acacia research group llcacaciaresearch.com/wp-content/uploads/2013/10/acacia-research... · nsn...

ACACIA RESEARCH GROUP, LLC


ACACIA

RESEARCH

GROUP LLC

UNLOCKING patent POTENTIAL

NASDAQ: ACTG A Subsidiary of Acacia Research Corporation



Forward Looking Statements

This presentation contains forward looking statements within the meaning of the “safe” harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements address future events and conditions concerning the company’s business plans. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments, and other circumstances affecting anticipated revenues and costs, which may cause actual results to differ materially. The company expressly disclaims any future obligation or undertaking to update or revise any forward looking statement contained herein.

CONFIDENTIAL AND PROPRIETARY 2



ACACIA

is at the

TRANSACTIONAL

CENTER of

INNOVATION.




Unlocking Patent Potential

Acacia is the No. 1 outsourced partner for monetizing patented technologies


*as of 6/30/2016

Key Financial Information

NASDAQ Listing ACTG

Stock Price* $4.40

Market Capitalization $222M

2015 Revenue $125M

Cash and Investments (No Debt) $186M

• Intermediates transactions between patent owners & patent infringers by partnering with patent owners

• Facilitates efficiency and delivers

monetary rewards to the patent owner • Approximately $705M returned to patent

partners



Investment Highlights Empowering Inventors and Patent Owners

• Leading outsourced patent licensing company an emerging patent

clearinghouse

• Strategic focus on more consistent, predictable and profitable business

model

• Robust portfolio of diverse licensing programs across multiple industries

• Strong operating leverage with highly scalable business model

• Deep legal and technology expertise

• Deep industry knowledge

• Presently proposed patent reform legislation is good for Acacia




Rewarding the Idea Makers and the World Changers

Acacia is a leading player in the secondary patent market • Most patents are owned by entities that do not

make products covered by their patents • Acacia partners with patent owners to bridge

the gap between invention and production, helping patent owners get paid by licensing their patents to the companies that use them

• Outsourced IP licensing transactions help

promote a secondary market for these patents

6

Patent Owners

Products & Services

ACACIA (Clearinghouse)

CONFIDENTIAL AND PROPRIETARY



7

Demand: Needs Driving Patent Holders To Outsource Monetization or Why Do Patent Owners Partner With Acacia?

• Complexity of current environment • Interdisciplinary experience (Licensing, Business,

Engineering) • History and track record of success

Licensing Expertise

• High cost for internal licensing programs • Longer time to revenue • Scale: Serial vs. Parallel Licensing

Risk Mitigation

• Transforming patents into cash • Short term cash flow • Long term royalty stream

Liquidity




Financial Models


Hybrid Partnership Acquisition Model

Acacia 70-100%

Legal 0-30%

Acacia buys 100% of the patents for 100% of the profits Typical partners: • Distressed Corporations • Failed Corporations

Controlled by VCs Higher margins with increased upside potential

How it works: • Up-front capital infusion as an

advance on future licensing • Acacia receives 100% of return

until capital infusion is returned Objectives: • Recover capital infusion in 18-24

months • Upon return of capital infusion,

net profit revenue split with patent partner begins

• 3x return of capital in 5 years Purpose: • Increases Acacia’s total

addressable market • Strong Balance Sheet yields

competitive advantage

Typical partners for Acacia: • Major corporations • Research labs and universities • Individual inventors Protects patent owner from countersuits High margins with upside leverage

Partnership

40% Patent Owner

40% Acacia

20% Law Firm

Patent Diligence

License patents to corporate

users

Pay legal costs

Split net profit 50/50 with patent

owner



Creating Opportunity Marquee Portfolios + New Industry Verticals


Smart Phones, Tablets, PCs and TVs • Palmsource mobile computing • Adaptix LTE/LTE Advanced • Nokia Siemens Networks 3G/LTE/LTE Advanced • Rambus backlighting units • Silicon Image high speed chip interconnects • Silicon Image high speed display interfaces • VoiceAge high definition voice • ST Micro shared memory architectures for application processors • Renesas semiconductors Medical Devices and Technology (Launched 2011) • Bonutti Skeletal Innovations • Boston Scientific stent grafts Automotive (Launched 2013) • Automotive Technologies International safety, diagnostics and navigation • Telematics • Smartphones portfolios, as set out above, (Adaptix, LTE/LTE Advanced,

Palmsource Mobile Computing etc.) Energy (Launched 2013) • Austin Geo 3D subsurface visualization • Covertech reflective insulation



Smart Phone Coverage


Rambus 69 Patents LED Back Lighting

Access 125 Patents Sync, Apps, User Interface

VoiceAge 274 Patents High Fidelity Voice Codecs

Adaptix 205 Patents LTE/LTE Advanced Cooperative Diversity

Silicon Image 1 138 Patents High Speed Chip Interconnect

NSN 505 Patents / Patent Applications 3G/LTE/LTE Advanced

Silicon Image 2 10 Patents High Speed Display Interfaces

ST Micro 13 Patents Shared Memory Architectures for Application Processors



Stent Graft and Vena Cava Filter Patent Coverage • 1800+ Patents • Single largest collection of US patents

covering stent graft technology • Comprehensive worldwide coverage • Portfolios come from leading

researchers and corporations

11

Orthopedics and Sports Medicine • Over 150 Patents and

applications • Technologies covered include:

Spine, hip, knee, shoulder, biologics and tissue repair


Emerging Opportunities



Driver-Assistance

Vehicle Sensing American Vehicular Sciences

• 230 patents covering automotive safety, navigation and diagnostics technologies

• Ranked 1st in research intensity and as 32nd overall innovator in The Patent Board TM January 2012 Automotive & Transportation Industry Scorecard

Rambus Automotive Illumination • Covering illumination applications including, headlights, taillights,

instrumentation, internal & external lighting

Rambus Backlighting Units • 69 Patents covering LED back lighting for navigation and

infotainment displays

Palmsource • 125 patents covering sync, apps, user interface

Adaptix

• 205 Patents covering LTE/LTE Advanced, cooperative diversity

NSN • 505 Patents / Patent Applications covering 3G/LTE/LTE Advanced

power control, handover, coding

12

Emerging Opportunities Automotive & Transportation Industry




Mobile Phones & Tablets*

Digital Home* Laptops & PCs* Automobiles*

Patented Technology*

Semiconductors

Wireless Air Interfaces

Software

Displays

13

Patents: Apply To A Wide Variety Of Products

Constant infusion of new technology creates licensing opportunities

*Representative sampling only




FINANCIAL

metrics.




Financial Performance – Non GAAP* The Power of Innovation


2010 (000’s)

2011 (000’s)

2012 (000’s)

2013 (000’s)

2014 (000’s)

2015 (000’s)

Q2 2016 6 months

(000’s)

Revenues $131,829 $184,707 $250,727 $130,556 $130,876 $125,037 $66,072

Non-GAAP Operating Margin 37.5% 24.4% 54.8% (1.1%) 7.1% 7.2% 21.7%

Non-GAAP Net Income (Loss) $49,405 $45,013 $137,339 ($1,424) $9,328 $8,959 $14,356

Pro-forma Non-GAAP EPS $1.46 $1.12 $2.80 ($0.04) $0.18 $0.18 $0.28

*Refer to disclosures in our Q2 2016 Earnings Release and 8-K filed with the SEC for information concerning

Non-GAAP financial measures.

15



Financial Performance – GAAP The Power of Innovation


2010 (000’s)

2011 (000’s)

2012 (000’s)

2013 (000’s)

2014 (000’s)

2015 (000’s)

Q2 2016 6 months

(000’s)

Revenues $131,829 $184,707 $250,727 $130,556 $130,876 $125,037 $66,072

GAAP Operating Margin 29.3% 16.4% 32.1% (63.5%) (47.5%) (122.1%) (67.6%)

GAAP Net Income (Loss) $34,051 $21,106 $59,453 $(56,434) $(66,029) $(160,036) $(50,538)

GAAP EPS $0.95 $0.50 $1.21 $(1.18) $(1.37) $(3.25) $(1.01)



Cumulative Licensing Revenue by Size of Licensee

95% of Licensing Revenue from Companies Generating > $100 Million Annually Large Licensees Drive Acacia’s Business


Licensee Revenue

Size

Less than $100M $101M - $1B > $1Billion

Percent Of Acacia Business

5% 15% 80%


ACACIA RESEARCH GROUP, LLC ACACIA RESEARCH GROUP, LLC

returns to PATENT OWNERS


Our partnership with patent owners is the cornerstone of Acacia’s corporate

strategy.

$705,000,000



ACACIA

RESEARCH

GROUP LLC

UNLEASHING patent POTENTIAL

NASDAQ: ACTG A Subsidiary of Acacia Research Corporation

acacia research group llcacaciaresearch.com/wp-content/uploads/2013/10/acacia-research... · nsn...

Documents