SEGMENT REPORTING

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

As of December 31, 2021, the Company operates and reports its results in two reportable segments: Intellectual Property Operations and Industrial Operations. Historically, the Company has managed and reported under a single reporting segment. In October 2021, the Company acquired Printronix, which comprises all of the operations of the Company’s Industrial Operations reportable segment and led to the identification of the additional reporting segment. The Company reports segment information based on the management approach and organizes its businesses based on products and services. The management approach designates the internal reporting used by the chief operating decision maker for decision making and performance assessment as the basis for determining the Company’s reportable segments. The performance measure of the Company’s reportable segments is primarily income or (loss) from operations. Income or (loss) from operations for each segment includes all revenues, cost of revenues, gross profit and other operating expenses directly attributable to the segment. Other than Acacia's equity securities investments, specific asset information is not included in managements review at this time.

The Company’s Intellectual Property Operations segment invests in IP and related absolute return assets, and engages in the licensing and enforcement of patented technologies. Through our Patent Licensing, Enforcement and Technologies Business we are a principal in the licensing and enforcement of patent portfolios, with our operating subsidiaries obtaining the rights in the patent portfolio or purchasing the patent portfolio outright. We assume all responsibility for advancing operational expenses while pursuing a patent licensing and enforcement program, and when applicable, share net licensing revenue with our patent partners as that program matures, on a prearranged and negotiated basis. We may also provide upfront capital to patent owners as an advance against future licensing revenue.

Currently, on a consolidated basis, our 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 variety of industries. We generate revenues and related cash flows from the granting of IP rights for the use of patented technologies that our operating subsidiaries control or own.

The Company’s Industrial Operations segment generates operating income by designing and manufacturing printers and consumable products for various industrial printing applications. Printers consist of hardware and embedded software and may be sold with maintenance service agreements. Consumable products include inked ribbons which are used in Printronix’s printers. Printronix’s products are primarily sold through channel partners, such as dealers and distributors, to end-users. The Industrial Operations reporting segment did not exist prior to the acquisition of Printronix in October 2021. Therefore, as of and for the year ended December 31, 2020, the consolidated results represented the results of the Company’s single reporting segment.

The Company's segment information, including Printronix's operations from October 7, 2021 through December 31, 2021, is as follows:

	Year Ended December 31, 2021
	Intellectual Property Operations		Industrial Operations		Total
	(In thousands)
Revenues:
License fees	$	76,043	$	—	$	76,043
Printers and parts	—		4,961		4,961
Consumable products	—		5,973		5,973
Services	—		1,070		1,070
Total revenues	76,043		12,004		88,047
Cost of revenues:
Inventor royalties	1,142		—		1,142
Contingent legal fees	12,074		—		12,074
Litigation and licensing expenses	5,462		—		5,462
Amortization of patents	9,851		—		9,851
Other patent portfolio expense (income)	162		—		162
Cost of sales	—		7,407		7,407
Total cost of revenues	28,691		7,407		36,098
Segment gross profit	47,352		4,597		51,949
Other operating expenses:
Engineering and development expenses	—		200		200
Sales and marketing expenses	—		1,538		1,538
Amortization of intangible assets	—		399		399
General and administrative expenses	6,177		2,398		8,575
Total other operating expenses	6,177		4,535		10,712
Segment operating income	$	41,175	$	62	41,237
Parent general and administrative expenses					26,692
Operating income					14,545
Total other income					160,107
Income before income taxes					$	174,652

For comparability purposes, Acacia's year ended December 31, 2020 general and administrative expenses, as reported in the consolidated statement of operations, were $24.5 million, and included parent general and administrative expenses of $19.5 million, which derives a comparative Intellectual Property Operations general and administrative expense amount of approximately $5.0 million.

	December 31,
	2021
	(In thousands)
Equity securities investments:
Equity securities at fair value	$	361,778
Equity securities without readily determinable fair value	5,816
Investment securities - equity method investments	30,934
Total	398,528
Other parent assets	172,726
Segment total assets:
Intellectual property operations	175,286
Industrial operations	52,316
Total assets	$	798,856

The Company's revenues, including Printronix's net sales from October 7, 2021 through December 31, 2021, and long-lived tangible assets, by geographic area are presented below. Acacia's revenues are attributed to licensees domiciled in foreign jurisdictions. Printronix's net sales to external customers are attributed to geographic areas based upon the final destination of products shipped. The Company, primarily through its Printronix subsidiary, has identified three global regions for marketing its products and services: Americas, Europe, Middle East and Africa, and Asia-Pacific. Assets are summarized based on the location of held assets.

	Year Ended December 31, 2021
	Intellectual Property Operations		Industrial Operations		Total
	(In thousands)
Revenues by geographic area:
United States	$	23,256	$	4,937	$	28,193
Canada and Latin America	402		251		653
Total Americas	23,658		5,188		28,846
Europe, Middle East and Africa	1,841		2,589		4,430
China	—		1,910		1,910
India	—		1,076		1,076
Asia-Pacific, excluding China and India	50,544		1,241		51,785
Total Asia-Pacific	50,544		4,227		54,771
Total revenues	$	76,043	$	12,004	$	88,047

	December 31, 2021
	Intellectual Property Operations			Industrial Operations		Total
	(In thousands)
Long-lived tangible assets by geographic area:
United States	$	204		$	473	$	677
Malaysia	—			3,203		3,203
Other foreign countries	—			303		303
Total	$	204	29782000	$	3,979	$	4,183