Good afternoon and welcome, ladies and gentlemen, to the Acacia Research 2017 fourth quarter and year-end 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. I will now turn the conference over to Mr. Rob Stewart. Please go ahead, sir.

Welcome. And thank you for joining today's fourth quarter and year-end 2017 shareholder conference call. I am Robert Stewart, President of Acacia Research. With me this afternoon are Clayton Haynes, our CFO, and Ed Treska, our General Counsel. Today, Clayton will review our financial performance and Ed will review the status of some of our current licensing and enforcement programs. I will then provide a business update for Acacia. First, our Safe Harbor statement. Today's call may involve what the SEC considers to be forward-looking statement. Please refer to our earnings release filed with the SEC today as an exhibit to our 8-K for 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 patent rights, acquisitions, development, license and enforcement activities are conducted solely by certain Acacia Research's wholly, majority-owned 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 fourth quarter and year-end 2017 earnings conference call. Today, I will provide a summary of the fourth quarter and full-year 2017 results and provide an update of our financial condition and 2018 expense outlook. First, I'll summarize the fourth quarter 2017 results. Fourth quarter 2017 revenues decreased 84% to $3.5 million compared to $22 million of revenues in the comparable prior-year quarter. For the fourth quarter of 2017, two licensees individually accounted for 43% and 36% of revenues recognized as compared to three licensees individually accounting for 48%, 19% and 18% of revenues recognized during the fourth quarter of 2016. For the fourth quarter of 2017, we reported a GAAP net loss of $110.2 million or $2.18 per share versus a GAAP net loss of $10.6 million or $0.21 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 a fourth quarter 2017 non-GAAP net loss of $103.7 million or $2.04 per share as compared to non-GAAP net income of $1.1 million or $0.02 per share for the fourth quarter of 2016. The GAAP and non-GAAP fourth-quarter 2017 results included an unrealized investment loss totaling $104 million comprised of an unrealized loss 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 each period. The unrealized loss resulted from the net decrease in Veritone stock price during the three months ended December 31, 2017. 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. Fourth quarter 2017 inventor royalties expense was not material,…

Thank you, Clayton. I'll provide updates for some of the litigation activity in Acacia's CCE, Saint Lawrence and Limestone subsidiaries. Starting with Cellular Communications Equipment, or CCE, there are remaining lawsuits against HTC, ZTE and the major cellular carriers. Trial for HTC and ZTE are currently scheduled to begin on September 17, 2018. Second trial against the same two defendants is scheduled for February of 2019. On the call last quarter, I referred to three IPR proceedings against three CCE patents conducted on the same day, for which CCE prevailed, but which had subsequently been appealed to the Federal Circuit. I reported that the Federal Circuit had affirmed two of those three IPR rulings in CCE's favor, but we awaited a ruling for the third. I can report now that the Federal Circuit also affirmed entirely the third IPR case for CCE. Additional IPR proceedings for other CCE patents are ongoing. For example, we recently received an adverse decision in a separate IPR proceeding, but that ruling does not impact the aforementioned trials. Next, I'll address Saint Lawrence and in particular the case pending against Apple. On January 22, in response to Saint Lawrence's and Apple's joint motion to stay all deadlines and notice of settlement, the District Court judge in Texas presiding over the case issued an order granting the requested 30-day stay. At this time, we do not have further comment on the status of the pending case against Apple. For the Saint Lawrence case against Motorola, for which Saint Lawrence was awarded a jury verdict in March 2017, our post-trial motion for enhanced damages was denied by the court, which we intend to appeal. In addition, we are still awaiting final rulings on other post-judgment motion filed with, and pending before, the trial court, including Saint Lawrence's motion to recover its attorney's fees. With respect to Limestone Memory Systems, the various IPR proceedings brought against the Limestone patents have now ended. Limestone received favorable outcomes from the patent trial and appeal board during the IPR proceedings and there are four patents remaining in the litigation. Parties filed a joint stipulation to lift the stay, which the court has grant, allowing the litigation to proceed. The court also has adopted a preliminary schedule governing the proceedings in the case, which includes a trial date set for January of 2020. We look forward on reporting on further developments in the cases just mentioned as well as litigation activity pending with other Acacia subsidiaries.

Thank you, Clayton and Ed. As discussed on previous earnings calls, 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. We continue to experience challenges in the existing patent and licensing environment, including challenges in identifying and acquiring new high-quality patent assets, which will impact future revenue opportunities from IP licensing. For example, as described our previous quarterly conference calls, systematic changes to our business, such as the introduction of interparty reviews, or IPRs, by defendants continues to be a significant factor contributing to the challenges in the patent licensing industry. The IPR process can result in the loss of patent rights or can lead to significant delays in infringement litigation, increases in costs and increases in the over-complexity of infringement actions. Despite these challenges, we will continue to invest in and monetize our existing quality patent assets. We look forward to updating you on our portfolio license efforts throughout 2018. Our team's experience in identifying and evaluating complex IP and in developing and cultivating long-term business relationships provides us a unique window into innovation and technological advancement. We're increasing our efforts to leverage our expertise and experience to create new avenues, which we believe will lead to increased shareholder value. In this regard, in addition to monetizing our existing IP assets, Acacia will increase its focus on opportunities to partner with high-growth and potentially disruptive technology companies. We will leverage our experience and expertise, data and relationships developed as a leader in the IP industry to pursue these opportunities and increase shareholder value. Our activities will be focused on capitalizing on opportunities that we believe can benefit from our IP…

Ladies and gentlemen, this concludes our conference for today. Thank you for participating and have a nice day. All parties may now disconnect.