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 30, 2005. Acacia Research Corporation comprises two operating groups, the Acacia Technologies
"Acacia Technologies group revenues for the second quarter of 2005 were $2,682,000, an increase of 44% from the previous quarter and over 300% from the year ago period. We generated revenues from 6 patent licensing programs, including revenues from 3 new programs, with initial licenses to Nokia for our multi-dimensional bar code technology, National Instruments National Instruments, or NI (NASDAQ: NATI), is an American company with over 4,000 employees and direct operations in 41 countries founded in 1976 by Dr. James Truchard, Bill Nowlin and Jeff Kodosky. for our computer simulation technology Computer Simulation Technology (CST) is a German company that develops software tools for the simulation of electromagnetic fields. Its products are among the most used electromagnetic simulators worldwide and are a de facto "standard" in the sector. and Funai for our high capacity compact disk technology," commented Paul Ryan Paul Ryan may refer to:
"We added Sony as a licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. for our interactive television technology, Patriot Media Patriot Media & Communications CNJ, LLC is a private company that engages in the buying and operating of cable television systems. The company services 81,000+ customers in 31 communities of Central New Jersey including Somerset, Morris, Mercer and Hunterdon counties. for our Digital Media Transmission (DMT See DSL. (R)) technology, and Foot Locker Foot Locker, Inc. (NYSE: FL) is a major American sportswear and footwear retailer, with its headquarters in New York City, and operating in approximately 20 countries worldwide. It is the successor corporation to the F.W. Woolworth Company (“Woolworth’s”). , Petco, Too Inc., Tuesday Morning and Sterling Jewelers for our 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 technology. Acacia is also pursuing 12 additional licensing programs, including our recently acquired laptop Same as laptop computer. laptop - portable computer connectivity technology. We plan to continue acquiring new patent portfolios as we move toward our goal of becoming the leader in technology licensing," concluded Mr. Ryan. "The CombiMatrix group's revenues for the second quarter of 2005 were $1,857,000. This represents a gain of 74% over revenues from the first quarter of 2005, and gain of 147% over revenues of the second quarter of 2004. Product and equipment revenues related to CustomArray(TM) were $565,000, which represents an increase of 103% relative to such revenues earned in the first quarter of 2005 and over 1200% greater than such revenues for the second quarter of 2004," commented Dr. Amit Kumar, President and CEO of CombiMatrix Corporation. "Last quarter we achieved our first one million dollar quarter, and during this quarter we nearly achieved our first two million dollar quarter. The CombiMatrix group continues to execute on its plan as our products become accepted in our industry. In addition to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. sales growth, we made advances in all facets of our business, and began execution of 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 strategy by establishing CombiMatrix Molecular Diagnostics," concluded Dr. Kumar. Acacia Research Corporation Consolidated Financial Results Consolidated revenues for the second quarter of 2005 were $4,539,000 versus $1,416,000 in the comparable 2004 period. Second quarter 2005 revenues recognized by the CombiMatrix group were $1,857,000, comprised of $1,281,000 in government contract revenues and $576,000 in CustomArray(TM) product, equipment and service revenues. Second quarter 2005 revenues recognized by the Acacia Technologies group were $2,682,000, comprised of $832,000 in recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. license fee revenues and $1,850,000 in paid-up Paid-Up The state of a settlement when all payment obligations for a security have been completed in a customer account. When an individual has paid up, he or she has paid for the security in full. license fee revenues. Recurring license fee revenues are recognized from licensees that make recurring quarterly or annual license fee payments under their respective license agreements. Paid-up license fee revenues are recognized from licensees that make paid-up license fee payments for past infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. and future use of our patented technologies, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with their respective license agreements. Certain of our paid-up license agreements provide for potential additional payments to the Acacia Technologies group based on future activities. All of the paid-up license fee revenues recognized in the second quarter of 2005 relate to patents acquired in the January 2005 acquisition of Global Patent Holdings, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (the "GPH GPH Gallons Per Hour GPH Gospel Publishing House (Pentecostal Christian publisher) GPH Grams Per Hour GPH Good Payment History GPH Generalized Proportional Hazard(s) GPH Gnome Phone Acquisition"). Second quarter 2005 license fee revenues included fees from the licensing of our Digital Media Transmission (DMT(R)) technology, credit card fraud protection technology, multi-dimensional bar code technology, computer simulation technology, high capacity compact disk technology and interactive television technology. The second quarter 2005 consolidated net loss was $5,417,000 versus $4,669,000 in the comparable 2004 period. The second quarter 2005 results include net 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. totaling $1,891,000, comprised primarily of patent amortization charges of $1,610,000 and asset depreciation charges of $266,000. Patent amortization, non-cash stock compensation and asset depreciation charges totaled $865,000 in the comparable 2004 period. The increase in patent amortization charges reflects the amortization of patent related intangibles acquired in connection with the GPH Acquisition. Patent amortization charges will continue to be significant in future periods as the Acacia Technologies group continues to amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. the acquired patent related costs over a weighted average economic useful life of approximately 6 years. The second quarter 2004 results included a non-cash credit of $391,000 related to changes in the fair value of AR-CombiMatrix common stock issuable in connection with certain anti-dilution provisions Anti-Dilution Provision A provision in an option or a convertible security. It protects an investor from dilution resulting from later issues of stock at a lower price than the investor originally paid. of the September 2002 settlement agreement with Nanogen, Inc. The anti-dilution provisions expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. in September 2005. Second quarter 2005 government contract costs totaled $1,209,000 versus $653,000 in the comparable 2004 period. The change was due to increased costs recognized in connection with the CombiMatrix group's commitments under its biological threat detection cost plus fixed fee contract with the Department of Defense, which was originally awarded in March 2004. As of June 30, 2005, the biological threat detection contract is approximately 68% complete. Second quarter 2005 internal research and development expenses were $1,415,000 versus $1,409,000 in the comparable 2004 period. During the second quarter of 2005 and 2004, the CombiMatrix group continued internal research and development efforts to improve and expand the CombiMatrix group's technology and product offerings. Government contract costs and research and development expense were incurred solely by the CombiMatrix group. Marketing, general and administrative expenses for the second quarter of 2005 increased to $4,261,000 from $3,388,000 in the comparable 2004 period, due primarily to the addition of licensing and business development personnel for the Acacia Technologies group, an increase in the Acacia Technologies group's consulting expenses related to a consulting agreement executed with the former CEO of Global Patent Holdings, LLC and an increase in marketing and sales expenses related to commercial sales of the CombiMatrix group's CustomArray(TM) products and services. Second quarter 2005 patent related legal expenses, comprised solely of costs incurred by the Acacia Technologies group, were $536,000 versus $576,000 in the comparable 2004 period. Second quarter 2005 patent related legal expenses included $278,000 in patent related prosecution and enforcement costs incurred by certain of the companies acquired in the GPH Acquisition transaction. Excluding the impact of the GPH Acquisition, patent related legal expenses decreased to $258,000 in the second quarter of 2005 due to a decrease in costs incurred in connection with the Acacia Technologies group's ongoing DMT patent commercialization and enforcement programs, including decreased legal costs related to new patent claims and a decrease in patent enforcement costs related to ongoing DMT patent related litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . DMT related legal fees paid to outside attorneys are incurred based on actual time and 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 external counsel and fluctuate from period to period based on patent enforcement and prosecution activity in each period. DMT related legal expenses will fluctuate in future periods based on actual outside patent counsel fees incurred in connection with the Acacia Technologies group's ongoing DMT patent commercialization and enforcement programs. In the second quarter of 2005, the Acacia Technologies group recognized contingent legal fee expenses totaling $592,000 and 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 expenses totaling $528,000, in connection with the recognition of related paid-up license fee revenues. Financial Condition Total consolidated assets were $116,757,000 as of June 30, 2005 compared to $88,327,000 as of December 31, 2004. Cash and cash equivalents 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 on a consolidated basis totaled $55,331,000 as of June 30, 2005 compared to $52,358,000 as of December 31, 2004. In June 2005, Acacia Research Corporation obtained commitments to purchase approximately $3.2 million of its Acacia Research-CombiMatrix common stock in a registered direct offering, which closed on July 5, 2005. Under the terms of the transaction, 1,400,444 shares of Acacia Research-CombiMatrix common stock were sold at $2.25 per share to a select group of institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). , totaling approximately $3.1 million, which are net of offering costs, were allocated to the CombiMatrix group. All of the shares of Acacia Research-CombiMatrix common stock were offered by Acacia Research Corporation pursuant to an effective registration statement previously filed with the Securities and Exchange Commission. Acacia Technologies Group (A Division of Acacia Research Corporation) Financial Results License fee revenues for the second quarter of 2005 were $2,682,000 versus $666,000 in the comparable 2004 period. Second quarter 2005 revenues recognized by the Acacia Technologies group included $832,000 in recurring license fee revenues and $1,850,000 in paid-up license fee revenues. Recurring license fee revenues are recognized from licensees that make recurring quarterly or annual license fee payments under their respective license agreements. Paid-up license fee revenues are recognized from licensees that make paid-up license fee payments for past infringement and future use of our patented technologies, in accordance with their respective license agreements. Certain of our paid-up license agreements provide for potential additional payments based on future activities. All of the paid-up license fee revenues recognized in the second quarter of 2005 relate to patents acquired in the January 2005 GPH Acquisition. Second quarter license fee revenues included fees from the licensing of our Digital Media Transmission (DMT(R)) technology, credit card fraud protection technology, multi-dimensional bar code technology, computer simulation technology, high capacity compact disk technology and interactive television technology. The second quarter 2005 division net loss was $1,760,000 versus $1,153,000 in the comparable 2004 period. Included in the second quarter 2005 divisional results are non-cash patent amortization charges totaling $1,336,000 versus $125,000 in the comparable 2004 period. Patent amortization charges increased in the second quarter of 2005 due to the amortization of patent related intangibles acquired in connection with the GPH Acquisition. Patent amortization charges will continue to be significant in future periods as we continue to amortize the acquired patent related costs over a weighted average economic useful life of approximately 6 years. Second quarter 2005 marketing, general and administrative expenses increased to $1,759,000 from $1,160,000 in the comparable 2004 period, due primarily to the addition of licensing and business development personnel for the Acacia Technologies group and an increase in consulting expenses related to a consulting agreement executed with the former CEO of Global Patent Holdings. Second quarter 2005 patent related legal expenses were $536,000 versus $576,000 in the comparable 2004 period. Second quarter 2005 patent related legal expenses included $278,000 in patent related prosecution and enforcement costs incurred by certain of the companies acquired in the GPH Acquisition transaction. Excluding the impact of the GPH Acquisition, patent related legal expenses decreased to $258,000 in the second quarter of 2005 due to a decrease in costs incurred in connection with the Acacia Technologies group's ongoing DMT patent commercialization and enforcement programs, including decreased legal costs related to new patent claims and a decrease in patent enforcement costs related to ongoing DMT patent related litigation. DMT related legal fees paid to outside attorneys are incurred based on actual time and out-of-pocket expenses incurred by external counsel and fluctuate from period to period based on patent enforcement and prosecution activity in each period. DMT related legal expenses will fluctuate in future periods based on actual outside patent counsel fees incurred in connection with the Acacia Technologies group's ongoing DMT patent commercialization and enforcement programs. In the second quarter of 2005, the Acacia Technologies group recognized contingent legal fee expenses totaling $592,000 and inventor royalty expenses totaling $528,000, in connection with the recognition of related paid-up license fee revenues. It is anticipated that the majority of litigation expenses associated with the recently acquired patent portfolios will be incurred on a contingency contingency n. an event that might not occur. basis where patent attorney fees are paid out of license fee revenues collected based on a contractual percentage. In connection with the GPH Acquisition, we expect that other legal expenses associated with the maintenance, licensing and enforcement of our patented technologies, will increase in future periods as we continue to roll out our licensing programs for our recently acquired patented technologies. Financial Condition Total assets for the Acacia Technologies group were $67,658,000 as of June 30, 2005 compared to $33,058,000 as of December 31, 2004. Cash and cash equivalents and short-term investments totaled $39,158,000 as of June 30, 2005 compared to $28,646,000 as of December 31, 2004. CombiMatrix Group (A Division of Acacia Research Corporation) Financial Results Revenues for the second quarter of 2005 were $1,857,000 versus $750,000 in the comparable 2004 period. Second quarter 2005 revenues were comprised of $1,281,000 in government contract revenues and $576,000 in CustomArray(TM) product, equipment and service revenues. Government contract revenues relate to the CombiMatrix group's development of biological threat detection technology under its $5.9 million Department of Defense cost plus fixed fee contract, originally awarded in March 2004. The second quarter 2005 division net loss was $3,657,000 versus $3,516,000 in the comparable 2004 period. The second quarter 2005 results include non-cash patent amortization, asset depreciation and stock compensation charges totaling $541,000 as compared to $727,000 in the comparable 2004 period. The second quarter 2004 results also included a non-cash credit totaling $391,000 related to changes in the fair value of AR-CombiMatrix common stock issuable in connection with certain anti-dilution provisions of the September 2002 settlement agreement with Nanogen, Inc. The anti-dilution provisions expire in September 2005. Second quarter 2005 government contract costs totaled $1,209,000 versus $653,000 in the comparable 2004 period. The change was due to increased costs recognized in connection with the CombiMatrix group's commitments under its biological threat detection cost plus fixed fee contract with the Department of Defense, which was originally awarded in March 2004. As of June 30, 2005, the biological threat detection contract is approximately 68% complete. Second quarter 2005 internal research and development expenses were $1,415,000 versus $1,409,000 in the comparable 2004 period. During the second quarter of 2005 and 2004, the CombiMatrix group continued internal research and development efforts to improve and expand the CombiMatrix group's technology and product offerings. Second quarter 2005 marketing, general and administrative expenses increased to $2,502,000 versus $2,228,000 in the comparable 2004 period, due primarily to an increase in marketing and sales expenses related to the CombiMatrix group's CustomArray(TM) products and services. Financial Condition Total assets for the CombiMatrix group were $49,186,000 as of June 30, 2005 compared to $55,388,000 as of December 31, 2004. Cash and cash equivalents and short-term investments totaled $16,173,000 as of June 30, 2005 compared to $23,712,000 as of December 31, 2004. In June 2005, Acacia Research Corporation obtained commitments to purchase approximately $3.2 million of its Acacia Research-CombiMatrix common stock in a registered direct offering, which closed on July 5, 2005. Under the terms of the transaction, 1,400,444 shares of Acacia Research-CombiMatrix common stock were sold at $2.25 per share to a select group of institutional investors. The net proceeds, totaling approximately $3.1 million, which are net of offering costs, were allocated to the CombiMatrix group. All of the shares of Acacia Research-CombiMatrix common stock were offered by Acacia Research Corporation pursuant to an effective registration statement previously filed with the Securities and Exchange Commission. Business Highlights and Recent Developments Business highlights of the second quarter and recent developments include: Acacia Technologies group: --As of July 2005, the Acacia Technologies group is pursuing 18 licensing and enforcement programs which include its audio/video enhancement and 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. , broadcast data retrieval, 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 protection, 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 and 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 , digital media transmission, digital video production, dynamic manufacturing modeling, image resolution enhancement, interactive television, 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. , high capacity compact disks, laptop 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, 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, and resource scheduling technologies. As of July 2005, the Acacia Technologies group has executed license agreements and recognized revenues from 7 of its ongoing licensing and enforcement programs. --In April 2005, Financial Systems Innovation LLC, a 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. that is part of the Acacia Technologies group, entered into a non-exclusive license and settled patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. litigation covering the Acacia Technologies group's credit card fraud protection technology with Petco Animal Supplies, Inc. The patented technology generally relates to a computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. system for protecting retailers and consumers engaged in credit card, check card and debit A monetary amount that is subtracted from an account balance. A debit from one account is a credit to another. See credit. transactions. --In April 2005, VData, LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, entered into a license with Nokia Corporation covering a portfolio of patents that apply to certain multi-dimensional bar codes. The multi-dimensional bar code technology generally relates to encoding See encode. 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 on to an ordinary bar code. This patented technology can have many applications in the manufacturing, distribution, operations, accounting and security industries such as tracking the movement of products, collection of data, improved production capabilities and anti-counterfeiting. --In April 2005, Microprocessor Enhancement Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, filed a patent infringement lawsuit lawsuit: see procedure; tort. in the District Court for the Central District of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). against Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking and Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. Corporation. The lawsuit alleges infringement of Microprocessor Enhancement Corporation's microprocessor enhancement technology patents by Intel's Itanium(R) line of microprocessors This is a list of microprocessors. Intel
--In April 2005, Acacia Patent Acquisition Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, acquired a patent relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a commonly used technology to connect laptop computers A portable computer that has a flat LCD screen and usually weighs less than eight pounds. Often called just a "laptop," it uses batteries for mobile use and AC power for charging the batteries and desktop use. Today's high-end laptops provide all the capabilities of most desktop computers. to peripheral devices See peripheral. peripheral device - peripheral via docking stations (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. . 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 laptop to the docking station. --In April 2005, Acacia Media Technologies Corporation added Time Warner Cable This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Cablevision Systems Corporation, Insight Communications Insight Communications is the ninth largest cable operator in the United States with approximately 1.4 million customer relationships in the four contiguous states of Illinois, Kentucky, Indiana and Ohio. Company, Cebridge Connections and Bresnan Communications to its DMT(R) patent infringement litigation. The lawsuit against Time Warner, Insight and Bresnan Communications was filed in the U.S. District Court for the Southern District of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The lawsuit against Cablevision Systems Corporation was filed in the Eastern District of New York, and the lawsuit against Cebridge Connections was filed in the Northern District of California. In accordance with the Transfer Order issued February 24, 2005, by the Judicial Panel on Multidistrict Litigation The Judicial Panel on Multidistrict Litigation is a special body within the United States federal court system, established by Congress in 1968, that has the power to transfer similar pending lawsuits brought in multiple districts to a single judge in a single jurisdiction. , all of the cases were transferred to the Northern District of California for consolidation with the existing DMT(R) litigation. --In May 2005, Computer Cache Coherency Managing a cache so that data are not lost or overwritten. For example, when data are updated in a cache, but not yet transferred to its target memory or disk, the chance of corruption is greater. Cache coherency is obtained by well-designed algorithms that keep track of the cache. Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, added Intel Corporation and Advanced Micro Devices, Inc. to the patent infringement litigation for its Computer Memory Cache Coherency technology, which is pending in the District Court for the Northern District of California. Industry reports tracking 2003 sales of core logic chipsets by all manufacturers indicate total annual sales of approximately $4 billion, with Intel holding the largest market share. In December 2004, the Company filed a patent infringement lawsuit against Via Technologies, Inc., another core logic chipset A group of chips designed to work as a unit to perform a function. For example, a modem chipset contains all the primary circuits for transmitting and receiving. A PC chipset provides the electronic interfaces between all subsystems (see PC chipset for illustration). market leader. The cases will likely be consolidated for pretrial pre·tri·al n. A proceeding held before an official trial, especially to clarify points of law and facts. adj. 1. Of or relating to a pretrial. 2. purposes. --In May 2005, Financial Systems Innovation LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, entered into a non-exclusive license covering its credit card fraud protection technology with Tuesday Morning Corporation. --In May 2005, KY Data Systems, LLC, a wholly owned subsidiary that is part of the Acacia Technologies Group, entered into a non-exclusive license with Sony Corporation covering a portfolio of patents that apply to interactive television. The patents cover receivers such as set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. and certain televisions used in digital satellite and digital cable systems that permit television viewers to access interactive television features supplied by their satellite and cable providers as part of their digital programming packages. --In May 2005, TechSearch, LLC, a wholly owned subsidiary that is part of the Acacia Technologies Group, entered into a non-exclusive license with Funai Electric Co., Ltd. covering a patent that applies to a system for recording and playing high capacity compact disks. The patent, currently being reexamined by the United States Patent and Trademark Office The United States Patent and Trademark Office (PTO or USPTO) is an agency in the United States Department of Commerce that provides patent protection to inventors and businesses for their inventions, and trademark registration for product and intellectual property , covers certain systems for recording and playing compact disks containing compressed audio data utilizing certain data-compression methods. --In June 2005, the Acacia Technologies group entered into a license agreement for its Digital Media Transmission (DMT(R)) technology with Patriot Media, which provides cable TV services throughout central and northern New Jersey. The Acacia Technologies group's DMT(R) technology involves the transmission and receipt of digital audio and/or audio video content via a variety of means including the 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 , cable, satellite and local area networks. Elements of the DMT(R) transmission process include a source material library, identification encoding process, format conversion, sequence encoding, compressed data storage and transmission. Elements of the DMT(R) receiving process include a transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. , format conversion, storage, decompression decompression /de·com·pres·sion/ (de?kom-presh´un) removal of pressure, especially from deep-sea divers and caisson workers to prevent bends, and from persons ascending to great heights. and playback Playback could mean:
--In June 2005, Tech Search LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, entered into a non-exclusive license with National Instruments covering a portfolio of patents that apply to computer simulation systems. The patents cover aspects of computer simulation systems which can iteratively simulate simulate - simulation a complex system represented by a network of interconnected function blocks and enable the user to graphically program their simulations. --In June 2005, Financial Systems Innovation LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, entered into non-exclusive licenses covering its credit card fraud protection technology with Sterling Jewelers, Too Inc. (operator of Limited Too and Justice stores) and Foot Locker, Inc. --In July 2005, Financial Systems Innovation LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, entered into a non-exclusive license covering its credit card fraud protection technology with LensCrafters, Inc., Sunglass sun·glass n. 1. A convex lens used to focus the sun's rays and produce heat, especially for ignition. 2. sunglasses Eyeglasses with tinted or polarizing lenses to protect the eyes from the sun's glare. Hut Trading Corporation, Pearle Vision, Inc., Cole Vision Corporation, Watch World International, Inc. and Things Remembered, Inc. --In July 2005, Acacia Patent Acquisition Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, acquired several patents covering electromagnetic compatibility (hardware, testing) Electromagnetic Compatibility - (EMC) The extent to which a piece of hardware will tolerate electrical interference from other equipment, and will interfere with other equipment. shielding ("ECS See eComStation. ") technology commonly incorporated into hearing aids Hearing Aids Definition A hearing aid is a device that can amplify sound waves in order to help a deaf or hard-of-hearing person hear sounds more clearly. . The patented technology shields hearing aids from electromagnetic interference See EMI. produced by portable electronic devices such as cell phones, cordless phones A wireless telephone that transmits to and receives signals from a base station within a range of a few hundred feet. Cordless phones are for local use and cannot travel long distances as can cellphones and satellite phones. See DECT and multihandset cordless. , wireless headphones Head-mounted speakers. Headphones have a strap that rests on top of the head, positioning a pair of speakers over both ears. For listening to music or monitoring live performances and audio tracks, both left and right channels are required. and headsets, and WIFI and Bluetooth enabled devices. The ECS technology can be incorporated into many styles of hearing aids. --In July 2005, Intel Corporation filed a Complaint in the District Court for the Northern District of Illinois against Information Technology LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, seeking a Declaratory Judgment declaratory judgment In law, a judgment merely declaring a right or establishing the legal status or interpretation of a law or instrument. It is binding but is distinguished from other judgments or court opinions in that it includes no executive element (an order that of non-infringement of a patent relating to Information Technology's Dynamic Manufacturing Modeling technology. The Dynamic Manufacturing Modeling 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 fabrication (fab´rikā´sh  n),n the construction or making of a restoration. sequences, collections of job sets, scheduling rules and machine reliability standards. This technology can be used for exacting manufacturing processes such as semiconductor fabrication. --In July 2005, Spreadsheet Automation Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, commenced a patent infringement lawsuit in the District Court for the Eastern District of Texas against Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, . The suit alleges the unauthorized use by certain Microsoft products, including without limitation certain versions of Microsoft Access A database program for Windows, available separately or included in the Microsoft Office suite. Access is programmable using Visual Basic for Applications (VBA). Access can read Paradox, dBASE and Btrieve files, and using ODBC, Microsoft SQL Server, SYBASE SQL Server and Oracle data. and Microsoft Excel (tool) Microsoft Excel - A spreadsheet program from Microsoft, part of their Microsoft Office suite of productivity tools for Microsoft Windows and Macintosh. Excel is probably the most widely used spreadsheet in the world. Latest version: Excel 97, as of 1997-01-14. , of our Spreadsheet Automation technology. The Spreadsheet Automation technology generally relates to automating the production of worksheet files for use by electronic spreadsheet programs. Specifically, the patented technology permits the efficient retrieval of data from external databases by allowing the user to select specific data from a database and import the specified data into a spreadsheet program through uniquely streamlined spreadsheet commands. The adaptive quality of the technology permits, among other things, the user to retrieve updated information from an external database without creating formatting issues in the user's spreadsheet program. CombiMatrix group: --In May 2005, the CombiMatrix group entered into a non-exclusive distribution agreement with Inter Medical to distribute the CombiMatrix group's CustomArray(TM) products in Japan. Inter Medical will market, sell and service the CustomArray products in the Japanese marketplace. --In May 2005, CombiMatrix Corporation formed a wholly owned subsidiary, CombiMatrix Molecular Diagnostics, Inc. ("CMD CMD cerebromacular degeneration. "), to take advantage of CombiMatrix's unique approach to array-based diagnostics. Matthew C. Watson was named Chief Executive Officer, and David A. Baunoch, Ph.D. was named President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of CMD. Mr. Watson and Dr. Baunoch come to CMD from US LABS, which was recently acquired by Laboratory Corporation of America, where they were Vice President of Laboratory Operations and Vice President of Research and Development, respectively. Both executives bring to CMD more than 20 years of industry experience and a track record of building successful companies. --In June 2005, the CombiMatrix group entered into a co-development agreement with STMicroelectronics ("ST"), a global leader in the development and manufacturing of semiconductor products. The co-development will combine the CombiMatrix group's proprietary electrochemical electrochemical /elec·tro·chem·i·cal/ (-kem´i-k'l) pertaining to interaction or interconversion of chemical and electrical energies. e·lec·tro·chem·i·cal adj. detection technology with ST's In-Check(TM) Lab-on-Chip platform to investigate the feasibility of addressing the research and point-of-care diagnostics markets. Under the terms of the agreement, in addition to the sharing of technology and knowledge, ST will financially support the CombiMatrix group in this work. --In July 2005, the CombiMatrix group entered into a non-exclusive agreement with J.K. International Inc. to distribute the CombiMatrix group's CustomArray(TM) products in Japan. J.K. International's marketing and sales organizations will market, sell and service the CustomArray products in the Japanese marketplace. --In July 2005, the CombiMatrix group expanded the management team at CMD and appointed Dr. Mathew Moore as Director of Research and Development, Robert Embree as Director of Laboratory Operations and John Besser as Chief Financial Officer. The three executives bring to CMD more than 40 years of combined industry experience and a track record in building successful diagnostic companies. 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 1:45 p.m. Pacific Time (4:45 p.m. Eastern). To listen to the presentation by phone, dial 800-406-5345 for domestic callers and 913-981-5571 for international callers, both of whom will need to provide the operator with the confirmation code 1494274. 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 1494274 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 31 patent portfolios, which include over 120 U.S. patents, and certain foreign counterparts, covering technologies used in a wide variety of industries including audio/video enhancement & synchronization, broadcast data retrieval, computer memory cache coherency, credit card fraud protection, database management, data encryption & product activation, digital media transmission (DMT(R)), digital video production, dynamic manufacturing modeling, enhanced Internet navigation, 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, Internet access See how to access the Internet. redirection Diverting data from their normal destination to another; for example, to a disk file instead of the printer, or to a server's disk instead of the local disk. See virtual directory, symbolic link, shortcut, redirector and DOS redirection. 1. , interstitial Internet advertising, laptop connectivity, microprocessor enhancement, multi-dimensional bar codes, network data storage, resource scheduling, rotational video imaging, and spreadsheet automation. 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, 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 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,
2005 2004
-------- ------------
Total Assets $116,757 $ 88,327
======== ============
Total Liabilities $ 12,214 $ 11,913
======== ============
Minority Interests $ 482 $ 778
======== ============
Total Stockholders' Equity $104,061 $ 75,636
======== ============
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months For the Six Months
Ended Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues:
Research and
development contract $- $- $- $17,302
License fees 2,682 666 4,545 1,265
Government contract 1,281 701 2,012 918
Products and services 576 49 914 146
----------- ----------- ----------- -----------
Total revenues 4,539 1,416 7,471 19,631
----------- ----------- ----------- -----------
Operating expenses:
Cost of government
contract revenues 1,209 653 1,900 858
Cost of product sales 190 36 353 40
Research and
development expenses 1,415 1,409 2,555 2,792
Non-cash stock
compensation
amortization -
research and
development - 32 - 101
Marketing, general
and administrative
expenses 4,261 3,388 8,150 6,672
Legal expense -
patents 536 576 1,097 1,178
Contingent legal fees
and inventor
royalties expense -
patents 1,120 - 1,767 -
Non-cash stock
compensation
amortization -
marketing, general
and administrative 15 143 (111) 477
Amortization of
patents 1,610 399 2,800 798
Legal settlement
charges (credits) (16) (391) (195) 866
----------- ----------- ----------- -----------
Total operating
expenses 10,340 6,245 18,316 13,782
----------- ----------- ----------- -----------
Operating income
(loss) (5,801) (4,829) (10,845) 5,849
----------- ----------- ----------- -----------
Other income (expense):
Interest income 382 192 655 350
Other expense (62) - (101) -
----------- ----------- ----------- -----------
Total other income 320 192 554 350
----------- ----------- ----------- -----------
Income (loss) from
continuing operations
before income taxes
and minority interest (5,481) (4,637) (10,291) 6,199
Benefit for income
taxes 64 69 134 136
----------- ----------- ----------- -----------
Income (loss) from
continuing operations
before minority
interests (5,417) (4,568) (10,157) 6,335
Minority interests - 3 - 3
----------- ----------- ----------- -----------
Income (loss) from
continuing operations (5,417) (4,565) (10,157) 6,338
----------- ----------- ----------- -----------
Discontinued operations:
Estimated loss on
disposal of discontinued
operations - (104) (210) (104)
----------- ----------- ----------- -----------
Net income (loss) $(5,417) $(4,669) $(10,367) $6,234
=========== =========== =========== ===========
Earnings (loss) per
common share:
Attributable to the
Acacia Technologies
group:
Net loss $(1,760) $(1,153) $(3,634) $(2,142)
Basic and diluted loss
per share (0.06) (0.06) (0.14) (0.11)
Attributable to the
CombiMatrix group:
Basic
Net income (loss) $(3,657) $(3,516) $(6,733) $8,376
Basic earnings (loss)
per share (0.12) (0.12) (0.22) 0.29
Diluted
Net income (loss) $(3,657) $(3,516) $(6,733) $8,376
Diluted earnings
(loss) per share (0.12) (0.12) (0.22) 0.28
Weighted average shares:
Acacia Research -
Acacia Technologies stock:
Basic and diluted 27,271,416 19,787,466 25,922,412 19,769,901
=========== =========== =========== ===========
Acacia Research -
CombiMatrix stock:
Basic 31,200,984 30,459,576 31,200,742 28,867,101
=========== =========== =========== ===========
Diluted 31,200,984 30,459,576 31,200,742 30,385,512
=========== =========== =========== ===========
ACACIA TECHNOLOGIES GROUP
(A Division of Acacia Research Corporation)
SUMMARY FINANCIAL INFORMATION
(In thousands)
(Unaudited)
GROUP BALANCE SHEET INFORMATION
June 30, December 31,
2005 2004
--------- ------------
Total Assets $ 67,658 $ 33,058
========= ============
Total Liabilities $ 3,254 $ 3,472
========= ============
Minority Interests $ 482 $ 778
========= ============
Total Stockholders' Equity $ 63,922 $ 28,808
========= ============
GROUP STATEMENTS OF OPERATIONS
For the Three For the Six
Months Ended Months Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
License fees $2,682 $666 $4,545 $1,265
-------- -------- -------- --------
Total revenues 2,682 666 4,545 1,265
-------- -------- -------- --------
Operating expenses:
Marketing, general and
administrative expenses 1,759 1,160 3,369 2,166
Legal expenses - patents 536 576 1,097 1,178
Contingent legal fees and inventor
royalties expense - patents 1,120 - 1,767 -
Amortization of patents 1,336 125 2,252 250
-------- -------- -------- --------
Total operating expenses 4,751 1,861 8,485 3,594
-------- -------- -------- --------
Operating loss (2,069) (1,195) (3,940) (2,329)
-------- -------- -------- --------
Other income:
Interest income 278 108 449 220
Other income 1 - 1 -
-------- -------- -------- --------
Total other income 279 108 450 220
-------- -------- -------- --------
Loss from continuing operations
before income taxes
and minority interests (1,790) (1,087) (3,490) (2,109)
Benefit for income taxes 30 35 66 68
-------- -------- -------- --------
Loss from continuing operations
before minority interests (1,760) (1,052) (3,424) (2,041)
Minority interests - 3 - 3
-------- -------- -------- --------
Loss from continuing operations (1,760) (1,049) (3,424) (2,038)
Discontinued operations:
Estimated loss on disposal of
discontinued operations - (104) (210) (104)
-------- -------- -------- --------
Division net loss $(1,760) $(1,153) $(3,634) $(2,142)
======== ======== ======== ========
COMBIMATRIX GROUP
(A Division of Acacia Research Corporation)
SUMMARY FINANCIAL INFORMATION
(In thousands)
(Unaudited)
GROUP BALANCE SHEET INFORMATION
June 30, December 31,
2005 2004
--------- ------------
Total Assets $ 49,186 $ 55,388
========= ============
Total Liabilities $ 9,047 $ 8,560
========= ============
Minority Interests $ - $ -
========= ============
Total Stockholders' Equity $ 40,139 $ 46,828
========= ============
GROUP STATEMENTS OF OPERATIONS
For the Three For the Six
Months Ended Months Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
Research and development
contract $- $- $- $17,302
Government contract 1,281 701 2,012 918
Products and services 576 49 914 146
-------- -------- -------- --------
Total revenues 1,857 750 2,926 18,366
-------- -------- -------- --------
Operating expenses:
Cost of government contract
revenues 1,209 653 1,900 858
Cost of product sales 190 36 353 40
Research and development expenses 1,415 1,409 2,555 2,792
Non-cash stock compensation
amortization - research and
development - 32 - 101
Marketing, general and
administrative expenses 2,502 2,228 4,781 4,506
Non-cash stock compensation
amortization - marketing, general
and administrative 15 143 (111) 477
Amortization of patents 274 274 548 548
Legal settlement charges (credits) (16) (391) (195) 866
-------- -------- -------- --------
Total operating expenses 5,589 4,384 9,831 10,188
-------- -------- -------- --------
Operating income (loss) (3,732) (3,634) (6,905) 8,178
-------- -------- -------- --------
Other income (expense):
Interest income 104 84 206 130
Other expense (63) - (102) -
-------- -------- -------- --------
Total other income 41 84 104 130
-------- -------- -------- --------
Income (loss) from operations
before income taxes (3,691) (3,550) (6,801) 8,308
Benefit for income taxes 34 34 68 68
-------- -------- -------- --------
Division net income (loss) $(3,657) $(3,516) $(6,733) $8,376
======== ======== ======== ========
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