Acacia Research Corporation

Good day, ladies and gentlemen, and welcome to the Acacia Research Second Quarter 2022 Financial Results Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Fink of SNKIR. Sir, the floor is yours.

Thank you, Operator. Hosting the call today are Clifford Press Chief Executive Officer and Rich Rosenthal Chief Financial Officer. Before beginning, I would like to remind everyone 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. future results, or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see the risk factor section described in Acacia's annual report on Form 10-K and quarterly reports on Form 10-Q that are filed with the SEC. I'd also like to remind everyone that a press release disclosing the company's financial results were issued this morning before the market opened. This release may be accessed on the company's website at acaciaresearch.com under the News and Events tab. With all that said, I'd now like to turn the call over to Clifford. Clifford, the call is yours.

Thanks, Rob, and good morning, everyone. Before discussing the results of the last quarter, if I look back over what has been achieved over the past two and a half years, it's become clear that our ongoing partnership with Starboard has added immense value to Acacia. Starboard's initial capital commitment enabled the company to establish the acquisition platform and initiate key initial investments. This relationship and the investments it has facilitated has propelled rapid value creation at the company. More importantly, it has allowed us to develop a differentiated approach to acquire operating entities and other assets as an advantaged buyer, unencumbered by the mandates and timelines that have constrained others. Our collaboration with Starboard Value has been built on the basis of contractual arrangements that have now matured. The appreciation in value has highlighted the need to revisit and expand on the terms of that initial partnership. In particular, we believe that simplifying Starboard's ownership structure in Acacia with clarity on capital resources can better position the company for the next phase of development. We are working with Starboard on simplifying this current ownership structure. Our board of directors has formed a special committee of directors not affiliated or associated with Starboard. The special committee has retained both financial and legal advisors to assist with evaluating and negotiating a resolution of these contractual arrangements. Given the complexity of our current capital structure and the fact that the derivative instruments are in the money, this will not be a simple transaction. It would be premature to provide an estimate regarding when or even if this new structure will be defined and there can be no assurance that the parties will be able to reach agreement on terms. Our M&A program continues to be active and we are expanding our pipeline of potential opportunities. Recent changes in equity and credit markets have reduced valuations and given us the opportunity to re-evaluate specific transactions in light of these changes. We have significant experience with complex transactions, especially situations where we see an opportunity to unlock value. We have established a clear focus on the type of opportunities that we are seeking. Simultaneously, we are increasing our base of capital. During the quarter, we realized an additional $5 million in gains from monetization of the Life Sciences portfolio as we continue to realize these positions. To date, we've generated $408 million of cash proceeds from this transaction. We continue to hold $156 million in assets. at market value for public companies and at cost or equity method accounting for private companies. One of these holdings is Viomet, which benefited from approval by the US Food and Drug Administration in April for a compound for the treatment of recurring yeast infections. This approval has triggered a milestone payment to Acacia of 26.7 million due by the end of this year, 2022, and importantly, sets the stage for commercialization of this novel product. In addition, our intellectual property business continues to generate value. During the quarter, this business generated 8.1 million in revenue, largely through licensing agreements related to recently acquired patent portfolios. During the second quarter, we also repurchased 6.1 million of our own shares, at an average price of $4.64 per share. Subsequent to the end of the quarter, we completed the $40 million buyback program that we announced in April. Coupled with our $15 million buyback program initiated in late 2021, we have retired 11.6 million shares, or 23% of shares outstanding. With that, I'd like to turn the call over to Rich Rosenstein, our CFO, to discuss the financial results.