Acacia(US:ACTG)2022-05-12 21:43Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $13.5 million, up from $5.8 million in the same quarter last year, with Printronix contributing $10.9 million [20] - GAAP net loss for the quarter was $73.3 million or $1.61 per diluted share, compared to a net loss of $164.5 million or $2.81 per diluted share in Q1 2021 [23] - GAAP book value at March 31, 2022, was $345.5 million or $7.42 per basic share, down from $430.5 million or $8.80 per basic share at December 31, 2021 [19] Business Line Data and Key Metrics Changes - Printronix contributed $10.9 million in revenue, while the Intellectual Property business generated $2.6 million, down from $5.8 million in the previous year [20] - Operating loss was $8.5 million, with Printronix contributing positive $1.6 million in operating income, offset by a $3.6 million operating loss in the Intellectual Property business [21] Market Data and Key Metrics Changes - Realized and unrealized loss on securities totaled $105.3 million, primarily due to a 43% decline in the share price of Oxford Nanopore [22] - Cash and equity securities at fair value totaled $535.9 million at March 31, 2022, down from $670.7 million at December 31, 2021 [24] Company Strategy and Development Direction - The company is focusing on acquisitions of operating assets and has established a strategic partnership with Starboard Value LP to identify opportunities [9][13] - The strategy includes a flexible approach to acquiring public or private companies and participating in larger transactions through consortia [9][15] Management's Comments on Operating Environment and Future Outlook - Management noted that market volatility is creating attractive opportunities for acquisitions, with a strong capital base and an experienced team in place [7][25] - The company aims to leverage its infrastructure to identify and close appropriate transactions, with 2022 potentially being a transformative year [25] Other Important Information - The company realized an additional $59.5 million in gains from monetization of its life sciences portfolio during the quarter, totaling $394 million realized from this portfolio to date [9] - A milestone payment of $26 million is expected from Mycovia due to FDA approval of a novel compound, with future royalties anticipated [10][28] Q&A Session Summary Question: Additional milestone payments and royalties from Mycovia - Management confirmed a significant milestone payment of $26 million triggered by FDA approval, with smaller payments expected from other geographies, and future royalties based on sales [28] Question: Areas of expertise in the acquisition team - The team focuses on industrials, mature technology, healthcare, and consumer sectors, with flexibility in deal sizing based on value and contribution to the company [31] Question: Debt repayment strategy - The company plans to continue paying down debt as it has resources from selling securities, while still maintaining significant capital for potential acquisitions [33] Question: Participation in AMO Pharma's recent investment - Management clarified that they did not participate in the recent investment round for AMO Pharma, which was part of a previously negotiated equity investment [35] Question: Valuation changes for Mycovia - Management indicated that the accounting for Viamet is through a joint venture, and future clarity on valuation will come as royalties are generated [36][38] Question: Institutional buying of stock - Management acknowledged the complexity of attracting institutional investors, noting that scale and capital structure are factors being addressed [45]