July 24, 2017

IP HAWK

Acacia Research Group (ACTG) David Hoff

iphawk@outlook.com
Q1 2017 Earnings Preview @theiphawk
http://theiphawk.blogspot.com

Thoughts From the Hawk

I estimate the company generated around $25,000,000 in licensing revenue in four licensing programs. I expect the expense line to be
around $20M, which will result in a profit for the quarter. Acacia will report Q2 2017 earnings after the close on Thursday July 27,
2017. A conference call will be start at 4:30PM EST, but I dont believe the company will take any live questions.

Key Q2 2017 events:

$3.1M Investment in Miso Robotics

VoiceAge (Saint Lawrence) Markman Opinion v Apple with most claims being construed in Acacias favor

Key 2H 2017 events:

Final Judgments entered in the Cellular Communications Equipment and Saint Lawrence (VoiceAge) cases.
Final Decisions in IPR proceedings in the Rapid Completions (Packers Plus) portfolio
Trials have been pushed out to 1H 2018.

The company needs to provide some visibility on their future operations. On the most recent conference call, new President Rob
Stewart briefly spoke about alternative IP opportunities, which the company needs to explain what this really means along with the
pipeline of opportunities they might already have. With two recent investments in Veritone and Miso Robotics are they going to
also continue down this path? Is the company going to continue to acquire new patents for licensing?

Acacia needs a clear presentation of their future. Insiders continued to buy stock in Q2 2017, which is telling me they are positive on
the future direction of Acacia, but it needs to be explained better to investors.

Key Data

Price $4.05
TTM Revenue $136.83M
Market Cap $201M
Shares Outstanding 50.59mm
Float 45.01mm

52 Week Range $3.70-$7.68

3 Month Avg. Volume 303,250

I am long ACTG. I have not been paid to prepare or disseminate this report by Acacia Research Group or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.
July 24, 2017

IP HAWK
Acacia Research Group
Revenue Estimates by Announced Settlement David Hoff
David Hoff
iphawk@outlook.com
Founder
@theiphawk
iphawk@outlook.com
http://theiphawk.blogspot.com

Date IPR Status at Estimated

Portfolio Licensee Case Status
Announced Settlement Amount

Delaware Display Vizio 6/19/2017 PreTrial Final Decisions $3,000,000

Lifeport Sciences Medtronic 6/6/2017 Markman Final Decision $10,000,000

Not
Limestone Memory (Renesas #2) PNY Stayed Filed $2,000,000
Announced

Saint Lawrence ZTE 6/26/2017 PreTrial Filed $10,000,000

Total $25,000,000

Lifeport Sciences (Boston Scientific) settled with Medtronic. The case in Delaware has been stayed pending the results of an IPR,
which was successfully won by Acacia and affirmed on appeal at the CAFC. This portfolio does have two large settlements from other
defendants, WL Gore $30M and CR Bard $7M. I do think there could be upside to my estimate up to $20M based on the prior
settlements and the significant IPR win.

The Limestone Memory deal was not announced and might have gotten lost in the recent CEO transition. This is the second portfolio
transferred over from Renesas and it is unknown if the settlement also included the two most recent Renesas portfolios, which could
significantly increase the value of the settlement.

Saint Lawrence (VoiceAge) settled with ZTE before the trial in Texas was to begin. Acacia was also enforcing an injunction in
Germany on ZTE handsets. I believe this agreement will be similar to the recent HTC deal although there could be upside to the range
of the Sony/LG deals to around $20M.

While ACTG management does not provide guidance, investors can use historical data in the specific portfolios and licensing trends in
the patent business to model quarterly estimates. It will never be 100% accurate as there are multiple confidential input variables such
as: litigation status, jurisdiction coverage, number of years, IPR status, and units covered. I do think investors can get close, which can
be further used to model estimates for the rest of the portfolio.

I am long ACTG. I have not been paid to prepare or disseminate this report by Acacia Research Group or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.
July 24, 2017

IP HAWK
Acacia Research Group
Disclosure David Hoff
David Hoff
iphawk@outlook.com
Founder
@theiphawk
iphawk@outlook.com
http://theiphawk.blogspot.com

Disclosure: I, David Hoff, own stock in ACTG. I wrote this report myself, and it expresses my own opinions. I have no business
relationship with any company whose stock is mentioned in the article.

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