AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 15,SEPTEMBER 29, 2000
REGISTRATION NO. 333-43222
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 12
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ACACIA RESEARCH CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4405754
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
55 SOUTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
(626) 396-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
----------------
VICTORIA WHITE
VICE PRESIDENT, LEGAL AFFAIRS
ACACIA RESEARCH CORPORATION
55 SOUTH LAKE AVENUE
PASADENA, CALIFORNIA 91101
(626) 396-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
COPIES OF COMMUNICATIONS TO:
DAVID J. JOHNSON, JR.
JOHN A. LACO
O'MELVENY & MYERS LLP
400 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA 90071
(213) 430-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time or times on and after the date on which this Registration Statement
becomes effective as the Selling Securityholders may determine.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
(Continued on next page)
CALCULATION OF REGISTRATION FEE
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NUMBER OF PROPOSED
SECURITIES OF MAXIMUM PROPOSED
EACH CLASS TO OFFERING PRICE MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF BE PER AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) SECURITY(2)(3) OFFERING PRICE(2)(3) FEE(4)
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Common Stock, $0.001 par value
per share...................... 2,263,833 $26.7815 $60,628,843 $16,006
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(1) Includes a number of shares of Common Stock initially issuable upon
exercise of certain warrants and options held by the Selling
Securityholders and, pursuant to Rule 416 under the Securities Act, an
indeterminate number of shares of Common Stock as may be issued from time
to time upon exercise of such warrants and options by reason of adjustment
of the number of shares of Common Stock to be issued upon such exercises
under certain circumstances outlined.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Pursuant to Rule 457(c), the price of the Common Stock is based upon the
average of the high and low prices of the Common Stock on the Nasdaq
National Market on August 4, 2000.
(4) Previously paid.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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The information contained in this Preliminary Prospectus is not complete and
may be changed. The Selling Securityholders may not sell these securities
pursuant to this Prospectus until the Registration Statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED AUGUST 15,SEPTEMBER 29, 2000.
PROSPECTUS
ACACIA RESEARCH CORPORATION
2,263,833 SHARES OF
COMMON STOCK
----------------
Selling Securityholders who are identified in this prospectus may offer and
sell from time to time up to 2,263,833 shares of common stock of Acacia
Research Corporation by using this prospectus.
The offering price for the common stock may be the market price for our
common stock prevailing at the time of sale, a price related to the prevailing
market price, at negotiated prices or such other price as the Selling
Securityholders determine from time to time.
Acacia Research Corporation's common stock is traded on the Nasdaq National
Market under the ticker symbol "ACRI." On August 4,September 27, 2000, the closing sale
price of the common stock, as reported by Nasdaq, was $26.75$27.875 per share.
----------------
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD ACQUIRE THESE
SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON
PAGE 5 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this prospectus is August ,September 29, 2000.
TABLE OF CONTENTS
PAGE
----
The Company................................................................ 1
Recent Developments........................................................ 3
Risk Factors............................................................... 5
Forward-Looking Statements................................................. 15
Use of Proceeds............................................................ 15
Selling Securityholders.................................................... 1716
PAGE
----
Plan of Distribution....................................................... 18
Legal Matters.............................................................. 18
Experts.................................................................... 18
Available Information...................................................... 18
Incorporation of Certain Documents by Reference............................ 19
i
SUMMARY
You should read the following summary together with the more detailed
information about our company and the common stock being sold in this offering,
including "Risk Factors" and our consolidated financial statements and related
notes, contained elsewhere in this prospectus or incorporated by reference.
THE COMPANY
Acacia Research Corporation develops and operates majority-owned
subsidiaries and also acquires strategic positions in other companies. Our
mission is to build new businesses. We focus primarily on technology-related
companies. Our current new business focus is to identify and develop
opportunities in the life science sector that will be created by
commercialization of theand technology industries. Our most important
subsidiary is CombiMatrix Corporation, which is developing a new biochip
technology of our subsidiary, CombiMatrix,
and other new technologies in that sector.technology. Our strategyprimary focus is to achieve majority-ownershipenhance the value of new companiesthis technology by
internally
developing new business ideasforming and by partnering with entrepreneurs. We provide
management expertise, incubation services and capital to our subsidiaries. We
also acquire minority positions in other emergingacquiring companies that we have
identified as having significant growth potential. We believe business
development focus, reputationcan utilize this new technology in the
medical, life science and network of contacts provide us significant
accessresearch industries.
Our other majority-owned subsidiaries include: Merkwerks Corporation which
has developed a product designed for use with CD-recordable computer drives and
allows users to investment opportunities.copy data, music and video onto blank CDs; Soundbreak.com
Incorporated, a music webcasting company; and Soundview Technologies
Incorporated, which owns a patent for television V-chip technology.
We provide our subsidiaries with numerous operational and management services,
especially in early stages of their development. Our management team and
corporate staff providesprovide hands-on assistance in the areas of marketing, strategic planning,
business development, marketing, technology, accounting, andcorporate finance,
legal and human resources and recruiting services. We also support our subsidiaries by
providing capital and securing and structuring external financing.resources. Our centralized infrastructure of experienced professionals
allows the management teams of our subsidiaries to focus on developing their
core businesses. This provides our subsidiaries with significant time and cost
savings.
We believe the entrepreneurial energy and creativity of the managersmanagement teams
of our partner companies are essential components of their success and consequently we
plan to keep them as independent businesses with the opportunity to go public.
The entrepreneurs and theirsuccess.
Consequently, these management teams retain or are granted equity ownership and
incentives in their own companies. This strategy enables us to partner with
highly motivated entrepreneurs who have the opportunity to reap the rewards of
their efforts by participatingefforts.
We have also acquired minority-ownership positions in The EC Company, which
provides and electronic exchange to facilitate business to business trading
relationships; Greenwich Information Technologies, LLC, a licensing company for
an international portfolio of video-on-demand patents; Mediaconnex
Communications Incorporated, which is developing software products for
inventory and sales management solutions for the value they create.television and cable
broadcasting industry; and Signature-mail.com llc, which has developed on-
demand software service to personalize e-mail.
1
Through our majority-owned subsidiaries, we engage in the following
businesses:
OWNERSHIP % AS OF
JUNE 30, 2000 ON AN
COMPANY NAME DESCRIPTION OF BUSINESS AS CONVERTED BASIS
------------ ----------------------- -------------------
Acacia Launchpad LLC.................... An incubator that 100.0%
provides seed capital,
management support and
an environment for the
rapid development of
start-up companies.
CombiMatrix Corporation................. A biotech company with a 58.4%
proprietary biochip
array processor system for
the rapid, cost-
competitive synthesiscreation of
DNA peptides and other
chemical compounds
on a software programmable
semiconductor chip.
ThisTheir proprietary
technology has
significant applications
in the
areas of genomics,
proteomicsrelating to genetics and
diagnostics.DNA.
MerkWerks Corporation................... A technology company 99.9%
developing a utility
software product for use
with CD-Recordable
computer drives.
Soundbreak.com Incorporated............. An new media company 66.9%
featuring 24 hour video
streaming of music
performances and
live performances hosted
by professional talent
targeting a demographic
of viewers under age 35
and including extensive
viewer interaction
formats.
Soundview Technologies Incorporated..... A technology company 66.7%
that owns intellectual
property related to the
telecommunications
field, including audio
and videoa
television blanking
systems, also known as
the "V-chip."
We also hold minority interests in the following businesses:
OWNERSHIP % AS OF
JUNE 30, 2000 ON AN
COMPANY NAME DESCRIPTION OF BUSINESS AS CONVERTED BASIS
------------ ----------------------- -------------------
The EC Company.......................... A provider of business- 4.5%
to-business Internet
exchange transactions
for mid-market
suppliers.
Greenwich Information Technologies LLC.. A marketing and 33.3%
licensing agent for
several patents relating
to video-on-demand and
audio-on-demand
technology.
Mediaconnex Communications, Inc......... An Internet business-to- 31.0%
business company
developing technology
that will enable buying
and selling of broadcast
media.
Signature-mail.com llc.................. A provider of on-demand 25.0%
software that allows
users to personalize
their e-mail and
computer documents with
handwritten signatures,
greetings and drawings.
2
We were initially incorporated in the State of California on January 25,
1993, and conducted our initial public offering on June 15, 1995. We
reincorporated in the State of Delaware on December 28, 1999. Our common stock
trades on the Nasdaq National Market under the symbol "ACRI." The closing sale
price of our common stock on August 4,September 27, 2000 as reported on the Nasdaq
National Market was $26.75$27.875 per share. The transfer agent and registrar for
our common stock is U.S. Stock Transfer Corporation.
As used in this prospectus, "we," "us" and "our" refer to Acacia Research
Corporation and its consolidated subsidiaries. Throughout this prospectus,
Launchpad, CombiMatrix, The EC Company, Greenwich Information Technologies,
Mediaconnex, MerkWerks, Signature-mail.com, Soundbreak.com and Soundview
Technologies are collectively referred to as our partner companies; however,
we do not act as an agent or legal representative for any of our partner
companies and we do not have the types of liabilities for our partner
companies that a general partner of a partnership would have. See "Risk
Factors" for certain risks associated with individual partner companies.
Our executive offices are located at 55 South Lake Avenue, Pasadena,
California 91101 and our telephone number is (626) 396-8300. Our website
address is www.acaciaresearch.com. Neither the information contained in our
website nor the websites linked to our website shall be deemed to be a part of
this prospectus.
RECENT DEVELOPMENTS
In January 2000, we acquired a 7.6% interest in The EC Company for $3
million out of a $17.3 million private placement of "non-voting" Series B
Preferred Stock.
The EC Company is a corporation engaged in business-to-
business Internet exchange transactions for mid-market suppliers.
In February 2000, we issued a 30-day redemption notice for common stock
purchase warrants issued in a December 1999 private placement. As a result,
all of the warrants were exercised prior to the redemption date and we
received proceeds of approximately $14.8 million for the issuance of 578,238
shares of common stock.
In March 2000, CombiMatrix completed a private equity financing raising
gross proceeds of $17.5 million through the sale of 3.5 million shares of
CombiMatrix common stock. Acacia invested $10 million in this private
placement to acquire 2 million shares of CombiMatrix. As a result of the
transaction, Acacia increased equity ownership in CombiMatrix from 50.0%50.01% to
51.8%. Warrants to purchase 31,050 shares of CombiMatrix's common stock were
issued to finders with a per share exercise price of $5.50.
Also in March 2000, Soundbreak.com completed a "non-voting" Series C
Preferred private equity financing raising gross proceeds of $19 million
through the sale of shares of 188,437 Series C Preferred Stock. Acacia
invested $9 million in this private placement to acquire 90,000 shares of
Preferred Stock.shares. As a
result of the transaction, our equity ownership in Soundbreak.com decreased
from 73.6% to 66.9%. Warrants to purchase 40,838 shares of Soundbreak.com's
common stock were issued to finders with a per share exercise price of $6.66.
In June 2000, we contributed capital to three early stage companies that
are being incubated in Launchpad.
In July 2000, we increased our ownership of CombiMatrix from 51.8 percent51.8% to 61.4 percent61.4%
by acquiring additional ownership positions from existing shareholders of
CombiMatrix in exchange for 488,557 restricted shares of common stock. This
purchase will be accounted for as a step acquisition. The purchase price will
be allocated to the fair value of assets acquired and liabilities assumed
including acquired in-process research and development. Any amount attributed
to in-process research and development will be charged to expense in the third
quarter of 2000. The allocation of the purchase price is expected to be
completed in the third quarter of 2000.
3
In July 2000, we completed a private offering of 861,638 units at $27.50 per
unit for gross proceeds of approximately $23.7 million. Each unit consisted of
one share of common stock and one common stock purchase warrant entitling the
holder to purchase one share of common stock at an exercise price of $33.00 per
share, subject to adjustment, expiring in three years. The warrants are
callable by Acacia Research once the closing bid price of the Company's common
stock averages $39.60 or above for 20 consecutive trading days on the Nasdaq
National Market System. An additional 11,000 units were purchased by a finder
pursuant tounder a Finder Agreement between Acacia and the finder.
Also in July 2000, Gerald D. Knudson, the chief executive officer of
CombiMatrix, was appointed to our Board of Directors. Robert L. Harris II, a
director of the Company, was named President of the Company.
In August 2000, CombiMatrix completed a private equity financing raising
gross proceeds of $36 million through the sale of 4 million shares of
CombiMatrix common stock. We invested $17.5 million in this private placement
to acquire 1,944,445 shares. As a result of the transaction, Acacia's equity
ownership in CombiMatrix decreased from 61.4 % to 58.6%.
Also in August 2000, CombiMatrix was granted a United StatesU.S. patent for its biochip
micro array processor system, which enables quick and economical turnaround of
custom-designed microarrays for use in biological research. A microarray
consists of a chemical "virtual flask" located on the surface of a semi-
conductor chip containing thousands of microarrays, which are separated from
each other using special solutions instead of physical barriers. Each
microarray has electronic circuitry that may be directed by a computer to
construct a specified compound. The patent covers CombiMatrix's core
technology, which is a method for producing microarrays by synthesizing
biological materials on a three-dimensional, active surface.
4
RISK FACTORS
Investment in our common stock is speculative and involves a high degree of
risk. You should only purchase shares if you can afford to lose your entire
investment. In deciding whether to buy our common stock, you should carefully
consider the following risk factors, other information contained in this
prospectus and information we have incorporated by reference. If any of the
following risks actually occur, our business could be harmed, the trading price
of our common stock could decline, and you may lose all or part of your
investment.
BECAUSE OUR BUSINESS OPERATIONS ARE SUBJECT TO MANY INHERENT AND UNCONTROLLABLE
RISKS, WE MAY NOT SUCCEED.
We have significant economic interests in our partner companies. Our
business operations are therefore subject to numerous risks, challenges,
expenses and uncertainties inherent in the establishment of new business
enterprises. Many of these risks and challenges are subject to outside
influences over which we have no control, including:
. our partner companies' products and services face uncertain market
acceptance;
. technological advances may make our partner companies' products and
services obsolete or less competitive;
. competition;
. increases in operating costs, including costs for supplies, personnel,
and equipment;
. the availability and cost of capital;
. general economic conditions; and
. governmental regulation that excessively restricts our partner companies'
businesses.
We cannot assure you that our partner companies will be able to market any
product or service on a commercial scale, that our partner companies will ever
achieve or maintain profitable operations or that they, or we, will be able to
remain in business.
BECAUSE OF THE RISKS INHERENT IN INVESTING IN EMERGING COMPANIES, CARRIES A HIGH DEGREEINCLUDING THE
LACK OF RISK.OPERATING HISTORIES AND UNPROVEN TECHNOLOGIES AND PRODUCTS, YOU MAY
INCUR SUBSTANTIAL LOSSES.
Investing in emerging companies carries a high degree of risk, including
difficulties in selecting ventures with viable business plans and acceptable
likelihoods of success and future profitability. There is a high probability of
loss associated with investments in emerging companies. We must also dedicate
significant amounts of financial resources, management attention and personnel
to identify and develop each new business opportunity, without any assurance
that these expenditures will prove fruitful.
We generally invest in start-up ventures with no operating histories,
unproven technologies and products and, in some cases, without experienced
management. We may not be successful in developing these start-up ventures.
Because of the uncertainties and risks associated with such start-up ventures,
you should expect substantial losses associated with failed ventures.
In addition, the market for venture capital in the United States is
increasingly competitive. As a result, we may lose business opportunities and
may need to accept financing and equity investments on less favorable terms.
Also, we may be unable to participate in additional ventures because we lack
the financial resources to provide them with full funding. We, as well as our
partner companies, may need to depend on external financing to provide
sufficient capital.
5
BECAUSE OUR OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY, IN THE FUTURE.OUR STOCK PRICE MAY
BE MORE VOLATILE THAN OTHER COMPANIES.
Our operating results may vary significantly from quarter to quarter due to
a variety of factors, including:
. the operating results of our current and future partner companies;
. the nature and timing of our investments in new partner companies;
. our decisions to acquire or divest interests in our current and future
subsidiaries may create changes in losses or income and amortization of
goodwill;
. changes in our methods of accounting for our current and future
subsidiaries may cause us to recognize gains or losses under applicable
accounting rules;
. the timing of the sales of equity interests in our current and future
partner companies;
. our ability to effectively manage our growth and the growth of our
partner companies; and
. the cost of future acquisitions could increase from intense competition
from other potential acquirers of technology-related companies or ideas.
We alsohave incurred and expect to continue to incur significant expenses in
pursuing and developing new business ventures. To date, we have lacked a
consistent source of recurring revenue. Each of the factors we have described
may cause our stock to be more volatile than other companies.
BECAUSE OUR PARTNER COMPANIES MAY NOT GENERATE ANY REVENUES AND OPERATING
RESULTS FROM OUR PARTNER COMPANIES MAY FLUCTUATE SIGNIFICANTLY, OUR OWN
OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY.BE NEGATIVELY AFFECTED.
Our operating results may be materially impacted by the operating results
of our partner companies. None of our partner companies have generated any
significant revenues to date. We cannot assure that these companies will be
able to meet their anticipated working capital needs to develop their products
and services. If they fail to properly develop these products and services,
they will be unable to generate meaningful product sales. We anticipate that
these partner companies operating results are likely to vary significantly as
a result of a number of factors, including:
. the timing of new product introductions by each partner company;
. the stage of development of the business of each partner company;
. the technical feasibility of each partner company's technologies and
techniques;
. the novelty of the technology owned by these partner companies;
. the level of product acceptance;
. the strength of each partner company's intellectual property rights;
. each partner company's ability to exploit and commercialize its
technology;
. the volume and timing of orders received and product line maturation;
. the impact of price competition; and
. each partner company's ability to access distribution channels.
Many of these factors are beyond our partner company's control. We cannot
provide any assurance that any partner company will experience growth in the
future or be profitable on an operating basis in any future period.
THE UNCERTAINTY OF EMERGING COMPANIES AND6
THE POTENTIAL LACK OF MARKET ACCEPTANCE OF THEIRTHE PRODUCTS DECREASE THE POSSIBILITY OF OUR SUCCESS.EMERGING COMPANIES
MAY RESULT IN OPERATING LOSSES.
Our partner companies are generally emerging companies with little or no
existing revenues. Often, emerging companies have new and unproven business
plans and products for which market acceptance has not been obtained. We can
give you no assurance that our partner companies will ever generate revenues or
achieve profitability. We further describe the risks facing a number of our
partner companies below.
CombiMatrix. CombiMatrix is developing a proprietary biochip arraymicroarray
processor system that integrates semiconductor technology with new developments
in biotechnology and chemistry. Although CombiMatrix has been awarded three
federal contracts, CombiMatrix is a developmental stage company without any
significant current revenues. Its current activities relate almost exclusively
to research and development.
6
In addition, becauseBecause the technologies critical to the success of this industry are in
their infancy, we cannot assure that CombiMatrix will be able to successfully
implement its technologies. If its technologies are successful, CombiMatrix
intends to pursue collaborations with pharmaceutical companies which may includefor activities
such as screening potential drug companies' or CombiMatrix's libraries and
possibly licensing internally developed chemical compounds. We cannot assure you that
CombiMatrix, even if successful in developing its technologies, would be able
to successfully implement collaborative efforts with pharmaceutical companies.
The EC Company. The EC Company provides a hosted Internet transaction
exchange that manages data standards and facilities trading relationships
within and across communities to enable the exchange of business-to-business e-
commerce transactions. To date, The EC Company is in the development stage and
has created a minimal number of relationships with vendors and buyers for
business-to-business e-commerce transactions. The EC Company's business model
is new and unproven and we cannot give you any assurance that vendors and
buyers will continue to use its services for Internet transactions. In
addition, The EC Company faces significant competition in the business-to-
business Internet market.
Greenwich Information Technologies. Greenwich Information Technologies is
the exclusive marketing and licensing agent for a number of domestic and
international patents pertaining to information-on-demand systems. To date,
Greenwich Information Technologies has yet to license any of its patents. It is
uncertain if and to what extent Greenwich Information Technologies will be able
to profitably market and license its rights to the information on-demand
technology.
Launchpad. Launchpad was formed to incubate and accelerate the development
of new companies. Launchpad will provide seed capital and an environment
intended to promote growth of new companies and to enable them to get to the
marketplace quickly. Launchpad's business model is new and unproven and may not
be able to develop successful emerging companies.
Mediaconnex. Mediaconnex develops software that performs inventory and sales
management functions for television and cable broadcasters using the Internet.
To date, Mediaconnex has not generated any revenues nor signed contracts with
significant customers. We cannot provide assurance that Mediaconnex will ever
be able to successfully market its services.
MerkWerks. MerkWerks was formed as a software development company. Its first
product is software for use with CD-Recordable disk drives for Macintosh
platforms. MerkWerks is in the developmental stage and, to date, has not
generated any revenues.
We cannot provide assurance that MerkWerks will ever be
able to successfully market its products.
MerkWerks' success will depend on whether it is accepted by original
equipment manufacturers (OEMs) that produce CD-Recordable disk drives. We
cannot assure that MerkWerks' software will gain the acceptance of OEMs or ever
be incorporated into CD-Recordable disk drives.
Signature-mail.com. Signature-mail.com has developed software services for
use on the Internet that personalize e-mail with proprietary mass customization
technologies. To date, Signature-mail.com has not generated meaningful
revenues. We cannot provide assurance that Signature-mail.com will ever be able
to successfully market its products.
7
Soundbreak.com. SoundbreakSoundbreak.com is a 24-hour worldwide web-cast site
providing music programming, user participation and music-related e-commerce.
SoundbreakSoundbreak.com is in the developmental stage and market acceptance for
SoundbreakSoundbreak.com is uncertain. We cannot provide assurance that Soundbreak will generate revenues
or achieve profitability.
In addition, the industry it is entering is a rapidly changing and highly
competitive environment. Soundbreak'sSoundbreak.com's success depends on its ability to
develop or obtain sufficiently compelling content to attract and retain an
audience, its ability to form partnerships for music and merchandise
fulfillment and distribution, and its ability to successfully market and
establish its presence on the Internet.
7
Soundview Technologies. Soundview Technologies was formed to commercialize
patent rights of a method of video and audio blanking technology, also known as
V-chip technology, that screens objectionable television programming and blocks
it from the viewer. It is uncertain if and to what extent Soundview
Technologies will be able to profitably exploit its technology.
IF WE MAY NEED TO SEEKENCOUNTER UNFORESEEN DIFFICULTIES AND CANNOT OBTAIN ADDITIONAL FINANCING IN THE FUTURE FOR OURSELVES OR OUR
PARTNER COMPANIES, BUT CANNOT PROVIDE ASSURANCE THAT WE WILL BE ABLE TO OBTAIN
NEEDED FINANCINGFUNDING ON
FAVORABLE TERMS.TERMS, OUR BUSINESS MAY SUFFER.
As of June 30, 2000, we had working capital of $54.6 million and
stockholders' equity of $52.3 million based on our consolidated financial
statements. However, a portion of these funds were held by our consolidated
subsidiaries and thus are restricted to use in the business of the particular
subsidiary.
To date, our partner companies have primarily relied upon selling equity
securities, including sales to and loans from us, to generate the funds they
needed to finance implementing their plans of operations. Our partner companies
may be required to obtain additional financing through bank borrowings, debt or
equity financings or otherwise, which would require us to make additional
investments or face a dilution of our equity interest.
We cannot assure that we will not encounter unforeseen difficulties that may
deplete our capital resources more rapidly than anticipated. Any efforts to
seek additional funds could be made through equity, debt, or other external
financings; however, we cannot assure that additional funding will be available
on favorable terms, if at all. If we fail to obtain additional funding when
needed for ourselves and our partner companies, we may not be able to execute
our business plans and our business may suffer.
BECAUSE EACH PARTNER COMPANY'S SUCCESS GREATLY DEPENDS ON THEIR ABILITY TO
DEVELOP AND MARKET NEW PRODUCTS AND SERVICES AND TO RESPOND TO THE RAPID
CHANGES IN TECHNOLOGY AND DISTRIBUTION CHANNELS, WE CANNOT ASSURE THAT OUR
PARTNER COMPANIES WILL BE SUCCESSFUL IN THE FUTURE.
The markets for each partner company's products are marked by extensive
competition, rapidly changing technology, frequent product and service
improvements, and evolving industry standards. We cannot assure you that our
partner company's existing or future products and services will be successful
or profitable. We also cannot assure you that competitor's products, services
or technologies will not render our partner companies' products and services
noncompetitive or obsolete.
Our success will depend on our partner companies' ability to adapt to this
rapidly evolving marketplace and to develop and market new products and
services or enhance existing ones to meet changing customer demands. Our
partner companies may be unable to adequately adapt products and services or
acquire new products and services that can compete successfully. In addition,
our partner companies may be unable to establish and maintain effective
distribution channels.
OURTHE FUTURE PLANS OF A NUMBER OF PARTNER COMPANIES DEPEND ON INCREASED USE OF
THE INTERNET BY BUSINESSES AND INDIVIDUALS AND THUS OUR BUSINESS MAY SUFFER IF
USE OF THE INTERNET FAILS TO GROW IN THE FUTURE.
Commercial use of the Internet is currently at an early stage of development
and the future of the Internet is not clear. Because a significant amount of
our resources will be allocated to our existing and future Internet companies,
including The EC Company, Launchpad, Mediaconnex, Soundbreak.com, and
Signature-mail.com, our business may suffer if commercial use of the Internet
fails to grow in the future.
IF THE U.S. OR OTHER GOVERNMENTS REGULATE THE INTERNET MORE CLOSELY, OUR
BUSINESS MAY BE HARMED.8
Because of the Internet's popularity and increasing use, new laws and
regulations may be adopted. These laws and regulations may cover issues such as
privacy, pricing, content and taxation of Internet commerce. If the U.S. or
other governments enact any additional laws or regulations it may impede the
growth of the Internet and our Internet-related businesses and we could face
additional financial burdens.
8
BECAUSE WE AND OUR PARTNER COMPANIES IN THE INTERNET MARKET ARE SUBJECT TO
INTENSE COMPETITION, WEBUSINESS MAY BE UNSUCCESSFULHARMED IF MARKET AND COMPETITION MAY REDUCEOTHER CONDITIONS ADVERSELY AFFECT OUR
POTENTIAL REVENUES.
The market for technology and Internet products and services is highly
competitive. Moreover, the market for Internet products and services lacks
significant barriers to entry, enabling new businesses to enter this market
relatively easily. Competition in the market for Internet products and services
may intensify in the future. Numerous well-established companies and smaller
entrepreneurial companies are focusing significant resources on developing and
marketing products and services that will compete with our products and
services. In addition, many of our current and potential competitors have
greater financial, technical, operational, and marketing resources. Our partner
companies may not be able to compete successfully against these competitors in
selling our goods and services. Competitive pressures may also force prices for
Internet goods and services down and these price reductions may reduce our
potential revenues.
SELLINGABILITY TO DISPOSE OF CERTAIN ASSETS OF, OR INVESTMENTS IN, THE PARTNER COMPANIES THAT WE HAVE
ACQUIRED AND DEVELOPED PRESENTS RISKS.AT FAVORABLE PRICES.
An element of our business plan involves selling,disposing of, in public offerings
or private offerings,transactions, our partner companies and future partner companies, or
portions thereof, that we have acquired and developed.developed, to the extent such
assets are no longer consistent with our business plan. If we sell such assets,
the price we receive for these assets will be dependent upon market and other
conditions. Market and other conditions largely beyond our control affect:
. our ability to effect these sales;
. the timing of these sales; and
. the amount of proceeds from these sales.
As a result, weWe may not be able to sell some or any of these assets.assets due to poor market
and other conditions. In addition, even if we are able to sell, we may not be
able to sell at favorable prices. As a result, we may be adversely affected
because we will be unable to dispose of assets or may receive a lesser amount
for our assets than we believe is favorable.
OUR GROWTH PLACES STRAINS ON OUR MANAGERIAL, OPERATIONAL, AND FINANCIAL
RESOURCES.
Our growth has placed, and is expected to continue to place, a significant
strain on our managerial, operational and financial resources. Further, as the
number of our partner companies and their respective businesses grow, we will
be required to manage multiple relationships. Any further growth by us or our
partner companies or an increase in the number of our strategic relationships
will increase this strain on our managerial, operational, and financial
resources. This strain may inhibit our ability to achieve the rapid execution
necessary to successfully implement our business plan. In addition, our future
success depends on our ability to expand our organization to match the growth
of our business and our subsidiaries.
IF OUR BUSINESS AND OUR PARTNER COMPANIES ARE TO SUCCEED, WE WILL NEED TO
ATTRACT AND RETAIN QUALIFIED PERSONNEL. WE CANNOT ASSURE THAT WE WILL BE ABLE
TO ASSEMBLE AND RETAIN THE NECESSARY MANAGEMENT AND MARKETING TEAMS.
We believe that our success will depend on continued employment by us and
our partner companies of senior management and key technical personnel. Our
partner companies will need to attract, retain and motivate qualified
management personnel to execute their current plans and to successfully develop
commercially viable products and services. Competition for qualified personnel
is intense and we cannot assure you that we will successfully retain our
existing key employees or attract and retain any additional personnel we may
require.
In addition, CombiMatrix and MerkWerks currently intend to develop, market,
sell and license their respective products and services directly to customers.
Because CombiMatrix and MerkWerks have not completed research and development
of their products, they have not hired marketing and sales personnel or
finalized strategic marketing plans. We cannot assure you that either
CombiMatrix or MerkWerks will be able to attract and retain qualified marketing
and sales personnel or that any marketing efforts undertaken by them will be
successful.
9
Each of our partner companies has key executives upon whom we significantly
depend and the success of those partner companies depends on our ability to
retain and motivate those individuals. We do not maintain
9
key person life insurance on any of these individuals, except for CombiMatrix's
and development, on whom we maintain key person life insurance coverage in the
amount of $1,000,000.
OUR PARTNER COMPANIES FACE INTENSE COMPETITION AND WE CANNOT ASSURE THAT THEY
WILL BE SUCCESSFUL.
Each of our partner companies faces intense competition. Many of the
competitors to our partner companies have greater financial, marketing, and
other resources. In addition, a number of competitors may have greater brand
recognition and longer operating histories, than our partner companies. Our
partner companies also face the risks described below.
CombiMatrix. The pharmaceutical and biotechnology industries are subject to
intense competition and rapid and significant technological change. CombiMatrix
anticipates that it will face increased competition in the future as new
companies enter the market and advanced technologies become available. Many of
these competitors have greater financial and other resources, and more experience in research and development than
CombiMatrix. Technological advances or entirely different approaches developed
by one or more of CombiMatrix's competitors could render CombiMatrix's
processes obsolete or uneconomical. The existing approaches of CombiMatrix's
competitors or new approaches or technology developed by CombiMatrix's
competitors may be more effective than those developed by CombiMatrix.
The EC Company. Competition for Internet products and services is intense.
The EC Company competes for a share of a customer's purchasing budget for
services, materials and supplies with other online providers and traditional
distribution channels. Several companies offer competitive solutions that
compete with The EC Company. We expect that additional companies will offer
competing solutions on a stand-alone or combined basis in the future.
Furthermore, competitors may develop Internet products or services that are
superior to, or have greater market acceptance than, the solutions offered by
The EC Company. Many competitors have greater brand recognition and greater
financial, marketing and other resources than The EC Company. This may place
The EC Company may be at a disadvantage in responding to their
competitors pricing strategies, technological advances, advertising campaigns,
strategic partnerships and other initiatives.
Greenwich Information Technologies. Although we believe that Greenwich
Information Technologies has marketing and licensing rights to enforceable
patents and other intellectual property relating to video and audio on demand,
we cannot assure you that other companies will not develop competing
technologies that offer better or less expensive alternatives to those offered
by Greenwich Information Technologies. In the event a competing technology
emerges, Greenwich Information Technologies would expect substantial
competition.
Potential competitors could have significantly greater research
capabilities and financial and technical resources than Greenwich Information
Technologies, and some could have established brand names in the market for
such products.
Launchpad. There are a significant number of other Internet incubators, such
as Internet Capital Group, Inc., CMGI, Inc., and idealab!, each competing for
the same opportunities. In addition, Launchpad faces competition from other
capital providers, including publicly-traded Internet companies, venture
capital companies and large corporations. Many of these competitors have
greater financial resources and brand name recognition than Launchpad. These competitors may limit
Launchpad's opportunities.
Mediaconnex. The market for the sale of commercial inventory for television
and cable broadcasters is highly competitive and rapidly changing. In addition
to the long-standing traditional sales channels, there are a number of newly
created Internet-based sites competing for market acceptance among the
broadcasters and media buyers. Because Mediaconnex's software is not yet
complete, acceptance of its software and business model in the market is
unproven and speculative. Moreover, because there are few barriers to entry,
competition is likely to increase, including the probability of established
competitors expanding their current offering of services.
Many of the current
and potential competitors to Mediaconnex may have substantial competitive
advantages relative to Mediaconnex, including longer operating histories as
well as greater financial, technical or marketing resources.
MerkWerks. There are a number of CD-Recordable disk drive software packages
on the market. Thus, the acceptance of MerkWerks' software in the market is
unproven and speculative. The markets for software 10
products are intensely
competitive and are characterized by rapid changes in technological standards.
MerkWerks faces competition from large companies with substantial technical, marketing and financial resources,
allowing them to aggressively develop, enhance and market competing products.
These advantages
10
may allow competitors to dominate distribution channels and to respond more
quickly than MerkWerks to emerging technologies or to changing customer
requirements. Numerous actions by these competitors, including price reductions
and product giveaways, increased promotion, the introduction of enhanced
products and product bundling could have a material adverse effect on
MerkWerks' ability to develop and market its software products and on its
business, financial condition and operating results.products.
Signature-mail.com. The software industry is highly competitive. Signature-
mail.com seeks to achieve a competitive advantage through proprietary
technology. Signature-mail.com has ten pending patent applications. However, no
patents have been issued yet and we cannot be certain that any patents will be
issued, that they will withstand challenges to their validity or that they will
have sufficiently broad scope to effectively limit competition for Signature-
mail.com's software product.
Soundbreak.com. The number of websites competing for the attention and
spending of consumers, advertisers and users has increased, and we expect it to
continue to increase because there are few barriers to entry to Internet
commerce. Soundbreak faces competitive pressures from numerous actual and
potential competitors. Competition is likely to increase significantly as new companies
enter the market and current competitors expand their services. Certain
companies have announced agreements to work together to offer music over the
Internet, and SoundbreakSoundbreak.com may face increased competitive pressures as a
result. Many of Soundbreak'sSoundbreak.com's current and potential competitors in the
Internet and music entertainment businesses may have substantial competitive
advantages, including: longer operating histories; significantly greater financial,
technical and marketing resources; greater brand name recognition; existingincluding customer bases;bases and more popular content. These
competitors may be able to respond more quickly to new or emerging technologies
and changes in customer requirements and devote greater resources to develop,
promote and sell their products or services than Soundbreak.com. Websites
maintained by existing and potential competitors may be perceived by consumers,
artists, talent management companies and other music-related vendors or
advertisers as being superior to Soundbreak'sSoundbreak.com's website.
Soundview Technologies. We believe that Soundview Technologies' V-chip
technology is protected by enforceable patent rights. However, no assurances
can be given that other companies
will notmay develop competing technologies that offer better or less expensive
alternatives to those offered by Soundview Technologies. Many potential
competitors, including television manufacturers, have significantly greater
research capabilities and financial and technical
resources than Soundview Technologies and may have established brand names in
the market.resources.
WE CANNOT ASSURE THAT WE WILL BE ABLE TO EFFECTIVELY PROTECT OUR PARTNER
COMPANIES' PROPRIETARY TECHNOLOGY.TECHNOLOGY AND WE COULD ALSO BE SUBJECT TO INFRINGEMENT
CLAIMS.
The success of our partner companies relies, to varying degrees, on
proprietary rights and their protection or exclusivity. Although reasonable
efforts will be taken to protect their proprietary rights, the complexity of
international trade secret, copyright, trademark and patent law, and common
law, coupled with limited resources and the demands of quick delivery of
products and services to market, create risk that these efforts will prove
inadequate. For certainFrom time to time, we may be subject to third party claims in the
ordinary course of business, including claims of alleged infringement of
proprietary rights by us and our partner companies. Any such claims may damage
our business by subjecting us and our partner companies such as Greenwich Information
Technologiesto significant
liability for damage and Soundview Technologies,invalidating proprietary rights, constitutewith or without
merit, could subject our partner companies to costly litigation and the
only
significant assetsdiversion of such company.their technical and management personnel.
CombiMatrix, Greenwich Information Technologies, Signature-mail.com and
Soundview Technologies depend largely on the protection of enforceable patent
rights. They have applications on file with the U.S. Patent and Trademark
Office seeking patents on their core technologies and/or have patents or rights
to patents that have been issued. We cannot assure you that the pending patent
applications will be issued, that third 11
parties will not violate, or attempt to
invalidate these intellectual property rights, or that certain aspects of their
11
intellectual property will not be reverse-engineered by third parties without
violating the their patent rights. For certain partner companies, such as
Greenwich Information Technologies and Soundview Technologies, proprietary
rights constitute the only significant assets of such company.
Many of our partner companies also own licenses from third parties and it is
possible that they could become subject to infringement actions based upon such
licenses. Our partner companies generally obtain representations as to the
origin and ownership of such licensed content; however, this may not adequately
protect them.
Our partner companies also enter into confidentiality agreements with third
parties and generally limit access to information relating to their proprietary
rights. Despite these precautions, third parties may be able to gain access to
and use their proprietary rights to develop competing technologies and/or
products with similar or better features and prices. Any substantial
unauthorized use of our partner companies' proprietary rights could materially
and adversely affect their business and operational results.
Any disputes involving our partner companies' proprietary rights, with or
without merit, could subject our partner companies to costly litigation and the
diversion of their technical and management personnel. On April 5, 2000, Soundview Technologies filed a patent and antitrust
lawsuit against Sony Corporation of America, Philips Electronics North America
Corporation, the Consumer Electronics Manufacturers Association, and the
Consumer Electronics Association in the federal district court alleging that
Sony and Philips television sets fitted with "V-chips" infringe Soundview
Technologies' patent. However, no assurance can be given that Soundview
Technologies will prevail in that action or that the television manufacturers
will be required to pay royalties to Soundview Technologies.
See "Business--Soundview Technologies"
below.
WE COULD BE SUBJECT TO INFRINGEMENT CLAIMS ON PROPRIETARY RIGHTS.
From time to time,Because we mayhave a limited operating history, we cannot assure that our
operations will be subject to third party claims in the ordinary
course of business, including claims of alleged infringement of proprietary
rights by us and our partner companies. Any such claims may damage our business
by:
. subjecting us and our partner companies to significant liability for
damages;
. invalidating proprietary rights held by our partner companies;
. being time-consuming and expensive to defend even if such claims are not
meritorious; and
. resulting in the diversion of management time and attention.
BECAUSE WE HAVE A LIMITED OPERATING HISTORY, WE CANNOT ASSURE THAT OUR
OPERATIONS WILL BE PROFITABLE.profitable.
We commenced operations in 1993 and, accordingly, have a limited operating
history. In addition, many of our partner companies are in the early stages of
development and have limited operating histories. You should consider our
prospects in light of the risks, expenses, and difficulties frequently
encountered by companies with such limited operating histories. Since we have a
limited operating history, we cannot assure you that our operations will be
profitable or that we will generate sufficient revenues to meet our
expenditures and support our activities.
During the fiscal year ended December 31, 1999, we had an operating loss of
approximately $10.4 million and a net loss of approximately $8.2 million.
During the six months ended June 30, 2000, we had an operating loss of
approximately $16.8 million and a net loss of approximately $9.8 million. If we
continue to have operating losses, we may not have enough money to expand our
business and our partner companies' businesses in the future.
12
ALTHOUGH WE HOLD MINORITY POSITIONS IN CERTAIN SUBSIDIARIES, WE DO NOT HAVE THE
ABILITY TO CONTROL THEIR DECISION MAKING OR DAY-TO-DAY OPERATIONS.The lack of control over decision-making and day-to-day operations at certain
partner companies means that we cannot prevent them from taking actions that we
believe may result in adverse consequences.
The EC Company. We currently own a 4.5% interest in The EC Company and have
no board representation. Additional rounds of equity financing may further
dilute our interest in The EC Company. We do not have the ability to control
decision-making at The EC Company.
Greenwich Information Technologies. We currently maintain a membership
interest of 33.3% in Greenwich Information Technologies. Although we are a
senior member of Greenwich Information Technologies, we do not hold a majority
of the board of three senior members, and we have no control over its day-to-
day operations.
Mediaconnex. We currently own 73.77% of the outstanding Series A Preferred
Stock of Mediaconnex. The holders of the Series A Preferred Stock, voting
together as a class, have the right to designate two members to the board of
directors of Mediaconnex, giving us the right to control 40% of the board. To
date, Paul Ryan, our Chief Executive Officer, and Amit Kumar, Vice President,
Life Sciences, have been appointed
12
to the board of directors of Mediaconnex. This minority position and board
representation gives us influence over, but not the ability to control,
decision-making at Mediaconnex.
Signature-mail.com. We have a membership interest of 25.0% in Signature-
mail.com. Although we are a senior member of Signature-mail.com, we do not hold
a majority of the board of three senior members, and we have no control over
its day-to-day operations.
SOME OF OUR FACILITIES ARE LOCATED NEAR MAJOR EARTHQUAKE FAULT LINES.Because some of our facilities are located near major earthquake fault lines,
we could be materially affected in the event of a major earthquake.
Our facilities and the facilities of a number of our partner companies,
including CombiMatrix, The EC Company, Launchpad, Mediaconnex, MerkWerks, and
Soundbreak.com, are located near major earthquake fault lines. We could be
materially and adversely affected inIn the event of
a major earthquake.earthquake, these facilities could be significantly damaged and/or
destroyed, and result in a material adverse loss to us and some of our partner
companies. We have not obtained and do not presently intend to obtain
earthquake insurance or business interruption coverage.
WE MAY INCUR SIGNIFICANT COSTS TO AVOID INVESTMENT COMPANY STATUS AND MAY
SUFFER ADVERSE CONSEQUENCES IF DEEMED TO BE AN INVESTMENT COMPANY.We may incur significant costs to avoid investment company status and may
suffer adverse consequences if deemed to be an investment company.
We may incur significant costs to avoid investment company status and may
suffer other adverse consequences if deemed to be an investment company under
the Investment Company Act of 1940. Some of our equity investments may
constitute investment securities under the Investment Company Act. A company
may be deemed to be an investment company if it owns investment securities with
a value exceeding 40% of its total assets, subject to certain exclusions.
Investment companies are subject to registration under, and compliance with,
the Investment Company Act unless a particular exclusion or regulatory safe
harbor applies. If we are deemed an investment company, we would become subject
to the requirements of the Investment Company Act. As a consequence, we would
be prohibited from engaging in business or issuing its securities as it has in
the past and might be subject to civil and criminal penalties for
noncompliance. In addition, certain of our contracts might be voidable, and a
court-appointed receiver could take control of us and liquidate our business.
Although we believe our investment securities currently comprise less than
40% of its assets, fluctuations in the value of these securities or of our
other assets may cause this limit to be exceeded. This would require us to
attempt to reduce its investment securities as a percentage of its total
assets. This reduction can be attempted in a number of ways, including the
disposition of investment securities and the acquisition of non-investment
security assets. If we sell investment securities, we may sell them sooner than
we otherwise would. These sales may be at depressed prices and we may never
realize anticipated benefits from, or may incur losses on, these investments.
Some investments may not be sold due to contractual or legal restrictions or
the inability to locate a suitable buyer. Moreover, we may incur tax
liabilities when we sells assets. We may also be unable to 13
purchase additional
investment securities that may be important to our operating strategy. If we
decide to acquire non-investment security assets, we may not be able to
identify and acquire suitable assets and businesses.
THE AVAILABILITY OF SHARES FOR SALE IN THE FUTURE COULD REDUCE THE MARKET PRICE
OF OUR COMMON STOCK.The availability of shares for sale in the future could reduce the market price
of our common stock.
In the future, we may issue securities to raise cash for acquisitions, and
we may also pay for interests in additional partner companies by using a
combination of cash and our common stock, or just our common stock. We may also
issue securities convertible into our common stock. Any of these events may
dilute your ownership interest in us and have an adverse impact on the price of
our common stock.
In addition, sales of a substantial amount of our common stock in the public
market, or the perception that these sales may occur, could reduce the market
price of our common stock. This could also impair our ability to raise
additional capital through the sale of our securities.
THERE MAY BE VOLATILITY IN OUR STOCK PRICE.13
There may be volatility in our stock price.
Our common stock, which is quoted on the Nasdaq National Market, has
experienced significant price and volume fluctuations. These fluctuations are
likely to continue in the future. The market price of our common stock may
decline below the price of the stock sold in this offering. The market prices
of the securities of technology and Internet-related companies have been
especially volatile.
DELAWARE LAW AND OUR CHARTER DOCUMENTS CONTAIN PROVISIONS THAT COULD DISCOURAGE
OR PREVENT A POTENTIAL TAKEOVER OF OUR COMPANY THAT MIGHT OTHERWISE RESULT IN
OUR STOCKHOLDERS RECEIVING A PREMIUM OVER THE MARKET PRICE OF THEIR SHARES.Delaware law and our charter documents contain provisions that could discourage
or prevent a potential takeover of our company that might otherwise result in
our stockholders receiving a premium over the market price of their shares.
Provisions of Delaware law and our certificate of incorporation and bylaws
could make more difficult the acquisition of our company by means of a tender
offer, proxy contest or otherwise, and the removal of incumbent officers and
directors. These provisions include:
. Section 203 of the Delaware General Corporation Law, which prohibits a
merger with a 15%-or-greater stockholder, such as a party that has
completed a successful tender offer, until three years after that party
became a 15%-or-greater stockholder;
. amendment of our bylaws by the shareholders requires a two-thirds
approval of the outstanding shares;
. the authorization in the certificate of incorporation of undesignated
preferred stock, which could be issued without stockholder approval in a
manner designed to prevent or discourage a takeover;
. provisions in our bylaws eliminating stockholders' rights to call a
special meeting of stockholders, which could make it more difficult for
stockholders to wage a proxy contest for control of our board or to vote
to repeal any of the anti-takeover provisions contained in our
certificate of incorporation and bylaws; and
. the division of our Board of Directors into three classes with staggered
terms for each class, which could make it more difficult for an outsider
to gain control of our Board of Directors.
14
FORWARD-LOOKING STATEMENTS
This prospectus and the documents it incorporates by reference contain
forward-looking statements within the meaning of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995. In particular, these
statements include the description of our plans and objectives for future
operations, assumptions underlying such plans and objectives, and other
forward-looking statements included in this report. These statements may be
identified by the use of forward-looking terminology such as "may," "will,"
"expect," "believe," "estimate," "anticipate," "intend," "continue," or similar
terms, variations of such terms or the negative of such terms. These statements
are based on management's current expectations and are subject to a number of
factors and uncertainties, which could cause actual results to differ
materially from those described in the forward-looking statements. These
statements address future events and conditions concerning product development,
capital expenditures, earnings, litigation, regulatory matters, markets for
products and services, liquidity and capital resources, and accounting matters.
Actual results in each case could differ materially from those anticipated in
these statements by reason of the factors described under the caption "Risk
Factors" and such other factors such as future economic conditions, changes in
consumer demand, legislative, regulatory and competitive developments in
markets in which we and our subsidiaries operate, and other circumstances
affecting anticipated revenues and costs. We expressly disclaim any obligation
or undertaking to release publicly any updates or revisions to any forward-
looking statements contained in this prospectus to reflect any change in our
expectations with regard theretoto those statements or any change in events,
conditions or circumstances on which any such statement is based.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common stock
offered by the Selling Securityholders pursuant tounder this prospectus. We will receive
proceeds if Selling Securityholders exercise their warrants or options to
purchase shares of common stock. If all of the Selling Securityholders were to
exercise their warrants and options, we would receive gross proceeds of
$28,951,036. When and if we receive these funds, they will be used for general
corporate purposes.
15
SELLING SECURITYHOLDERS
The shares of common stock offered pursuant toby this prospectus have been or will be
issued to the Selling Securityholders (or their assignees) directly by our
company. Of the shares of our common stock covered by this prospectus, 861,638
shares were issued to certain Selling Securityholders in a private placement
completed in July 2000 pursuant tounder an exemption from registration contained in
Regulation D promulgated underand Section 4(2) of the Securities Act. An additional 861,638
shares of common stock (subject to adjustment under certain circumstances)
covered by this prospectus are issuable upon the exercise of common stock
purchase warrants issued to certain Selling Securityholders in that private
placement. An additional 11,000 shares and 11,000 warrants were issued pursuant tothrough
a purchase by a finder in such private placement. Another 488,557 shares of
common stock covered by this prospectus were issued to certain Selling
Securityholders in a series of separate transactions to acquire additional
equity interests in CombiMatrix. Another 30,000 shares were issued pursuant tothrough an
option exercise by M. Robert Ching.
The following table sets forth certain information with respect to the
beneficial ownership of shares of our common stock by the Selling
Securityholders as of August 3, 2000 and the number of shares which may be
offered pursuant tounder this prospectus for the account of each of the Selling
Securityholders or their transferees from time to time. Except as described in
the footnotes to the table, to the best of our knowledge, none of the Selling
Securityholders has had any position, office or other material relationship
with our company or any of our affiliates.
MAXIMUM NUMBER OF NUMBER OF SHARES PERCENT OF CLASS
NUMBER OF SHARES SHARES WHICH MAY BENEFICIALLY BENEFICIALLY
BENEFICIALLY OWNED BE SOLD IN THIS OWNED AFTER THE OWNED AFTER THE
SELLING SECURITYHOLDERS PRIOR TO OFFERING(1) OFFERING(1) OFFERING(2) OFFERING(2)Maximum Number of Number of Shares Percent of Class
Number of Shares Shares Which May Beneficially Beneficially
Beneficially Owned Be Sold in This Owned After the Owned After the
Selling Securityholders Prior to Offering(1) Offering(1) Offering(2) Offering(2)
----------------------- -------------------- ----------------- ---------------- ----------------
All Points Management
Trust.................. 125,000 81,250 43,750 *
Aries Domestic Fund,
L.P.................... 46,058 46,058 0 0
Aries Domestic Fund II,
L.P.................... 12,948 12,948 0 0
Aries Master Fund II.... 86,450 86,450 0 0
Balboa Fund L.P.........L.P. ....... 80,008 78,788 1,220 *
Balboa Fund Ltd.........Ltd. ....... 40,000 40,000 0 0
Douglas Benson & Zinita
Benson................. 29,250 29,250 0 0
R. Carlton Browne II.... 4,636 3,636 1,000 *
Richard C. Browne....... 29,818 21,818 8,000 *
Chelonia Fund L.P....... 19,697 19,697 0 0
M. Robert Ching (3)..... 672,500(4)(5) 30,000(4) 642,500 4.46%
Philip Ching & Beverly
Ching.................. 41,665 20,313 21,352 *
Victor Ching............ 10,261 8,125 2,136 *
C. Perry Chu............ 8,636 6,500 2,136 *
Priscilla Chu........... 4,063 4,063 0 0
Crescent International
Ltd....................Ltd. .................. 36,000 36,000 0 0
Dimensional Partners,
L.P....................L.P. .................. 148,400 148,400 0 0
Dimensional Partners,
Ltd....................Ltd. .................. 381,600 381,600 0 0
John Drake.............. 343,820 73,125 270,695 1.88%
Fred Finocchiaro........ 307,000 32,500 274,500 1.90%
Hermes Partners, L.P....L.P. .. 115,000 100,000 15,000 *
Kevin Kennelly.......... 91,413 39,813 51,600 *
David Lackey............ 108,000 10,595 97,405 *
Calvin Layland.......... 58,157(6) 23,157(6) 35,000 *
Christopher Lenzo....... 62,500 32,500 30,000 *
William Moon............ 9,825 8,125 1,700 *
Pequot Scout Fund,
L.P....................L.P. .................. 36,364 36,364 0 0
Donald Richey........... 18,100 8,938 9,162 *
Royal Bank of Canada.... 436,364 436,364 0 0
16
MAXIMUM NUMBER OF NUMBER OF SHARES PERCENT OF CLASS
NUMBER OF SHARES SHARES WHICH MAY BENEFICIALLY BENEFICIALLY
BENEFICIALLY OWNED BE SOLD IN THIS OWNED AFTER THE OWNED AFTER THE
SELLING SECURITYHOLDERS PRIOR TO OFFERING(1) OFFERING(1) OFFERING(2) OFFERING(2)Maximum Number of Number of Shares Percent of Class
Number of Shares Shares Which May Beneficially Beneficially
Beneficially Owned Be Sold in This Owned After the Owned After the
Selling Securityholders Prior to Offering(1) Offering(1) Offering(2) Offering(2)
----------------------- -------------------- ----------------- ---------------- ----------------
Seneca Capital, L.P.....L.P. ... 126,728 126,728 0 0
Seneca Capital
International Ltd...... 236,910 236,910 0 0
Vertical Ventures LLC
(7).................... 22,000 22,000 0 0
West Bay Investments,
LLC.................... 10,000 10,000 0 0
Scott Wilfong........... 11,818 11,818 0 0
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* Less than 1% of class
(1) Assumes exercise of all common stock purchase warrants or options
beneficially owned by the Selling Securityholder at the exercise price and
for the maximum number of shares permitted as of the date of this
prospectus. Share figures include shares of our common stock issued in the
private placement and underlying the common stock purchase warrants as
follows:
SHARES OF COMMON STOCK SHARES UNDERLYING
SELLING SECURITYHOLDERS ISSUED IN PRIVATE PLACEMENT WARRANTSShares of Common Stock Shares Underlying
Selling Securityholders Issued in Private Placement Warrants
- ----------------------- --------------------------- -----------------
Aries Domestic Fund, L.P........ 23,029 23,029
Aries Domestic Fund II, L.P. ...L.P..... 6,474 6,474
The Aries Master Fund II........ 43,225 43,225
Balboa Fund Ltd................. 20,000 20,000
R. Carlton Browne II............ 1,818 1,818
Richard C. Browne............... 10,909 10,909
Crescent International Ltd...... 18,000 18,000
Dimensional Partners, L.P....... 74,200 74,200
Dimensional Partners, Ltd....... 190,800 190,800
Hermes Partners, L.P............ 50,000 50,000
Pequot Scout Fund, L.P.......... 18,182 18,182
Royal Bank of Canada............ 218,182 218,182
Seneca Capital, L.P............. 63,364 63,364
Seneca Capital International
Ltd. .......................... 118,455 118,455
Vertical Ventures LLC........... 11,000 11,000
West Bay Investments, LLC....... 5,000 5,000
- --------
(2) Assumes that each Selling Securityholder will sell all shares of common
stock offered pursuant tounder this prospectus, but not any other shares of common
stock beneficially owned by such Selling Securityholder.
(3) Dr. Ching has provided consulting services to the Company.
(4) Includes shares beneficially owned by Dr. Ching issued in the names of M.
Robert Ching & Phyllis Ching Living Trust, M. Robert Ching M.D. Money
Purchase Pension Plan, M. Robert Ching, M.D. Inc. Defined Benefit Plan and
Phyllis Ching.
(5) Includes 7,500 shares subject to option at an exercise price of $3.50 per
share, expiring August 5, 2001.
(6) Includes shares beneficially owned by Dr. Layland issued in the name of
Calvin C. Layland Pension & Profit Sharing Plan.
(7) Vertical Ventures LLC acted as a finder in connection with the July 2000
private placement.
17
PLAN OF DISTRIBUTION
The shares of common stock offered herebyby this prospectus may be sold by the
Selling Securityholders or by their respective pledgees, donees, transferees or
other successors in interest. Such sales may be made at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, or at negotiated prices. The shares may be
sold by one or more of the following:
. one or more block trades in which a broker or dealer so engaged will
attempt to sell all or a portion of the shares held by the Selling
Securityholders as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
. purchase by a broker or dealer as principal and resale by such broker or
dealer as principal and resale by such broker or dealer for its account
pursuant tounder this prospectus;
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
. privately negotiated transactions between the Selling Securityholders and
purchasers without a broker-dealer.
The Selling Securityholders may effect such transactions by selling shares
to or through broker dealers, and such broker-dealers will receive compensation
in negotiated amounts in the form of discounts, concessions, commissions or
fees from the Selling Securityholders and/or the purchasers of the shares for
whom such broker-dealers may act as agent or to whom they sell as principal, or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). Such brokers or dealers or other participating brokers
or dealers and the Selling Securityholders may be deemed to be "underwriters"
within the meaning of the Securities Act, in connection with such sales. Except
for customary selling commissions in ordinary brokerage transactions, any such
underwriter or agent will be identified, and any compensation paid to such
persons will be described, in a prospectus supplement. In addition, any
securities covered by this prospectus that qualify for sale pursuant tounder Rule 144
might be sold under Rule 144 rather than pursuant tounder this prospectus.
LEGAL MATTERS
The validity of the shares of common stock intended to be sold pursuant tounder this
prospectus will be passed upon for the Company by O'Melveny & Myers LLP.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Acacia Research Corporation for
the year ended December 31, 1999 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of saidthat firm as experts in auditing and accounting.
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act with respect to the shares of
common stock offered by this prospectus. This prospectus does not contain all
the information set forth in the registration statement and the exhibits and
schedules thereto.to the registration statement. For further information about us and
the shares of common stock, we refer you to the registration statement and to
the exhibits and schedules filed with it. Statements contained in this
prospectus as to the contents of any contract or other documents referred to
are not necessarily complete. We refer you to those copies of contracts or
other documents that have been filed as exhibits to the registration statement,
and statements relating to such documents are qualified in all aspects by such
reference.
18
We are subject to the information requirements of the Securities Exchange
Act of 1934 and therefore we file reports, proxy statements and other
information with the Commission. You can inspect and copy the reports, proxy
statements and other information that we file at the public reference
facilities maintained by the Commission at the Public Reference Room, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices
at 7 World Trade Center, Suite 1300, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You can also obtain copies
of such material from the Commission's Public Reference Room, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. You may obtain information
on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-
0300.1-800-SEC-0300. The Commission also makes electronic filings publicly available
on its Web site at http://www.sec.gov. Our common stock is traded on the Nasdaq
National Market under the symbol "ACRI" and reports, proxy and information
statements and other information about us may be inspected at the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington,
D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents, which we have filed with the Commission under the
Exchange Act (SEC File No. 0-26068), are incorporated by reference into this
prospectus:
. our annual report on Form 10-K, as amended for the fiscal year ended
December 31, 1999;
. our quarterly reports on Form 10-Q, each as amended for the fiscal
quarters ended March 31, 2000 and June 30, 2000;
. our current reports on Form 8-K filed on February 24, 2000 and April 7,
2000;7;
and
. the description of our common stock contained in Amendment No. 2 to our
registration statement on Form 8-A/A dated December 30, 1999.
All documents that we file with the Commission pursuant tounder Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus and before
the termination of the offering of the shares of common stock shall be deemed
incorporated by reference into this prospectus and to be a part of this
prospectus from the respective dates of filing such documents.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon such person's written or oral request, a copy of
any and all of the information incorporated by reference in this prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this prospectus
incorporates. Requests should be directed to the Secretary at Acacia Research
Corporation, 55 South Lake Avenue, Pasadena, California 91101, telephone number
(626) 396-8300.
Any statement containedInformation in a document incorporated or deemed to bethis prospectus supersedes information incorporated by
reference in this prospectus shall be deemed modified,
superseded or replaced for purposesthat we filed with the Commission before the date of this prospectus,
towhile information that we file later with the extent that a
statement contained in this prospectus or in any subsequently filed with
document that also is or is deemed to be incorporated by reference in this
prospectus modifies, supersedes or replaces such statement. Any statement so
modified, superseded or replaced shall not be deemed, except as so modified,
superseded or replaced, to constitute a part of this prospectus.Commission will automatically
update and supersede prior information.
19
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YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE, PROVIDED
IN THIS PROSPECTUS OR ANY SUPPLEMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE
NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
HOWEVER, YOU SHOULD REALIZE THAT OUR AFFAIRS MAY HAVE CHANGED SINCE THE DATE
OF THIS PROSPECTUS. THIS PROSPECTUS WILL NOT REFLECT SUCH CHANGES. YOU SHOULD
NOT CONSIDER THIS PROSPECTUS TO BE AN OFFER OR SOLICITATION RELATING TO THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION RELATING
TO THE SECURITIES IS NOT AUTHORIZED, IF THE PERSON MAKING THE OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR IF IT IS UNLAWFUL FOR YOU TO
RECEIVE SUCH AN OFFER OR SOLICITATION.You should rely only on the information incorporated by reference, provided
in this prospectus or any supplement or that we have referred you to. We have
not authorized anyone else to provide you with different information. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of those documents.
However, you should realize that our affairs may have changed since the date
of this prospectus. This prospectus will not reflect such changes. You should
not consider this prospectus to be an offer or solicitation relating to the
securities in any jurisdiction in which such an offer or solicitation relating
to the securities is not authorized, if the person making the offer or
solicitation is not qualified to do so, or if it is unlawful for you to
receive such an offer or solicitation.
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ACACIA RESEARCH CORPORATION
2,263,833 SHARES OF
COMMON STOCKShares of
Common Stock
----------------
PROSPECTUS
----------------
AugustSeptember , 2000
- -------------------------------------------------------------------------------
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PART II
ITEMItem 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONOther Expenses of Issuance and Distribution
The expenses in connection with the registration of shares of the Selling
Securityholders will be borne by the Company and are estimated as follows:
Commission registration fee......................................... $16,006
Printing and engraving.............................................. 2,0003,500
Accounting fees and expenses........................................ 2,00015,000
Legal fees and expenses............................................. 10,00020,000
Miscellaneous expenses.............................................. 5,000
-------
Total............................................................. $35,006$59,506
=======
ITEMItem 15. INDEMNIFICATION OF DIRECTORS AND OFFICERSIndemnification of Directors and Officers
The Company's Certificate of Incorporation provides for the elimination of
personal monetary liability of directors to the fullest extent permissible
under Delaware law. Delaware law does not permit the elimination or limitation
of director monetary liability for: (i) breaches of the director's duty of
loyalty to the corporation or its stockholders; (ii) acts or omissions not in
good faith or involving intentional misconduct or knowing violations of law;
(iii) the payment of unlawful dividends or unlawful stock repurchases or
redemptions or (iv) transactions in which the director received an improper
personal benefit.
The Company's Bylaws provide for the indemnification to fullest extent
permitted by applicable law of any person who was or is made or is threatened
to be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of his or
her current or past service to the Company, against all liability and loss
suffered and expenses (including attorney' fees) reasonably incurred by such
person.
The Company plans to enter into agreements (the "Indemnification
Agreements") with each of the directors and executive officers of the Company
pursuant tounder which the Company has agreed to indemnify such director or executive
officer from claims, liabilities, damages, expenses, losses, costs, penalties
or amounts paid in settlement incurred by such director or executive officer in
or arising out of such person's capacity as a director or executive officer of
the Company or any other corporation of which such person is a director at the
request of the Company to the maximum extent provided by applicable law. In
addition, such director or executive officer will be entitled to an advance of
expenses to the maximum extent authorized or permitted by law.
To the extent that the Board of Directors or the stockholders of the Company
may in the future wish to limit or repeal the ability of the Company to provide
indemnification as set forth in the Certificate of Incorporation, such repeal
or limitation may not be effective as to directors and executive officers who
are parties to the Indemnification Agreements, because their rights to full
protection would be contractually assured by the Indemnification Agreements. It
is anticipated that similar contracts may be entered into, from time to time,
with future directors of the Company.
ITEMItem 16. EXHIBITSExhibits
See the attached Exhibit Index that follows the signature page.
ITEMItem 17. UNDERTAKINGSUndertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales ar being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(6) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(7) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 6 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pasadena, State of California, on the
14th28th day of AugustSeptember 2000.
ACACIA RESEARCH CORPORATION
/s/ Robert L. Harris IIPaul R. Ryan
By: _________________________________
Robert L. Harris II
PresidentPaul R. Ryan
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 12 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATESignature Title Date
--------- ----- ----
* Chairman of the Board and August 14,September 28, 2000
____________________________________ Chief Executive Officer
Paul R. Ryan (Principal Executive
Officer)
* Director and President August 14,September 28, 2000
____________________________________ (Principal Financial
Robert L. Harris II Officer)
* Vice President, Finance and August 14,September 28, 2000
____________________________________ Controller (Principal
Mary Rose Colonna Accounting Officer)
* Director August 14,September 28, 2000
____________________________________
Thomas B. Akin
* Director August 14,September 28, 2000
____________________________________
Fred A. de Boom
* Director August 14,September 28, 2000
____________________________________
Edward W. Frykman
* Director August 14,September 28, 2000
____________________________________
Gerald Knudson
/s/ Robert L. Harris IIPaul R. Ryan
*By ____________________________
Robert L. Harris IIPaul R. Ryan
Attorney-in-fact
EXHIBIT
NUMBER DESCRIPTIONExhibit
Number Description
------- -----------
4.1 Form of Common Stock Warrant Agreement issued as part of the July 2000
private placement (2)
4.2 Form of Specimen Certificate of Company's Common Stock (1)
5.1 Opinion of Counsel re: legality of securities being registered (2)
23.1 Consent of Independent Accountants
23.3 Consent of Counsel (included in Exhibit 5.1) (2)
24.1 Powers of Attorney (included on page S-1) (2)
- --------
(1) Previously filed by Registrant with Amendment No. 2 on Form 8-A/A on
December 30, 1999 (SEC File No. 000-26068).
(2) Previously filed by Registrant with the Registration Statement on Form S-3
on August 7, 2000 (SEC File No. 333-43222).