SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 27, 1998
ACACIA RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
California 000-26068 95-440574
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
12 South Raymond Avenue, Pasadena, California 91105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (626) 449-6431
(Former name or former address, if changed since last report.)
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
In January 1998, the Registrant completed a series of independent, but
related transactions (the "Transactions") with certain individuals owning
equity interests in CombiMatrix Corporation ("CombiMatrix"), Greenwich
Information Technologies LLC ("Greenwich Information Technologies"),
MerkWerks Corporation ("MerkWerks"), and Soundview Technologies Incorporation
("Soundview Technologies"). CombiMatrix, Greenwich Information Technologies,
MerkWerks, and Soundview Technologies are collectively referred to
hereinafter as the "Affiliates."
Prior to entering the Transactions, the Registrant held a majority
interest as follows: (i) 51.4% of the outstanding common stock of Soundview
Technologies; (ii) 69.5% of the outstanding common stock of MerkWerks; and
(iii) 51.4% of the outstanding common stock of CombiMatrix. The Registrant
also held a minority interest of 30.02% of the membership interests in
Greenwich Information Technologies.
In the Transactions, the Registrant acquired additional interests in
each of the Affiliates in exchange for newly-issued shares of the
Registrant's common stock. Although the shares of the Registrant's common
stock were restricted and issued pursuant to the private placement exemption
from registration under Securities Act of 1933, as amended, the Registrant
agreed to register the resale of such shares with the Securities and Exchange
Commission. A registration statement of Form S-3 covering those shares was
filed by Registrant on February 2, 1998 (File No. 333-45397).
There is no public market for any of Affiliate equity interests acquired
by the Registrant. Among the factors the Registrant considered in
determining the offer price for the equity interests in a particular
Affiliate were that Affiliate's intellectual property rights, prices at which
equity interests in an Affiliate have been sold in prior private
transactions, estimates of the business potential and earnings prospects of
the Affiliate and its industry in general, an overall assessment of that
Affiliate, and an assessment of that Affiliate's management.
The Transactions consisted of a total of a number of agreements entered
into with holders of securities in the Affiliates. In certain situations, a
single agreement involved exchanges for interests in two or more of the
Affiliates. Although the first transaction occurred on January 14, 1998, the
Transactions, as a whole, were not deemed to be material until the vast
majority of the transactions were completed on January 27, 1998. A detailed
breakdown of the Transactions is as follows:
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# OF PER PURCHASE ACRI TOTAL
AFFILIATE SHARE TOTAL VALUE AGREEMENT 10 DAY ACRI
SHARES OFFER PRICE OF OFFER DATE SHARE PRICE(1) SHARES
---------- ------------- ------------ ----------- -------------- ---------
CombiMatrix Corporation
Douglas Benson.................... 100,000 $ 1.61 $ 161,000 1/22/98 7.29 22,085
---------- ------------ ---------
Greenwich Information Technologies(2)
All Points Management(3).......... 0.67% $ 12.1 mil(2)$ 80,900 1/27/98 7.54 10,729
John D. Drake(3).................. 1.67% $ 12.1 mil(2)$ 201,600 1/27/98 7.54 26,737
Gary Freeman(6)................... 0.67% $ 12.1 mil(2)$ 80,900 1/28/98 7.74 10,452
Scott & Joan Lovely............... 0.30% $ 7.5 mil(2)$ 22,500 1/17/98 7.26 3,099
---------- ------------ ---------
3.31% $ 385,900 51,017
MerkWerks Corporation
All Points Management(3).......... 113,334 $ 1.61 $ 182,468 1/27/98 7.54 24,200
Douglas Benson.................... 45,000 $ 1.61 $ 72,450 1/22/98 7.29 9,938
M. Robert & Phyllis Ching(4)(6)... 193,500 $ 1.61 $ 311,535 1/27/98 7.54 41,318
Gary Freeman(6)................... 10,025 $ 1.61 $ 16,140 1/27/98 7.54 2,085
Calvin C. Layland................. 17,000 $ 1.61 $ 27,370 1/27/98 7.54 3,630
William M. Moon................... 22,500 $ 1.61 $ 36,225 1/27/98 7.54 4,804
---------- ------------ ---------
401,359 $ 646,188 85,975
Soundview Technologies Incorporated
All Points Management(3).......... 100,000 $ 1.61 $ 161,000 1/27/98 7.54 21,353
Douglas Benson.................... 200,000 $ 1.61 $ 322,000 1/14/98 7.38 43,631
Rene Carrel....................... 10,000 $ 1.61 $ 16,100 1/22/98 7.29 2,209
M. Robert & Phyllis Ching(4)(6)... 274,000 $ 1.61 $ 441,140 1/27/98 7.54 58,506
Philip & Beverly Ching............ 50,000 $ 1.61 $ 80,500 1/27/98 7.54 10,676
Victor & Beverly Ching............ 5,000 $ 1.61 $ 8,050 1/27/98 7.54 1,068
C. Perry Chu...................... 5,000 $ 1.61 $ 8,050 1/27/98 7.54 1,068
John D. Drake..................... 120,000 $ 1.61 $ 193,200 1/27/98 7.54 25,623
Forbank........................... 100,000 $ 1.61 $ 161,000 1/22/98 7.29 22,085
Forbank........................... 40,000 $ 1.61 $ 64,400 1/27/98 7.54 8,541
Gary Freeman(6)................... 50,000 $ 1.61 $ 80,500 1/28/98 7.74 10,400
David Lackey(5)................... 24,000 $ 1.61 $ 38,640 1/27/98 7.54 5,125
Laredo Trading.................... 5,000 $ 1.61 $ 8,050 1/30/98 8.13 990
C. Layland Pension & Profit
Sharing......................... 25,000 $ 1.61 $ 40,250 1/27/98 7.54 5,338
Calvin Layland.................... 25,000 $ 1.61 $ 40,250 1/27/98 7.54 5,338
Daniel & Shelly S. Lodes.......... 10,000 $ 1.61 $ 16,100 1/30/98 8.13 1,980
William M. Moon................... 20,000 $ 1.61 $ 32,200 1/27/98 7.54 4,271
Sigler & Co....................... 75,000 $ 1.61 $ 120,750 1/30/98 8.13 14,852
Joseph & Diane Tsai(6)............ 6,000 $ 1.61 $ 9,660 1/27/98 7.54 1,282
---------- ------------ ---------
1,144,000 $ 1,841,840 244,336
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$ 3,034,928 403,413
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(1) The number of shares of the Registrant's common stock exchanged was
based on the prior ten day average of the stock's trading price on the
Nasdaq National Market.
(2) Because Greenwich Information Technologies is a limited liability
company, equity is expressed in terms of percentage of membership
interests rather than shares. In addition, Per Share Offer Price is
expressed in total valuation of Greenwich Information Technologies as
was offered by Sellers to determine the total value of each Seller's
membership interest.
(3) All Points Management Trust provides consulting services to the
Registrant.
(4) Dr. Ching has provided consulting services to the Registrant.
(5) Mr. Lackey provides consulting to the Registrant. Mr. Lackey also
has acted as a finder in connection with a private placement offering
made by the Registrant in December 1997.
(6) May include certain shares held in trust as trustee and/or held
jointly with minor children.
The Transactions did not cause nor result in the Registrant acquiring
control of any Affiliate. The Registrant already had control of three of the
Affiliates--Soundview Technologies, MerkWerks, and CombiMatrix--prior to
completing the Transactions. After completion of the Transactions, the
Registrant's interests in the Affiliates increased as follows: (i) 66.7% of
the outstanding common stock of Soundview Technologies; (ii) 89.6% of the
outstanding common stock of MerkWerks; (iii) 52.7% of the outstanding common
stock of CombiMatrix; and (iv) 33.33% of the membership interests in
Greenwich Information Technologies.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits
2.1 Form of Purchase Agreement
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACACIA RESEARCH CORPORATION
/s/ PAUL R. RYAN
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By: Paul R. Ryan
President and Chief Executive Officer
DATED: February 11, 1998
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