Earnings Call: Where's the Beef?
(ACTG) concluded their 50 minute 4Q Earnings Conference Call leaving
all those listening (shareholders and non-Acacia fans) wondering,
"Where's the Beef?'
equivalent battle of "tastes great" vs. "less filling"
of the viability of the DMT patent didn't get any super sizing from
this 4Q call.
The first half
of the call was discussing Combimatrix, Acacia Technologies sister
which was the bathroom break until the real no-show started. The
only interesting part of the CMBX call was a question about the
$50M shelf filing to potentially raise money for working capital
(full PR at the bottom). It's interesting to note that Acacia has
$33M in cash, but yet feels the need for up to $50M in cash.
From the 4Q
Technologies group continued to roll out its Digital Media Transmission
technology licensing program and entered into 72 new licensing agreements
in the fourth quarter, bringing total DMT licensing agreements to
115. Fourth quarter licensing revenues increased to $481,000, from
$186,000 in the previous quarter, and do not include fourth quarter
license fees due from a number of licensees, which will be recognized
as revenues when received in the first quarter of 2004. All of our
license agreements provide for recurring payments," commented
Chairman and CEO, Paul Ryan.
More 4Q information
presented at the end of this article.
There were many
mentions of how companies were utilizing the DMT technology, from
websites to cable companies. Noting the billions of dollars being
spent on the use of digital audio and video.
point here... there is no technology that is the DMT Patent, it's
merely ideas of a process for downloading audio/video.
How is it that
companies have been creating technology (servers, software, codecs,
etc) for delivery of audio/video and yet, have never heard of the
DMT patent nor read it?
How were audio
or video files being distributed on BBS systems years before the
inventors filed their patent?
How can companies
like Microsoft, Real, and Apple create audio/video delivery mechanisms
without ever reading the blueprints for the DMT patent?
If the DMT patent
is so ground breaking and "pioneering", why aren't the
and more are what we will find out from the conclusion of the current
Paul Ryan (CEO)
or Chip Harris (President) said that Acacia filed a lawsuit against
OnCommand after spending a lot of money in negotiations for licensing
and not coming to an agreement.
They also filed
8 new lawsuits in December 2003 since the original 39 targets were
reduced to 9. The 8 new defendants get rolled into the current 9,
with the effect of just having one big party. No additional potential
lawsuits were mentioned in other industries.
was parading 24/7 University as being a licensee in the "e-learning"
sector but failed to point out that the licensing was paid in peanuts
or cashews, the exact details are not known.
Some early signers
got a "most favored nation's provision" (as Ryan put it)
for signing, which just translates into "sweetheart deals".
So many were saying there were no sweetheart deals, they were right
there were sweetheart "most favored nation's provision"
Ryan made a
comment that they know about all the prior art and have no concerns.
Famous last words to be brought up at the conclusion of this patent
absurdity case when the defendants are found to be not-infringing.
He also added that there wouldn't be any result of the Markman Hearing
until June (summer), which FightThePatent.com concurs.
were few and sugar coated. There were no mentions about expanding
operations in Europe as was reported in the 3Q call. There was no
pressing of where additional revenue would come in.
tone seemed to be nervous and cautious. Very little was said and
probably due to the current litigation and potential SEC or FTC
watching of Acacia for tactics that certainly raises many eyebrows.
4Q earnings did not trigger a spike
in stock buying and for those shareholders thinking they were striking
gold, should instead, be looking out
for the cry from the Titanic of patent abuse cases, the crying out
Acacia Technologies Group (A Division of Acacia Research Corporation)
fee revenues for the fourth quarter of 2003 were $481,000 versus
zero in the comparable 2002 period. DMT license fee revenues for
2003 were $692,000 versus $43,000 in V-chip license fee
revenues in 2002. Since November 2002, the Acacia Technologies group
has entered into 115 license agreements for its DMT technology.
Seventy-two (72) of these license agreements were executed in the
fourth quarter of 2003. All of the Acacia Technologies group's DMT
license agreements provide for recurring license fee payments to
be made by the respective licensees over the term of the licenses.
The fourth quarter 2003 division net loss was $1,082,000 versus
$831,000 in the comparable 2002 period. Included in the fourth quarter
2003 division net loss are non-cash patent amortization and
depreciation charges totaling $145,000 versus $243,000 in the comparable
The 2003 division
net loss was $5,451,000 versus $12,754,000 in the comparable 2002
period. Included in the 2003 division net loss are non-cash patent
amortization and depreciation charges totaling
$616,000 versus $1,800,000 in 2002. The 2003 and 2002 division net
loss includes non-cash impairment charges totaling $207,000 and
$2,748,000, respectively, related to a decline in fair value of
a cost-method investment.
and administrative expenses decreased in the fourth quarter of 2003
and for the year ended December 31, 2003 as compared to the same
periods in 2002, primarily due to a reduction in
professional fees related to Acacia Research Corporation's recapitalization
and merger transactions completed in December 2002, a reduction
in corporate legal expenses, and a reduction in overhead due
to reduced general and administrative personnel compared to the
prior period. The decrease was partially offset by an increase in
costs related to Acacia Technologies group's ongoing DMT patent
commercialization and enforcement efforts, including increased legal
and engineering costs related to new patent claims and the identification
of additional potential licensees of our DMT technology.
for the Acacia Technologies group were $39,978,000 as of December
31, 2003 compared to $47,212,000 as of December 31, 2002.
Cash and cash equivalents and short-term investments totaled $33,201,000
as of December 31, 2003 compared to $39,792,000 as of December 31,
Acacia Research/Stock -2: Proceeds For Working Capital
WASHINGTON (Dow Jones)--Acacia Research Corp. (ARC.XX) filed to
sell up to $50 million of stock and warrants from time to time under
a shelf registration statement filed Tuesday with the Securities
and Exchange Commission.
may consist of Acacia Research-CombiMatrix (CBMX) shares, and Acacia
Research-Acacia Technologies (ACTG) stock or warrants.
Details of the
offering will be provided in a prospectus.
said it will use the net proceeds from the offering for working
were listed in the filing.
develops, acquires and licenses enabling technologies for the life
sciences and media technologies sectors, which comprise the two
business groups of Acacia Research.
-By Todd Goren;
Dow Jones Newswires; 202-862-1351; email@example.com