CORRECTION OF IMMATERIAL ERROR

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company identified and recorded an adjustment to the current and prior periods related to the estimated amortization period of deferred debt issuance costs. Pursuant to the Securities Purchase Agreement dated November 18, 2019 with Starboard and the Buyers, an upfront fee was payable by the Company upon the first closing of Senior Secured Notes. The fee was defined as 1.25% of the maximum $365.0 million principal amount of the Senior Secured Notes issuable under the Securities Purchase Agreement. The Company paid and capitalized this upfront fee of $4.6 million upon the issuance of our Senior Secured Notes in June 2020 (refer to Note 10). The lender fees were initially recognized as long-term deferred debt issuance costs and were included in other non-current assets in the consolidated balance sheets up to and as of September 30, 2021, and were to be amortized to interest expense until November 15, 2027, the original maturity/expiration date of the transactions governed by the Starboard investment. During the fourth quarter of 2021, it was determined the correct deferred debt issuance costs amortization period was the approximate seven month period ended December 31, 2020, the initial redemption date of the Notes. Accordingly, the Company has adjusted the related prior period consolidated financial statements to reflect this correction to the periods presented below.

In accordance with Staff Accounting Bulletin ("SAB") No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the error and determined that the related impact did not materially misstate previously issued consolidated financial statements. Although the Company concluded that the misstatement was not material to its previously issued consolidated financial statements, the Company has determined it is appropriate to adjust its previously issued consolidated financial statements to correct for the error. The following are the relevant line items from the Company's consolidated financial statements illustrating the effect of the corrections to the periods presented:


	As of and for the Year Ended December 31, 2020
	As Previously Reported		Adjustments		As Adjusted
	(In thousands, except per share data)
Balance Sheet:
Other non-current assets (excluding property, plant and equipment)	$	4,718	$	(4,213)	$	505
Total assets	515,520		(4,213)		511,307
Accumulated deficit	(326,708)		(4,213)		(330,921)
Total stockholders' equity	292,529		(4,213)		288,316

Statement of Operations:
Interest expense on Senior Secured Notes	$	(5,923)	$	(4,213)	$	(10,136)
Total other income	131,803		(4,213)		127,590
Net income attributable to Acacia Research Corporation	113,444		(4,213)		109,231
Income per share:
Basic net income per common share	$	1.85	$	(0.07)	$	1.78
Diluted net income per common share	$	1.54	$	(0.06)	$	1.48

Statement of Cash Flows:
Net income including noncontrolling interests in subsidiaries	$	113,444	$	(4,213)	$	109,231
Amortization of debt discount and issuance costs	2,838		4,213		7,051
Net cash used in operating activities	(19,620)		—		(19,620)


	As of and for the Three Months Ended March 31, 2021
	As Previously Reported		Adjustments		As Adjusted
	(Unaudited and in thousands, except per share data)
Balance Sheet:
Other non-current assets	$	4,834	$	(4,060)	$	774
Total assets	568,958		(4,060)		564,898
Accumulated deficit	(491,326)		(4,060)		(495,386)
Total stockholders' equity	128,148		(4,060)		124,088

Statement of Operations:
Interest expense on Senior Secured Notes	$	(1,310)	$	153	$	(1,157)
Total other expense	(158,032)		153		(157,879)
Net loss attributable to Acacia Research Corporation	(164,618)		153		(164,465)
Loss per share:
Basic and diluted net loss per common share	$	(2.81)	$	—	$	(2.81)

Statement of Cash Flows:
Net loss including noncontrolling interests in subsidiaries	$	(163,718)	$	153	$	(163,565)
Amortization of debt discount and issuance costs	702		(153)		549
Net cash used in operating activities	(6,120)		—		(6,120)


	As of and for the Six Months Ended June 30, 2021
	As Previously Reported		Adjustments		As Adjusted
	(Unaudited and in thousands, except per share data)
Balance Sheet:
Other non-current assets	$	4,653	$	(3,907)	$	746
Total assets	627,732		(3,907)		623,825
Accumulated deficit	(471,819)		(3,907)		(475,726)
Total stockholders' equity	147,103		(3,907)		143,196

Statement of Operations:
Interest expense on Senior Secured Notes	$	(3,070)	$	306	$	(2,764)
Total other expense	(139,653)		306		(139,347)
Net loss attributable to Acacia Research Corporation	(145,111)		306		(144,805)
Loss per share:
Basic and diluted net loss per common share	$	(3.03)	$	0.01	$	(3.02)

Statement of Cash Flows:
Net loss including noncontrolling interests in subsidiaries	$	(144,205)	$	306	$	(143,899)
Amortization of debt discount and issuance costs	128		(306)		(178)
Net cash used in operating activities	(6,197)		—		(6,197)


	As of and for the Nine Months Ended September 30, 2021
	As Previously Reported		Adjustments		As Adjusted
	(Unaudited and in thousands, except per share data)
Balance Sheet:
Other non-current assets	$	4,482	$	(3,754)	$	728
Total assets	749,834		(3,754)		746,080
Accumulated deficit	(382,215)		(3,754)		(385,969)
Total stockholders' equity	235,862		(3,754)		232,108

Statement of Operations:
Interest expense on Senior Secured Notes	$	(5,601)	$	459	$	(5,142)
Total other expense	(37,316)		459		(36,857)
Net loss attributable to Acacia Research Corporation	(55,507)		459		(55,048)
Loss per share:
Basic and diluted net loss per common share	$	(1.21)	$	0.01	$	(1.20)

Statement of Cash Flows:
Net loss including noncontrolling interests in subsidiaries	$	(54,601)	$	459	$	(54,142)
Amortization of debt discount and issuance costs	460		(459)		1
Net cash used in operating activities	(7,602)		—		(7,602)