Acacia Research Reports Third Quarter Financial Results.Business Editors 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.--(BUSINESS WIRE)--Nov. 13, 2002 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:ACRI) today reported third quarter financial results. Revenues for the third quarter of 2002 were $179,000 versus $10,831,000 in the comparable 2001 period. Third quarter 2002 revenues were comprised of V-chip licensing payments received by the company and revenues recognized by our CombiMatrix Corporation subsidiary from its U.S. Department of Defense and National Institutes of Health grants and product sales to a Japanese government institution. In addition, during the third quarter of 2002 our CombiMatrix Corporation subsidiary recorded $3,532,000 in deferred revenues pursuant to its agreements with Roche Diagnostics Roche Diagnostics Division is a subsidiary of Hoffmann-La Roche which manufactures equipment and reagents for research and medical diagnostic applications. Internally, it is organized into six major business areas: Roche Applied Science, Roche Centralized Diagnostics, Roche , GmbH ("Roche"). The third quarter 2002 net loss from operations was $20,622,000 or $1.05 per share versus a net loss from operations of $2,827,000 or $0.15 per share in the comparable 2001 period. Results for the third quarter of 2002 include legal settlement charges totaling $18,471,000 related to CombiMatrix's settlement with Nanogen, Inc. on September 30, 2002. The charge includes accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. cash payments of $1,000,000 and the fair value of 4,016,364 CombiMatrix common shares issued pursuant to the terms of the settlement agreement. As a result of the settlement agreement, all 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. between the companies has been settled. Excluding non-cash stock compensation charges, the third quarter 2002 net loss from operations was $19,454,000 versus net income of $170,000 in the comparable 2001 period. Non-cash compensation charges after minority interests were $1,168,000 and $2,997,000 for the third quarter of 2002 and 2001, respectively and relate primarily to a step-up step-up A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock. in value of our CombiMatrix subsidiary in connection with its proposed initial public offering in 2000. (Note: All share and per-share information has been adjusted retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin to reflect the 10% stock dividend declared by Acacia Research on October 22, 2001 and distributed on December 5, 2001.) Financial Condition Total assets were $82.7 million as of September 30, 2002 as compared to $110.9 million as of December 31, 2001. 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 on a consolidated basis were $57.8 million as of September 30, 2002 as compared to $84.6 million as of December 31, 2001. Business Highlights Business highlights of the third quarter include: -- In July 2002, Acacia executed a license agreement with Loewe Opta GmbH, whereby Acacia will receive payment and grant a non-exclusive license of its patented V-chip technology to Loewe Opta GmbH, a manufacturer of televisions sold under the Loewe brand name. -- In July 2002, CombiMatrix completed a prototype electrochemical detection system and delivered the system to the U.S. Department of Defense. CombiMatrix developed its sensor technology through grants from the U.S. Department of Defense. The focus of the grants was aimed at developing an ultrasensitive hand-held biochip system for detecting the deployment of chemical and biological warfare agents. -- In September 2002, CombiMatrix expanded its strategic alliance with Roche. The amended agreement grants Roche rights to manufacture CombiMatrix's custom and catalog DNA microarray chips in addition to its rights to distribute and sell CombiMatrix's technology worldwide. CombiMatrix will receive additional payments under the amended agreement from Roche for granting manufacturing rights and the transfer of manufacturing know-how. CombiMatrix will also receive R&D and milestone payments upon the fulfillment of certain conditions. -- On September 30, 2002, CombiMatrix entered into an agreement with Nanogen to settle all litigation pending between the two companies. As part of the settlement, Nanogen waived all rights to make any claims of any type, regarding the patents. CombiMatrix issued to Nanogen approximately 4 million shares of its common stock, or 17.5% of its outstanding shares post-issuance and agreed to pay Nanogen $500,000 within 30 days following the settlement and an additional $500,000 within one year following the settlement. CombiMatrix will also pay Nanogen a minimum of $37,500 per quarter for the period October 1, 2003 through October 1, 2004 and $25,000 per quarter thereafter until the patents 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 2018. These payments may increase to a maximum $1.5 million annually, based on 12.5% of the first $12 million of CombiMatrix's annual net payments received from product sales. No payments to Nanogen are required from revenues resulting from upfront licensing, research and development or milestone payments. -- In September 2002, a motion for summary judgment motion for summary judgment n. a written request for a judgment in the moving party's favor before a lawsuit goes to trial and based on recorded (testimony outside court) affidavits (or declarations under penalty of perjury), depositions, admissions of fact, answers was granted by the U.S. District Court for the District of Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). finding that television manufacturers named in Soundview's Connecticut lawsuit lawsuit: see procedure; tort. do not infringe in·fringe v. in·fringed, in·fring·ing, in·fring·es v.tr. 1. To transgress or exceed the limits of; violate: infringe a contract; infringe a patent. 2. Soundview's V-chip patent. The suit involves Soundview's U.S. Patent No. 4,554,584, which relates to television video and audio blanking technology, commonly known as "V-chip" technology. We are currently exploring strategies in response to this ruling and intend to appeal it. The ruling has no effect on the revenues that we have received from current licensees of our patented V-chip technology. Further, none of the revenues that we have received are contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent any court rulings or the future outcome of any litigation with unlicensed television manufacturers. Soundview continues to pursue its antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. claim against the defendants. -- In August 2002, Soundview Technologies filed a federal patent 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. lawsuit against seventeen television manufacturers in the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. for the District of Nevada. In this lawsuit, Soundview alleges that television sets fitted with V-chips and sold in the United States infringe Soundview Technologies' patent. As a result of the summary judgment ruling in the case before the United States District Court for the District of Connecticut, in October 2002, Soundview Technologies voluntarily filed to dismiss, without prejudice Without any loss or waiver of rights or privileges. When a lawsuit is dismissed, the court may enter a judgment against the plaintiff with or without prejudice. When a lawsuit is dismissed without prejudice , the Nevada infringement lawsuit. By voluntarily dismissing this lawsuit at this time, Soundview Technologies will be able to refile the action in the event that a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. final decision is reached with respect to the issue of infringement in the Connecticut lawsuit. A conference call is scheduled for today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern). The conference call will include a review of financial results for the third quarter and a discussion of business developments. Shareholders, analysts and reporters are welcome to participate. Paul R. Ryan, 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. of Acacia Research, Robert "Chip" Harris, President, and Amit Kumar, Ph.D., CEO of CombiMatrix Corporation will host the call. To listen to the presentation by phone, dial (800) 388-8975 for domestic callers and (973) 694-2225 for international callers. A replay of the audio presentation will be available for 30 days at (800) 428-6051 for domestic callers and (973) 709-2089 for international callers, both of whom will need to enter the code 268570 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 Web site at www.acaciaresearch.com. About Acacia Research Corporation Acacia Research develops licenses and provides products for the life science and media technology sectors. Acacia licenses its V-chip technology to television manufacturers and owns pioneering technology for digital streaming and video-on-demand. Acacia's CombiMatrix subsidiary is developing a biochip biochip Small-scale device, analogous to an integrated circuit, constructed of or used to analyze organic molecules associated with living organisms. One type of theoretical biochip is a small device constructed of large organic molecules, such as proteins, and capable of technology for the life science market. Acacia Research's Web site is located 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 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 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. 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 (ACRI)
SUMMARY FINANCIAL INFORMATION
(unaudited)
CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
September 30, December 31,
2002 2001
Total Assets $ 82,724 $ 110,859
Total Liabilities $ 26,107 $ 19,824
Minority Interests $ 35,047 $ 32,303
Total Stockholders' Equity $ 21,570 $ 58,732
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share information)
Three Months Ended
September 30, 2002 September 30, 2001
Revenues:
License fee income $43 $10,740
Product revenue 23 -
Grant revenue 113 91
Total revenues 179 10,831
Operating expenses:
Cost of sales 6 -
Research and development expenses 6,449 4,153
Non-cash stock compensation expense -
research and development 753 1,712
Marketing, general and administrative
expenses 4,727 8,522
Non-cash stock compensation expense -
marketing, general and administrative 1,263 3,486
Amortization of patents and goodwill 550 654
Legal settlement charge 18,471 -
Total operating expenses 32,219 18,527
Operating loss (32,040) (7,696)
Total other (expense) income (2,749) 796
Loss from continuing operations before
income taxes and minority interests (34,789) (6,900)
Benefit (provision) for income taxes 287 (778)
Loss from continuing operations before
minority interests (34,502) (7,678)
Minority interests 14,080 4,851
Loss from continuing operations (20,422) (2,827)
Discontinued operations
Estimated loss on disposal of
Soundbreak.com (200) -
Net loss $(20,622) $(2,827)
Loss per common share:
Basic and diluted
Loss from continuing operations $(1.04) $(0.15)
Loss from discontinued operations (0.01) -
Net loss $(1.05) $(0.15)
Weighted average number of common and
potential common shares outstanding used
in computation of loss per share:
Basic and diluted 19,640,808 19,525,807
(Note: All share and per-share information has been adjusted retroactively to reflect the 10% stock dividend declared by Acacia Research on October 22, 2001 and distributed on December 5, 2001.) |
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