ACQUISITION On January 12, 2012 (the  Acquisition Date ), pursuant to the terms and conditions of the Agreement and Plan of Merger dated as of November 22, 2011 (the  Merger Agreement ) among Acacia Research Group LLC ( ARG ), a wholly-owned subsidiary of Acacia, Apollo Patent Corp., a newly-formed, wholly-owned subsidiary of ARG ( Merger Sub ), ADAPTIX, a Delaware corporation, and Baker Communications Fund II (QP), L.P. solely in its capacity as shareholder representative, ARG completed its acquisition of ADAPTIX, which held no material assets other than its portfolio of patents and $10 million in cash, through a merger of Merger Sub with and into ADAPTIX, with ADAPTIX as the surviving corporation (the  Merger ). Upon completion of the Merger, the separate corporate existence of Merger Sub ceased and ADAPTIX became a wholly-owned subsidiary of ARG. ADAPTIX, a pioneer in the development of 4G technologies for wireless systems, is an award-winning technology company long recognized in the industry as one of the first developers of cutting edge 4G wireless systems. With patents filed as early as 2000, ADAPTIX s research and development efforts have resulted in one of the world s most significant intellectual property portfolios focused on 4G technologies. With its rapidly growing portfolio of 230 issued and pending patents in 13 countries, ADAPTIX s innovations extend across a broad range of 4G technologies including OFDMA and MIMO. The Merger is being accounted for in accordance with the acquisition method of accounting under Financial Accounting Standards Board ( FASB ) ASC Topic 805,   Business Combinations  ( Topic 805 ). Topic 805 requires, among other things, that identifiable assets acquired and liabilities assumed be recognized at their fair values as of the Acquisition Date. Under the acquisition method of accounting, the purchase consideration is allocated to the assets acquired, including tangible assets, patents and other identifiable intangible assets and liabilities assumed, based on their estimated f