarter ended June 30, 2006. In addition, this control deficiency would have resulted in a misstatement mis·state tr.v. mis·stat·ed, mis·stat·ing, mis·states To state wrongly or falsely. mis·state  ment n. of revenue that would have resulted in a
material misstatement to our annual or interim consolidated financial
statements that would not have been prevented or detected. Accordingly,
we have determined that this control deficiency constitutes a material
weakness. A material weakness is a control deficiency, or combination of
control deficiencies, that results in more than a remote likelihood that
a material misstatement of the annual or interim financial statements
will not be prevented or detected.We performed additional analysis of our license agreements to ensure that revenue reported in our interim consolidated financial statements included herein was recognized in the proper period in accordance with generally accepted accounting principles. Plan for remediation of material weakness. In addition to the additional procedures performed in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the preparation of our second quarter 2006 financial statements to ensure our consolidated financial statements included herein were prepared in accordance with generally accepted accounting principles, during the third quarter of fiscal 2006, we are implementing enhanced procedures and controls which include an emphasis on the evaluation of revenue recognition for our license arrangements with non-standard terms and conditions. We continue to monitor and assess our remediation activities to ensure that the material weakness discussed above is remediated as soon as practicable practicable adj. when something can be done or performed. . Acacia Technologies Group Financial Results (A Division of Acacia Research Corporation) For the Three Months Ended June 30, 2006 and 2005 Second quarter 2006 license fee revenues recognized by the Acacia Technologies group were $14,371,000, versus $2,682,000 in the comparable 2005 period. Second quarter 2006 revenues included license fees from 27 new licensing agreements covering 9 of our technology licensing programs, including initial license fees for our Dynamic Manufacturing Modeling technology and Product Activation technology portfolios. Second quarter 2006 license fee revenues also included fees from the licensing of our DMT See DSL. (R) technology, Audio/Video Enhancement and Synchronization technology, Image Resolution Enhancement technology
Resolution enhancement technology (RET) is a form of image processing technology used to manipulate dot characteristics popular among laser printer and inkjet printer , Interstitial In a separate window. See interstitial ad. (World-Wide Web) interstitial - A World-Wide Web page that appears before the expected content page. Interstitials can be used for advertising (intermercial, transition ad) or to confirm that the user is old enough to view the Internet Advertising Delivering ads to Internet users via Web sites, e-mail, ad-supported software and Internet-enabled cellphones. Also called an "ad network," Internet advertising organizations act as a middleman between the advertiser and the Web sites and software publishers that display the ads. technology, Laptop Connectivity technology, Multi-Dimensional Bar Code technology, and Resource Scheduling technology. To date, the Acacia Technologies group has generated revenues from 18 of its technology licensing programs. The Acacia Technologies group reported second quarter 2006 division net income of $1,191,000 versus a net loss of $1,760,000 in the comparable 2005 period. Included in second quarter 2006 divisional results are non-cash stock compensation charges and non-cash patent amortization charges totaling $2,215,000. Second quarter 2006 non-cash stock compensation charges were $889,000, versus $0 in the comparable 2005 period. The increase reflects the adoption of SFAS No. 123(R), effective January 1, 2006, which requires public companies to measure all employee stock-based compensation awards using a fair-value method and record such expense in their financial statements, as described earlier. Second quarter 2006 operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. also included a non-cash impairment charge of $297,000 related to the write-off of certain patent-related assets during the quarter. Second quarter 2006 marketing, general and administrative expenses increased to $3,441,000 (including non-cash stock compensation charges of $889,000 related to the adoption of SFAS No. 123(R), as described earlier) from $1,759,000 in the comparable 2005 period. Excluding the impact of the adoption of SFAS No. 123(R), the increase was due primarily to the addition of licensing, business development and engineering personnel, an increase in the Acacia Technologies group's patent-related research and consulting expenses related to new and ongoing licensing programs, and an increase in corporate, general and administrative costs related to the Acacia Technologies group's ongoing operations. Operating expenses for the second quarter of 2006 and 2005 include inventor royalty expenses of $3,998,000 and $528,000, respectively, and contingent legal fees expenses of $3,849,000 and $592,000, respectively. The majority of the Acacia Technologies group's patent and patent rights agreements are subject to agreements with inventors that contain provisions granting to the original patent owners the right to receive inventor royalties based on future net revenues, as defined in the respective agreements and are also subject to contingent legal fee arrangements with external law firms engaged on a contingent fee basis. As such, inventor royalties and contingent legal fees expenses fluctuate in accordance with the timing and amount of related revenues recognized by the Acacia Technologies group from these patent portfolios. Second quarter 2006 patent-related legal expenses were $593,000 versus $536,000 in the comparable 2005 period. Patent-related legal expenses included patent-related prosecution prosecution n. 1) in criminal law, the government attorney charging and trying the case against a person accused of a crime. 2) a common term for the government's side in a criminal case, as in "the prosecution will present five witnesses" or "the prosecution rests" and enforcement costs incurred by outside patent attorneys engaged on an hourly basis and the out-of-pocket expenses out-of-pocket expenses n. moneys paid directly for necessary items by a contractor, trustee, executor, administrator or any person responsible to cover expenses not detailed by agreement. incurred by law firms engaged on a contingent fee basis. Patent-related legal expenses fluctuate from period to period based on patent enforcement and prosecution activity associated with ongoing licensing and enforcement programs and the timing of the commencement of new licensing and enforcement programs in each period. Financial Condition Total assets for the Acacia Technologies group were $67,289,000 as of June 30, 2006 compared to $68,893,000 as of December 31, 2005. Cash and cash equivalents and short-term investments totaled $40,715,000 as of June 30, 2006 compared to $38,960,000 as of December 31, 2005. CombiMatrix Group Financial Results (A Division of Acacia Research Corporation) For the Three Months Ended June 30, 2006 and 2005 Revenues for the second quarter of 2006 were $1,792,000 versus $1,857,000 in the comparable 2005 period. Second quarter 2006 revenues were comprised of $574,000 in government contact revenues and $1,218,000 in CustomArray(TM) product, equipment and service revenues, including $71,000 of array revenue from our diagnostics subsidiary, CombiMatrix Molecular Diagnostics. Second quarter 2005 revenues were comprised of $1,281,000 of government contract revenues and $576,000 of CustomArray(TM) product and service revenues. The second quarter 2006 division net loss was $3,442,000 versus $3,657,000 in the comparable 2005 period. The second quarter 2006 results included non-cash stock compensation, patent amortization and depreciation charges totaling $971,000 versus $541,000 in the comparable 2005 period. The increase in non-cash charges primarily reflects the adoption of SFAS No. 123(R), effective January 1, 2006, which requires public companies to measure all employee stock-based compensation awards using a fair-value method and record such expense in their consolidated financial statements, as discussed earlier. Second quarter non-cash stock compensation charges included in research and development expense and marketing, general and administrative expense totaled $193,000 and $280,000, respectively. The second quarter 2006 results also included a non-cash gain of $1,490,000 related to the adjustment of the CombiMatrix group's long-term warrant liability to fair value as of June 30, 2006. Second quarter 2006 government contract costs totaled $542,000 versus $1,209,000 in the comparable 2005 period. The decrease was due to an anomalously high level of activity under our biological threat detection contract with the Department of Defense during the second quarter of 2005. Second quarter 2006 internal research and development expenses were $2,182,000 (including non-cash stock compensation charges of $193,000) versus $1,415,000 in the comparable 2005 period. During the second quarter of 2006 and 2005, the CombiMatrix group continued internal research and development efforts to improve and expand the CombiMatrix group's technology and product offerings. The increase in internal research and development expenses was due primarily to the impact of the CombiMatrix group's wholly owned subsidiary, CombiMatrix Molecular Diagnostics, which was formed and began research and development activities in the second quarter of 2005. Second quarter 2006 marketing, general and administrative expenses increased to $3,229,000 (including non-cash stock compensation charges of $280,000) from $2,517,000 in the comparable 2005 period. Excluding the impact of the adoption of SFAS No. 123(R), the increase was due primarily to an increase in general and administrative expenses incurred by CombiMatrix Molecular Diagnostics and an increase in other general and administrative expenses related to ongoing operations. Financial Condition Total assets for the CombiMatrix group were $41,396,000 as of June 30, 2006 compared to $52,541,000 as of December 31, 2005. Cash and cash equivalents and short-term investments totaled $9,976,000 as of June 30, 2006 compared to $20,213,000 as of December 31, 2005. In June 2006, Acacia Research Corporation executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. a standby equity distribution agreement In Finance, SEDA stands for a Standby Equity Distribution Agreement. This is an agreement whereby a small publicly-traded company arranges to raise additional capital by selling new stock without making a formal Secondary Market Offering to the market. for up to $50 million in common stock equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. from Cornell Cornell named after New York State Veterinary College at Cornell University, NY, USA. Cornell alternative-month accelerated lambing system enables each ewe to lamb three times in every 2 years. Capital Partners, LP ("Cornell") for the CombiMatrix group. Subject to the terms and conditions of the agreement between Acacia Research Corporation and Cornell, over the next 24 months, Acacia may sell up to 13,368,674 registered shares of its AR-CombiMatrix common stock at its discretion to Cornell less a 2.5% discount from the market price and associated fees ranging from 4-5%. The shares of common stock are being offered pursuant to an effective registration statement filed with the SEC on April 25, 2006. A fee was paid to Cornell in the amount of $550,000, upon closing of the agreement. Business Highlights and Recent Developments Business highlights of the second quarter and recent developments include:
Acacia Technologies group:
-- Certain of the Acacia Technologies group's wholly owned
subsidiaries entered into license agreements with companies
covering patents that apply to our Audio/Video Enhancement and
Synchronization, and Image Resolution Enhancement technologies
as follows:
-- IP Innovation, LLC entered into a license and settlement
agreement with Koninklijke Philips Electronics, N.V. The
agreement resolves a patent infringement lawsuit which was
pending in the United States District Court for the
Northern District of Illinois Eastern Division.
-- IP Innovation, LLC and AV Technologies, LLC entered into a
license agreement with D & M Holdings, Inc. for certain
electronics products, including televisions, projectors
and DVD players, sold by Boston Acoustics, Inc., Denon
Electronics (USA) LLC, Digital Networks North America, and
Marantz America, Inc.
-- In July 2006, Acacia Technologies announced that New
Medium Technologies, LLC, IP Innovation, LLC and AV
Technologies, LLC entered into a license and settlement
agreement with Sanyo Electric Co., Ltd. The agreement
resolves a patent infringement lawsuit which was pending
in the United States District Court for the Northern
District of Illinois Eastern Division.
The Audio/Video Enhancement and Synchronization technologies
generally relate to the use of a noise reduction filtering
system for digital video compression, and for video and
audio signals received by digital radios and video
displays. Other aspects of the technologies apply to the
synchronization of audio/video signals. The Image
Resolution Enhancement technology generally relates to the
modification of a video or printed display to improve the
perceived image quality beyond the basic pixel resolution
of the display.
-- InternetAd Systems, LLC, a wholly owned subsidiary that is
part of the Acacia Technologies group, entered into license
agreements with the following companies covering a patent that
applies to interstitial Internet advertising:
-- Stephens Media Group and the Greenspun Media Group, owners
and operators of travel and destination websites.
-- MN Airlines, LLC D/B/A Sun Country Airlines and ATA
Airlines, Inc.
-- Midwest Airlines, Inc. The agreement resolves a patent
infringement lawsuit that was pending in the District
Court for the Northern District of Texas.
-- aQuantive, Inc., a digital media marketing company that
operates websites including singaporeairlines.com.
The interstitial Internet advertising technology generally
relates to the display of certain advertising,
informational, and branding messages that appear between
or outside the web pages when the user is conducting a
search.
-- VData, LLC, a wholly owned subsidiary that is part of the
Acacia Technologies group, entered into license agreements
with the following companies covering a portfolio of patents
that apply to certain multi-dimensional bar codes:
-- Stamps.com. The license to Stamps.com resolves a patent
infringement lawsuit against Stamps.com, which was pending
in the District Court for the District of Minnesota.
-- U.S. Bank National Association. This resolves an action
filed in the United States District Court for the District
of Minnesota.
-- Extremetix, Inc., one of the leaders in providing online,
print-your-own ticketing for entertainment, concert, and
sporting events.
-- Intel Corporation
The multi-dimensional bar code technology generally relates to
encoding and reading a data matrix consisting of an array
of data cells with a border. The data matrix can contain a
variety, amount, and depth of information that would not
fit onto an ordinary bar code. This patented technology
can have many applications in the manufacturing,
distribution, accounting, and security industries such as
tracking the movement of products, collection of data,
improved production capabilities, and anti-counterfeiting.
-- Computer Docking Station Corporation, a wholly owned
subsidiary that is part of its Acacia Technologies group,
entered into license agreements with the following companies
covering patents that relate to laptop connectivity
technology.
-- International Business Machines Corporation
-- Lenovo Group, Ltd.
-- In July 2006, Acacia Technologies announced that Computer
Docking Station Corporation entered into a license
agreement with Hewlett-Packard Company.
The patented technology is used to connect a laptop or other
portable computer to multiple external devices such as a
keyboard, monitor, printer, or mouse, through a single
connector from the portable computer to the docking
station. The use of a single connector for multiple
devices makes it easier to remove the portable computer
from the devices when it is used remotely, and to
reconnect the portable computer to the devices when it is
returned to the docking station.
-- Product Activation Corporation subsidiary, a wholly owned
subsidiary that is part of the Acacia Technologies group,
entered into a license agreement with MathSoft Engineering and
Education, Inc. covering patents that relate to the use of
product activation technology.
The patented technology generally relates to accessing data
through the submission of a product identification and
computer specific information to a remote station. The
remote station sends an encrypted key that is stored on
the computer and provides access to the data. This
technology can be used by software and other products to
help deter the distribution of illegal copies. Other
aspects of the technologies generally relate to accessing
clear data, and encrypted data via an identification
label. Once decrypted, the clear and decrypted data are
combined to activate software programs, and other files.
-- Resource Scheduling Corporation, a wholly owned subsidiary
that is part of the Acacia Technologies group, entered into
license agreements with the following companies, covering a
patent that applies to systems for scheduling and managing
resources.
-- Siemens Medical Solutions USA, Inc. and Siemens Medical
Solutions Health Services Corporation. The agreement with
Siemens Medical Solutions resolved a patent infringement
lawsuit which was pending.
-- Global Shop Solutions
-- API software, Inc., a leading provider of time and
attendance, staffing/scheduling, payroll, human resource,
productivity management, education tracking and access
control software for healthcare organizations.
-- RES-Q Healthcare Systems, Inc., a leading provider of
labor management and employee scheduling software for the
healthcare industry. The agreement with RES-Q Healthcare
Systems resolves a patent infringement lawsuit that was
pending in the District Court for the Eastern District of
Texas.
-- Picis, Inc., a provider of information systems that are
installed in over 900 medical center and hospital
networks. The agreement with Picis resolves a patent
infringement lawsuit that was pending in the District
Court for the Eastern District of Texas.
-- Madrigal Soft Tools, Inc., a provider of scheduling
software products.
-- Cerner Corporation, a leading supplier of healthcare
information technology solutions. The agreement with
Cerner resolves a patent infringement lawsuit that was
pending in the District Court for the Eastern District of
Texas.
-- McKesson Corporation. The agreement with McKesson resolves
a patent infringement lawsuit that was pending in the
District Court for the Eastern District of Texas.
-- In July 2006, Acacia Technologies announced that Resource
Scheduling Corporation entered into a license agreement
with General Electric Company, acting through its GE
Healthcare business.
The Resource Scheduling technology generally relates to
methods and software application tools for scheduling and
managing resources used in manufacturing facilities,
hospital facilities, fleet delivery organizations, and
other resource-dependent markets. These resource
scheduling tools are often integrated as part of an
Enterprise Resource Planning (ERP) solution used to manage
a company's complete operations.
-- Information Technology Innovation LLC, a wholly owned
subsidiary that is part of the Acacia Technologies group,
entered into a license with Brooks Automation, Inc., covering
a portfolio of patents that apply to Dynamic Manufacturing
Modeling technology. The license resolves two lawsuits, with
respect to Brooks' products, that were pending in the District
Court for the Northern District of Illinois involving Intel
Corporation, Motorola, Inc, and Freescale Semiconductor, Inc.
This patented technology generally relates to a modeling and
control process used to decrease costs and increase
production for factory operations. Such simulation
modeling can include a variety of parameters such as
products, fabrication sequences, collections of job sets,
scheduling rules, and machine reliability standards. This
technology can be used for exacting manufacturing
processes such as semiconductor fabrication.
-- Acacia Media Technologies Corporation, a wholly owned
subsidiary that is part of the Acacia Technologies group,
entered into a license agreement with Eastman Chemical Company
for certain uses of its Digital Media Transmission ("DMT(R)")
technology. Acacia Media Technologies Corporation has now
entered into 318 license agreements for its DMT technology
with companies that provide online entertainment, movies,
music, news, and sports, e-learning, cable television
services, hotel on-demand television services, and corporate
advertising and promotion.
-- Acacia Patent Acquisition Corporation, a wholly owned
subsidiary that is part of the Acacia Technologies group,
continued its patent and patent rights acquisition activities
as follows:
-- In May 2006, acquired rights to patents relating to
two-way mobile communication and control devices for data
and voice communication networks. The patented technology
generally relates to mobile communication devices that are
capable of accessing and/or controlling other devices on a
network to receive, transmit, relay and/or process voice
and data across the network.
-- In May 2006, acquired a patent relating to portable audio
recording and playback devices from ESPRO Information
Technologies, Ltd., www.espro.com, a provider of
electronic audio guiding and interpretation systems. The
patented technology relates to products such as certain
MP3 players and cell phones using solid state memory that
can download compressed audio and record analog audio.
-- In June 2006, acquired rights to a patent relating to
improving the performance and user experience of video
conferencing technologies. The patent generally relates to
technology for automatically tracking and centering the
images of videoconference participants. This technology
allows webcams and other digital cameras to automatically
optimize and align a videoconference participant's image
in each of the other conference participants' displays.
The Video Tracking technology improves desktop
videoconferencing and video mail performance.
-- In June 2006, acquired rights to a patent relating to
software license management technology. The patent
generally relates to technology for monitoring and
tracking the use of software applications across a
network. This technology can be used to provide a system
for managing software license compliance in an enterprise
environment as well as metering actual usage levels in a
Software-as-a-Service (SaaS) environment.
-- In June 2006, acquired patents relating to the rapidly
growing field of telematics. Telematics refers to systems
used in vehicles that combine wireless communication with
GPS tracking and can be used in vehicle navigation systems
and mobile fleet management. The patents generally relate
to technology for displaying mobile vehicle information on
a map. This technology can be used in navigation and fleet
management systems that combine wireless communication
with GPS tracking and map displays.
-- Since the last report to stockholders on April 20, 2006,
companies that are part of the Acacia Technologies group
dismissed lawsuits against 26 companies in connection with our
Audio Video Enhancement and Synchronization, Laptop
Connectivity, Digital Media Transmission, Dynamic
Manufacturing Modeling, User Activated Internet Advertising,
Multi-Dimensional Barcode, and Resource Scheduling
technologies. In addition, we became involved in lawsuits with
11 companies in connection with our User Activated Internet
Advertising, Computer Device Performance and Resource
Scheduling technologies. We currently have 25 ongoing lawsuits
involving 93 companies.
CombiMatrix group:
-- In April 2006, the CombiMatrix group announced that its
subsidiary, CombiMatrix Molecular Diagnostics ("CMDX"), had
established a new facility in the world-class MaRS Discovery
District in downtown Toronto.
-- In April 2006, the CombiMatrix group announced that a paper
describing its Influenza Surveillance technology had been
published in the April edition of the Journal of Clinical
Microbiology. The paper is titled "Use of Semiconductor-Based
Oligonucleotide Microarrays for Influenza A Virus Subtype
Identification and Sequencing." This research was conducted in
collaboration with the U.S. Air Force Institute of Operational
Health and the group of Dr. Richard J. Webby at the Infectious
Diseases department of St. Jude Children's Research Hospital,
chaired by Dr. Robert G. Webster.
-- In April 2006, the CombiMatrix group, in collaboration with
Texas A&M University, was awarded a National Academies Keck
Futures Initiative grant (NAKFI). The grant will fund a novel
method to increase the speed of hybridization in DNA
microarray applications. The co-Principal Investigators will
be Dr. Robin Liu of CombiMatrix Corporation and Prof. Victor
Ugaz of Texas A&M University. This award will enable the two
collaborators to begin initial studies to obtain data that
will serve as the cornerstone for additional funding.
-- In April 2006, CMDX was awarded an accreditation by the
Commission on Laboratory Accreditation of the College of
American Pathologists ("CAP"), based on the results of a
recent inspection of their laboratory in Irvine, California.
-- In April 2006, CMDX begun shipment of its first diagnostic
microarray product. This product, developed in conjunction
with Array Genomics of France, was designed to detect genomic
copy number variations associated with constitutional
chromosome imbalances as well as with those associated with
over 40 defined genetic diseases and syndromes.
-- In April 2006, the CombiMatrix group received notification of
a new $1.9 million award from the Army Research Office. The
contract will fund development of new products and
capabilities for fielding CombiMatrix technologies. The
objective of the contract is to develop a self-contained,
fully integrated, automatic, and disposable device for
detection of a wide variety of microorganisms within one hour.
-- In April 2006, the CombiMatrix group, in collaboration with
INBIO of Australia, formed a marketing and sales division in
Europe for CombiMatrix CustomArray(TM) products. The entity,
"CombiMatrix Europe GmbH," is based in Freiburg, Germany.
-- In April 2006, the CombiMatrix group executed a distribution
and manufacturing agreement with Prisma Biotech Corporation.
In this relationship, Prisma will promote and sell CombiMatrix
products in Taiwan, China, and various other countries and,
using CombiMatrix CustomArray(TM) Synthesizers in the region,
has the ability to synthesize content onto CombiMatrix
CustomArrays and to sell those arrays to end users.
-- In May 2006, the CombiMatrix group announced it will
collaborate with the Washington Animal Disease Diagnostic
Laboratory (WADDL) on influenza testing. A broad interagency
effort is being undertaken to monitor the Pacific Flyway, to
determine if the seasonal migration of birds will bring the
highly pathogenic Eurasian strain of Avian Influenza (AI:
H5N1) into North America and the United States. This effort is
being coordinated by the U.S. Department of Agriculture,
Department of the Interior, and the Department of Health and
Human Services in collaboration with State regulatory
agencies.
-- In May 2006, the CombiMatrix group launched the
next-generation CustomArray and CustomArray Synthesizer,
providing researchers with the ability to fabricate the new
CustomArray 90K. This high-density, customizable, re-usable
microarray has over 94,000 unique DNA probes. The CustomArray
90K enables CombiMatrix to completely serve the entire
research market with whole-genome gene expression, SNP
genotyping, comparative genomic hybridization (CGH), tiling,
ChIP-on-chip, and resequencing.
-- In May 2006, the CombiMatrix group launched an updated version
of its Influenza A array incorporating new sequences that had
recently become available. CombiMatrix's Influenza A Typing
Microarray is a component of the company's Electrochemical
Influenza Surveillance System. This system is being evaluated
under the U.S. National Early Detection System for Avian
Influenza, directed by the U.S. Department of Agriculture,
Department of the Interior, and the Department of Health and
Human Services in collaboration with State regulatory
agencies.
-- In May 2006, the CombiMatrix group executed a collaboration
with EAI Corporation, a subsidiary of Science Applications
International Corporation, for field deployment of
CombiMatrix's influenza-screening technology for the
identification of all versions of influenza A, including the
highly pathogenic Eurasian (H5:N1) strain. Funding for this
program will be provided by the Center for Innovative
Technology/Institute for Defense and Homeland Security through
its Partnership Intermediary Agreement with the Department of
Defense. Additional partners in this project include the San
Francisco Bay Estuary Field Station of the U.S. Geological
Survey/Western Ecological Research Center and the Prince
William Sound Science Center of Cordova, Alaska.
-- In May 2006, the CombiMatrix group began offering its Human
90K(TM) CatalogArray(TM). Powered by the Company's proprietary
CustomArray Platform, the new Human 90K CatalogArray can
interrogate 39,882 RNA transcripts, offering researchers the
most up-to-date human array.
-- In May 2006, the CombiMatrix group executed a subcontract with
Northrop Grumman (NYSE:NOC) to develop technology and
components for the Handheld Isothermal Silver Standard Sensor
("HISSS") program. The Special Project Office of the Defense
Advanced Research Projects Agency funds the HISSS program. The
goal of the HISSS program is to develop a handheld sensor that
is capable of identifying biological weapon threats across the
entire threat spectrum including bacteria, viruses and toxins.
-- In May 2006, CMDX named renowned genomics expert Stephen W.
Scherer, Ph.D. to its scientific advisory board. Dr. Scherer
is a Senior Scientist in Genetics and Genomic Biology at The
Hospital for Sick Children and Associate Professor of Medicine
at the University of Toronto.
-- In June 2006, the CombiMatrix group executed a manufacturing
and distribution agreement with Macrogen, Inc.
(KOSDAQ:038290.KQ). The agreement establishes Macrogen as a
key distributor of the CombiMatrix group and enables Macrogen,
through use of CustomArray Synthesizers that it has purchased,
to synthesize content onto CustomArrays for distribution in
Korea and to offer CustomArray-based services.
-- In June 2006, CMDX announced plans to commercially launch its
first molecular diagnostic service offering in August, 2006.
This first product offering, which is already being sold in
Europe through CMDX' distributor Array Genomics, is in the
final phases of internal human/clinical validation prior to
U.S. launch. This service utilizes CMDX' Constitutional
Genetic Array Test (CGAT), which can genetically identify over
50 common genetic disorders in one test.
A conference call is scheduled for today. The Acacia Technologies Group presentation and Q&A will start at 1:15 p.m. Pacific Time (4:15 p.m. Eastern). The CombiMatrix Group presentation and Q&A session will start at 2:00 p.m. Pacific Time (5:00 p.m. Eastern). To listen to the presentation by phone, dial (866) 558-6338 for domestic callers and (213) 785-2437 for international callers, both of whom will need to provide the operator with the confirmation code 8240145. A replay of the audio presentation will be available for 30 days at (888) 203-1112 for domestic callers and (719) 457-0820 for international callers, both of whom will need to enter the code 8240145 when prompted. The call is being webcast by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and can be accessed at Acacia's website at www.acaciaresearch.com. ABOUT ACACIA RESEARCH CORPORATION Acacia Research Corporation comprises two operating groups, Acacia Technologies group and CombiMatrix group. The Acacia Technologies group develops, acquires, and licenses patented technologies. Acacia controls 46 patent portfolios covering technologies used in a wide variety of industries including audio/video enhancement & synchronization, broadcast data retrieval retrieval /re·triev·al/ (-tre´v'l) in psychology, the process of obtaining memory information from wherever it has been stored. re·triev·al n. , computer memory cache See cache. coherency co·her·en·cy n. pl. co·her·en·cies Coherence. Noun 1. coherency - the state of cohering or sticking together coherence, cohesion, cohesiveness , credit card fraud Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. protection, database management, data encryption data encryption, the process of scrambling stored or transmitted information so that it is unintelligible until it is unscrambled by the intended recipient. Historically, data encryption has been used primarily to protect diplomatic and military secrets from foreign & product activation, digital media transmission (DMT(R)), digital video production, dynamic manufacturing modeling, enhanced Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the navigation navigation, science and technology of finding the position and directing the course of vessels and aircraft. Early Navigational Techniques In ancient times, mariners navigated by the guidance of the sun and stars and landmarks along the coast. , hearing aid ECS See eComStation. , image resolution enhancement, interactive data sharing The ability to share the same data resource with multiple applications or users. It implies that the data are stored in one or more servers in the network and that there is some software locking mechanism that prevents the same set of data from being changed by two people at the same time. , interactive television, laptop docking station (1) A cradle for a portable device that serves to charge the unit and connect it to other sources or destinations. For example, an iPod docking station charges the iPod and connects it to a computer, speakers or TV set. connectivity, microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. enhancement, multi-dimensional bar codes, network data storage, resource scheduling, rotational rotational characterized by rotation. rotational crossbreeding system a program in which the sire for the terminal cross of lamb or calf is changed each year so that the state of heterosis is maintained at a high level. video imaging, spreadsheet spreadsheet Computer software that allows the user to enter columns and rows of numbers in a ledgerlike format. Any cell of the ledger may contain either data or a formula that describes the value that should be inserted therein based on the values in other cells. automation, user activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. Internet advertising and web conferencing A videoconferencing session via the Internet. In order to interact with other participants, attendees use either a Web application or an application downloaded into their client machines. & collaboration software See collaborative software. . The CombiMatrix group is developing a platform technology to rapidly produce customizable arrays, which are semiconductor-based tools for use in identifying and determining the roles of genes, gene mutations Noun 1. gene mutation - (genetics) a mutation due to an intramolecular reorganization of a gene point mutation genetic science, genetics - the branch of biology that studies heredity and variation in organisms and proteins. The CombiMatrix's group's technology has a wide range of potential applications in the areas of genomics ge·no·mics n. The study of all of the nucleotide sequences, including structural genes, regulatory sequences, and noncoding DNA segments, in the chromosomes of an organism. , proteomics pro·te·o·mics n. The analysis of the expression, localization, functions, and interactions of the proteins produced by the genes of an organism. , biosensors, drug discovery, drug development, diagnostics, combinatorial chemistry Combinatorial chemistry involves the rapid synthesis or the computer simulation of a large number of different but structurally related molecules. Introduction Synthesis of molecules in a combinatorial fashion can quickly lead to large numbers of molecules. , material sciences and nanotechnology nanotechnology: see micromechanics. nanotechnology Manipulation of atoms, molecules, and materials to form structures on the scale of nanometres (billionths of a metre). . Acacia Research-Acacia Technologies (Nasdaq:ACTG) and Acacia Research-CombiMatrix (Nasdaq:CBMX) are both classes of common stock issued by Acacia Research Corporation and are intended to reflect the performance of the respective operating groups and are not issued by the operating groups. Information about the Acacia Technologies group and the CombiMatrix group is available at www.acaciaresearch.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including the recent economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. affecting technology companies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and competitive developments and general economic conditions. Our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , recent and forthcoming Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. , recent Current Reports on Forms 8-K and 8-K/A, and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION
(In thousands, except share and per share information)
(Unaudited)
CONSOLIDATED BALANCE SHEET INFORMATION
June 30, December 31,
2006 2005
---- ----
Total Assets $ 108,685 $ 121,434
================ ===============
Total Liabilities $ 10,221 $ 14,090
================ ===============
Minority Interests $ - $ 447
================ ===============
Total Stockholders' Equity $ 98,464 $ 106,897
================ ===============
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months For the Six Months Ended
Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues:
License fees $ 14,371 $ 2,682 $ 19,088 $ 4,545
Government
contract 574 1,281 838 2,012
Products 1,158 567 2,082 845
Service contracts 60 9 117 69
----------- ----------- ----------- -----------
Total revenues 16,163 4,539 22,125 7,471
----------- ----------- ----------- -----------
Operating expenses:
Cost of
government
contract
revenues 542 1,209 792 1,900
Cost of product
sales 340 190 561 353
Research and
development
expenses
(including non-
cash stock
compensation
expense of $193
and $486 for the
three and six
months ended
June 30, 2006) 2,182 1,415 4,561 2,555
Marketing,
general and
administrative
expenses
(including non-
cash stock
compensation
expense of
$1,169 and
$2,619 for the
three and six
months ended
June 30, 2006
and $15 and
($111) for the
three and six
months ended
June 30, 2005) 6,670 4,276 14,169 8,039
Legal expenses -
patents 593 536 959 1,097
Inventor
royalties and
contingent legal
fees expense -
patents 7,847 1,120 10,118 1,767
Goodwill
impairment
charge - 63 - 102
Amortization of
patents 1,600 1,610 3,217 2,800
Patent impairment
charge 297 - 297 -
Legal settlement
credits - (16) - (195)
Loss from equity
investments 294 - 533 -
----------- ----------- ----------- -----------
Total operating
expenses 20,365 10,403 35,207 18,418
----------- ----------- ----------- -----------
Operating loss (4,202) (5,864) (13,082) (10,947)
----------- ----------- ----------- -----------
Total other
income
(expense) 2,021 383 737 656
----------- ----------- ----------- -----------
Loss from
continuing
operations before
income taxes (2,181) (5,481) (12,345) (10,291)
(Provision)
benefit for
income taxes (70) 64 (4) 134
----------- ----------- ----------- -----------
Loss from
continuing
operations (2,251) (5,417) (12,349) (10,157)
Discontinued
operations:
Estimated loss on
disposal of
discontinued
operations - - - (210)
----------- ----------- ----------- -----------
Net loss $ (2,251) $ (5,417) $ (12,349) $ (10,367)
=========== =========== =========== ===========
Earnings (loss)
per common share:
Attributable to
the Acacia
Technologies
group:
Income (loss)
from continuing
operations $ 1,191 $ (1,760) $ (1,218) $ (3,424)
Basic and
diluted income
(loss) per
share 0.04 (0.06) (0.04) (0.13)
Loss from
discontinued
operations $ - $ - $ - $ (210)
Basic and
diluted loss
per share - - - (0.01)
Net income
(loss) $ 1,191 $ (1,760) $ (1,218) $ (3,634)
Basic and
diluted income
(loss) per
share 0.04 (0.06) (0.04) (0.14)
Attributable to
the CombiMatrix
group:
Net loss $ (3,442) $ (3,657) $ (11,131) $ (6,733)
Basic and
diluted loss
per share (0.09) (0.12) (0.29) (0.22)
Weighted average
shares:
Acacia Research -
Acacia
Technologies
stock:
Basic 27,507,024 27,271,416 27,454,066 25,922,412
=========== =========== =========== ===========
Diluted 30,324,732 27,271,416 27,454,066 25,922,412
=========== =========== =========== ===========
Acacia Research -
CombiMatrix
stock:
Basic and
diluted 39,018,844 31,200,984 39,005,696 31,200,742
=========== =========== =========== ===========
ACACIA TECHNOLOGIES GROUP
(A Division of Acacia Research Corporation)
SUMMARY FINANCIAL INFORMATION
(In thousands)
(Unaudited)
GROUP BALANCE SHEET INFORMATION
June 30, December 31,
2006 2005
---- ----
Total Assets $ 67,289 $ 68,893
================ ===============
Total Liabilities $ 4,539 $ 6,647
================ ===============
Minority Interests $ - $ 443
================ ===============
Total Stockholders' Equity $ 62,750 $ 61,803
================ ===============
GROUP STATEMENTS OF OPERATIONS
For the Three For the Six
Months Ended Months Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
-------- -------- -------- --------
Revenues:
License fees $14,371 $ 2,682 $19,088 $ 4,545
------- ------- ------- -------
Total revenues 14,371 2,682 19,088 4,545
------- ------- ------- -------
Operating expenses:
Marketing, general and
administrative expenses
(including non-cash stock
compensation expense of $889 and
$1,937 for the three and six
months ended June 30, 2006) 3,441 1,759 6,978 3,369
Legal expenses - patents 593 536 959 1,097
Inventor royalties and contingent
legal fees expense - patents 7,847 1,120 10,118 1,767
Amortization of patents 1,326 1,336 2,669 2,252
Patent impairment charge 297 - 297 -
------- ------- ------- -------
Total operating expenses 13,504 4,751 21,021 8,485
------- ------- ------- -------
Operating income (loss) 867 (2,069) (1,933) (3,940)
Total other income 394 279 753 450
------- ------- ------- -------
Income (loss) from continuing
operations before income taxes 1,261 (1,790) (1,180) (3,490)
(Provision) benefit for income
taxes (70) 30 (38) 66
------- ------- ------- -------
Income (loss) from continuing
operations 1,191 (1,760) (1,218) (3,424)
Discontinued operations:
Estimated loss on disposal of
discontinued operations - - - (210)
------- ------- ------- -------
Division net income (loss) $ 1,191 $(1,760) $(1,218) $(3,634)
======= ======= ======= =======
COMBIMATRIX GROUP
(A Division of Acacia Research Corporation)
SUMMARY FINANCIAL INFORMATION
(In thousands)
(Unaudited)
GROUP BALANCE SHEET INFORMATION
June 30, December 31,
2006 2005
---- ----
Total Assets $ 41,396 $ 52,541
================ ===============
Total Liabilities $ 5,682 $ 7,443
================ ===============
Minority Interests $ - $ 4
================ ===============
Total Stockholders' Equity $ 35,714 $ 45,094
================ ===============
GROUP STATEMENTS OF OPERATIONS
For the Three For the Six
Months Ended Months Ended
----------------- ------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
-------- -------- --------- --------
Revenues:
Government contract $ 574 $ 1,281 $ 838 $ 2,012
Products 1,158 567 2,082 845
Service contracts 60 9 117 69
------- ------- -------- -------
Total revenues 1,792 1,857 3,037 2,926
------- ------- -------- -------
Operating expenses:
Cost of government contract
revenues 542 1,209 792 1,900
Cost of product sales 340 190 561 353
Research and development
expenses (including non-cash
stock compensation expense of
$193 and $486 for the three and
six months ended June 30, 2006) 2,182 1,415 4,561 2,555
Marketing, general and
administrative expenses
(including non-cash stock
compensation expense of $280
and $682 for the three and six
months ended June 30, 2006 and
$15 and ($111) for the three
and six months ended June 30,
2005) 3,229 2,517 7,191 4,670
Goodwill impairment charge - 63 - 102
Amortization of patents 274 274 548 548
Legal settlement credits - (16) - (195)
Loss from equity investments 294 - 533 -
------- ------- -------- -------
Total operating expenses 6,861 5,652 14,186 9,933
------- ------- -------- -------
Operating loss (5,069) (3,795) (11,149) (7,007)
Total other income (expense) 1,627 104 (16) 206
------- ------- -------- -------
Loss from operations before
income taxes (3,442) (3,691) (11,165) (6,801)
Benefit for income taxes - 34 34 68
------- ------- -------- -------
Division net loss $(3,442) $(3,657) $(11,131) $(6,733)
======= ======= ======== =======
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