5. INVESTMENTS

9 Months Ended

Sep. 30, 2020

Schedule of Investments [Abstract]

5. INVESTMENTS

5. INVESTMENTS

Investment at Fair Value

During 2016 and 2017, Acacia made certain investments in Veritone, Inc. (“Veritone”). As a result of these transactions, Acacia received an aggregate total of 4,119,521 shares of Veritone common stock and warrants to purchase a total of 1,120,432 shares of Veritone common stock at an exercise price of $13.61 per share expiring between 2020 and 2027. During the year ended December 31, 2018, Acacia sold 2,700,000 shares Veritone common stock and recorded a realized loss of $19.1 million. During the year ended December 31, 2019, Acacia sold 1,121,071 shares Veritone common stock and recorded a realized loss of $9.2 million. During the three months ended March 31, 2020, Acacia sold all remaining 298,450 shares Veritone common stock and recorded a realized loss of $3.3 million.

During the three months ended June 30, 2020, Acacia exercised 154,312 warrants of the total 1,120,432 Veritone common stock purchase warrants at a price of $13.61 per warrant, and then sold the 154,312 shares of Veritone stock received at $17.23 per share, and recorded a realized gain of $554,000. At September 30, 2020, the fair value of the 966,120 remaining warrants held by Acacia totaled $982,000.

Changes in the fair value of Acacia’s investment in Veritone are recorded as unrealized gains or losses in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2020 and 2019, the accompanying condensed consolidated statements of operations reflected the following:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
	(In thousands)
Change in fair value of investment, warrants	$	(3,081	)		(3,216	)	$	225		$	(822	)
Change in fair value of investment, common stock		–			(1,050	)		3,479			10,444
Gain on sale of investment, warrants		–			–			554			–
Loss on sale of investment, common stock		–			(915	)		(3,316	)		(8,147	)
Net realized and unrealized gain (loss) on investment at fair value	$	(3,081	)	$	(5,181	)	$	942		$	1,475