SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

License revenues were comprised of the following for the periods presented:


	Years Ended December 31,
	2021		2020
	(In thousands)
Paid-up license revenue agreements	$	73,585	$	28,389
Recurring License Revenue Agreements	2,458		1,393
Total	$	76,043	$	29,782

Printronix's net revenues from October 7, 2021 through December 31, 2021 were comprised of the following (in thousands):





Printers, consumables and parts	$	10,934
Services	1,070
Total	$	12,004

Schedule of Other Operating Cost and Expense, by Component

Cost of revenues were comprised of the following for the periods presented:


	Years Ended December 31,
	2021		2020
	(In thousands)
Inventor royalties	$	1,142	$	7,349
Contingent legal fees	12,074		7,419
Litigation and licensing expenses	5,462		5,683
Amortization of patents	9,851		4,681
Other patent portfolio expense (income)	162		(308)
Total	$	28,691	$	24,824

Schedule of Product Warranty Liability

The following is a summary of the accrued warranty liabilities for the period from October 7, 2021 through December 31, 2021, which are included in accrued expenses and other current liabilities, and other long-term liabilities in the consolidated balance sheet as of December 31, 2021 (in thousands):





Beginning balance (October 7, 2021)	$	260
Estimated future warranty expense	17
Warranty claims settled	(55)
Ending balance	$	222

Unrealized Gain (Loss) on Investments

Equity securities at fair value for the periods presented were comprised of the following:


Security Type	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
	(In thousands)
December 31, 2021:
Equity securities - Life Sciences Portfolio (Note 4)	$	56,037	$	262,811	$	(1,488)	$	317,360
Equity securities	43,822		2,068		(1,472)		44,418
Total	$	99,859	$	264,879	$	(2,960)	$	361,778

December 31, 2020:
Equity securities - Life Sciences Portfolio (Note 4)	$	32,765	$	72,689	$	(583)	$	104,871
Equity securities	4,086		1,410		(1,264)		4,232
Total	$	36,851	$	74,099	$	(1,847)	$	109,103

The consolidated statements of operations reflected the following net realized and unrealized gains from our Life Sciences Portfolio:


	Years Ended December 31,
	2021		2020
	(In thousands)
Change in fair value of equity securities of public companies	$	188,875	$	72,104
Change in fair value of equity securities without readily determinable fair value	—		103,751
Conversion of equity securities without readily determinable fair value to equity securities of public companies	(102,067)		—
Gain (loss) on sale of equity securities of public companies	115,172		(3,930)

Gain on sale of prepaid investment and derivative	—		2,845
Net realized and unrealized gain	$	201,980	$	174,770

Schedule of useful lives of property and equipmen

Depreciation and amortization is computed on a straight-line basis over the following estimated useful lives of the assets:


Machinery and equipment			2 to 10 years
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 calculation of basic and diluted income/loss per share of common stock:


	Years Ended December 31,
	2021		2020
	(In thousands, except share and per share data)
Numerator:
Net income attributable to Acacia Research Corporation	$	149,197	$	109,231
Dividend on Series A redeemable convertible preferred stock	(1,452)		(1,381)
Accretion of Series A redeemable convertible preferred stock	(3,829)		(2,835)
Undistributed earnings allocated to participating securities	(25,112)		(18,169)
Net income attributable to common stockholders - Basic	118,804		86,846

Add: Dividend on Series A redeemable convertible preferred stock	1,452		—
Add: Accretion of Series A redeemable convertible preferred stock	3,829		—
Less: Change in fair value of Series A redeemable convertible preferred stock embedded derivative	(8,280)		—
Less: Change in fair value of Series A warrants	—		(1,348)
Less: Change in fair value of dilutive Series B warrants	44,037		(5,557)
Add: Interest expense associated with Starboard Notes, net of tax	4,658		1,889
Add: Undistributed earnings allocated to participating securities	25,112		18,169
Reallocation of undistributed earnings to participating securities	(1,388)		(15,105)
Net income attributable to common stockholders - Diluted	$	188,224	$	84,894

Denominator:
Weighted average shares used in computing net income per share attributable to common stockholders - Basic	48,797,290		48,840,829
Potentially dilutive common shares:
Series A Preferred Stock	9,589,041		—
Restricted stock units	758,682		637,044
Stock options	37,167		2,952
Series A Warrants	—		77,592
Series B Warrants	39,288,690		7,876,711
Weighted average shares used in computing net income per share attributable to common stockholders - Diluted	98,470,870		57,435,128

Basic net income per common share	$	2.43	$	1.78
Diluted net income per common share	$	1.91	$	1.48

Anti-dilutive potential common shares excluded from the computation of diluted net income per common share:
Equity-based incentive awards	393,750		206,916
Series A warrants	5,000,000		—
Series B warrants	—		68,493,151
Total	5,393,750		68,700,067