Good afternoon, and welcome ladies and gentlemen, to the Acacia Research First Quarter Earnings Release Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers after the presentation. I will now turn the conference over to Mr. Paul Ryan. Please go ahead, sir.

Thank you for being with us today. Today’s call may involve what the SEC considers to be forward-looking statements. Please refer to our 8-K, which was filed with the SEC today for our forward-looking statement disclaimer. In today’s call, the terms we, us and our, refer to Acacia Research Corporation and/or its wholly and majority owned operating subsidiaries. All intellectual property acquisitions, development, licensing and enforcement activities are conducted solely by certain of Acacia Research Corporation’s wholly and majority owned operating subsidiaries. With us today are Chip Harris, President of Acacia; Dooyong Lee, Executive Vice President; and Clayton Haynes, our Chief Financial Officer. Today, I will give you an overview of the progress we are making in building the business, and Clayton Haynes will provide you with an analysis of our financial results. We will then open the call for questions. First of all, we welcome and thank our new shareholders who participated in our recent stock offering. We also want to thank our long-term shareholders who increased their investment in Acacia through the offering. This significant increase in capital will enable Acacia to accelerate its market leadership in this new asset class. Acacia had a great first quarter, as we continue to build our leadership position and patent licensing. Acacia had record first quarter revenues of $61.1 million, record trailing 12 month revenues of $153.2 million, and with the completion of our stock offering, we increased our cash position to a record $314 million. Our first quarter GAAP net income of $12.4 million was significantly impacted by a foreign tax withholding expense of $7.4 million and $2.4 million of accelerated patent amortization related to our recruitment of upfront advances for patent portfolios. Clayton Haynes will provide you with specific details regarding these expenses in his financial presentation. Acacia continued…

Thank you, Paul. And thank you to everyone joining us for today’s first quarter 2011 earnings conference call. As indicated in today’s earnings press release on a consolidated basis Acacia reported record first quarter 2011 revenues of $61.1 million as compared to $39.8 million in the first quarter of 2010. First quarter 2011 revenues included license fees from 35 new licensing agreements covering 32 of our technology licensing programs as compared to 40 new licensing agreements covering 29 of our technology licensing programs during the comparable prior year quarter. For more details please refer to today’s earnings press release for a summary of technology licensing programs contributing to revenues during the quarter. We continued our trend of trailing 12-month revenue growth over the comparable prior year quarter with consolidated trailing 12-month revenues totaling a record $153.2 million as of March 31, 2011, as compared to $90.2 million as of the end of the prior year quarter. Currently, on a consolidated basis our operating subsidiaries have generated revenues from 99 of our technology licensing programs up from 73 technology licensing programs as of the end of the comparable prior year quarter. License fee revenues continue to fluctuate from period to period based on the various factors discussed on previous earnings conference calls and as disclosed in our periodic filings with the SEC. For the first quarter of 2011, Acacia Research reported net income of $12.4 million or $0.34 per fully diluted share versus net income of $18.5 million or $0.55 per fully diluted share for the comparable prior year quarter. Net results for the first quarter of 2011 as compared to the first quarter of 2010 included the impact of the following items. First, an increase in our effective tax rate resulting from Korean foreign withholding taxes totaling $7.4 million withheld…

Thank you, Clayton. Operator, can you open the call for questions please.

Thank you, sir. The question-and-answer session will begin. (Operator instructions) Please standby for your first question, sir. Our first question comes from the line of Mark Argento of Craig-Hallum Capital, please state your question. Mark Argento – Craig-Hallum Capital: Good morning, guys or good afternoon. When you are thinking about the new capital you just raised and the opportunities to deploy that capital, could you give us a little bit of color on the kind of what you see out there different possibilities of ways, you could put that capital work and earn some good returns?

Sure. As I said in a prepared remarks, a number of companies who are facing IP balance of payments deficits are considering selling assets, we think that’s going to be an increasing trend of (inaudible), unlocking patents and we would like to be participants in purchasing those in some cases directly and in other cases in combination with strategic partner. We think that a lot of companies that haven’t previously considered selling patents are going to be doing that and we are already seeing evidence of it. I mean, if you just looked at the last couple of weeks, you saw where HTC paid $75 million for some patents from ADC Telecommunications, where OmniVision, paid $65 million for some patents from Kodak. So, I mean it’s in the news all over the place. Obviously, you’ve got situations where, Google has made an opening offer of $900 million on the Nortel patents and RIM has already made a statement that they’re going to exceed that number. So, all you got to do is open up the Wall Street Journal, look and see everyday patent assets are beginning to come on the market. And so, this capital will enable us to accretively acquire we think valuable assets either as a standalone or in combination with other partners.

And in terms of kind of the processing going about doing that, I mean, are you actively out there, I’m going to push out there looking. But, what expectations in terms of your ability to get something done and deploy this capital whose – sometime a 2011 event, I mean, what kind of expectations should we have to see you guys be active with that capital?

Yeah Mark, this is Chip. I think 2011, yeah, we’ll start to deploy some of the capital or maybe a large chunk of the capital in 2011. But, we’ve already said this business is kind of two degrees of separation. I think you can be rest assured that if people are starting to pedal very valuable IP, Acacia where we’re positioned is seeing those packages. We don’t know that there is anything that’s being trafficked in the industry that we are not getting, very early, if not first look. We’ve positioned ourselves as kind of the partner of choice for major corporations as well as hopefully the acquirer of choice.

Great, that’s helpful. And then, in terms of, and the quarter looks like you’ve signed at least one or two pretty good sized deals. You had the tax withholding. Could you walk me through a little bit about kind of how that works with the Korean tax authorities, and do you expect to be able to recoup some of that withholding over time now or should we really think of you guys as a kind of a full 35% tax bear here going forward?

No, definitely we’re not a full 35% taxpayer. The irony is this. The fact, that we have 100 million of NOLs that caused us to have to expense this withholding. So, eventually, we will get used of it, but ironically it’s our existing as we’ve told the market, we have about a 100 million NOL. But, given the accounting regulations, say withholding from a foreign tax authority given the large NOL forces us to expense that.

So, you can always see us as a large taxpayer if we continue the deals with Koreans.

Until, we’ve recouped our entire NOL.

And that’s an aberration, we don’t, like I said, outside of doing other deals with other Korean national firms, we would not have this treatment.

Got you, and then…

Actually, the other issues are pretty good one to have. The $2.4 million of accelerated patent amortization was taking the risk out for our shareholders. As we told people, we are beginning to make advances on certain portfolios, and obviously as soon as we recoup those advances, we have eliminate the financial risk and in this particular quarter, we did that very successfully. But again, you can book a profit from recouping advances.

Yeah, in a large number of our deals, we have advanced some hard dollars. We in effect take a preferred position that we take that capital back first. And, you know, we think it's very accretive. We don’t think we are going to change the way we operate, now that we have over 300 million to back when we didn’t have any money, we are running still that same discipline and looking at patent portfolios. IEB it’s always been kind of our policy and our behavior that to get our shareholders money back early in the process. And so, we can work – we’ve always been return on investment focused, in the early stages because we didn’t really have much capital with the investment. We think, if we take that discipline that we have learned over last five or six years that we can continue to make very, very accretive acquisitions for our shareholders.

When you think about the returns profile of kind of deploying capital versus the partnership model. Do you expect to be able to achieve similar types of returns or I mean, what kind of, how do you guys think about that type of return profile?

Well, I think, we have been asked this question on the road, a number of times and when you don’t have any capital, it’s all infinite from a return standpoint. But in the times that we have started to – we’ve always looked at kind of four to as much as ten times depending on – yeah, each one of these portfolios has different potential licensees. One of the assets we have is our own intangible asset, which is we’ve done over thousand deals. We with great certainty think we can anticipate a certain portfolio and how it gets rolled out to a certain industry because of our experience in doing that. And, as you see us start to deploy capital, rest assured, that we’re doing it with benefit of knowing how and who and what and when and where, those things get done, we don’t want to change the discipline that for us, we used to put forward maybe $200,000, it's very important for us to get back that 200,000 right away to start some momentum and get it returned. The same thing with the hundreds of millions dollars we have, we are not going to change our philosophy, its tried and true and we think there are opportunities. There is more opportunities now for the reasons that Paul said in his opening remarks. Board rooms all over the world are waking up to the fact that these are monetizable assets. And by and large they are going to decide to do one of the four things, the alternatives that Paul laid out. We think we are very attractive, we’ll look for ourselves in two of those respects up against anybody in that kind of beauty contest.

Great, and that’s helpful. And then, when you think about kind of the new intake side of the business, on the new IPs brought in, I think you said, like there was eight new portfolios brought in. I mean, the size and scope of these portfolios continue to increase. In terms of time-to-money and your ability to monetize these, are you seeing acceleration in the kind of the time-to-money and even some of these bigger portfolios as you get them and bring them in and start working with them?

Well, we’ve certainly exhibited that on the Palm Source excess portfolio, that’s one that we brought in. And we’ve done two very significant licenses, one without litigation with Microsoft and one with litigation with Samsung that we have announced. So, we think we’ve got the skill set and the ability on larger portfolios to get deals done in fairly short timeframes.

Great. Thanks, guys.

Okay. Thank you, Mark.

Our next question comes from the line of Paul Coster of JP Morgan. Please state your question.

Yes, thank you. Good afternoon. Let me start by just focusing on the comments around future growth. Paul, I think you mentioned in your prepared remarks that you expect to see growth in profits. When you talk about growth in profits, what metrics should we use, should we use the EPS or EBITDA or operating income?

Well, whatever – different analysts are going to use different approaches, it’s our stated goal. Obviously, we are not promising any growth. But it's one of our key four metrics, we have reached the point. In the earlier years it was about gathering assets, number one of them starting licensing programs and then up until about a year ago, it was growing 12-month trailing revenues. Obviously, we’ve now scaled to the company where it’s becoming profitable and so the goal is to continue to increase those profits. But –

But on both on EPS and EBITDA.

Okay. So, for instance, I mean, just nitpicking here. But obviously, because the tax, certainly EPS was a little bit lower than perhaps we even might have anticipated yet EBITDA was really quite strong. So, when you say you’re going grow profits on a trailing 12-month basis, do you think that’s going to include EPS, when you have such kind of random?

Surely, yes. This quarter I think was zero, we had a couple of aberrant events in there that accounted for about $10 million compared to $12 million in earnings. So, certainly without those, your earnings would have been 180% of what they were.

Okay. The other thing is on the comprehensive deal that you did this quarter. Can you confirm that it was of a similar size or even bigger than the prior, two deals that you’ve done there. And also that you’re still on track for achieving something in the region of 12 of these deals over a two year period, I guess, starting in 2010.

Yes, I think you’ll see the progression in each of our 10-Q as obviously we have to report concentration of revenues from customers. And so, that’s available in all of those periods in where we did structured deals and I think you will see a continued increase in the size of this deal compared to the earlier ones. Paul Coster – JP Morgan: And how many deals do you think you will be doing this year and do you think that will be of similar magnitude or even bigger?

Our goal is to do two more, we want to do three this year. So, and we would hope that there would be – and yeah, it’s going to depend on the size of the company. The relationship, there’re some strategic advantages to us with certain companies. Some will be larger, some will be smaller, but I think on average we’re going to see given the fact that we have more and more assets under our control, the deals on average are going to become larger.

One other things, we would like to do Paul, this is Chip Harris. And one of the things we’d like to deal with is, we see that the combination of quality and the quantity of the licensing opportunities we present to any one potential customer, with this new found, with this new cash totals, we think that we can go out and buy numerous other significant portfolios. And if you think about that, we would hope that the purchase of those portfolios would lead to a larger structured deals. Because some of the – when we talk about these structured deals inclusive are those, for instance are the license, longstanding besides that’s side by side is the license with the Palm Source, which is driving a lot of interest into structured deals. So, if we have two or three of those Palm Source type of portfolios, one can only assume that the amount of the structured deal will be significantly larger. Paul Coster – JP Morgan: Got it. Is there any way of helping us project forward a patent amortization and FAS 123 expenses?

Sure, sure, this is Clayton here. With respect to patent amortization and the current assets that we have carrying values for on our balance sheet. For the remainder of 2011, currently we have scheduled about 4.1 million of additional patent amortization for 2011. Paul Coster – JP Morgan: So, that should fall pretty significantly in the subsequent quarters then?

Correct, correct, correct – and, I’m sorry, go ahead. Paul Coster – JP Morgan: No, I’m sorry, can you continue on FAS 123?

Sure, sure. And then, with respect to FAS 123 projected stock compensation expense for the rest of 2011, it should be roughly around $10 million.

We’re sorry, that keeps going up, but the stock price keeps affecting that. Paul Coster – JP Morgan: Okay. And my last question really is, do you think you are going to see a mix shift towards medical technology type licensing moving forward or is there anything, any kind of color you can provide us on the kind of the nature of the pipeline that’s coming up?

Well, we’ve said that we think we can grow the medical technology business to the size our tech business is currently in about three years. It took us about five years to grow the tech business. And we think, given our experience and brand name in the market that we should be able to accomplish the same thing there in three years.

We’ve got about what a dozen portfolios, active portfolios right now in the medical tech, I mean, by certain estimate that business is the same size of the tech business depending on how you define it, and there is no reason it should take us five or six years to do the same thing given the platform what we have. We want to move very heavily into that area. There is a sophistic group of potential licensees who really understand the IP business, but think that what we come to offer will be very valuable. We want to do some strategic partnerships like we’ve done with the Renaissance. There is a lot of disaggregated R&D out there, both at the, let's say the doctor level as well as the corporate level, as well as the university level areas that we’ve been very successful in tapping into. We’ve hired, as you know, we’ve hired an executive out of the industry. And it’s an area that we think we can build probably in half the time what we’ve done on the tech side. We’re really excited about it.

But, what percentage of revenues does Medtech represent at the moment?

Right now, I would say, it’s probably less than 5%.

Yeah.

And certainly, less than 10%.

It’s kind of hard fall, it’s all definitional. I mean, Medtech, if you think about some of the imaging technologies, those imaging technologies really probably came out of the photocopier business that made their way into medical technologies, into the CAT Scans and the MRIs. So, it’s some of the software related technologies, we’re just not exclusive to Medtech. But, with the healthcare and issues going on are making big inroads on that side of the browser. So, we need to be careful when we define something as tech or Medtech because those two worlds are converging.

Got it. Thank you.

Our next question comes from the line of Jonathon Skeels of Davenport & Company. Please state your question. Jonathon Skeels – Davenport & Company: Hi guys, I just wanted to focus in on the structured term deals. You said, you’ve planned to do a limited number of these agreements in kind of specific vertical markets. And this should generate demand I guess from multiple companies to sign the deal on that specific vertical. Have you started to see this happen where you have multiple companies interested in signing a deal?

We actually, vis-à-vis a recent structured term deal are no longer offering a structured term deal to another company to answer your question.

Yeah, we understand that, we understand the attractiveness of the scarcity. Jonathon Skeels – Davenport & Company: Got you, okay. And then, on the term deals, you said the plan is for two more this year which would bring you to three total. And I believe you said four in 2012, what’s the total number that you see signing out over the next couple of years?

Well, it’s really hard to say. I mean, there are companies – if we really push into the medical tech area, we could see doing a couple in that area that weren’t anticipated originally. There are some companies that we could describe and nine out of ten people say they’re technology companies when in fact more than 50% of their business is coming out of the Medtech. So, I wouldn’t give – like I said, we have always said we think we can do somewhere between 8 and 12, over kind of the starting in ’09 last year and we’re still comfortable with that. We think that right size is the market. As I said, if we’re successful in deploying this capital and buying a number of new kind of what we call tadpole patent portfolios, we will be asking for significantly larger amounts in these structured deals. So, you might do one or two fewer than 12, but it might be at 30% or 40% more in aggregate. So, it’s a little hard to do, but rest assured, we understand the power in our model and the ability to generate good returns and we’re going to continue to focus on that. Jonathon Skeels – Davenport & Company: Got you. And then, when looking out, I guess past 2012 and 2013 that should be when you start to see the first renewals from the agreements you signed in 2010, right?

Potentially, yes. Jonathon Skeels – Davenport & Company: And then, kind of the second aspect of the structured deal is the idea to partner with some of these companies to monetize their non-core assets. Have you started to see that happen, have you started to receive portfolios from your structured term licensees?

We can’t comment on that. Obviously, we’ve stated that it makes sense for us to do these strategic term licenses with companies that are IP rich because it may afford the additional opportunity and value add to them quite frankly of us monetizing their non-performing assets. I think you’ll see us do both that, as well as jointly acquired third party patent. Jonathon Skeels – Davenport & Company: Okay. And does the discussion turn around making the relationship profitable with you, so if the company is paying you X amount for the term deal, you’re in discussions with them to potentially generate at least that much on monetizing?

No, that’s not a quid pro quo, but certainly companies are increasingly getting very sophisticated around IP. And certainly the companies we’ve done deals with are very sophisticated in the IP sector. And they were one of the first companies to realize there is this IP balance of payments as a corporation and how are they going to deal with this long term. And they put together strategic plans to make sure that’s a profit center for them not a loss center. So, certainly that comes into their thinking but there is no contractual obligation to do this, it’s just that there are – and also in certain markets there is competitors and there is common sense of your line up. For certain companies, you are probably not going to line up with our archrivals. Jonathon Skeels – Davenport & Company: And then on the acquisition front, will the acquisitions only be made with the select structure deal partners that you signed up, is that who you are looking to jointly buyback portfolios with?

Oh, no. We will buy somewhat 100% directly on balance sheet. So, that will make sense and we want to bring a partner in either for economies or they have a strong interest and that makes sense and it’s accretive for us then we will do it together. Jonathon Skeels – Davenport & Company: Then last one, I will ask, on the Renaissance Portfolio, you signed a number of licenses this quarter to, I believe some patent portfolios that belong to Renaissance, are you seeing momentum pickup there and can you comment at all on maybe the number of licensing programs you currently have with Renaissance or how many you are generating revenue from now?

I think we have six portfolios, distinct portfolios that we now have gone through the signing process. Jonathon Skeels – Davenport & Company: I think three of them have started generating revenues to my recollection.

Yeah, and I think there is a couple more actions getting ready to start.

Right, yeah, we have been active, if you think about, yeah the relationship only started at the end of last August. So literally, in six or seven months we have gotten a half a dozen programs up and half of those are already producing revenue. Jonathon Skeels – Davenport & Company: And looking out longer term, I mean, how many licensing programs do you think could come out of a patent portfolio of that size?

It’s hard to predict. Obviously, they have a very deep portfolio and we are continuingly mining it and in discussions with them. But, yeah, it’s hard to predict ultimately how many there would be. But certainly, today it has been a very mutually beneficial relationship. Jonathon Skeels – Davenport & Company: Okay, and then one more and I will get off. Other partnerships with large companies Renaissance relationships, you know, you’re acquiring patents from large companies according to press releases that you have put out there, do these relationships usually starts small and grow larger and should we expect other partnerships of much larger (inaudible).

Yeah, I mean, that’s our goal. I mean, the large relationships we have today started small, you can earn your stripes and they see it, hopefully we are able to accelerate that. But before any company is going to turn over the remits of billions and billions of dollars of R&D. You know, common sense says that maybe there is a dating period before you start to have a family. Jonathon Skeels – Davenport & Company: Okay, thanks I will get back in the queue, thank you.

(Operator Instructions) Our next question comes from the line of Walter Ramsley of Walrus Partners. Please state your question. Walter Ramsley – Walrus Partners: Thank you. Congratulations that was another terrific quarter. Got a question for Clayton actually, the non controlling interest, who owns those or what are they exactly?

In the first quarter of 2011 that particular amount relates to one of our partners in the Acacia Intellectual Property Fund. Walter Ramsley – Walrus Partners: The fund, okay. All right. And looking forward, I mean, was that kind of one shot deal or is that sort of a recurring number to look forward to?

I’m sure our partner hopes it’s a recurring number. Walter Ramsley – Walrus Partners: Yeah.

That will be made a limited number of investment in the fund with our institutional partner and we are beginning to generate returns very early for them and they are very pleased with that. Walter Ramsley – Walrus Partners: Okay, so that’s the full extent of it?

Yes. Walter Ramsley – Walrus Partners: That’s the fund.

That I do, yes. Walter Ramsley – Walrus Partners: All right, and that money just gets reinvested in the fund, I mean they don’t take it out or anything?

It's not. No, it’s a onetime investment and there are no returns and that is not automatically reinvested. Walter Ramsley – Walrus Partners: Oh I see. Okay. All right. And also on the Korean transaction, could you tell us what the tax rate was the withholding tax rate?

Sure, sure. Pursuant to the treaty between the United States and the Republic of Korea, the withholding percentage on royalty base payment is approximately 16.5%. Walter Ramsley – Walrus Partners: Okay. And that’s after, how much cost did the company deduct before they whacked you with the tax?

Yeah, that withholding is on the actual payment from the Korean entity to – Walter Ramsley – Walrus Partners: Okay. So that’s just the gross amount. Okay. And just kind of ballpark, do you have an estimate for what the share count might look like in Q2?

The total outstanding shares? Walter Ramsley – Walrus Partners: Well, the diluted number that you plan to hope to report?

It will be slightly higher. No, I’m sorry. Is your question for, the second question standalone or – Walter Ramsley – Walrus Partners: Right, just all by itself, with all the new shares?

It will be slightly higher than the 36.4 that we are showing now, I mean just, yeah.

Yeah, it’s 41.

Yeah, roughly. Yeah. Walter Ramsley – Walrus Partners: Say that again 41.

Roughly, yeah. Walter Ramsley – Walrus Partners: Okay. All right. And I mean this is kind of after all, it might be the last question. The Chinese are considered to be the worst patent infringers in the universe. Is there any chance of ever getting any money out of them?

They are actively building a patent office and they anticipate having four times the patent application in the Chinese office that we do in the United States within five years. So, apparently they are realizing that IP has value and they’ll probably start paying once they have a lot of it.

And I think, in the past we’ve licensed a couple of change in the companies. Walter Ramsley – Walrus Partners: So, that could actually turn into a business for you guys down the road?

We’re beginning to respect IP because they understand the importance of it. Internally in China, they are making, there’s a major initiative to develop intellectual property for Chinese companies.

And these Chinese products get more accepted by tech products, get more accepted into the US marketplaces, they’ll pay us licensing revenues, just like anybody else. Walter Ramsley – Walrus Partners: Okay. That will be something to look forward to. Anyway great going, I appreciate it. Thanks a lot.

Our next question comes from the line of Tim Quillin of Stephens Inc. Please state your question.

Good afternoon. Thanks for taking my questions. First, Clayton, I just want to make sure I understand MG&A expense in the quarter, you explicitly breakout the non-cash stock compensation expense which was up about a million year-over-year. But, even the part that’s not explicitly, the increase in MG&A that’s not explicitly listed as stock comp, there was also a large degree of non-cash compensation in that as well, is that the right way to think about that?

No, the non-cash stock compensation relates specifically to the non-cash charges that we do reflect.

That’s that $1 million increase?

Yes, yes.

Well, it appears then MG&A was up $2.6 million or $2.7 million excluding that?

Yes, there was a lot of significant including onetime payment in the first quarter that related to performance bonuses, but it’s not necessarily – you shouldn’t count that as a recurring number because it was a one time – and many of them were onetime payments.

Okay. So, there is cash compensation as well?

Yes, yes.

And the guidance, the $20 million to $20.5 million, so that include, tell me what exactly that includes or kind of how I should think about that for the rest of the year?

Sure, sure. Just from a standpoint of attempting to estimate, that number includes the impact of the performance based charges in the first quarter and then an estimate for the remaining of the year as far as performance based compensation will be similar to what it was in the second, third and fourth quarter of last year. So, that’s what the estimate currently reflects. But, if we have great quarters with really larger revenues it could be higher, which will be a good problem to have.

Right, right, understood. And the taxes, the Korean taxes, again, I just want to make sure I am understanding this correctly is that because of the NOLs, you don’t really have anything to deduct it against. And so, you – was it a cash tax expense in Korea that may be sometime down the road, you will be able to get a credit for but for now there is going to be a cash outflow?

Yes, currently the taxes were withheld by the Korean Tax Authority. So that is an actual cash outflow. What we would then do is for tax return purposes is we would have either a future deduction or a future credit that we potentially could utilize in the future.

Okay, but timing wise, because the NOLs, you don’t think you will be able to use that anytime soon?

Timing wise –

It is a good quarters away.

Yeah, yeah. It really depends upon the actual results but –

Yeah, as soon as we use up our NOL we will get a credit for it.

Certainly.

Or have the ability to utilize that credit.

Right. And on the net income attributable to non-controlling interest, I can understand how that arises. But is there any way to help us, think about that. I mean what is the ownership in the IP portfolio, what ownership does your partner have?

Right now, personally, it’s roughly about 40% after our fees and after our joint investment in the fund.

How about specific?

Well, it’s about 60-40 split, we generate about 60% of the returns and the institutional partner about 40.

Right. And that’s on how much or how many patents?

25 million of capital.

Excuse me.

Approximately, 25 million of dedicated capital for the fund.

Okay, okay. And then in terms of, and this is splitting, Harris, I understand. But I understood you had talked about potentially getting to 12 structured term licensees. And then, my understanding that may be Medtech would be on top of that. And I understand, it seems to be hedging a little bit in terms of the numbers, but maybe because they might be increasing in size. And so now are you saying kind of 8 to 12 structured licensees altogether, but maybe in the larger size?

I think, we’ve always said, two last year, three this year, four the following year. And it’s kind of in the –

Kind of total, but we have set 12 in total. So eventually, a patent would be an addition to that.

It depends on who they are quite frankly. There are certain companies that if we do these deals with them, it would eliminate other companies from an exclusivity standpoint, so.

There are certain companies that have big investments in the tech side as well as the Medtech side. I wouldn’t get too focused on the absolute number. I think we’re going to keep driving the revenues the way we have. But I mean your model is going to be wrong, because we just don’t know. But I wouldn’t start splitting hairs between 11, 12 or 10. We’re going to try to maximize revenue potential. If we can do as much money as we thought we can do in 12 in 6 deals, we do six, because it’s driving more of the capital without putting those companies on the bench so to speak. But we think that we can drive their revenue somewhere between that 9 and 12 number. We’re not trying to hedge on any of them, we see these things getting more and more valuable when assets come into our hands. And we’d like to drive that -- frankly, we’ve done every licensing program. We tried to offer attractive terms early on to help us get our shareholder’s capital back and then drive the pricing as we get farther along into the process. Same thing with these.

Right, fair enough. All right, thank you.

Okay, thanks Tim.

Our next question comes from the line of Bill Block of WAB Capital. Please state your question.

I had a couple of questions. One, can you give us the percentage breakdown of the concentration of your customer mix, like, A, customers account for more than 10% of revenue in the quarter? WAB Capital: I had a couple of questions. One, can you give us the percentage breakdown of the concentration of your customer mix, like, A, customers account for more than 10% of revenue in the quarter?

Yeah, Bill. We traditionally do that and we’ll continue to do that in our Q, which we will get filed, what, in another 10 days.

Yeah, you’ll see that.

Yeah, you’ll have that in the next 10 days. But, we don’t do it on the conference call, we put it in the Q.

Okay. Now, another comment that I have is, I’ve mentioned this to Rob before, but when you make an announcement that, one of your subsidiaries and company actually agreed to settlement. Why don’t you announce the number of patents that were involved in that settlement? WAB Capital: Okay. Now, another comment that I have is, I’ve mentioned this to Rob before, but when you make an announcement that, one of your subsidiaries and company actually agreed to settlement. Why don’t you announce the number of patents that were involved in that settlement?

Well, generally, it depends, we have not done that historically and don’t plan on doing it in the future.

It’s not relative.

Because it’s really not relative in the sum of it. Sometimes they’re settling on certain patents that are only a litigation. So, it really wouldn’t I think be very informative that he want to detail exactly how many patents there were.

Well, there is no linear relationship between patents and revenue for people who are trying to figure out revenue per patent. There is no relationship. So, we don’t want to confuse people.

Okay. And then, my last question is, this is based on comment that was made by Clayton. On the stock based compensation, like for example, the first quarter is significantly higher than it had been a year ago. And it was mentioned they had to do with the price of the stock. So, when did you – WAB Capital: Okay. And then, my last question is, this is based on comment that was made by Clayton. On the stock based compensation, like for example, the first quarter is significantly higher than it had been a year ago. And it was mentioned they had to do with the price of the stock. So, when did you –

Correct.

Yeah, so at what point do you determine that the price of the stock, is it at the end of the quarter or at the particular time that you decide to issue the shares to that particular individual? WAB Capital: Yeah, so at what point do you determine that the price of the stock, is it at the end of the quarter or at the particular time that you decide to issue the shares to that particular individual?

Bill, we have a policy, the comp committee does annual grabs consistently in January. And so, it just depends on the price of the stock on the day that they do that grant in January.

And so, if it’s – WAB Capital: And so, if it’s –

Obviously, this is January was much higher than it was in the previous January.

Yeah, but now look what happens is they in quarters two, three and four, you would be granting, there will be additional – WAB Capital: Yeah, but now look what happens is they in quarters two, three and four, you would be granting, there will be additional –

We don’t do grant. We do only to new employees basically, our grants for the year are done in January, one time. So, there won’t be additional grants every quarter to the whole company, it’s only done once a year.

And the non-cash stock compensation charge is based upon the grant date for value. And doesn’t get modified in future course.

No, you actually gave that number. We have a number, we can give you for the year, basically.

I think it’s 10 million. WAB Capital: I think it’s 10 million.

Right, exactly.

For the remainder of the year.

Ten million, so that means for the full year it will be approximately $12 million? WAB Capital: Ten million, so that means for the full year it will be approximately $12 million?

Correct, correct.

Okay. Those are my questions. Thank you. WAB Capital: Okay. Those are my questions. Thank you.

Okay. Thank you, Bill.

Our next question comes from the line of Mark Argento of Craig-Hallum Capital. Please state your question. Mark Argento – Craig-Hallum Capital: Hey guys, just one of a housekeeping question for Clayton. Could you just, you guided to the patent amortization expense I believe for the remainder of the year. I think you said you have roughly $4 million left or $4.1 million. So, when we are going to have the income statement here in the quarter, the quarter that you guys just reported, you guys realize roughly it was about $3.8 million in amortization of patent expense in the quarter. So, is it safe to assume we basically take, we are just taking the $4 million that you have left and we can burn that off for the rest of this year or is there something else that goes into the line item in the income statement?

Well, the number of 4.1 million is the scheduled amortizations for the remainder of fiscal 2011. Of course, the number may be impacted by future recoveries of advances paid. But, as far as what is scheduled for the remainder of 2011, that’s the 4.1. Mark Argento – Craig-Hallum Capital: Okay. So, assuming you guys, if you have any other large license deals above and beyond, kind of whatever schedule you have used that could drive that number higher. So, it’s probably not the right thing to do to run $4 million through there. But probably adjust that up assuming higher revenue levels?

Well, we’ve recouped a lot of our advances this quarter. So, I don’t think those advances would be a big impact for the rest of the year.

We don’t have a model so we don’t really worry about it.

But you have to, right. Mark Argento – Craig-Hallum Capital: I just want to, if I hear a number like that, I just want to make sure, I know how to – the context of it a little bit. So I’ll –

I think it’s going to be pretty close to the scheduled amortization number. Mark Argento – Craig-Hallum Capital: Okay, good. I appreciate the help there guys. Thanks, again.

Okay.

Our next question comes from the line Jonathon Skeels of Davenport & Company. Please state your question.

Again? Jonathon Skeels - Davenport & Company: Hey, earlier you said that or you made the comment that, you guys have over $300 million in cash on the balance sheet. I think you’ve said that you’d like to keep about a $100 million, which leaves north of $200 million left on the balance sheet. And you said earlier that you could see yourselves spending a large chunk of that in 2011. So, I guess that would imply that you are looking at large acquisitions, I mean, how much money –

Or a lot of small ones. Jonathon Skeels - Davenport & Company: How much money would you see committing or what’s kind of the maximum amount of capital that you would commit?

Probably not more than $316 million. I mean, who knows, I mean, when we do it, we’ll tell you. And we’ll give you a new schedule. I understand you guys want to build the model and want to build it correctly. But, we can’t help you in this quarter-to-quarter stuff. But, when we do it, we’ll tell you exact where it is and your models will be accurate at that point. I don’t mean to be flipping about it but it’s hard. There is a huge amounts of opportunities. We can get a call tomorrow which change anything we give you today. I mean, it’s moving that fast. Paul read off a couple of examples. We had actually looked at one of them. I mean, it’s – they are popping up everywhere.

Yeah. We could have been the buyer of one of the ones I just mentioned.

And, we understand that all of a sudden the models go up and then we could do one deal and we can accelerate a lot of that. Jonathon Skeels - Davenport & Company: Okay. Well I wasn’t so much asking as with respect to the model. But, more or less trying to find out if some of the portfolios you’re looking at are large in size?

They are, yes.

Yeah, okay, we wouldn’t have diluted the shareholders. Jonathon Skeels - Davenport & Company: Got you. Okay, great, thanks.

Okay. Thanks, Jonathon.

This will conclude the question-and-answer session. I will now turn the call back over to Mr. Ryan.

Thank you, operator. I want to thank everyone for being on the call today. If you’ve got follow-up questions, you can either give myself or Rob Stewart a call. We look forward to talking to you again on the next quarter.

Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 800-642-1687 or 706-645-9291 with confirmation code 52505878. This concludes our conference for today. Thank you all for your participating and have a nice day. All parties may now disconnect.