Item 7.01 Regulation FD Disclosure.
On November 18, 2019, Acacia Research Corporation, a Delaware corporation (the
"Company"), entered into a Securities Purchase Agreement (the "Purchase
Agreement") with Starboard Value LP and certain of its affiliates (the "Buyers")
pursuant to which the Company (i) sold and issued 350,000 shares of Series A
Convertible Preferred Stock, par value $0.001 per share (the "Preferred Shares")
at an aggregate purchase price of $35,000,000, and (ii) issued warrants (the
"Series A Warrants") to purchase up to 5,000,000 shares of the Company's common
stock, par value $0.001 per share ("Common Stock"), at an exercise price equal
to $3.65 per share (subject to certain price-based anti-dilution adjustments).
Pursuant to the Purchase Agreement, the Company may issue up to $365 million in
senior secured notes due 2027 (the "Notes") to the Buyers, the proceeds of which
may be used to fund investment opportunities and strategic acquisitions approved
by the Buyers and the Company.
In addition, promptly following the receipt of Stockholder Approval (as defined
below), the Company has agreed to issue to the Buyers warrants to purchase up to
100,000,000 shares of Common stock (the "Series B Warrants" and together with
the Preferred Shares, the Series A Warrants and the Notes, the "Securities") at
an exercise price (subject to certain price-based anti-dilution adjustments) of
either (i) $5.25 per share if exercising by cash payment, or (ii) to the extent
Notes have been issued, $3.65 per share if exercising by cancellation of the
Notes.
The Company has agreed to solicit the affirmative vote of the Company's
stockholders for the approval of resolutions providing for: (i) the Company's
issuance of the securities described in the Purchase Agreement without giving
effect to any limitations under the rules of the Nasdaq Stock Market LLC, and
(ii) an amendment to the Company's certificate of incorporation to increase the
number of authorized shares of Common Stock by not less than 200,000,000 shares
(such approvals, collectively, the "Stockholder Approval").
Subject to the receipt of Stockholder Approval and certain other conditions, the
Company will have the option to complete one or more offerings (a "Stockholder
Offering") of senior secured notes with terms substantially identical to the
Notes, in an aggregate principal amount of up to $100,000,000, and warrants to
purchase up to 27,397,261 shares of Common Stock with terms substantially
identical to the Series B Warrants, to holders of Common Stock of the Company.
The foregoing transactions contemplated by the Purchase Agreement are referred
to herein as the "Financing."
On November 18, 2019, the Company issued a press release announcing the
transactions contemplated by the Financing. A copy of the press release is
furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in
this Item 7.01 and in Exhibit 99.1 to this Current Report shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
The information in this report and the exhibit hereto may contain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such statements are made based on the
current beliefs and expectations of the Company's management and are subject to
significant risks and uncertainties. Actual results or events may differ from
those anticipated by forward-looking statements.
Important Additional Information and Where to Find It
In connection with the Financing, the Company will file with the SEC a Current
Report on Form 8-K describing the terms of the Financing, a preliminary proxy
statement and other documents relating to the Financing and the Stockholder
Approvals required thereunder and may file one or more amendments to such
documents. When completed, a definitive proxy statement and a form of proxy will
be filed with the SEC and mailed to the Company's stockholders. INVESTORS AND
SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION
WITH THE FINANCING OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE FINANCING AND THE
AUTHORIZATION AND ISSUANCE OF SECURITIES THEREUNDER. Investors and security
holders may obtain a free copy of the proxy statement and other documents filed
by the Company at the SEC's Web site at http://www.sec.gov. The proxy statement
and such other documents may also be obtained for free from the Company by
directing such request to Acacia Research Corporation, 4 Park Plaza, Suite 550,
Irvine, California 92614, Attention: Corporate Secretary, Telephone: (949)
480-8300.
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The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from its stockholders in connection with the proposed authorization and
issuance of securities. Information concerning the interests of the Company's
participants in the solicitation, which may be different than those of the
Company stockholders generally, is set forth in the Company's definitive proxy
statement for the Company's 2019 annual meeting of stockholders, previously
filed with the SEC on June 14, 2019, and the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2018, filed with the SEC on March
15, 2019, as amended by Amendment No. 1 to Form 10-K on Form 10-K/A, filed with
the SEC on April 30, 2019, as well as other documents filed with the SEC.
Additional information regarding the interests of such participants will be
included in the preliminary proxy statement, definitive proxy statement and
other relevant documents regarding the Financing filed with the SEC when they
become available. To the extent holdings of such participants in the Company's
securities are not reported, or have changed since the amounts described in the
proxy statements, such changes have been or will be reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of Change in
Ownership on Form 4 filed with the SEC.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 Press release, dated November 18, 2019, issued by Acacia Research
Corporation announcing strategic partnership with Starboard Value
LP
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