Acacia Releases 4Q Earnings Report

NEWPORT BEACH, Calif. – Acacia Technologies Group reported its fourth quarter and year-end financials, indicating steady growth in its Digital Media Transmission licensing revenue for the streaming of audio and visual content over the Internet and satellite channels.

Acacia's Chairman and CEO Raul Ryan led the live conference call in the company of executives Chip Harris and Robert Berman, touching upon a recent $19.6 million cash infusion from the sale of Acacia stock; plans to continue patent litigation and pursue additional patent portfolio acquisitions; and enforcement of its newly acquired collection of 27 patent portfolios, which represent 120 patents covering a wide range of technologies.

For financials, Acacia reported revenues for the year ending Dec. 31 of $4.3 million, consisting of $2.8 million in DMT licensing and $1.5 million in deferred revenues from Acacia's V-chip licensing program.

For the fourth quarter alone, Acacia reported $779,000 in licensing revenues for DMT patents, compared to $481,000 in the previous 2003 quarter.

Outstanding litigation in five separate jurisdictions against cable companies and the Joint Defense Group, representing 12 online adult companies, has been put on hold while a judical panel decides whether to consolidate those cases into one jurisdiction, which Berman predicts will either be in Southern California or Northern California where presiding Judge James Ware is based.

Acacia legal expenses for the 12 months ending on Dec. 31 totaled $3 million, with expectations of a more costly year ahead in 2005.

Berman said there is no current time frame when the panel will make its decision, but he said it could be a "matter of days." Berman added that the benefits of the transfer would speed up the discovery process and hasten trial dates.

"The claims in question are not indefinite, but even if the court holds that they are, there are still several surviving claims that we believe are being infringed on and will keep the case alive," Berman said.

Meanwhile, Ryan said, "the meter is running on all those companies and royalty rates have increased and will continue to."

Ryan stated that Acacia has so far secured 294 DMT licensing agreements, 182 for Internet usage, 107 for cable television and five covering the delivery of digital media in hotel rooms. In the fourth quarter, of those licensees, 103 new agreements were entered into for DMT technology and 95 for cable TV.

"We are very enthusiastic regarding our DMT licensing program," Ryan said, adding that Acacia intends to pursue corporate websites, e-learning, sports and other online industries, which all continue to grow with the increased use of high-speed Internet access.

On the wireless front, Ryan said that one of Acacia's largest licensing opportunities on the horizon will be full-motion services with the rollout of 3G wireless and digital video platforms being offered by Verizon and Cingular Wireless.

"Based on industry estimates, including wireless, satellite, fiber optic, cable TV and the Internet, we have only licensed 2 to 3 percent of the total market so far," Ryan said. "There are lots of opportunities ahead for us with the continued rollout of video-on-demand and digital ad insertion, which continue to accelerate."

Ryan referred to recent statistics from telecommunications giant Comcast that 60 percent of its subscribers have access to VOD and that 72 million VOD streams were viewed in the month of January alone.

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