Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 06, 2017 | Jun. 30, 2016 | |
Entity Information [Line Items] | |||
Entity Registrant Name | ACACIA RESEARCH CORP | ||
Entity Central Index Key | 934,549 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 50,466,611 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 216,379,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 127,540 | $ 135,223 |
Restricted cash | 11,512 | 10,725 |
Short-term investments | 19,443 | 0 |
Accounts receivable | 26,750 | 33,500 |
Deferred income tax | 0 | 210 |
Prepaid expenses and other current assets | 3,245 | 4,219 |
Total current assets | 188,490 | 183,877 |
Loan receivable and accrued interest | 18,616 | 0 |
Investment warrants | 1,960 | 0 |
Property and equipment, net of accumulated depreciation and amortization | 127 | 272 |
Patents, net of accumulated amortization | 86,319 | 162,642 |
Other assets | 491 | 1,110 |
Total assets | 296,003 | 347,901 |
Current liabilities: | ||
Accounts payable and accrued expenses | 14,283 | 17,347 |
Accrued patent investment costs | 0 | 1,000 |
Royalties and contingent legal fees payable | 13,908 | 14,878 |
Total current liabilities | 28,191 | 33,225 |
Deferred income taxes | 0 | 210 |
Other liabilities | 369 | 311 |
Total liabilities | 28,560 | 33,746 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 50,476,042 shares issued and outstanding as of December 31, 2016 and 50,651,239 shares issued and outstanding as of December 31, 2015 | 50 | 51 |
Treasury stock, at cost, 1,729,408 shares as of December 31, 2016 and 2015 | (34,640) | (34,640) |
Additional paid-in capital | 642,453 | 633,146 |
Accumulated comprehensive loss | (76) | (215) |
Accumulated deficit | (342,198) | (288,131) |
Total Acacia Research Corporation stockholders’ equity | 265,589 | 310,211 |
Noncontrolling interests in operating subsidiaries | 1,854 | 3,944 |
Total stockholders’ equity | 267,443 | 314,155 |
Total liabilities and stockholders' equity | $ 296,003 | $ 347,901 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 50,476,042 | 50,651,239 |
Common stock, shares outstanding | 50,476,042 | 50,651,239 |
Treasury stock, shares | 1,729,408 | 1,729,408 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenues | $ 152,699 | $ 125,037 | $ 130,876 |
Cost of revenues: | |||
Inventor royalties | 22,730 | 18,462 | 20,670 |
Contingent legal fees | 26,474 | 16,169 | 23,563 |
Litigation and licensing expenses - patents | 27,858 | 39,373 | 37,614 |
Amortization of patents | 34,208 | 53,067 | 53,745 |
General and administrative expenses (including non-cash stock compensation expense of $9,062 in 2016, $11,048 in 2015 and $18,115 in 2014) | 32,919 | 38,176 | 48,554 |
Research, consulting and other expenses - business development | 3,079 | 3,391 | 3,840 |
Impairment of Patent-Related Intangible Assets | 42,340 | 74,731 | 3,497 |
Impairment of Goodwill | 0 | 30,149 | 0 |
Other | 500 | 4,141 | 1,548 |
Total operating costs and expenses | 190,108 | 277,659 | 193,031 |
Operating loss | (37,409) | (152,622) | (62,155) |
Total other income (expense) | 798 | (56) | (595) |
Loss from operations before provision for income taxes | (36,611) | (152,678) | (62,750) |
Provision for income taxes | (18,188) | (4,800) | (3,912) |
Net loss including noncontrolling interests in operating subsidiaries | (54,799) | (157,478) | (66,662) |
Net (income) loss attributable to noncontrolling interests in operating subsidiaries | 732 | (2,558) | 633 |
Net loss attributable to Acacia Research Corporation | (54,067) | (160,036) | (66,029) |
Net Loss Available to Common Stockholders, Basic and Diluted | $ (54,067) | $ (160,730) | $ (66,755) |
Earnings Per Share, Basic and Diluted | $ (1.08) | $ (3.25) | $ (1.37) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 50,075,847 | 49,505,817 | 48,658,088 |
Common Stock, Dividends, Per Share, Cash Paid | $ 0 | $ 0.500 | $ 0.500 |
Consolidated Statements of Ope5
Consolidated Statements of Operations Parentheticals - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Non-cash stock compensation | $ 9,062 | $ 11,048 | $ 18,115 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) including noncontrolling interests in operating subsidiaries | $ (54,799) | $ (157,478) | $ (66,662) |
Other comprehensive income (loss): | |||
Unrealized loss on short-term investments | 40 | (356) | (1,488) |
Unrealized gain on foreign currency translation | 77 | (123) | (128) |
Add: reclassification adjustment for losses included in net income | 22 | 617 | 2,210 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | (54,660) | (157,340) | (66,068) |
Net (income) loss attributable to noncontrolling interests in operating subsidiaries | (732) | 2,558 | (633) |
Comprehensive income | $ (53,928) | $ (159,898) | $ (65,435) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Noncontrolling Interests [Member] |
Balance at Dec. 31, 2013 | $ 562,198 | $ 49 | $ (34,640) | $ 653,314 | $ (947) | $ (62,066) | $ 6,488 |
Common stock, shares outstanding at Dec. 31, 2013 | 49,385,057 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) attributable to Acacia Research Corporation | (66,029) | (66,029) | |||||
Payments of Dividends | (25,039) | (25,039) | |||||
Stock Issued During Period, Value, New Issues | (25,039) | ||||||
Stock options exercised, shares | 44,506 | ||||||
Proceeds from Stock Options Exercised | 206 | ||||||
Stock options exercised, value | 206 | 206 | |||||
Stock issued during period, shares, share-based compensation, net of forfeitures | 635,819 | ||||||
Non-cash stock compensation | 18,115 | $ 1 | 18,114 | ||||
Net (income) loss attributable to noncontrolling interests in operating subsidiaries | (633) | (633) | |||||
Payments to Noncontrolling Interests | 867 | ||||||
Foreign Currency Transaction Gain (Loss), Unrealized | (99) | (99) | |||||
Unrealized Gain (Loss) on Investments | 693 | 693 | |||||
Distributions to noncontrolling interests in operating subsidiary | (364) | (364) | |||||
Payments for Repurchase of Common Stock | 0 | ||||||
Balance at Dec. 31, 2014 | 489,048 | $ 50 | (34,640) | 646,595 | (353) | (128,095) | 5,491 |
Common stock, shares outstanding at Dec. 31, 2014 | 50,065,382 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) attributable to Acacia Research Corporation | (160,036) | (160,036) | |||||
Payments of Dividends | (25,434) | (25,434) | |||||
Stock options exercised, shares | 135,000 | ||||||
Proceeds from Stock Options Exercised | 938 | ||||||
Stock options exercised, value | 938 | 938 | |||||
Stock issued during period, shares, share-based compensation, net of forfeitures | 450,857 | ||||||
Non-cash stock compensation | 11,048 | $ 1 | 11,047 | ||||
Net (income) loss attributable to noncontrolling interests in operating subsidiaries | 2,558 | 2,558 | |||||
Payments to Noncontrolling Interests | 4,105 | ||||||
Foreign Currency Transaction Gain (Loss), Unrealized | (123) | (123) | |||||
Unrealized Gain (Loss) on Investments | 261 | 261 | |||||
Distributions to noncontrolling interests in operating subsidiary | (4,105) | (4,105) | |||||
Payments for Repurchase of Common Stock | 0 | ||||||
Balance at Dec. 31, 2015 | $ 314,155 | $ 51 | (34,640) | 633,146 | (215) | (288,131) | 3,944 |
Common stock, shares outstanding at Dec. 31, 2015 | 50,651,239 | 50,651,239 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) attributable to Acacia Research Corporation | $ (54,067) | (54,067) | |||||
Payments of Dividends | $ 0 | ||||||
Stock Repurchased During Period, Shares | (13,529) | ||||||
Stock options exercised, shares | 101,000 | 100,992 | |||||
Proceeds from Stock Options Exercised | $ 326 | ||||||
Stock options exercised, value | 326 | ||||||
Stock issued during period, shares, share-based compensation, net of forfeitures | (262,660) | ||||||
Non-cash stock compensation | 9,062 | $ (1) | 9,063 | ||||
Net (income) loss attributable to noncontrolling interests in operating subsidiaries | (732) | (732) | |||||
Payments to Noncontrolling Interests | 1,358 | ||||||
Foreign Currency Transaction Gain (Loss), Unrealized | 40 | ||||||
Unrealized Gain (Loss) on Investments | 99 | ||||||
Distributions to noncontrolling interests in operating subsidiary | (1,358) | ||||||
Payments for Repurchase of Common Stock | (82) | ||||||
Balance at Dec. 31, 2016 | $ 267,443 | $ 50 | $ (34,640) | $ 642,453 | $ (76) | $ (342,198) | $ 1,854 |
Common stock, shares outstanding at Dec. 31, 2016 | 50,476,042 | 50,476,042 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) including noncontrolling interests in operating subsidiaries | $ (54,799) | $ (157,478) | $ (66,662) |
Adjustments to reconcile net income (loss) including noncontrolling interests in operating subsidiaries to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 34,355 | 53,289 | 54,049 |
Non-cash stock compensation | 9,062 | 11,048 | 18,115 |
Provision for deferred income taxes | 0 | 0 | (1,736) |
Impairment of Patent-Related Intangible Assets | 42,340 | 74,731 | 3,497 |
Impairment of Goodwill | 0 | 30,149 | 0 |
Other | (477) | (109) | (28) |
Changes in assets and liabilities: | |||
Increase (Decrease) in Restricted Cash | (787) | (10,725) | 0 |
Accounts receivable | 6,750 | (13,332) | (13,827) |
Prepaid expenses and other assets | 1,593 | (619) | 3,154 |
Accounts payable and accrued expenses / costs | (3,006) | 2,570 | 3,718 |
Royalties and contingent legal fees payable | (970) | 527 | 3,904 |
Net cash provided by (used in) operating activities | 34,061 | (9,949) | 4,184 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (4) | (8) | (109) |
Purchase of available-for-sale investments | (62,633) | (23,296) | (109,963) |
Sale of available-for-sale investments | 43,232 | 82,115 | 182,115 |
Patent acquisition costs | (1,225) | (19,504) | (42,746) |
Payments to Acquire Investments | (20,000) | 0 | 0 |
Net cash provided by (used in) investing activities | (40,630) | 39,307 | 29,297 |
Cash flows from financing activities: | |||
Payments of Dividends | 0 | (25,434) | (25,039) |
Distributions to noncontrolling interests in operating subsidiary | (1,358) | (4,105) | (867) |
Proceeds from the exercise of stock options | 326 | 938 | 206 |
Repurchases of common stock | (82) | 0 | 0 |
Net cash provided by (used in) financing activities | (1,114) | (28,601) | (25,700) |
Increase in cash and cash equivalents | (7,683) | 757 | 7,781 |
Cash and cash equivalents, beginning | 135,223 | 134,466 | 126,685 |
Cash and cash equivalents, ending | 127,540 | 135,223 | 134,466 |
Patent acquisition costs included in accrued expenses | $ 0 | $ 1,000 | $ 16,700 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
DESCRIPTION OF BUSINESS [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Description of Business. As used herein, “Acacia” and the “Company” refer to Acacia Research Corporation and/or its wholly and majority-owned and controlled operating subsidiaries, and/or where applicable, its management. All patent investment, prosecution, licensing and enforcement activities are conducted solely by certain of Acacia’s wholly and majority-owned and controlled operating subsidiaries. Acacia’s operating subsidiaries invest in, license and enforce patented technologies. Acacia’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. Acacia’s operating subsidiaries generate revenues and related cash flows from the granting of intellectual property rights for the use of patented technologies that its operating subsidiaries control or own. Acacia’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. Acacia’s operating subsidiaries are principals in the licensing and enforcement effort, obtaining control of the rights in the patent portfolio, or control of the patent portfolio outright. Acacia’s operating subsidiaries own or control the rights to multiple patent portfolios, which include U.S. patents and certain foreign counterparts, covering technologies used in a wide variety of industries. Neither Acacia nor its operating subsidiaries invent new technologies or products; rather, Acacia depends upon the identification and investment in new patents, inventions and companies that own intellectual property through our relationships with inventors, universities, research institutions, technology companies and others. If Acacia's operating subsidiaries are unable to maintain those relationships and to continue to identify and grow new relationships, then they may not be able to identify new technology-based opportunities for sustainable revenue and / or revenue growth. During fiscal 2016 Acacia obtained control of 2 new patent portfolios. Further, in fiscal year 2015, Acacia obtained control of 3 new patent portfolios, compared to 6 new patent portfolios, and 25 new patent portfolios in fiscal years 2014 and 2013, respectively. Acacia was incorporated on January 25, 1993 under the laws of the State of California. In December 1999, Acacia changed its state of incorporation from California to Delaware. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Principles and Fiscal Year End. The consolidated financial statements and accompanying notes are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America. Principles of Consolidation. The accompanying consolidated financial statements include the accounts of Acacia and its wholly and majority-owned and controlled subsidiaries. Material intercompany transactions and balances have been eliminated in consolidation. Noncontrolling interests in Acacia’s majority-owned and controlled operating subsidiaries (“noncontrolling interests”) are separately presented as a component of stockholders’ equity. Consolidated net income or (loss) is adjusted to include the net (income) or loss attributed to noncontrolling interests in the consolidated statements of operations. Refer to the accompanying consolidated statements of stockholders’ equity for total noncontrolling interests. A wholly owned subsidiary of Acacia is the general partner of the Acacia Intellectual Property Fund, L.P. (the “Acacia IP Fund”), which was formed in August 2010. The Acacia IP Fund is included in the Company’s consolidated financial statements since 2010, as Acacia’s wholly owned subsidiary, as the general partner, has the ability to control the operations and activities of the Acacia IP Fund. Refer to Note 12 to these consolidated financial statements. Revenue Recognition. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed pursuant to the terms of the arrangement, (iii) amounts are fixed or determinable, and (iv) the collectibility of amounts is reasonably assured. In general, revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by Acacia’s operating subsidiaries. These rights typically include some combination of the following: (i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled by Acacia’s operating subsidiaries, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation. The intellectual property rights granted may be perpetual in nature, extending until the expiration of the related patents, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. Pursuant to the terms of these agreements, Acacia’s operating subsidiaries have no further obligation with respect to the grant of the non-exclusive retroactive and future licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on Acacia’s operating subsidiaries’ part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the agreement, or upon receipt of the minimum upfront payment for term agreement renewals. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectibility is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all other revenue recognition criteria have been met. For the periods presented herein, the majority of the revenue agreements executed by the Company provided for the payment of one-time, paid-up license fees in consideration for the grant of certain intellectual property rights for patented technology rights owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Certain of the Company’s revenue arrangements provide for future royalties or additional required payments based on future licensee activities. Additional royalties are recognized in revenue upon resolution of the related contingency provided that all revenue recognition criteria, as described above, have been met. Amounts of additional royalties due under these license agreements, if any, cannot be reasonably estimated by management. Certain of the Company’s revenue arrangements provide for the calculation of fees based on a licensee’s actual quarterly sales or actual per unit activity, applied to a contractual royalty rate. Licensees that pay fees on a quarterly basis generally report actual quarterly sales or actual per unit activity information and related quarterly fees due within 30 days to 45 days after the end of the quarter in which such sales or activity takes place. The amount of fees due under these revenue arrangements each quarter cannot be reasonably estimated by management. Consequently, Acacia’s operating subsidiaries recognize revenue from these revenue arrangements on a three -month lag basis, in the quarter following the quarter of sales or per unit activity, provided amounts are fixed or determinable and collectibility is reasonably assured. The lag method described above allows for the receipt of licensee royalty reports prior to the recognition of revenue. Amounts related to revenue arrangements that do not meet the revenue recognition criteria described above are deferred until the revenue recognition criteria are met. Acacia assesses the collectibility of fees receivable based on a number of factors, including past transaction history and credit-worthiness of licensees. If it is determined that collection is not reasonably assured, the fee is recognized when collectibility becomes reasonably assured, assuming all other revenue recognition criteria have been met, which is generally upon receipt of cash. Cost of Revenues . Cost of revenues include the costs and expenses incurred in connection with Acacia’s patent licensing and enforcement activities, including inventor royalties paid to original patent owners, contingent legal fees paid to external patent counsel, other patent-related legal expenses paid to external patent counsel, licensing and enforcement related research, consulting and other expenses paid to third-parties and the amortization of patent-related investment costs. These costs are included under the caption “Cost of revenues” in the accompanying consolidated statements of operations. Inventor Royalties and Contingent Legal Expenses. Inventor royalties are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In certain instances, pursuant to the terms of the underlying inventor agreements, upfront advances paid to patent owners by Acacia’s operating subsidiaries are recoverable from future net revenues. Patent costs that are recoverable from future net revenues are amortized over the estimated economic useful life of the related patents, or as the prepaid royalties are earned by the inventor, as appropriate, and the related expense is included in amortization expense in the consolidated statements of operations. Any unamortized upfront advances recovered from net revenues are expensed in the period recovered, and included in amortization expense in the consolidated statements of operations. Refer to Note 12 for additional information. Contingent legal fees are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In instances where there are no recoveries from potential infringers, no contingent legal fees are paid; however, Acacia’s operating subsidiaries may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement. Fair Value Measurements. U.S. generally accepted accounting principles define fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three-level hierarchy of valuation techniques established to measure fair value is defined as follows: ● Level 1 - Observable Inputs: Quoted prices in active markets for identical investments; ● Level 2 - Pricing Models with Significant Observable Inputs: Other significant observable inputs, including quoted prices for similar investments, interest rates, credit risk, etc.; and ● Level 3 - Unobservable Inputs: Significant unobservable inputs, including the entity’s own assumptions in determining the fair value of investments. Whenever possible, the Company is required to use observable market inputs (Level 1 - quoted market prices) when measuring fair value. Acacia has not elected the fair value option for recording non-financial assets and liabilities, and therefore no fair value measurements are performed on a recurring basis. Cash and Cash Equivalents . Acacia considers all highly liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents. For the periods presented, Acacia’s cash equivalents are comprised of investments in AAA rated money market funds that invest in first-tier only securities, which primarily includes: domestic commercial paper, securities issued or guaranteed by the U.S. government or its agencies, U.S. bank obligations, and fully collateralized repurchase agreements. Acacia’s cash equivalents are measured at fair value using quoted prices that represent Level 1 inputs. Investments in Marketable Securities. Investments in securities with original maturities of greater than three months and less than one year and other investments representing amounts that are available for current operations are classified as short-term investments, unless there are indications that such investments may not be readily sold in the short term. The fair values of these investments approximate their carrying values. As of December 31, 2015, the balance of short term investments was zero. At December 31, 2016, all of Acacia’s short-term investments were classified as available-for-sale, which are reported at fair value on a recurring basis using significant observable inputs (Level 1), with related unrealized gains and losses in the value of such securities recorded as a separate component of other comprehensive income (loss) in stockholders’ equity until realized. Realized and unrealized gains and losses are recorded based on the specific identification method. Interest on all securities is included in total other income (expense). Impairment of Marketable Securities. Acacia evaluates its investments in marketable securities for potential impairment, employing a systematic methodology on a quarterly basis that considers available quantitative and qualitative evidence. If the cost or carrying value of an investment exceeds its estimated fair value, the Company evaluates, among other factors, general market conditions, credit quality of instrument issuers, the duration and extent to which the fair value is less than cost, and the Company’s intent and ability to hold, or plans or ability to sell. Fair value is estimated based on publicly available market information or other estimates determined by management. Investments are considered to be impaired when a decline in fair value is estimated to be other-than-temporary. Acacia reviews impairments associated with its investments in marketable securities and determines the classification of any impairment as temporary or other-than-temporary. An impairment is deemed other-than-temporary unless (a) Acacia has the ability and intent to hold an investment for a period of time sufficient for recovery of its carrying amount and (b) positive evidence indicating that the investment’s carrying amount is recoverable within a reasonable period of time outweighs any evidence to the contrary. All available evidence, both positive and negative, is considered to determine whether, based on the weight of such evidence, the carrying amount of the investment is recoverable within a reasonable period of time. For investments classified as available-for-sale, unrealized losses that are other-than-temporary are recognized in the consolidated statements of operations. Concentration of Credit Risks. Financial instruments that potentially subject Acacia to concentrations of credit risk are cash equivalents, investments and accounts receivable. Acacia places its cash equivalents and investments primarily in highly rated money market funds and investment grade marketable securities. Cash equivalents are also invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. Acacia has not experienced any significant losses on its deposits of cash and cash equivalents. Three licensees individually accounted for 26% , 23% and 11% , respectively, of revenues recognized during the year ended December 31, 2016 . Three licensees individually accounted for 24% , 20% and 16% , respectively, of revenues recognized during the year ended December 31, 2015 . Two licensees individually accounted for 22% and 22% , respectively, of revenues recognized during the year ended December 31, 2014 . Four licensees individually represented approximately 39% , 22% , 16% and 15% , respectively, of accounts receivable at December 31, 2016 . Two licensees individually represented approximately 72% and 21% , respectively, of accounts receivable at December 31, 2015 . For 2016, 2015 and 2014 , 79% , 49% and 43% , respectively, of revenues were attributable to licensees domiciled in foreign jurisdictions, based on the jurisdiction of the entity obligated to satisfy payment obligations pursuant to the applicable revenue arrangement. The Company does not have any material foreign operations. Acacia performs credit evaluations of its licensees with significant receivable balances, if any, and has not experienced any significant credit losses. Accounts receivable are recorded at the executed contract amount and generally do not bear interest. Collateral is not required. An allowance for doubtful accounts may be established to reflect the Company’s best estimate of probable losses inherent in the accounts receivable balance, and is reflected as a contra-asset account on the balance sheet and a charge to operating expenses in the statement of operations for the applicable period. The allowance is determined based on known troubled accounts, historical experience, and other currently available evidence. There was no allowance for doubtful accounts established for the periods presented. Property and Equipment. Property and equipment are recorded at cost. Major additions and improvements that materially extend useful lives of property and equipment are capitalized. Maintenance and repairs are charged against the results of operations as incurred. When these assets are sold or otherwise disposed of, the asset and related depreciation are relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal. Depreciation and amortization is computed on a straight-line basis over the following estimated useful lives of the assets: Furniture and fixtures 3 to 5 years Computer hardware and software 3 to 5 years Leasehold improvements 2 to 5 years (Lesser of lease term or useful life of improvement) Rental payments on operating leases are charged to expense in the consolidated statements of operations on a straight-line basis over the lease term. Patents. Patents include the cost of patents or patent rights (hereinafter, collectively “patents”) acquired from third-parties or obtained in connection with business combinations. Patent costs are amortized utilizing the straight-line method over their remaining economic useful lives, ranging from one to ten years. Certain patent application and prosecution costs incurred to secure additional patent claims, that based on management’s estimates are deemed to be recoverable, are capitalized and amortized over the remaining estimated economic useful life of the related patent portfolio. Goodwill. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Acacia considers its market capitalization and the carrying value of its assets and liabilities, including goodwill, when performing its goodwill impairment test. When conducting its annual goodwill impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that goodwill is impaired. If it is determined by a qualitative evaluation that it is more likely than not that goodwill is impaired, the Company then applies a two-step impairment test. The two-step impairment test first compares the fair value of the Company’s reporting unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the reporting unit exceeds its fair value, the Company determines the implied fair value of the reporting unit’s goodwill and if the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded in the consolidated statement of operations. Acacia's goodwill balance of $30.1 million was fully written-off as of December 31, 2015. Refer to Note 7 for additional information. Impairment of Long-lived Assets. Acacia reviews long-lived assets and intangible assets for potential impairment annually (quarterly for patents) and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. Refer to Note 7 for additional information. Fair value is generally estimated using the “Income Approach,” focusing on the estimated future net income-producing capability of the patent portfolios over the estimated remaining economic useful life. Estimates of future after-tax cash flows are converted to present value through “discounting,” including an estimated rate of return that accounts for both the time value of money and investment risk factors. Estimated cash inflows are typically based on estimates of reasonable royalty rates for the applicable technology, applied to estimated market share data. Estimated cash outflows are based on existing contractual obligations, such as contingent legal fee and inventor royalty obligations, applied to estimated license fee revenues, in addition to other estimates of out-of-pocket expenses associated with a specific patent portfolio’s licensing and enforcement program. The analysis also contemplates consideration of current information about the patent portfolio including, status and stage of litigation, periodic results of the litigation process, strength of the patent portfolio, technology coverage and other pertinent information that could impact future net cash flows. Fair Value of Financial Instruments. The carrying value of cash and cash equivalents, investments, accounts receivables, and accounts payable approximates their fair values due to their short-term maturities. Contingent Liabilities. The Company, from time to time, is involved in certain legal proceedings. Based upon consultation with outside counsel handling its defense in these matters and the Company’s analysis of potential outcomes, if the Company determines that a loss arising from such matters is probable and can be reasonably estimated, an estimate of the contingent liability is recorded in its consolidated financial statements. If only a range of estimated loss can be determined, an amount within the range that, based on estimates, assumptions and judgments, reflects the most likely outcome, is recorded as a contingent liability in the consolidated financial statements. In situations where none of the estimates within the estimated range is a better estimate of probable loss than any other amount, the Company records the low end of the range. Any such accrual would be charged to expense in the appropriate period. Litigation expenses for these types of contingencies are recognized in the period in which the litigation services were provided. Stock-Based Compensation. The compensation cost for all stock-based awards is measured at the grant date, based on the fair value of the award, and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity award) which is generally two to four years. The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock. The fair value of each option award is estimated on the date of grant using a Black-Scholes option-pricing model. Stock-based compensation expense for awards with service and / or performance conditions that affect vesting is recorded only for those awards expected to vest using an estimated forfeiture rate. Refer to Note 11 to these notes to consolidated financial statements for information on stock-based awards granted for the periods presented. The fair value of stock options granted during the year ended December 31, 2016 was estimated using the Black-Scholes option-pricing model, based on the following weighted-average assumptions: Weighted-Average Assumptions Risk-free interest rate 1.1% Term 3.06 Volatility 53% Dividend yield —% Due to a lack of sufficient historical stock option exercise experience, the Company utilized the simplified method for estimating the expected term for stock options granted during the year ended December 31, 2016. Expected volatility is based on the historical volatility of the Company’s stock for the length of time corresponding to the expected term of the option. The risk-free interest rate is based on the U.S. treasury yield curve on the grant date for the expected term of the option. Restricted stock awards and stock option awards with performance-based vesting conditions generally vest based upon the Company achieving specified cash flow performance targets over a one and two-year period from the date of grant. Performance-based stock options awards with market-based vesting conditions vest based upon the Company achieving specified stock price targets over a four-year period. The effect of a market condition is reflected in the estimate of the grant-date fair value of the options utilizing a Monte Carlo valuation technique. Compensation cost is recognized for an option with a market-based vesting condition provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. The service period for options with a market-based vesting condition is inferred from the application of the Monte Carlo valuation technique. The derived service period represents the duration of the median of the distribution of share price paths on which the market condition is satisfied. The duration is the period of time from the service inception date to the expected date of satisfaction, as determined from the valuation technique. Assumptions utilized in connection with the Monte Carlo valuation technique included: estimated risk-free interest rate; expected volatility; and expected dividend yield. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined using historical volatility. The expected dividend yield was based on expectations regarding dividend payments. Income Taxes. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in Acacia’s consolidated financial statements or consolidated income tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized, or if it is determined that there is uncertainty regarding future realization of such assets. Under U.S. generally accepted accounting principles, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not threshold are measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. If a deduction reported on a tax return for an equity-based incentive award exceeds the cumulative compensation cost for those instruments recognized for financial reporting purposes, any resulting realized tax benefit that exceeds the previously calculated deferred tax asset for those instruments is considered an excess tax benefit, and is recognized as additional paid-in capital. If the tax deduction is less than the cumulative book compensation cost, the tax effect of the resulting difference is charged first to APIC, to the extent of the available pool of windfall tax benefits, with any remainder recognized in income tax expense. Segment Reporting. Acacia uses the management approach, which designates the internal organization that is used by management for making operating decisions and assessing performance as the basis of Acacia’s reportable segments. Acacia’s patent licensing and enforcement business constitutes its single reportable segment. Use of Estimates . The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Acacia believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, stock-based compensation expense, impairment of marketable securities and intangible assets, the determination of the economic useful life of amortizable intangible assets, income taxes and valuation allowances against net deferred tax assets, the allocation of loans to investees between the loans receivable and common stock purchase warrants received, and the application of the acquisition method of accounting for business combinations, require its most difficult, subjective or complex judgments. Income (Loss) Per Share. The Company computes net income (loss) attributable to common stockholders using the two-class method required for capital structures that include participating securities. Under the two-class method, securities that participate in non-forfeitable dividends, such as the Company’s outstanding unvested restricted stock, are considered “participating securities.” In applying the two-class method, (i) basic net income (loss) per share is computed by dividing net income (loss) (less any dividends paid on participating securities) by the weighted average number of shares of common stock and participating securities outstanding for the period and (ii) diluted earnings per share may include the additional effect of other securities, if dilutive, in which case the dilutive effect of such securities is calculated by applying the two-class method and the treasury stock method to the assumed exercise or vesting of potentially dilutive common shares. The method yielding the more dilutive result is ultimately reported for the applicable period. Potentially dilutive common stock equivalents primarily consist of employee stock options, and restricted stock units for calculations utilizing the two-class method, and also include unvested restricted stock, when utilizing the treasury method. The following table presents the weighted-average number of common shares outstanding used in the calculation of basic and diluted income per share: 2016 2015 2014 Numerator (in thousands): Basic and Diluted Net loss $ (54,067 ) $ (160,036 ) $ (66,029 ) Total dividends declared / paid — (25,434 ) (25,039 ) Dividends attributable to common stockholders — 24,740 24,313 Net loss attributable to common stockholders – basic and diluted $ (54,067 ) $ (160,730 ) $ (66,755 ) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted 50,075,847 49,505,817 48,658,088 Basic and diluted net loss per common share $ (1.08 ) $ (3.25 ) $ (1.37 ) Anti-dilutive equity-based incentive awards excluded from the computation of diluted loss per share 3,682,532 71,468 27,760 Treasury Stock . Repurchases of the Company’s outstanding common stock are accounted for using the cost method. The applicable par value is deducted from the appropriate capital stock account on the formal or constructive retirement of treasury stock. Any excess of the cost of treasury stock over its par value is charged to additional paid-in capital, and reflected as Treasury Stock on the consolidated balance sheets. Recent Accounting Pronouncements - Not Yet Adopted. In May 2014, the FASB issued a new accounting standards update addressing revenue from contracts with customers, which clarifies existing accounting literature relating to how and when a company recognizes revenue. Under the standard, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The amendments for this standard update are effective for interim and annual reporting periods beginning after December 15, 2016, and are to be applied retrospectively or the cumulative effect as of the date of adoption, with early application not permitted. The Company is currently evaluating the impact and method of adoption the pronouncement will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued an accounting standard update to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. This update is effective for annual reporting periods beginning after December 31, 2016, including interim periods within those annual periods, and early adoption is permitted. Management is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In February 2016, the FASB issued an accounting standard update which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the |
Short-term Investments
Short-term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Short-term Investments [Abstract] | |
Short-Term Investments | SHORT-TERM INVESTMENTS Short-term marketable securities for the periods presented were comprised of the following (in thousands): December 31, 2016 Security Type Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government fixed income securities $ 19,403 $ 40 $ — $ 19,443 Short-term investments at December 31, 2016 were comprised of investments in highly liquid, AAA, U.S. government fixed income securities with maturity dates in 2017 . There were no short-term investments at December 31, 2015 . U.S. government fixed income securities . The Company has the ability to hold these securities until maturity, currently has no intent to sell, there is no requirement to sell and the Company believes that it can recover the amortized cost of these investments. The Company has found no evidence of impairment due to credit losses in its portfolio. However, the Company cannot provide any assurance that its portfolio of short-term marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results. For the year ended December 31, 2016 , proceeds from the sale of short-term marketable securities classified as available-for-sale were $43,232,000 and gross realized gains were $1,000 . For the year ended December 31, 2015 , proceeds from the sale of short-term marketable securities were $82,115,000 and gross realized losses were $617,000 . For the year ended December 31, 2014 , proceeds from the sale of short-term marketable securities were $182,115,000 and gross realized losses were $2,188,000 . Gross realized gains are recorded in the statements of operations in other income (expense). |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consists of the following at December 31, 2016 and 2015 (in thousands): 2016 2015 Furniture and fixtures $ 733 $ 739 Computer hardware and software 603 649 Leasehold improvements 131 145 1,467 1,533 Less: accumulated depreciation and amortization (1,340 ) (1,261 ) $ 127 $ 272 Depreciation expense was $147,000 , $222,000 and $304,000 for the years ended December 31, 2016, 2015 and 2014 , respectively. In 2016 and 2015, the Company retired $68,000 and $30,000 , respectively, of items held in furniture and equipment and recorded a $3,000 and $14,000 , respectively, loss on disposal. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accounts Payable and Accrued Expenses / Costs | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following at December 31, 2016 and 2015 (in thousands): 2016 2015 Payroll and other employee benefits $ 1,593 $ 576 Accrued vacation 533 701 Accrued legal expenses - patent 6,564 10,135 Foreign taxes payable (1) 3,150 3,960 Accrued consulting and other professional fees 1,967 1,592 Other accrued liabilities 476 383 $ 14,283 $ 17,347 (1) - Included in "Accounts payable and accrued expenses / patent costs" line item on the consolidated statement of cash flows included elsewhere herein. |
Patents
Patents | 12 Months Ended |
Dec. 31, 2016 | |
Patents [Abstract] | |
Patents | Acacia’s only identifiable intangible assets are patents and patent rights, with estimated remaining economic useful lives ranging from one to seven years . For all periods presented, all of Acacia’s identifiable intangible assets were subject to amortization. The gross carrying amounts and accumulated amortization related to investments in intangible assets as of December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Gross carrying amount - patents $ 444,362 $ 444,137 Accumulated amortization - patents (1) (358,043 ) (281,495 ) Patents, net $ 86,319 $ 162,642 (1) Includes patent impairment charges for the applicable periods. The weighted-average remaining estimated economic useful life of Acacia’s patents and patent rights is 5 years . Scheduled annual aggregate amortization expense is estimated to be $22,333,000 in 2017, $21,256,000 in 2018, $19,150,000 in 2019, $6,707,000 in 2020, $5,421,000 in 2021 and $11,452,000 thereafter. For the years ended December 31, 2016, 2015 and 2014 , Acacia paid patent investment costs totaling $1,225,000 , $19,504,000 and $42,746,000 , respectively. The patents have initial estimated economic useful lives ranging from two to ten years . Included in net additions to capitalized patent costs during the year ended December 31, 2015 and 2014 are accrued patent investment costs totaling $1,000,000 and $16,700,000 , respectively, which are amortized over the estimated economic useful life of the related patents. During the periods presented, certain operating subsidiaries recovered up-front patent portfolio advances from applicable net licensing proceeds prior to the scheduled amortization of such up-front patent portfolio advances, resulting in the acceleration of amortization expense for the applicable patent-related assets. For the years ended December 31, 2016 and 2014, accelerated amortization expense related to the recovery of up-front patent portfolio advances totaled $225,000 and $1,247,000 , respectively. For the year ended December 31, 2015, there was no accelerated amortization expense. For the years ended December 31, 2015 and 2014, pursuant to the terms of the respective inventor agreements, certain Acacia operating subsidiaries elected to terminate or sell their rights to patent portfolios, resulting in the acceleration of amortization expense for the patent-related assets totaling $380,000 and $2,702,000 , respectively. For the year ended December 31, 2016, there were no terminations or sales of patent portfolios. Acacia recorded impairment of patent-related intangible asset charges totaling $ 42,340,000 , $74,731,000 and $3,497,000 for the years ended December 31, 2016, 2015 and 2014 , respectively. The impairment charges related to impairments of patent portfolios due to a reduction in expected estimated future net cash flows and certain patent portfolios that management determined it would no longer allocate future resources to in connection with the licensing and enforcement of such portfolios, due primarily to adverse litigation outcomes, potential prior art related complexities and/or the overall determination that future resources would be allocated to other licensing and enforcement programs with higher potential return profiles. In December 2015, Acacia's subsidiary Adaptix, Inc. received a jury verdict in its case against Alcatel Lucent USA, Inc., and others. The jury returned a verdict that the asserted claims of the patent at issue were invalid and non-infringed. The Adaptix trial loss resulted in a reduction in estimated cash flows for the Adaptix portfolio expected to be realized from future licensing and enforcement activities, leading to partial impairment charges on the portfolio in the fourth quarter of 2015. Patent impairment charges included the impairment of the remaining carrying value for the Adapitx portfolio in the second quarter of 2016. In addition, for the year ended December 31, 2015 analysis, management considered the impact of the fourth quarter 2015 adverse trial outcomes on its estimates of future cash flows that could be realized from future licensing and enforcement activities for other patent portfolios. Estimates of future cash flows for these portfolios were reduced in part in connection with the Company's assessment of probabilities of realization given the recent adverse trial outcomes. Additionally, patent impairment charges include the carrying value of other patent portfolios for which, in 2015, the Company experienced adverse litigation or trial outcomes, leading to a reduction in or elimination of expected future cash flows. In addition, headcount reductions and internal staff optimization efforts led to changes with respect to which patent portfolios the Company intends to allocate licensing and enforcement resources to in future periods. As such, certain portfolio programs were selected for termination due to a decision to no longer pursue or allocate resources, resulting in a write-off any remaining carrying value in the fourth quarter of 2015. The impairment charges for the periods presented consisted of the excess of the asset’s carrying value over its estimated fair value. For the years ended December 31, 2016, 2015 and 2014 , capitalized patent costs, accumulated amortization, and sales proceeds related to patent-related sales and disposals are as follows (in thousands): 2016 2015 2014 Capitalized patent costs $ — $ 500 $ 3,000 Accumulated amortization — 120 298 Sales proceeds — 750 3,500 |
Goodwill Impairment Charges (No
Goodwill Impairment Charges (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Patent Impairment Charges [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | GOODWILL IMPAIRMENT CHARGES Pursuant to applicable accounting standards, if goodwill and another asset group of a reporting unit are tested for impairment at the same time, the other asset group, the Company's patent portfolios, are to be tested for impairment before goodwill. Refer to Note 6 for additional information regarding patent impairment charges for the year ended December 31, 2015. Goodwill Impairment Testing - December 31, 2015. At December 31, 2015, prior to the completion of the annual goodwill impairment test, the goodwill balance totaled $30.1 million . Goodwill is tested for impairment at the Company's single reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Factors considered important, which could trigger an impairment review, include the following: • significant consistent gradual decline in the Company's stock price for a sustained period; • significant underperformance relative to expected historical or projected future operating results; • significant changes in the manner of use of assets or the strategy for the Company's overall business; • significant negative industry or economic trends; and • significant adverse changes in legal factors or in the business climate, including adverse regulatory actions or assessments. In connection with Acacia's annual goodwill impairment testing for 2015, the Company identified several qualitative factors triggering an impairment test at December 31, 2015, as follows: • Adverse legal outcomes and changes in legal factors. In December 2015, Acacia announced that its subsidiary Adaptix, Inc. received a jury verdict in its case against Alcatel Lucent USA, et al., deciding that the claims of the applicable patents in suit were invalid and non-infringed. This adverse legal outcome and others in the fourth quarter of 2015 resulted in changes in estimates of realization related to litigation outcomes in future periods for certain patent portfolios. • Significant consistent gradual decline in the Company’s stock price: Historically, the Company's stock price has been volatile, and the volatility continued during fiscal 2015, declining from $16.72 as of January 2, 2015, to $4.29 as of December 31, 2015, a 74% decline. In addition, subsequent to December 31, 2015, the Company's stock price volatility has continued, trending downward to $3.16 as of February 29, 2016. In the fourth quarter of 2015, given the continued decline in stock price up through December 31, 2015, and the impact of the December 2015 adverse trial outcomes noted above, the gradual consistent decline in the Company's stock price was deemed to be sustained, and hence indicative of a reduction in the estimated fair value of the Company, as reflected in its lower overall market capitalization. • Changes in Company Management and Resource Allocations. In connection with certain resource allocation changes within the organization given a change in management in the fourth quarter of 2015, headcount reductions and internal staff optimization efforts occurred, which led to changes with respect to estimates of which patent portfolios the Company intends to continue to allocate licensing and enforcement resources to in future periods. As such, certain patent portfolio programs were selected for termination due to a decision to no longer allocate resources. In addition, changes in estimates regarding the best and highest use of certain patent portfolios were made, resulting in reductions in estimated future cash flows. At December 31, 2015, the Company utilized the following methods and assumptions in its annual goodwill impairment testing, which was prepared with the assistance of a third-party valuation specialist: • At December 31, 2015, the initial qualitative assessment included consideration of the factors described above, resulting in a conclusion that as of December 31, 2015, the consistent gradual decline in the Company’s stock price was sustained. The Company also considered the impact of the December 2015 adverse trial outcomes on the Company's stock price and related estimates of fair value for remaining portfolio opportunities. Based on the Company's assessment of these factors, the Company determined that it was more likely than not that goodwill was impaired, constituting a triggering event requiring a goodwill impairment test as of December 31, 2015. • The Company conducted the first step of the goodwill impairment test for its single reporting unit as of December 31, 2015. The Company utilized the market capitalization plus cost synergies approach to estimate the fair value of the Company. The estimated market capitalization was determined by multiplying the Company's stock price and the common shares outstanding as of December 31, 2015. Management also considered a control premium in its estimate of fair value for the Company's single reporting unit. The cost synergies were estimated based on the cost savings which could be achieved if the Company was acquired by a competitor in the same operating business. • Based on the analysis utilizing the market capitalization plus cost synergies approach, the estimated fair value of the reporting unit of $252 million was below its carrying value of $344.3 million as of December 31, 2015, and therefore, goodwill was determined to be more likely than not, impaired. • The purpose of step 2 of the analysis was to determine the estimated fair value of the assets and liabilities of the Company's reporting unit, in order to determine the implied fair value of goodwill for the reporting unit. The excess, if any, of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. Based upon the analysis performed, the fair value of the Company's single reporting unit did not exceed the amounts assigned to its reporting unit assets and liabilities, resulting in a difference between the implied fair value of goodwill of zero and the historical carrying value of goodwill. As a result, the Company recognized a goodwill impairment charge totaling $30.1 million in the fourth quarter of 2015. |
Loan Receivable and Investment
Loan Receivable and Investment in Warrants (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Investments and Other Noncurrent Assets [Text Block] | LOAN RECEIVABLE AND INVESTMENT IN WARRANTS On August 15, 2016, Acacia entered into an Investment Agreement with Veritone, Inc. (“Veritone”), which provides for Acacia to invest up to $50 million in Veritone, consisting of both debt and equity components. Pursuant to the Investment Agreement, on August 15, 2016, Acacia entered into a secured convertible promissory note with Veritone (the “Veritone Loans”), which permits Veritone to borrow up to $20 million through two $10 million advances, each bearing interest at the rate of 6.0% per annum (included in Other Income (Expense) in the consolidated statement of operations). On August 15, 2016, Acacia funded the initial $10 million loan (the “First Loan”), which initially had a one-year term. On November 25, 2016, Acacia funded the second $10 million loan (the “Second Loan”), which has a one-year term. In addition, upon the funding of the Second Loan, the maturity date of the First Loan was automatically extend to the maturity date of the Second Loan. As a result, both the First Loan and the Second Loan are due and payable on November 25, 2017. Veritone’s obligations under the Veritone Loans are secured by substantially all of Veritone’s assets pursuant to a security agreement that Acacia entered into with Veritone dated August 15, 2016. In addition, commencing on the earlier of Veritone’s consummation of a private round of financing of at least $10 million (a “Next Equity Financing”) and the maturity date of the Veritone Loans, Acacia has the right, under certain circumstances, to convert all or a portion of the principal and accrued interest of the Veritone Loans into shares of Veritone’s Series B Preferred Stock or, if Veritone consummates a Next Equity Financing, into shares of Veritone capital stock issued in such financing, at various conversion rates, with the exact conversion rate to depend upon (i) whether Veritone consummates a Next Equity Financing, (ii) the price per share in such Next Equity Financing and (iii) whether or not Acacia elects to convert all of the outstanding principal and accrued interest under the Veritone Loans. If Veritone consummates a qualified public offering of its common stock, any outstanding principal and accrued interest under the Veritone Loans will automatically convert into shares of Veritone’s common stock at the applicable conversion rate. In conjunction with the First Loan, Veritone issued Acacia a four-year $700,000 warrant to purchase shares of Veritone’s common stock at various exercise prices, with the actual exercise price to be determined by the type and/or valuation of Veritone’s future equity financings, if any. The actual number of shares to be purchased upon exercise of the warrant is determined by dividing the warrant value by the applicable exercise price. Upon funding of the Second Loan, Veritone issued to Acacia two additional four-year $700,000 warrants to purchase shares of Veritone’s common stock with similar terms. In addition, pursuant to the Investment Agreement, Veritone issued Acacia a five-year Primary Warrant to purchase up to $50 million , less all converted amounts or amounts repaid under the Veritone Loans, worth of shares of Veritone’s common stock at various exercise prices, with the actual exercise price per share to be determined by the amount of principal and accrued interest under the Veritone Loans converted into shares of Veritone common stock. Acacia may exercise the Primary Warrant at any time during its five year term after the earlier of August 15, 2017 or the completion of a public offering with gross proceeds to Veritone of at least $15.0 million . Immediately subsequent to such a public offering, Veritone has the right to elect that Acacia exercise the Primary Warrant, and upon such election, Acacia agrees to exercise the Primary Warrant in full, provided that the then current fair market value of Veritone common stock is equal to or greater than the exercise price per share of the Primary Warrant. Immediately following Acacia’s exercise of the Primary Warrant in full, Veritone has the obligation to issue to Acacia an additional 10% Warrant that provides for the issuance of additional shares of Veritone common stock, with 50% of the shares underlying the 10% Warrant vesting as of the issuance date of the 10% Warrant, and the remaining 50% of shares vesting on the anniversary of the issuance date of the 10% Warrant. Our Investment Agreement, as described above, represents a variable interest in Veritone for which Acacia is not the primary beneficiary, primarily due to a lack of a controlling interest in Veritone. As of December 31, 2016, the Veritone Loans are not considered in-substance common stock and the common stock purchase warrants are unexercised, and therefore, the equity method of accounting is not applied. In addition, the Veritone Loans do not meet the criteria for classification as a debt security. As such, the Veritone Loans and the related common stock purchase warrants described above are accounted for as separate units of account based on the relative estimated fair values of the separate units as of the effective date of the transaction, with the $20 million amount of the Veritone Loans allocated to (1) the Veritone Loans, which are accounted for as long-term loan receivables and (2) the common stock purchase warrants. The estimated relative fair value allocation of the $20 million investment to the Veritone Loans and the related common stock purchase warrants was determined using a Monte Carlo simulation model. Key inputs to the model included the estimated value of Veritone's equity on the effective date of the transactions, related volatility of equity assumptions, discounts for lack of marketability, assumptions related to liquidity scenarios, and assumptions related to recovery scenarios on the Veritone Loans. A summary of assumptions used in connection with estimating the relative fair values were as follows: Valuation Technique Significant Unobservable Inputs Range of Inputs Monte Carlo simulation model Volatility 40 % - 50% Marketability discount 7% Funding scenario probabilities 25 % - 75% Recovery 100% The Veritone Loans and warrants are reflected in the accompanying consolidated financial statements as follows (in thousands): As of and For the Year Ended December 31, 2016 Face value of loan receivable $ 20,000 Unamortized loan discount (1,384 ) Carrying value of loan receivable 18,616 Investment in warrants (initial loan discount) 1,960 Total $ 20,576 Interest receivable $ 286 Accretion of loan discount 576 Interest income $ 862 The loan discount, representing the difference between the face amount of the Veritone Loans and the relative fair value allocated to the Veritone Loans, is accreted over the expected life of the loans, using the effective interest method, with the related interest amounts reflected in Other Income in the consolidated statement of operations. Acacia will re-evaluate its variable interest in Veritone and related accounting conclusions and disclosure requirements each reporting period. The effective yield for the First Loan and Second Loan was 20% and 9% , respectively. Management performs a review of the Veritone Loans on a quarterly basis to assess the need for allowances for uncollectibility, based on current trends and other factors affecting collectibility, and to determine if any impairment has occurred. A loan receivable is considered impaired when it is probable that amounts related to the loan receivable will not be collected according to the contractual terms of the agreement. As of December 31, 2016, no allowances for uncollectibility have been recorded. An allowance for uncollectibility would be reflected as a charge to earnings in the consolidated statement of operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Cash Dividends. On April 23, 2013, Acacia announced that its Board of Directors approved the adoption of a cash dividend policy that calls for the payment of an expected total annual cash dividend of $0.50 per common share, payable in the amount of $0.125 per share per quarter. Under the policy, the Company paid four quarterly cash dividends totaling $25,434,000 and $25,039,000 in 2015 and 2014, respectively. On February 25, 2016, Acacia announced that its Board of Directors terminated the company’s dividend policy effective February 23, 2016. The Board of Directors terminated the dividend policy due to a number of factors, including the Company’s financial performance and its available cash resources, the Company’s cash requirements and alternative uses of capital that the Board of Directors concluded would represent an opportunity to generate a greater return on investment for the Company and its stockholders. Tax Benefits Preservation Plan . On March 15, 2016, Acacia's Board of Directors announced that it unanimously approved the adoption of a Tax Benefits Preservation Plan (the “Plan"). The purpose of the Plan is to protect the Company's ability to utilize potential tax assets, such as net operating loss carryforwards (“NOLs") and tax credits to offset potential future taxable income. The Plan is designed to reduce the likelihood that the Company will experience an ownership change by discouraging any (i) person or group from acquiring beneficial ownership of 4.9% or more of the Company's outstanding common stock and (ii) any existing shareholders who, as of the time of the first public announcement of the adoption of the Plan, beneficially own more than 4.9% of the Company's then-outstanding shares of the Company's common stock from acquiring additional shares of the Company's common stock (subject to certain exceptions). There is no guarantee, however, that the Plan will prevent the Company from experiencing an ownership change. In connection with the adoption of the Plan, Acacia's Board of Directors authorized and declared a dividend distribution of one right for each outstanding share of the Company's common stock to shareholders of record at the close of business on March 16, 2016. Approval of 2016 Acacia Research Corporation Stock Incentive Plan. On April 26, 2016, Acacia’s Board of Directors adopted the 2016 Acacia Research Corporation Stock Incentive Plan, or the Plan, which was approved by the stockholders in June 2016. The Plan will expire on the 10th anniversary of the date of its approval by shareholders, except with respect to awards then outstanding, and no further awards may be granted thereafter. Summary of the Plan • Shares Available . The number of shares of our common stock initially reserved for issuance under the Plan shall be 4,500,000 shares plus any shares remaining available for issuance under our 2013 Acacia Research Corporation Stock Incentive Plan, or the 2013 Plan, as of the effective date of the Plan. As of the approval date of the Plan, 625,390 shares of our common stock were available for grant under the 2013 Plan. • Eligibility . Options, restricted stock units and direct stock awards may be granted under the Plan. Options may be either “incentive stock options,” as defined in Section 422 of the Internal Revenue Code of 1986, as amended, or the Code, or non-qualified stock options. Awards may be granted under the Plan to any employee, non-employee member of the Board of Directors, consultant or advisor who provides services to us or our subsidiaries, except for incentive stock options which may be granted only to our employees. • Administration . Generally, the Plan will be administered by either the entire Acacia Board of Directors or a committee of the Board of Directors, which shall consist of at least two members of the Board, each of whom must qualify as a “non-employee director” under Rule 16b-3 under the Exchange Act, an “outside director” under Section 162(m) of the Code and an “independent director” under the Nasdaq Listing Rules. • Discretionary Option Awards . The Plan administrator may grant either non-qualified stock options or incentive stock options. A stock option entitles the recipient to purchase a specified number of shares of our common stock at a fixed price subject to terms and conditions set by the Plan administrator, including conditions for exercise that must be satisfied, which typically will be based on continued provision of services. The exercise price of stock options granted under the Plan cannot be less than 100% of the fair market value of our common stock on the date the option is granted. • Direct Stock Awards . Direct stock awards may be issued under the Stock Issuance Program (as defined in the Plan) either alone or in addition to other awards granted under the Plan. The Plan administrator determines the terms and conditions of direct stock awards, including the number of shares of common stock granted, and the conditions for vesting that must be satisfied, if any, which typically will be based on continued provision of services but may include a performance-based component. Unless otherwise provided in the award agreement, the holder of a restricted direct stock award will have the rights of a stockholder from the date of grant of the award, including the right to vote the shares of common stock and the right to receive distributions on the shares. • Discretionary Restricted Stock Unit Awards . The Plan provides that the Plan administrator may grant restricted stock units to Plan participants. A restricted stock unit entitles the recipient to receive upon settlement thereof a specified number of shares of our common stock subject to terms and conditions set by the Plan administrator. The restricted stock units will vest as prescribed by the Plan administrator. The Plan permits payment of the purchase price of restricted stock units, if any, to be made by cash or cash equivalents, shares of our common stock previously acquired by the underlying optionee, cancellation of indebtedness, waiver of compensation due for services rendered or to be rendered, any other form of legal consideration determined by the Plan administrator, or any combination of the foregoing. • Termination of Employment . The Plan administrator will determine and set forth in the award agreement whether any awards will continue to be exercisable, and the terms of such exercise, on and after the date the participant ceases to be employed by, or to otherwise provide services to, us, whether by reason of death, disability, voluntary or involuntary termination of employment or service, or otherwise, but in no event shall any unvested awards vest after the date the participant ceases to be employed by, or otherwise provide services to, us. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Acacia’s provision for income taxes for the fiscal periods presented consisted of the following (in thousands): 2016 2015 2014 Current: Federal $ — $ — $ — State taxes 262 379 289 Foreign taxes 17,926 4,421 5,359 Total current 18,188 4,800 5,648 Deferred: Federal — — (1,867 ) State taxes — — 131 Total deferred — — (1,736 ) Provision for income taxes $ 18,188 $ 4,800 $ 3,912 The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consist of the following at December 31, 2016 and 2015 (in thousands): 2016 2015 Deferred tax assets: Net operating loss and capital loss carryforwards and credits $ 83,323 $ 71,494 Stock compensation 2,416 1,385 Fixed assets and intangibles 14,343 1,359 Basis of investments in affiliates 2,195 499 Accrued liabilities and other 422 442 State taxes 90 81 Total deferred tax assets 102,789 75,260 Valuation allowance (102,627 ) (75,179 ) Total deferred tax assets, net of valuation allowance 162 81 Deferred tax liabilities: Fixed assets and intangibles — — Other (162 ) (81 ) Total deferred tax liabilities (162 ) (81 ) Net deferred tax assets (liabilities) $ — $ — A reconciliation of the federal statutory income tax rate and the effective income tax rate is as follows: 2016 2015 2014 Statutory federal tax rate - (benefit) expense (35 )% (35 )% (35 )% State income and foreign taxes, net of federal tax effect 50 % 3 % 9 % Foreign tax credit (49 )% (3 )% (8 )% Noncontrolling interests in operating subsidiaries 1 % (1 )% — % Goodwill — % 7 % — % Nondeductible permanent items — % — % 1 % Expired capital loss carryforwards — % 1 % — % Valuation allowance 83 % 31 % 39 % 50 % 3 % 6 % For the fiscal years ended December 31, 2016 and 2015, the Company recorded full valuation allowances against its net deferred tax assets due to uncertainty regarding future realization pursuant to guidance set forth in ASC 740, “Income Taxes.” In future periods, if the Company determines it will more likely than not be able to realize certain of these amounts, the applicable portion of the benefit from the release of the valuation allowance will generally be recognized in the statement of operations in the period the determination is made. At December 31, 2016 , Acacia had U.S. federal and state income tax net operating loss carryforwards (“NOLs”) totaling approximately $147,770,000 and $32,821,000 , expiring between 2025 and 2035, and 2017 and 2036, respectively, for which $0 and $441,000 of federal and state net operating losses are included as a deferred tax asset related to the tax benefits of stock option deductions and which will be credited to additional paid-in capital when realized as a reduction of taxes payable on Acacia’s tax return. In addition, $1,928,000 and $37,771,000 of federal and state net operating losses are not included as a deferred tax asset and will be credited to additional paid-in capital when realized as a reduction of taxes payable on Acacia’s tax return as they relate to unrecognized excess tax benefits (see additional information regarding the ordering of windfall tax benefits and use of the “with-and-without” approach below). Capital loss carryovers totaled $3,423,000 at December 31, 2015, expiring between 2017 and 2020. At December 31, 2016 , approximately $29,318,000 of the U.S. federal NOLs, acquired in connection with the acquisition of ADAPTIX, Inc. in 2012, are subject to an annual utilization limitation of approximately $14,100,000 , pursuant to the “change in ownership” provisions under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). As of December 31, 2016 , Acacia had approximately $52,224,000 of foreign tax credits, expiring between 2017 and 2026, of which $20,313,000 has been utilized for financial statement purposes. Future realization of the credits as a reduction of taxes payable on Acacia’s tax return will result in an income tax benefit recognizable through additional paid in capital since the entire amount of the credits have been utilized for financial statement purposes under the “with-and-without approach.” In general, foreign taxes withheld may be claimed as a deduction on future U.S. corporate income tax returns, or as a credit against future U.S. income tax liabilities, subject to certain limitations. Tax expense for the periods presented, primarily reflects foreign taxes withheld on revenue agreements with licensees in foreign jurisdictions, a benefit totaling $1,735,000 from the reversal of the net deferred tax liability that existed at the beginning of the year (2014 only) and other state taxes. Excluding the impact of the change in valuation allowance, annual effective tax rates were (33)% , (28)% and (33)% , for fiscal years 2016, 2015 and 2014, respectively. The Company has elected to utilize the “with-and-without approach” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit has reduced taxes payable. Under this approach, the windfall tax benefits would be recognized in additional paid in capital only if an incremental tax benefit is realized after considering all other tax benefits presently available to the Company. The deductions related to the exercise and vesting of equity-based incentive awards during the periods presented are, in general, available to offset taxable income on Acacia’s consolidated tax returns. Accordingly, the excess tax benefit related to the exercise and vesting of equity-based incentive awards for the periods presented was credited to additional paid-in capital, not taxes payable. For the years ended December 31, 2016, 2015 and 2014, the Company incurred approximately $1,319,000 , $1,917,000 and $2,713,000 , respectively, of net short falls from the exercise and vesting of equity-based incentive awards, of which $1,319,000 , $1,917,000 and $2,713,000 , respectively, was recorded against its additional paid-in capital, subject to a full valuation allowance, with no impact to the income statement. Acacia is subject to taxation in the U.S. and in various state jurisdictions and incurs foreign tax withholdings on revenue agreements with licensees in certain foreign jurisdictions. With no material exceptions, Acacia is no longer subject to U.S. federal or state examinations by tax authorities for years before 2001. The California Franchise Tax Board is auditing the 2011 and 2012 California combined income tax returns. The audit is in process and no findings or adjustments have been proposed. At December 31, 2016 and 2015, the Company had total unrecognized tax benefits of approximately $1,355,000 and $2,127,000 , including a recorded noncurrent liability of $85,000 , related to unrecognized tax benefits primarily associated with state taxes. No interest and penalties have been recorded for the unrecognized tax benefits as of December 31, 2016 . At December 31, 2016, if recognized, approximately $1,355,000 , net of valuation analysis, would impact the Company’s effective tax rate. The Company does not expect that the liability for unrecognized tax benefits will change significantly within the next 12 months. The change in total unrecognized tax benefits as of December 31, 2016 was due to a lapse of the applicable statute of limitations related to an unrecognized benefit originating in a prior period. Acacia recognizes interest and penalties with respect to unrecognized tax benefits in income tax expense. Acacia has identified no uncertain tax position for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within 12 months. |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |
Stock-based Incentive Plans | STOCK-BASED INCENTIVE PLANS The 2002 Acacia Technologies Stock Incentive Plan (“2002 Plan”), the 2013 Acacia Research Corporation Stock Incentive Plan (“2013 Plan”) and the 2016 Acacia Research Corporation Stock Incentive Plan (“2016 Plan”) (collectively, the “Plans”) were approved by the stockholders of Acacia in December 2002, May 2013 and June 2016, respectively. All Plans allow grants of stock options, stock awards and performance shares with respect to Acacia common stock to eligible individuals, which generally includes directors, officers, employees and consultants. Except as noted below, the terms and provisions of the Plans are identical in all material respects. Acacia’s compensation committee administers the discretionary option grant and stock issuance programs. The compensation committee determines which eligible individuals are to receive option grants or stock issuances under those programs, the time or times when the grants or issuances are to be made, the number of shares subject to each grant or issuance, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws, the vesting schedule to be in effect for the option grant or stock issuance and the maximum term for which any granted option is to remain outstanding. The exercise price of options is generally equal to the fair market value of Acacia’s common stock on the date of grant. Options generally begin to be exercisable six months to one year after grant and generally expire seven to ten years after grant. Stock options with time-based vesting generally vest over two to three years and restricted shares with time based vesting generally vest in full after two to three years (generally representing the requisite service period). The Plans terminate no later than the tenth anniversary of the approval of the incentive plans by Acacia’s stockholders. The Plans provide for the following separate programs: • Discretionary Option Grant Program . Under the discretionary option grant program, Acacia’s compensation committee may grant (1) non-statutory options to purchase shares of common stock to eligible individuals in the employ or service of Acacia or its subsidiaries (including employees, non-employee board members and consultants) at an exercise price not less than 85% of the fair market value of those shares on the grant date, and (2) incentive stock options to purchase shares of common stock to eligible employees at an exercise price not less than 100% of the fair market value of those shares on the grant date (not less than 110% of fair market value if such employee actually or constructively owns more than 10% of Acacia’s voting stock or the voting stock of any of its subsidiaries). • Stock Issuance Program . Under the stock issuance program, eligible individuals may be issued shares of common stock directly, upon the attainment of performance milestones or the completion of a specified period of service or as a bonus for past services. Under this program, the purchase price for the shares shall not be less than 100% of the fair market value of the shares on the date of issuance, and payment may be in the form of cash or past services rendered. The eligible individuals shall have full stockholder rights with respect to any shares of Common Stock issued to them under the Stock Issuance Program, whether or not their interest in those shares is vested. Accordingly, the eligible individuals shall have the right to vote such shares and to receive any regular cash dividends paid on such shares. • Automatic Option Grant Program . Each non-employee director will receive restricted stock units or stock options for the number of shares determined by dividing the annual retainer by the grant date fair value of Acacia’s common stock on the grant date, provided that such individual has served as a non-employee director for at least 6 months. In addition, each new non-employee director will receive restricted stock units or stock options for the number of shares determined by dividing the annual board of directors retainer by the grant date fair value of Acacia’s common stock on the commencement date. Restricted stock units and stock options vest in a series of twelve quarterly installments over the three year period following the grant date, subject to immediate acceleration upon a change in control. Acacia will deliver the restricted shares corresponding to the vested restricted stock units within thirty (30) days after the first to occur of the following events: (i) the fifth (5th) anniversary of the grant date; or (ii) termination of the non-employee director’s service as a member of the Company’s Board of Directors. The non-employee directors do not have any rights, benefits or entitlements with respect to any shares unless and until the shares have been delivered. The number of shares of common stock available for issuance under the 2002 Plan automatically increased on the first trading day of January each calendar year during the term of the Plan by an amount equal to three percent ( 3% ) of the total number of shares of common stock outstanding on the last trading day in December of the immediately preceding calendar year, not to exceed 500,000 shares. The aggregate number of shares of common stock available for issuance under the 2002 Plan could not exceed 20,000,000 shares. At December 31, 2016 , there were no shares available for grant under the 2002 Plan. The number of shares of Common Stock initially reserved for issuance under the 2013 Plan was 4,750,000 shares. No new additional shares will be added to the 2013 Plan without security holder approval (except for shares subject to outstanding awards that are forfeited or otherwise returned to the 2013 Plan). The stock issuable under the 2013 Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market. In June 2016, 625,390 shares of common stock available for issuance under the 2013 Plan were transferred into the 2016 Plan. On April 26, 2016, Acacia’s Board of Directors adopted the 2016 Plan which was approved by the stockholders in June 2016. The number of shares of Common Stock initially reserved for issuance under the 2016 Plan was 4,500,000 shares plus 625,390 shares of common stock available for issuance under the 2013 Plan, as of the effective date of the Plan. At December 31, 2016 , there were 1,754,000 shares available for grant under the 2016 Plan. Upon the exercise of stock options, the granting of restricted stock, or the delivery of shares pursuant to vested restricted stock units, it is Acacia’s policy to issue new shares of common stock. Acacia’s board of directors may amend or modify the Plans at any time, subject to any required stockholder approval. The following table summarizes stock-based award grant activity for the Plans for the years ended December 31, 2016 and 2015: 2016 2015 Shares Aggregate fair value (in thousands) Shares Aggregate fair value (in thousands) Restricted stock awards with time-based service conditions — $ — 894,000 $ 11,470 Restricted stock unit awards with time-based service conditions — — 28,000 468 Restricted stock awards with performance-based vesting conditions 138,000 431 — — Stock options with time-based service vesting conditions 3,434,000 5,704 — — Stock options with market-based vesting conditions 2,250,000 5,530 — — Stock options with performance-based vesting conditions 200,000 487 — — Total incentive awards granted 6,022,000 $ 12,152 922,000 $ 11,938 During the year ended December 31, 2016 , the Company granted restricted stock awards and stock options (with weighted-average exercise price of $5.75 per share) with performance-based vesting conditions. The awards vest based upon the Company achieving specified cash flow performance targets over a one and two-year period from the date of grant. Under the terms of the awards, the number of restricted shares or stock options that will actually vest is based on the extent to which the Company achieves the specified performance targets during the performance period. As of December 31, 2016 , 138,000 shares of restricted stock and 200,000 stock options with performance-based vesting conditions remain unvested. As of December 31, 2016 , unrecognized expense for awards with performance-based vesting conditions totaled $683,000 . During the year ended December 31, 2016 , the Company granted stock options with market-based vesting conditions, with a weighted-average exercise price of $5.75 per share. The options with market-based vesting conditions vest based upon the Company achieving specified stock price targets over a four-year period. Under the terms of the awards, the number of stock options that will actually vest is based on the extent to which the Company achieves the specified market conditions during the four-year performance period. The stock options vest in equal installments of 25% upon the Company's achievement of 30-day average share prices ranging from $7.00 to $10.00 . As of December 31, 2016 , 1,687,500 options with market-based vesting conditions remain unvested. As of December 31, 2016 , unrecognized expense for options with market-based vesting conditions totaled $2.4 million which is expected to be recognized over an estimated 1 year period. The following table summarizes stock option activity for the Plans for the year ended December 31, 2016 : Weighted-Average Options Exercise Price Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2015 15,000 $ 13.38 Granted 5,884,000 $ 4.82 Exercised (101,000 ) $ 3.22 Expired/forfeited (202,000 ) $ 3.12 Outstanding at December 31, 2016 5,596,000 $ 4.93 6.7 years $ 8,865,000 Vested 1,113,000 $ 5.03 6.5 years $ 1,743,000 Exercisable at December 31, 2016 1,113,000 $ 5.03 6.5 years $ 1,743,000 The aggregate intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $344,000 , $751,000 , and $518,000 , respectively. The aggregate intrinsic value of options vested during the year ended December 31, 2016 was $2,074,000 . The aggregate fair value of options granted during the year ended December 31, 2016 was $11,721,000 .The aggregate fair value of options vested during the year ended December 31, 2016 was $2,342,000 . No options were granted or vested during the years ended December 31, 2015 and 2014. As of December 31, 2016, the total unrecognized compensation expense related to nonvested stock option awards was $6,842,000 , which is expected to be recognized over a weighted-average term of approximately 2 years . The following table summarizes nonvested restricted share activity for the year ended December 31, 2016 : Nonvested Restricted Shares Weighted Average Grant Date Fair Value Nonvested restricted stock at December 31, 2015 829,000 $ 14.41 Granted 138,000 $ 3.12 Vested (342,000 ) $ 15.33 Canceled (292,000 ) $ 14.28 Nonvested restricted stock at December 31, 2016 333,000 $ 8.90 The weighted-average grant date fair value of nonvested restricted stock granted during the years ended December 31, 2016, 2015 and 2014 was $3.12 , $12.83 , and $14.41 , respectively. The aggregate fair value of restricted stock that vested during the years ended December 31, 2016, 2015 and 2014 was $5,243,000 , $11,494,000 and $21,490,000 , respectively. As of December 31, 2016 , the total unrecognized compensation expense related to nonvested restricted stock awards was $1,873,000 , which is expected to be recognized over a weighted-average period of approximately 1 year . The following table summarizes restricted stock unit activity for the year ended December 31, 2016 : Restricted Stock Units Weighted Average Grant Date Fair Value Nonvested restricted stock units outstanding at December 31, 2015 35,000 $ 15.78 Vested (21,000 ) $ 15.43 Nonvested restricted stock units outstanding at December 31, 2016 14,000 $ 16.27 Vested restricted stock units outstanding at December 31, 2016 80,000 $ 20.99 The weighted-average grant date fair value of restricted stock units granted during the years ended December 31, 2015 and 2014 was $16.72 and $14.33 , respectively. There were no restricted units granted during the year ended December 31, 2016. The aggregate fair value of restricted stock units that vested during the years ended December 31, 2016, 2015 and 2014 was $324,000 , $480,000 and $460,000 , respectively. As of December 31, 2016 , the total unrecognized compensation expense related to restricted stock unit awards was $162,000 , which is expected to be recognized over a weighted-average period of approximately 1 year . Compensation expense for the periods presented was comprised of the following: 2016 2015 2014 Restricted stock awards with time-based service conditions $ — $ 10,575 $ 17,631 Restricted stock unit awards with time-based service conditions 4,391 473 484 Restricted stock awards with performance-based vesting conditions 197 — — Stock options with time-based service vesting conditions 1,316 — — Stock options with market-based vesting conditions 3,158 — — Stock options with performance-based vesting conditions — — — Total compensation expense $ 9,062 $ 11,048 $ 18,115 As of December 31, 2016 , there are 7,445,000 shares of common stock reserved for issuance under the Plans. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating Leases Acacia leases certain office space under various operating lease agreements expiring at various dates from 2017 through 2020. Minimum annual rental commitments for operating leases of continuing operations having initial or remaining noncancellable lease terms in excess of one year are as follows (in thousands): Years ending December 31, 2017 $ 1,279 2018 1,323 2019 1,369 2020 16 Total minimum lease payments $ 3,987 Rent expense for the years ended December 31, 2016, 2015 and 2014 approximated $1,795,000 , $1,926,000 and $1,523,000 , respectively. Rental payments are expensed in the statements of operations in the period to which they relate. Scheduled rent increases are amortized on a straight-line basis over the lease term. Inventor Royalties and Contingent Legal Expenses In connection with the investment in certain patents and patent rights, certain of Acacia’s operating subsidiaries executed related agreements which grant to the former owners of the respective patents or patent rights, the right to receive inventor royalties based on future net revenues (as defined in the respective agreements) generated as a result of licensing and otherwise enforcing the respective patents or patent portfolios. Acacia’s operating subsidiaries may retain the services of law firms that specialize in patent licensing and enforcement and patent law in connection with their licensing and enforcement activities. These law firms may be retained on a contingent fee basis whereby such law firms are paid on a scaled percentage of any negotiated fees, settlements or judgments awarded based on how and when the fees, settlements or judgments are obtained. The economic terms of the inventor agreements, operating agreements and contingent legal fee arrangements associated with the patent portfolios owned or controlled by Acacia’s operating subsidiaries, if any, including royalty rates, contingent fee rates and other terms, vary across the patent portfolios owned or controlled by such operating subsidiaries. Inventor royalties, payments to noncontrolling interests and contingent legal fees expenses fluctuate period to period, based on the amount of revenues recognized each period, the terms and conditions of revenue agreements executed each period and the mix of specific patent portfolios with varying economic terms and obligations generating revenues each period. Inventor royalties and contingent legal fees expenses will continue to fluctuate and may continue to vary significantly period to period, based primarily on these factors. Patent Enforcement and Other Litigation Acacia is subject to claims, counterclaims and legal actions that arise in the ordinary course of business. Management believes that the ultimate liability with respect to these claims and legal actions, if any, will not have a material effect on Acacia’s consolidated financial position, results of operations or cash flows. Certain of Acacia’s operating subsidiaries are often required to engage in litigation to enforce their patents and patent rights. In connection with any of Acacia’s operating subsidiaries’ patent enforcement actions, it is possible that a defendant may request and/or a court may rule that an operating subsidiary has violated statutory authority, regulatory authority, federal rules, local court rules, or governing standards relating to the substantive or procedural aspects of such enforcement actions. In such event, a court may issue monetary sanctions against Acacia or its operating subsidiaries or award attorney’s fees and/or expenses to a defendant(s), which could be material, and if required to be paid by Acacia or its operating subsidiaries, could materially harm the Company’s operating results and financial position. Fiscal year 2016, 2015 and 2014 operating expenses included expenses for court ordered attorney fees and settlement and contingency accruals totaling $500,000 , $4,141,000 and $1,548,000 , respectively. Guarantees and Indemnifications Certain of Acacia’s operating subsidiaries have made guarantees and indemnities under which they may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions, including revenue transactions in the ordinary course of business. In connection with certain facility leases, Acacia and certain of its operating subsidiaries have indemnified lessors for certain claims arising from the facilities or the leases. Acacia indemnifies its directors and officers to the maximum extent permitted under the laws of the State of Delaware. However, Acacia has a directors and officers insurance policy that may reduce its exposure in certain circumstances and may enable it to recover a portion of future amounts that may be payable, if any. The duration of the guarantees and indemnities varies and, in many cases is indefinite but subject to statute of limitations. The majority of guarantees and indemnities do not provide any limitations of the maximum potential future payments that Acacia could be obligated to make. To date, Acacia has made no payments related to these guarantees and indemnities. Acacia estimates the fair value of its indemnification obligations to be insignificant based on this history and therefore, have not recorded any liability for these guarantees and indemnities in the accompanying consolidated balance sheets. Additionally, no events or transactions have occurred that would result in a material liability at December 31, 2016 . Bank Guarantee In March 2015, an operating subsidiary of Acacia entered into a standby letter of credit and guarantee arrangement (“Guarantee”) with a bank for purposes of enforcing a court ruling in a German patent court granting an injunction against the defendants in the related patent infringement case. An injunction is an equitable remedy in the form of a court order that compels the defendant(s) to cease marketing, offering for sale or importing applicable infringing products into applicable jurisdiction(s). Under German law, in order to enforce the injunction granted by the court, a Guarantee is required to be furnished by the operating subsidiary, the plaintiff in the case, for potential payment to the defendants of any applicable claims which may be incurred by the defendants as a result of the enforcement of the injunction, only in the event that the aforementioned court ruling is subsequently successfully appealed by the defendants or otherwise amended. The Guarantee is required to be issued unlimited with respect to time, until appropriately extinguished in accordance with German law. The Guarantee will be extinguished when a relevant extinguishment order by the court having jurisdiction takes effect, typically occurring when the related infringement case has been settled or a final non-appealable decision has been issued by the court. The Guarantee is secured by a cash deposit at the contracting bank, which is classified as restricted cash in the accompanying balance sheets, totaling $11,512,000 and $10,725,000 of December 31, 2016 and 2015, respectively. Changes in the balance are primarily a result of additional court rulings granting injunctions with respect to additional defendants, and foreign currency exchange rate fluctuations and the related impact on the underlying collateral, which is denominated in U.S. dollars. The Guarantee expires on April 10, 2017, however, it is automatically extended without amendment for a period of one (1) year from the present or any future expiration date, unless at least 30 days prior to any expiration date, the Guarantee is extinguished in accordance with German law. The Guarantee facility fee is 1.15% per year, and the related expense is included in the consolidated statement of operations. Other In August 2010, a wholly owned subsidiary of Acacia became the general partner of the Acacia IP Fund, which was formed in August 2010. The Acacia IP Fund is authorized to raise up to $250,000,000 . The Acacia IP Fund invests in, licenses and enforces intellectual property consisting primarily of patents, patent rights, and patented technologies. Refer to Note 2 to these notes to consolidated financial statements for information regarding the consolidation of majority-owned subsidiaries and the presentation of related noncontrolling interests. At December 31, 2016 and 2015 , the Acacia IP Fund net assets and net income (loss) were primarily comprised of the following (in thousands): 2016 2015 Cash and other assets $ 1,118 $ 7,740 Patents, net of accumulated amortization — 147 Investments - noncurrent 2,933 5,829 Total assets $ 4,051 $ 13,716 Accrued expenses and contributions $ 2,394 $ 7,436 Net assets $ 1,657 $ 6,280 2016 2015 Revenues $ 16 $ 18 Operating expenses 572 1,617 Loss from operations (556 ) (1,599 ) Net gain (loss) in equity method investments (1,013 ) 6,922 Net income (loss) $ (1,569 ) $ 5,323 |
Retirement Savings Plan and Exe
Retirement Savings Plan and Executive Severance Policy | 12 Months Ended |
Dec. 31, 2016 | |
RETIREMENT SAVINGS PLAN AND EXECUTIVE SEVERANCE POLICY [Abstract] | |
Retirement Savings Plan and Executive Severance Policy | RETIREMENT SAVINGS PLAN AND EXECUTIVE SEVERANCE POLICY Retirement Savings Plan. Acacia has an employee savings and retirement plan under section 401(k) of the Code (the “Plan”). The Plan is a defined contribution plan in which eligible employees may elect to have a percentage of their compensation contributed to the Plan, subject to certain guidelines issued by the Internal Revenue Service. Acacia may contribute to the Plan at the discretion of the board of directors. There were no contributions made by Acacia during the periods presented. Executive Severance Policy. Under Acacia’s Amended Executive Severance Policy, full-time employees with the title of Senior Vice President and higher (“SVP and higher”) are entitled to receive certain benefits upon termination of employment. If employment of an SVP and higher employee is terminated for other than cause or other than on account of death or disability, Acacia will (i) promptly pay to the SVP and higher employee a lump sum amount equal to the aggregate of (a) accrued obligations (i.e., annual base salary through the date of termination to the extent not theretofore paid and any compensation previously deferred (together with any accrued interest or earnings thereon) and any accrued vacation pay, and reimbursable expenses, in each case to the extent not theretofore paid) and (b) three (3) months of base salary for each full year that the SVP and higher employee was employed by the Company (the “Severance Period”), up to a maximum of twelve (12) months (eighteen (18) months for executive officers of Acacia Research Corporation) of base salary, and (ii) provide to the SVP and higher employee, Acacia paid COBRA coverage for the medical and dental benefits selected in the year in which the termination occurs, for the duration of the Severance Period. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for state income taxes totaled $223,000 , $211,000 and $172,000 for the years ended December 31, 2016, 2015 and 2014 , respectively. Foreign taxes withheld totaled $14,776,000 , $4,421,000 and $5,159,000 for the years ended December 31, 2016, 2015 and 2014 , respectively. Refer to Note 5 for accrued foreign taxes payable. Refer to Note 6 for information regarding noncash investing activity related to the investment in patent portfolios for the periods presented. Refer to Note 8 for information regarding noncash investing activity related to the investment in Veritone, Inc. for the periods presented. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | QUARTERLY FINANCIAL DATA (unaudited) The following table sets forth unaudited consolidated statements of operations data for the eight quarters in the period ended December 31, 2016 . This information has been derived from Acacia’s unaudited condensed consolidated financial statements that have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the information when read in conjunction with the audited consolidated financial statements and related notes thereto. Acacia’s quarterly results have been, and may in the future be, subject to significant fluctuations. As a result, Acacia believes that results of operations for interim periods should not be relied upon as any indication of the results to be expected in any future periods. Quarter Ended Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2016 2016 2016 2016 2015 2015 2015 2015 (Unaudited, in thousands, except share and per share information) Revenues $ 24,721 $ 41,351 $ 64,658 $ 21,969 $ 34,210 $ 40,336 $ 12,994 $ 37,497 Operating costs and expenses: Cost of revenues: Inventor royalties 1,573 — 17,844 3,313 9,325 1,265 116 7,756 Contingent legal fees 4,109 10,418 7,709 4,238 4,784 5,512 1,972 3,901 Litigation and licensing expenses - patents 7,723 7,324 7,348 5,463 8,675 9,012 10,345 11,341 Amortization of patents 10,760 10,759 6,467 6,222 13,038 13,228 13,688 13,113 General and administrative expenses (including non-cash stock compensation expense) 7,994 7,535 8,334 9,056 10,575 9,587 9,442 8,572 Research, consulting and other expenses - business development 522 1,334 666 557 997 732 802 860 Impairment of patent-related intangible assets — 40,165 — 2,175 — — — 74,731 Impairment of goodwill — — — — — — — 30,149 Other 1,742 (1,242 ) — — 426 — 3,465 250 Total operating costs and expenses 34,423 76,293 48,368 31,024 47,820 39,336 39,830 150,673 Operating income (loss) (9,702 ) (34,942 ) 16,290 (9,055 ) (13,610 ) 1,000 (26,836 ) (113,176 ) Total other income (expense) (3 ) (52 ) 261 592 228 (104 ) (180 ) — Income (loss) before (provision for) benefit from income taxes (9,705 ) (34,994 ) 16,551 (8,463 ) (13,382 ) 896 (27,016 ) (113,176 ) Provision for income taxes (192 ) (5,927 ) (9,655 ) (2,414 ) (170 ) (119 ) (337 ) (4,174 ) Net income (loss) including noncontrolling interests (9,897 ) (40,921 ) 6,896 (10,877 ) (13,552 ) 777 (27,353 ) (117,350 ) Net (income) loss attributable to noncontrolling interests in operating subsidiaries (68 ) 348 186 266 422 (4,463 ) 43 1,440 Net income (loss) attributable to Acacia Research Corporation $ (9,965 ) $ (40,573 ) $ 7,082 $ (10,611 ) $ (13,130 ) $ (3,686 ) $ (27,310 ) $ (115,910 ) Net loss per common share attributable to Acacia Research Corporation: Basic and diluted income (loss) per share $ (0.20 ) $ (0.81 ) $ 0.14 $ (0.21 ) $ (0.27 ) $ (0.08 ) $ (0.55 ) $ (2.33 ) Weighted-average number of shares outstanding, basic 49,925,550 50,015,869 50,124,302 50,237,784 49,212,207 49,423,472 49,630,369 49,749,941 Weighted-average number of shares outstanding, diluted 49,925,550 50,015,869 50,618,757 50,237,784 49,212,207 49,423,472 49,630,369 49,749,941 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS On February 16, 2017, AIP Operation LLC, a Delaware limited liability company (“AIP”), and an indirect subsidiary of Acacia, adopted a Profits Interest Plan (the “Plan”) that provides for the grant of equity interests in AIP to certain members of management and Board of Directors of Acacia as compensation for services rendered for or on behalf of AIP. Each profits interest unit granted pursuant to the Plan is intended to qualify as a “profits interest” for U.S. federal income tax purposes and will only have value to the extent the equity value of AIP increases beyond the value at issuance. The equity interests are represented by units (the “Units”) reserved for the issuance of awards under the Plan. The Units entitle the holders to share in or be allocated certain AIP profits and losses and to receive or share in AIP distributions pursuant to the AIP Limited Liability Company Operating Agreement entered into as of February 16, 2017 (the “LLC Agreement”). In connection with the adoption of the Plan, a form of Profits Interest Agreement was approved pursuant to which Units may be granted from time to time. Units vest upon AIP’s achievement of certain performance milestones, subject to the continued service of the recipient, and are subject to the terms and conditions of the Plan, the Profits Interest Agreement and the LLC Agreement. Acacia owns substantially all of the equity in AIP and at all times will control AIP. Although AIP currently holds no material assets, Acacia from time to time may contribute to AIP certain assets or securities related to portfolio companies in which Acacia holds an interest. Units may be awarded as one-time, discretionary grants to recipients. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Fiscal Period | Accounting Principles and Fiscal Year End. The consolidated financial statements and accompanying notes are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America. |
Consolidation, Subsidiaries or Other Investments, Consolidated Entities | Principles of Consolidation. The accompanying consolidated financial statements include the accounts of Acacia and its wholly and majority-owned and controlled subsidiaries. Material intercompany transactions and balances have been eliminated in consolidation. |
Net income (loss) attributable to noncontrolling interest | Noncontrolling interests in Acacia’s majority-owned and controlled operating subsidiaries (“noncontrolling interests”) are separately presented as a component of stockholders’ equity. Consolidated net income or (loss) is adjusted to include the net (income) or loss attributed to noncontrolling interests in the consolidated statements of operations. Refer to the accompanying consolidated statements of stockholders’ equity for total noncontrolling interests. A wholly owned subsidiary of Acacia is the general partner of the Acacia Intellectual Property Fund, L.P. (the “Acacia IP Fund”), which was formed in August 2010. The Acacia IP Fund is included in the Company’s consolidated financial statements since 2010, as Acacia’s wholly owned subsidiary, as the general partner, has the ability to control the operations and activities of the Acacia IP Fund. Refer to Note 12 to these consolidated financial statements. |
Revenue Recognition | Revenue Recognition. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed pursuant to the terms of the arrangement, (iii) amounts are fixed or determinable, and (iv) the collectibility of amounts is reasonably assured. In general, revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by Acacia’s operating subsidiaries. These rights typically include some combination of the following: (i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled by Acacia’s operating subsidiaries, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation. The intellectual property rights granted may be perpetual in nature, extending until the expiration of the related patents, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. Pursuant to the terms of these agreements, Acacia’s operating subsidiaries have no further obligation with respect to the grant of the non-exclusive retroactive and future licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on Acacia’s operating subsidiaries’ part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the agreement, or upon receipt of the minimum upfront payment for term agreement renewals. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectibility is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all other revenue recognition criteria have been met. For the periods presented herein, the majority of the revenue agreements executed by the Company provided for the payment of one-time, paid-up license fees in consideration for the grant of certain intellectual property rights for patented technology rights owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Certain of the Company’s revenue arrangements provide for future royalties or additional required payments based on future licensee activities. Additional royalties are recognized in revenue upon resolution of the related contingency provided that all revenue recognition criteria, as described above, have been met. Amounts of additional royalties due under these license agreements, if any, cannot be reasonably estimated by management. Certain of the Company’s revenue arrangements provide for the calculation of fees based on a licensee’s actual quarterly sales or actual per unit activity, applied to a contractual royalty rate. Licensees that pay fees on a quarterly basis generally report actual quarterly sales or actual per unit activity information and related quarterly fees due within 30 days to 45 days after the end of the quarter in which such sales or activity takes place. The amount of fees due under these revenue arrangements each quarter cannot be reasonably estimated by management. Consequently, Acacia’s operating subsidiaries recognize revenue from these revenue arrangements on a three -month lag basis, in the quarter following the quarter of sales or per unit activity, provided amounts are fixed or determinable and collectibility is reasonably assured. The lag method described above allows for the receipt of licensee royalty reports prior to the recognition of revenue. Amounts related to revenue arrangements that do not meet the revenue recognition criteria described above are deferred until the revenue recognition criteria are met. Acacia assesses the collectibility of fees receivable based on a number of factors, including past transaction history and credit-worthiness of licensees. If it is determined that collection is not reasonably assured, the fee is recognized when collectibility becomes reasonably assured, assuming all other revenue recognition criteria have been met, which is generally upon receipt of cash. |
Cost of Revenues | Cost of Revenues . Cost of revenues include the costs and expenses incurred in connection with Acacia’s patent licensing and enforcement activities, including inventor royalties paid to original patent owners, contingent legal fees paid to external patent counsel, other patent-related legal expenses paid to external patent counsel, licensing and enforcement related research, consulting and other expenses paid to third-parties and the amortization of patent-related investment costs. These costs are included under the caption “Cost of revenues” in the accompanying consolidated statements of operations. |
Inventor Royalties and Contingent Legal Expenses | Inventor Royalties and Contingent Legal Expenses. Inventor royalties are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In certain instances, pursuant to the terms of the underlying inventor agreements, upfront advances paid to patent owners by Acacia’s operating subsidiaries are recoverable from future net revenues. Patent costs that are recoverable from future net revenues are amortized over the estimated economic useful life of the related patents, or as the prepaid royalties are earned by the inventor, as appropriate, and the related expense is included in amortization expense in the consolidated statements of operations. Any unamortized upfront advances recovered from net revenues are expensed in the period recovered, and included in amortization expense in the consolidated statements of operations. Refer to Note 12 for additional information. Contingent legal fees are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In instances where there are no recoveries from potential infringers, no contingent legal fees are paid; however, Acacia’s operating subsidiaries may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement. |
Fair Value Measurements | Fair Value Measurements. U.S. generally accepted accounting principles define fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three-level hierarchy of valuation techniques established to measure fair value is defined as follows: ● Level 1 - Observable Inputs: Quoted prices in active markets for identical investments; ● Level 2 - Pricing Models with Significant Observable Inputs: Other significant observable inputs, including quoted prices for similar investments, interest rates, credit risk, etc.; and ● Level 3 - Unobservable Inputs: Significant unobservable inputs, including the entity’s own assumptions in determining the fair value of investments. Whenever possible, the Company is required to use observable market inputs (Level 1 - quoted market prices) when measuring fair value. Acacia has not elected the fair value option for recording non-financial assets and liabilities, and therefore no fair value measurements are performed on a recurring basis. |
Cash and Cash Equivalents | Cash and Cash Equivalents . Acacia considers all highly liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents. For the periods presented, Acacia’s cash equivalents are comprised of investments in AAA rated money market funds that invest in first-tier only securities, which primarily includes: domestic commercial paper, securities issued or guaranteed by the U.S. government or its agencies, U.S. bank obligations, and fully collateralized repurchase agreements. Acacia’s cash equivalents are measured at fair value using quoted prices that represent Level 1 inputs. |
Marketable Securities | Investments in Marketable Securities. Investments in securities with original maturities of greater than three months and less than one year and other investments representing amounts that are available for current operations are classified as short-term investments, unless there are indications that such investments may not be readily sold in the short term. The fair values of these investments approximate their carrying values. As of December 31, 2015, the balance of short term investments was zero. At December 31, 2016, all of Acacia’s short-term investments were classified as available-for-sale, which are reported at fair value on a recurring basis using significant observable inputs (Level 1), with related unrealized gains and losses in the value of such securities recorded as a separate component of other comprehensive income (loss) in stockholders’ equity until realized. Realized and unrealized gains and losses are recorded based on the specific identification method. Interest on all securities is included in total other income (expense). Impairment of Marketable Securities. Acacia evaluates its investments in marketable securities for potential impairment, employing a systematic methodology on a quarterly basis that considers available quantitative and qualitative evidence. If the cost or carrying value of an investment exceeds its estimated fair value, the Company evaluates, among other factors, general market conditions, credit quality of instrument issuers, the duration and extent to which the fair value is less than cost, and the Company’s intent and ability to hold, or plans or ability to sell. Fair value is estimated based on publicly available market information or other estimates determined by management. Investments are considered to be impaired when a decline in fair value is estimated to be other-than-temporary. Acacia reviews impairments associated with its investments in marketable securities and determines the classification of any impairment as temporary or other-than-temporary. An impairment is deemed other-than-temporary unless (a) Acacia has the ability and intent to hold an investment for a period of time sufficient for recovery of its carrying amount and (b) positive evidence indicating that the investment’s carrying amount is recoverable within a reasonable period of time outweighs any evidence to the contrary. All available evidence, both positive and negative, is considered to determine whether, based on the weight of such evidence, the carrying amount of the investment is recoverable within a reasonable period of time. For investments classified as available-for-sale, unrealized losses that are other-than-temporary are recognized in the consolidated statements of operations. |
Concentrations of Credit Risk | Concentration of Credit Risks. Financial instruments that potentially subject Acacia to concentrations of credit risk are cash equivalents, investments and accounts receivable. Acacia places its cash equivalents and investments primarily in highly rated money market funds and investment grade marketable securities. Cash equivalents are also invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. Acacia has not experienced any significant losses on its deposits of cash and cash equivalents. Three licensees individually accounted for 26% , 23% and 11% , respectively, of revenues recognized during the year ended December 31, 2016 . Three licensees individually accounted for 24% , 20% and 16% , respectively, of revenues recognized during the year ended December 31, 2015 . Two licensees individually accounted for 22% and 22% , respectively, of revenues recognized during the year ended December 31, 2014 . Four licensees individually represented approximately 39% , 22% , 16% and 15% , respectively, of accounts receivable at December 31, 2016 . Two licensees individually represented approximately 72% and 21% , respectively, of accounts receivable at December 31, 2015 . For 2016, 2015 and 2014 , 79% , 49% and 43% , respectively, of revenues were attributable to licensees domiciled in foreign jurisdictions, based on the jurisdiction of the entity obligated to satisfy payment obligations pursuant to the applicable revenue arrangement. The Company does not have any material foreign operations. Acacia performs credit evaluations of its licensees with significant receivable balances, if any, and has not experienced any significant credit losses. Accounts receivable are recorded at the executed contract amount and generally do not bear interest. Collateral is not required. An allowance for doubtful accounts may be established to reflect the Company’s best estimate of probable losses inherent in the accounts receivable balance, and is reflected as a contra-asset account on the balance sheet and a charge to operating expenses in the statement of operations for the applicable period. The allowance is determined based on known troubled accounts, historical experience, and other currently available evidence. There was no allowance for doubtful accounts established for the periods presented. |
Furniture and Equipment | Property and Equipment. Property and equipment are recorded at cost. Major additions and improvements that materially extend useful lives of property and equipment are capitalized. Maintenance and repairs are charged against the results of operations as incurred. When these assets are sold or otherwise disposed of, the asset and related depreciation are relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal. Depreciation and amortization is computed on a straight-line basis over the following estimated useful lives of the assets: Furniture and fixtures 3 to 5 years Computer hardware and software 3 to 5 years Leasehold improvements 2 to 5 years (Lesser of lease term or useful life of improvement) Rental payments on operating leases are charged to expense in the consolidated statements of operations on a straight-line basis over the lease term. |
Patents | Patents. Patents include the cost of patents or patent rights (hereinafter, collectively “patents”) acquired from third-parties or obtained in connection with business combinations. Patent costs are amortized utilizing the straight-line method over their remaining economic useful lives, ranging from one to ten years. Certain patent application and prosecution costs incurred to secure additional patent claims, that based on management’s estimates are deemed to be recoverable, are capitalized and amortized over the remaining estimated economic useful life of the related patent portfolio. |
Goodwill | Goodwill. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Acacia considers its market capitalization and the carrying value of its assets and liabilities, including goodwill, when performing its goodwill impairment test. When conducting its annual goodwill impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that goodwill is impaired. If it is determined by a qualitative evaluation that it is more likely than not that goodwill is impaired, the Company then applies a two-step impairment test. The two-step impairment test first compares the fair value of the Company’s reporting unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the reporting unit exceeds its fair value, the Company determines the implied fair value of the reporting unit’s goodwill and if the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded in the consolidated statement of operations. Acacia's goodwill balance of $30.1 million was fully written-off as of December 31, 2015. Refer to Note 7 for additional information. |
Impairment of Long-Lived Assets | Impairment of Long-lived Assets. Acacia reviews long-lived assets and intangible assets for potential impairment annually (quarterly for patents) and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. Refer to Note 7 for additional information. Fair value is generally estimated using the “Income Approach,” focusing on the estimated future net income-producing capability of the patent portfolios over the estimated remaining economic useful life. Estimates of future after-tax cash flows are converted to present value through “discounting,” including an estimated rate of return that accounts for both the time value of money and investment risk factors. Estimated cash inflows are typically based on estimates of reasonable royalty rates for the applicable technology, applied to estimated market share data. Estimated cash outflows are based on existing contractual obligations, such as contingent legal fee and inventor royalty obligations, applied to estimated license fee revenues, in addition to other estimates of out-of-pocket expenses associated with a specific patent portfolio’s licensing and enforcement program. The analysis also contemplates consideration of current information about the patent portfolio including, status and stage of litigation, periodic results of the litigation process, strength of the patent portfolio, technology coverage and other pertinent information that could impact future net cash flows. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The carrying value of cash and cash equivalents, investments, accounts receivables, and accounts payable approximates their fair values due to their short-term maturities. |
Contingent liabilities [Policy Text Block] | Contingent Liabilities. The Company, from time to time, is involved in certain legal proceedings. Based upon consultation with outside counsel handling its defense in these matters and the Company’s analysis of potential outcomes, if the Company determines that a loss arising from such matters is probable and can be reasonably estimated, an estimate of the contingent liability is recorded in its consolidated financial statements. If only a range of estimated loss can be determined, an amount within the range that, based on estimates, assumptions and judgments, reflects the most likely outcome, is recorded as a contingent liability in the consolidated financial statements. In situations where none of the estimates within the estimated range is a better estimate of probable loss than any other amount, the Company records the low end of the range. Any such accrual would be charged to expense in the appropriate period. Litigation expenses for these types of contingencies are recognized in the period in which the litigation services were provided. |
Stock-based Compensation | Stock-Based Compensation. The compensation cost for all stock-based awards is measured at the grant date, based on the fair value of the award, and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity award) which is generally two to four years. The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock. The fair value of each option award is estimated on the date of grant using a Black-Scholes option-pricing model. Stock-based compensation expense for awards with service and / or performance conditions that affect vesting is recorded only for those awards expected to vest using an estimated forfeiture rate. Refer to Note 11 to these notes to consolidated financial statements for information on stock-based awards granted for the periods presented. The fair value of stock options granted during the year ended December 31, 2016 was estimated using the Black-Scholes option-pricing model, based on the following weighted-average assumptions: Weighted-Average Assumptions Risk-free interest rate 1.1% Term 3.06 Volatility 53% Dividend yield —% Due to a lack of sufficient historical stock option exercise experience, the Company utilized the simplified method for estimating the expected term for stock options granted during the year ended December 31, 2016. Expected volatility is based on the historical volatility of the Company’s stock for the length of time corresponding to the expected term of the option. The risk-free interest rate is based on the U.S. treasury yield curve on the grant date for the expected term of the option. Restricted stock awards and stock option awards with performance-based vesting conditions generally vest based upon the Company achieving specified cash flow performance targets over a one and two-year period from the date of grant. Performance-based stock options awards with market-based vesting conditions vest based upon the Company achieving specified stock price targets over a four-year period. The effect of a market condition is reflected in the estimate of the grant-date fair value of the options utilizing a Monte Carlo valuation technique. Compensation cost is recognized for an option with a market-based vesting condition provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. The service period for options with a market-based vesting condition is inferred from the application of the Monte Carlo valuation technique. The derived service period represents the duration of the median of the distribution of share price paths on which the market condition is satisfied. The duration is the period of time from the service inception date to the expected date of satisfaction, as determined from the valuation technique. Assumptions utilized in connection with the Monte Carlo valuation technique included: estimated risk-free interest rate; expected volatility; and expected dividend yield. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined using historical volatility. The expected dividend yield was based on expectations regarding dividend payments. |
Income Taxes | Income Taxes. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in Acacia’s consolidated financial statements or consolidated income tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized, or if it is determined that there is uncertainty regarding future realization of such assets. Under U.S. generally accepted accounting principles, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not threshold are measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. If a deduction reported on a tax return for an equity-based incentive award exceeds the cumulative compensation cost for those instruments recognized for financial reporting purposes, any resulting realized tax benefit that exceeds the previously calculated deferred tax asset for those instruments is considered an excess tax benefit, and is recognized as additional paid-in capital. If the tax deduction is less than the cumulative book compensation cost, the tax effect of the resulting difference is charged first to APIC, to the extent of the available pool of windfall tax benefits, with any remainder recognized in income tax expense. |
Segment Reporting | Segment Reporting. Acacia uses the management approach, which designates the internal organization that is used by management for making operating decisions and assessing performance as the basis of Acacia’s reportable segments. Acacia’s patent licensing and enforcement business constitutes its single reportable segment. |
Use of Estimates | Use of Estimates . The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Acacia believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, stock-based compensation expense, impairment of marketable securities and intangible assets, the determination of the economic useful life of amortizable intangible assets, income taxes and valuation allowances against net deferred tax assets, the allocation of loans to investees between the loans receivable and common stock purchase warrants received, and the application of the acquisition method of accounting for business combinations, require its most difficult, subjective or complex judgments. |
Earnings Per Share | Income (Loss) Per Share. The Company computes net income (loss) attributable to common stockholders using the two-class method required for capital structures that include participating securities. Under the two-class method, securities that participate in non-forfeitable dividends, such as the Company’s outstanding unvested restricted stock, are considered “participating securities.” In applying the two-class method, (i) basic net income (loss) per share is computed by dividing net income (loss) (less any dividends paid on participating securities) by the weighted average number of shares of common stock and participating securities outstanding for the period and (ii) diluted earnings per share may include the additional effect of other securities, if dilutive, in which case the dilutive effect of such securities is calculated by applying the two-class method and the treasury stock method to the assumed exercise or vesting of potentially dilutive common shares. The method yielding the more dilutive result is ultimately reported for the applicable period. Potentially dilutive common stock equivalents primarily consist of employee stock options, and restricted stock units for calculations utilizing the two-class method, and also include unvested restricted stock, when utilizing the treasury method. The following table presents the weighted-average number of common shares outstanding used in the calculation of basic and diluted income per share: 2016 2015 2014 Numerator (in thousands): Basic and Diluted Net loss $ (54,067 ) $ (160,036 ) $ (66,029 ) Total dividends declared / paid — (25,434 ) (25,039 ) Dividends attributable to common stockholders — 24,740 24,313 Net loss attributable to common stockholders – basic and diluted $ (54,067 ) $ (160,730 ) $ (66,755 ) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted 50,075,847 49,505,817 48,658,088 Basic and diluted net loss per common share $ (1.08 ) $ (3.25 ) $ (1.37 ) Anti-dilutive equity-based incentive awards excluded from the computation of diluted loss per share 3,682,532 71,468 27,760 |
Treasury Stock [Policy Text Block] | Treasury Stock . Repurchases of the Company’s outstanding common stock are accounted for using the cost method. The applicable par value is deducted from the appropriate capital stock account on the formal or constructive retirement of treasury stock. Any excess of the cost of treasury stock over its par value is charged to additional paid-in capital, and reflected as Treasury Stock on the consolidated balance sheets. |
Recently Adopted Accounting Policies | Recent Accounting Pronouncements - Not Yet Adopted. In May 2014, the FASB issued a new accounting standards update addressing revenue from contracts with customers, which clarifies existing accounting literature relating to how and when a company recognizes revenue. Under the standard, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The amendments for this standard update are effective for interim and annual reporting periods beginning after December 15, 2016, and are to be applied retrospectively or the cumulative effect as of the date of adoption, with early application not permitted. The Company is currently evaluating the impact and method of adoption the pronouncement will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued an accounting standard update to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. This update is effective for annual reporting periods beginning after December 31, 2016, including interim periods within those annual periods, and early adoption is permitted. Management is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In February 2016, the FASB issued an accounting standard update which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. Management is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In March 2016, the FASB issued a new standard that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted. Management is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In June 2016, the FASB issued guidance on the measurement and recognition of credit losses on most financial assets. For trade receivables, loans, and held-to-maturity debt securities, the current probable loss recognition methodology is being replaced by an expected credit loss model. For available-for-sale debt securities, the recognition model on credit losses is generally unchanged, except the losses will be presented as an adjustable allowance. The guidance will be applied retrospectively with the cumulative effect recognized as of the date of adoption. The guidance will become effective at the beginning of our first quarter of fiscal 2021 but can be adopted as early as the beginning of our first quarter of fiscal 2020. Management is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. |
Recently adopted accounting policies [Policy Text Block] | Recently Adopted Accounting Pronouncements - Recently Adopted. In August 2014, the FASB issued a new accounting standard which requires management to assess an entity’s ability to continue as a going concern every reporting period including interim periods, and to provide related footnote disclosure in certain circumstances. Adoption of this standard is required for annual periods beginning after December 15, 2016 and are to be applied retrospectively or the cumulative effect as of the date of adoption. Early adoption is permitted. The adoption of this standard effective December 31, 2016 did not have a material impact on the Company's consolidated financial statements and related disclosures. In June 2014, the FASB issued a new accounting standard which requires that a performance target that affects vesting and could be achieved after the requisite service period shall be treated as a performance condition. Adoption of this standard is required for annual periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard effective January 2016 did not have a material impact on the Company's consolidated financial statements and related disclosures. In August 2016, the FASB issued amended guidance to clarify guidance on the classification of certain cash receipts and cash payments. Additionally, the guidance requires that the statement of cash flows reflect changes in restricted cash in addition to cash and cash equivalents. Amended guidance includes clarification on debt prepayment and extinguishment costs, contingent consideration in business combinations, proceeds from insurance claims, and premium payments on company-owned life insurance. Refer to the consolidated statement of cash flows elsewhere herein for separate presentation of changes in restricted cash. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of stock options granted during the year ended December 31, 2016 was estimated using the Black-Scholes option-pricing model, based on the following weighted-average assumptions: Weighted-Average Assumptions Risk-free interest rate 1.1% Term 3.06 Volatility 53% Dividend yield —% |
Property and Equipment, Useful Lives | Depreciation and amortization is computed on a straight-line basis over the following estimated useful lives of the assets: Furniture and fixtures 3 to 5 years Computer hardware and software 3 to 5 years Leasehold improvements 2 to 5 years (Lesser of lease term or useful life of improvement) |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the weighted-average number of common shares outstanding used in the calculation of basic and diluted income per share: 2016 2015 2014 Numerator (in thousands): Basic and Diluted Net loss $ (54,067 ) $ (160,036 ) $ (66,029 ) Total dividends declared / paid — (25,434 ) (25,039 ) Dividends attributable to common stockholders — 24,740 24,313 Net loss attributable to common stockholders – basic and diluted $ (54,067 ) $ (160,730 ) $ (66,755 ) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted 50,075,847 49,505,817 48,658,088 Basic and diluted net loss per common share $ (1.08 ) $ (3.25 ) $ (1.37 ) Anti-dilutive equity-based incentive awards excluded from the computation of diluted loss per share 3,682,532 71,468 27,760 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Short-term Investments [Abstract] | |
Short-term Investments | Short-term marketable securities for the periods presented were comprised of the following (in thousands): December 31, 2016 Security Type Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government fixed income securities $ 19,403 $ 40 $ — $ 19,443 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following at December 31, 2016 and 2015 (in thousands): 2016 2015 Furniture and fixtures $ 733 $ 739 Computer hardware and software 603 649 Leasehold improvements 131 145 1,467 1,533 Less: accumulated depreciation and amortization (1,340 ) (1,261 ) $ 127 $ 272 |
Accounts Payable and Accrued 29
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accounts Payable and Accrued Expenses / Costs | Accounts payable and accrued expenses consist of the following at December 31, 2016 and 2015 (in thousands): 2016 2015 Payroll and other employee benefits $ 1,593 $ 576 Accrued vacation 533 701 Accrued legal expenses - patent 6,564 10,135 Foreign taxes payable (1) 3,150 3,960 Accrued consulting and other professional fees 1,967 1,592 Other accrued liabilities 476 383 $ 14,283 $ 17,347 (1) - Included in "Accounts payable and accrued expenses / patent costs" line item on the consolidated statement of cash flows included elsewhere herein. |
Patents (Tables)
Patents (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Patents [Abstract] | |
Patents | The gross carrying amounts and accumulated amortization related to investments in intangible assets as of December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Gross carrying amount - patents $ 444,362 $ 444,137 Accumulated amortization - patents (1) (358,043 ) (281,495 ) Patents, net $ 86,319 $ 162,642 |
Patent costs and accumulated amortization related to patent sales and disposals [Table Text Block] | For the years ended December 31, 2016, 2015 and 2014 , capitalized patent costs, accumulated amortization, and sales proceeds related to patent-related sales and disposals are as follows (in thousands): 2016 2015 2014 Capitalized patent costs $ — $ 500 $ 3,000 Accumulated amortization — 120 298 Sales proceeds — 750 3,500 |
Loan Receivable and Investmen31
Loan Receivable and Investment in Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | A summary of assumptions used in connection with estimating the relative fair values were as follows: Valuation Technique Significant Unobservable Inputs Range of Inputs Monte Carlo simulation model Volatility 40 % - 50% Marketability discount 7% Funding scenario probabilities 25 % - 75% Recovery 100% |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The Veritone Loans and warrants are reflected in the accompanying consolidated financial statements as follows (in thousands): As of and For the Year Ended December 31, 2016 Face value of loan receivable $ 20,000 Unamortized loan discount (1,384 ) Carrying value of loan receivable 18,616 Investment in warrants (initial loan discount) 1,960 Total $ 20,576 Interest receivable $ 286 Accretion of loan discount 576 Interest income $ 862 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Acacia’s provision for income taxes for the fiscal periods presented consisted of the following (in thousands): 2016 2015 2014 Current: Federal $ — $ — $ — State taxes 262 379 289 Foreign taxes 17,926 4,421 5,359 Total current 18,188 4,800 5,648 Deferred: Federal — — (1,867 ) State taxes — — 131 Total deferred — — (1,736 ) Provision for income taxes $ 18,188 $ 4,800 $ 3,912 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consist of the following at December 31, 2016 and 2015 (in thousands): 2016 2015 Deferred tax assets: Net operating loss and capital loss carryforwards and credits $ 83,323 $ 71,494 Stock compensation 2,416 1,385 Fixed assets and intangibles 14,343 1,359 Basis of investments in affiliates 2,195 499 Accrued liabilities and other 422 442 State taxes 90 81 Total deferred tax assets 102,789 75,260 Valuation allowance (102,627 ) (75,179 ) Total deferred tax assets, net of valuation allowance 162 81 Deferred tax liabilities: Fixed assets and intangibles — — Other (162 ) (81 ) Total deferred tax liabilities (162 ) (81 ) Net deferred tax assets (liabilities) $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the federal statutory income tax rate and the effective income tax rate is as follows: 2016 2015 2014 Statutory federal tax rate - (benefit) expense (35 )% (35 )% (35 )% State income and foreign taxes, net of federal tax effect 50 % 3 % 9 % Foreign tax credit (49 )% (3 )% (8 )% Noncontrolling interests in operating subsidiaries 1 % (1 )% — % Goodwill — % 7 % — % Nondeductible permanent items — % — % 1 % Expired capital loss carryforwards — % 1 % — % Valuation allowance 83 % 31 % 39 % 50 % 3 % 6 % |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |
Schedule of Other Share-based Compensation, Activity [Table Text Block] | Compensation expense for the periods presented was comprised of the following: 2016 2015 2014 Restricted stock awards with time-based service conditions $ — $ 10,575 $ 17,631 Restricted stock unit awards with time-based service conditions 4,391 473 484 Restricted stock awards with performance-based vesting conditions 197 — — Stock options with time-based service vesting conditions 1,316 — — Stock options with market-based vesting conditions 3,158 — — Stock options with performance-based vesting conditions — — — Total compensation expense $ 9,062 $ 11,048 $ 18,115 |
Share-based Compensation Arrangement by Share-based Payment Award, Grants in Period [Text Block] | The following table summarizes stock-based award grant activity for the Plans for the years ended December 31, 2016 and 2015: 2016 2015 Shares Aggregate fair value (in thousands) Shares Aggregate fair value (in thousands) Restricted stock awards with time-based service conditions — $ — 894,000 $ 11,470 Restricted stock unit awards with time-based service conditions — — 28,000 468 Restricted stock awards with performance-based vesting conditions 138,000 431 — — Stock options with time-based service vesting conditions 3,434,000 5,704 — — Stock options with market-based vesting conditions 2,250,000 5,530 — — Stock options with performance-based vesting conditions 200,000 487 — — Total incentive awards granted 6,022,000 $ 12,152 922,000 $ 11,938 |
Stock Options Activity | The following table summarizes stock option activity for the Plans for the year ended December 31, 2016 : Weighted-Average Options Exercise Price Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2015 15,000 $ 13.38 Granted 5,884,000 $ 4.82 Exercised (101,000 ) $ 3.22 Expired/forfeited (202,000 ) $ 3.12 Outstanding at December 31, 2016 5,596,000 $ 4.93 6.7 years $ 8,865,000 Vested 1,113,000 $ 5.03 6.5 years $ 1,743,000 Exercisable at December 31, 2016 1,113,000 $ 5.03 6.5 years $ 1,743,000 |
Nonvested Restricted Stock Activity | The following table summarizes nonvested restricted share activity for the year ended December 31, 2016 : Nonvested Restricted Shares Weighted Average Grant Date Fair Value Nonvested restricted stock at December 31, 2015 829,000 $ 14.41 Granted 138,000 $ 3.12 Vested (342,000 ) $ 15.33 Canceled (292,000 ) $ 14.28 Nonvested restricted stock at December 31, 2016 333,000 $ 8.90 |
Restricted Stock Units Activity | The following table summarizes restricted stock unit activity for the year ended December 31, 2016 : Restricted Stock Units Weighted Average Grant Date Fair Value Nonvested restricted stock units outstanding at December 31, 2015 35,000 $ 15.78 Vested (21,000 ) $ 15.43 Nonvested restricted stock units outstanding at December 31, 2016 14,000 $ 16.27 Vested restricted stock units outstanding at December 31, 2016 80,000 $ 20.99 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum annual rental commitments for operating leases of continuing operations having initial or remaining noncancellable lease terms in excess of one year are as follows (in thousands): Years ending December 31, 2017 $ 1,279 2018 1,323 2019 1,369 2020 16 Total minimum lease payments $ 3,987 |
Net assets of IP Fund [Table Text Block] | At December 31, 2016 and 2015 , the Acacia IP Fund net assets and net income (loss) were primarily comprised of the following (in thousands): 2016 2015 Cash and other assets $ 1,118 $ 7,740 Patents, net of accumulated amortization — 147 Investments - noncurrent 2,933 5,829 Total assets $ 4,051 $ 13,716 Accrued expenses and contributions $ 2,394 $ 7,436 Net assets $ 1,657 $ 6,280 2016 2015 Revenues $ 16 $ 18 Operating expenses 572 1,617 Loss from operations (556 ) (1,599 ) Net gain (loss) in equity method investments (1,013 ) 6,922 Net income (loss) $ (1,569 ) $ 5,323 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY FINANCIAL DATA (unaudited) [Abstract] | |
Quarterly Financial Data | The following table sets forth unaudited consolidated statements of operations data for the eight quarters in the period ended December 31, 2016 . This information has been derived from Acacia’s unaudited condensed consolidated financial statements that have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the information when read in conjunction with the audited consolidated financial statements and related notes thereto. Acacia’s quarterly results have been, and may in the future be, subject to significant fluctuations. As a result, Acacia believes that results of operations for interim periods should not be relied upon as any indication of the results to be expected in any future periods. Quarter Ended Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2016 2016 2016 2016 2015 2015 2015 2015 (Unaudited, in thousands, except share and per share information) Revenues $ 24,721 $ 41,351 $ 64,658 $ 21,969 $ 34,210 $ 40,336 $ 12,994 $ 37,497 Operating costs and expenses: Cost of revenues: Inventor royalties 1,573 — 17,844 3,313 9,325 1,265 116 7,756 Contingent legal fees 4,109 10,418 7,709 4,238 4,784 5,512 1,972 3,901 Litigation and licensing expenses - patents 7,723 7,324 7,348 5,463 8,675 9,012 10,345 11,341 Amortization of patents 10,760 10,759 6,467 6,222 13,038 13,228 13,688 13,113 General and administrative expenses (including non-cash stock compensation expense) 7,994 7,535 8,334 9,056 10,575 9,587 9,442 8,572 Research, consulting and other expenses - business development 522 1,334 666 557 997 732 802 860 Impairment of patent-related intangible assets — 40,165 — 2,175 — — — 74,731 Impairment of goodwill — — — — — — — 30,149 Other 1,742 (1,242 ) — — 426 — 3,465 250 Total operating costs and expenses 34,423 76,293 48,368 31,024 47,820 39,336 39,830 150,673 Operating income (loss) (9,702 ) (34,942 ) 16,290 (9,055 ) (13,610 ) 1,000 (26,836 ) (113,176 ) Total other income (expense) (3 ) (52 ) 261 592 228 (104 ) (180 ) — Income (loss) before (provision for) benefit from income taxes (9,705 ) (34,994 ) 16,551 (8,463 ) (13,382 ) 896 (27,016 ) (113,176 ) Provision for income taxes (192 ) (5,927 ) (9,655 ) (2,414 ) (170 ) (119 ) (337 ) (4,174 ) Net income (loss) including noncontrolling interests (9,897 ) (40,921 ) 6,896 (10,877 ) (13,552 ) 777 (27,353 ) (117,350 ) Net (income) loss attributable to noncontrolling interests in operating subsidiaries (68 ) 348 186 266 422 (4,463 ) 43 1,440 Net income (loss) attributable to Acacia Research Corporation $ (9,965 ) $ (40,573 ) $ 7,082 $ (10,611 ) $ (13,130 ) $ (3,686 ) $ (27,310 ) $ (115,910 ) Net loss per common share attributable to Acacia Research Corporation: Basic and diluted income (loss) per share $ (0.20 ) $ (0.81 ) $ 0.14 $ (0.21 ) $ (0.27 ) $ (0.08 ) $ (0.55 ) $ (2.33 ) Weighted-average number of shares outstanding, basic 49,925,550 50,015,869 50,124,302 50,237,784 49,212,207 49,423,472 49,630,369 49,749,941 Weighted-average number of shares outstanding, diluted 49,925,550 50,015,869 50,618,757 50,237,784 49,212,207 49,423,472 49,630,369 49,749,941 |
Description of Business (Detail
Description of Business (Details) - patents | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Description of Business [Line Items] | ||||
Number of patent portfolios acquired | 2 | 3 | 6 | 25 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.00% |
Fair Value Assumptions, Expected Term | 3 years 22 days |
Lag time in recognizing revenues from licensee's quarter | 3 months |
Fair Value Assumptions, Weighted Average Volatility Rate | 53.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Expected Dividend | $ 0 |
Minimum [Member] | |
Period after quarter end licensees report activity | 30 days |
Patents, useful life | 1 year |
Maximum [Member] | |
Period after quarter end licensees report activity | 45 days |
Patents, useful life | 10 years |
Summary of Significant Accoun38
Summary of Significant Accounting Policies Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Licensee 1 [Member] | Revenue, Rights Granted [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 26.00% | 24.00% | 22.00% |
Licensee 1 [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 39.00% | 72.00% | |
Licensee 2 [Member] | Revenue, Rights Granted [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 23.00% | 20.00% | 22.00% |
Licensee 2 [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22.00% | 21.00% | |
Licensee 3 [Member] | Revenue, Rights Granted [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 16.00% | |
Licensee 3 [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | ||
Licensee 4 [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15.00% | ||
Licensees in foreign jurisdictions [Member] | Revenue, Rights Granted [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 79.00% | 49.00% | 43.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property and Equipment [Line Items] | |
Estimated useful lives, years | 3 |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property and Equipment [Line Items] | |
Estimated useful lives, years | 5 |
Computer Hardware and Software [Member] | Minimum [Member] | |
Property and Equipment [Line Items] | |
Estimated useful lives, years | 3 |
Computer Hardware and Software [Member] | Maximum [Member] | |
Property and Equipment [Line Items] | |
Estimated useful lives, years | 5 |
Leasehold Improvements [Member] | Minimum [Member] | |
Property and Equipment [Line Items] | |
Estimated useful lives, years | 2 |
Leasehold Improvements [Member] | Maximum [Member] | |
Property and Equipment [Line Items] | |
Estimated useful lives, years | 5 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||||||||||
Net income (loss) attributable to Acacia Research Corporation | $ (10,611) | $ 7,082 | $ (40,573) | $ (9,965) | $ (115,910) | $ (27,310) | $ (3,686) | $ (13,130) | $ (54,067) | $ (160,036) | $ (66,029) |
Payments of Dividends | 0 | (25,434) | (25,039) | ||||||||
Dividends attributable to common stockholders under the two class method | 0 | 24,740 | 24,313 | ||||||||
Net Loss Available to Common Stockholders, Basic and Diluted | $ (54,067) | $ (160,730) | $ (66,755) | ||||||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 50,237,784 | 50,124,302 | 50,015,869 | 49,925,550 | 49,749,941 | 49,630,369 | 49,423,472 | 49,212,207 | 50,075,847 | 49,505,817 | 48,658,088 |
Earnings Per Share, Basic and Diluted | $ (0.21) | $ 0.14 | $ (0.81) | $ (0.20) | $ (2.33) | $ (0.55) | $ (0.08) | $ (0.27) | $ (1.08) | $ (3.25) | $ (1.37) |
Anti-dilutive equity-based incentive awards excluded from the computation of diluted income (loss) per share | 3,682,532 | 71,468 | 27,760 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies Impact of revision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||||||||||
Net income (loss) attributable to Acacia Research Corporation | $ (10,611) | $ 7,082 | $ (40,573) | $ (9,965) | $ (115,910) | $ (27,310) | $ (3,686) | $ (13,130) | $ (54,067) | $ (160,036) | $ (66,029) |
Net Loss Available to Common Stockholders, Basic and Diluted | $ (54,067) | $ (160,730) | $ (66,755) |
Short-term Investments (Details
Short-term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, amortized cost | $ 19,403 | ||
Available-for-sale securities, gross unrealized gains | 40 | ||
Available-for-sale securities, gross unrealized losses | 0 | ||
Available-for-sale securities, fair value | $ 19,443 | ||
Investment Maturity Date | Dec. 31, 2017 | ||
Available-for-sale Securities, Gross Realized Losses | $ 1 | $ 617 | $ 2,188 |
Proceeds from Sale and Maturity of Marketable Securities | $ 43,232 | $ 82,115 | $ 182,115 |
Short-term Investments Marketab
Short-term Investments Marketable Securities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale Securities, Amortized Cost Basis | $ 19,403 |
Available-for-sale Securities, Gross Unrealized Gain | 40 |
Available-for-sale Securities, Gross Unrealized Loss | 0 |
Available-for-sale Securities | $ 19,443 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 147,000 | $ 222,000 | $ 304,000 |
Property, Plant and Equipment, Disposals | 68,000 | 30,000 | |
Gain (Loss) on Disposition of Property Plant Equipment | $ 3,000 | $ 14,000 |
Property and Equipment Summary
Property and Equipment Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and Equipment [Line Items] | ||
Furniture and fixtures | $ 733 | $ 739 |
Computer hardware and software | 603 | 649 |
Leasehold improvements | 131 | 145 |
Property and equipment, gross | 1,467 | 1,533 |
Less: accumulated depreciation and amortization | (1,340) | (1,261) |
Property and equipment, net | $ 127 | $ 272 |
Accounts Payable and Accrued 46
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and other employee benefits | $ 1,593 | $ 576 |
Accrued vacation | 533 | 701 |
Accrued legal expenses - patent | 6,564 | 10,135 |
Foreign taxes payable | 3,150 | 3,960 |
Accrued consulting and other professional fees | 1,967 | 1,592 |
Other accrued liabilities | 476 | 383 |
Accounts payable and accrued expenses | $ 14,283 | $ 17,347 |
Patents (Details)
Patents (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Patents [Line Items] | |||||||||||
Patents, net | $ 86,319,000 | $ 162,642,000 | $ 86,319,000 | $ 162,642,000 | |||||||
Patents, weighted average useful life | 5 years | ||||||||||
Payments to acquire intangible assets | $ 1,225,000 | 19,504,000 | $ 42,746,000 | ||||||||
Accrued patent acquisition related payments | 1,000,000 | 1,000,000 | 16,700,000 | ||||||||
Accelerated amortization expense | 225,000 | 0 | 1,247,000 | ||||||||
Accelerated amortization expense (termination) | 0 | 380,000 | 2,702,000 | ||||||||
Impairment of Patent-Related Intangible Assets | 2,175,000 | $ 0 | $ 40,165,000 | $ 0 | 74,731,000 | $ 0 | $ 0 | $ 0 | $ 42,340,000 | 74,731,000 | $ 3,497,000 |
Minimum [Member] | |||||||||||
Patents [Line Items] | |||||||||||
Patents, useful life | 1 year | ||||||||||
Acquired Finite Lived Intangible Asset, Useful Life | 2 years | ||||||||||
Maximum [Member] | |||||||||||
Patents [Line Items] | |||||||||||
Patents, useful life | 10 years | ||||||||||
Acquired Finite Lived Intangible Asset, Useful Life | 10 years | ||||||||||
Patents [Member] | |||||||||||
Patents [Line Items] | |||||||||||
Gross carrying amount - patents | 444,362,000 | 444,137,000 | $ 444,362,000 | 444,137,000 | |||||||
Accumulated amortization - patents | 358,043,000 | 281,495,000 | 358,043,000 | 281,495,000 | |||||||
Patents, net | $ 86,319,000 | $ 162,642,000 | $ 86,319,000 | $ 162,642,000 | |||||||
Patents [Member] | Minimum [Member] | |||||||||||
Patents [Line Items] | |||||||||||
Patents, useful life | 1 year | ||||||||||
Patents [Member] | Maximum [Member] | |||||||||||
Patents [Line Items] | |||||||||||
Patents, useful life | 7 years |
Patents Cost and Accumulated Am
Patents Cost and Accumulated Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Patents [Line Items] | |||
Patent cost, disposals | $ 0 | $ 500 | $ 3,000 |
Accumulated amortization, disposals | 0 | 120 | 298 |
Proceeds from Sale of Intangible Assets | $ 0 | $ 750 | $ 3,500 |
Patents Future Amortization Exp
Patents Future Amortization Expense (Details) | Dec. 31, 2016USD ($) |
Patents [Abstract] | |
2,017 | $ 22,333,000 |
2,018 | 21,256,000 |
2,019 | 19,150,000 |
2,020 | 6,707,000 |
2,021 | 5,421,000 |
After Year Five | $ 11,452,000 |
Goodwill Impairment Charges (De
Goodwill Impairment Charges (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 29, 2016 | Jan. 02, 2015 | |
Goodwill and Patent Impairment Charges [Abstract] | |||||||||||||
Goodwill | $ 30,100 | ||||||||||||
Share Price | $ 4.29 | $ 4.29 | $ 3.16 | $ 16.72 | |||||||||
Estimated Fair Value of the Reporting Unit | $ 252,000 | $ 252,000 | |||||||||||
Estimated Carrying Value of Reporting Unit, Market Capitalization Plus Cost Synergies Approach | 344,300 | 344,300 | |||||||||||
Assets | $ 296,003 | 347,901 | $ 296,003 | 347,901 | |||||||||
Impairment of Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 30,149 | $ 0 | $ 0 | $ 0 | $ 0 | $ 30,149 | $ 0 |
Goodwill Impairment Charges Det
Goodwill Impairment Charges Details (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | |||||||||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 | $ 30,149 | $ 0 | $ 0 | $ 0 | $ 0 | $ 30,149 | $ 0 |
Loan Receivable and Investmen52
Loan Receivable and Investment in Warrants (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Sep. 30, 2016 | Aug. 15, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
First Loan Warrant | $ 700,000 | |||
Time-sharing Transactions, Stated Interest Rate for Notes Receivable | 6.00% | |||
Maximum Investment in Veritone | $ 50,000,000 | |||
Secured Promissory Note Advance | 10,000,000 | |||
1st Loan Warrant Condition: Proceeds from Private Financing | $ 10,000,000 | |||
Second Loan Warrant | 700,000 | |||
Veritone Primary Warrant | 50,000,000 | |||
Primary Warrant Condition: Offering Proceeds | 15,000,000 | |||
Secured Convertible Promissory Note | $ 20,000,000 | |||
Unamortized loan discount | $ (1,384,000) | |||
Fair Value Inputs, Discount for Lack of Marketability | 7.00% | |||
Fair value inputs recovery | 100.00% | |||
Loan receivable and accrued interest | $ 18,616,000 | $ 0 | ||
Investment warrants | 1,960,000 | $ 0 | ||
Total Investment, Long Term | 20,576,000 | |||
Interest Receivable | 286,000 | |||
Accretion (Amortization) of Discounts and Premiums, Investments | 576,000 | |||
Interest Income, Other | $ 862,000 | |||
Maximum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Fair Value Assumptions, Expected Volatility Rate | 50.00% | |||
Fair Value Inputs, Probability of Default | 75.00% | |||
Minimum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Fair Value Assumptions, Expected Volatility Rate | 40.00% | |||
Fair Value Inputs, Probability of Default | 25.00% | |||
First Loan [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 20.00% | |||
Second Loan [Member] [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 9.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 26, 2016 | |
Stockholders Equity [Line Items] | ||||
Dividends declared, per share | $ 0.50 | |||
Common stock dividends declared, quarterly | $ 0.125 | |||
Payments of Dividends | $ 0 | $ 25,434 | $ 25,039 | |
Beneficial Ownership Percentage Limit | 4.90% | |||
2013 Stock Plan [Member] | ||||
Stockholders Equity [Line Items] | ||||
Number of shares available for grant | 625,390 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||
Operating loss carryforwards, federal | $ 147,770,000 | ||
Operating loss carryforwards, state | 32,821,000 | ||
Deferred tax assets, valuation allowance | 102,627,000 | $ 75,179,000 | |
Federal NOL annual utilization limit | 14,100,000 | ||
Net operating losses, unrecognized excess tax benefits, federal | 1,928,000 | ||
Net operating losses, unrecognized excess tax benefits, state | 37,771,000 | ||
Capital loss carryovers | 3,423,000 | ||
Deferred Tax Asset, Operating and Capital Loss Carryforwards and Credits | 83,323,000 | 71,494,000 | |
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation | 1,319,000 | 1,917,000 | $ 2,713,000 |
Foreign tax credits, additional paid in capital benefit | 52,224,000 | ||
Foreign tax credits utilized for financial statement purposes | $ 20,313,000 | ||
Tax Benefit From Reversal of the Net Deferred Tax Liability | $ 1,735,000 | ||
Effective Income Tax Rate Reconciliation, Percent | 50.00% | 3.00% | 6.00% |
Effective tax rate excluding valuation allowance | (28.00%) | (33.00%) | |
Unrecognized tax benefits | $ 1,355,000 | $ 2,127,000 | |
unrecognized tax benefits primarily associated with state taxes | 85,000 | ||
Domestic Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses included in deferred tax assets | 0 | ||
State and Local Jurisdiction [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses included in deferred tax assets | 441,000 | ||
Capital Loss Carryforward Related to Business Acquisition [Member] | Internal Revenue Service (IRS) [Member] | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | $ 29,318,000 |
Income Taxes Provision for Taxe
Income Taxes Provision for Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||||||||||
Federal | $ 0 | $ 0 | $ 0 | ||||||||
State taxes | 262 | 379 | 289 | ||||||||
Foreign taxes | 17,926 | 4,421 | 5,359 | ||||||||
Total current | 18,188 | 4,800 | 5,648 | ||||||||
Deferred: | |||||||||||
Federal | 0 | 0 | (1,867) | ||||||||
State taxes | 0 | 0 | 131 | ||||||||
Total deferred | 0 | 0 | (1,736) | ||||||||
(Provision) benefit for income taxes | $ 2,414 | $ 9,655 | $ 5,927 | $ 192 | $ 4,174 | $ 337 | $ 119 | $ 170 | $ 18,188 | $ 4,800 | $ 3,912 |
Income Taxes Deferred Taxes (De
Income Taxes Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Deferred Tax Asset, Operating and Capital Loss Carryforwards and Credits | $ 83,323 | $ 71,494 |
Stock compensation | 2,416 | 1,385 |
Deferred tax assets intangibles and fixed assets | 14,343 | 1,359 |
Basis of investments in affiliates | 2,195 | 499 |
Accrued liabilities and other | 422 | 442 |
State taxes | 90 | 81 |
Total deferred tax assets | 102,789 | 75,260 |
Deferred tax liabilities: | ||
Fixed assets and intangibles | 0 | 0 |
Other | (162) | (81) |
Deferred Tax Liabilities, Gross | (162) | (81) |
Net deferred tax liabilities | 0 | 0 |
Less: valuation allowance | (102,627) | (75,179) |
Net deferred taxes | $ 162 | $ 81 |
Income Taxes Income Tax Rate (D
Income Taxes Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate reconciliation goodwill | 0.00% | 7.00% | 0.00% |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
Statutory federal tax rate | (35.00%) | (35.00%) | (35.00%) |
State income and foreign taxes, net of federal tax effect | 50.00% | 3.00% | 9.00% |
Foreign tax credit | (49.00%) | (3.00%) | (8.00%) |
Noncontrolling interests in operating subsidiaries | 1.00% | (1.00%) | 0.00% |
Non deductible permanent items | 0.00% | 0.00% | 1.00% |
Expired net operating loss carryforwards | 0.00% | 1.00% | 0.00% |
Valuation allowance | 83.00% | 31.00% | 39.00% |
Total | 50.00% | 3.00% | 6.00% |
Stock-Based Incentive Plans (De
Stock-Based Incentive Plans (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 26, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | $ 9,062,000 | $ 11,048,000 | $ 18,115,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Grants in Period, Weighted Average Grant Date Fair Value | $ 0 | $ 16.72 | $ 14.33 | |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Vested in Period, Fair Value | $ 324,000 | $ 480,000 | $ 460,000 | |
Ownership percent of voting stock | 10.00% | |||
Aggregate intrinsic value of options exercised | $ 344,000 | 751,000 | 518,000 | |
Weighted average grant date fair value of restricted stock granted | $ 3.12 | |||
Number of shares of common stock reserved for issuance | 7,445,000 | |||
Restricted stock awards with time based vesting conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | $ 0 | $ 10,575,000 | $ 17,631,000 | |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Weighted average grant date fair value of restricted stock granted | $ 12.83 | $ 14.41 | ||
Aggregate fair value of restricted stock vested | 5,243,000 | $ 11,494,000 | $ 21,490,000 | |
Total unrecognized compensation expense for nonvested awards | $ 1,873,000 | |||
Weighted average period over which unrecognized compensation expense will be recognized | 1 year | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Total unrecognized compensation expense for nonvested awards | $ 162,000 | |||
Weighted average period over which unrecognized compensation expense will be recognized | 1 year | |||
Restricted stock unit awards with time-based vesting conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | $ 4,391,000 | 473,000 | 484,000 | |
Restricted stock unit awards with performance based vesting conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | 197,000 | 0 | 0 | |
Stock options with time-based vesting conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | 1,316,000 | 0 | 0 | |
Stock options with market-based vesting conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | 3,158,000 | 0 | 0 | |
Stock options with performance-based vesting conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Non-cash stock compensation | $ 0 | $ 0 | $ 0 | |
2007 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares available for grant | 0 | |||
2016 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Aggregate shares available for issuance | 4,500,000 | |||
Number of shares available for grant | 1,754,000 | |||
Discretionary Option Grant Program [Member] | Nonstatutory Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of fair market value on grant date, minimum exercise price | 85.00% | |||
Stock Issuance Program [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of fair market value on grant date, minimum exercise price | 100.00% | |||
2002 Stock Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Increase in number of shares available, percentage of outstanding shares on last trading day of prior December | 3.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Increase | 500,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Available for Issuance | 20,000,000 | |||
Number of shares available for grant | 0 | |||
2013 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares available for grant | 4,750,000 | |||
2013 Stock Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares available for grant | 625,390 | |||
Less than 10% [Member] | Discretionary Option Grant Program [Member] | Incentive Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of fair market value on grant date, minimum exercise price | 100.00% | |||
10% or More [Member] | Discretionary Option Grant Program [Member] | Incentive Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of fair market value on grant date, minimum exercise price | 110.00% |
Stock-Based Incentive Plans Sto
Stock-Based Incentive Plans Stock Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Awards with Market Conditions, Compensation Cost Not yet Recognized, Period for Recognition | 1 year | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 5,884,000 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 4.82 | |
Outstanding at December 31, 2015 | 15,000 | |
Exercised | (101,000) | |
Outstanding at December 31, 2016 | 5,596,000 | 15,000 |
Vested | 1,113,000 | |
Exercisable at December 31, 2016 | 1,113,000 | |
Outstanding at December 31, 2015, weighted average exercise price | $ 13.38 | |
Exercised, weighted average exercise price | 3.22 | |
Outstanding at December 31, 2016, weighted average exercise price | 4.93 | $ 13.38 |
Vested, weighted average exercise price | 5.03 | |
Exercisable, weighted average exercise price | $ 5.03 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 8 months | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 6 years 6 months | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 1,743,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 6 months | |
Outstanding at December 31, 2016, aggregate, intrinsic value | $ 8,865,000 | |
Vested, aggregate intrinsic value | 2,074,000 | |
Exercisable, aggregate intrinsic value | 1,743,000 | |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | 11,721,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 2,342,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (202,000) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 3.12 | |
Employee Service Share-based Compensation, Awards with Performance Condiditons, Compensation Cost Not yet Recognized | $ 683,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |
Unvested Shares with Market Based Vesting Conditions | 1,687,500 | |
Employee Service Share-based Compensation, Awards with Market Conditions, Compensation Cost Not yet Recognized | $ 2,400,000 | |
Performance Based Vesting Conditions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000,000 | 0 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 5.75 | |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | $ 487,000 | $ 0 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year | |
Unrecognized Compensation Expense Options | $ 1,873,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments With Performance Conditions, Nonvested, Number, | 138,000 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |
Unrecognized Compensation Expense Options | $ 6,842,000 | |
Equity Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments With Performance Conditions, Nonvested, Number, | 200,000 | |
Market Based Vesting Conditions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,250,000,000 | 0 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 5.75 | |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | $ 5,530,000 | $ 0 |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market Based Vesting Conditions, price | $ 7 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market Based Vesting Conditions, price | $ 10 |
Stock-Based Incentive Plans Non
Stock-Based Incentive Plans Nonvested Restriced Stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Nonvested at December 31, 2015 | 829,000 | ||
Granted | 138,000 | ||
Vested | (342,000) | ||
Canceled | (292,000) | ||
Nonvested at December 31, 2016 | 333,000 | 829,000 | |
Nonvested, weighted average grant date fair value at December 31, 2015 | $ 14.41 | ||
Granted, weighted average grant date fair value | 3.12 | ||
Vested, weighted average grant date fair value | 15.33 | ||
Canceled, weighted average grant date fair value | 14.28 | ||
Nonvested, weighted average grant date fair value at December 31, 2016 | $ 8.90 | $ 14.41 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted, weighted average grant date fair value | $ 12.83 | $ 14.41 |
Stock-Based Incentive Plans N61
Stock-Based Incentive Plans Nonvested Restricted Stock Units (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Awards, Restricted Stock Units, Vested Oustanding | 80,000 | |
Share-based Compensation Arrangement Restricted Stock Units, Nonvested | 14,000 | 35,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Nonvested, Weighted Average Grant Date Fair Value | $ 16.27 | $ 15.78 |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Grants in Period | (21,000) | |
Granted | 138,000 | |
Nonvested at December 31, 2016 | 333,000 | 829,000 |
Granted, weighted average grant date fair value | $ 3.12 | |
Vested, weighted average grant date fair value | 15.43 | |
Nonvested, weighted average grant date fair value at December 31, 2016 | 8.90 | $ 14.41 |
Vested outstanding, weighted average grant date fair value | $ 20.99 |
Stock-Based Incentive Plans Sch
Stock-Based Incentive Plans Schedule of Grants by Type (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 138,000 | |
Share-based Compensation Arrangment by Share-based Payment Award, Restricted Stock Units, Granted, Fair Value | $ 0 | $ 468,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Total Grants During the Period | 6,022,000,000 | 922,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, All Grants, Fair Value | $ 12,152,000 | $ 11,938,000 |
Employee Service Share-based Compensation, Awards with Performance Condiditons, Compensation Cost Not yet Recognized | $ 683,000 | |
Unvested Shares with Market Based Vesting Conditions | 1,687,500 | |
Employee Service Share-based Compensation, Awards with Market Conditions, Compensation Cost Not yet Recognized | $ 2,400,000 | |
Employee Service Share-based Compensation, Awards with Market Conditions, Compensation Cost Not yet Recognized, Period for Recognition | 1 year | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 5,884,000 | |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | $ 11,721,000 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market Based Vesting Conditions, price | $ 7 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market Based Vesting Conditions, price | $ 10 | |
Time Based Vesting Conditions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | 894,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Grants in Period | 0 | 28,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Awards, Granted, Fair Value | $ 0 | $ 11,470,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,434,000,000 | 0 |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | $ 5,704,000 | $ 0 |
Market Based Vesting Conditions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,250,000,000 | 0 |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | $ 5,530,000 | $ 0 |
Performance Based Vesting Conditions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 138,000,000 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Awards, Granted, Fair Value | $ 431,000 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000,000 | 0 |
Share-based Compensation Arrangment by Share-based Payment Award, Options, Granted, Fair Value | $ 487,000 | $ 0 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments With Performance Conditions, Nonvested, Number, | 138,000 | |
Equity Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments With Performance Conditions, Nonvested, Number, | 200,000 |
Commitments and Contingencies63
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||||||||||
Rent expense | $ 1,795,000 | $ 1,926,000 | $ 1,523,000 | ||||||||
Other | $ 0 | $ 0 | $ (1,242,000) | $ 1,742,000 | $ 250,000 | $ 3,465,000 | $ 0 | $ 426,000 | 500,000 | 4,141,000 | $ 1,548,000 |
Partners' capital, authorized | 250,000,000 | 250,000,000 | |||||||||
Cash and other assets, IP Fund | 1,118,000 | 7,740,000 | 1,118,000 | 7,740,000 | |||||||
Patents, net of accumulated amortization, IP Fund | 0 | 147,000 | 0 | 147,000 | |||||||
Investments, IP Fund | 2,933,000 | 5,829,000 | 2,933,000 | 5,829,000 | |||||||
Total assets, IP Fund | 4,051,000 | 13,716,000 | 4,051,000 | 13,716,000 | |||||||
Accrued expenses and contributions, IP Fund | 2,394,000 | 7,436,000 | 2,394,000 | 7,436,000 | |||||||
Net assets, IP Fund | $ 1,657,000 | $ 6,280,000 | 1,657,000 | 6,280,000 | |||||||
Revenues, IP Fund | 16,000 | 18,000 | |||||||||
IP Fund, Operating expenses | 572,000 | 1,617,000 | |||||||||
IP Fund, Gain from Operations | (556,000) | (1,599,000) | |||||||||
IP Fund, Net Loss in Equity Method Investment | (1,013,000) | 6,922,000 | |||||||||
IP Fund, Net Loss | $ (1,569,000) | $ 5,323,000 | |||||||||
Line of Credit Facility, Commitment Fee Percentage | 1.15% |
Commitments and Contingencies O
Commitments and Contingencies Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Year: | |
2,017 | $ 1,279 |
2,018 | 1,323 |
2,019 | 1,369 |
2,020 | 16 |
Total minimum lease payments | $ 3,987 |
Supplemental Cash Flow Inform65
Supplemental Cash Flow Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for state income taxes | $ 223,000 | $ 211,000 | $ 172,000 |
Foreign withholding taxes | $ 14,776,000 | $ 4,421,000 | $ 5,159,000 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
QUARTERLY FINANCIAL DATA (unaudited) [Abstract] | |||||||||||
Revenues | $ 21,969 | $ 64,658 | $ 41,351 | $ 24,721 | $ 37,497 | $ 12,994 | $ 40,336 | $ 34,210 | |||
Inventor royalties | 3,313 | 17,844 | 0 | 1,573 | 7,756 | 116 | 1,265 | 9,325 | $ 22,730 | $ 18,462 | $ 20,670 |
Contingent legal fees | 4,238 | 7,709 | 10,418 | 4,109 | 3,901 | 1,972 | 5,512 | 4,784 | 26,474 | 16,169 | 23,563 |
Litigation and licensing expenses - patents | 5,463 | 7,348 | 7,324 | 7,723 | 11,341 | 10,345 | 9,012 | 8,675 | 27,858 | 39,373 | 37,614 |
Amortization of patents | 6,222 | 6,467 | 10,759 | 10,760 | 13,113 | 13,688 | 13,228 | 13,038 | 34,208 | 53,067 | 53,745 |
Marketing, general and administrative expenses (including non-cash stock compensation expense) | (9,056) | (8,334) | (7,535) | (7,994) | (8,572) | (9,442) | (9,587) | (10,575) | (32,919) | (38,176) | (48,554) |
Research, consulting and other expenses - business development | 557 | 666 | 1,334 | 522 | 860 | 802 | 732 | 997 | 3,079 | 3,391 | 3,840 |
Impairment of Patent-Related Intangible Assets | 2,175 | 0 | 40,165 | 0 | 74,731 | 0 | 0 | 0 | 42,340 | 74,731 | 3,497 |
Impairment of Goodwill | 0 | 0 | 0 | 0 | 30,149 | 0 | 0 | 0 | 0 | 30,149 | 0 |
Other | 0 | 0 | (1,242) | 1,742 | 250 | 3,465 | 0 | 426 | 500 | 4,141 | 1,548 |
Total operating costs and expenses | 31,024 | 48,368 | 76,293 | 34,423 | 150,673 | 39,830 | 39,336 | 47,820 | 190,108 | 277,659 | 193,031 |
Operating loss | (9,055) | 16,290 | (34,942) | (9,702) | (113,176) | (26,836) | 1,000 | (13,610) | (37,409) | (152,622) | (62,155) |
Total other income (expense) | 592 | 261 | (52) | (3) | 0 | (180) | (104) | 228 | 798 | (56) | (595) |
Income (loss) from operations before (provision for) benefit from income taxes | (8,463) | 16,551 | (34,994) | (9,705) | (113,176) | (27,016) | 896 | (13,382) | (36,611) | (152,678) | (62,750) |
(Provision) benefit for income taxes | (2,414) | (9,655) | (5,927) | (192) | (4,174) | (337) | (119) | (170) | (18,188) | (4,800) | (3,912) |
Net loss including noncontrolling interests in operating subsidiaries | (10,877) | 6,896 | (40,921) | (9,897) | (117,350) | (27,353) | 777 | (13,552) | (54,799) | (157,478) | (66,662) |
Net (income) loss attributable to noncontrolling interests in operating subsidiaries | (266) | (186) | (348) | 68 | (1,440) | (43) | 4,463 | (422) | (732) | 2,558 | (633) |
Net loss attributable to Acacia Research Corporation | $ (10,611) | $ 7,082 | $ (40,573) | $ (9,965) | $ (115,910) | $ (27,310) | $ (3,686) | $ (13,130) | $ (54,067) | $ (160,036) | $ (66,029) |
Earnings Per Share, Basic and Diluted | $ (0.21) | $ 0.14 | $ (0.81) | $ (0.20) | $ (2.33) | $ (0.55) | $ (0.08) | $ (0.27) | $ (1.08) | $ (3.25) | $ (1.37) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 50,237,784 | 50,124,302 | 50,015,869 | 49,925,550 | 49,749,941 | 49,630,369 | 49,423,472 | 49,212,207 | 50,075,847 | 49,505,817 | 48,658,088 |
Weighted Average Number of Shares Outstanding, Diluted | 50,237,784 | 50,618,757 | 50,015,869 | 49,925,550 | 49,749,941 | 49,630,369 | 49,423,472 | 49,212,207 |