Good afternoon, and welcome ladies and gentlemen, to the Acacia Research Third Quarter 2017 Earnings Conference Call. At this time, I'd like to inform you that this conference is being recorded and that all participants are in a listen-only mode. I will now turn the conference over to Mr. Rob Stewart. Please go ahead, sir.

Welcome and thank you for joining today's third quarter 2017 shareholder conference call. I am Rob Stewart, President of Acacia Research. With me this afternoon are Clayton Haynes, our CFO; and Ed Treska, our General Counsel. Today, Clayton will overview our financial performance and Ed will review the status of some of our current licensing and enforcement programs. I will then provide an overview and brief business update of Acacia. First, our Safe Harbor statement. Today's call may involve what the SEC considers to be forward-looking statements. Please refer to our earnings release filed with the SEC today as an exhibit to our 8-K on our forward-looking statement disclaimer. In today's call, the terms we, us and our refer to Acacia Research Corporation and its wholly and majority-owned operating subsidiaries. All rights, acquisitions, development, licensing and enforcement activities are conducted solely by certain Acacia Research Corporation's wholly and majority operating subsidiaries. I will now turn the call over to Clayton Haynes for the financial review.

Thank you, Rob, and thank you to those joining us for today's third quarter 2017 earnings conference call. Third quarter 2017 revenues totaled $36.6 million compared to $64.7 million in the comparable prior year quarter. For the third quarter of 2017, one licensee individually accounted for 96% of revenues recognized. In the comparable prior year quarter, two different licensees individually accounted for 60% and 27% of revenues recognized. For the third quarter of 2017, we've reported GAAP net income of $158.5 million or $3.13 per share versus GAAP net income of $7.1 million or $0.14 per share for the comparable prior year quarter. On a non-GAAP basis, excluding non-cash stock compensation, patent amortization and patent impairment charges, we reported third quarter 2017 non-GAAP net income of $167.6 million or $3.31 per share as compared to non-GAAP net income of $16.1 million or $0.32 per share for the third quarter of 2016. Please refer to our disclosures regarding the presentation of non-GAAP financial measures and other notes in today's earnings release and 8-K filed with the SEC. The GAAP and non-GAAP third quarter 2017 results include an unrealized investment gain totaling $159 million, comprised of an unrealized gain related to the application of the fair value method of accounting to our equity investment in Veritone and the requirement to mark our Veritone investment to market as of September 30, 2017. Third quarter 2017 contingent legal fees expense increased 58% to $12.2 million due to lower average contingent legal fee rates for the portfolios generating revenues in Q3 2016 as compared to the portfolios generating revenues in Q3 2017. There were no Inventor Royalties expenses for the third quarter of 2017, primarily due to preferential returns on portfolios generating revenues during the quarter. Average margins for the third quarter of 2017 increased…

Thank you, Clayton. Today, I will provide updates for some of the litigation activity in Acacia's CCE, St. Lawrence and Limestone subsidiaries. Beginning with Cellular Communications Equipment or CCE; as we previously announced, CCE resolved its dispute with Apple including cases pending in the U.S. and Germany. CCE has additional pending suites against HTC, ZTE and Verizon. Trials for these remaining sentences [ph] are currently scheduled to begin in late 2018. This is also awaiting [indiscernible] growing from the federal circuit with respect to an IPR proceeding that was part of three IPR proceedings argued together. And as we announced before, CCE has already prevailed in the other two IPRs at the federal circuit. Moving on to St. Lawrence; the patent assertion cases against Apple have not been resolved and the trail against Apple in the U.S. is still for February of 2018. With respect to the St. Lawrence trial victory against Motorola in March of this year, the U.S. District Court is still considering St. Lawrence's post-trial motion based on willfulness for enhanced damages and attorney's fees. In Germany, the adjunction against Motorola was appealed and the District Court of Manheim has upheld the adjunction and corresponding sanctions against Motorola for violation of that adjunction order. I'll turn now to Limestone Memory Systems; Limestone's actions against various hardware manufacturers have been stayed since early 2016, pending resolution of various IPR proceedings. Limestone has prevailed on three of the IPRs and just last week the patent trial and appeal board granted Limestone's petition to terminate the proceedings on the final pending IPR. Limestone now has four patents which can continue in this litigation and Limestone will be filing a joint stipulation with accord to lift this stay and we anticipate the litigation will become active again near the end of this year. We look forward to reporting on further developments in the cases just mentioned, as well as litigation activity pending with other Acacia subsidiaries. Thank you.

Thank you, Clayton and Ed. As our current litigation is progressing, we are encouraged by Acacia's patent assets and licensing programs. However, as stated in previously conference calls, we continue to experience the challenges in the existing patent environment including the challenges surrounding quality patent intake. As Clayton mentioned in his remarks, Acacia's third quarter financial performance included licensing revenue totaling $36.6 million for the quarter. An increase in working capital from $118 million to $134.9 million, quarter-over-quarter, an increase of nearly $17 million. A continued downward trend and fixed operating expenses, and an increase in the fair market value of our Veritone investment. We consistently want to remind our investors due to the nature of Acacia's business our revenues can and will vary quarter-to-quarter. Our goal is not to manage the financial results of the company on a quarterly basis but rather build long-term shareholder value. As previously communicated, we intend to leverage our patent licensing brand, expertise, relationships and data into new opportunities. Consistent with this theme, we continue to be excited about Acacia's investment in Veritone. Since the IPO in May of this year, Acacia's investment of Veritone has risen with the stock closing at $45.45 on September 30, 2017. This resulted in an unrealized gain reflected in Acacia's Q3 financial statements. In response to enquiries we received, let me clarify Acacia's ownership in Veritone. Acacia currently owns 4,119,521 common shares of Veritone and 1,120,432 common stock purchase warrants of Veritone with $13.61 stock price. For more information on Veritone please visit Veritone's website. We're also excited about the progress and opportunities associated with our investment and partnership with Miso Robotics. Miso Robotics is revolutionizing the restaurant and food industries with innovative robotics and artificial intelligent solutions. Miso leverages robotics and AI technology to help increase the productivity, reduce cost and drive profitability. Again, for additional information on Miso Robotics please visit Miso's website. As we move forward, our intent is to continue our success in patent licensing and partner with exciting innovative companies like Veritone and Miso Robotics. I want to thank everyone on this call. As always, if anyone has any questions, please do not hesitate to call Clayton or myself. Thank you very much and we look forward to speaking with you next quarter.