Edgar Filing: ACACIA RESEARCH CORP

Acacia Research Corporation

FILED PURSUANT TO RULE 424(B)(5)

REGISTRATION NO. 333-133529

PROSPECTUS SUPPLEMENT

To Prospectus dated April 25, 2006

9,768,313 Units

Each unit consisting of one share of Acacia Research -- CombiMatrix Common Stock and warrant to purchase 1.2 shares of Acacia Research -- CombiMatrix Common Stock

ACACIA RESEARCH CORPORATION

$ 1.02 per unit

· Acacia Research Corporation is offering 9,768,313 units of its securities, each unit consisting of one share of its Acacia Research - CombiMatrix common stock and warrant to purchase 1.2 shares of Acacia Research - CombiMatrix common stock.		· Trading symbol: Nasdaq National Market --CBMX
· The last reported sale price of our Acacia Research - CombiMatrix Common Stock on December 7, 2006 was $0.87 per share.

________________

This investment involves a high degree of risk. See “Risk Factors” beginning on page 4 of the accompanying prospectus.


	Per Unit		Total
Public offering price	$	1.0200	$	9,963,679
Placement agency fees		0.0714	$	697,458
Proceeds, before expenses, to Acacia Research Corporation		0.9486	$	9,266,221

Delivery of the units will be made on or about December 13, 2006. The cash proceeds will be delivered to Acacia Research Corporation. All funds received will be held in a non-interest bearing account.

Neither the Securities and Exchange Commission nor any state securities commission has approved of anyone’s investment in these securities or determined if this prospectus supplement and the accompanying prospectus are truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is December 8, 2006.

TABLE OF CONTENTS

Prospectus Supplement	Page

About This Prospectus Supplement	S-1
Information Incorporated by Reference	S-1
Capitalization	S-1
Dilution	S-3
Plan of Distribution	S-3
Legal Matters	S-3

Prospectus

Prospectus Summary	1
Risk Factors	4
Cautionary Statement Concerning Forward-Looking Information	24
Use Of Proceeds	25
Plan Of Distribution	25
Experts	26
Legal Matters	26
Where You Can Find More Information	26
Incorporation Of Certain Information By Reference	27
Indemnification	27

_____________________________

ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement and the accompanying prospectus dated April 25, 2006, relate to the offer by us of 9,768,313 units of our securities, each unit consisting of one share of our Acacia Research - CombiMatrix Common Stock and a warrant to purchase 1.2 shares of our Acacia Research - CombiMatrix Common Stock. Each warrant shall have an exercise price of $0.87 per share. These documents contain important information you should consider when making your investment decision. This prospectus supplement may add, update or change information in the accompanying prospectus. You should read both this prospectus supplement and the accompanying prospectus as well as the additional information described under “Information Incorporated by Reference” on page S-2 of this prospectus supplement and “Where You Can Find More Information” on page 26 of the accompanying prospectus before investing in our securities.

You should rely only on the information contained or incorporated by reference into this prospectus supplement and the accompanying prospectus. We have not authorized any other person to provide you with information different from that contained or incorporated in this prospectus supplement and the accompanying prospectus. We are offering to sell our securities only in jurisdictions where offers and sales are permitted. The information contained or incorporated into this prospectus supplement and the accompanying prospectus is complete and accurate only as of the date of such information, regardless of the time of delivery of this prospectus supplement and the accompanying prospectus or of any sale of our securities.

In this prospectus supplement, unless the context otherwise indicates, the terms “we,” “our,” “us,” and “the company” refer to Acacia Research Corporation.

INFORMATION INCORPORATED BY REFERENCE

The Securities and Exchange Commission (the “SEC”) allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus supplement or the accompanying prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of the securities that we may offer with this prospectus supplement and the accompanying prospectus are sold:

Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006;

Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006;

Our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2006;

Our Current Reports on Form 8-K filed on June 15, 2006, June 22, 2006, July 18, 2006, July 20, 2006, July 25, 2006, October 18, 2006, and October 26, 2006.

You may request a copy of these filings at no cost, by writing or telephoning Chief Financial Officer, Acacia Research Corporation, 500 Newport Center Drive, 7^th Floor, Newport Beach, CA 92660, (949) 480-8300.

CAPITALIZATION

The following table sets forth our actual capitalization as of September 30, 2006, and our capitalization as adjusted to give effect to the issuance of 9,768,313 units consisting of our Acacia Research-CombiMatrix common stock and warrants in this offering at an assumed offering price of $1.02 per unit, net of offering costs, plus the issuance of 1,089,918 shares of Acacia Research-CombiMatrix common stock at a price of $0.73 per share and the issuance of 101,781 shares of Acacia Research-CombiMatrix common stock at a price of $0.98 per share sold since September 30, 2006, pursuant to the registration statement of which this supplement is a part.

The information set forth in the following table should be read in conjunction with, and is qualified in its entirety by, the financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2005, and in our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2006, June 30, 2006, and September 30, 2006, which are incorporated by reference into the accompanying prospectus.

S-1


	AS OF SEPTEMBER 30, 2006

	HISTORICAL			AS ADJUSTED
	(dollars in thousands)

REDEEMABLE STOCKHOLDERS’ EQUITY:

Preferred stock -

Acacia Research Corporation, par value $0.001 per share; 10,000,000 shares authorized; no shares outstanding	$	-		$	-

Common stock -

Acacia Research-Acacia Technologies common stock, par value $0.001 per share, 100,000,000 authorized; 28,017,459 shares issued and outstanding; 28,017,459 Shares issued and outstanding, as adjusted		28			28

Acacia Research-CombiMatrix common stock, par value $0.001 per share, 100,000,000 authorized; 41,405,798 shares issued and outstanding, 52,365,810 shares issued and outstanding, as adjusted		41			52

Additional paid-in capital		321,604			330,968

Accumulated comprehensive income		16			16
Accumulated deficit		(224,731	)		(224,731	)

Total redeemable stockholders’ equity	$	96,958		$	106,333

S-2

DILUTION

Our net tangible book value on September 30, 2006, was as follows:

	Net Tangible Book Value (In Thousands)		Shares of Common Stock Outstanding		Net Tangible Book Value Purchase
CombiMatrix Group	$	10,917		41,405,798	$	0.26
Acacia Technologies Group	$	42,807		28,017,459	$	1.53
Acacia Research Corporation Consolidated	$	53,724		N/A		N/A

Without taking into account any other changes in the net tangible book value for the CombiMatrix group after September 30, 2006, other than to give effect to our receipt of the estimated net proceeds from the sale of the maximum number of units issuable in this offering (9,768,313 units of Acacia Research-CombiMatrix common stock and warrants to purchase Acacia Research-CombiMatrix common stock ) at an offering price of $1.02 per unit, less our estimated offering expenses, the net tangible book value of the CombiMatrix group as of September 30, 2006, after giving effect to the items above, would have been approximately $51,174,000, or $0.39 per share. This represents an immediate increase in the net tangible book value of $0.13 per share to existing holders of Acacia Research-CombiMatrix common stock and an immediate dilution of $0.63 per share to new investors.

The following table illustrates this per share dilution:

Offering price per share of Acacia Research-CombiMatrix common stock		$1.02
Net tangible book value per share as of September 30, 2006 (1)	0.26
Increase in net tangible book value per share attributable to the offering (1)	0.13
Pro forma net tangible book value per share as of September 30, 2006, after giving effect to the offering (1)		0.39
Dilution per share to new investors in the Offering		$0.63

(1) Per share amounts calculated using the net tangible book value of Acacia Research Corporation's CombiMatrix group.

The tables above are based on 28,017,459 shares of Acacia Research-Acacia Technologies common stock and 41,405,798 shares of Acacia Research-CombiMatrix common stock outstanding as of September 30, 2006, and exclude the shares of Acacia Research-Acacia Technologies common stock and Acacia Research-CombiMatrix common stock that may be issued upon the exercise of outstanding options granted and shares reserved for issuance under our 2002 Acacia Technologies Stock Incentive Plan and our 2002 CombiMatrix Stock Incentive Plan, as of September 30, 2006.

To the extent that any Acacia Research-CombiMatrix common stock options outstanding as of September 30, 2006, are exercised, new Acacia Research-CombiMatrix common stock options are issued under our stock incentive plans and exercised, or we issue additional shares of Acacia Research-CombiMatrix common stock in the future, there will be further dilution to new investors.

PLAN OF DISTRIBUTION

This is an offer by us to sell 9,768,313 units, each unit consisting of (i) one share of our Acacia Research - CombiMatrix Common Stock and (ii) a warrant to purchase 1.2 shares of our Acacia Research - CombiMatrix Common Stock, pursuant to a Placement Agency Agreement that we entered into with Oppenheimer & Co, Inc. on December 7, 2006. Under the Placement Agency Agreement, Oppenheimer & Co. Inc. has agreed to act as our exclusive placement agent to solicit offers for the purchase of the units by investors.

We have agreed to pay as fees to Oppenheimer an amount equal to seven percent (7%) of the gross proceeds received by us from the sale of the units on the closing date. In addition, for a purchase price of $0.01 per warrant, we are issuing to Oppenheimer on the closing date five-year warrants to purchase 488,416 shares of our Acacia Research - CombiMatrix Common Stock at an exercise price equal to $1.0875 per share. These warrants are not exercisable for the first six months following the closing date. Certain employees and affiliates of Oppenheimer participated in this offering, on the same terms and conditions as the new investors, in the aggregate amount of $255,000. Two of the executive officers of CombiMatrix Corporation also participated in this offering, on the same terms and conditions as the new investors, for an aggregate amount of $279,480.

LEGAL MATTERS

Certain legal matters in connection with the legality of the offering of the securities hereby will be passed upon for us by Greenberg Traurig LLP, Costa Mesa, California.


PROSPECTUS SUMMARY	1

RISK FACTORS	3

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION	22

USE OF PROCEEDS	23

PLAN OF DISTRIBUTION	23

EXPERTS	24

LEGAL MATTERS	24

WHERE YOU CAN FIND MORE INFORMATION	24

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	25

INDEMNIFICATION	25


YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF OUR COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK. ___________________		$9,963,679 ACACIA RESEARCH CORPORATION Acacia Research-CombiMatrix Common Stock ________________ PROSPECTUS SUPPLEMENT ________________ December 7, 2006 _________________