MJ McNulty: Yeah, and of course thanks Brett, nice to hear from you.
Operator: [Operator Instructions] Your next question is coming from a private investor, [Ron Heller] (ph). Please post your question, your line is live.
Unidentified Analyst: Hi. Can you go through the cash on the balance sheet again? I think we went from $400 million and — I heard 2 numbers, $439 million and $460 million. Can you clarify that?
MJ McNulty: Yes, Kirsten, do you want to take that one?
Kirsten Hoover: Sure, 1 sec. So yes, the $439 million is our cash and cash equivalents as of the end of March, and then the $460 million includes our cash and equity securities.
Unidentified Analyst: And that’s up from the previously reported $400 million. Can you tell me what the delta is on that?
Kirsten Hoover: Sure. We had some receivables as of the end of December from our IP group that were all collected in the quarter. That was really the biggest driver of the increase. Sorry — and also, as we mentioned, in the fourth quarter, we recorded an unrealized gain on our Arix investment for the forward sale contract that we had. That closed also in the quarter and turned to cash.
MJ McNulty: Yes. So Ron (ph), if you take the December 31 cash number, add the cash receipts from the intellectual property business and the Arix sale, which moved from a marketable security to cash with a slight gain associated to the 12/31 marketable security number when we actually converted it into cash. That’s how you get to the numbers that Kirsten is talking about. And then the other number that I mentioned is pro forma for the funding of the second Benchmark acquisition. We will have approximately $400 million of cash and securities, of liquid marketable securities that we can use to go deploy into other acquisitions.
Unidentified Analyst: Okay. Two more questions. Back in November of 2023, the company announced a buyback of stock, no obligation to buy stock back, but I think it was $20 million, not to exceed 5 million shares. Has the company bought any stock back to-date?
MJ McNulty: We have not bought any stock back yet Ron.
Unidentified Analyst: Okay. And did the company intend to buy stock back, back when they made the announcement in the fourth quarter? And if so, why hasn’t the company bought any stock back considering it’s been in some cases, a 30% discount to book value?
MJ McNulty: I appreciate you asking the question. We’re evaluating it on a consistent basis, and we are seeing a lot of opportunities to deploy cash into acquisitions. So we — when we think it is opportunistic, we’ll buy stock back. And if we don’t think, it’s opportunistic or it’s less opportunistic than making acquisitions, then we use cash to make acquisitions.
Unidentified Analyst: One footnote question regarding the lot of time and releases — time and conversation, and the CC in the release has been on book value per share. And is my math correct that if you did buy stock back or any company bought stock back at a significant discount that it would, by definition increase book value per share?
MJ McNulty: As a general theory, yes that is correct. The magnitude of which this buyback increases book value per share is attractive. But again, we have attractive ways to deploy the capital.
Unidentified Analyst : Okay thank you.
Operator: Your next question is coming from Adam Eagleston with Formidable Asset Management. Please post your question, your line is live.
Adam Eagleston: Hi, MJ, Kirste. How you’re today?
MJ McNulty: Hi, Adam. How it’s going.
Adam Eagleston: Doing well, Ron beat me to the punch on the buyback question, but would love to hear little bit more. I echo his sentiment about that being seen as the cost of capital so to speak. I hope that’s the way you and the Board are looking at it. In terms of the legacy Woodford assets, you don’t talk much about those. They are sort of orphaned at this point. Any impetus by management to divest those or do something with them? Is there a market out there for those assets?
MJ McNulty: Yes. I appreciate you asking the question. And you are right — we didn’t mention it in the transcript. I’d use the term non-core as opposed to orphan maybe because we do work those assets pretty hard. And hence the goal is to create liquidity on those assets. And as you know, there are two biotech companies. The overwhelming majority of the value there is two biotech companies, and we are actively working to create liquidity in those positions.
Adam Eagleston: Got it. Great. And that’s a good segue actually as we think about the market opportunities out there. You mentioned biotech, and there is clearly a lot of carnage in that space. Is there any opportunity in that orphan biotech space? And again, apologies for the pejorative term. But with regards to some publicly traded biotech that are sub cash, et cetera or is that one of those cliche kind of too hard stacked as you think about the public market opportunity?
MJ McNulty: I mean I think, the answer to the question is a little bit in between the two kind of goalposts you put out there. I would say, in the past we have evaluated some of the net-nets in the pharmaceutical world. One of the issues is, without control, you can’t really effect the change or the trajectory of the cash burn, which gives us a little bit of heartburn. And then with the control, you’re effectively taking technology risk, and that’s not really the business that we’ve set out to be in. We are looking for companies with durable earnings. And so there is potential alpha in those names. I’m candidly not sure that we are the right people with the right folks on staff and experience to be able to pick that horse. And so while it is alluring from a valuation standpoint, for us we don’t know — we’re not exactly sure how we create value out of those opportunities as opposed to just betting on a horse.
Adam Eagleston : Got it. Thanks for taking the call.
MJ McNulty : Yeah, of course.
Operator: Your next question is coming from [Todd Selter] (ph) with [88 Management] (ph). Please post your question. Your line is live.
Unidentified Analyst: Thank you. Congratulations on a solid quarter. Quick question. When I look at the income statement, we are sitting with $400 million large. And I know T-bills and money-market accounts are yielding in the area of 5%, which should generate somewhere around $5 million a quarter. Where do we see any income generated from our liquidity on our income statement?
