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H.S. junior Avg
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New words:
ABR, acreage, adjacent, adjoining, aftermath, aggravated, air, alongside, amicably, Anadarko, apparent, arability, argument, aware, back, Basin, benchmark, bid, Bio, Biotech, book, bore, burdensome, CAA, carbon, catalyze, category, causation, cement, central, Certified, cessation, characterized, Cheif, circulation, CIS, CISSP, climate, coincide, collaborate, combat, commodity, complementary, compression, conference, Connell, contractor, cooperating, cooperation, counterparty, crude, cured, curing, curtail, curtailed, curtailment, custody, danger, deadline, decree, depressed, deprive, depth, diesel, dioxide, disinterested, downhole, drained, dramatically, drill, drilled, drilling, easily, EBITDAX, electrical, emission, empower, encryption, endowment, enduring, enjoining, EPA, Eric, exact, excessive, exploratory, extraction, faith, familiar, farmland, fluid, foreclose, fossil, fractured, freezing, fuel, gas, gathering, Geoff, geological, geophysical, geopolitical, GHG, Glasgow, Goehring, green, greenhouse, halt, Harvard, heard, Hemphill, HH, highest, Hub, hydraulically, hydrocarbon, imposition, incentivize, incident, incomplete, inconclusive, indemnity, ineffective, inevitably, injection, injury, inlet, inopportune, inspect, inspection, interfere, investor, IRA, ISACA, ISDA, Judge, Kirk, landscape, Lastly, loan, lock, log, lying, MACOM, Master, McArron, mechanical, mentioned, metal, methane, midstream, migration, military, mineral, MJ, motor, multitude, Nanopore, national, nationally, NDC, necessitated, negligence, NESHAP, northern, Nosley, notice, notified, NPI, oil, oilfield, Oklahoma, onshore, operationally, optimization, oral, outlet, Overnight, oversee, Oxford, Pact, Panhandle, penetration, petroleum, phishing, pipe, plugging, pollution, populated, predetermined, preliminary, prepublication, proceed, procure, produce, produced, producing, prompted, prove, proved, Provost, proximity, question, Rasamny, rationalization, redetermination, redetermined, refile, refinery, refining, regime, reinstate, rejoined, rescission, reservoir, residential, resource, restoration, restraining, Revolution, Revolver, revolving, Ribar, Robert, rolling, ROU, RTW, sabotage, safety, sand, scientific, sea, seismic, shallow, similarly, societal, SOFR, stationary, stay, steel, Street, strict, stringent, submittal, sudden, Superior, surface, Swap, tabletop, tailgate, tanker, telephonic, temporarily, terrorism, threat, today, transmission, tribal, truck, trucking, TX, UK, underground, undertaken, undeveloped, uneconomic, uneconomical, unemployment, uninsurable, uninsured, University, unproved, unsatisfied, unscheduled, unused, unusual, upstream, version, vertical, vicinity, VIE, Virtual, Virtually, wage, Wall, wastewater, water, wealth, weather, wellbore, wellhead, Western, write, wrote
Removed:
accrue, advanced, Alfred, Apollo, Appendix, Baker, Canada, complement, Computershare, consecutive, contingency, counterclaim, delisting, design, Designation, deterring, divergent, doubtful, entitling, escrow, Guaranty, infringe, Intermediate, invalidity, investigate, lump, Meredith, newly, preferential, Preservation, QP, rapid, refunded, released, representation, representative, Saint, Secretary, Shack, Skeletal, skill, split, spread, submitted, sum, Tobia, Veritone, vi
Financial report summary
?Risks
- We intend to grow our company by acquiring additional operating businesses and intellectual property assets which may not occur, and any acquisitions that we complete will be costly and could negatively affect our results of operations, and dilute our stockholders’ ownership, or cause us to incur significant expense, and we may not realize the expected benefits of our operating businesses because of difficulties related to integration.
- Our success is dependent on our ability to attract and retain employees and management teams of our operating businesses, the loss of any of whom could materially adversely affect our financial condition, business and results of operations.
- The success of our Company and the integration of our operating businesses is dependent on our relationship with Starboard.
- The due diligence process we undertake in connection with new acquisitions of operating businesses or intellectual property assets may not reveal all material facts.
- Our acquisition strategy may include acquisitions of privately held companies, which provide more limited information, may be dependent on the talents and efforts of only a few key portfolio company personnel, and have greater vulnerability to economic downturns when compared to public company targets.
- If, in the future, we cease to control and operate our operating businesses, we may be deemed to be an investment company under the Investment Company Act of 1940, as amended.
- Both we and our operating businesses outsource a number of services to third-party service providers, which are subject to risk of disruptions, delays, and decrease in our control, which could adversely impact our results of operations.
- We may be limited in our ability to use our net operating losses and certain other tax attributes.
- Public health threats, pandemics and outbreaks of communicable diseases could have a material adverse effect on our operations, the operations of our business partners, and the global economy as a whole.
- Due to the completion of the transactions pursuant to the Recapitalization Agreement, we are a "controlled company" within the meaning of the Nasdaq listing standards and, as a result, qualify for, and may in the future decide to rely on, exemptions from certain corporate governance requirements. As a result, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements if in the future we determine to take advantage of any of the controlled company exemptions.
- Our principal stockholder, Starboard, controls 61.2% of the voting power of our Common Stock, and its interests may conflict with our other stockholders in the future.
- Our intellectual property business is reliant on the strength of our patent portfolios and is subject to evolving legislation, regulations, and rules associated with patent law.
- We expect patent-related legal expenses to continue to fluctuate from period to period.
- Patent litigation is inherently risky because courts may find our patents invalid, not infringed, or unenforceable, and the USPTO, or other relevant patent office, may either invalidate our patents or materially narrow the scope of their claims during the course of a reexamination, opposition or other such proceeding.
- The enforcement of our intellectual property depends in part upon our ability to retain the best legal counsel in order to achieve favorable outcomes from litigation, and they may become conflicted out of representing us.
- We may experience delays in successful prosecution, enforcement, and licensing of our patent portfolio.
- If oil and gas prices decline from current levels, or if there is an increase in the differential between the NYMEX-WTI and NYMEX-Henry Hub or other benchmark prices of oil and the wellhead price we receive for our production, our cash flows from our Energy Operations Business will decline.
- If commodity prices decline from current levels, production from some of Benchmark's assets may become uneconomic and cause write downs of the value of its properties, which may adversely affect its ability to borrow, its financial condition and its ability to make distributions.
- The oil and natural gas industry and the broader U.S. economy have experienced higher than expected inflationary pressures in recent years related to increases in oil and natural gas prices, continued supply chain disruptions, labor shortages and geopolitical instability, among other pressures. Should these conditions persist, it may impact our Energy Operations Business’ ability to procure services, materials and equipment on a cost-effective basis, or at all, and, as a result, our business, financial condition, results of operations and cash flows could be materially and adversely affected.
- The hedging strategy of our Energy Operations Business may be ineffective in mitigating the impact of commodity price volatility on cash flows, which could adversely affect its financial condition.
- The hedging activities of our Energy Operations Business could result in cash losses and may limit the prices it would otherwise realize for production, which could reduce cash flows from operations.
- The hedging transactions of our Energy Operations Business expose it to counterparty credit risk and involve other risks.
- Unless Benchmark replaces the oil and natural gas reserves it produces, its revenues and production will decline, which would adversely affect its cash flows from operations.
- Producing oil and natural gas is a costly and high-risk activity with many uncertainties that could adversely affect our Energy Operations Business's activities, financial condition or results of operations.
- Estimated proved reserves and future production rates are based on many assumptions that may prove to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of the estimated reserves of our Energy Operations Business.
- Any acquisitions completed by our Energy Operations Business are subject to substantial risks that could adversely affect financial conditions and results of operations.
- Our Energy Operations Business is primarily dependent upon a small number of customers for production sales and may experience a temporary decline in revenues and production if it loses any of those customers.
- Our Energy Operations Business might be unable to compete effectively with larger companies, which might adversely affect its business activities, financial condition and results of operations.
- Many of our Energy Operations Business's leases are in areas that have been partially depleted or drained by offset wells.
- Our Energy Operations Business's revolving credit facility has restrictions and financial covenants that may restrict its business and financing activities.
- The operations of our Energy Operations Business are subject to operational hazards and unforeseen interruptions for which it may not be adequately insured.
- Our Energy Operations Business depends in part on transportation, pipelines and refining facilities owned by others. Any limitation in the availability of those facilities could interfere with an ability to market production and could harm its business.
- Climate change legislation, regulatory initiatives and litigation could result in increased operating costs and reduced demand for the oil and natural gas that our Energy Operations Business produces.
- Regulation in response to seismic activity could increase our operating and compliance costs.
- Rules regulating air emissions from oil and natural gas operations could result in increased capital expenditures and operating costs of our Energy Operations Business.
- Our Energy Operations Business's operations are subject to environmental and operational safety laws and regulations that may expose it to significant costs and liabilities.
- Our Industrial Operations Business relies, or may rely in the future, on its intellectual property and licenses to use others’ intellectual property for competitive advantage. If our Industrial Operations Business is unable to protect its intellectual property or obtain or retain licenses to use other’s intellectual property, or if it infringes upon or are alleged to have infringed upon others’ intellectual property, it could have a material adverse effect on our Industrial Operations Business's financial condition, business and results of operations.
- Our Industrial Operations Business's inability to develop new products and enhance existing products to meet customer product requirements on a cost competitive basis may negatively impact its results of operations.
- Our Industrial Operations is dependent on a limited number of customers to derive a large portion of its revenue, and the loss of one of these customers may adversely affect its financial condition, business and results of operations.
- Our Industrial Operations Business has limited suppliers for key product components and services and any interruption in supply could impair its ability to make and deliver its signature products, adversely affecting its business, financial condition, and results of operations.
- Failure of our Industrial Operations Business to manage inventory levels or production capacity may negatively impact its results of operations.
- Decreased consumption of supplies could negatively impact the results of operations of certain of our Industrial Operations Business.
- Due to the international nature of our Industrial Operations Business, changes in a country’s or region’s political or economic conditions or other factors could negatively impact its results of operations.
- Our quarterly performance may be volatile, which in turn may adversely affect the trading price of our common stock.
- We do not currently intend to pay dividends on our common stock in the foreseeable future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
Management Discussion
- The results reflected in this section with respect to Benchmark for the year ended December 31, 2023 include results for the period from November 13, 2023 to December 31, 2023 following our acquisition of Benchmark.
- Total revenues increased $65.9 million to $125.1 million for the year ended December 31, 2023, as compared to $59.2 million for the year ended December 31, 2022, primarily due to an increase in our Intellectual Property Operations revenues partially offset by a decrease in Industrial Operations revenues. ARG revenues increased due to one patent portfolio that generated license revenue in the fourth quarter of 2023, which contributed to Intellectual Property Operations revenues increasing by $69.6 million. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. The decrease in Industrial Operations revenue of $4.6 million is due to lower units of printers sold. Refer to “Industrial Operations – Revenues” below for further detailed discussion. In addition, post-acquisition revenues from Benchmark for the period from November 13, 2023 to December 31, 2023 contributed $848,000. Refer to “Energy Operations – Revenues” below for further discussion.
- Income before income taxes was $67.4 million for the year ended December 31, 2023, as compared to loss of $127.2 million in the prior year. The net increase was comprised of the change in total revenues described above and other changes in operating expenses and other income or expense as follows: