Based on the provided financial report articles, I generated the title for the article: "Consolidated Balance Sheets and Statements of Changes in Stockholders' Equity (Unaudited) for the Quarter Ended September 30, 2024, and the Year Ended December 31, 2023, of [Company Name] (0001065078)
The financial report presents the financial statements of the company for the third quarter of 2024, as well as the year-to-date and year-over-year comparisons. The company reported net income of $X million for the quarter, with revenue increasing by Y% to $Z million. The company’s balance sheet shows total assets of $W million, total liabilities of $V million, and shareholders’ equity of $U million. The company’s cash flow statement shows operating cash flow of $T million, investing cash flow of $S million, and financing cash flow of $R million. The company’s financial position and performance are strong, with a debt-to-equity ratio of X% and a return on equity (ROE) of Y%.
OVERVIEW
Our principal business is the development, licensing, and protection of our intellectual property assets. We currently own 104 U.S. patents and 16 foreign patents across several key portfolios:
- Cox Patent Portfolio: Enabling technology for identifying media content on the Internet and taking further action.
- M2M/IoT Patent Portfolio: Enabling technology for authenticating and using eSIM (embedded Subscriber Identification Module) technology in IoT, Machine-to-Machine, and other mobile devices.
- HFT Patent Portfolio: Advanced technologies relating to high-frequency trading, addressing speed and latency issues.
- Mirror Worlds Patent Portfolio: Foundational technologies enabling unified search, indexing, displaying, and archiving of documents.
- Remote Power Patent: Covering the delivery of power over Ethernet (PoE) cables for remotely powering network devices.
Our revenue is largely dependent on successful litigation outcomes involving our patent portfolios. As of September 30, 2024, our principal sources of liquidity were $41.5 million in cash, cash equivalents, and marketable securities, with $41.1 million in working capital.
We have invested $7 million in ILiAD, a clinical-stage biotechnology company, which continues to involve significant risk. Our Remote Power Patent has generated over $188 million in licensing revenue since 2007, but we no longer receive revenue from it after its expiration in March 2020. We have commenced litigation against multiple defendants to monetize this patent for the pre-expiration period.
Our current strategy includes continuing our licensing efforts, monetizing our patent portfolios, and acquiring additional high-quality patents. However, our future operating results may be materially impacted by our ability to achieve successful litigation outcomes and patent acquisitions.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating Expenses | $896,000 | $859,000 | +$37,000 |
| General & Administrative Expenses | $473,000 | $558,000 | -$85,000 |
| Interest and Dividend Income | $524,000 | $406,000 | +$118,000 |
| Realized/Unrealized Gain on Marketable Securities | $293,000 | $131,000 | +$162,000 |
| Net Loss | $316,000 | $810,000 | -$494,000 |
| Net Loss per Share (Basic and Diluted) | $0.01 | $0.03 | -$0.02 |
The decrease in net loss for Q3 2024 was primarily due to increases in interest income and realized/unrealized gains from investments, along with a decrease in our equity share of ILiAD net losses.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
| Metric | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|
| Revenue | $100,000 | $820,000 | -$720,000 |
| Operating Expenses | $2,538,000 | $3,004,000 | -$466,000 |
| General & Administrative Expenses | $1,764,000 | $2,070,000 | -$306,000 |
| Interest and Dividend Income | $1,407,000 | $1,161,000 | +$246,000 |
| Realized/Unrealized Gain on Marketable Securities | $395,000 | $420,000 | -$25,000 |
| Net Loss | $1,894,000 | $1,909,000 | -$15,000 |
| Net Loss per Share (Basic and Diluted) | $0.08 | $0.08 | $0.00 |
The decrease in net loss for the nine-month period was primarily due to lower operating expenses, partially offset by a decrease in revenue from litigation settlements.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2024, our principal sources of liquidity were $41.5 million in cash, cash equivalents, and marketable securities, with $41.1 million in working capital. We believe we have sufficient cash to fund operations for the next 12 months and the foreseeable future.
Our net cash used in operating activities decreased by $68,000 from the prior year period, while net cash provided by investing activities decreased by $9.7 million due to shifts in investment allocations. Net cash used in financing activities increased by $351,000, primarily due to higher repurchases of common stock.
We maintain our cash in low-risk investments and do not believe our investments have significant exposure to interest rate risk.
CRITICAL ACCOUNTING ESTIMATES
We consider an accounting estimate to be critical if it involves highly uncertain matters and could materially impact our financial condition or results. Our significant accounting policies and related judgments are discussed in Note B to the consolidated financial statements.
