Acacia Research Corporation

Greetings and welcome to a CASA Research first quarter financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Rob Fink with FNK IR. Thank you. You may begin. Thank you, operator.

Hosting the call today are Clifford Kress, Chief Executive Officer, and Altovia Chief Investing Officer. Before beginning, I would like to remind you that the information provided during this call may contain forward-looking statements relating to current expectations, estimates, forecasts, and projections about future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For discussion of such risks and uncertainties, please see the risk factors described in Acacia's annual report on 10Q and quarterly reports on 10Q that are filed with the SEC. I would like to remind everyone that a press release disclosing the company's financial results was issued this morning before the market opened. This release may be accessed on the company's website at acaciaresearch.com under the News tab. In addition, the company has prepared an investor presentation for this call that can also be downloaded on Acacia's website under the Events and Presentations tab. With all that said, I'd like to turn the call over to Crystal Clifford for us. Clifford, the call is yours.

Thank you Rob and good morning. Our recently announced relationship with Starboard Value combined with volatile equity markets has kept us very busy. We are executing against a very broad mandate and are reviewing a wide range of investment opportunities. Our strategic committee has been meeting frequently. Unlike other structures that may face redemptions and liquidity or approval constraints, we have permanent capital that has positioned us well to evaluate an increasing number of compelling opportunities. We have built the new Acacia to be remarkably flexible. We are not tied to investments in intellectual property, and we can pursue investments in multiple revenue streams. We can do public or private corporate acquisitions or acquire assets directly. We believe that together with Starboard, we are well positioned to pursue corporate development opportunities of greater scale and flexibility. With regard to specifically the IP business, we announced the acquisition of two patent portfolios during the quarter. Al will describe these purchases later. At this point, I think it is important to review a brief history of Acacia's involvement in the IP industry and how we view our ongoing operations. We generally support the consensus that the patent business peaked in 2012, while multiple empirical data points are hard to come by. We reference price per patent by year. The regulatory environment turned sharply negative with the implementation of the AIA in 2012 and the Alice decision in 2014, among other changes. By the time Mark Booth rejoined Acacia in the second half of 2018, conditions were starting to improve. Mark and his team were tasked with monetizing Acacia's legacy patent portfolios. From the fourth quarter of 2018 to the first quarter of 2020, they recovered approximately 64 million in gross revenues through a combination of various licensing agreements and litigation settlements. The IP Group has worked with management to present our board with a comprehensive study of our patent organization. With a fresh set of eyes, we reviewed patents purchased from 2012 through 2016 in Acacia's core markets. A detailed analysis showed favorable returns during this sharply negative macro environment. With that in mind, we have started to commit capital in a measured way where we see an attractive risk-adjusted return. We should note that a case's history as an aggressive litigator is a leverageable asset as we increase our focus on licensing. We see IP assertion as a segment of our overall absolute return investment strategy. We have strategically built the IP portfolio with outcome diversification in mind, using licensing revenue as a base with the upside potential of litigation outcomes as well. Adding these assets to our existing portfolio creates an attractive blend of licensing and litigation opportunities to pursue. We expect these additions to begin generating licensing revenues this quarter with significant contributions beginning in 2021. I'll now turn the call over to Al.